BUSINESS PLAN DEVELOPMENT MMS SEMESTER-II

Contemporary Business Environment

Why entrepreneurship education?

Employee Intrapreneur

Intrapreneurship is the act of behaving like an entrepreneur, except within a larger organization. Intrapreneurship refers to employee initiatives in organizations to undertake something new, without being asked to do so." Hence, the Intrapreneur focuses on innovation and creativity, and transforms an idea into a profitable venture, while operating within the organizational environment. Thus, intrapreneurs are Inside entrepreneurs who follow the goal of the organization. Intrapreneurship is an example of motivation through job design, either formally or informally.

Entrepreneurship: A Perspective

Entrepreneurship is more than a mere creation of VENTURE. Its a Mindset It is seeking opportunities, taking risks beyond security, and having the tenacity to push an idea through reality.

Who is an Entrepreneur???

An entrepreneur is an individual who accepts financial risks and undertakes new financial ventures. The word derives from the French "entre" (to enter) and "prendre" (to undertake), and in a general sense applies to any person starting a new project or trying a new opportunity.

Contd..

Entrepreneurial process is defined as involving all the functions, activities, and actions associated with perceiving of opportunities and creation of organizations to pursue them Schumpeter tied entrepreneurship to the creation of five basic new combinations namely: introduction of a new product, introduction of a new method of production, opening of a new market, the conquest of a new source of supply and carrying out of a new organization of industry.

Difference between Businessman & Entrepreneur

An entrepreneur one who initiates, conceptualize and materialize a business process which is entirely unique. In other words an entrepreneur is someone who starts a business from a fresh idea and make it work. A business man one who starts a business on an existing market platform laid by the entrepreneurs. In this context it we can see that entrepreneurs weigh more than a business man. It is usually an evolution. A businessman transforms into an entrepreneur

Difference between Businessman & Entrepreneur

Businessman Entrepreneur Usually a profit oriented oriented Usually plays safe ambitious Generally traditional

Customer

Bold and
An innovator

Basic Types of Entrepreneurship

Opportunity-based entrepreneurship an entrepreneur perceives a business opportunity and chooses to pursue this as an active career choice.

Necessity-based entrepreneurship an entrepreneur is left with no other viable option to earn a living. It is not the choice but compulsion, which makes him/her, choose entrepreneurship as a career.

Factors conducive for entrepreneurs in India

India high on Consumer confidence Index Huge Domestic Demand Sterling Demographic Dividend

19th century Entrepreneurs

JAMESETJI TATA

ESTEE LAUDER

HENRY FORD

WALT DISNEY

Wanted a better quality of life

Had a vision of the future Experimented & Constantly Improved their offer Sought help from others

Ignored negative views

Not deterred by setbacks

Combination of IDEAS + DREAMS + EXPERIMENTATION

20th century Entrepreneurs

Dhirubhai Ambani - A visionary Verghese Kurien The Milkman of India N R Narayana Murthy Powered by Intellect and Driven by Values Karsanbhai Patel Naresh Goyal Ratan Tata Subhash Chandra Vijay Mallya Tulsi Tanti

21st century Entrepreneurs

Global Entrepreneurship Monitor (GEM) -2002

Among 28 countries, India is highest in Necessity based entrepreneurship, whereas it is 5th from the lowest in opportunity based entrepreneurship. India TEA 12.1% Chinas average rate of Entrepreneurship has averaged 14.1%. World Average = 10.6% Asia (11.2%) Europe (6.4%) North America (13.4%) South America (19.2%) Middle East (11.8%)

Social entrepreneurs

A social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to forge social change. Unlike business entrepreneurs, they dont measure performance in profit and returns, but assess success by the impact they have on society Ashoka Fellow is a non profit organization supporting the field of social entrepreneurship. Ashoka was founded by Bill Drayton in 1981 to identify and support leading social entrepreneurs through a Social Venture Capital approach

Social venture capital

Social venture capital is a form of venture capital investing that provides capital to businesses deemed socially and environmentally responsible. These investments are intended to provide both attractive returns to investors and to provide market-based solutions to social and environmental issues.

Fabindia - John Bissell

Fabindia is synonymous with the country's handloom couture revolution. The birth of the chain in 1960 marked the beginning of the transformation of traditional Indian fabrics into fashion textiles for apparel and designer home decor. It also pushed traditional Indian weaves to the American market.

Vishal Talreja Cofounder Dream A Dream

Empowering children from vulnerable backgrounds by developing life skills, Today, Dream a Dream partners with six NGOs. Dream a Dream runs structured programs in these partnerships: for development of life skills in these children

Mitra Technology Social Entrepreneurship

Owns and manages Indias largest volunteer placement initiative iVolunteer

Entrepreneur of the Year ET Awards

Narendra Mukumbi Shree Renuka Sugars

What is Common among these people? Background? Their approach?

Background
MONEY?
LAKSHMI MITTAL VIJAY MALLYA

AGE?
SUHAS GOPINATH RAY KROC

Background
EDUCATION?
DHIRUBHAI AMBANI NARAYAN MURTHY

How have they built such great empires?

IS THERE A METHOD IN THEIR MADNESS?

THE ENTREPRENEURSHIP PROCESS

(Capturing opportunity without owning resources)

SPOTTING OPPORTUNITY IDENTIFYING RESOURCES

ACQUIRING RESOURCES MANAGING VENTURE

BUSINESS CHALLENGES Current Business Scenario

Managing Bottom line Meeting stakeholders expectations Developing and retaining top talent

Creating a customer responsive organization

Diminishing time to market

Market agility
Pricing and quality

What do you Environment???

mean

by

Business

The environment of any organization is the aggregate of all conditions, events and influences that surround and affect it. Characteristics of Business Environment: Complex Dynamic Multi-faceted Far- reaching impact

Types of Environment
Internal Environment External Environment

Micro

environment Macro environment Economic Non Economic

Internal Environment

Refers to all the factors that are within an organization which impart strengths or cause weaknesses of strategic nature.

