Various Business Models Explained 1674415130

Business Models
‫نماذج األعمال‬
Data Collected By: Hamed Ali Mohamed
Part One
Managers and Managing
1/18/2023 Hamed Ali

@Hamed.ali.Mohamed2@gmail.com 1-3
Learning Objectives
1. Describe what management is, why management is

important, what managers do, and how managers
utilize organizational resources efficiently and
effectively to achieve organizational goals
2. Distinguish among planning, organizing, leading,

and controlling (the four principal managerial tasks),
and explain how managers’ ability to handle each
one affects organizational performance
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Learning Objectives
3. Differentiate among three levels of management, and

understand the tasks and responsibilities of managers
at different levels in the organizational hierarchy
4. Distinguish between three kinds of managerial skill,

and explain why managers are divided into different
departments to perform their tasks more efficiently and
effectively.
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Learning Objectives
5. Discuss some major changes in management

practices today that have occurred as a result of
globalization and the use of advanced information
technology (IT).
6. Discuss the principal challenges managers face in
today’s increasingly competitive global environment
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What is Management?
• All managers work in organizations

• Organizations – collections of people
who work together and coordinate their
actions to achieve a wide variety of goals
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Managers
Managers –
– The people responsible for supervising the
use of an organization’s resources to meet
its goals
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What is Management?
The planning, organizing, leading, and

controlling of human and other resources
to achieve organizational goals effectively
and efficiently
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What is Management?
– Resources include people, skills, know-how

and experience, machinery, raw materials,
computers and IT, patents, financial capital,
and loyal customers and employees
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Organizational Performance
A measure of how efficiently and effectively

managers use available resources to
satisfy customers and achieve
organizational goals
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Importance of Management
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The Importance of Management
Management –
planning, organizing, staffing, directing, & controlling
Achieving objectives requires skilled

management team.
1/18/2023 Hamed Ali

@Hamed.ali.Mohamed2@gmail.com
Management Definition
Process designed to achieve an organization’s

objectives by using its resources effectively &
efficiently in a changing environment.
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What Managers Do
Make decisions – utilization of resources – achieve

organization’s objectives though implementation of proper:-
•Planning
•Organizing
•Staffing
•Directing
•Controlling
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Resource acquisition & coordination
Resources
•People
•Raw materials
•Equipment
•Money
•Information
1/18/2023 Hamed Ali

@Hamed.ali.Mohamed2@gmail.c
Management Functions
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Planning –
Process of determining the organization’s
objectives and deciding how to accomplish
them.
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Planning
Objectives – results desired by organization
Mission – organization’s purpose and

philosophy
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Objectives
Common & Elaborate Organizational

Objectives --
•Profit, competitive advantage, efficiency, growth
•Service, ethics, community responsibility
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Plans
Strategic Plans
Tactical Plans
Operational
Plans
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Strategic Plans
Executive level managers

•Establish the long-range objectives & overall strategy to fulfill
firm’s mission
•2-10 years forward-looking
•Sustainability
•diversification, divestiture , mergers &
acquisitions,
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Tactical Plans
Short-range – strategy implementation
•1 year or less
•Environmental change
•Periodically reviewed & updated
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Operational Plans
Very short-term – actionable, specific
•Individuals, work groups, departments
•1 month, 1 week, 1 day
•Achieve tactical plans
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Crisis Management
Contingency Planning
Focus on potential disasters

•Product tampering
•Oil spills
•Fire, earthquake, terrorist attack
•Unethical/illegal employee activity
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Organizing –
Structuring of resources & activities to
accomplish objectives efficiently & effectively.
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Organizing
Importance –
– Creates synergy
– Establishes lines of authority
– Improves communication
– Improves competitiveness
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Staffing –
Hiring people to carry out the work of the
organization.
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Staffing
Importance –
– Recruiting
– Determine skills
– Motivate & train
– Compensation levels
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Downsizing –
Elimination of significant numbers of employees
(rightsizing, trimming the fat)
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Directing –
Motivating and leading employees to achieve
organizational objectives.
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Management Functions -- Directing
Motivation
•Incentives (raise, promotion)
•Employee involvement (cost reduction, customer service, new
products)
•Recognition and appreciation
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Controlling –
Process of evaluating and correcting activities to
keep organization on course.
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Controlling
Five Activities –
– Measuring performance
– Comparing performance against standards
– Identifying deviations from standards
– Investigating causes of deviations
– Taking corrective action
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Types of Management
Levels of Management –
• Top management
• Middle management
• First-line/supervisory management
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Types of Management
Top Management
•President
•Chief Executive Officer (CEO)
•Chief financial officer (CFO)
•Chief operations officer (COO)
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Levels of Management
Rank CEO Company Total

Compensation ($
millions)
1. Lawrence J. Ellison Oracle $192.92
2. Frederic M. Poses Trane $127.10
3. Aubrey K. McClendon Chesapeake Energy $116.89
4. Angelo R. Mozilo Countrywide Financial $102.84
5. Howard D. Schultz Starbucks $98.60
The 5 Highest Paid CEO’s in 2007
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Types of Management
Middle Management
•Responsible for tactical planning

•Implement general guidelines established
by top management
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Types of Management
First-Line Management
•Supervise workers
•Oversee daily operations
•Directing and controlling primary
functions
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Areas of Management
• Finance
• Production
• Operations
• Human Resources
• Marketing
• Administration
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Areas of Management
Financial Management –
Focus on obtaining money necessary for the
successful operations and using funds to
further organizational goals.
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Areas of Management
Production & Operations Management–

Develop & administer activities to transform
resources into goods, services, and ideas for
the marketplace.
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Areas of Management
Human Resources Management –

Handle staffing function and deal with
employees in a formalized manner
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Areas of Management
Marketing Management –
Responsible for planning, pricing, and promoting
products and making them available to
customers
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Areas of Management
Information Technology (IT) Management –

Responsible for implementing, maintaining, and
controlling technology applications in business
(computer networks)
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Areas of Management
Administrative Managers –
Manage an entire business or major segment of
the business. Coordinate activities of
specialized managers.
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Skills Needed by Managers
•Leadership
•Technical expertise
•Conceptual skills
•Analytical skills
•Human relations skills
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Managerial Skills
Leadership –
Ability to influence employees to work toward
organizational goals.
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Managerial Skills
Seven Tips for Successful Leadership
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Skills Needed by Managers
•Autocratic Leaders
•Decision makers, “tell” employees
•Democratic Leaders
•Involve employees in decisions
•Free-rein leaders
•Employees work without interference
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Most Admired Companies & CEO’s
Company Chief Executive Officer

