Entrepren1314-05-01-12.doc
ENTREPRENEURSHIP Spring 2012 Dr. Soon Paik
Chapter 13 Growth Strategies(05/01/2012)
1. Domestic Growth Strategies
(1) types Product
Existing New
Market Existing
New
(2) overcoming pressures
Pressures Overcoming strategies
1) financial
2) human
3) management
4) entrepreneurs’
2. Global Growth Strategies
1) exporting
2) non-equity
3) direct
4) entrepreneurial
3. Expansion Growth Strategies
1) franchising
2) joint ventures
3) acquisition
4) mergers
5) leveraged buyouts
Chapter 14 Ending Strategies
1. Chapter 11 Bankruptcy:
- reorganization
- succession
- selling
2. Chapter 13 Extension
3. Chapter 7 Liquidation
Entrepren01-01-25-12.doc
Entrepreneurship Dr. Soon Paik
Chapter 1. Entrepreneurship 1 (01/25/2012)
1. Definition
- Entrepreneur:
- Entrepreneurship:
- History: Early
Middle ages
17th c.
18th c.
19th & 20th c.
20th & 21st c.
2. Entrepreneurial Process
1) identify
2) develop
3) determine
4) manage
5) start-up
3. Role of Entrepreneurship in Economic Development
- 1750
- J. Schumpeter
- Bridging gap between science and marketplace
1) Gov. 2) Corp. 3) Individuals.
4. Entrepreneur’s Decision-Making
1) effectuation
2) cognitive
3) learning from
5. Entrepreneur’s Characteristics
1) education
2)age
3) work history
4) role model
5) moral support network
6) professional support network
7) male vs. female
8) minority
9) corporate entrepreneurship
6. Small Businesses
- 25.1 m(98.5%)
- contributions: + GDP
+ employment
+ new inventions
Entrepren02-02-01-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 2. Entrepreneurship 2: Creativity (02/01/2012))
* Creativity: (1) new ideas, (2) innovations
1. New Ideas
(1) Brains: left brain and right brain
(2) Sources of New Ideas: - consumers + production process + distributors
- R & D
- Federal and State
(3) Methods of Obtaining New Ideas
1) brainstorming
2) checklist
3) forced relationships
4) attribute listing
5) big-dream approach
2. Innovation
(1) types: 1) breakthrough I
2) technological I
3) ordinary I
- uniqueness
quantity
(2) Product Development Process
1) idea stage
2) concept
3) development
4) test marketing
5) commercialization
(3) Intellectual Properties
1) patents
2) trademarks
3) copyrights
4) trade secrets
5) licensing
6) product safety/liability
7) insurance
8) Sarbanes-Oxley Act
9) contracts
** Carl Goldberg: dog seatbelt
** Goodyear: rubber + sulfa + lead
** Pirates: software
movies
Entrepren03-02-08-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 3. Business Plan 1: What, Who, Perspectives (02/08/2012)
1. What - business plan
- two questions: 1) where
2) how
2. Who - entrepreneurs
- consultants
3. Perspectives: 1) entrepreneur
2) customers
3) investors
4. Twelve Elements
(1) introduction: 1) name/address, needs
2) elevator pitch
(2) executive summary: 1) who
2) what
3) how
(3) vision/mission and goals/objectives:
1) vision
2) mission
3) goals
4) objectives
(4) environment/industry analysis:
- 3 tests: 1) reality
2) competitiveness
3) value
(5) venture description: - goods&services, size, history
(6) organization: - ownership forms (private, partner, corporation)
(7) marketing: - marketing plan (price, distribution, promotion)
(8) financing: 1) forecasted sales/expenses,
2) forecasted cash flows,
3) forecasted balance sheets
(9) production: - price vs. quality
(10) operation: - manufacturing, shipping, inventory, custom services
(11) risk assessment: 1) potential risks
3) prevention/dissolution of risks
(12) appendix: 1) resume
2) leases/contracts/agreements
3) market research data
