Entrepreneurship—MAN 4802
New Venture Management MGT 682-01: Syllabus Winter 2007
Wednesdays 5:55pm-8:30pm – Miriam Hall, Room 106
|Professor: Diane M. Sullivan, Ph.D. |Office Hours: By appointment |
|Office location: SBA, room 702 | |
|Phone: 937-229-3705 | |
|Email: sullivdi@notes.udayton.edu | |
|Website: |
Objective
This course is intended to provide the student with the basic knowledge necessary to create new business ventures and to innovate within existing companies. Some goals of the course include:
1. Learn decision-making tools that can help entrepreneurs identify and develop new venture opportunities
2. Learn the importance of innovation, market research, new business feasibility, and planning for product and service concepts
3. Learn the basics of formulating a business plan
4. Understand how to manage a new and growing business venture
Text
Barringer, B.R. and Ireland, R.D. (2006). Entrepreneurship: Successfully Launching New Ventures. Pearson Prentice Hall: Upper Saddle River: NJ.
There are several articles that are required readings for the course in addition to the text cited above. All of these articles are available for download from the library’s website. Specifically, for the article citations below, please visit the Roesch Library website () and search for the database entitled “Business Source Complete”. Once you are at the Business Source Complete search screen, type in the publication name in one field and then the article title or author’s name in a second field. All articles are available in full-text via html text and/or .pdf formats. Please download and read these articles as they correspond to the itinerary (e.g., the first author’s name will appear in the itinerary for the day that this reading is required).
Article Citations for winter 2007:
Borland, J. (2006). Tensions grow between labels and digital radio. ZDNet News. Access from the following web address:
Block, Z. & MacMillan, I.C. (1985). Milestones for successful business planning. Harvard Business Review. 63(5): 184-196.
Bruno, A. (2006). Napster’s new old business model: Free. Billboard. 118(19) 20-20.
Elsbach, K.D. (2003). How to pitch a brilliant idea. Harvard Business Review. 81(9): 117-123.
Hargadon, A. & Sutton, R.I. (2000). Building an innovation factory. Harvard Business Review. 78 (3): 157-166.
Karlgaard, R. (2006). Schumpeter on speed. Forbes. 178(3): 35-35.
Liebowitz, S.J. (2006). File sharing: Creative destruction of just plain destruction? Journal of Law and Economics. 49(1): 1-28.
Magretta, J. (2002). Why business models matter. Harvard Business Review. 80(5): 86-92.
• Any other supplemental materials (e.g., handouts, etc.) that may be needed will be available as needed on my website. You will be informed as to when you are to print out these materials and bring them to class.
Grades
Grades are comprised of:
|Assignments |Point Value |Due Date |
|Individual Assignments | | |
|Elevator Pitch |100 |January 24, 2007, Wednesday |
|Networking Report |100 |April 11, 2007, Wednesday |
|Exam #1 (Chapters 1-5, Articles, Special Topics, Guest Speakers if |100 |March 7, 2007, Wednesday |
|applicable) | | |
|Final Exam (Chapters 5, 6, 8, 9, Articles, Special Topics, Guest |100 |The final exam is on May 2, 2007, Wednesday from |
|Speakers if applicable) | |6:30pm-8:20pm |
|Team Assignments: | | |
|Feasibility Analysis Study Presentation Assignment |100 |April 18, 2007, Wednesday |
|Total Possible Points (individual and team): |500 | |
| |
➢ Grading
The plus/minus system will be used whereby grades will be distributed according to the following schedule:
Out of 500 Points:
|Grade |High Range |Low Range |Percentage (low |GPA |
| | | |range) | |
|A |= |500 |463 |92.5% |4.00 |
|A- |= |462 |450 |90.0% |3.67 |
|B+ |= |449 |438 |87.5% |3.34 |
|B |= |437 |413 |82.5% |3.00 |
|B- |= |412 |400 |80.0% |2.67 |
|C+ |= |399 |388 |77.5% |2.34 |
|C |= |387 |363 |72.5% |2.00 |
|C- |= |362 |350 |70.0% |1.67 |
|D |= |349 |325 |65.0% |1.00 |
|F |= |324 |0 |0.00% |0.00 |
➢ Attendance
Excessive absences (more than 3) will result in a reduction of your final grade, and will also detrimentally affect how your team evaluates you and how I evaluate your class participation efforts. If you are late coming into class or leave early, that will have a direct effect on your class participation grade. I will not excuse absences for any reason. If you believe you have a good reason for your absences, I suggest you apply for a withdrawal status should your absences become excessive. Any class information (e.g., lectures, notes, etc.) missed due to attendance is the sole responsibility of the student to make-up. Except under extreme, and appropriately documented instances (as determined by the professor), will missed assignments that are due be allowed to be made up. Circumstances include appropriately documented family deaths, student medical injuries requiring hospitalization, and student incarceration. Grade reductions for all absences (documented or not) will occur as follows:
4 absences: 1 letter grade reduction
5 absences: 2 letter grade reductions
6+ absences: 3 letter grade reductions
Miscellaneous Policies
➢ Academic Integrity
1. Academic dishonesty will not be tolerated. This is a policy that I take very seriously. If cheating, plagiarism, or academic dishonesty of any kind occurs, the offender will be automatically dismissed from the course with a failing grade.
