Entp 15 Ppt

Entrepreneurship

Session-156/07/07

What is Venture Capital? Venture capital - high risk contributions

made usually to new and expanding companies

Venture capitalist - a person or company that invest in generally high risk business ventures

Venture capital fund - a company that invests capital accumulated by third party investors

Types of venture capital

Seed Capital--There are different kinds of venture capital available for different stages of business development.

If you are a company still in initial development stage you would most likely need seed capital. Seed capital is usually for the purpose of marketing research and product or service testing.

Types of venture capital

Start-up Capital--If your company has already gone past the research and testing stage and is ready to begin doing business then you are in need of start-up capital.

Startup capital is mainly used for hiring staff, renting office space, purchasing computer equipment, purchasing inventories, building production system, and other activities involved in starting the business.

Types of venture capital

Development Capital: If your company is already gone

beyond the start-up stage and has grown to a point where the company needs to expand in order to maximize profitability but does not have enough liquid assets to make it happen, you are in need of development capital.

The Role of the venture capitalist

directly providing funds for high risk, high return ventures

arranging additional financing from other sources

assessing and revising the proposed business model

reformulating the overall strategy

The Role of the venture capitalist

finding and hiring key managers finding supportive service

companies and other business contacts

firing existing managers when they think this is necessary

buying-out existing partners (owners) when they think this is necessary

What is a Social Entrepreneur?

Someone who adopts a mission to create and sustain social values.

Someone who constantly pursues new

opportunities to serve a particular social mission

Someone who is engaged in a continuous process of creative destruction, i.e. innovation, adaptation and learning.

What is a Social Entrepreneur?

Someone who takes accountability to the constituencies served and the outcomes created

Why Create Social Value? Businesses are motivated by profit-creation

whereas social projects have to be driven towards social value creation.

As a result most successful social entrepreneurs that face various challenges share the same philosophy or a strategic service vision, that is, a set of ideas and actions that maximizes the leverage of results over efforts directed toward well-defined targets and supported with highly-focused operating strategies.

Why Create Social Value?

It is necessary for Social entrepreneurs not only to create social value for its ‘customers’ i.e. its target group but also its ‘investors’ i.e. its donors.

Social entrepreneurs generate social capital when they create channels in which individuals can contribute to their communities and to the welfare of others

Example of a Strategic Service Vision Framework

India’s Aravind Eye Hospital is the largest provider of eye surgery in the world, performing 180,000 cataract operations a year, 70% percent of them for free.

It costs the hospital about $10 to perform a cataract operation which would cost about $1650 in the United States.

Why Marketing Research Is Necessary?

Marketing communications is typically

asked to achieve four things - introduce

a new fact or idea, correct an existing

misconception, reinforce a favorable

opinion or stimulate action.

What Is Marketing Research:

‘Marketing Research’ is the function which links the consumer,customer and public to the marketer through information – information used to identify and define marketing opportunities and problems;generate,refine and evaluate marketing actions;monitor marketing performance; actions; improve understanding of marketing as a process.

Marketing Research can reveal consumer characteristics:

Demographic. Socio-economic. Life-style. Awareness. Behavior (past, present and

intended )

Market research in pre start up phase

Who is the customer? Gender and Age Income Status Occupation and Education Other customer characteristics

Market research in pre start up phase

Where is the market? Market size and changes Segmenting the Market Growth characteristics Sales Forecast

Market research in pre start up phase

Competition Who are the market players? Existing competitors Products or substitutes

Market research in pre start up phase

Distribution How will customers be reached?

Market research in pre start up phase

Sources of market intelligence: Existing competitors Trade publications Securities Analysts Reports Potential customers

The Importance of Information

Companies need information about their: Customer needs Marketing

environment Competition

Marketing managers do not need more information, they need better information.

The Marketing Information System

Developing Marketing Information

Internal Databases: Electronic collections of information obtained from data sources within the company.

Marketing Intelligence: Systematic collection and analysis of publicly available information about competitors and developments in the marketing environment.

Marketing Research: Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

Competitive Intelligence:

It is the selection ,collection,interpretation and distribution of publicly-held information that has strategic importance.

Competitive Intelligence:

Competitor intelligence is the analytical process that transforms disaggregated competitor intelligence into relevant, accurate and usable strategic knowledge about competitor performance

It is highly specific and timely information about a corporation.

Competitive Intelligence:

Goals: Detecting competitive threats. Eliminating or lessening

surprises. Enhancing competitive advantage

by lessening reaction time. Finding new opportunities.

From Information to Intelligence

All the information needs to be collated.

The information need to be indexed and catalogued.

It pieces of information to be analyzed and interpreted.

Source: H. I. Ansoff, New Corporate Strategy (New York: Wiley, 1988), p. 109.

Competitive Growth Strategies

Growth Strategies for Business Units

Intensive Growth Growth occurring when current

products and current markets have the potential for increasing sales

Market penetration: increasing sales of current products in current markets

Growth Strategies for Business Units

Market development: increasing sales of current product in new markets

Product development: increasing sales by improving present products or developing new products for current markets

Growth Strategies for Business Units (cont’d)

Diversified Growth Growth occurring when new products

are developed to be sold in new markets Advantage of diversified growth is the

spread of risk across a number of markets

Diversification allows for a wider use of managerial, technical, and financial resources

Growth-Share Matrix Developed by the Boston Consulting Group

Source: Perspectives, No. 66, “The Product Portfolio.” Reprinted by permission from The Boston Consulting Group, Inc., Boston, MA. Copyright © 1970.