Apple Steve Jobs
Berkshire Hathaway Warren Buffett
General Electric Jeffrey Immelt
Google Eric Schmidt
Toyota Motor Katsuaki Watanabe
America’s Most Admired Companies, 2020
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Decision Making
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The Realities of Management
According to management functions boil down to:
1.Figuring out what to do despite uncertainty,

diversity, and a great deal of potentially relevant
information.
2.Getting things done through a large and diverse

set of people despite having little direct control
over them.
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1/18/2023 Hamed Ali Figure 1.1
Organizational Performance
Efficiency
– A measure of how well or how productively
resources are used to achieve a goal
Effectiveness
– A measure of the appropriateness of the goals
an organization is pursuing and the degree to
which they are achieved.
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Why study management?
1. The more efficient and effective use of

scarce resources that organizations
make of those resources, the greater the
relative well-being and prosperity of
people in that society
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Why study management?
2. Helps people to deal with their bosses

and coworkers.
3. Opens a path to a well-paying job and a
satisfying career
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Managerial Tasks
• Managers at all levels in all organizations

perform each of the four essential
managerial tasks of planning, organizing,
leading, and controlling.
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Four Functions of Management
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@Hamed.ali.Mohamed2@gmail.com Figure 1.2 1-59
Planning
Process of identifying and selecting

appropriate organizational goals and courses
of action
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Steps in the Planning Process
• Deciding which goals the organization

will pursue
• Deciding what courses of action to
adopt to attain those goals
• Deciding how to allocate organizational
resources
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Planning
• Complex, difficult activity

• Strategy to adopt is not always
immediately clear
• Done under uncertainty
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Organizing
Task managers perform to create a

structure of working relationships that
allow organizational members to interact
and cooperate to achieve organizational
goals
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Organizing
• Involves grouping people into departments

according to the kinds of job-specific tasks
they perform
• Managers lay out lines of authority and
responsibility
• Decide how to coordinate organizational
resources
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Organizational Structure
A formal system of task and reporting

relationships that coordinates and motivates
members so that they work together to
achieve organizational goals
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Leading
Articulating a clear organizational vision for

its members to accomplish, and energize
and enable employees so that everyone
understands the part they play in achieving
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Leading
• Leadership involves using power,

personality, and influence, persuasion, and
communication skills
• Outcome of leadership is highly motivated

and committed workforce.
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Controlling
• Task of managers is to evaluate how well

an organization has achieved its goals and
to take any corrective actions needed to
maintain or improve performance
– The outcome of the control process is the ability to
measure performance accurately and regulate
organizational efficiency and effectiveness
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Part Two
Managers Roles
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Decisional Roles
Roles associated with methods managers use in planning

strategy and utilizing resources.
– Entrepreneur—deciding which new projects or programs to
initiate and to invest resources in.
– Disturbance handler—managing an unexpected event or
crisis.
– Resource allocator—assigning resources between
functions and divisions, setting the budgets of lower
managers.
– Negotiator—reaching agreements between other managers,
unions, customers, or shareholders.
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Interpersonal Roles
Roles that managers assume to provide direction and

supervision to both employees and the organization as a
whole.
– Figurehead—symbolizing the organization’s mission and
what it is seeking to achieve.
– Leader—training, counseling, and mentoring high
employee performance.
– Liaison—linking and coordinating the activities of people
and groups both inside and outside the organization.
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Informational Roles
Roles associated with the tasks needed to obtain and

transmit information in the process of managing the
organization.
– Monitor—analyzing information from both the internal and
external environment.
– Disseminator—transmitting information to influence the
attitudes and behavior of employees.
– Spokesperson—using information to positively influence
the way people in and out of the organization respond to it.
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Figure 1.3
Areas of Managers
Department
– A group of managers and employees who
work together and possess similar skills
or use the same knowledge, tools,
or techniques
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• First line managers - Responsible for daily

supervision of the non-managerial employees who
perform many of the specific activities necessary to
produce goods and services.
• Middle managers - Supervise first-line managers.

Responsible for finding the best way to organize
human and other resources to achieve
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• Top managers –
• Responsible for the performance of all departments
and have cross-departmental responsibility.
• Establish organizational goals and monitor middle
managers
• Decide how different departments should interact
• Ultimately responsible for the success or failure of an
organization
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• Chief executive officer (CEO) is

company’s most senior and important
manager
• Central concern is creation of a smoothly
functioning top-management team
– CEO, COO, Department heads
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Relative Amount of Time That Managers Spend on
the Four Managerial Functions
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@Hamed.ali.Mohamed2@gmail.com Figure 1.4 1-78
Managerial Skills
• Conceptual skills
– The ability to analyze and diagnose a situation and
distinguish between cause and effect.
• Human skills
– The ability to understand, alter, lead, and control the
behavior of other individuals and groups.
• Technical skills
– Job-specific skills required to perform a particular type
of work or occupation at a high level.
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Skill Types Needed
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Figure 1.5 1-80
Core Competency
Specific set of departmental skills, abilities,

knowledge and experience that allows one
organization to outperform its competitors
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Restructuring
• Involves simplifying, shrinking, or

downsizing an organization’s operations to
lower operating costs.
– Can reduce the morale of remaining

employees
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Outsourcing
• Contracting with another company, usually in a

low cost country abroad, to perform a work
activity that the company previously performed
itself.
• Increases efficiency by lowering operating costs,
freeing up money and resources that can now
be used in more effective ways
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Empowerment
Involves giving employees more authority and

responsibility over the way they perform their
work activities.
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Self-managed teams
Groups of employees who assume collective

responsibility for organizing, controlling,
and supervising their own work activities
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Challenges for Management in
a Global Environment
• Rise of Global Organizations.

• Building a Competitive Advantage
• Maintaining Ethical Standards
• Managing a Diverse Workforce
• Utilizing Information Technology and Technologies
• Global Crisis Management
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Building Competitive Advantage
• Competitive Advantage – ability of one

organization to outperform other
organizations because it produces desired
goods or services more efficiently and
effectively than its competitors.
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Building Blocks of Competitive Advantage
1/18/2023 Hamed Ali Figure 1.6

• Increasing efficiency
– Reduce the quantity of resources used to
produce goods or services
• Increasing Quality
– Improve the skills and abilities of the workforce
– Introduce total quality management
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• Increasing speed, flexibility, and innovation

– How fast a firm can bring new products to
market
– How easily a firm can change or alter the way
they perform their activities
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• Innovation
– Process of creating new or improved goods
and services that customers want.
– Developing better ways to produce or provide
goods and services.
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Turnaround Management
• Difficult and complex management tasks