Entrepren04-02-15-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 4 Organizing 1: Ownership (02/15/2012)
* Types: Number Sales Net Income
Sole
Partnership
Corporation
1. Characteristics of 3 Forms
Sole Partnership Corporation
1) ownership
2) liability
3) cost of org
4) continuity of bus
5) transferability of interest
6) capital request
7) management control
8) distribution of profit/loss
9) raising capital
2. Tax Issues of 3 Forms
1) sole
2) partnership
3) corporation
4) LLC/S
3. Designing
- 5 areas: 1) structure
2) goals/objectives
3) rewards
4) selection
5) training
Entrepren05-02-22-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 5 Organizing 2: Franchising and Buy-Out (02/22/2012)
I. Franchising
1. Concept and Growth
- concept
- growth
2. Types 1) trade name: car dealers, Western Auto,
2) product distribution: Exxon, Coca-Cola, McDonald, Safeway,
3) services: personnel agencies, income tax preparation, real estates,
3. Advantages 1) access to bus system
2) get management trainings
3) use national advertising programs
4) use financing arrangements
5) use proven bus-formats
4. Disadvantages 1) high fees/profit sharing
2) limited product line
3) market saturation
5. Laws: 1971
1979
6. Trends - international
- intercept
- co-branding
- baby-boomers
II. Buy-Out
1. Advantages: successful bus, good location, good financing, bargain
2. Disadvantages: losing bus, bad location, bad financing, over-priced
3. How to Buy?
1st step: self-analysis: interests
abilities and skills
2nd step: list: brokers, banks, accountants, lawyers,
Newspapers/trade journals, trade ass, www.
3rd step: investigating: 5questions: Why to sell? What firm’s assets?
What market potential? How financial? What legal?
4th step: evaluating: (1) balance sheet
(2) income statement
(3) market
5th step: negotiating: 5Ps: 1) preparation, 2) persuasiveness, 3) poise,
4) patience, 5) persistence
Bargain zone
Entrepren06-02-29-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 6 Marketing 1 (02/29/2012)
* marketing plan: 3 questions: 1. where has been?
2. where to go?
3. how to get there?
I. Situation Analysis
1. upside-down pyramid approach
Situations
Goals/objectives
2. survey methods
Costs speed depth response rate
Telephone
Personal
Internet
II. Goals/Objectives
1. target marketing
- cases: Chico’s
DLNY
Pulte
- guerrilla marketing: 1) find
2) do
3) concentrate
2. market segmentation
- by customers’ characteristics
1) geographic
2) demographic
3) psychographic
- by customers’ buying patterns
1) products
2) usage
3) time
Entrepren07-03-07-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 7 Marketing 2 (03/07/2012)
III. Strategies
1. marketing mix: 4 elements: (1) G&S, (2) price, (3) distribution, (4) promotion
(1) goods/services
- product cycle
(2) price
- 3 factors: 1) costs
2) markups
3) competitive
- price/quality strategies: quality
Low high
Price high
low
(3) distribution
- directness:
- number of channels
(4) promotion
- market communications
1) advertising
+ expenditure by medium
TV
Direct mail
Newspaper
Radio
2) public relations
3) sponsorship
4) personal selling
2. budgeting: - percentages
- hiring
- saving
3. implementing/monitoring
- implementing:
- monitoring:
Entrepren08-03-21-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 8 Marketing 3: E-Commerce and Global Marketing (03/21/2012)
I. E-Commerce
- on-line purchases
- strategies
(1) market: 1) who are customers?
2) what customers want?
(2) domain
(3) search
(4) order
(5) privacy
(6) security
2. Global Marketing
- country screening matrix
Market factors country 1 country 2 country 3 ….
