business opportunities for entrepreneurs

7/29/2019 Business Opportunities for Entrepreneurs

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Prof. Vidhya Srinivas


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Free entry into world trade. Improved risk taking ability. Governments of nations withdrawn some restrictions Technology and inventions spread into the world. Encouragement to innovations and inventions. Promotion of healthy completions among nations Consideration increase in government assistance for

international trade.

Establishment of other national and internationalinstitutes to support business among nations of theworld.

Benefits of specialization. Social and cultural development


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Problems of raising equity capital Difficulty in borrowing fund. Throat-cut completions endangered existence of

small companies. Problems of availing raw-materials. Problems of obsolescence of indigenous

technology Increased pollutions Ecological imbalanced. Problems of TRIPS and TRIMS. Exploitation of small and poor countries, etc.


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Small and Medium Enterprises Family Owned Enterprises

Next Gen Enterprises Women Entrepreneurs Social Entrepreneurship Rural Entrepreneurship Off shoring Developing SMES to Large Corporations


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The Government of India passed in June 2006 anact regarding the Micro , Small , and MediumEnterprises . The Micro , Small and Medium

Enterprise Development Act ,2006 (MSMEDA ) The Act accomplishes many long -standing goals

of the government and stakeholders in the MSMEsector .


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The Act decisively defines the MSMEs bythe level of by Plant and Machinery (P&M )

investment.

The categorization also makes allowancesfor the inherently smaller investments ofService enterprises.


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The new definition has expanded the P&M limits ; now eachenterprise level encompasses larger investments than before. The new categorization is as follows :-

Micro Manufacturing : P&M* Less than Rs 25 lacs Micro Service : Equipments* Less than Rs10 lacs

Small Manufacturing : Less than Rs 5 crore Small Service : Less than Rs 2 crore Medium Manufacturing : Less than Rs 10 crore Medium Service : Less than Rs 5 crore

*Original cost excluding Land and building and furniture,fittings and such items, specifically excluded

Loans not exceeding Rs. 20.00 Lacs granted to Retail Tradewould henceforth be part of Small Service Enterprise underMSME.


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Evolution of SMEs judicious use of foreign exchange for import of capital

goods and inputs labour intensive mode of production employment generation Non concentration of diffusion of economic power in the

hands of few (as in the case of big houses) discouraging monopolistic practices of production and

marketing

finally effective contribution to foreign exchange earningof the nation with low import-intensive operations. It wasalso coupled with the policy of de-concentration ofindustrial activities in few geographical centers.


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High contribution to domestic production Significant export earnings Low investment requirements

Operational flexibility Location wise mobility Low intensive imports Capacities to develop appropriate indigenous

technology Import substitution Contribution towards defense production Technology oriented industries Competitiveness in domestic and export markets


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Low Capital base Concentration of functions in one / two

persons Inadequate exposure to international

environment Inability to face impact of WTO regime Inadequate contribution towards R & D Lack of professionalism


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Food Processing Agricultural Inputs Chemicals & Pharmaceuticals Engineering; Electricals; Electronics Electro-medical equipment Textiles and Garments Leather and leather goods Meat products

Bio-engineering Sports goods Plastics products Computer Software, etc.


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Western Maharashtra: Pune, Kolhapur,Satara, Nasik, Ahmednagar

Konkan Region: Ratnagiri, Sawantwadi,Kudal Marathwada : Aurangabad, Nanded,Latur, Beed

Vidharbha: Nagpur, Amaravati Greater Mumbai: Thane, Belapur, Navi

Mumbai


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Family Business like beauty tends to be in the eye of thebeholder.

There is no consensus on the definition of Family Enterprise.

The common elements in defining Family Business can be:

Percentage of share capital owned by the family. Number of generations of owning families involved in the business Direct descendents of the founder having Management/Ownership

control


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Family and its Institutions Family Council &Assembly

The Board of Directors The CEO or The top management

Happy families are alike, Every unhappy family isunhappy in its own way .

Tolstoy in Anna Karenia


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Family companies employ morethan half of the worlds

industrialized workforce. They produce 65% of the GNP inthe USA

Worlds most famous brand arefrom family firms Marriot,

Disney, Ford, Nestle Family firms are 5% more

profitable than their non-familycompetitors.


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Merits High level of respect and

trust

Continuity of Businesstradition and values

Operational flexibility in

decision making process Sense of identity, pride

and legacy.

Demerits Lack strategically planned

Management succession

Only 30% of FamilyBusinesses have writtenstrategic plans UNBusiness report 2003

Informal channels ofcommunication

Emotional Involvement


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Succession Participation

Compensation and Ownership Harmony Responsibility Professional Management

Succession or transition process is theultimate test for family businesses.


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Only 5% of Family Businessesin the world are goingconcerns in 3rd Generation -

Survey by J P Morgan Transition involves both

management and ownership

Family firms are minefields of

complex relationship andcompeting norms.

What is the way out?