• Done under conditions of great uncertainty
• Risk of failure is greater for a troubled
company
• More radical restructuring necessary
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Maintaining Ethical and Socially
Responsible Standards
• Managers are under considerable pressure

to make the best use of resources
• Too much pressure may induce managers
to behave unethically, and even illegally
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Managing a Diverse Workforce
• To create a highly trained and motivated

workforce managers must establish HRM
procedures that are legal, fair and do not
discriminate against organizational
members
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Part Three
Managers &
Management
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Who Are Managers?
Where Do They Work?
• Organization
– A deliberate arrangement of people brought together
to accomplish some specific purpose. Such as,a
football teams.
• Common Characteristics of Organizations
– Distinct purpose expressed in a goal or a set of goals
– People working together to achieve the orgs goal
through a set of decisions and work activities.
– A deliberate systematic structure that define and limits
the behavior of its members
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Hamed
How Are Managers Different from
Nonmanagerial Employees?
• Nonmanagerial Employees
– People who work directly on a job or task and
have no responsibility for overseeing the work
of others.
– Examples, associates, team members
• Managers
– Individuals in organizations who direct and
oversee the activities of others.
– Managers do work directly on tasks such as
servicing some costumers.
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Hamed
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Hamed
What Titles Do Managers Have?
• Top Managers
– Responsible for making decisions about the direction of the
organization and establishing policies and philosophies that effect
all organizational members .
– Examples; President, Chief Executive Officer, Vice-President
• Middle Managers ( btw the lowest and top levels)
– Manage the activities of other managers and non managerial
employees and translating the goals set by top managers to
specific details that lower managers can understand.
– Examples; District Manager, Division Manager
• First-line Managers
– Responsible for directing the day to day activities of non-
managerial employees
– Examples; Supervisor, Team Leader
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Hamed
What Is Management?
• Management
– The process of getting things done effectively
and efficiently, with and through people
– A process refers to a set of ongoing and
interrelated activities.
• Efficiency
– “Doing things right”, and getting the most
output from the least amount of input
(minimizing the cost).
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Hamed
What Is Management?
• Effectiveness
• doing those work tasks that help the org to reach
its goals.
• Doing the right things.
• Efficiency is concerned with the means of getting
things done while effectiveness is concerned
with the ends.
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Hamed
What Do Managers Do?
Management researchers have developed

three approaches to describe what
managers do: functions , roles and skills.
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Four Management Functions
• Planning
– Defining the organizational purpose and ways to
achieve it ex, defining goals, developing plans and
sup plans to coordinate the activities, and
establishing the strategy.
• Organizing
– Arranging and structuring work to accomplish
organizational goals ex who reports to whom and
dividing work on employees.
• Leading
– Directing the work activities of others ex resolving
conflicts, motivating employees, chosen the most
effective channel to communicate
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Hamed
Four Management Functions
• Controlling
– Monitoring, comparing, and correcting work
performance ex evaluation
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Hamed
What Roles Do Managers Play?
A manager’s job can be described by ten roles

performed by managers in three general
categories:
• Interpersonal Roles(ones that involve
subordinates and persons outside the org) and
other duties that are ceremonial & symbolic in
nature)
– Figurehead, Leader, and Liaison
• Informational Roles (collecting , receiving
and analyzing info)
– Monitor, Disseminator and Spokesperson
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Hamed
What Roles Do Managers Play?
• Decisional roles ( making decision and look

into choices )
– Entrepreneur, Disturbance Handler, Resource
Allocator and Negotiator
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Hamed
What Skills Do Managers Need?
four critical skills in managing

• Conceptual Skills
– Used to analyze and diagnose complex situations, help managers
see how things fit together and facilitate making good decision.
• Interpersonal Skills
– working well with other people both individually and groups , so
managers must have good skills to communicate, motivate,
mentor and delegate.
• Technical Skills
– Based on specialized knowledge required for work (lower and
middle managers knowing of the job they are performing, top
managers knowing of the industry and a general understanding of
the org’s process and products.
• Political Skills
– Used to build a power base and establish connections.
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Hamed
Is The Manager’s Job Universal?
All manager plan, organize, lead, and control but how they
do them and how much they do them vary according to
several dimensions:
• Levels in the Organization
– Top level managers do more planning and less direct
oversees of others than supervisors.
– All managers make decisions, planning…..but the
amount they delegate to each of them is different.
– Therefore, the difference is not on the activity or
function itself but on the degree, emphasis, and time
that been given to each activity.
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Hamed
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Hamed
Is The Manager’s Job Universal?
Profit vs. Nonprofit
• Manager’s job are the same in both profit and non profit
org. All of them make decisions, set goals, and motivate
their employees.
• The only difference is in the (performance measurement):
• Profit organizations measure their performance by the
amount of profit they achieve.
• There are no specific measurement to measure the
success of non-profit org.
• The financial side is still important in nonprofit org.
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Hamed
Is the Manager’s Job Universal?
• Size of the Organization

– Small businesses have fewer than 500 employees and
which doesn’t often engage in any new innovative
practices … managers in this kind of org do the role of
spokesperson and spend most of their time in doing
outwardly directed action ex meeting with costumers.
– Large business is the contrast of the above.
• National Borders (Geographic location)
– It is not a good idea to make the manager and
management concept universal because each country
is greatly differ in its economic, political, social, and
cultural environment.
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Hamed
Why Study
Management?
• All of us have a vested interest in improving
the way organizations are managed, by
studying management you can know (what
good manager should be going and what poor
management are)
• The causes of studying management are:
• Organizations that are well managed find ways
to prosper even in challenging economic times
• After graduation most students become
managers or are managed
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Hamed
What Can Students of Management
Learn From Other Courses?
• The following areas of study are important and could
affect the management practices:
• Anthropology
– The study of social societies which helps us learn about
humans and their activities
– Focusing on culture and environment>> could help
managers to understand differences in attitudes and
behaviors between people in different countries and within
different org.
• Economics
– Provides us with an understanding of the changing
economy and competition in a global context
– Help managers to understand the trading policies when they
are operating in global marketplace.
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What Factors Are Reshaping and
Redefining Management?
Welcome to the new world of management! Today
managers must deal with
– Changing workplaces
– Ethical and trust issues
– Global economic uncertainties
– Changing technologies
– Two areas of critical importance of managers are:
– 1. Delivering high- quality customer service.
– 2. Encouraging innovative efforts.
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Hamed
Why Are Customers Important to
the Manager’s Job?
• Without customers most organizations would face
difficulties to exist.
• Today we’re discovering that employee attitudes
and behaviors play a big part in customer
satisfaction
• For managers to survive and success in today’s
competitive environment, they must create a
customer responsive where employees are
friendly, knowledgeable, responsive to customer
needs
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Hamed
Why Is Innovation Important to
the Manager’s Job?
• “Nothing is more risky than not innovating”
• Innovation: is doing things differently, by
taking risks.
• Innovation isn’t just important for high
technology companies but essential in all
types of organizations
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Global Crisis Management
May be the result of:

