Entrepreneurship and Innovation

Can you identify these companies?(and you get a bonus for identifying the product)

…listening to music was never so cool. And a totally new audio genre was invented.

Apple , the ipod… the audio genre was the podcast… … there is a new way to sweep a hardwood floor.. Proctor and Gamble , Swiffer Duster ...a 50c commodity became a status symbol beverage. Starbucks, Coffee of course …something went wrong with the adhesive… 3M, Post It Notes …an accident prone wife+ a busy executive…. Johnson and Johnson, Bandaids... …a cure for dyspepsia + Carbonated water Coca Cola, Coke

InnovationNew

Idea

Business

Results

Innovation

•Explore + Develop new ways of doing things• Vital for future

viability• Key to long-term

success

Most innovative companies of 2008 http://www.fastcompany.com/multimedia/slideshows/content/fast50_08.html?page=1

What does the industry say?

41% of executives think their companies are above average at moving quickly to develop new ideas. (Only 37% CFOs think so though!)

Just 23% companies said innovation was their top priority, compared with 32% in 2006.

The top is most satisfied when it comes to the return on investment in innovation- >50% of all CEOs.

A risk averse culture is the biggest challenge to innovation New to the world products are the most important Customer satisfaction is the biggest measure to innovation Only about 42% executives are not making investments in

R&D… China is the hottest new destination

Source: Business Week. http://www.businessweek.com/innovate/di_special/20070503mostinnovat.htm

C Capability

Culture

Cash and Recognition

Customer Orientation

Cut Losses

Entrepreneurship The process of Strategic thinking and risk-taking behavior that results in the creation of new opportunities for individuals and/or organizations.

Involves deploying resources and people in a unique way to develop a new organization.

Entrepreneur An individual who creates an enterprise

that becomes a new entry to a market. Takes actions to pursue opportunities and situations others may fail to recognize or may view as problems or threats.

Found businesses that become large-scale enterprises.

Introduce a new product or operational change in an existing organization

Myths – is this true?? Entrepreneurs are born, not made. It is necessary to have access to

money to become an entrepreneur. An entrepreneur takes a large or

irrational risk in starting a business. Most successful entrepreneurs start

with a breakthrough invention. Entrepreneurs become successful on

their first venture

Characteristics Internal locus of control High energy level High need for achievement Tolerance for ambiguity Self-confidence Passion and action-orientation Self-reliance and desire for

independence Flexibility

Skills Negotiation skills: Ability to obtain

resources controlled by other individuals.

Networking skills: Gather information and build alliances.

Leadership skills: Provide a shared vision

Distinction from Small and Family Businesses

Benefits of Entrepreneurship

1. Job Creation: most new jobs in the U.S. economy.

2. Innovation: responsible for introducing new and innovative products and services into market.

3. Opportunities for Diverse People

Stages in the Life of an entrepreneurship

Why entrepreneurships fail Poor financial control Poor knowledge of the market Faulty product design Human resource problems Poor understanding of the competition Lack of experience Lack of expertise Lack of strategy and strategic leadership Growing too fast Insufficient commitment Ethical failure

Legal forms Proprietorship – business owned by

an individual Partnership – association of two or

more persons acting as co-owners of a business

Corporation – legal entity separate from the individuals who own it

Financing an Entrepreneurship

Debt Financing – obtaining a commercial loan setting up a plan to repay the principal and interest

Equity Financing – raising money by selling part ownership of the business to investors• Private investors• Venture capitalists• Public offerings of stock

..but what if you grow too quickly

Cash flow crisis -spending most available cash on expansion & not meeting obligations to creditors.

Employees likely to experience stress- rapid changes and growth.

Accounting and information systems -not adequate for the larger business.

Growing so quickly that control is lost.

Alternate forms Intrapreneurships Spin-offs Franchises