em slides for students

8/11/2019 EM Slides for Students

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Entrepreneurship Management

Lecture 1


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Syllabus

Prescribed Syllabus

Part IEntrepreneurial Perspective

Part IIEntrepreneurial Environment

Part IIILaunching an Enterprise


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Syllabus

Part -I: Entrepreneurial Perspective

Concepts of entrepreneur, entrepreneurship andenterprise

Advantages of entrepreneurship

Nature and development of entrepreneurship

Gender issues in entrepreneurship

Dynamic role of small businesses in economic

development

Personality of entrepreneurs and of intrapreneurs

Innovation and entrepreneurship


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Syllabus

Part -II: Entrepreneurial Environment Policy perspectives to promote entrepreneurship and

enterprises

Analysis of business opportunities in different sectorsof economy at national and global levels

Quickstart routes to enterprises (franchises,ancillaries and acquisitions)

Support organizations for entrepreneurs and theirrole

Legal framework for starting a business in India


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Syllabus

Part -III: Launching Enterprises

Product and project identification

Developing a project report or business plan

Business financing including VC finance

Managing early growth

Business incubation

New venture expansionstrategies and issues


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Out of Syllabus

What makes entrepreneurs entrepreneurial ?

Entrepreneurial thinking & acting approach

Entrepreneurship films

Case studies of successful entrepreneurs

Debates & Discussions

Project


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Suggested Reading

Books1. Dr. P.N. Singh, JC Saboo


2. S.S. Khanka

Entrepreneurial Development,

3. Rashmi Bansal, Stay Hungary Stay Foolish

I have a Dream

4. Robert Hisrich and MichaelPeters

Entrepreneurship,

5. Vasant Desai

Entrepreneurship

6. Jugaad

Megazines/Newspapers Economic Times/Mint

Business Standard

The Economist

Entrepreneur

Websites

www.nisebud.nic.in

www.ediindia.org

www.nenonline.org

www.msme.gov.in

www.nsteb.com

www.sidbi.in
http://www.nisebud.nic.in/http://www.ediindia.org/http://www.nenonline.org/http://www.msme.gov.in/http://www.nsteb.com/http://www.nsteb.com/http://www.msme.gov.in/http://www.nenonline.org/http://www.ediindia.org/http://www.nisebud.nic.in/


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Entrepreneurship Grid

Entrepreneur

PersonProcessor

PhilosophyObject

Entrepreneurship Enterprise


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Entrepreneurship

Definition

1. Risk-taking, Innovating, thrill-seeking

2. It is a philosophy or process through which an

entrepreneur seeks innovation and employment.3. A creative and innovative response to the environment

4. An attempt to create value through

Recognition of business opportunity

Management of risk involved in opportunity

Mobilization & management of resources


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Entrepreneurship

Definition

5. Process of creating something different with

value

by devoting the necessary time and effort,

assuming the accompanying financial, psychic,

social risks and

receiving the resulting rewards of monetary,

personal satisfaction and independence.


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Entrepreneurship

Definition6. Doing new things or doing things that are

already been done, in a new way can be

called entrepreneurship

Key words: Innovation, Risk-taking,Independence, Rewards


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Entrepreneur

An Individual (also applicable to a group)

Systematic Search

Combine

Create

Improve

Shift


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Entrepreneur

An Individual (also applicable to a group) Dream to create something of own

attitude of an owner with grit of blue collared boy

Action to fulfill the dream despite all odds with Managerial

perspective Innovation in product/idea/service

Passionate about learning

Determined, Dedicated and untiring

Not afraid of taking risks

Flexible

Networking


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Entrepreneurs background &

Characteristics

Family Environment: Fathers footsteps, family business,

E.g. Punjab, West U.P.,

Education: usually no or reverse co-relation, more educated go for job

Age: most start early (25-35)

Marital status: no real co-relation but most are married

Working history: usually have some work experience at a job or concern

Family contacts: help reducing risk and providing support

Professional contacts: help very much (IITs, IIM, Alumni, ex bosses)

Personal values: what do you stand for ? (Ethics, social cause)

Lifestyle: willing to wait for good/luxurious things till become stable &rich


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Who can be an Entrepreneur?

The one who: Feels the need for achievement

Can take moderate risks

Can spot opportunities

Possess skills in organizing

Can capitalize on opportunities

Has some financial strengthOn his own orborrowed

Has ability to work hard


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Who can be an Entrepreneur?

