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strange familiar and the familiar strange Fundamental Design Method: alter habitual ways of viewing problems Hypothetical Situations: design for hypothetical situations-translate for today Forced Relationships: contact between different elements not related earlier Attribute Listing: look at each aspect and find ways to improve it
Innovation What is Innovation? Specific Instrument of Entrepreneurship Purposeful & Organized Search for Change Analysis of Opportunities such Change might offer New ways of delivering value to the customer. Purpose of Innovation Response to increased competitive Discontinuity Profitability Market Leadership Principles of Innovation Innovation must be approached as a discipline Innovation must be approached comprehensively Innovation must include an organized, systematic and continual search for new opportunities Innovation must involve everyone in the organization pressure
Individual drives innovation 2. Innovation requires creative people 4.centered Types of Innovation Efficiency Innovation: Internally focused Evolutionary Innovation: Incremental Achievements Revolutionary Innovation: Externally focused Process of Innovation Selecting Innovation Goals Gathering Information Clarifying the Problem Seeking Ideas and Stimuli from around the Organization Selecting Ideas Worth Exploring Developing an Innovation Road map Outlining the possible Plan Gaining Commitment Implementing the final Plan Innovation – Myths and Reality Myths 1. An innovation process will give the results you need Reality . Innovation must be customer. Innovation begins with brainstorming 3.
self confident. Innovation begins with understanding the customer 3. New York 1950’ climbing Appliances Sales / Bloomingdale’s responded IBM – Modern Accounting Machine 1930’ for Banks. Innovation is a team sport 2. They account for60% of the workforce. Own less than 1% of the real estate We found that women were equally achievement oriented.H. –Library Computers – Advanced Scientific Work . risk takers. independent.exploited (Pay roll) The Unexpected Failure • • • Ford Motor Co. Innovation requires effective problem solvers rather than creative people 4. hard working etc as their male counterparts. aggressive. IBM. – Edsel 1957 / Thunderbird British Exports of Padlocks to India – 1920’ Novocaine – 1905 – Major Surgery / Dentists Woman Entrepreneurship • • • • • • • Women constitute not only half of the World’s population but also sway the growth of the remaining half. Thomas Watson Sr. benevolent. Comprise only 10% of the world economy.1. The innovation process is only one tool for successful innovation Sources of Innovation The Unexpected Success • • • R.1945 Univac spurned. They produce half of the world’s food supply. . Store. Macy – Deptl.
” However. It is a known fact that personal characteristics as well as social aspects clearly play some role in developing entrepreneurship but Entrepreneurs can also be developed through conscious action Professional Women: Problems & Perceptions When one tries to explore the root cause of the underachievement of women as professionals.Male VS Female Entrepreneurs – A Comparison Women Entrepreneurs as research demonstrates may do things differently. are less self-centered & personal ego to them is less important than success of the organization or business idea they are pursuing. The underlying reasons are more related to The social reality of Indian women which imposes certain socio-cultural role-models & stereotypes leading to a conditioning of people’s psyche. autonomy. there is no difference in characteristics such as achievements. As compared to male entrepreneurs. aggression. one finds that reasons are actually different from the commonly attributed “lack of commitment and competence” on part of women professionals. less property – no security – no loan Business Community/ Government Some countries. • • • women tend to work more in teams. Major Barriers for Women Entrepreneurs from different cultures Level Barriers Financial Women look for security Individual Household/ Family Men decide about expenses Less income. signature of husband required for loan . independence & benevolence between female & male entrepreneurs.
. there are very few problems from the men. When women get organized and raise their consciousness about their disempowerment and use their critical understanding to organize themselves and struggle for greater access to resources. Less means to exert power/less protection by the state for women Entrepreneur s In male dominated industries. not politically Limited mobility – problems with the marketing.Economical Women get less education Women lack support for household work Violence against women Husband must not be neglecte Women have got less influence and negotiation power in the family Lack of management know-how Women discriminated in terms of access to economic resources SocioCultural Independent Thinking is not allowed to women Women act privately. women entrepreneurs are not accepted Political legal Lack of knowledge about women Entrepreneurs. in order to be able to develop appropriate policies Psychological Philosophical Low selfesteem. but a process that has to bring about these intrinsic changes in women but in men also. does not dare to demand rights Women are divided Women are afraid to be more successful than men/husbands State views men as the ones who publicly represent the family Conclusion • • Empowerment is not only an external process.
Revenue generation through Innovation Reflection [motivation] for other Employees. more freedom.. They lose talented people. since she is considered a financial & social burden Therefore. . on one’s own terms. there is nothing more to say than. want responsibility. desire to create. • Security More potential resources Advantages For Company • • • Retention of knowledge – worker. Why people stay as Intrapreneur [and not Entrepreneur]. For Employee • • • Business Plan Development Incubation Service Mentorship.• There is a need of consciousness raising both in men & women and the discrimination bias can be shattered only if we bring a change in our social customs which make the birth of a female child unwelcome. Strong belief in own talents. strong desire for selfexpression. Why do companies encourage Intrapreneurship? • • Else they become obsolete [non-innovative]. “ Let us all continue to give a new shape to the society and build a better tomorrow” • • Intrapreneurship • • Doing your own things.
