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

Mail

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)

LAB 3 Creating New Variables Name___Danyah Aldailami____

Objective:

The purpose of this lab is to explore different ways of creating or adding new variables to a dataset.

In this 6-week life-style changing program, many people experienced a change in body mass index (BMI). There are several statistics describing the change in BMI that would be interesting such as mean BMI change, maximum BMI gain, and maximum BMI loss. To investigate these statistics and several others you will need to first create this new variable.

1. Create a new variable called BMI at baseline (BMI1) and BMI after 6 weeks (BMI2) and then calculate the change in BMI (BMIchange). To do this, calculate BMI using the following information: Note: the following formula is for weight (lb), and height (in). If you use units of weight in kilograms and height in meters, the constant 703 will drop from it.

BMI1 = (weight at baseline x 703)/Height2

BMI2= (weight after 6weeks x 703)/Height2

BMI Change = BMI2 – BMI1

To compute new data values based on numeric transformations of existing variables:

· From the menu choose:

Transform

Compute variable

· Enter the name of the target variable BMI1

· Enter the numeric expression… (weight at baseline x 703)/Height2

· Click ok

After you have created BMI1, create BMI2 and change in BMI, create a frequency table for change in BMI. Use the frequency table to answer the following questions:

a) For change in BMI, find:

Mean (s.d.): __0.2969__ Minimum: __ -2.92___ Maximum: __2.15__

Extreme Outliers (if any): There are three outliers with one extreme outlier

b) What percent of the population reduced BMI:___ 94.8%___

c) What is the mean change in BMI for the females: ____ 3.3205____

2. A) Often it is useful to examine a variable such as baseline BMI (a quantitative variable) by recoding it into several meaningful categories (a qualitative variable).

To Recode the Values of a Variable into a New Variable

· From the menus choose:

·  Transform    Recode Into Different Variables...

· Select baseline BMI into the box as the “Input Variable”

· For the “Output Variable”, name it BaselineBMI_CAT and click “Change”.

· Next Click “Old and New Values”.

· In this new box, under Old Value, choose "Range Lowest through value" and put 20 in there, because you want all the values lowest through 20. Under New Value, put in a 1 for category 1, and click "Add."

· Next, under Old Value, choose "Range ____ through ____" and put 20.01 in the first box and 24 in the second, because you want a range between 20.01 and 24. Under New Value, put in a 2 for category 2, and click "Add."

· Next, under Old Value, choose "Range ____ through ____" and put 24.01 in the first box and 27 in the second, because you want a range between 24.01 and 27. Under New Value, put in a 3 for category 3, and click "Add."

· Lastly, under Old Value, choose "Range value through Highest" and put 27.01 in there, because you want all the values from 27.01 to the highest. Under New Value, put in a 4 for category 4, and click "Add."

· Click “continue” then “ok”.

B) Summarize the BMI categories variable

There 9(2.1%) people with BMI falling under this category of BMI less or equal to 20 of which 0(0%) and 9(3.5%)were females. Those with BMI of between 20.01-24 were 71 in number(16.7%),of these 24 (14.4%) were males while 47(18.1%) were females. The ones with the BMI of between 24.01-27 were 92 in number(21.6%) with 37(22.2%) being males and 55(21.2%) being females. Those with BMI of greater or equal to 27 were 254 in number with 106(63.5%)being males and 148(57.1% ) being females.

3. What percent of those who reduced their BMI are males? ____39.6%______

4. What percent of the males increased their BMI? ____5.79%_______

Please submit your responses to the above questions

LAB 3:

Creating New Variables

1

Types of original variables

Procedures

Type of new

variables

Creating New Variables

Transform

(Compute)

Quantitative Variable

Quantitative Variable

Transform

(Recode Into Different variables)

Qualitative Variable

Quantitative

Variable

Quantitative Variable

To recode the values of BMI change (Quantitative) into BMI change as qualitative variable

Now label each category

The row percentage (i.e., out of the 404 who reduced BMI, 160 are males, (160/404)*100=39.6%).

The column percentage (i.e., out of the 167 males, 5 increased their BMI, (5/167)*100=3.0%).

The overall column percentage (i.e., out of all 426 people, 404 reduced their BMI, (404/426)*100=94.8%).

The overall row percentage (i.e., out of all 426 people, 259 were females , (259/426)*100=60.8%).

BMI_change_CAT * GENDER
GENDER Total
MALE FEMALE
BMI_change_CAT Reduced Count 160 244 404
% within BMI_change_CAT 39.6% 60.4% 100.0%
% within GENDER 95.8% 94.2% 94.8%
No change Count 2 6 8
% within BMI_change_CAT 25.0% 75.0% 100.0%
% within GENDER 1.2% 2.3% 1.9%
Increased Count 5 9 14
% within BMI_change_CAT 35.7% 64.3% 100.0%
% within GENDER 3.0% 3.5% 3.3%
Total Count 167 259 426
% within BMI_change_CAT 39.2% 60.8% 100.0%
% within GENDER 100.0% 100.0% 100.0%

LAB 3:

Creating New Variables

1

The main purpose of this lab is to explore different ways to create new variables or to manipulate existing variables.

Transform Compute procedure in SPSS is used to create a quantitative variable from another quantitative variable(s)

Transform Recode into different variables procedure in SPSS is used to create a qualitative variable from another quantitative variable

Cumulative percentage is a way of describing frequency distributions. It is also used to identify the percent of people Under, At, or Above a certain cut-off point of a scale variable. For example, the percent of population who have weight less than 200 lbs.

