ENTREPRENEURSHIP - Entrepreneurship is a process of creating something different with

value, devoting time and effort, adopting financial, psychological, and social risks, and taking
the benefits in terms of money and personal satisfaction. Robert Hisrich (1985)
 Teaching ABOUT entrepreneurship - Innovation theories, funding models, etc.
 Teaching IN entrepreneurship - More promotion, goal setting, strategy, etc.
 Teaching FOR entrepreneurship - Idea screening tools, investment evaluation
methods, etc.
 Teaching THROUGH entrepreneurship - Develop skills, manage fears, etc.

LEVELS OF ENTREPRENEURSHIP
 Level 1 Entrepreneurship = business venture
 Level 2 Entrepreneurship = transforming any opportunity into capital
 Level 3 Entrepreneurship = innovation and social change

INVENTION (solves a scientific problem) - Creating something no one else has before

INNOVATION (solves a business problem) - Adapting something new from the inside or
outside environment (is considered new to the adopting organization)
 Theoretical conception (idea to satisfy customer needs/preferences)
 Technical invention (solves a scientific problem)
 Commercial utilization (attractive to the market for the users to adopt)

TYPES OF INNOVATION
 Product vs. process
 Technological vs. administrative
 Radical vs. incremental

INTELLECTUAL PROPERTY - The end results of intellectual efforts and research

 Patents (method, element, mechanism)
 Intellectual rights
 Formulas

BUSINESS MODEL - Shows how the new venture is using the resources to generate revenues
by providing superior value to the customers

BUILDING BLOCKS OF BUSINESS MODEL

 Which customers do you want? (B2B/B2C)
 What value proposition are you offering? (USP – unique selling proposition)
 Which channels are used to reach your customers? (from production to
consumption)
 What are the relationships you create? (long term or short term, personalized or
automated, for new customers or customer retention)
 What are the revenue streams you generate? (member fees, ads, subsidies,
donations, selling products, providing services)
 What are your key resources?
o Resources - what is available, ex. people, infrastructure, money technology,
know-how, raw materials
 o Key resources - competences, core capabilities (cannot be copied, transferred,
durable)
 What are the key activities you need to perform? (produce, sell, provide services)
 What are the key partners? (for performing better, cannot be customers)
 What are the most important costs inherent in your business model?

BUSINESS PLAN - Written document providing information about a new venture, describing
all relevant internal and external elements for starting a new venture, answering questions:
 Where are we now?
 Where do we want to go?
 How will we go there?
 For how long?
 In business planning, the environment is the one you choose based on the new
venture you create and its main activity

WHY YOU NEED BUSINESS PLAN:

 Ensure funding
 Make clear where the venture will go (direction)
 Motivate the management team to accomplish goals
 Help the owners understand their business
o Who are the customers?
o What products / services they offer?
o What about needs in terms of resources?
 From where will profits come?

STRATEGIC PLAN - We have an existing business, and we adjust what we want with what we
have. In strategic planning, the environment is given (macro and micro) for the existing
organization and you analyze it to:
 Identify threats / opportunities
 Handle threats and exploit opportunities
ENVIRONMENTAL ANALYSIS

1st Level: Macro-environmental analysis. Analysis of macro-factors (PEST) at the national

or/and international level
 To select factors with the most important impact on the venture
 To handle consequences in terms of Opportunities and Threats
 Not all factors are important (changes over time)
 Each factor can be both O and T: conclude
 O/T are not similar between players
 Macro-factors: Political-legal (P), Economic (E), Socio-cultural (S), Technological (T)

2nd Level: Micro-environmental analysis. Analysis of competitive forces at the industry/

sectoral level based on Porter’s model
 To identify and handle Opportunities and Threats
 For services suppliers are not included
 Each force suggests either T or O: conclude
o Separate your customers (B2B, B2C)
o Identify direct/indirect competitors
o Identify carefully substitutes

TO DESCRIBE A COMPANY
 Define the vision and mission
 Define the product portfolio (product/service offerings service)
 Define the required resources
 Define goals and strategies
 Conduct SWOT analysis

VISION OF A COMPANY - Gives an idea of how the firm will be in the future

MISSION OF A COMPANY - Defines the business (corporate identity) and the values

PHILOSOPHY OF A COMPANY - Incorporates general principles, defines the management

style and the relations with third parties

MAIN DECISIONS FOR THE NEW VENTURE

 Resources (key resources=core capabilities for competitive advantage)
o What do you need to have?
o Tangibles (physical, human, financial) and intangibles (employees relations,
know-how)
o Think in terms of core/unique capabilities (vs. threshold) durable, non-
transparent, non-transferable, non-duplicable
 Goals – specific, measurable, attainable, relevant, time-bound
o Acquire x% market share
o Acquire x € sales/revenues/turnover o acquire x € profits
o Acquire x customers
 Market share – based on assumptions from other countries, similar sectors
  Maximum capacity - how many customers, how many services do you provide daily,
how much you charge?
 Strategy - corporate level, business level, functional level