2. The University Bulletin specifies what constitutes academic dishonesty, so I suggest that you read it. For example, beyond those types of dishonesty discussed in point one in this section, academic dishonesty also involves enabling others to cheat. That is, if you “lend an assignment” to someone, and they copy it (or just portions of it), you will receive the same penalty as they do. It doesn’t matter if you tell them not to copy, if they do so anyway, you share liability with them. If it is a group assignment, I use my judgment to decide what to do, but everyone within the group can received the same grade.
3. With regard to citing references that you have used within the body of your work, you must cite all sources. Anything that is cut and pasted should be included in quotes, and cited in your references section. Do not excessively use direct quotes, either. Be sure to paraphrase if direct quoting becomes excessive. If you are unclear of what to cite or not, contact me for clarification prior to turning in materials.
4. Throughout the semester I will be evaluating the adequacy your individual class participation. Evaluations of participation will primarily be based on the frequency and quality of your contributions to in-class discussions as well as your contributions during in-class exercises (both individual and team-based). If individual class contributions are not deemed adequate (e.g., if you never speak up in class) or value-adding to the class discussions and in-class projects (e.g., your contributions must be meaningful to the topics under discussion), your overall final grade can be reduced up to 10%.
5. I will send a number of emails throughout the semester regarding the class. I will use the University’s Lotus Notes email system and the corresponding email addresses for the members of the class. Consequently, it is your responsibility to check your Notes account for emails regarding the class.
➢ Electronic Devices
1. Cellular phones and other electronic devices are not allowed to be used in the classroom. All electronic devices must be turned off.
➢ Classroom Professionalism
1. Always be respectful of others in the class (professor and students alike); both their opinions and their comments.
2. Respect extends beyond the classroom. The content of any emails, group meetings, online chat meetings, etc., should be carefully thought out. Please be respectful of each other and the professor, including your electronic transmittals. Remember this is a formal business course and I expect you to conduct yourselves as business people both inside and outside of the classroom, including any correspondence.
3. The professor reserves the right to alter the syllabus, itinerary, or class assignments at any time.
4. Any behavior deemed by the professor as unprofessional, disrespectful, inappropriate, and/or rude will result in up to a 20% reduction in your final grade.
New Venture Management MGT 682
Course Outline for Winter 2007
Professor: Diane M. Sullivan
The following is a schedule outlining the various topics to be discussed in the course. All readings and assignments are due on the day noted on this itinerary, so please come to class prepared to discuss the readings assigned for each class period. Changes can and may occur to maximize learning.
|Class Date |Day |Topics |Assignments Due |
|January 3 |Wednesday |*Classes Begin* | |
| | |Course Introduction | |
| | |Assignment Discussion | |
|January 10 |Wednesday |Introduction to Entrepreneurship |Individual Assignment Due: Individual Performance Contract |
| | |Types of New Venture Start-ups |Due |
| | | |Reading Assignment(s) Due: Textbook, Chapter 1 |
|January 17 |Wednesday |Recognizing Opportunities and Generating Ideas |Reading Assignment(s) Due: Textbook, Chapter 2 |
| | |Special Topic: The “Art” of the Elevator Pitch |Reading Assignment(s) Due: Author: Kimberly D. Elsbach |
| | |In-class Exercise: Identifying Entrepreneurial |Download and bring to class Elevator Pitch Slides on website|
| | |Opportunities and Pitching the Ideas | |
|January 24 |Wednesday |Elevator Pitch #1, Class selection of businesses, and Team|Individual Assignment Due: Two-minute elevator pitch |
| | |Formation |(100-points) |
|January 31 |Wednesday |Recognizing Opportunities and Generating Ideas |Reading Assignment(s) Due: Author: Rich Karlgaard |
| | |Creative Destruction and Opportunity Recognition |Reading Assignment(s) Due: Author: Stan Liebowitz (only |
| | |Industry Structure and Opportunities |read pages 1-5 of this article) |
| | |Team in-class Exercise: New Product Development Task |Download Industry Structures and Opportunities Handout from |
| | |within Emerging Industries |website |
|February 7 |Wednesday |Introduction to Feasibility Analyses |Reading Assignment(s) Due: Textbook, Chapter 3 |
| | |Product/Service Feasibility analysis |Reading Assignment(s) Due: Author: Andrew Hargadon |
| | |Using tools from market research | |
| | |Prototypes and R&D (IDEO) | |
|February 14 |Wednesday |Industry and Competitor/Market Feasibility Analysis |Reading Assignment(s): Textbook, Chapter 4 |
| | |Assessing Industry Attractiveness via Porter’s Five Forces|Download Porter’s Five Forces Handout from website |
| | | | |
| | |Industry Structures and Opportunities | |
|February 21 |Wednesday |Organizational Feasibility Analysis – Part I |Reading Assignment(s) Due: Textbook, Chapter 5 |
| | |VRIO Analysis |Reading Assignment(s) Due: Author: Joan Magretta |
| | | |Reading Assignment(s) Due: Author: Anthony Bruno |
| | | |Download VRIO Handout from website |
|February 28 |Wednesday |Exam #1 Review and Team Work Day | |
|March 7 |Wednesday |Exam #1 |Individual Assignment: First exam (100-points) |
| | |(Chapters 1-5, articles, in-class material, and guest | |
| | |speakers if applicable) | |
|March 14 |Wednesday | |
| | |*Mid-Term Break, No Classes* |
|March 21 |Wednesday |Organizational Feasibility Analysis – Part II |Reading Assignment(s) Due: Textbook, Chapter 6 |
|March 28 |Wednesday |Ethical and Legal Issues Associated with Founding New |Reading Assignment(s) Due: Textbook, Chapter 8 |
| | |Ventures |Reading Assignment(s) Due: Author: John Borland |
| | |Team in-class exercise | |
| | |Possible Guest Speaker | |
