UNIT 5: NEW VENTURE and INTRAPRENEURSHIP

A. IDEA GENERATION AND EVALUATION

IDEA GENERATION

 It describe as the process of creating, developing and communicating abstract, concrete or

visual ideas.
 It is the front end part of the idea management funnel.
 It focuses on the formulation of possible solutions to perceived or actual problems and
opportunities.

Tools and Techniques for Generating Ideas

1. Idea Challenge
 It is 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)

 It is a method used for problem-solving and creative thinking.
 It is 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:
a. Substitute - refers to replacing a part of your product, concept or process with another
to achieve even better outcome
b. Combine - explores the possibility to combine two ideas into a single, more effective
solution
c. Adapt - the possibilities to make the process more flexible and focuses on other similar
incremental improvements to the idea, process, or concept
d. Modify - looks at the problem or opportunity from a bigger perspective and aims for
improving the overall results
e. Put to another use - focuses on how to use the idea or existing solution for another
purpose
f. Eliminate - examines the possible outcomes if one or more parts of the concept were
eliminated
g. Reverse - focuses on reversing the order of interchangeable elements of an idea

3. Opposite Thinking
 It is a technique that can help you question long-held assumptions related to your business.
 It considers the exact opposite of what’s normal, including unconventional solutions.

4. Brainstorm Cards
 It helps consider external factors such as: societal trends, new technologies, and regulation
in the context of your business.
 It is to generate a great number of ideas with little effort.
 5. Analogy Thinking
 It refers to the use of information from one source to solve a problem in another context.
 It is an effortless method for coming up with new ideas that are pre-validated.

RESOURCE REQUIREMENTS

 These 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:
a. Financial Resources: Funding
 It is the most important element in starting a business.
b. Human Resources: Employees
 The success of an organization is heavily reliant on the talent and strength of its
employees.
c. Educational Resources: Industry Know How
 Perhaps the greatest thing an entrepreneur can do when establishing a new business is
to gain as much education possible.
d. Physical Resources: Premises and Equipment
 It 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.
e. Emotional Resources: Support Systems
 This team may be composed of friends and family as well as a mentor or professional
groups.

MARKETING PLANNING AND E-MARKETING

Marketing Plan

 It is a written strategy for selling the products/services of a new business.

 It is a reflection of how serious a company is in meeting the competition head on.

Two Levels of Operation

1. Strategic Marketing Plan

 It develops the broad marketing objectives (MO) and strategy based on an analysis of
current market situation and opportunities.
2. Tactical Marketing Plan
 It outlines the specific marketing tactics for the period, including advertising, pricing, and
channels.

Contents of Marketing Plan

1. Title Page
 It includes the name of the company, period of time and completion date.
2. Table of Contents
 List of all the contents of the marketing plan in the order they appear and citing relevant
page numbers.
 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
 It is 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
 It includes the "mission statement" of the business; an idea of what its goals are.
5. Market Analysis
 It examine whether or not your industry is growing, maturing or declining.
6. Environmental Analysis - Global Business Environment
 Look at and comment on the world in which you will be operating.
7. Environmental Analysis - Local Business Environment
 Conduct an environmental analysis that looks at and comments on your local area and
your network of business contacts, competitors and customers.
8. Consumer Analysis
 Identify target market.
 It describes how company will meet the needs of the consumer better than the
competition does.
9. Product or Service
 Products or services should reflect your overall company strategy.
10. Price
 Pricing should be competitive as well as a reflection of the quality, costs and profit margin.
11. Location
 Identify the location of your business.
12. Promotion
 Describe the type of promotional methods you will use to spread the word about your
product.
13. Financial Information
 It shows the predicted level of sales you expect to realize with and without the strategies
you have outlined in the marketing plan.
14. Tables, Graphs, Diagrams and Pictures
 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 Materials
 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
  It includes appropriate demographic information such as populations, age
distributions, and projected population growth and household sizes.
d. Pricing
 "Break-even point" in sales, competitor pricing schemes, consumer profiles and
product/service expectations. Separate the "fixed cost" components and your
"variable costs".

E- MARKETING (Electronic Marketing)

Marketing:

 It 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.

E-Marketing

 It is the marketing of products using electronic technology to determine the consumer market.
 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.

THE CONCEPT OF E-MARKETING

Marketing Objectives

 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

 Website to display and sell your products
 Internet advertising to promote your business
 Software to collect and analyze 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 and other
objectives such as industry, products, etc.

ESP (ENVIRONMENT STRATEGY PERFORMANCE)

 The e-marketing plan flows from the organizations 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.

E-BUSINESS PROJECT

 Most strategic plans explain the rationale for the chosen objectives and strategies.
 Four appropriate types of rationale for e-business projects:
a. Strategic justification
b. Operational justification
c. Technical justification
d. Financial justification

BUSINESS MODEL

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

E-BUSINESS MODEL

 Value and Revenue

a. 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
b. Revenue
 E-business strategies help to decrease internal costs
 E-business strategies also increase the enterprise revenue stream.

THE MARKETING PROCESS

 A comprehensive marketing process and resulting Marketing Plan is critical for the success of
your business.
 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.
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.
2. Partnership
 Owned by two or more individuals.
 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.
4. Corporation
 An entity separated from its owners.
 Two types:
a. C corporations - owned by shareholders, are taxed as separate entities
b. S corporations - owners also have limited liability protection.
c. B corporations (Benefit Corporations) - for profit entities structured to make a positive
impact on society
d. Closed corporations - run by a few shareholders, are not publicly traded
e. Nonprofit corporations - help others in some way and are rewarded by tax exemption
5. Cooperative
 Owned by the same people it serves.

IPR AND RELATED LAWS

1. 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.
 It is divided into categories:
a. 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
b. Trademark - a toll used that differentiates goods and services from each other.
c. Copyright - right that creator have to stop others from copying their works without
permission.

2. Intellectual Property Rights (IPR)

 Rights given to persons over the creations of their minds.
 It usually gives the creator an exclusive right over the use of his/her creation for a certain
period of time.
EXECUTION, OPERATIONS AND EXPANSIONS

Business Operation: Meaning and Purpose

 It is 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

Execution

 Business execution leads to greater success”. How can you create the foundation for business
execution that moves your organization from “strategizing” to “executing”?
 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 Operations Functions

 Often subjected to change.

 Business operation functions 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.
 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

 It is a stage of a company’s life that is fraught with both opportunities and perils.
 It usually seen as validation of the entrepreneur’s initial business startup idea, and of
subsequent efforts to bring that vision to fruition.

PRICING STRATEGIES

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.
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 skimming.
4. Psychological Pricing Strategy (left-digit effect)
 Encourages consumer to buy products based on emotions rather than on common-sense
logic.

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 statement 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.

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 pitch and 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.
 Business execution leads to greater success”. How can you create the foundation for business
execution that moves your organization from “strategizing” to “executing”?
 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.

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.