New Enterprise and Innovation Management

(NE & IM)

Semester–3, MBA

NILESH MANORIYA
Associate Professor, R K College of Business Management,
Rajkot

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2010. Nilesh Manoriya Session 1
 Course Guidelines
As per GTU :
• 40 sessions

• 70% end term exam, 30% int. assessment (20% mid term exam,
10% quiz/ assignments / role plays etc.)

• In the end term exam, there will be 5 questions. Out of 70

marks, questions of 21 marks are compulsory

• Passing norm is 50% in each head

• Check GTU website for more details and updates

2
 Important Instructions
• Attendance > 80%, No late coming beyond 10 minutes

• In-class discipline a must to get through the subject

• 13 groups of 4 students each for group presentation.

20 minutes followed by Q&A of 5-10 minutes. Free
riders would be detained in group presentation.

• Contact details : Room No. 14 Staff Room, extension

No. 302, Timings 8 am-2 pm,
manoriya@rkcollege.ac.in, manoriya@yahoo.com
Course Outline

4
Course Outline

5
Books
Reference Books
 Pedagogy
(a) Case based learning

(b) Fast paced, pre-reading must to grasp in-class discussion

(c) Lectures (50%), Simulation exercise like managerial

games, role play etc (10%)
 
(e) Experience sharing with entrepreneurs by visiting
industry, guest talks and live projects (10%)
 
(f) Presentation by students on case analysis and project
presentation (30%)
 Entrepreneur
• “An entrepreneur is a person who has possession of a new
enterprise, venture or idea and assumes significant
accountability for the inherent risks and the outcome”-
Wikipedia

• Risk is the key element

• Is your “milkman” or “vegetable vendor” an entrepreneur ?

• Anil Ambani building up power plant in Sasan MP, is he an

entrepreneur ?

• Immediate images ???

 Concept

Entrepreneur Entrepreneurship Enterprise

Person Process Object

 So what are the similarities
What are general traits of an entrepreneur ?

a) Strong belief in themselves, Enthusiastic, Dedicated

and Passionate

b) Prepared to take initiatives with calculated risks and

assuming consequences

c) Goals, short and long term are clearly laid out

d) Knowledgeable about their business

 General Traits …..
f) Updated with the latest developments

g) Time Management

h) Ability to organise socio-economic mechanism

to turn resources into practical account

i) Leadership and team building

 Types of Entrepreneurs
• Innovative
E.g. – Steve Jobs, Bill Gates, Richard Branson

• Imitative
E.g. – Generic drug/ dyes chemical makers, Low
cost Airlines

• Fabian
E.g. – Typical family business ran by old people
 Entrepreneurship and Enterprise

Entrepreneurship :
-act of being an entrepreneur

-“process of creating something new with value by

investing resources assuming consequent risk and
reward”

-“Dynamic process of creating incremental wealth”

Was Harshad Mehta an entrepreneur ??

 Enterprise
• “a project undertaken or to be undertaken, especially one
that is important or difficult or that requires boldness or
energy”

• Indo-Pak peace process – Is it an enterprise ?

• Are all start-ups enterprise ?

• Silicon Valley, Venture Capitals, Angel Investors ?

• Can government ever do entrepreneurship and innovation ?

Maruti, DRDO, Green / White revolutions, CSIR, NDDB, ISRO?
 Types of start-up firms
• Lifestyle firms
E.g. – firms for in-house purpose like testing laboratory,
consumer research, transport operations

• Foundation company :
E.g. - CISCO’s growth model – Presentation by group 1

• High potential venture “Gazelle” – the real

entrepreneurship
E.g. – Airtel, Sun pharma, Future group etc.
 Role in Economic Development
• Development of new products and services
What is iterative synthesis ?

• Stimulates investments in new areas, capital

formation

• Employment generation

• Increase in national income

 Role in Economic Development….
• Dispersal of economic power

• Balanced regional development

• Better standards of living

• Harnessing youth vigour

What promotes Entrepreneurship ?
• Attitude of people

• Demographic and economic factors

• Entrepreneurial education

• Shift of service economy

• Technological Advancements

• International Opportunities
 Key takeaways from article
• Developing countries must focus on proven
technologies

• Entrepreneurs can’t make use of this. Why?