|April 4 |Wednesday |*Easter Recess, No Classes* |
|April 11 |Wednesday |Special Topic: Human Resource Management Issues for New |Download Human Resource Slides from website |
| | |and Growing Ventures |Reading Assignment(s) Due: Textbook, Chapter 9 |
| | |The Business Plan |Reading Assignment(s) Due: Author: Zenas Block |
| | |Team in-class exercise |Individual Assignment: Networking Report due (100-points) |
|April 18 |Wednesday |Team Feasibility Study Presentation Day (100-points) |Team Assignment: Feasibility Analysis Study Presentations |
| | | |due (100-points) |
|April 25 |Wednesday |*Last Day of Classes* | |
| | |Wrap up and preparation for final exam | |
|May 2 |Wednesday | |Individual Assignment: Final exam (100-points) |
| | |Final Exam (100-points) |The final exam is on Wednesday, May 2, 2007 from 6:30pm to |
| | |(Chapters 5, 6, 8, 9, articles, in-class material, and |8:20pm in room MH106 |
| | |guest speakers if applicable) | |
New Venture Management: Individual Assignments
Assignment Name: Networking Report
Assignment Type: Individual Assignment
Points: 100-points
Due Date: April 11, 2007, Wednesday
Overview
This is an individual assignment. Each student will attend a business meeting such as a chamber of commerce function, i-Zone event, EATT luncheon, or other networking meeting, and then submit a report on your experience. This event must occur during this term. Obtain instructor approval for the meeting before you attend. You are expected to practice your networking skills to meet a minimum of five (5) people. A 5-page report on this experience, using the outline below, is to be turned on April 11, 2007.
It is highly suggested that you obtain your own business cards before you attend a networking event. Check with local printers as well as online. Try ($9.99 plus shipping and handling of $6.00) and (cards are free, pay shipping and handling of $8.95). You can also create your own business cards through MS Word. See a local office supply store for business card template sheets.
You may attend an event as a team or in smaller groups, but each student is expected to individually practice networking with five different people. None of these can be your fellow students. If you do not collect 5 different business cards to use in your report, then you must attend additional networking events until you have collected a total of 5 business cards that are different from any other student in this class. If you have duplicate cards you will both lose 10% of your grade on this assignment. Note: don’t procrastinate on this; get started early in the term!
Among other avenues, you might be able to identify a business networking event in the Dayton Business Journal or on one of the following websites:
•
•
Before Attending the Event
Choose an event that will help you to research your team’s business. Submit an event announcement or brochure to obtain approval to complete your Networking assignment at this particular event. Get my initials on the announcement, and keep it to attach to your Networking Report.
Preparation:
• Obtain Business Cards – consider the information included on them, paper choice, where to get them printed
• Choose Proper Business Attire – wear your interview suit; choose solid colors, plain/simple accessories and makeup, polished shoes. Women’s shoes should be closed-toe; men’s socks should be dark and cover the ankle. When you call to register ask about the typical attire.
• Information About the Event – determine the purpose of the event, directions to location, time to arrive, where to park, and cost. Ask if there is a discount for UD students as most organizations typically want to encourage students to attend.
• Key People attending the event – this will help you to have meaningful conversations. Do some research ahead of time.
• Practice Handshake – firm, use whole hand (not just fingers).
• Remember Names – people are impressed when you remember their names. Jot notes on the back of their business cards to help you remember them.
• Read the newspaper on the day of the event – this will help you to have something interesting to discuss.
• Plan What to Say – develop a “30-Second Elevator Speech” about the reason why you are attending the event. Everyone will expect you to be looking for information, advice, or an opportunity to talk about your business. While you may change what you actually say, you need to be prepared to say something intelligent. This will help reduce nervousness.
• Remember that you represent UD and the School of Business. It is extremely important that you are professional and polite. This is a heavy responsibility; take it seriously.
During the Event:
• Name Tag – Make sure to write your name per the convention of the event. If you don’t know, ask someone.
• Payment Receipt – keep for tax purposes and for proof you attended this event.
• Territorial or Personal Space Considerations
• Cultural Differences
• Nesting vs. Roaming
• Know staff of key people
• Topics of discussions
• How to introduce yourself and how to move on to meet someone else.
• Be aware of your personal safety just as you would be at any other organization meeting.
After the Event:
• Thank all sponsors and send thank you notes to event leaders - call, email, or send note.
• Develop file for future follow-ups
• Follow up on promises
• Write a 5-page minimum report using the content outline below to be turned (not including coversheet and grade sheet).
Written Report Outline
You are expected to follow the outline below for the written portion of your networking project. Be sure to use proper grammar and complete sentences for each section of the paper. Use the outline to organize the content of your paper with headings.
1. Include a cover sheet that lists your name, the assignment name, the name of the course, and the assignment due date.
2. Event Description
• Name of event
• Organization sponsoring the event (if applicable)
• Date, time, and location of event
• Why you chose to attend this particular event instead of another
• Advertised price, and the price you actually paid
3. Elevator Speech
• What did you plan to say? Actually include your prepared ice breaker speech in the content of your paper.
