Unit 5

New Venture and Intrapreneurship

I. Idea Generation and Evaluation

- The process of creating, developing and communicating abstract, concrete or visual ideas
- The front end part of the idea management funnel
- Focuses on the formulation of possible solutions to perceived or actual problems and
opportunities

A. Tools and techniques for generating ideas

1. Idea Challenge
o A focused form of innovation where you raise a problem or opportunity with
the hopes of coming up with creative solutions
2. SCAMPER Technique (by Bob Eberle)
o A method used for problem-solving and creative thinking
o A holistic way of applying critical thinking to modify ideas, concepts or
processes that already exist
The purpose of the SCAMPER is to make adjustments to some parts of the existing idea or process
to reach the best solution. It consists of seven actions that can be used to replace parts in the
process:
Substitute – Replacing a part of your product, concept or process with another to achieve even
better outcome
Combine – Explores the possibility to combine two ideas into a single, more effective solution
Adapt – Focuses on other similar incremental improvements to the idea, process, or concept. the
possibilities to make the process more flexible and focuses on the other similar incremental
improvements to the idea, process, or concept
Modify / Magnify – Looks at the problem or opportunity from a bigger perspective and aims for
improving the overall results
Put to another use – Focuses on how to use the idea or existing solution for another purpose and
analyzes the possible benefits if applied to other parts of the business.

Eliminate – Examines the possible outcomes if one or more parts of the concept were eliminated
Reverse – Focuses on reversing the order of interchangeable elements of an idea
3. Opposite Thinking
o A technique that can help you question long-held assumptions related to
your business
o Consider the exact opposite of what’s normal, including unconventional
solutions
4. Brainstorm Cards
o Help consider external factors such as: societal trends, new technologies,
and regulation in the context of your business
o To generate a great number of ideas with little effort
5. Analogy Thinking
o Using information from one source to solve a problem in another context
o An effortless method for coming up with new ideas that are pre-validated

II. Resource Requirements

Are inputs that are used to create things or help in the provision of services

“It is a key part of any business or project management plan. In this phase, small business owners
identify all the resources needed to deliver a project within a specific timeframe. In this respect,
anything counts as a resource: staff members, roles and responsibilities for each member, equipment
for doing the work” (Sima, 2017).
Furthermore, Small Businesses in an article from Hearst Newspapers categorized such resources
to be the following:
1. Financial Resources: Funding
o Most important element in starting a business Human Resources: Employees
 o The most important element in starting a business is funding. Even the most
basic home business incurs a multitude of startup costs, including registering
a business name, obtaining a business telephone line and printing business
cards.
o Human Resources:
‒ The success of an organization is heavily reliant on the talent and
strength of its employees. The hiring of experienced professionals
with track records of excellence within their area of expertise ensures
that the mission and goals of the company will be carried out
efficiently and with competence
2. Educational Resources: Industry Know How
o Found through professional trade associations that are geared toward
industry, local chamber of commerce as well as the Small Business
Administration
o Perhaps the greatest thing an entrepreneur can do when establishing a new
business is to gain as much education possible.
o By understanding competition and gaining an in-depth knowledge of the
industry, one will be better prepared to make smarter decisions regarding the
direction of the firm.
o Mentoring (?)
3. Physical Resources: Premises and Equipment

o Includes a proper work space, working telephone line, adequate information

systems and effective marketing materials. This aspect of business planning
can be one of the costliest
o This includes a proper work space, working telephone line, adequate
information systems and effective marketing materials.
o This aspect of business planning can be one of the costliest.
4. Emotional Resources: Support Systems
o This team may be composed of friends and family as well as a mentor or
professional groups
o Starting a business can be an extremely stressful endeavor for an
entrepreneur to undertake. To maintain her sanity as well as stay motivated,
it is important she have a support team that can give her inspirations and
guidance as needed. This team may be composed of friends and family as
well as a mentor or professional group.

III. Marketing Planning and E-Marketing

E – Marketing
 Electronic Marketing is the marketing of products using electronic technology to determine the
consumer market

A. Marketing plan
o A written strategy for selling the products/services of a new business
o A reflection of how serious a company is in meeting the competition head
on
o It is a reflection of how serious a company is in meeting the competition
head on, with strategies and plans to increase market share and attract
customers
Purposes:
• To help you to improve your odds
• To recognize and take action on any trends and consumer preferences
• To develop and expand your own select group of loyal customers
• Shows to others that you have carefully considered how to produce a product
that is innovative, unique and marketable

Two levels of operation:

1. Strategic Marketing Plan- develops the broad marketing objectives (MO) and
strategy based on an analysis of current market situation and opportunities
2. Tactical Marketing Plan- outlines the specific marketing tactics for the period,
including advertising, pricing, channels
Contents of Marketing Plan:
1. Title Page
o Includes the name of the company, period of time that the contents of the
marketing plan covers and completion date
2. Table of Contents
o List of all the contents of the marketing plan in the order they appear, citing
relevant page numbers
o List tables, graphs and diagrams on a separate page so that the reader
can locate these presentation tools quickly. List the appendices that will be
included at the end of your document
3. Historical Background
o An indication of where your business idea originated, citing the date you
began researching into the idea, the existence of any mentors or advisors,
the scope and opportunities for expansion
4. Marketing Goals and Objectives
o Include the "mission statement" of the business; an idea of what its goals are
for customers, clients, employees and the consumer
5. Market Analysis
o Examine whether or not your industry is growing, maturing or declining
6. Environmental Analysis - Global Business Environment
o To look at and comment on the world in which you will be operating
o Conduct an environmental analysis to look at and comment on the world in
which you will be operating
7. Consumer Analysis
o Identify target market, describing how your company will meet the needs
of the consumer better than the competition does. List the expectations
consumers have for your type of product
8. Strengths, Weaknesses, Opportunities, Threats (SWOT)
o Strengths
i. List the strengths of your business approach such as cost
effectiveness, service quality and customer loyalty
o Weaknesses
i. Describe the areas of weakness in your company's operations
o Opportunities
i. Examine how proper timing, as well as other factors such as your
company's innovativeness, may improve your business's chances of
success
o Threats
i. List all the threats to your business' success
9. Environmental Analysis - Local Business Environment
o Conduct an environmental analysis that looks at and comments on your
local area and your network of business contacts, competitors and
customers
10. Consumer Analysis
o Describing how company will meet the needs of the consumer better than
the competition does
11. Marketing Focus
o Product or Service
i. Identify your product or service
ii. Be specific about how your product/service improves upon those
already existing
o Location
i. Identify the location of your business
o Promotion
i. Describe the type of promotional methods you will use to spread
the word about your product
12. Product or Service
o products or services should reflect your overall company strategy
13. Price
o Pricing should be competitive as well as a reflection of the quality, costs
and profit margin
 o The prices of your products or services should reflect your overall company
strategy
o Pricing should be competitive as well as a reflection of the quality, costs
and profit margin
14. Financial Information
o Show the predicted level of sales you expect to realize with and without the
strategies you have outlined in the marketing plan
o Show the market share you will hope to attain
o Outline the areas of weakness
o Provide appropriate suggestions for reducing the effect of the deficiencies
15. Tables, Graphs, Diagrams and Pictures
o By presenting information in a picture format, some areas that are hard to
express in words become easy to show to the reader. Here are some
examples:
a. Position Analysis
 Figure that shows where your company's image lies in
relation to your direct competition.
b. Advertising Examples and Other Promotional Material
 Provide the reader with some examples of the type of
artwork and advertising you hope to use to attract
potential customers, and, to portray a particular
image of your product/service
c. Demographics, Consumer Statistics and Budgets
 Include appropriate demographic information such as
populations, age distributions, projected population
growth and household sizes
 Include statistics covering family expenditures,
personal income characteristics, employment figures,
and spending and consumer patterns
 Provide budget sheets
 Include printing costs and expected reordering
schedules
d. Pricing
 "Breakeven point" in sales, competitor pricing
schemes, consumer profiles and product/service
expectations. Separate the "fixed cost" components
and your "variable costs"
 Relate the pricing of your products or services to your
costs, profit margin, competitor pricing schemes,
consumer profiles and product/service expectations
IV. E- Marketing
- Electronic Marketing is the marketing of products using electronic technology to determine the
consumer market
- Compasses all the activities a business conduct via World Wide Web (WWW) with the aim of
attracting new business, retaining current developing its brand identification
- Refers to using technology such as the internet, website and email, sms, including its wide variety of
options and tools to conduct your marketing activities and achieve your marketing objectives.
Marketing
- A comprehensive process that involves every aspect of a business from designing its products,
setting the pricing strategy to analyzing sales statistics and collecting customer feedback.

The Concept of E – Marketing

The objectives of marketing are to:
• Get the right product
• Promoted in the right way
• Sold at the right price
• Distributed at the right place
• Profitably

Examples of e-Marketing include:

• Online Surveys to conduct market research
 • Web Site to display and sell your products
• Internet advertising to promote your business
• Software to collect and analyse your customer information

Strategic Planning
- “A managerial process to develop and maintain a viable fit between the organization’s
objectives, skills, and resources and its changing market opportunities”.
- Process identifies firm’s goals for
- Growth
- Competitive position
- Geographic scope
- Other objectives, such as industry, products, etc.