• But they can play crucial complementary role

• US v/s. Indian entrepreneur ?

Competition, indirect taxes, Make or buy, own or lease, credit v/s. lesser price, price
v/s. differentiation, small is beautiful, capital required and employment generated
 Entrepreneurial Competencies
• How are they different from managerial
competencies ?

• Can we actually have a list of competencies ?

• What if few skills are not there ? Will he be

unsuccessful ? Did Bill Gates had all the
competencies ???
 Entrepreneurial Comp…
• Wear multiple hats, hence multiple roles

• Group of competencies
a) People Skills
b) Business Management skill
c) Personal Skills
 People Skills
• Communication – written, verbal and non verbal

• Networking

• Leading, Team building and mentoring

• Negotiation
 Business Management Skills
• B Plan ------> Launching the Business

• Core skills - technical, finance, HR, marketing

• Supervisory

• Managing growth
 Personal Skills
• Innovative – Think beyond obvious

• Focused, persistent and disciplined

• Ability to ride change and industry dynamics

• Measure underlying risk and work under

uncertainty
 Key takeaways from article
• Distribution is the biggest obstacle , Internet, credit
card penetration are low, transportation is poor

• Access to capital, right connections are big hurdles

for startups (explains IT’s growth)

• Mindset of youth against working in start-ups

• Networking and government contacts are necessary

 Key takeaways from article

• Products are inherently harder to sell than services

• Services an easier market to enter for startups

because cash flow problems are fewer

• Hurdles are now fewer and situation has improved

 Entrepreneurial Process

The process of starting a new venture

Identify & Manage the

Develop a Resources
evaluate enterprise
opportunty
business plan required
 Step 1 : Identify and evaluate opportunity
• Opportunity Assessment : ASK

• Market Size and length of opportunity

• Real and perceived value of opportunity

• Risk and return of opportunity

• Opportunity v/s skills and goals

• Competitive environment
 2. Develop a business plan
• Description of future direction of business

• Brief outline – Main objective and contents

• Executive summary

• Detailed plan on all aspects of business marketing,

technology, industry, finance etc.

• Exhibits to back up facts

 3. Resources Required
• Determine resources needed

• Determine existing resource

• Identify resource gaps and

available suppliers

• Develop access to needed resources

• Least cost and least loss of control

 4. Managing the enterprise
• Develop managerial style, operational excellence

• Understand key variable of success

• Identify potential and existing problems

• Implement control system

• Develop growth strategy

International Entrepreneurship Opportunities
• Malachi Mixon – Profile

Small town upbringing,

Harvard education,

ex Marine Corp,

Grew strong in Sales and Marketing,

fiercely intellectual and competitive,

Visionary and believed in prompt action.

 Invacare Profile
• Old, lousy, small town company

• 10 % market share with zero product innovation

• Very poor financials

• Bought and sold many times

• Sales force, Non- aggressive and

Non- talented
 How did Mixon do it ?
• Replaced sales force.

• Focused on product innovation with engineers

• Expanded product range

• Went all out to sell

• Managed both expansion and administration

• Took swift decision in face of competitive threats

 Key learning
Identify and
Develop a
evaluate the
business plan
opportunity

R
es
o
ur
c
es
re
q
ui
re
d

Manage the Enterprise

 International Entrepreneurship
• Process of an entrepreneur conducting
business activities across national boundaries
Tulsi Tanti, Narayan Murthy, Steve Ballmer
 How is it different from Domestic
• Different economic conditions

• BoP

• Political – Legal framework

• Cultural Environment

• Technological conditions

• Strategic Issues
 Strategic Issues
Responsibilit
y delegation

Organisation
al structure

Goal

standarisation
Degree of
Control system
Reporting - ->
Planning - - >
 Entry into International Business
• Export – Direct and Indirect

• Non- equity arrangement

a) Licensing
b) Turnkey
c) Management contract

• Direct Foreign investments

a) Minority interest
b) JVs
c) Majority Interest – M&A