• What did you actually end up saying? Be specific and be sure to include some excerpts from conversations that you had. Hint: After you leave the event you will want to have some paper and a pen handy so that you can record what happened.
3. What Was Most Difficult
• What were your concerns before you arrived at the event?
• What was difficult once you arrived at the event?
4. What Was Easier Than You Expected
• What went better than you thought it would?
• What pleasant surprises did you have?
5. Information, Leads, and Referrals Obtained
• What information did you get that will help your team’s business?
• What information did you get that will help your career?
• What other important information did you get?
6. Importance of Networking
• What did you think of networking before you attended this event?
• What do you think of networking after the event?
• Why do you think networking is important to entrepreneurs?
• Discuss what role you expect networking to play in your career.
7. Conclusion
• Discuss the most important points about your experience. Specifically and in detail discuss the importance of networking for entrepreneurs and business people, relating your networking experience to what you have learned in class and the concepts and tasks involved with starting a new venture.
8. Appendices – if all of these documents are not included, the report will not be graded until they have been provided. If not provided, the report grade will be reduced by 50%.
• Event announcement with Dr. Sullivan’s initials on it,
• Proof of your attendance (registration receipt or confirmation letter), and
• A photocopy of at least 5 business cards you received from at least 5 business people that are different from other students’ business cards. Do not turn in the actual business cards.
Format and Cautions
• Use 12-point Times New Roman font
• Use headings per the outline above
• The document should have 1” margins.
• Insert page numbers on the bottom right corner of your paper
• Staple your paper and the supporting documents together in the top left corner. Do not use a binder or plastic cover for your document.
• Write in complete sentences.
• Be cautious of your writing skills. Your writing skills must be suitable for your report to be submitted to a lender or investor. Proof read your paper to insure there are no problems with your writing skills. You will lose 2 points for each error; you can lose up to 50% of your points for poor writing skills.
• Late papers NOT be accepted. Any papers not turned in at the beginning of the class period for which they are due will receive a zero grade.
• Compare your content and format with these instructions. You will lose points if you have not followed directions.
Assignment Name: Elevator Pitch*
Assignment Type: Individual Assignment
Points: 100-points
Due Date: January 24, 2007, Wednesday
For this assignment, you will be required to identify an opportunity for a new venture and to conduct a two-minute elevator pitch of that venture in front of the class. The business can be a salary-substitute, lifestyle, or growth-oriented business. The new venture elevator pitches conducted by the class are very important as up to five of them will become the topic of your group feasibility projects. Consequently, carefully consider and prepare these presentations. Specifically, after everyone in the class has completed the two-minute new venture elevator pitches, members of the class will vote and select up to five that seem the most promising upon initial inspection of the idea. Teams will then be formed around the selected business opportunities.
Written Portion (70-points)
In addition to the two-minute, oral, elevator pitch each individual is also be required to submit a write-up of the idea. Each individual must turn in, prior to their verbal pitch, a written description of their business opportunity that includes, 1) a brief description of the business opportunity, 2) the verbal elevator pitch typed out, and 3) a written justification of how the opportunity meets the five criteria distinguishing it as a potential opportunity versus just an idea. That is, the written document must include the following:
1. Include a cover sheet that lists your name, the assignment name, the name of the course, and the assignment due date.
2. A description of the business opportunity. This is not the same as the elevator pitch. This description should be in more detail than the elevator pitch and should be a supporting document that elaborates on the different components of the business as presented in the elevator pitch.
3. The contents of the elevator pitch conducted in front of the class
4. A description of how this opportunity meets the following five criteria of an opportunity, as discussed in class:
1. Attractive
2. Durable (e.g., the business opportunity is competitively sustainable—not easily imitated by competitors, unique in some way(s) that allows you to have some amount of a competitive advantage)
3. Timely (e.g., is being introduced into the market at a time when that opportunity will likely be accepted due to the state of the environment/market/industry/etc.)
4. Adds value to customers
5. Adds value to network partners (e.g., adds value those people/organizations that you need to cooperate with you in order to make your business work—your resource providers)
5. A reference page that includes any research conducted that helped you support your business opportunity as discussed.
Written Paper Format
• Use 12-point Times New Roman font
• Use headings per the outline above
• The document should have 1” margins.
• Insert page numbers on the bottom right corner of your paper
• Staple your paper and the supporting documents together in the top left corner. Do not use a binder or plastic cover for your document.
• Write in complete sentences.
• Be cautious of your writing skills. Your writing skills must be suitable for your report to be submitted to a lender or investor. Proof read your paper to insure there are no problems with your writing skills. You will lose 2 points for each error; you can lose up to 50% of your points for poor writing skills.
• Late papers NOT be accepted. Any papers not turned in at the beginning of the class period for which they are due will receive a zero grade.
• Compare your content and format with these instructions. You will lose points if you have not followed directions.
• The write-up is due at the beginning of class.
Elevator Pitch (30-points)
The elevator pitch should consist of the following and you should be sure to follow the guidelines discussed in the lecture on the “art” of the elevator pitch. That is,
• The elevator pitch should be a short, simple description of your company or business idea that your grandmother could understand by the time you ride up three floors in a typical elevator.
o You have two-minutes to complete your pitch. You will be stopped if you exceed two-minutes.