The one who:

Has desire for responsibility

Has a clear perception of probability ofsuccess

Gets stimulation by feedback

Does not necessarily have previous

experience


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What makes an Entrepreneur

Successful

The urge for achievement

Monetary & Self dependence ambitions

Willingness to take moderate risks

High risk takers are not entrepreneurs but gamblers.

Determination to win

WinWin Personality

Ability to identify & explore opportunities

Analytical ability to take strategic decisions

Perseverance


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What makes an Entrepreneur Successful

Flexibility

Capacity to plan and organize

Preparedness to undergo physical andemotional stress

Positive self concept/Self Belief

Future orientationVision

Ethics and ValuesMission


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Nature & Characteristics of an

Entrepreneur

Mental ability

Clear objectives

Business secrecy

H.R. ability

Communication ability

Technical knowledge

Achievementoriented

Perseverance

Determined

Ethical

Motivator

Selfconfident

Long term involvement

High energy level

Problem solver

Initiator

Goal setter

Risk taker


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Key Elements (traits) of an

Entrepreneur

Urge for Achievement

Risk taking

Organizing Skills

Innovation

Ethics & Values

Vision

Perseverance

Hard-working

Self-confidence


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Advantages of being an entrepreneur

To an Individual

Self Employment

Provide employment for near & dear ones

Often provide employment and livelihood for nextgenerations as well.

Freedom to use own ideasInnovation and creativity

Unlimited income / higher retained income

Independence

Satisfaction


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To the nation

Provides larger employment

Results in wider distribution of wealth

Mobilizes local resources, skills and savings

Accelerates the pace of economic development

Entrepreneurship is the govts one of the most

trusted vehicles for economic development

Stimulates innovation & efficiency


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(summary)

Self-employed, not working on directions forothers

Provide employment/purpose of engagement

to others

Bridge the demand gap by seizing opportunity

Add economic value to the country besides self

Create wealth

Self-fulfillment

Lots of learning, become a better human being


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How an MBA course is helpful in

entrepreneurship?

Broadens the perspectives & thinking

Brings systems & process orientation

Gives insights in nitty-gritty of doing business

Helps create managerial perspectives


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Entrepreneurship

2ndLecture


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Case Study

SWEET SUCCESS

Narendra MurukhumbiShree Renuka Sugars


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Case Study: Sweet Success

Came from family of traders

family background played role

I always wanted to do something on my own.

Determination & commitment

NOT A PIONEER

Networked with old family fiend to start MurukumbiBio-agro, got success

Used networks for advantage


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Not satisfied with scale & scalability (??), soughtfurther opportunities

Business analytics, ability to see future & Commitment

Choice of Sugar Business

Neck of spotting opportunity (??)

Large, evergreen product.

Resource mobilization

Strategic intent, organization capabilities, finance raisingability (??)farmers co-operatives


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Resource mobilization continued

Innovation in factory set-up (??)

Full utilization of products (by product to produce

power)

Survival during recession & price crash

Globalization (produce more & export)

Manufacturers V/s trading mentality

360 degree view of sugar (do everything that is connectedto sugar)


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Conclusion

Entrepreneur Can spot opportunities,

Innovate

add value take risk

committed

keeps low profile

Narendra Murukhumbi had all these qualities

Today his sugar business empire is Rs.7000 crore


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Competencies required for

entrepreneurs

1. Entrepreneurial Competencies

2. Managerial Competencies


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Competency ?

Knowledge

Skills, and

Attitude

required to perform to a particular task


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Entrepreneurial competencies

1. Opportunity Competency

Ability to discover, evaluate & exploit opportunities

E.g. Chef on hire, M-spa in Mumbai/Delhi

2. Organizing & Leading Competency

Ability to organize different internal & external resources

E.g. Irfan Alam, SammaN

3. Strategic Competency

Ability to formulate & implement strategy to achieve goals

E.g. Renuka Sugar, Educomp

4. Network/Relationship competency

Ability to draw upon networks & build relationship


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5.

