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Entrepreneurship and Innovation

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…

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Entrepreneurship and Innovation

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  1. Entrepreneurship and Innovation

  2. 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

  3. 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

  4. What does the industry say? Source: Business Week. http://www.businessweek.com/innovate/di_special/20070503mostinnovat.htm 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

  5. C • Capability • Culture • Cash and Recognition • Customer Orientation • Cut Losses

  6. 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.

  7. 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

  8. 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

  9. 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

  10. Skills • Negotiation skills: Ability to obtain resources controlled by other individuals. • Networking skills: Gather information and build alliances. • Leadershipskills: Provide a shared vision

  11. Distinction from Small and Family Businesses

  12. Benefits of Entrepreneurship • Job Creation: most new jobs in the U.S. economy. • Innovation: responsible for introducing new and innovative products and services into market. • Opportunities for Diverse People

  13. Stages in the Life of an entrepreneurship

  14. 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

  15. 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

  16. 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

  17. ..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.

  18. Alternate forms • Intrapreneurships • Spin-offs • Franchises

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