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COURSE OUTLINE

ENTR415 NEW VENTURE STRATEGY

Queenstown 18, 19, 20, 21 March 2014

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Table of Contents

Paper Description 3

Learning Outcomes 3

Staff 3

Course Delivery 4

Expectations and Workload 4

Course Materials and Course Resources 4

Blackboard 6

Lectures 7

Assessment 8

Course Requirements 11

Safe Assign 11

Student Learning Centre 11

Dishonest Practice and Plagiarism 12

Concerns about the Course 12

Disclaimer 12

Centre for Entrepreneurship Policy on Student Internal Assessment 12

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Paper Description

Planning and managing growth in a new entity. Legal and ethical issues. Exit strategies.

Learning Outcomes

The overall aim of ENTR415 is to develop students’ knowledge about strategies employed in successful new ventures. At the completion of this paper, students will be able to:

Demonstrate an understanding of the challenges that new ventures face when they enter foreign markets.

Critically analyse a range of strategic concepts and how they can be used by new ventures that internationalise.

Understand models used in planning for new venture growth and internationalisation.

Apply and refine models used in planning new ventures.

Understand the organisational challenges in launching and growing a new venture.

Understand how to plan and manage for growth and expansion.

Understand exit strategies.

Staff

Lecturers Professor Sylvie Chetty Director of the Centre for Entrepreneurship Office: Commerce Building room 623 Phone: 479 8147 Email: sylvie.chetty@otago.ac.nz Richard Higham Email: rhigham@business.otago.ac.nz Course leader: Professor Sylvie Chetty

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Course Delivery

ENTR415 is run over six weeks. It is taught through four days of seminars in week two, followed by four weeks for the completion of assignments. Seminars will include sessions from lecturers, who deliver the majority of the conceptual material, as well as guest speakers. Participants are expected to contribute through questions and discussion. This course involves a computer simulation that is completed in groups. Students must attend all of these sessions in order to receive marks for this assessment. Lecture Timetable: Tuesday 18 March 8.00am – 6.00pm Wednesday 19 March 8.00am – 6.00pm Thursday 20 March 8.00am – 6.30pm Friday 21 March 8.00am –12.00 pm Participants are expected to prepare for and attend all classes to gain full benefit from the course. The taught portion of the course should be prepared for by completing assigned readings. Unless stated otherwise, all aspects of the course are examinable.

Expectations and Workload

(i) Contact hours hours derivation Lectures 30 (4 days of 7.5 hours)

Sub-total 30

(ii) Non-contact hours Class preparation 24 (6 hours for each day of lectures) Assignment 1 20 Assignment 2 50 Assignment 3 30 Private study and mentoring 26

Sub-total 150

(iii) Total number of hours 180

Course Materials and Course Resources

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The University Library provides online resources for participants. These include subject guides, and other research resources, and citation styles. Readings are provided either in the Library or are available online. Textbook: Timmons J.A. & Spinelli, S. (2008 or 2012). New Venture Creation: Entrepreneurship for the 21st Century ( 8th or 9th Ed.) McGraw Hill. Chapters 12 (Franchising), 17 (Leading rapid growth, crises and recovery), 19 (Harvest and beyond). Additional readings/resources. Please familiarise yourself with these resources For Sylvie Chetty’s sessions, these readings are on blackboard: Chetty, Sylvie and Colin Campbell-Hunt (2004) A Traditional versus ‘Born Global’ Approach to Internationalisation. Journal of International Marketing. Vol. 12, No. 1, pp. 57-81. Johanson and Vahlne (2009) The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, pp. 1-21. Knight and Cavusgil (2004) Organizational capabilities, and the Born-Global firm. Journal of International Business Studies, Vol. 35, No. 2, pp. 124-141. Liu and Li (2002) Strategic implications of emerging Chinese multinationals: The Haier Case Study, European Management Journal, Vol. 20, No. 6, pp. 699-706. Mathews and Zander (2007) The international entrepreneurial dynamics of accelerated internationalisation. Journal of International Business Studies, Vol 38, 387-403. Oviatt and McDougall (2005) Defining international entrepreneurship and modelling the speed of internationalization. Entrepreneurship Theory and Practice. Partanen, Chetty and Rajala (2011) Innovation and Networks in SME growth. Journal of Entrepreneurship Theory and Practice. 1DOI: 10.1111/j.1540-6520.2011.00474 Chetty and Agndal (2007) Social Capital and Its Influence on Changes in Internationalization Mode Among Small and Medium-Sized Enterprises, Journal of International Marketing Vol. 15, No. 1, 2007, pp. 1–29 Prashantham and Dhanaraj (2010) The dynamic influence of social capital on the international growth of new ventures. Journal of Management Studies, Vol. 47, No. 6, pp. 968-994.