• Natural causes
• Manmade causes
• International terrorism
• Geopolitical conflicts
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Part Four
Change
Management
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Change Management
Change Management
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70% of Change Attempts Fail
• Nearly all projects require humans to do work
differently than before. Humans usually don‘t like
this.
• Change Management is an approach of transition
individuals, teams and organizations.
• Change Management is the art to design and

manage the transition as painless as possible in
order to reduce friction and inefficiencies.
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Why Resistence to Change
• Human fears:
– Loss of job
– Loss of social status
– Loss of privileges
– Loss of control
– General fear of the unknown
• Need to learn new tools or skills
• Leaving the „comfort zone“
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Kübler-Ross Model of Grief
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Force-Field Analysis
Supporting Forces Opposing Forces

Steps:
• Identify all relevant Senior Management Support
stakeholders Middle Management Resistance
• Identify forces for and User Support to „Clean Up“
against change Staff Resistence
• Prioritise the forces Some Enthusiastic Users
• Develop strategies to Staff Cynism About Hidden Agendas

strengthen supporting Other BU Already „Done It“
forces
• Develop strategies to Lack of Resources
reduce, weaken or
Kübler-Ross Users
isolate opposing
forces.
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Force-Field Analysis Steps
• Perform exhaustive
stakeholder analysis.
Take notes about the
interests of each
stakeholder.
• Prioritise the forces
• Develop strategies to strengthen or leverage
supporting forces
• Develop strategies to weaken or isolate opposing
forces.
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Kotter’s Eights Steps to Change
1. Create a sense of
Urgency
2. Build a Guiding Coalition
3. Form a Strategic Vision
and Initiatives
4. Enlist a Volunteer Army
5. Enable Action by
Removing Barriers
6. Generate Short-Term
Wins
7. Sustain Acceleration
8. Institute Change
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Kotter’s Eights Steps to Change
1. Create a sense of Urgency

Craft and use a significant opportunity as a means for exciting people to sign up to change their organization
2. Build a Guiding Coalition

Assemble a group with the power and energy to lead and support a collaborative change effort
3. Form a Strategic Vision and Initiatives

Shape a vision to help steer the change effort and develop strategic initiatives to achieve that vision
4. Enlist a Volunteer Army

Raise a large force of people who are ready, willing and urgent to drive change
5. Enable Action by Removing Barriers

Remove obstacles to change, change systems or structures that pose threats to the achievement of the vision
6. Generate Short-Term Wins

Consistently produce, track, evaluate and celebrate volumes of small and large accomplishments – and correlate them to results
7. Sustain Acceleration
Use increasing credibility to change systems, structures and policies that don’t align with the vision; hire, promote and develop employees
who can implement the vision; reinvigorate the process with new projects, themes and volunteers
8. Institute Change
Articulate the connections between the new behaviors and organizational success, and develop the means to ensure leadership
development and succession
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Reduce User Resistance
• Involve users early in the process

of designing the solution and
allow them to „take control“.
• „Green Pastures on the Other
Side“:
Develop a convincing scenario for
the time after the change and
communicate to all users.
• Identify the negative aspects of
the current situation and
emphasize them in meetings.
• Negotiate with moderately
opposing users and check if you
can adapt the system to their
needs.
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Strengthen Supporting Forces
• Create Beach-Heads:
Identify supportive users
and include them in
rollout team meetings as
experts or in pilot groups
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Weaken Opposing Forces
• Deal with individual users using

Kübler-Ross tools
• Provide success stories of other
organizations who have gone
through the same change process.
• „Build bridges“:
Create opportunities for opposing
agents to join the project without
loosing face.
• Apply „Five bases of power“:
Use power to deal with remaining
forces.
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General
• „Build Trust“:
Start with small steps or a „pilot system“ and
celebrate the milestone
• „Shared Reality“:
Make sure you understand and „live“ the
reality of your stakeholders. They need to
accept the change agents as „one of them“.
• Know when not to proceed:
Don‘t execute the project if the opposing
forces are too strong.
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Part Five
Business model
Business model
workshop
workshop
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Agenda
• What is a Business Model? Why should we care?

• The building blocks of a Business Model: The Business
Model Canvas
• Patterns in Business Models
• Business Model Innovation
• Limits and Caveats of Business Modeling
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Why should you care about Bm's?
• BMs are useful to • BMs are useful to

think through all communicate your
critical aspects of a business concept
business: A through a 'common
checklist language'
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The bm canvas
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#1: customer segments
• Who is(are) the target customer(s)?

– Mass market Vs niche
– Single segment Vs multi-segments
– Multi-sided platforms (serving several interdependent
customer segments)
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#2: value proposition
Perceived value
$$$$
Product
+
Actual
Services =OFFER price
+
Brand $$$
• Perceived value may be a combination of ECONOMIC

value (benefits to customer) and SOCIAL value (benefits to
others)
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#3: distribution channels
• Direct:
– Sales Force
– Online
– Own stores
• Indirect:
– Partner stores (physical/online)
– Wholesalers (physical/online)
• Key question: who takes care of
after-sales service?
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#4: customer relationships
• What CR do we want to establish and maintain with our

target customers?
– Self-service
– Personal assistance
– Automated service (= hybrid)
– Communities
– Co-creation
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#5: revenue stream(s)
=Cash we generate from each customer

segment
– Asset sale: transfer of ownership
– Usage fee
– Subscription
– Licensing
– Brokerage fee
– Advertising
– Consumer data sale to third-party
• Can mix: e.g. "freemium"
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#6: key resources
• Most important assets required to run the

business ops
– Physical
– Intellectual/intangible
– Human
– Financial
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#7: Key activities
• What key activities are critical to the success

of our BM? Esp. to deliver the value
proposition
– Problem solving
– Production
– Delivery
– Network
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#8: key partnerships
• Buyer-supplier relationships
• Strategic alliances with non-rivals
• Co-opetition: partnership with rivals
• Can be based on simple contract, or

a structured dedicated organization
(e.g. Joint-Venture)
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#9: cost structure
• What are the cost drivers of our business?

• Reflection in terms of:
– Product Costing, but also Activity-Based Costing
(ABC)
– Variable Vs Fixed costs
=> Break-even point
=> Size-related economies
=> Scalability
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The bm canvas: example
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bm innovation:
challenge industry norms
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Try various combinations
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Limits and caveats
 The BM approach focuses on economic imperatives

(break-even point, sustainability of operational profits),
NOT competitive positioning
 A BM may be great on paper, but implementation is
everything
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Business Models What’s new?
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Part Six
E-commerce
Business Models
and Concepts
Eight Key Elements of a Business
Model
1. Value proposition
2. Revenue model
3. Market opportunity
4. Competitive environment
5. Competitive advantage
6. Market strategy
7. Organizational development
8. Management team
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1. Value Proposition
• How does the product or service fulfill
customer needs
• E-commerce value propositions:
– Personalization/customization
– Convenience
– Price/No shipping cost
– Quick delivery
– Unparalleled Selection
– Product/service quality
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2. Revenue Model
• How will the company earn money