Controllable factors. These include:

Value system Mission and Objectives Management Structure and Nature

Components of Internal Environment

Human Resources Company Image and Brand Equity Other Factors

Physical Assets and Facilities

R & D and Technological Capabilities Marketing Resources

Financial Resources

External Environment

Includes all factors outside the organization which provide opportunities or pose threats to the organization

Uncontrollable factors
Consists of Micro and Macro environment

Micro Environment

It consists of the factors in the companys

immediate environment that affect the performance of the company.

Micro Environment Factors

Suppliers Customers Marketing Intermediaries Competitors Publics Financial Community

Macro Environment
It comprises general trends and forces that may not immediately affect the organization but sooner or later will alter the way organization operates. Macro Environment : Economic Non Economic

Economic Environment

Economic stages that exists at a given time in a country Economic system that is adopted by a country for example. Capitalistic, Socialistic or Mixed Economy Economic planning, such as five year plans, budgets, etc. Economic policies for example, monetary, industrial and fiscal policies Economic Indices such as National Income, Per Capital Income, Disposable Income, Rate of growth of GNP, Distribution of Income, Rate of savings, Balance of Payments etc. Economic Problems Functioning of economy

Non Economic Environment

Regulatory Environment
Socio- Cultural Environment Demographic Environment Technological Environment Political Environment

Non- Economic Environment

Cultural Environment

Social Customs & Rituals and practices Lifestyle patterns

Family structure
Role & position of men, women, children and aged in family & society

Non- Economic Environment

Demographic Environment

Growth of population Age Composition Life Expectancy

Sex Ratio
Fertility and Mortality rates

Inter-state migration

Macro Environment

Technological Environment

Sources of technology Technological development Impact of technology

Political Environment

Political parties in power Political Philosophy

Macro Environment

Regulatory Environment

Constitutional framework Policies relating to pricing and foreign investment Policies related to the public sector, SSIs, development of backward areas and control of environmental pollution

International Environment
Important factors that operate organization are:

at

global level which

have an impact on

Growth of world economy Distribution of world GDP International institutions IMF,WTO ILO Economic relations between nations Global human resource-nature and quality of skills, mobility of labor Global technology and quality standards Global demographic patterns

Environmental Analysis
Environmental Scanning The process by which organizations monitor their opportunities and threats affecting their business is known as environmental scanning SWOT Analysis

Comparison of Prior and Contemporary Business Environment

Manufacturing Prior Environment Basis of Economies of competition standardization Business Contemporary Environment Business

scale, Quality, functionality, customer satisfaction Low volume, short production runs, focus on reducing inventory levels and other nonvalue added activities and costs team-paced,

Manufacturing High volume, long production process runs, significant levels of inprocess and finished inventory Required Labour skills Machine-paced, skills low

level Individually and high-level skills

Emphasis on Acceptance of a normal or Goal of zero defects quality usual amount of waste

Contd..
Marketing Prior Business Environment Relatively few variations, long products life cycles Largely Domestic
Contemporary Business Environment Large number of variations, short product life cycles Global

Products

Markets

Contd
Management Organizations Prior Business Environment Focus Financial measures performance Hierarchical, control command Contemporary Environment Business of Non Financial Measures such as quality, customer service, time to delivery and Network based organization forms, teamwork focus employee has more responsibility and control, coaching rather than command and control Emphasis on the long term, focus on critical success factors, commitment to the long term success of the firm including maximising shareholder value

Management organizational structure

Management focus

Emphasis on the short term, short term performance measures and compensation, concern for sustaining the current stock price, myopic focus

Tools for Analyzing Macro Environment

PEST Analysis PESTLE STEEPLE S - Social T - Technological E - Economic E - Environmental P - Political L - Legal E - Ethical

Emerging Business Opportunities

Organic food is the growing market segment in India estimated to be around 1500cr, main players are Conscious food, Down to Earth, Angel foods and Mother earth. Challenges are certification and Pricing

Rural BPOs an emerging outsourcing story in India

Agro tourism Cox and Kings took to Israel. Travel companies design special tours for farmers that give them practical training. Not only to foreign countries but also internal i.e. within India. Kesari is organizing by taking 2000 farmers within India.

Emerging Business Opportunities

Tata AIG General Insurance has launched HNIs jewellery and valuables insurance: has designed specialized division private client group to provide these services be it high end cars, rare paintings, etc

Private jets & luxury choppers an emerging opportunity in India: Religare Aviation the chartered air service wants to tap the growing demand Luxury cell phones not only for communication but as status symbol: Concept of Designer phones to capture the premium market by Christian Dior, Nokia, Gucci

BRIC Economies & Entrepreneurship

BRAZIL: Roughly one of eight adults are self employed and the rest are working for small companies. Unfortunately for Brazil most of these entrepreneurial minds do not operate growth companies but run small shops, restaurants and are street vendors. These entrepreneurs are entrepreneurs out of necessity in order to survive. In western countries most entrepreneurs are entrepreneurs out of opportunity.

Contd..
RUSSIA Very low on entrepreneurship due to existing new political and legal institutions CHINA Chinese entrepreneurs are very important. When foreign direct investments eventually start slowing down economic growth has to come from domestic consumption and entrepreneurship. So, in order for China to think ahead and plan for its future China needs to develop an environment that supports domestic entrepreneurship.

Thank You