Commitment competency Ability to see firm creation through fruition

6. Conceptual competencies

Ability to think and analyze information & situation and understandbroader business implications of ideas, issues and observations

E.g. Bhikchandani of Naukri.com

7. Technical competency

The ability to use tools, procedures and techniques of field


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8. Learning Competency Ability to learn proactive from various means, keep up-to-date

in relevant field and apply the learnt skills

9. Personal

The ability to maintain high level of energy

Motivate self

Respond to constructive criticism

Prioritize tasks to manage time

Maintain positive attitude

Do SWOT of self


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Managerial Competencies

1. Operations Ability to implement management systems & procedures

2. Finance

The ability to acquire adequate capital & build network infinancial markets

3. Marketing

The ability to carryout marketing function to effectivelydeliver customer solutions

4. HR

Ability to evaluate HR needs and develop systems


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Development Theory (Evolution of)

entrepreneurship

Five stages of decision making

1. Fantasy stage

2. Tentative decision making stage

3. Exploration stage

4. Trial stage

5. Commitment & Stability


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Fantasy Stage

Free expression of a wish without anyconsideration

Dependent on many environmental and

experimental factors could spur fantasies of being

entrepreneur

Stories with great achievement by people

Observing successful entrepreneurs making big money,

great lifestyle


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Tentative decision making stage

Interests in all appealing vocations AND

Comparison of relative attractiveness of

interesting vocations

A person tries to convert fantasies into reality

At a certain age (e.g. after completing education or

after some work experience)

Coming across information/network of entrepreneurs

help make this decision faster


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Exploratory stage

After making tentative decision in favour ofentrepreneurship

Person goes through exploratory stage duringwhich

Explores more information & facts

Makes in-depth study about types of business to beundertaken

Understands markets Finds sources of finance

Appropriate business model etc.


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Trial Stage

Stage of trial & error, adjustments and judgement

Failure could be due to any element

Marketing, finance, business model, inability to cope etc.

The MOST CRUCIAL STAGE : make or break

A person must keeps other options open

Go back to exploration stage

Doing/Going back to job

Spouse working and having income

Joint family supporting during failure


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Commitment & Stability

Once an entrepreneur passes through trialstage, he becomes committed due to

Success

Expected rewards after all hard work

Satisfaction

Sense of achievement

Taking business to new heights

This stage marks completion of cycle


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Entrepreneurship Film

Shawshank Redemption (2:16:30 hrs)

Understand the storyline

Watch traits of characters

Identify learning points from entrepreneurs point

of view

Submit page summary at the end


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Entrepreneurship

3rdLecture


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Women & Entrepreneurship

- Any thoughts?- Do women make better entrepreneurs??


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Gender Issues in Entrepreneurship

Share of women in population (48%)

Share of women in mainstream of Business in India

Corporate2-3%

Entrepreneurship5-7%

Contribution of women in business in major economies

In US38%

In Switzerland40%

Canada -33%

France-20% Russia -60%

5 million women in China contributing 25% of entrepreneurs

Cultural & Social Issues


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Women Entrepreneurship

A favorable career option for women

Flexibility as highly needed by women

Decide your own working time, promotion andsuccess

Ample opportunities for starting & growth

Large growing economy

No quota, No reservation


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Women have special entrepreneurial

qualities

Endurance among women (hard working)

Assuming Responsibility

Managerial Accumen

Financial Skills

Communication Skills

High Emotional Quotient

Due to social, cultural & upbringing nature


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Factors influencing women entrepreneurs

Economic independence Establishing their own creative idea

Establishing their own identity

Achievement of excellence Building confidence

Developing risk-taking ability

Motivation Equal status in society

Greater freedom and mobility


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Limitations for women

Lack of assertiveness

Limited understanding of legal issues ??

Emotional in Business decisions

Lack of exposure

Mobility

St d f t hi


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Study of women entrepreneurship,

Rajkot, Gujarat

St d f t hi


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Rajkot, Gujarat

Study of women entrepreneurship


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Rajkot, Gujarat

Study of women entrepreneurship


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Rajkot, Gujarat


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A Study

St d f t i


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Study of women entrepreneurs in

Delhi



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Delhi


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What makes an entrepreneur

Entrepreneurial ??

- Lets play a puzzle



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Entrepreneurial ?

Thinking & Acting approach

Managerial Thinking

Strategic Thinking

Entrepreneurial Thinking

Managerial Thinking: Casual


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Managerial Thinking: Casual

Reasoning Selecting between given means to achieve pre-

determined goal

M1

M2

M3

M4

M5

C l R i


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Casual Reasoning

Pre-determined goal and a given set of means

seeks to identify the optimalfastest,cheapest, most efficient, etc.alternative toachieve the given goal.