Introduction

2

Types of original variables

Procedures

Type of new

variables

Creating New Variables

Transform

(Compute)

Quantitative Variable

Quantitative Variable

Transform

(Recode Into Different variables)

Qualitative Variable

Quantitative

Variable

Quantitative Variable

The row percentage (i.e., out of the 404 who reduced BMI, 160 are males, (160/404)*100=39.6%).

The column percentage (i.e., out of the 167 males, 5 increased their BMI, (5/167)*100=3.0%).

The overall column percentage (i.e., out of all 426 people, 404 reduced their BMI, (404/426)*100=94.8%).

The overall row percentage (i.e., out of all 426 people, 259 were females, (259/426)*100=60.8%).

BMI_change_CAT * GENDER
GENDER Total
MALE FEMALE
BMI_change_CAT Reduced Count 160 244 404
% within BMI_change_CAT 39.6% 60.4% 100.0%
% within GENDER 95.8% 94.2% 94.8%
No change Count 2 6 8
% within BMI_change_CAT 25.0% 75.0% 100.0%
% within GENDER 1.2% 2.3% 1.9%
Increased Count 5 9 14
% within BMI_change_CAT 35.7% 64.3% 100.0%
% within GENDER 3.0% 3.5% 3.3%
Total Count 167 259 426
% within BMI_change_CAT 39.2% 60.8% 100.0%
% within GENDER 100.0% 100.0% 100.0%

Example: Use the corn1 dataset (lab2) to answer the following questions:

What percent of the subjects have body mass index (BMI) of 20 or more at baseline?

Answer:

Step 1: Computing the BMI from two quantitative variables

From the menu choose:

Transform Compute Variable Enter the name of the target variable BMI_baseline

Enter the numeric expression… (weight at baseline x 703)/Height2 Click ok

Please note that no space is allowed for the new name

Please select each variable name from the variable list because it might be different from the variable label.

The BMI formula in SPSS should look like this (weight*703)/height**2

5

Step 1:

Enter the name of the new variable (with no space)

Step 2:

Select the original variables from the list

Use this pad exclusively to complete the formula

Step 2:

Obtain the cumulative frequencies for the BMI at baseline:

From the menus choose:

Analyze Descriptive Statistics Frequencies ...( make sure the frequency tables item is checked

Step 3: Interpret the cumulative percent

Total percent of population who had BMI less than 20

Total percent of population who had BMI 20 or more = 100- 2.1 = 97.9%

The percent of population who had BMI exactly 20.01

Classify the study subjects BMI at baseline into the categories indicated in Table 1.1

Answer:

Step 1: Use Transform Record procedure to create BMI groups at baseline (qualitative) from BMI at baseline (quantitative). Use “Recode into Different Variables” option in order to avoid overwriting the original variable. See the next slide.

Indicate the percent of the subjects with overweight __________21.6%___________

What percent of the female population have normal weight? _________18.1%__________

LAB 3 Creating New Variables Name_____________________

Objective:

The purpose of this lab is to explore different ways of creating or adding new variables to a dataset.

In this 6-week life-style changing program, many people experienced a change in body mass index (BMI). There are several statistics describing the change in BMI that would be interesting such as mean BMI change, maximum BMI gain, and maximum BMI loss. To investigate these statistics and several others you will need to first create this new variable.

1. Create a new variable called BMI at baseline (BMI1) and BMI after 6 weeks (BMI2) and then calculate the change in BMI (BMIchange). To do this, calculate BMI using the following information: Note: the following formula is for weight (lb), and height (in). If you use units of weight in kilograms and height in meters, the constant 703 will drop from it.

BMI1 = (weight at baseline x 703)/Height2

BMI2= (weight after 6weeks x 703)/Height2

BMI Change = BMI2 – BMI1

To compute new data values based on numeric transformations of existing variables:

· From the menu choose:

Transform

Compute variable

· Enter the name of the target variable BMI1

· Enter the numeric expression… (weight at baseline x 703)/Height2

· Click ok

After you have created BMI1, create BMI2 and change in BMI, create a frequency table for change in BMI. Use the frequency table to answer the following questions:

a) For change in BMI, find:

Mean (s.d.) _______ Minimum______ Maximum_______

Extreme Outliers (if any): __________

b) What percent of the population reduced BMI ___________________________________

c) What is the mean change in BMI for the females ________________________________

2. A) Often it is useful to examine a variable such as baseline BMI (a quantitative variable) by recoding it into several meaningful categories (a qualitative variable).

To Recode the Values of a Variable into a New Variable

· From the menus choose:

·  Transform    Recode Into Different Variables...

· Select baseline BMI into the box as the “Input Variable”

· For the “Output Variable”, name it BaselineBMI_CAT and click “Change”.

· Next Click “Old and New Values”.

· In this new box, under Old Value, choose "Range Lowest through value" and put 20 in there, because you want all the values lowest through 20. Under New Value, put in a 1 for category 1, and click "Add."

· Next, under Old Value, choose "Range ____ through ____" and put 20.01 in the first box and 24 in the second, because you want a range between 20.01 and 24. Under New Value, put in a 2 for category 2, and click "Add."

· Next, under Old Value, choose "Range ____ through ____" and put 24.01 in the first box and 27 in the second, because you want a range between 24.01 and 27. Under New Value, put in a 3 for category 3, and click "Add."

· Lastly, under Old Value, choose "Range value through Highest" and put 27.01 in there, because you want all the values from 27.01 to the highest. Under New Value, put in a 4 for category 4, and click "Add."

· Click “continue” then “ok”.

B) Summarize the BMI categories variable

3. What percent of those who reduced their BMI are males? _______________________

4. What percent of the males increased their BMI? _______________________________

Please submit your responses to the above questions

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