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Sarasvathy,Kumar, York and Bhagavatula, (2014) An Effectual Approach to International Entrepreneurship: Overlaps, Challenges, and Provocative Possibilities, Entrepreneurship Theory and Practice. DOI: 10.1111/etap.12088 For Richard Higham’s section (powerpoint summaries of four articles will be available on blackboard) Brandt S. C. 1983. Entrepreneuring: The Ten Commandments for Building a Growth

Company. Mentor Press. Summary of Commandments and Chapter four on Planning, in full

Drucker P. 1985. Innovation and Entrepreneurship. Pan Books. Two chapters on

Entrepreneurial Necessities and Entrepreneurial Strategies.

Churchill N.C. and Lewis V.L. 1983. The Five Stages of Business Growth. HBR

Slatter S. 1992. Gambling on Growth. How to Manage the High Tech Firm. Chapter 5

Managing Growth

Blackboard

Blackboard https://blackboard.otago.ac.nz/webapps/login/ provides you with access to course materials, and class notices will be posted on Blackboard. Lecture slides will also be posted there. Blackboard is used to email the whole class so it is important that you check your student email and Blackboard regularly, or use PIMS to redirect your emails to your personal account. You will find helpful links to the Library referencing page, the Student Learning Centre, and writing resources in Blackboard.

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Lectures

Tuesday 18 March

Time Speaker Topic

8.00am -9.30am Sylvie Chetty Growing a new venture 9.30am – 9.45am Break

9.45am – 11.15pm Sylvie Chetty International Business Environment

11.15am - 12.45pm Sylvie Chetty Internationalisation Process Models

12.45pm – 1.45pm Lunch 1.45pm – 3.15pm Sylvie Chetty Internationalisation Process

Models 3.15pm-4.45pm Sylvie Chetty Assignment 1 presentation 4.45pm – 5.00pm Break

5.00 – 6.00pm Sylvie Chetty Special Topic in IE

Wednesday 19 March

Time Speaker Topic

8.00am -9.30am Sylvie Chetty International new venture strategy

9.30am – 9.45am Break

9.45am – 11.15am Sylvie Chetty International new venture strategy

11.15am - 12.45pm Sylvie Chetty International Marketing Mix 12.45pm – 1.45pm Lunch

1.45pm-3.15pm Sylvie Chetty International Marketing Mix 3.15pm – 4.45pm Sylvie Chetty Case Study 4.45pm – 5.00pm Break

5.00 – 6.00pm Sylvie Chetty Assignment 2 presentation

Thursday 20 March

Time Speaker Topic

8.00am -9.30am Sylvie Chetty Speed of internationalisation 9.30am – 9.45am Break

9.45am – 11.15am Sylvie Chetty Planning and Managing Growth 11.15am - 12.45pm Sylvie Chetty Networks and Social Capital 12.45pm – 1.45pm Lunch

1.45pm – 3.15pm Richard Higham Planning and financing a growth venture

3.15-4.45pm Richard Higham Launching: months 1-6 starting a franchise

4.45pm – 5.00pm Break

5.00 – 6.30pm Richard Higham Months 7 – 12. When and how to start an export campaign

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Friday 21 March

Time Speaker Topic

8.00am -9.30am Richard Higham Months 13 – 16. Handling growth plus a “friendly” merger

9.30am – 9.45am Break

9.45am – 11.15pm Richard Higham Months 17 – 22 further growth plus a takeover

11.15pm - 12.00pm Richard Higham Months 23 – 24 exit values and a follow up quiz of understanding

Assessment

All material presented is examinable (except where stated otherwise) by assignments. All important assessment information such as due dates and times, content and guidelines will be discussed at lectures, and detailed in the course outline and, where appropriate, on Blackboard. Participants are responsible for ensuring that they are aware of this information, keeping track of their own progress, and adhering to all deadlines.

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Marker Focus Value Due Date

Sylvie Chetty

Assignment 1-group class presentation

20% In class 18 March 2014

Sylvie Chetty

Assignment 2a-group class presentation

10% In class 19 March 2014

Sylvie Chetty

Assignment 2b individual written report: Analysis of one case study

40% Thursday 24 April 2014, 4pm. via Blackboard.