• Major types of revenue models:
– Advertising revenue model- Facebook
– Subscription revenue model –Anti virus,
Consumer Reports, Wall Street News Subscription, Online
Dating
– Transaction fee revenue model- ebay, E-trade,
Credit cards
– Sales revenue model – AmazonMP3, Amazon, Gap
– Affiliate revenue model – airlines/car rentals/hotels
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Foursquare: Check
Insight Your
on Society: Class Privacy at the
Discussion
Door
• What revenue model does Foursquare
use? What other revenue models might
be appropriate?
• Are privacy concerns the only
shortcoming of location-based mobile
services?
• Should business firms be allowed to call
cell phones with advertising messages
based on location?
Hamed Ali
@Hamed.ali.Mohamed2@gmail.com Slide 2-178
3. Market Opportunity
• The intended Marketspace of the company

– Marketspace: Area of actual or potential commercial
value in which company intends to operate
– Realistic market opportunity: Defined by revenue
potential in each market niche in which company
hopes to compete
• Market opportunity typically divided into
smaller niches
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4. Competitive Environment
• Who else occupies your intended marketspace?”

– Other companies selling similar products in the same
marketspace
– New entrants into market, substitute products, and power of
consumers and suppliers (nature of competition)
– Includes both direct and indirect competitors (e.g., Netflix vs
Xfinity or DirectTV)
• Influenced by:
– Number and size of active competitors
– Each competitor’s market share
– Competitors’profitability
– Competitors’pricing
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5. Competitive Advantage
• The special advantages of a firm
– Superior or cheaper product than competitors
– What makes a product superior?
• Important concepts:
– Asymmetries exist when one competitor has more resources or differential
access to them compared to other competitors
– First-mover advantage
– Unfair competitive advantage results from factors of production that are
hard to duplicate or acquire (brands, natural resources, capital
investments)
– Leverage using vast resources to move in other markets – leveraging a
large customer base, or lots of money (Apple car)
– Perfect markets do not allow for competitive advantage as all firms have
equal access to all factors of production
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6. Market Strategy
• How do you plan to promote your products

or services to attract the target audience
– Details how a company intends to enter market
and attract customers
– Best business concepts will fail if not properly
marketed to potential customers -IBM OS 2
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7. Organizational Development
• The types of organizational structures
within the firm necessary to carry out the
business plan
• Describes how firm will organize work
– Typically, divided into functional departments,
some organize around products, combination
of both (auto manufacturers)
– As company grows, hiring moves from
generalists to specialists
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8. Management Team
• “What kind of backgrounds should the

company’leaders have?”
• A strong management team:
– Make the business model work
– Give credibility to outside investors
– Has market-specific knowledge
– Has experience in implementing business
plans
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B2C Models: E-tailer
• Online version of traditional retailer (Walmart, Macys)
• Revenue model: Sales
• Variations:
– Virtual merchant (online bank)
– Bricks-and-clicks
– Catalog merchant (home shopping network)
• Sells large variety of household and personal products
– Manufacturer-direct
• Low barriers to entry
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B2C Models: Community Provider
• Provide online environment (social network)

where people with similar interests can
transact, share content, and communicate
– Examples: Facebook, LinkedIn, Twitter,
Pinterest
• Revenue models:
– Typically hybrid, combining advertising,
subscriptions, sales, transaction fees, and so
on
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B2C Models: Content Provider
• Digital content on the Web:
– News, music, video, text, artwork
• Revenue models:
– Subscription; pay per download (micropayment);
advertising; affiliate referral
• Variations:
– Syndication- firm does not own material just distributes
it (newspaper horoscopes and crossword puzzles are syndicated
content)
– Web aggregators (shopping.com, Travelocity, Priceline)
aggregate info and add value to it
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Battle of the
Insight Titans:
on Technology: ClassMusic
Discussion in the
Cloud
• Have you purchased music online or subscribed
to a music service? What was your experience?
• What revenue models do cloud music services
use?
• Do cloud music services provide a clear
advantage over download and subscription
services?
• Of the cloud services from Google, Amazon, and
Apple, which would you prefer to use, and why?
Hamed Ali
@Hamed.ali.Mohamed2@gmail.com Slide 2-188
B2C Business Models: Portal
• Searching capability plus an integrated package
of content and services
• Revenue models:
– Advertising, referral fees, transaction fees,
subscriptions
• Variations:
– Horizontal/general includes all internet users
– Vertical/specialized (vortal) provides a directory of links
to information related to a particular industry or subject matter
– Searching capabilities
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B2C Models: Transaction Broker
• Process online transactions for consumers
– Primary value proposition—saving time and money,
and enabling online transactions (stocks, credit card
and PayPal payments)
• Revenue model:
– Transaction fees
• Industries using this model:
– Financial services
– Travel services and entertainment
– Job placement services
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B2C Models: Market Creator
• Create digital environments where buyers and
sellers can meet and transact business
• Examples:
– Priceline
– eBay
– E-trade
• Revenue model:
– Transaction fees, fees to merchants for access
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B2C Models: Service Provider
• Online services
– Example: Google—Google Maps, Gmail, and
so on
• Value proposition
– Valuable, convenient, time-saving, low-cost
alternatives to traditional service providers
• Revenue models:
– Sales of services, subscription fees,
advertising, sale of marketing data
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B2B Business Models
• B2B relies on EDI (electronic data interchange)

• Net marketplaces (explained in upcoming slides)
– E-distributor
– E-procurement
– Exchange
– Industry consortium
• Private industrial network
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B2B Models: E-distributor
• Version of retail and wholesale store, MRO

(explain next slide) goods, and indirect goods
• Owned by one company seeking to serve

many customers
• Revenue model: Sales of goods
• Example: Grainger.com
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MRO
MRO - Maintenance, repair and operations:-

Supplies consumed in the production process but
which do not either become part of the end product
or are not central to the firm's output. MRO items
include consumables (such as cleaning, laboratory,
or office supplies), industrial equipment (such as
compressors, pumps, valves) and plant upkeep
supplies (such as gaskets, lubricants, repair tools),
and computers, fixtures, furniture, etc.
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B2B Models: E-procurement
• Creates and sells access to digital markets where

participants transact for indirect goods
– B2B service providers, application service
providers (ASPs)
• Revenue model:
– Service fees, supply-chain management,
fulfillment services
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B2B Models: Exchanges
• Independently owned vertical digital marketplace
where hundreds of suppliers meet a small number
of large commercial purchasers
• Revenue model: Transaction, commission
fees
• Create powerful competition between suppliers
• Tend to force suppliers into powerful price
competition; number of exchanges has dropped
dramatically
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B2B Models: Industry Consortia
• Industry-owned vertical digital marketplace
open to select suppliers
• More successful than exchanges
– Sponsored by powerful industry players
– Strengthen traditional purchasing behavior
• Revenue model: Transaction, commission
fees
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Difference between Exchange, Consortia, Private
Industrial Network
Exchange Consortia Private Industrial
Network
 Hundreds of suppliers  Is industry owned  Coordinate the flow of