- strategies: 1) world
2) trade
3) joint
4) foreign
5) international
6) counter
7) exprting
8) international
- barriers to international trade
1) domestic
2) international: [1] tariff
[2] non-tariff
3) political
- international trade agreements
+ GATT
+ WTO
+ NAFTA
+ KORUSFTA
Entrepren09-04-04-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 9 Financing 1: Financial Plan (04/04/2012)
1. Projected(Pro Forma) Financial Statements
- balance sheet:
- income statement:
- cash flow:
SAM’S BALANCE SHEET
Assets Liabilities
Current Current
Fixed Long-Term
Intangible Net Worth
Total Total
SAM’S INCOME STATEMENT 1st year 2nd 3rd
Net sale
Cost of goods sold
Total expenses
Net income
SAM’S CASH FLOW jan feb mar dec
sales
disbursements
cash
beginning balance
ending balance
2. Valuation
(1) Ratio Analysis
- liquidity ratios
1) current ratio:
2) quick ratio:
- leverage ratios
3) debt/asset ratio:
4) debt/net worth ratio:
- operating ratios
5) average inventory turnover ratio:
6) total asset turnover ratio:
- profitability ratios
7) net profit/sales ratio
8) net profit/equity ratio:
(2) Break-Even Analysis
- total cost proportions
1) break-even sales
2) break-even volume
Entrepren10-04-11-12.doc
ENTREPRENEURSHIP Spring 2012 Dr. Soon Paik
Chapter 10 Financing 2: Sources (04/11/12)
* Financing sources: 1. Internal
2. External:
1. Internal Financing: - profits; - assets sales; - payment terms extension
- cash management
- cash management:
+ cash flow Jan Feb Mar Dec
Sales $50k
Disbursements 150
Cash flow (100)
Beginning bal 300 200
Ending balance 200
+ Cash Flow Strategies
(1) account receivable: 4 point:
(2) account payable: 5 points:
(3) inventory control: 2 points:
+ Avoiding Cash Crunch
(1) bartering
(2) trimming overhead costs
(3) investing surplus cash
2. External Financing
(1) self-financing: - personal funds
- family/friends
(2) debt financing
- asset base loans
- cash flow loans
- SBA 7(A)
- SBIDA
- R&D Limited partnerships
Entrepren11-04-18-12.doc
ENTREPRENEURSHIP Spring 2012 Dr. Soon Paik
Chapter 11 Financing 3: Equity Financing (04/17/12)
* sources: 1. Internal vs. 2. External
2. External Financing:
(1) self financing
(2) debt financing
(3) equity financing:
* stages of equity financing
Early stage seed/start-up capital informal risk-capital market
Expansion stage growth/expansion capital venture-capital market
Public offering stage operation capital public-equity market
Acquisition stage acquisition/LBO capital public-equity market
1) informal risk-capital market
- characters: + educated
2) venture-capital market
- types: + private
- statistics: + value
- deal: + needs
- venture-capitalist’s share
+ company’s value =
+ vc’s share =
(ownership given-up)
3) public equity market
- advantages:
disadvantages:
- procedures: + timing
+ underwriter
+ registration
+ quiet
+ qualified
+ reporting
Entrepren12-04-25-12.doc
ENTREPRENEURSHIP Dr. Soon Paik
Chapter 12 New Entry Strategies (04/26/2012)
* Entrepreneurial strategies: New Entry S. Chapter 12
Growth S. Chapter 13
Ending S. Chapter 14
1. New Entry Generation Strategies
(1) creating resource bundle: 1)
2)
3)
2) opening new entry opportunity: 1)
2)
3) making decision to enter: 1)
2)
2. New Entry Exploitation Strategies
(1) first movers’ strategies: first movers’ advantages
1)
2)
3)
4)
5)
(2) risk reduction strategies
Risks(Uncertainty) Risk Reduction Strategies
1) environmental u.
- demand u. a)
b)
- technological u. a)
b)
2) customers’ u. a)
b)
3) lead-time u. lead-time extension: a)
b)
c)
d)
(3) new organization strategies: 1)
2)
3)