New ideas encouraged.structure. Formal team phase.• • • Infra. Failures allowed. Multidiscipline teamwork approach. Trial and error encouraged. No opportunity parameters. Stages in Intrapreneurial Team Development • • • • Solo phase. Sponsors and champions available. Bootleg phase. Resources available and accessible. Support of top management. Volunteer programme. Network phase. . Appropriate reward system. Reduced Risk Fulfillment of Self-actualization needs Intrapreneurial Environment • • • • • • • • • • • • Organization operates on frontier of technology. Long-term horizon.
early publicity triggers the corporate immune system. but realistic about ways to achieve them. Comparison of Entrepreneurs. – Honour your sponsors.Problem of Intrapreneurship • • • • Performance. – Be true to your goals. Longterm – growth of business Direct involvement Activity Direct involvement . quarterly and the annual planning horizon Delegates and supervises Short-term –business establishment. – Never bet on a race unless you are running in it. build a team of the best. weekly. satisfaction and money Creative freedom and recognition Tend to follow the middle path Time Orientation Short-term – meeting quotas and budgets. Long-term commitment. not merely delegation . Ten Commandments of Intrapreneurship – Follow your intuition about people. Constrained environment. – Build a quiet coalition for your idea. monthly. Lack of freedom in decision-making. Intrapreneurs and Traditional Managers Traditional Managers Entrepreneurs Intrapreneurs Primary motives Perks and promotion Self-employment.
customers.Risk Careful Moderate risk taker Moderate risk taker Monetary Risk Nil High Nil Status Concerned about status unconcern about status unconcerned about traditional status Failure and mistakes Tries to avoid mistakes and surprises Deals with mistakes and failures Attempts to hide risky projects from view until ready Decisions Like to take their own but unable to disagree with top Follows dream with decisions Able to get others to agree to help achieve their dreams Who serves Others Self and customers Self. professional Entrepreneurial small-business. and sponsors Family history Family members worked for large organizations Entrepreneurial smallbusiness. professional Relationship with others Hierarchy as basic relationship Transactions and dealmaking as basic relationship Transactions within hierarchy .
DISADVANTAGES OF AN ACQUISTION The existing business may have marginal success record or even failure The business is acquired at an inflated purchase price reflecting unwarranted goodwill or a faulty business model One may end up inheriting some one else’ problem. The existing products are in the decline phase of the life cycle. Employees of the existing business can be an important asset. is known. Fixed assets can be purchased for less in a buyout.ACQUISITIONING MEANING An acquisition is the purchase of a business or a part of it so that the acquired business is completely absorbed and no longer exists as a business entity. retailers etc. if any. The previous owner brings valuable experience to the enterprise. The entrepreneur can spent more time in assessing new opportunities to expand or strengthen the business. wholesalers. . Condition of the plant and equipment (assets).” ADVANTAGES OF AN ACQUISITION An existing business will have an operation in place and thus can avoid some of a new venture’s risks and challenges An entrepreneur typically starts with some profits and positive cash flow Market speculation and uncertainity in sales projections are reduced because the business already has a track record. Existing business may have a developed market structure of suppliers. Bankers and lenders and new outside investors feel more comfortable while lending or investing in an established business.
WHERE TO LOOK FOR A BUSINESS TO BUY Financial institutions Professionals like accountants.FOUR STEPS OF ACQUISITIONING Planning your approach and targeting the type of business you wish to acquire Finding available business to purchase Using an appropriate methodology to evaluate the deal Negotiating the terms and purchase price for the business. lawyers and consultants Venture capitalists Investment bankers Brokerage houses Advertisements Networking with business associates and contacts World wide web Product Evaluation Techniques Stability Factors Performance of market Breadth of market Possibility of captive market Difficult of copying Stability in recession Growth Factors Uniqueness of product .
Demand-Supply relationship Rate of technological change Export Possibilities Marketability Factors Ease of distribution After sales service Average order size/per customer Freedom from numerous variations Freedom from seasonal fluctuations Company Position Factors Time required to get established Degree of Value Addition Availability of Raw Material General Labour Atmosphere Production Factors Procurement of equipment Utilities/ facilities required Training of Personnel Freedom from difficult maintenance problems Freedom from costly waste-disposal problem .
Shifts in the Franchise Industry in USA • Fast Food is one of the oldest categories in franchising There were 19 hamburger entries in 1988 but only 13 in 1980.” At least two levels of people are involved in the franchise system: 1. which facilitates easy accessibility of the product to the customer and the actual sales transaction. Process Franchising Outlets are granted to use the brand name and process of the franchiser. The process and recipe are generally patented by the parent company. The Franchiser. Mc Donald’s growth is due to franchising The 80’s brought a variety of new industries: Photo finishing Video cassette and VCR rentals Instant printings. The recipe must be the same. Pizza grew from 26 to 35 Domino’s grew from 90 franchise and 69 company owned stores to 3065 and 1531 respectively. Franchisee.desktop publishing .Franchising What is franchising? “A management whereby the manufacturer or sole distributor of trademarked product or services gives the exclusive rights of local distribution to independent retailers for their payment and conformance to standardized operating procedures. who pays a royalty and often an initial fee for the right to do the business under the franchiser’s name and system Franchise Types Product Franchising Selling of the finished goods with just mere display of the goods. who lends his trademark / trade name and a business system 2. without any value addition.