meet small number of  Serves a vertical communications
large buyers marketplace among firms doing
 Generate revenue by business together
a commission or fee  Participation is by
based on the size of invitation only
the transaction  Walmart operates the
 Usually serve a single largest private network
industry
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E-commerce and Industry Value Chains
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E-commerce and Firm Value Chains
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Internet-enabled Value Web
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Business Strategy
• Plan for achieving superior long-term returns on
capital invested: that is, profit
• Five generic strategies
– Product/service differentiation
– Cost competition
– Scope
– Focus
– Customer intimacy: A marketing strategy where a service
supplier or product retailer gets close to customers. The benefits
include improved highly tailored problem solving capabilities,
greater customization of products to customer needs, as well as
higher customer loyalty.
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Business model: Definition
A business model describes

how an idea will create
value.
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Building your business model
You can visualize your business model

using a business model canvas…
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Key Customer Customer
Key What will your
activities relationship segments
partners business spend the What s
types of Who are your
most time doing? interactions will your paying customers?
What external Product customers expect to
Value Do you have any
partnerships development? have with you?
non-paying
should you Sales? Other? proposition customers?
invest in? Key Channels
How will customers How large is this
• Mentors? resources
What will it cost for: group?
find out about you?
• Lawyers? Manufacturing?
• Distributors? Do you have
Intellectual How will you get
• Suppliers? multiple customer
property? products to them?
segments?
Human resources?
Cost structure Revenue streams

• How might you make $ from this?
How much time and money will be • What value, other than money, are
required to do this? you hoping to create?
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Adapting the business model canvas
The structure of the business model canvas can

be used to develop any idea...
…even if you aren’t planning on turning that

idea into a business.
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Key
activities Audience
Key partners YOUR IDEA relationship Audience
What specific tasks
must you do to get Whatskind of segments
Who can you ask your idea off the Project idea relationship are you
to invest their time ground? trying to build with Who is your idea
and energy to help your audience? for?
you? Lesson idea
Channels What are the
• Teachers? Key
Thesis What are some
needs of this
• Peers? resources
What materials group?
• Parents?
statement different ways of
should you invest
• Subject presenting your
in? Why would they
idea?
experts? Hypothesis find your idea
valuable?
The cost of your idea The value of your idea

• Time investment • Social value
• Which collaborators would be valuable • Academic value
to invest in? • Monetary value
• Material investment
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Executive Summary
• A Business Plan identifies key areas of your business so you can

maximize the time you spend on generating income.
• Key investors will want to look at your Business Plan before
providing capital.
• A Business Plan helps you start and keep your business on a
successful path.
• You should prepare a Business Plan, although, in reality, many small
business owners do not.
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Part Seven
Business
Plan
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What is a Business Plan?
• A Business Plan is a written document that defines the goals of your

business and describes how you will attain those goals.
• A Business Plan is worth your considerable investment of time, effort,
and energy.
• A Business Plan sets objectives, defines budgets, engages partners,
and anticipates problems before they occur.
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10 Reasons Why You Need a Strong
Business Plan
1. To attract investors.
2. To see if your business ideas will work.
3. To outline each area of the business.
4. To set up milestones.
5. To learn about the market.
6. To secure additional funding or loans.
7. To determine your financial needs.
8. To attract top-level people.
9. To monitor your business.
10. To devise contingency plans.
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How Detailed Should
Your Plan Be?
• Business plans differ widely in their length, appearance, content,
and the emphasis placed on different aspects of the business.
• Depending on your business and your intended use, you may need
a very different type of Business Plan:
– Mini-plan: Less emphasis on critical details. Used to test your
assumptions, concept, and measure the interest of potential investors.
– Working Plan: Almost total emphasis on details. Used continuously to
review business operations and progress.
– Presentation Plan: Emphasis on marketability of the business concept.
Used to give information about the business to bankers, venture
capitalists, and other external resources.
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Assembling a Business Plan
Every Business Plan should include some essential components:

– Overview of the Business: Describes the business, including its
products and services.
– The Marketing Plan: Describes the target market for your product and
explains how you will reach that market.
– The Financial Management Plan: Details the costs associated with
operating your business and explains how you will pay for those costs,
including the amount of financing you may need.
– The Operations and Management Plan: Describes how you will
manage the core processes of your business, including use of human
resources.
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Seven Common Parts of a
Good Business Plan
• Business plans must help investors understand and gain
confidence on how you will meet your customers’ needs.
• Seven common parts of a good Business Plan are:
1. Executive Summary
2. Business Concept
3. Market Analysis
4. Management Team
5. Marketing Plan
6. Financial Plan
7. Operations and Management Plan
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Part 1: Executive Summary
• The Executive Summary of a Business Plan is a 3-5 page
introduction to your Business Plan.
• The Executive Summary is critical, because many individuals
(including venture capitalists) only read the summary.
• The Executive Summary section includes:
– A first paragraph that introduces your business.
• Your business name and location.
• A brief explanation of customer needs and your products or services.
• The ways that the product or service meets or exceeds the customer needs.
• An introduction of the team that will execute the Business Plan.
– Subsequent paragraphs that provide key details about your business,
including projected sales and profits, unit sales, profitability, and keys to
success.
– Visuals that help the reader see important information, including highlight
charts, market share projections, and customer demand charts.
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Part 2: Business Concept
• The business concept shows evidence that a product or service is

viable and capable of fulfilling an organization's particular needs.
• The Business Concept section:
– Articulates the vision of the company, how you plan to meet the unique
needs of your customer, and how you plan to make money doing that.
– Discusses feasibility studies that you have conducted for your products.
– Discusses diagnostics sessions you had with prospective customers for
your services.
– Captures and highlights the value proposition in your product or service
offerings.
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Part 3: Market Analysis
• A Market Analysis defines the target market so that you can

position your business to get its share of sales.
• A Market Analysis section:
– Defines your market.
– Segments your customers.
– Projects your market share.
– Positions your products and services.
– Discusses pricing and promotions.
– Identifies communication, sales, and distribution channels.
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Part 4: Management Team
The Management Team section outlines:

– Organizational Structure: Highlights the hierarchy and outlines
responsibilities and decision-making powers.
– Management Team: Highlights the track record of the company’s
managers. You may also offer details about key employees including
qualifications, experiences, or outstanding skills, which could add a
competitive edge to the image of the business.
– Working Structure: Highlights how your management team will operate
within your defined organizational structure.
– Expertise: Highlights the business expertise of your management and
senior team. You may also include special knowledge of budget control,
personnel management, public relations, and strategic planning.
– Skills Gap: Highlights plans to improve your company’s overall skills or
expertise. In this section, you should discuss opportunities and plans to
acquire new information and knowledge that will add value.
– Personnel Plan: Highlights current and future staffing requirements and
related costs.
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Part 5: Marketing Plan
 The Marketing Plan section details what you propose to

accomplish, and is critical in obtaining funding to pursue new
initiatives.
 The Marketing Plan section:
– Explains (from an internal perspective) the impacts and results of past
marketing decisions.
– Explains the external market in which the business is competing.
– Sets goals to direct future marketing efforts.
– Sets clear, realistic, and measurable targets.
– Includes deadlines for meeting those targets.
– Provides a budget for all marketing activities.
– Specifies accountability and measures for all activities.
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Part 6: Financial Plan
• The Financial Plan translates your company's goals into specific

financial targets.
• The Financial Plan section:
– Clearly defines what a successful outcome entails. The plan isn't
merely a prediction; it implies a commitment to making the targeted
results happen and establishes milestones for gauging progress.
– Provides you with a vital feedback-and-control tool. Variances from
projections provide early warnings of problems. When variances occur,
the plan can provide a framework for determining the financial impact
and the effects of various corrective actions.
– Anticipate problems. If rapid growth creates a cash shortage due to
investment in receivables and inventory, the forecast should show this. If
next year's projections depend on certain milestones this year, the
assumptions should spell this out.
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Part 6: Financial Plan
• The Financial Plan is the most essential part of your Business Plan.
It shows investors the timeframes you have scheduled to make
profits.
• Some elements of the Financial Plan include:
– Important Assumptions
– Key Financial Indicators
– Break-even Analysis
– Projected Profit and Loss
– Projected Cash Flow
– Projected Balance Sheet
– Business Ratios
– Long-term Plan
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Different Financial Planning Options
 Short-term Forecast: Projects either the current year or a rolling 12-

month period by month. This type of forecast should be updated at least
monthly and become the main planning and monitoring vehicle.
 Budget: Translates goals into detailed actions and interim targets. A
budget should provide details, such as specific staffing plans and line-
item expenditures.
– The size of a company may determine whether the same model used to
prepare the 12-month forecast can be appropriate for budgeting.
– In any case, unlike the 12-month forecast, a budget should generally be
frozen at the time they are approved.
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Different Financial Planning Options
 Strategic Forecast: Incorporates the strategic goals of the company

into the projections. For startup companies, the initial Business Plan
should include a month-by-month projection for the first year, followed
by annual projections for a minimum of three years.
 Cash Forecast: Breaks down the budget and 12-month forecast into
more detail. The focus of these forecasts is on cash flow, rather than
accounting profit, and periods may be as short as a week in order to
capture fluctuations.
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Part 7: Operations and Management
• The Operations and Management section outlines how your

company will operate.
• The Operations and Management section includes:
– Organizational structure of the company. Provides a basis for
projected operating expenses and financial statements. Because
these statements are heavily scrutinized by investors, the
organizational structure has to be well-defined and realistic within the
parameters of the business.
– Expense and capital requirements to support the organizational
structure. Provides a basis to identify personnel expenses,
overhead expenses, and costs of products/services sold. These
expenses/costs can then be matched with capital requirements.
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What Is a Business Plan?
• Business Plan
– A business plan is a written narrative, typically 25 to 35
pages long, that describes what a new business plans to
accomplish.
• Dual-Use Document
– For most new ventures, the business plan is a dual-
purpose document used both inside and outside the firm.
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Who Reads the Business Plan—And
What Are They Looking For?
There are two primary audiences for a firm’s business plan
Audience What They are Looking For
A Firm’s A clearly written business plan helps the

Employees employees of a firm operate in sync and move
forward in a consistent and purposeful manner.
Investors and A firm’s business plan must make the case that the
other external firm is a good use of an investor’s funds or the
stakeholders attention of others.
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Guidelines for Writing a Business Plan
1 of 5
• Structure of the Business Plan

– To make the best impression a business plan should follow a
conventional structure, such as the outline for the business
plan shown in the chapter.
– Although some entrepreneurs want to demonstrate creativity,
departing from the basic structure of the conventional
business plan is usually a mistake.
– Typically, investors are busy people and want a plan where
they can easily find critical information.
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• Structure of the Business Plan (continued)

– Software Packages
• There are many software packages available that employ an
interactive, menu-driven approach to assist in the writing of a
business plan.
• Some of these programs are very helpful. However, entrepreneurs
should avoid a boilerplate plan that looks as though it came from a
“canned” source.
– Sense of Excitement
• Along with facts and figures, a business plan needs to project a sense
of anticipation and excitement about the possibilities that surround a
new venture.
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• Content of the Business Plan

– The business plan should give clear and concise
information on all the important aspects of the proposed
venture.
– It must be long enough to provide sufficient information
yet short enough to maintain reader interest.
– For most plans, 25 to 35 pages is sufficient.
• Types of Business Plans
– There are three types of business plans, which are shown
on the next slide.
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Types of Business Plans
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• Recognizing the Elements of the Plan May Change

– It’s important to recognize that the plan will usually
change while written.
– New insights invariably emerge when an entrepreneur or
a team of entrepreneurs immerse themselves in writing
the plan and start getting feedback from others.
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Outline of Business Plan
• Outline of Business Plan

– A suggested outline of a business plan is shown on the next
several slides.
– Most business plans do not include all the elements
introduced in the sample plan; we include them here for the
purpose of completeness.
– Each entrepreneur must decide which elements to include in
his or her plan.
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Section 1: Executive Summary
• Executive Summary
– The executive summary is a short overview of the entire
business plan.
– It provides a busy reader with everything that needs to be
known about the new venture’s distinctive nature.
– An executive summary shouldn’t exceed two single-
spaced pages.
– Even though the executive summary appears at the
beginning of the business plan, it should be written last.
• The plan itself will evolve as it’s written, so not everything is
known at the outset.
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Section 1: Executive Summary
Key Insights
• In many instances an investor will
ask for a copy of a firm’s executive
Executive Summary summary and will ask for a copy of
the entire plan only if the executive
summary is sufficiently convincing.
• The executive summary, then, is
arguably the most important
section of a business plan.
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Section 2: Industry Analysis
• Industry Analysis
– This section should begin by describing the industry the
business will enter in terms of its size, growth rate, and
sales projections.
– Items to include in this section:
• Industry size, growth rate, and sales projections.
• Industry structure.
• Nature of participants.
• Key success factors.
• Industry trends.
• Long-term prospects.
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Section 2: Industry Analysis
Key Insights
• Before a business selects a target
market it should have a good grasp
Industry Analysis of its industry—including where its
promising areas are and where its
points of vulnerability are.
• The industry that a company
participates in largely defines the
playing field that a firm will
participate in.
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Section 3: Company Description
• Company Description
– This section begins with a general description of the
company.
• Company description.
• Company history.
• Mission statement.
• Products and services.
• Current status.
• Legal status and ownership.
• Key partnerships (if any).
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Section 3: Company Description
Key Insights
• While at first glance this section
may seem less important than the
Company Description others, it is extremely important.
• It demonstrates to your reader that
you know how to translate an idea
into a business.
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Section 4: Market Analysis
• Market Analysis
– The market analysis breaks the industry into segments
and zeros in on the specific segment (or target market) to
which the firm will try to appeal.
• Market segmentation and target market selection.
• Buyer behavior.
• Competitor analysis.
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Section 4: Market Analysis
Key Insights
• Most start-ups do not service their
entire industry. Instead, they focus
Market Analysis on servicing a specific (target)
market within the industry.
• It’s important to include a section in
the market analysis that deals with
the behavior of the consumers in the
market. The more a start-up knows
about the consumers in its target
market, the more it can tailor its
products or services appropriately.
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Section 5: The Economics of the Business
• The Economics of the Business