ESP: Environment Strategy Performance

- The e-marketing plan flows from the organization’s overall goals and strategies.
- The ESP framework illustrates the relationships among environment, strategy, and
performance.
- A SWOT analysis of the business environment (E) leads to the development of strategy (S) and
the measurement of performance (P).

E – Strategy
1. E – Business Strategy
- Strategy that deploys enterprise resources to reach performance objectives, competitive
advantages.
- Corporate-level (enterprise-level)
- E.g. Wal-Mart, MIS with suppliers
2. E – Marketing Strategy
- Strategy that capitalizes on information technology to reach marketing objectives.

3. E – Business Project
- Most strategic plans explain the rationale for the chosen objectives and strategies.
- Four appropriate types of rationale for e-business projects:
o Strategic justification
o Operational justification
o Technical justification
o Financial justification

Business Model
o A business model is a method for long-term survival and a value proposition for partners,
customers, and revenue.
o E-business models include the use of information technology to achieve long-term goals.

E – Business Model
o Value and Revenue
 Value
 Value encompasses the customer’s perceptions of the product’s benefits,
specifically its attributes, brand name, and support services.
 Value is similar to the marketing concept, which suggests that the social
and economic justification for an organization’s existence is the satisfaction
of customer wants and needs.
 Value can be determine by determining whether there are more benefits
than costs: Value = Benefits – Costs
 Revenue
 E-business strategies help to decrease internal costs
 E-business strategies also increase the enterprise revenue stream.

The Marketing Process

o A comprehensive marketing process and resulting Marketing Plan is critical for the success of
your business.
 o An effective marketing process should provide you with the information, strategies and
solutions to any and all obstacles you might encounter along the way in building and running
a successful and profitable business.

V. Legal Structures for New Business Ventures

- Shape the journey as a business, and choosing the best structure for your company requires time
and consideration
Types of business entities
1. Sole proprietorship
 One person is responsible for all of a company's profits and
debts
 The simplest structure, which usually involves just one individual
who owns and operates the enterprise. If you intend to work
alone, this structure may be the way to go
2. Partnership
 Owned by two or more individuals
 A type of business organization in which two or more individuals
pool money, skills, and other resources
Two types:
a. General Partnerships - All is shared equally
b. Limited Partnerships - Only one partner has control of its operation
3. Limited liability company (LLC)
- Limited liability company is a hybrid structure that allows owners, partners or
shareholders to limit their personal liabilities while enjoying the tax and flexibility benefits
of a partnership
- Is a separate legal entity from its owners, and is best suited for single or multiple
owner company needing liability protection

4. Corporation
- An entity separated from its owners
- An independent legal entity, separate from its owners, and as such, it requires
complying with more regulations and tax requirements

C corporations - Owned by shareholders, are taxed as separate entities

S corporations - Owners also have limited liability protection. is a closely held
company, and is best suited for smaller or family business

B corporations (Benefit Corporations) – for profit entities structured to make a

positive impact on society
Closed corporations - run by a few shareholders, are not publicly traded
Nonprofit corporations - help others in some way and are rewarded by tax
exemption
5. Cooperative
 owned by the same people it serves

VI. IPR and Related Laws

A. Intellectual Property (IP) - Creations of the mind such as inventions, literary and
artistic works, and symbols, names, images, and designs used in commerce
 A legal concept which refers to creations of the mind for
which exclusive rights are recognized

Intellectual Property is divided into categories:

1. Patent
- An exclusive right granted for an invention, which is a product or
a process that provides, in general, a new way of doing something, or
offers a new technical solution to a problem
 2. Trademark - A toll used that differentiates goods and services from each other.
A trademark can be one word, a group of words, sign, symbol, logo, or a combination
of any of these. Trademark is a very effective tool that makes the public remember the
quality of goods and services. Once a trademark becomes known, the public will keep
patronizing the products and services.

3. Copyright – Is the right that creators have to stop others from copying their
works without permission
- Copyright protects the work of creators, such as artists, writers, musicians, and
filmmakers.

- Works are protected as soon as they are created, as long as they have been
written down, filmed or recorded.
- Copyright is automatic. You don’t have to put a copyright notice on works, but
it is a good idea.
- You will often see works with the copyright symbol (©) and the copyright
owner’s name on them.
- Copyright is important because it gives creators control over their creative
works. This means they can decide who uses their work, how it can be used and if
they will charge a fee to other people who want to use it. This gives creators the
ability to earn a living from their works.