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Firm Foundation Meritocracy Open Communication Innovative Processes

The Implementation

of the abovestrategies demands


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Fresh IdeasInnovative thinkingPeer Learning and

Dynamic Positive Change

Entrepreneurship is the way out


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Wal-Mart, Ford, Samsung, LG, Motorola

The entrepreneurial traitInvolving Employeesand Customers as Shareholders.


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Long term Nature of family firms ownership

Kinship-ties have positive effect upon

entrepreneurial opportunity recognition Entrepreneurial activities increase

distinctiveness of the Family Firms products.

Family run local businesses have entrepreneurial

advantages over large corporations.


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Founders desire for lasting legacy

Organizational cultures

Ethnic heritage of the family

Societys regional cultures and historicalexperiences


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Dabur India Limited (DIL) is the third largestFMCG Company operating in India with a

turnover of more than Rs. 2,233 crores. Itoperates under three business categoriesnamely Consumer Care Division (CCD),Consumer Healthcare Division (CHD) andDabur foods Limited (in July 2007, Daburannounced the de-merger of DFL with DIL).


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Dr. S.K Burman started Dabur in 1884 as asmall pharmacy. Initially, he preparedAyurvedic medicines to treat diseases likemalaria, plague and cholera that had no cureduring that period. It was his dedication,commitment and empathy that made Dabur

a renowned name among the masses. Andtoday, after more than 120 years, Dabur isknown for its trustworthiness more thananything else.


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During this passage of time, Dabur went throughseveral structural and strategic changes to maintainits market strength. The real mass production startedin 1896. Early 1900s saw Dabur emerge as the first

company to provide health care through scientificallytested methods. It achieved significant improvementsafter setting up Research and Development centersand manufacturing automation. The launch ofDaburs

Amla hairoil and Chyawanprash was a boon to theexpanding business. To keep up with the times, Daburcomputerized its operations in 1957. Its Dant Manjanand digestive tablets were widely accepted as well.


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However with a large product portfolio in the market,Dabur had to maintain operational efficiency. To makesure it adjusted to the business environment it

became a public limited company in 1986 followed bydiversification in Spain in 1992. A major change camewhen Dabur came up with its IPO in 1994. Because ofits position, Daburs issue was 21 timesoversubscribed. Dabur further divided its businessinto three separate groups:

Health Care Products Division Family Products Division Dabur Ayurvedic Specialties Limited


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In 1998, for the first time in the history of Dabur, a non-familymember took charge. Dabur handed over the operations toprofessionals. Successful implementation of procedures, timelychanges and maintaining its essence, Dabur achieved its highest-ever sales figure of Rs 1166.5 crore in 2000-01.

As FMCG sector was struggling with the slow growth in the Indianeconomy, Dabur decided to take numerous strategic initiatives,reorganize operations and improvise on its brand architecturebeginning 2002. It decided to concentrate its marketing efforts onDabur, Vatika, Anmol, Real and Hajmola to strengthen their brand

equity, create differentiation and emerge as a pure FMCG playerrecognized as a herbal brand. This was chosen after a study withAccenture, which revealed that Dabur was mainly perceived as aHerbal brand and connected more with the age group above 35


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Product CategoryProducts HairoilVatika, Amla, Sarso

(Anmol coconut) Shampoo Vatika heena conditioning, root-strengthening

Anmol-natural shine, silky

Baby & Skin Care Vatika fairness, Gulabari, Vatika fairnessface packJanmaghutti, Olive oil, Gripewater, Dabur lal tel

Digestive Hajmola range, Hingoli, Pudin hara Health Supplements Chyawanprash, chyawanshakti,

Dabur Honey, Glucose Oral Care Babool (rural market), Meswak (unani method),promise, Lal paste, Binaca, Promise

Home Care Odomos, Odonil, Odopic, Sanifresh


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Brand Rejuvenation With youth forming a major population of India,

Dabur decided to revamp its brand identity.

Dabur associated itself with Amitabh Bachchan,Vivek Oberoi, Rani Mukherjee and VirenderSehwag for endorsements. New packaging andadvertising campaign saw the sales ofChyawanprash grow by 8.5 per cent in 2003-04.

The year 2004-05 saw a whole new brandidentity of Dabur. The old Banyan tree wasreplaced with a new, fresh Banyan tree.


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The logo was changed to a tree with a younger look. Theleaves suggesting growth, energy and rejuvenation, twincolors reflecting perfect combination of stability andfreshness, the trunk represented three people raising their

hands in joy, the broad trunk symbolized stability, multiplebranches were chosen to convey growth, and warmth andenergy were displayed through the soft orange color.Celebrating Life was chosen as a new tag that completelysummarized the whole essence.

The Chairman in his annual report message said, If I wereto summarize your Companys performance during theyear under review (2004-2005), it would be Pursuit ofProfitable Growth.