The make-vs.-buy decision in production

Choosing the target market with the highestpotential return in marketing

Picking a portfolio with the lowest risk in finance

Hiring the best person for the job in humanresources management, are all examples ofproblems of causal reasoning.

Strategic Thinking: Creative Casual


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g g

Reasoning

Selecting between existing means + Finding new means to achieve pre-determined

goals

M1

M2

M3

M4

M5

Entrepreneurial Thinking: Effectual


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Entrepreneurial Thinking: Effectual

Reasoning

Imagining possible ends by using givenmeans

Like explorers (Columbus discovering America)

IE1

IE2

IE3

IE4

IE5


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Basic Difference

Casual Reasoning Logic To the extent we can predict the future, we can

control it.

In the beginning of enterprise, it is better to use this

Effectual Reasoning Logic

To the extent we can control the future, we need notpredict it.

i.e. response to predictable future V/s creating futurewith available means

Eff l Thi ki


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Effectual Thinking


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Example

1. Restaurant business Marketing approach

Entrepreneurial approach

2. Color Ball drawing from the urn

Principles of Effectual Thinking


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Bird in Hand Principle

Start with your means. who you are, what you know, and who you know (means)

Affordable Loss Principle

Casual reasoning:

Analyse market, choose target segment and expect highestreturns

Effectual Reasoning:

Minimum expenditure/resource to market (zero resourceto market)

Set affordable loss



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Strategic Partnerships Principle

With people/org with commitment to jointly

create future rather than getting bogged down

with systematic competition analysis

Leverage contingencies

Brace emergencies, remain flexible, change trackif need be


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Intrapreneurship

Intrapreneurship is defined as entrepreneurshipwithin an existing business setup.

Intrapreneurship is corporate entrepreneurship

Diversification into new businesses

Reliance Retail

HDFC Education Venture

It is a tool for capitalizing the entrepreneurial

spirit of employees in the organisation

I


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Intrapreneur

Intrapreneur is (an entrepreneur within anorganization)

a manager who focuses on creation of new

business opportunities innovation and creativity,

brainstorms,

dreams and

puts ideas into profitable venture


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Intrapreneur V/s Entrepreneur

Differences V/s Similarities Differences

Risk

Desire for independence

Rewards

Similarities

All other aspects similar as entrepreneurs

Entrepreneurial Managers


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Innovation & Entrepreneurship


Lecture 4


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I ti & t hi


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Innovation & entrepreneurship

What do you see?

I ti d E t hi


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Innovation and Entrepreneurship

Innovation without Entrepreneurship

has no root& Entrepreneurshipwithout Innovation has no fruit.


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Entrepreneurship

Innovation ? New of doing business (product/service/process)

to create more value for customer


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h f


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The Importance of Innovation

Innovation Is often the source of success for an

entrepreneur in competitive environment

Differentiates Vs Commodity Provides greater value to customer

Is a key outcome firms seek throughentrepreneurship

entrepreneurial employees


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Can you think of a

business innovation in this?

S S i k h k


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SRN: Smart Rickshaw Network

India's Aadhar Bhalinge has won $ 20000 through "m2Work", a WorldBank-sponsored online challenge seeking the best ideas for spurring the job-

creation potential of mobile phones.

SRN S Ri k h N k


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SRN: Smart Rickshaw Network

SRN is by and for rickshaw drivers

Basis of this network is to create a Franchise of existing & aspiring

rickshaw owners /entrepreneurs

Empower them with technology to tap the existing vastness of usefulinformation of the city from the rickshaw drivers and help them in

gaining additional income.

SRN is a unique concept but can be duplicated and has a broad geographic

appeal hence Franchise model is chosen

H i k


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How it works

In SRN network all smart rickshaws have smart phones, whichmake it possible to use technology (touch /voice commands/autoGPS map coordinates) for Reliable and Quality data along withkeeping the process Easy, Quick and Safe.

Drivers are trained by SRN for appropriately rating the traffic

status/ location popularity (low, medium, high) and safetyprecautions while using application.

Fraud Control mechanism is in place to discourage driver to be ina chase to send as many sms as possible for more income, and

hence driver can concentrate on driving, thus adding safety tothe process.

To whom is it useful


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o o s t use u

Multiple Revenue Sources: With the best & always updatedinformation about the city, SNR drivers will be the best source of

information, for which various types of clients will be interested in

Real Time Traffic / Landmark updates in developing countries atcheap rates will attract GPS companies / Traffic Info Providers toinvest.