– This section addresses the basic logic of how profits are
earned in the business and how many units of a
business’s profits must be sold for the business to “break
even” and then start earning a profit.
• Revenue drivers and profit margins.
• Fixed and variable costs.
• Operating leverage and its implications.
• Start-up costs.
• Break-even chart and calculations.
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Section 5: The Economics of the Business
Key Insights
• Two companies in the same industry
may make profits in different ways.
The Economics of the One may be a high-margin, low-
Business volume business, while the other
may be a low-margin, high-volume
business. It’s important to check to
make sure the approach you select
is sound.
• Computing a break-even analysis
is an extremely useful exercise for
any proposed or existing business.
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Section 6: Marketing Plan
• Marketing Plan
– The marketing plan focuses on how the business will
market and sell its product or service.
• Overall marketing strategy.
• Product, price, promotions, and distribution.
• Sales process (or cycle).
• Sales tactics.
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Section 6: Marketing Plan
Key Insights
• The best way to describe a start-up’s
marketing plan is to start by
Marketing Plan articulating its marketing strategy,
positioning, and points of
differentiation, and then talk about
how these overall aspects of the
plan will be supported by price,
promotional mix, and distribution
strategy.
• It’s also important to discuss the
company sales process.
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Section 7: Design and Development Plan
• Design and Development Plan

– If you’re developing a completely new product or service,
you need to include a section in your business plan that
focuses on the status of your development efforts.
• Development status and tasks.
• Challenges and risks.
• Projected development costs.
• Proprietary issues (patents, trademarks, copyrights, licenses, brand
names).
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Section 7: Design and Development Plan
Key Insights
• Many seemingly promising start-ups
never get off the ground because
Design and their product development efforts
Development Plan stall or the actual development of
the product or service turns out to
be more difficult than thought.
• As a result, this is a very important
section for businesses developing a
completely new product or service.
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Section 8: Operations Plan
• Operations Plan
– Outlines how your business will be run and how your
product or service will be produced.
– A useful way to illustrate how your business will be run
is to describe it in terms of “back stage” (unseen to the
customer) and “front stage” (seen by the customer)
activities.
• General approach to operations.
• Business location.
• Facilities and equipment.
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Section 8: Operations Plan
Key Insights
• You have to strike a careful balance
between adequately describing this
Operations Plan topic and providing too much
detail.
• As a result, it is best to keep this
section short and crisp.
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Section 9: Management Team and
Company Structure
• Management Team and Company Structure

– The management team of a new venture typically consists
of the founder or founders and a handful of key
management personnel.
• Management team.
• Board of directors.
• Board of advisers.
• Company structure.
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Section 9: Management Team and
Company Structure
Key Insights
• This is a critical section of a
business plan.
Management Team • Many investors and others who
and Company read the business plan look first at
the executive summary and then
Structure go
directly to the management team
section to assess the strength of the
people starting the firm.
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Section 10: Overall Schedule
• Overall Schedule
– A schedule should be prepared that shows the major events
required to launch the business.
– The schedule should be in the format of milestones critical
to the business’s success.
– Examples of milestones:
• Incorporating the venture.
• Completion of prototypes.
• Rental of facilities.
• Obtaining critical financing.
• Starting production.
• Obtaining the first sale.
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Section 10: Overall Schedule
Key Insight
• An effectively prepared and
presented schedule can be
Overall Schedule extremely helpful in convincing
potential investors that the
management team is aware of
what needs to take place to launch
the venture and has a plan in
place to get there.
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Section 11: Financial Projections
• Financial Projections
– The final section of a business plan presents a firm’s pro
forma (or projected) financial projections.
• Sources and uses of funds statement.
• Assumptions sheet.
• Pro forma income statements.
• Pro forma balance sheets.
• Pro forma cash flows.
• Ratio analysis.
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Section 11: Financial Projections
Key Insights
• Having completed the earlier
sections of the plan, it’s easy to see
Financial Projections why the financial projections come
last.
• They take the plans you’ve
developed and express them in
financial terms.
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Presenting the Business Plan to Investors
• The Oral Presentation

– The first rule in making an oral presentation is to follow
directions. If you’re told you have 15 minutes, don’t talk
for more than the allotted time.
– The presentation should be smooth and well-rehearsed.
– The slides should be sharp and not cluttered.
• Questions and Feedback to Expect from Investors
– The smart entrepreneur has a good idea of the questions
that will be asked, and will be prepared for those queries.
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Presenting the Business Plan to Investors
Twelve PowerPoint Slides to Include in an Investor Presentation
1. Title Slide 7. Marketing and sales

2. Problem 8. Management team
3. Solution 9. Financial projections
4. Opportunity and target market 10. Current status
5. Technology 11. Financing sought
6. Competition 12. Summary
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Business Models

Managers and Managing

1/18/2023 Hamed Ali

1. Describe what management is, why management is

2. Distinguish among planning, organizing, leading,

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3. Differentiate among three levels of management, and

4. Distinguish between three kinds of managerial skill,

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5. Discuss some major changes in management

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• All managers work in organizations

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The planning, organizing, leading, and

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– Resources include people, skills, know-how

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A measure of how efficiently and effectively

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Achieving objectives requires skilled

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Process designed to achieve an organization’s

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Make decisions – utilization of resources – achieve

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Resource acquisition & coordination

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Objectives – results desired by organization

Mission – organization’s purpose and

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Common & Elaborate Organizational

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Executive level managers

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Focus on potential disasters

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Rank CEO Company Total

1. Lawrence J. Ellison Oracle $192.92

2. Frederic M. Poses Trane $127.10

3. Aubrey K. McClendon Chesapeake Energy $116.89

4. Angelo R. Mozilo Countrywide Financial $102.84

5. Howard D. Schultz Starbucks $98.60

The 5 Highest Paid CEO’s in 2007

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•Responsible for tactical planning

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