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HR Initiatives: ESOPS IT: SAP ERP

SCM: e-procurement, Dabur includedautomation, debottlenecking, Kaizen andwastage control. It set up production units inlocations providing tax holidays to reducecost and improve efficiency


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International Markets: UK, Nepal, Egypt,North America

New U: Health and lifestyle retailer withCosmetics, Skin care, Men Grooming, HerbalSkin care, fashion accessories, groomingaccessories, confectionery, personal care etc.

Extensive Distribution Network


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Tech Savy New ways and Means of Business

Social Media E Commerce


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Flip cart Olix

Biocon Wipro UB Group Bharti Airtel Samsung Apple


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Creating business models revolving around low-cost products and services to resolve social

problems

Social business is for more-than-profit

combine revenue-generating business with asocial-value-generating structure

Can be two kinds Creating services for poor

Owned by poor (** not a SB )


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How can you do business and serve social goals?Why is profit-making not conflicting with social objectives?Profits -

Promotes R&D, innovation, new technologies Increases efficiency

Enables penetration to new geographical areas and serve deeperlayers of low-income people

Helps recover costs and pay back investors, thus encouragesinvestments

PMBs (profit max. businesses) vs. SBs (social businesses)How they are same yet different

Employ workers, create goods & services for consumers

Must recover full costs

Profits are important

YET objective is to create social benefit and not limited to personalgains


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Banking and finance is the biggest

beneficiary of technology-enabled social

startups

Muhammad Yunus, Grameen Bank(Nobel Peace Prize 2006) ** not founded in India

Vikram Akula, SKS Microfinance (Social Entrepreneur ofthe Year Award 2006)

Kiva (peer-to-peer micro-lending website) ** notfounded in India

Energy

Solar Electrification - Harish Hande, SELCO (Social

Entrepreneur of the Year Award 2007)


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Why do poor need financial services?A study in Andhra Pradesh revealed that for the poor, about 50% of all risky

events were characterized as health-related and another 28% were nature-

related.

Responses to these risks -

1st preference of the rural poor is borrowing (money lenders have very highinterest rates, subject to exploitation),

followed by mortgaging/selling assets (often under difficult conditions that

limits the value received for such assets).

Why don't they just go to a bank?The poor rarely have access to the formal financial sector

No money to open a savings account

No collateral or credit record to secure a loan

Illiterate so cant do paperwork


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Microfinance is providing financial services tothe poor such as loans, savings, money transferservices and microinsurance.

In India, Self Help Groups (SHGs) form the basicconstituent unit of the microfinance

SHG is a group of a few individuals usually poor women (group of 5 to 20)

They pool their savings (as low as Rs. 10 or 20 cents monthly per member) into a fund from

which they can borrow as and when necessary

Such a group is linked with a bank where they maintain a group account.

Over time the bank begins to lend to the group as a unit, without collateral, relying on self-

monitoring and peer pressure within the group for repayment of these loans.

The group is eligible for bank-loan after atleast 6 months of inter-loan repayments

Maximum loan amount is a multiple (usually 4:1) of the total funds in group account starts

with lower multiples (1:1 to 2:1)


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Amul: Dr.Kurien Green Peace

Tyrocare: Dr.Velumani


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Rural women entrepreneurs Micro financing

Rural BPOs Health Organic Farming


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Large Corporate

Micro EquityProvisions

Donor Funded


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These terms have had various meanings and are used

interchangeably in some of the literature, to clarify:

Outsourcing: subcontracting business outside of the company

Offshoring: moving business from one country to another

Offshore outsourcing: transferring business outside of the

country, to another firm

Most of the research pertaining to offshore outsourcing simply

call it outsourcing, we will do the same


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Businesses outsource for the purpose of cuttingcosts and raising profits. An early example ofoutsourcing in America in the 1970s, IBM developed

the IT industry in India.

Economically, if some people can use some of theirskills more cheaply than others, then those people

have the comparative advantage. The idea is thatcountries should freely trade the items that cost theleast for them to produce.


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Production offshoring got its big push when the NAFTAmade it easier for manufacturers to shift production facilitiesfrom the US to Mexico.

After its accession to the WTO, China emerged as aprominent place for offshore outsourcing: Cheap prices through very low wage rates, cheap loans, land, and

huge economies of scale based on cities with populations of over amillion workers.

Currently, India's engineering talent has made India theoffshoring destination of American high-tech firms, lead byHP, IBM, Intel, AMD, Microsoft, Oracle, and Cisco.


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Outsourcing has been practiced for over ahundred years

In the early years of US History, America's covered wagon covers and clipper ships'

sails

Scotland

India

Indias textile manufacturing

England


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Jobs are leaving the United States and goingto other countries

Less people in the United States know tradesthat are outsourced


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Domestic companies can employ foreignworkers for less

Prices lower for products sold in the U.S. andmade in other parts of the world Countries in the rest of the world can become

more developed


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Tourism Automobiles Textiles

Social ventures Software Engineering Products Franchising

Education and Training Food Processing Events and Consulting Recycling

Ayurveda andtraditional medicine

Organic Farming

Media Packaging Floriculture Toys

Social Media Bio technology Healthcare Energy Solutions


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