• Remember that you are pitching what your business will do for investors and customers, so pitch how your business will solve a tangible problem that exists.
• You are NOT allowed to have any notes and the, verbal, elevator pitch must explicitly include the following, much of which will be based on research that you have conducted and not on your assumptions:
1. The Hook
2. A brief description of the product/service
3. A brief description of the market (this should be based upon research that you have conducted and not on your assumptions)
4. A brief description of the competition (this should be based upon research that you have conducted and not on your assumptions)
5. A description of how this opportunity is different from (or differentially value-adding relative to) the competitors offerings and/or other similar products/services (this should be based upon research that you have conducted and not on your assumptions)
6. A brief description of how the business opportunity will make money
• Further, I will consider the following criteria as I evaluate the elevator pitches: presentation and content.
o Presentation:
An “A” presentation features the following:
1. Excellent eye contact with the audience
2. Excellent flow, smooth throughout the entire pitch
3. Exhibits evidence of rehearsal
4. Absence of speech tics (e.g. “ummmmm”, Errrr”)
5. No nervous laughter, nor awkward body language
6. Clear speaking voice, loud enough to be heard by the class
7. No offensive speak
o Content:
An “A” on content features the following:
1. The pitch contains the six components of a good pitch listed above.
2. Concept is easy to understand: I can “get it” on first pass. It doesn’t require a lot of “backstory” or specialized knowledge.
3. The problem is clearly stated, and the opportunity fits well with the problem.
4. You clearly identify a potential target market.
5. Investment requirements are reasonable and at first pass it appears that the business could be lucrative.
6. You have identified a potential competitive advantage that is at first pass at least reasonably sustainable.
7. You demonstrate some knowledge of the industry, especially the key drivers of the industry’s profits.
8. It appears reasonable to assume you can execute the idea.
9. Demonstrates real innovation.
• There are some limitations on the types of business that can be topics for new venture pitches. Specifically, I am looking for ideas that are ethical, moral, and stretch you as a student. It is very easy for students to stay within their “comfort zone”, and as such, gravitate towards certain ideas. Too frequently that limits the learning value of opportunity exploration. While the following list of rejected ideas is not inclusive, it should help you tremendously. Please steer wide of them: Being the campus retailer of “volleyball shirts” is virtually identical to a t-shirt business. Pitches too closely conforming to one of these types of firms will receive an automatic 10% reduction in grade.
o Ethics and morality:
• Businesses you select must fit with the Marianist Values and sense of mission.
• An abortion clinic would not fit, a payday loan business would not fit, sweatshops would not fit, etc.
• Alcohol related ventures
• Any venture that requires a liquor license to legally operate is unacceptable for class projects.
• Scams
• “work at home” “vending routes”, etc. are unacceptable
o Ideas that have been done too many times in the past and are not acceptable this year include:
• T-shirt business
• Bed & breakfast
• eBay-like ventures (e.g., online auction websites)
• Campus video store
• Sports complex, gym, training facility
• Housing re-hab
• Grocery delivery businesses
• Campus coupons/coupon books, etc.
• On-line retailer of student products (e.g. dorm décor, etc.)
• Auto detailing, mobile car/truck service (e.g. car wash, oil change)
• Pet day care
• “Student painters”, window washers, power washing
• Ideas that are too small include:
o Lawn service businesses
o Snow removal businesses
o Convenience stores
* Note: A final note on the elevator pitches that are undertaken in class—you should not pitch an idea that you already intend to pursue in the future or one that you would not like to share with anyone at this point. Please realize that the business ideas pitched in front of the class are “fair game” and if there is anything proprietary involved with your venture idea, you should not use it for a topic in this class.
New Venture Management: Team Presentation Assignment
Overview
At the beginning of the semester (January 24, 2007) the class will be broken up into between 3 and 5 teams consisting of approximately 5 people depending upon the class size. As the semester progresses, the team will study the feasibility of a new venture opportunity that they have identified.
According to our text, feasibility analysis is the process of determining whether a business idea is viable. It is a preliminary evaluation of a business idea, conducted for the purpose of determining whether the idea is worth pursuing. It takes the guesswork out of a business launch and provides a more secure notion that a business idea is feasible or viable. Entrepreneurs often underestimate the competition or overestimate their personal chances for success.
Feasibility studies should be conducted after the opportunity recognition stage of starting a new business, and should be completed before considering writing a full business plan. If, upon completion of the feasibility study you discover that the idea is not feasible, you have two options: drop the idea, or revise it to the point that it is feasible. If indeed the business idea is revealed to be unfeasible, there is no reason to even consider writing a business plan to implement the idea.
If, during the process, it appears your business is not feasible, then look for ways to change your original ideas to make it feasible. Do more bootstrapping, get creative, be flexible. Do not just give up on a good idea without making an honest effort to make it feasible. However, your grade will not be hurt if your concept is truly not feasible, as the objective is for you to learn how to assess the feasibility of a potential business opportunity.
On January 24, 2007 each student in class will conduct an, individual, two-minute elevator pitch of an entrepreneurial opportunity that they have identified (described in the individual assignment section of this document). After everyone in the class has completed their elevator pitch, the class will vote on their pick for up to the five most viable upon their initial inspection and discussion of the potential opportunities. Teams will then be formed around the selected business opportunities. Each team will complete three feasibility analysis studies (one product/service, one industry/market/competitive, and one organizational) throughout the semester and will then present their findings to class in a 30-minute feasibility analysis presentation to the class. Students will self-select their team members on January 24, 2007.