Franchiser available for assistance and guidance Cost savings when purchasing supplies through the franchiser Access to R& D & product development. Advantages to the Franchiser • • • • • • • • • • • Quick expansion. Benefit and use of the business experience of others. with less Capital Investment Less Number of Employees Fast and well controlled distribution of its products Product and quality standards as per his specifications Limited Risk Factor Risk is spread Larger Market share in a short time Lean Organization Structure Ongoing Revenue from Royalties and Franchise Fee Integrated Public Image Growth . Reduced expenditure on Advertising & promotion at a per unit level. Computer retailing Automobile retailing Advantages to the Franchisee • • • • • • • Under franchising there are little chances of failure as compared to risk normally associated with start up business. efforts that the franchiser had invested in. FAX etc. Opportunity to start a proven business with limited capital. Business services – instant office.
Disadvantages Franchiser • • • • • Failure of the franchisee to operate franchise properly. 100 lakhs and engaged in : Manufacturing of parts. components. sub assemblies. . High Training efforts Difficult to maintain Quality Risk to reputation Loss of Business secrecy Franchisee • • • • • Revenue outflow Limited freedom Operating restrictions Inability of the franchiser to provide promised services Detailed and open financial records Ancillarisation Meaning of an Ancillary Unit Industrial undertaking having investment in fixed assets in plant & machinery not exceeding Rs. tooling or intermediates Rendering services and supplying not less than 50% of its production to one or more other industrial undertakings for production of further articles.
Areas of Ancillarization Industry Ancillaization Range % Transportation 50 to 90 Prime mover and Power base 30 to 50 Industrial machinery and Machine tools 20 to 40 Chemicals and Pharmaceuticals 15 to 30 Consumable durable goods 10 to 30 Metal. ceramic. mineral and petroleum industry 5 to 10 All other industries (wood. leather. paper.) 2 to 10 Advantages Minimizes set up cost Low level of Inventory Economical Sourcing Better Quality Standards Complementary Role Development of Entrepreneurial Skills . rubber etc.
It requires knowledge and ingenuity. To succeed. It makes great demands on diligence. 3. The unexpected= unexpected success failure event. Innovation at work. Three conditions have to be fulfilled to be an entrepreneur. 2. innovation must build on the strength.. persistence and commitment.event). Issac Newton. namely: 1. . indeed marketdriven.( Eg. Innovation always has to be close to the market focused on the market. Accordingly the four source areas where efforts made:1.Disadvantages Dependence on parent company Obsolescence Multiplicity of suppliers by parent company Securities like earnest money deposit Delay in receiving payments Government Initiatives to promote Ancillarization Sharing successful company experiences Training on ISO / QS 9000 Collaboration on Benchmarking Services Joint Projects for Productivity Improvements Technology Development Projects Trade Delegations Worldwide Trade Fairs / Exhibitions Global Dissemination of Information Entrepreneurship Management Entrepreneurship Theories According to Peter Drucker….
namely: Demographics Changes in perception New knowledge.Innovation and creativity Unlimited income / higher retained income Independence Satisfaction 2.2.science.e difference between reality and reality as it is assumed to be. skills and savings Accelerates the pace of economic development Stimulates innovation & efficiency Factors favouring Entrepreneurship Growth of education. social risks and receiving the resulting rewards of monetary and personal satisfaction and independence” Advantages of entrepreneurship 1. assuming the accompanying financial.Innovation opportunities in three enterprises. To an Individual Self Employment Employment for near & dear Prolonged career for next generations Freedom to use own ideas . technology & management Developed infrastructure facilities Financial assistance Training facilities Protective and promotional policies Globalization . To the Nation Provides larger employment Results in wider distribution of wealth Mobilizes local resources. 3.The incongruity: i. both scientific & non-scientific Entrepreneurship “Is the process of creating something different with value by devoting the necessary time and effort. psychic.
5. Economic. 5. Technological and Socio-demographical SLEPT – Social. Aesthetic. ability Communication ability Technical knowledge Achievement-oriented Perseverance Ethical 1. 6. Cultural. 2. Environmental and Sectoral PEETS – Political. 7. 9. 6.What makes a Successful Entrepreneur? The urge for achievement Determination to win Win-Win Personality Willingness to take moderate risks Ability to identify & explore opportunities Analytical ability to take strategic decisions Perseverance Flexibility Capacity to plan and organize Preparedness to undergo physical and emotional stress Positive self concept Future orientation: Vision Ethics and Values :Mission Characteristics of an Entrepreneur 1. 4. Political and Technological . Legal. Legal. Customer. Economical. 7. 4. Technological. 8. 3. Economic. 2. 3. Motivator Self-confident Long term involvement High energy level Problem solver Initiator Risk taker Dimensions of Environment SPECTACLES – Social. Political. Mental ability Clear objectives Business secrecy H. Ecological.R.