Government Traffic Unit/Local Traffic Reports will be interested inthis data for better Road Management & Transportation.

Advertisement Industry will be interested because Advertisementon rickshaws takes Ads directly to audience.

Tourism Industry can get real time updates of popular places andevents across the city at low cost.


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M bil W k


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Mobile Works

MobileWorks is a next-generationcrowdsourcing platform that puts the

underemployed talent of the world to work


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The innovation concept


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A tool of entrepreneurs Exploit change as an opportunity (gap identification)

To develop different product/service/process

Business opportunity IsaChanceto do something differently & better

innovation is wayof doing things differently & better

Innovations are the means of exploiting businessopportunity



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In economics Goods & Service are combination of (RM+Labour+Capital)

new combination of above factors delivering

different & better output (lower cost, faster,superior quality etc.) is entrepreneurialInnovation

Entrepreneurs create these new combinationsand present to customers (market)

The Innovation Concept


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The Innovation Concept

Invention, Innovation, Incremental

innovation & Radical innovation

Invention



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Innovation is a broader concept

Not merely invention

Identification of need gap opportunity

Conversion of need-gap opportunity to an offering

Bringingnew offering to the market (commercializing)

New Product e.g. Aakash tabs, Solar lamp

New Service e.g., m-Spa

New Production method e.g. Indian Railways

New selling & distribution or procurement processes

ITC e-choupal, flipkart, Naukri.com

New means of communication : Facebook

Incremental and Radical


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Innovation

Incremental Innovation Most innovations are

incremental

Provides small increments

in current product lines

Improves existing

knowledge and processes

Can create value

Radical Innovation Are rare because of

difficulty and risk

Provides significant

technologicalbreakthroughs

Creates new knowledge

and processes

Can create value

Market & innovation Grid


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Market & innovation Grid



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A discipline In itself Can be learnt & practiced

Entrepreneurs need to search for source ofinnovation purposefully

Apply principles of innovation

Multiple innovations


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Multiple innovations

An entrepreneur does not have to restrictwith just one innovation

He/She can create multiple innovations(simultaneously or otherwise)

New product, delivered in a new way with a new

communication mode

E.g. EduComp Smart Class, Makemytrip.com

Innovation & Entrepreneurship Grid


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Innovation & Entrepreneurship Grid

Sources of innovation


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Sources of innovation

1. Social Environment Demographics

Changes in Perception, Mood, and Meaning

Advancement in technology

New media (e.g. social media) New Knowledge : e.g. FMS

2. Within the industry

The Unexpected : e.g. FD formulation ban by DGCI Innovation Based on Process Need

Changes in Industry or Market Structure

Case of Homeopathy Industry


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Pharma market in IndiaRs. 65000 Crore growing@15% p.a.

Homeopathy market in India2500 Crore growng@30%

Homeopathy is as effective as allopathic medicines

Allopathy only treats symptoms whereas homeopathy cures the rootcause.

Still Homeopathy has not got right place

Considered only 2

nd

line treatment.

There are about 3000 homeopathic medicines



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Wilmar Schwabe India (WSI)

WSI is the 2ndlargest company in the world in homeopathic space It

has major operations in Germany, France, other western European

countries as well as USA and India.

In India also it is at No.2, behind SBL. The company has turnover ofRs. 80 Crore growing @25%.

WSI has a team of 100 sales reps covering about 20000 homeopathic

doctors to promote their medicines and generate orders.

In India homeopathic medicines can only be dispensed by a

homeopathic doctor or a licensed pharmacy which are far and few.



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The distribution channel comprises of;

Company

Dealers

Pharmacies

Consumers Doctors

Doctors

Doctors

Consumers



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Worldwide WSI distributes medicines directly to doctors or

Pharmacies.

It does not involve dealers other than India.

Due to geographic constraints, all homeopathic companies have

dependence on dealers.

Due to large chain of distribution, the cost of distribution comes to

15-20% and company realizes only 35-40% of MRP as revenue.

But the margins are still about 50-60%.



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WSI feels its growth and profitability is restricted by;

Secrecy of Doctors prescriptions

doctors do not give Rx but dispense medicines

Involvement of dealers, whereas 85-90% of medicines are finally

bought by the doctors

Dealers eating away margins and having vested interests.



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Analyse the case

Identify the problems and gap areas

Identify entrepreneurial opportunity(ies)

What innovation could be done in this business

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