Note: It should be noted that although the class will select the opportunities that will be studied by the team based on the initial elevator pitch, the final form of the business and the components of the business model can and in all likelihood should evolve as the team studies the different feasibility aspects of the opportunity. Further, it is possible that after conducting the various feasibility analyses relevant to the opportunity, the team might conclude that the opportunity is not in fact feasible. Grades on the assignments will not be based on the actual feasibility of the opportunity studied and instead will be based on the comprehensiveness and correctness of the feasibility analyses conducted.
Suggestions for Conducting Research
In terms of the research that the team will conduct for the feasibility analysis project, everyone on the team should look for information on the topics associated with each feasibility analysis below. Identify the industry that encompasses your business and the consumers or industry(ies) you will be selling to. Information you are seeking includes:
▪ Industry trends, past growth rate and future growth projections, target market wants and needs.
▪ Typical products/services offered by competitors, client/customer demographic description, pricing, location, promotional methods, distribution methods, customer service reputation, quality track record, etc. Learn how your competitors operate.
▪ Any other information needed to complete your feasibility report.
Suggested Approach to Research
1. First determine your NAICS code. This will increase the efficiency of your research.
2. Locate trade/professional associations; find one for similar companies in your industry. If you are selling to other businesses, then locate a second association for the industry your clients are likely to be in. Start with the Encyclopedia of Associations, which is located both in the library (AS22 .E5) and through the library’s online resources. Contact association(s) within the first few weeks of the term to determine what information they might provide to you. Be sure to discuss the association(s) you researched and describe the pertinent information you found through them in your presentation and memo.
3. Find magazine/journal articles or books about your type of business; photocopy the articles. Describe the articles and books you researched as well as the pertinent information that you found. Online library resources that students have found particularly helpful in the past include (great for industry and company information and overviews) and Business Source Complete database (great for articles). While these are great sources, do not limit your research to them. I put them here merely as a suggestion.
4. The following link provides industry profiles of only some industries, so check to see if yours or something close to yours is listed. Note that they are somewhat out of date, but they are likely to help you to some extent:
5. The following link provides average costs and sales for small businesses within different industries. You will want to select your industry (or as close as you can to your industry) and input an estimated business revenue:
A Note on Working in Teams
If a team member’s lack of contribution is hurting the team’s progress the team member may be fired by a unanimous vote of all team members. If this happens, the fired team member will be expected to complete all remaining team assignments on his/her own. The group’s presentation will be replaced with individual written analyses. These assignments are due the same date that the student’s ex-group makes their presentations. A total of 20 points will be deducted for every 24 hours period these assignments are late.
General Team Presentation Information:
• The purpose of the feasibility analysis study presentation is to present the feasibility analyses that the team has conducted on the business opportunity the team was assigned on January 24, 2007.
• In class, throughout the semester, we will discuss different feasibility analyses entrepreneurs must conduct in order to determine if they should pursue a business opportunity (e.g., is it likely that an opportunity that the entrepreneur recognized is viable?). Each team will be tasked with conducting three feasibility analysis studies on their potential business opportunity. I suggest that as we study each feasibility analysis component in class that the team works on the corresponding component of their presentation.
• At the end of the semester, teams in the class will present the results of the three feasibility analyses conducted on their potential business opportunity and they will synthesize this information and come up with a final feasibility conclusion (is the business feasible or not) for the business concept. That is, as of the conclusion of the presentation, the team should be able to determine if the business concept is or is not feasible. Specifically, the team must conclude the presentation with an overall feasibility conclusion based on the studies conducted throughout the semester and then elaborate on the following as applicable.
• If the business is determined not to be feasible, briefly describe/highlight what analyses lead the team to this conclusion.
• If the business concept is determined to be feasible, briefly describe what steps the team would take next to start the venture.
• Below is specific information regarding each of the three feasibility analyses that will be completed. Be sure to discuss each of the topics listed in the following descriptions. Failure to discuss all topics listed below will results in a reduction in grade. In addition, you will find information regarding the format of the presentation as well as materials that must be turned in with the presentation documents. Be sure to follow the instructions provided and if you have any questions, contact the professor.
• Note: Your presentation is not an advertisement for your business. It is an objective report on a business idea, so refrain from using language that tries to sell your product or service.
Team Presentation Format:
• The presentation must be between 25 and 30 minutes in length. Teams will be stopped at 30 minutes and any required information not covered will result in a deduction of points.
• Teams must turn in a copy of their PowerPoint slides to the Professor before their presentation and the slides must be printed 3-per page, printed on only one-side of the paper.
• All team members must speak during the presentation. Not all team members are required to speak for an equivalent amount of time. The important point is to harness each team member’s skills. That is, if some team members are better speakers than the others, then they should do more speaking relative to the others. If some members are better at doing research and the technical aspects of the project (e.g., PowerPoint slides, constructing surveys, tabulating results, etc.) then they should do more of that and perhaps less speaking.
• Late presentations and/or presentation document submissions will not be accepted and a zero will be given for the assignment.
• Use a heavy duty staple in the upper left corner for your slides and presentation documents. Do not put your documents in a folder or binder, and do not paper clip it together.