CORPORATE STRATEGIES

1st Level: Corporate

 Vertical Integration
o Backward: closer to raw materials
o Forward: closer to customers
 Horizontal Integration - control or acquire direct or indirect competitors
 Differentiation
o Related: develop new related products within the value system in which the
company operates. Control, reduce costs and risk, exploit resources, gain
market power
o Unrelated: develop new unrelated products, beyond the value system in
which the company operates. Slack resources, declining industry, monopoly
problems, exploit opportunity, synergies
 Market Penetration (same market, same products). Promising market, possibility for
economies of scale, inability to innovate in technology, barriers to entry.
o More usage
o Acquiring customers from competitors
o Gaining non-users
 Internationalization (expand beyond national borders)
o Global
o Multidomestic

2nd Level: Business

 Cost leadership (cons: Imitation, lower costs, quality, technology)
 Differentiation (cons: High costs, price sensitivity, intensive competition)
 Focus cost leadership (cons: imitation, viability)
 Focus differentiation
 Hybrid

3rd Level: Functional

 Every business function tries to add value in terms of products/ services
 Strategies at the functional level (business functions), such as production, marketing,
etc. ) are:
o Strategy of reducing running costs
o Strategy of differentiation
o Combination strategy
 Functional strategies should be in line with BU strategies

PRODUCTIONS PLAN
 Details how products will be manufactured
 Describes the complete manufacturing proces
  If some or all of the manufacturing process is to be subcontracted, the plan should
describe: subcontractors, location, reasons for selection, costs and contracts

OPERATIONS PLAN
 Details how products/services are provided
 If the venture is not manufacturing operation but a retail store or service, the section
will be titled operations plan. In this plan the chronological steps in completing the
business transaction are described.

MARKETING MIX
 Product - Involves managing the product that the customer will buy, from tangible to
intangible aspects. Main decisions refer to the design, branding, positioning,
customer service, packaging – which influence the other marketing mix elements
 Price - Involves the cost of the products, cash flows, the image for the customer, the
distribution channels’ payment, discounts, terms of payment and credit policy.
 Place - Involves the way the product will be delivered to the customer. Main
decisions refer to the physical distribution, the management of intermediaries
(retailers, wholesalers) and the geographical coverage
 Promotion - The most visible marketing mix element to create product awareness
and facilitate adoption. Main decisions refer to the promotion mix

ASSUMPTION OF A PRODUCT LIFE CYCLE

 Product have a limit life
 Product sales pass through different stages
 Marketing strategies should differ in each stages

ORGANIZATIONAL PLAN – how to manage the new venture throughout the specified time
period
 New venture size
 Organizational structure
 Business functions
o In-house vs. outsourcing
o Management Hierarchy
 Basic characteristics
 Legal form
 Shareholders/Owners
 Managers; ideally shareholders=managers (running the venture)
 Board of Directors (not in the hierarchy)
 Partnerships (outsourcing activities)

FINANCIAL PLAN
 Income statements
 Balance sheets
 Ratios
 Break Even point
 Net Present Value (NPV). NPV outcomes:
 o NPV=0 / PV=INVESTMENT indifferent result (neither gains nor loses)
o NPV<0 / PV < INVESTEMENT loss (NO avoid)
o NPV>0 / PV > INVESTMENT profit (YES go ahead)
 Sensitivity analysis (risk assessment)

PITCHING - concise practiced overview of your idea. Should be simple, easy to understand,
memorable and convincing. Should include:
 Why? What is the opportunity you exploit or the problem you solve?
 What is the unique value proposition?
 Tips: less is more, avoid jargon, balance humility with hype, be succinct

SOCIAL ENTREPRISES
 Mission motive
 Stakeholder accountability
 Income reinvested in social programs or operational costs
 Alternative way of doing business
 Based on the Social Economy/third sector (governments are weak, businesses do not
invest)
 Customers - pay instead of beneficiaries; don’t pay: beneficiaries
 Revenues from products/services; without revenues (funding to cover expenses)
 Impact = Social impact (benefits for society) + Environmental impact (reduction of
ecological footprint) + Economic impact (financial sustainability)
 Legislation - Tailor-made legal forms:
o Association and institutions with income-generating activities
o Cooperatives
o Enterprises with social objectives
 Constraints
o Definition
o Specialized services for scaling up o Infrastructure and legal context
o Access to markets
o Access to funding
o Impact measurement

COMMERCIAL ENTREPRISES
 Profit making motive
 Shareholder accountability
 Profit redistributed to shareholders
 Revenues from products/services