Richard Higham

3A plan and finance 3B launch and sell out 3C Quiz on learning

5% 15% 10%

End session 4 day 3 (Thu 20 March) End session 3 day 4 (Friday 21 March By 5.00pm Friday 4 April via email to: rhigham@business.otago.ac.nz

Assignment 1-Analysis of a Case Study 20% The case study will be given to you in class. Form a group of 2 or 3 people (depends on number in the class for 2 groups) to discuss this case study for 45 minutes. Each group will have 15 minutes to present their analysis in class. Assignment 2 –Analysis of a Case Study in two stages: 2a Class exercise (10%): Form a group of 2 or 3 people (depends on number in the class for 2 groups) to discuss this case study for 45 minutes. Each group will have 15 minutes to present their analysis in class. 2b Individual written assignment (40%): Each person does an analysis of the case study and submits this as a written assignment on Thursday 24 April 2014, 4pm. Please note that this part of the assignment is an individual piece of work not a group assignment. The written assignment should be five pages which includes references, single spacing, font size 12 point Times New Roman and margins 2.5cm all sides.

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Assignment 3 –Simulation exercises – IN GROUPS (Part A 5%, and Part B 15% and Part C 10% ). Richard Higham You will need to bring your laptops to class for this assignment. A new machine called an optimizing saw, used for the manufacture of custom-sized wooden “components” for the furniture industry, was invented some years ago by a Research Institute in New Zealand. It was successfully tested in the laboratory, and then made available for sale to enterprising venture teams in the South and North Islands. A market survey was done into the potential demand from the 680 New Zealand cabinet and furniture makers. Three existing firms already supplied the product, but they made components by hand rather than by machine. The potential is for high profitability, if you can get in first. But you need a launch budget based on your “bare bones assumptions” to show your venture management credentials and obtain venture finance, bank accommodation, and perhaps a lease, to add to your own money: all this so that you can buy machinery, rent, lease, or buy a building, and fund working capital for debtors and stocks In Part A, you will form launch syndicates, and use a customised spreadsheet to draw up a demand forecast and budget for the new product. This will require choice of customer segment, production planning and overhead budgeting. You will need to identify “unfair advantages”, build a team, and calculate investment levels. Grades will reflect the excellence and accuracy of your budget. There will be a lot of decisions taken in a short time, so everyone needs to learn fast and react quickly. The spreadsheet showing all your decisions will be submitted at the end of Session 4 on day 3, for grading overnight. Then in Part B: in syndicates, you will launch your simulation firms, and learn about the management of fast growth, the timing of entering export markets, the agreement of merger terms with another firm, winning or losing a hostile takeover battle, and creating a franchise. The finale is a “trade sale” offer for your shares by a corporate. Your decisions taken on the launch spreadsheet and submitted by the end of session 3 on day 4, will be subjected to critical analysis by an experienced venture investor. Grades will reflect both the excellence of your decisions, and the financial gain you have made in the value of your shares. Results will be circulated three days after the sessions in Queenstown – by 5.00pm on Monday 24th March . Part C is an individual quiz on what you have learned about the venture management process, submitted by e-mail to rhigham@business.otago.ac by the 4th April at 5.00 pm.

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The simulation is based on a real launch and the experts who took part then are willing to help me (Richard Higham) as organizer, with their opinions on your professional and practical approach to new venturing.

Course Requirements

To pass this course, students must attend all classes, complete the in-class exercises and hand in all assignments on time and achieve a 50% mark for the course.

Safe Assign

Please be aware that Safe Assign may be used for assessments in this paper. Safe Assign is a plagiarism detection tool which can report matches between sections of students work submitted to it and material on a comprehensive database to which Safe Assign has access. This includes material on the internet and other student’s assignments which have previously been submitted to Safe Assign. Assignments will need to be submitted to the Final Version Assignment folder in the Blackboard course for this paper. You may submit your assignment to this folder only once. You also have the option of submitting one draft assignment to the ‘Draft Safe Assignment’ folder. If you choose to utilise this option, you will receive the report generated which contains a percentage mark of the paper that matches other sources. Assignments submitted to the ‘Draft Assignment’ folder will not be assessed; however the report will be available for the paper co-ordinator to view. You can find further information on Safe Assign and dishonest practice at: http://www.otago.ac.nz/blackboard/assessing-your-students/anti-plagiarism-safeassign/anti-plagiarism/ and http://www.otago.ac.nz/administration/policies/otago003145.html

Student Learning Centre

The Student Learning Centre, which is part of the Higher Education Development Centre, provides learning support, free of charge, to ALL enrolled students. Their services include:

a workshop programme designed to help students to improve their learning strategies and their generic skills;

individual assistance with learning issues; on-line study skills advice; a student leadership programme a student-led peer support programme for students of all ages and backgrounds.