B. Intellectual Property Rights (IPR) - Rights given to persons over the creations of
their minds
 Usually give the creator an exclusive right over the use of
his/her creation for a certain period of time

VII. Execution, Operations and Expansions

o Execution occurs in the thousands of decisions made each day by people at every
level of your company

Execution
o Business execution leads to greater success”. How can you create the foundation for
business execution that moves your organization from “strategizing” to “executing”?
o Your strategy, people, and work processes need to be effectively linked for true
business execution excellence. Problems occur when companies have a brilliant
strategy, but fail to execute.

Business operation: Meaning and Purpose

 Done by making a profit
 The value increase is affected by just how well a business
performs financially, i.e. through dividends, interest and all
income that comes back to it. If this return is larger than the
investment, profit is registered. If a company manages to turn its
profit into a constant over an extended period, its value
increases exponentially
 Business operation function as a rough roadmap of a business.
 Business operations should evolve alongside the organization, or
glitches in the system will soon make their presence felt

Business operations functions

 Often subjected to change

 Company founders and stakeholders have a decisive hand in
how these functions will be performed
 Other factors for change, like human capital inventory,
departmental responsibilities, level of streamlining and
 effectiveness of leaders in charge of overseeing and adapting
business operations
Business Expansion
 A stage of a company’s life that is fraught with both
opportunities and perils
 Usually seen as validation of the entrepreneur’s initial business
startup idea, and of subsequent efforts to bring that vision to
fruition
 Business expansion is a stage of a company's life that is fraught
with both opportunities and perils.
 "The growth process begins with an honest assessment of
strengths and weaknesses," wrote Erick Koshner in Human
Resource Planning. "Given those skills, the organization then
identifies the key markets or types of future market opportunities
the company is likely to capture.

VIII. Pricing Strategies

o A pricing strategy takes into account segments, ability to pay, market conditions,
competitor actions, trade margins and input costs, amongst others. It is targeted at the
defined customers and against competitors.
o Good pricing strategy helps you determine the price point at which you can maximize
profits on sales of your products or services. When setting prices, a business owner needs
to consider a wide range of factors including production and distribution costs,
competitor offerings, positioning strategies and the business’ target customer base.

Price - Value that will purchase a finite quantity, weight, or other measure of a good or
service
- Value that is put to a product or service and is the result of a complex set of
calculations, research and understanding and risk-taking ability
Pricing - Defines the value that your product is worth for you to make and for your
customers to use
- Tangible price point to let customers know whether it is worth their time and
investment
Good pricing strategy - Helps determine price point at which profits on sales of products or
services can be maximized
Types of pricing strategy
1. Premium Pricing Strategy
 Most effective in the beginning of a product's life cycle
 A premium-priced product is priced higher than its competitors
 Small businesses that sell goods with unique properties are
better able to use premium pricing.
2. Penetration Pricing Strategy
 Price is set artificially low to gain market share quickly
 Done when a new product is being launched
 It is understood that prices will be raised once the promotion
period is over and market share objectives are achieved
3. Economy Pricing Strategy
 Strategy sets prices at the bare minimum to make a small profit
 Companies minimize their marketing and promotional costs
 A key to a profitable economy pricing program is to sell a high
volume of products and services at low prices
 Large companies, such as Walmart, are able to take
advantage of this low-price strategy, but small businesses
will have difficulty selling enough products at low prices to
stay in business.

4. Skimming Pricing Strategy

  Designed to help businesses maximize sales on new products and
services, price skimming involves setting rates high during the
introductory phase. The company then lowers prices gradually as
competitor goods appear on the market.
 One of the benefits of price skimming is that it allows businesses to
maximize profits on early adopters before dropping prices to attract
more price-sensitive consumers. Not only does price skimming help a
small business recoup its development costs, but it also creates an
illusion of quality and exclusivity when your item is first introduced to the
marketplace
5. Psychological Pricing Strategy ("left-digit effect)
 Encourages consumer to buy products based on emotions
rather than on common-sense logic
 The best example is when a company prices its product at
$199 instead of $200. Even though the difference is small,
consumers perceive $199 as being substantially cheaper.
This is known as the "left-digit effect

IX. Business Plan Presentation and Evaluation
Business Plan
- A fundamental tool to startup any business needs to have in place prior to beginning its
operations
- A written document describing the nature of the business, the sales, marketing strategy, and the
financial background, and containing a projected profit and loss statements of the company or
business
- Allows a company to lay out its goals and plans to attract investments. They are also a way for
companies to keep themselves on track and how to go forward.

How to Present Your Business Plan Successfully?