Documents to be turned in on the day the team presents:
• General Documents:
• Include a cover sheet that indicates the assignment name, the team name, the proposed company name, team members’ names, and the due date of the assignment.
• Print the PowerPoint slides out 3-slides per page—only print on one side of the page.
• The PowerPoint slides must be effective, clear, and correct (e.g., formatted well, consistently, and no grammatical errors)
• From the Product/Service Feasibility Analysis:
• In the appendices, include any cover letters, surveys, interviews, etc. used throughout the semester as well as the tabulated results of this research.
• The concept statement that the team constructed.
• From the Industry/Market/Competitive Feasibility Analysis:
• In the appendices, include a detailed explanation of the Porter’s Five Forces analysis discussion from the presentation. That is, provide a written explanation for each force as well as each component that impacts each force that the team went through in determining the overall industry’s attractiveness and prospects for long-term profitability.
• From the Organizational Feasibility Analysis:
• In the appendices, include each team member’s resume.
• Other:
• Be sure to include a bibliography of the sources that you used for research purposes. Failure to include a bibliography section at the end of the document will not be graded and will be awarded zero-points.
Feasibility Study #1 Name: Product/Service Feasibility Analysis Study
Purpose
The purpose of this part of the assignment and of conducting product/service feasibility analyses is to provide an assessment of the overall appeal of the product or service being proposed. As such, a number of tasks must be completed and research must be conducted.
Include the following in the presentation:
1. Conduct a concept test:
• Write a Concept Statement for your venture (see an example of a concept statement on my website).
• Show the concept statement to a couple of individuals in the target market and ask for their feedback about the product/service (e.g., what do they think about the product/service). Discuss the feedback you received any discuss any changes in the product/service offerings that need to be made as a consequence of their feedback.
• Include a copy of your concept statement in the appendices of your presentation documents.
2. Discuss the marketability of the product/service by specifically answering the following questions. Note that your business opportunity may only address one or two of these three issues. So, for it to be marketable based on these questions, it does not have to address all of the following issues:
• How does your product or service:
(1) solve a problem,
(2) make someone’s life or business more efficient, or
(3) make someone’s life or business more effective?
• Find this information by conducting research: Specifically, use industry publications, firm publications, and databases like to help gather information. Additionally, interview or survey potential customers and get feedback to find out how the product/service offering addresses these issues associated with marketability. You may be able to gather some of this information during your concept test.
3. Discuss the profile of the firm’s target customer. Answer the following questions as base them on the market research that you have conducted:
• Who will MOST LIKELY use your product/services?
• More specifically, exactly who will your customers (or target market) be? Do market research to insure you fully understand the demographic and psychographic profile of your target customer. That is, you must construct, distribution, and analyze the results of a survey that is intended to determine the characteristics of your intended target market.
• Find this information by conducting research: Specifically, use industry publications, firm publications, and databases like to help gather information on the target market characteristics of firms offering similar products/services. Construct a survey (e.g., within your team, write some questions and put them in a survey format that the team will then distribute to some number of individuals within the firm’s target market).
• Include a copy of the survey in the appendices of the presentation.
• Note that when constructing a survey and distributing it to potential customers you are representing the University and the School of Business. Also remember that you are asking these people for their help and their help is completely voluntary. Consequently, be sure to be gracious when asking for their help and fully explain why you are requesting their help as opposed to someone else. Clearly explain the assignment that you are completing and be sure to thank them—regardless of whether or not they complete your survey or participate in your interviews. For assistance in developing your survey/interview questions and/or for help in developing your cover letter/story for your request of help please set up an appointment with the professor and also follow the guidelines discussed in class. Also, see some survey, cover letter, and results examples on my website.
• Include a discussion/copy of the results of the surveys in the presentation.
• Discuss whether or not the results of this research meet the team’s initial expectations as to the profile of the target market. If it does not (e.g., this is not the proper target market for the product/service) how would the team 1) alter the product/service to meet the needs of the target market or 2) reconsider the target market for the firm’s offerings.
4. Test the usability of your product/service (e.g., a Usability Test):
• A usability test involves creating a prototype of the product/service and then showing it to potential customers (e.g., a beta test). I realize that you may not be able to make a prototype of your offerings. As such, for this portion of the assignment, include the following:
• Describe the steps you would use to conduct an actual usability test as well as the likely results of this test were it actually conducted. Describe your prototype, who you would ask to participate in the usability test, and what you would hope to learn.
• Discuss how potential customers would use your product or service.
• Discuss what features of your product/service would make it easy or difficult to use?
• In considering the potential results the usability test, what changes can you anticipate that you must you make to the product/service to increase its usefulness?
5. Intellectual Property:
• Discuss whether or not your product/service is protected by intellectual property rights?
• Do you have any patents and trademarks? ()
6. First-mover advantages/second-mover advantages:
• Do you have a first-mover advantage or a second-mover advantage?
• If so, explain what advantage you have and how you have achieved said advantage.
• If you don’t have a first- or second-mover advantage, will that hurt you? Explain your answer.
• Feasibility Study #2 Name: Industry/Market and Competitive Environment Feasibility Analysis
Purpose
The purpose of this part of the assignment and of conducting industry/market and competitive environment feasibility analyses is to provide an assessment of the overall appeal of the industry and market for the product or service being proposed.