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conversational English groups for students from a non-English speaking background The Centre also provides two very helpful study guides, “Guidelines for Writing and Editing” and “Writing University Assignments” and these are available on the SLC website. http://hedc.otago.ac.nz/hedc/sld/About-us.html

Dishonest Practice and Plagiarism

Students should make sure that all submitted work is their own. Plagiarism is a form of dishonest practice. Plagiarism is defined as copying or paraphrasing another’s work and presenting it as one’s own (University of Otago Calendar 2012 page 224). In practice this means plagiarism includes any attempt in any piece of submitted work (e.g. an assignment or test) to present as one’s own work the work of another (whether of another student or a published authority). Any student found responsible for plagiarism in any piece of work submitted for assessment shall be subject to the University’s dishonest practice regulations which may result in various penalties, including forfeiture of marks for the piece of work submitted, a zero grade for the paper, or in extreme cases exclusion from the University. The University of Otago reserves the right to use plagiarism detection tools.

Concerns about the Course

We hope you will feel comfortable coming to talk to us if you have a concern about the course. The Course leader will be happy to discuss any concerns you may have. Alternatively, you can report your concerns to the Class Representative who will follow up with departmental staff. If, after making approaches via these channels, you do not feel that your concerns have been addressed, there are University channels that may aid resolution. For further advice or more information on these, contact the departmental administrator or head of department.

Disclaimer

While every effort is made to ensure that the information contained in this document is accurate, it is subject to change. Changes will be notified in class and via Blackboard. Participants are encouraged to check Blackboard regularly. It is the participant’s responsibility to be informed.

Centre for Entrepreneurship Policy on Student Internal Assessment

The purpose of this document is to have a consistent policy throughout the centre as well as to develop students’ time management skills. It reflects usual practices in the business world in which neither success (here: grades) nor deadlines are negotiable.

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1. Dissemination of Grades –The letter grade only will be returned to the student on their work. At the end of the course, all internal assessment will be displayed by Student ID with the letter grades for each assignment. All students are requested to check these when posted on the web-based Blackboard – any discrepancies should be reported to the course leader as soon as possible.

2. Late Assignments – Assignments received after the deadline and within 24 hours after the deadline will have 5 % deducted from the available grade for the piece of assessment (ie. 78% becomes a 73%, a B+ becomes a B). Assignments will have a further 5% deducted from the grade for each 24 hour period following this. Should you fail a paper, you will be given one chance to resubmit the assessment and should this meet a passable standard, you will receive a 50% pass for the paper. If, after resubmission, you fail the paper, you will not be permitted to continue with the Master of Entrepreneurship.

3. Extensions – Extensions will be granted only in exceptional circumstances (eg. illness with supporting medical documentary evidence stating nature and length of impairment, family emergency, provincial or national representative activities) by the Course Leader. A formal medical certificate is required for all extensions. Lecturers are not authorised to give extensions. Only the Course Leader should be approached (consult the course outline for the person(s) responsible). Computer problems do not constitute an exceptional circumstance unless it is an officially notified failure of university equipment.

4. Plagiarism – Plagiarism is the dishonest use of someone else’s words, facts or ideas, without proper acknowledgement. Most students will include other people’s ideas and information in their work and assignments - such material may be either quoted or digested and used by students. In either case, acknowledgement is essential. Note that the University of Otago Calendar under Student Conduct Rules Part 1 Section 1 (e) states that no student shall “engage in any dishonest practice as described in regulation 5(b) of the Examinations and Assessment Regulations in connection with an examination or other method of academic work which counts towards the attainment of a pass in any subject.”

5. Problems with group work – Where group work is set and a group is experiencing difficulties, the students should approach their tutor to try to resolve these differences. The tutor will counsel the group, or individuals from the group, on the procedures open to them to resolve group problems (the problem should be raised prior to the work being completed or handed in).

The procedure to be followed is:

i) students should try to resolve the problems within the group without outside assistance.

ii) students should meet with their course leader to endeavour to resolve outstanding issues, who will endeavour to resolve the situation.

This procedure MUST be completed to step ii) before the assignment is submitted for grading. Where there are still unresolved difficulties, step iii) will be implemented.

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iii) students will complete a ‘Peer Assessment’ form available from the appropriate course leader (which must be submitted to the course leader before any grades are released).

The Course Leader reserves the right to require all students to complete peer assessment forms at any time during and/or after submission of an assessed group project. Should there be differences in the peer assessment forms, the student(s) will be required to either submit in writing to, or meet with a group comprised of their course leader, academic advisor and lecturer(s) and others (as deemed appropriate) to provide an explanation for the discrepancy. A differential allocation of grade may result from this process.