1. Prepare yourself first: it is worthy to note that investors invest first in the entrepreneur before
the business plan. Investors will want to see that you are fast, thoughtful and efficient, and
can sustain the project through its conception and growth. No matter how good your
business plan is, if you lack strong presentation skills, you may not be getting as much
attention from the investors as you actually should.
*Do professional (non-colloquial) presentation as always, when preparing your plan, keep
your audience in mind it doesn't matter how compelling your business plan is if the readers or
audiences starts with a negative impression. *
2. Prepare your pitch: To be able to catch your audience, you need to prepare a brief,
compelling presentation that tells your story, describes your business and explains how you
will fulfill a customer want, need or desire, you should have presented a great detail of your
target market. You might be surprised to find that the size of the market may not be as large
as you had anticipated, the size of the target market often determines the success of a
business, and investors also know this. You should have to show that your business has the
ability to grow and expand in the future. A business that has no growth strategy is simply not
worth investing in because it has no future, and no investor would want to put his or her
money in a sinking ship.
*Research your target, - learn as much as possible about how much money people have to
invest, industries they’re interested in and other requirements. Search venture capital
directories, Who’s Who, news articles, websites and similar sources.
3. Pepper your presentation with facts and figures: while carrying out your presentation, you
need to use facts and figures to support every conclusion and claim with research from third-
party sources. If you mention trends or evaluate your market potential, make sure you have
done the research to back your claims, you have to show that you have looked at your
project from every angle and prepared contingency plans. Discuss how your previous
experience and achievements will help you run a better business.
 *Your business plan presentation should be able to explain how your business intends to
generate revenue. You need to explicitly outline how your fees would be charged and if the
fees you charge would lead to profit for the business, and with what margin. *
4. Be realistic: to be effective, your forecasts should clearly show how your business or project
will be profitable for both you and your boss or investor. These forecasts must be rational and
backed up by solid data. Be careful about making bogus and unsubstantial claims, and to
be able to get the funding you need, you need to make your case watertight. You should
put on your salesman cap and give it your best. It is good to be passionate about your
business, but it is your facts and figures that will get you the money.
* Since there are very few businesses that are still undiscovered, investors would like to know
how you intend to deal with the competition. You should outline what would make you stand
out from them as well as your competitive advantage.
5. Practice makes perfect: when preparing to make your pitch to investors and lenders, you
should never leave anything to chance. So practice your pitchand presentation in front of
family, friends, business associates, etc. and get feedback on how to improve it.
* Don’t memorize the presentation: you have to know your business plan like the back of your
hand, after all you are expected to have put a lot of time into it. You should be able to give
your presentation fluidly. *

How to Critically Evaluate Your Business Plan

- After you create a business plan order to succeed, it is essential to evaluate it periodically
and modify the sections that you feel are not working for your business

1. How Viable is your Plan?

-Don’t read it with a critical eye the first time. Just try to absorb as much information as
you can. The second time through, begin making notes about sections that seem unclear
and also look for the gap between these assumptions and the reality of your
business.Make adjustments and corrections to ensure that your business plan is more
realistic and in touch with the current and future scenarios of your business. Create a
Business Action plan based on this evaluation and ensure it works well with your strategies
for growth.

* also check grammatical and spelling errors.as entrepreneur they are so close to their plan
document that it is easy for him to overlook common errors in grammar or spelling. Finding a lot
of these can be jarring to investors reading the plan and may even cast doubt about the
credibility of the statements made in the document. *
2. Think like an investor.
- As you review the plan, ask yourself whether this business looks like a good investment.
Many plans dwell too much on how intriguing the company's technology is and ignore
the factor of critical importance to investors, can we make money? Try to identify aspects
of the company’s business model that will allow it to earn higher than average profits.
3. Analyze the benefits of the products or services.
-The plan should give you a clear idea of the superiority of the company’s products or
services compared with those offered by competitors. Make sure you see why the target
customers have a compelling need for the company’s products or services. If you don’t,
suggest that this section of the plan be strengthened.

4. Evaluate the management team.

-Ask yourself whether you believe this team is capable of executing the business strategy
outlined in the plan. Does the team look complete? Look for gaps in talent or experience
that need to be addressed by bringing additional managers aboard. Determine whether
the capabilities of the team match up well with the requirements for success in this industry.

5. Check the assumptions for the financial projections

-Make sure the entrepreneur has provided easy-to-follow logic behind the numbers. You
should be able to take the revenue assumptions and duplicate the calculations presented.
Entrepreneurs tend to present overly optimistic revenue and profit projections. Look for
areas where costs were underestimated or omitted altogether. Determine whether the
projected revenue growth, particularly in the first two years, seems realistic.