Include the following in the presentation:
3. Description of the industry:
• Provide an introduction to the industry within which your firm will compete. Use research that you have conducted to provide an overview of the industry (e.g., briefly describe the industry and what firms in this industry do/provide to consumers, briefly describe the top competitors within the industry, and describe how the team’s firm fits into the industry—does it serve a niche within the larger industry, etc.).
• Hint: will be able to help you with much of this information.
• Use Porter’s Value Chain model to describe how or if your firm addresses a primary activity, a secondary activity, and/or interfaces between multiple Value Chain activities within the industry. That is, is the firm serving the needs of a specific activity(ies) within a larger industry?
• If your firm does not fulfill tasks associated with one or a couple Value Chain activities within the industry (e.g., is not serving a niche), describe what the entire Value Chain looks like for your firm. In this description, talk about any firms/ network partners that will fulfill any Value Chain activities that are not a part of the core competencies of the firm (e.g., that the firm cannot perform the activity(ies) better themselves relative to those that can be hired to perform those activities).
4. Assess the attractiveness of the industry within which the firm will compete:
a) Conduct a Porter’s Five Forces analysis on the industry within which the firm will compete.
• Go through each of the forces in Porter’s Five Forces model as well as the factors/criteria that impact each of the five forces. Based on this analysis, determine the relative impact (increases/decreases) of each force on the industry’s attractiveness and prospects for long-term profitability.
• At the end of the Porter’s Five Forces analysis, be sure to conclude as to the team’s overall assessment of the attractiveness of the industry.
• Base your conclusions on the research that you have conducted.
• Hint 1: In trying to determine the relative impact of each force and the criteria that effect each force, don’t forget to search through the annual reports of the top three or so firms’ within the industry (in terms of market share/sales) to identify trends in how they respond to and/or what they have to say about each force.
a) Determine the structure of the industry (e.g., fragmented, emerging, mature, declining, global) within which your firm will compete. Base your conclusions as to the industry’s structure on the research that you have conducted. See p. 85-89 in your text for a description of industry structures and their corresponding opportunities.
• Describe how and/or if your firm capitalizes on the opportunities that are presented as a consequence of the structure of the industry. If your firm does not capitalize on an opportunity present as a result of the industry’s structure, can you modify your approach to launching venture so that you can more likely capitalize on the opportunity(ies) presented? If the venture cannot be modified to capitalize on opportunities presented by the industry’s structure, does this mean that it is not timely to enter this market?
1. Discuss the competition. Answer the following questions:
• Approximately how many companies compete in the industry?
• How are market shares distributed across firms within the industry (e.g., do one or a few firms control the majority of the market share?)
• Are sales generally increasing or decreasing for companies in this industry?
• Hint: Look over the historical sales figures for the firms on .
• Do first-move advantages exist for existing firms?
• What attributes of your firm distinguish it from other firms competing within the industry? If the team determines that there are no distinguishing attributes of the firm relative to competitors, can the venture concept be modified to create/integrate some distinguishing attributes?
• Hint: A competitive analysis grid might help you with completing this bullet (see p. 91 in your text).
• Does a sustainable competitive advantage exist for your firm or another firm(s) within the industry? Conduct a VRIO analysis to determine this (e.g., go through the questions asked by a VRIO analysis to see if a sustainable competitive advantage is possible for your firm and to see the likely economic implications for your firm based on this VRIO analysis).
• Hint: On my website is a helpful VRIO handout ()
Feasibility Study #3 Name: Organizational Feasibility Analysis
Purpose
The purpose of this assignment and of conducting organizational feasibility analyses is to determine if your business idea has sufficient management expertise, organizational competency, and resources necessary for success.
Include the following in the presentation:
1. Describe the Management Team (e.g., the people in your group)
• Specifically discuss the prowess (e.g., expertise) of each member of your management team:
• Describe your startup’s founding management team.
• Describe the qualifications of each of the key members of the team.
• Discuss if and how your team is uniquely qualified to make this business a success. If your qualifications are lacking, what must you do to improve your abilities?
• If you are not qualified and cannot acquire the necessary skills within the team, how will you handle these shortcomings? Are you able to immediately hire the necessary individuals? Are the financial requirements associated with immediately hiring these individuals realistic for the team to meet this early in the venture’s development?
• What evidence can you provide, if any, that the founders of your firm and/or its current management team are passionate about its business idea (e.g., is the business associated with any of the team member’s prior experience? Hobbies? A family business? A specific interest? A desire to improve some aspect of society?)
2. Describe any Anticipated Future Human Resource Needs
• As your firm grows, you will likely need to hire on additional employees. Describe two or three additional members that should be added to the venture’s employee roster (I don’t need the name of a person – just the profile of the type of person that you’d want). Describe the unique contribution each of these individuals could bring to the team.
3. Resource Sufficiency (non-financial resources that the firm possesses)
• Describe the non-financial resources (e.g., know-how, firm clusters, intellectual property, management team/founder reputation, etc.) that are most important for your firm to properly execute its business plan. Make a list of the most critical resources, and comment on the extent to which your firm has sufficient resources in these areas. If there are any significant resource gaps, suggest ways that these gaps could be closed.
4. Location
• Describe the geographical location of your firm’s headquarters, and its major production facility/office/operations location.
• Why did the team decided to found the venture at this location? (e.g., what was the rationale used to determine that was the best founding location for the firm?)
• To what extent is your firm near a “cluster” of similar firms? In your firm’s particular case, how important is it to be near a cluster of similar firms?
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