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Entrepreneurship and Small Business - University of Delaware

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Entrepreneurship and Small Business - University of Delaware ...

     MGMT 472 ENTREPRENUERSHIP AND SMALL BUSINESS

    Spring 2009

Yasemin Y. Kor, Ph.D.

E-mail: ykor@moore.sc.edu; Phone: 777- 5956

    Office hours (BA754): MW after class or by appointment

―Who dares to teach must never cease to learn.‖ John Cotten Dana

Prerequisites: MGMT 371 must be completed before enrolling in MGMT 472.

Course Objectives

    We live in an era of innovation where creative acts of entrepreneurship take place relentlessly in sta variety of firm settings. In the 21 century, regardless of size, business focus, or geographical location, firms are all engaged in an intense competition to develop innovative products and

    business models. This course is designed to help you develop an understanding of how

    entrepreneurs can start, grow, and manage new ventures successfully. In this course we focus on

    specific topics of entrepreneurship including:

    ? How to transform creative ideas into business opportunities

    ? How to analytically assess new business opportunities and models

    ? How to build strong venture teams

    ? Fundamentals on market attractiveness, competitive advantage, and competitive strategy

    ? Knowledge of alternative resource strategies and financing options

    ? Franchising, social entrepreneurship, and sustainable entrepreneurship

In this course, we heavily utilize case analyses, discussions, and debates. Case discussions and

    course assignments will give you ample opportunity to build a rich understanding of venture

    creation and growth, and allow you to practice problem solving in different entrepreneurial

    settings. With case discussions and assignments, you will get to feel the excitement of

    entrepreneurs from many real-life examples. You will also learn to draw lessons from these

    entrepreneurs‘ accomplishments, mistakes, and the hardships they encountered.

This course will emphasize the certain skills of entrepreneurship and strategic thinking including:

    ? Mobilizing your creativity and interests in developing new products and new business

    models

    ? Analytical skills to assess/develop new business initiatives and to anticipate roadblocks

    ? Problem-solving skills to generate solutions for challenges

    ? Formal/informal communication skills to speak with knowledge, confidence, and clarity

    about new business ideas, models, markets, and entrepreneurial challenges

    ? Writing skills for persuasive and clear articulation of business matters in writing

    Kor-MGMT472-page 1

COURSE REQUIREMENTS AND GRADING (100 Points)

(1) Active Participation in Case Discussions and Exercises 20 points

    (2) Group Case Write-up 20 points

    (3) Group Case Presentation 20 points

    (4) Exam I and Exam II (20 points each) 40 points

To complete this course, you will prepare individual and group assignments and participate in

    case discussions and lectures. You are responsible for all assignments that are in the syllabus

    (whether or not I remind you of them). Also, everything needs to be turned in on time.

REQUIRED TEXT:

Custom Textbook (available through University Bookstore)

I reserve the right to hand out additional material or to place additional material in the library.

BIBLIOGRAPHY OF CASES

    1. Roxanne Quimby: Burt‘s Bees Personal Care Products Industry 2. Jim Poss: Seahorse Power Co. Solar Trash Compactor Business

    3. Starbucks Gourmet Coffee (Retail) Industry

    4. Peanut Butter Fantasies Gourmet Food Industry

    5. Icedelights Ice Cream Franchise

    6. Hickory Ridge Golf Club Golf Club Industry

    7. Digital Data Divide IT Industry/Social Entrepreneurship

    8. WholeFoods Market, Inc. Supermarket Industry

    9. Ben & Jerry‘s and Unilever Ice Cream/Social Entrepreneurship

    10. ZipCar Car Sharing Industry

    11. Nantucket Nectars Beverage Industry

POLICY ON CLASS ETIQUETTE

    You are required to attend class on time. When you come to class late, you reduce the quality of instruction and the presentations since everyone is distracted as you enter the class. Coming to

    class late will affect your participation grade adversely. Cell phones should be turned off during

    class. Laptops are to be used for class activities only. If you are seen net surfing or e-mailing

    during a class session you lose laptop privileges for the remainder of the course.

POLICY ON CHEATING

    No form of cheating is allowed. I encourage you to become familiar with the University‘s Honor

    Code found in the Official Student Handbook available on the Web at:

    http://www.sc.edu/academicintegrity/honorcode.html

    Kor-MGMT472-page 2

(1) PARTICIPATION IN CASE DISCUSSIONS AND EXERCISES

    (20 points)

A successful business career requires speaking with knowledge, confidence, and clarity on

    business ideas, models, markets, and strategic issues. Active participation in case discussions

    will give you ample opportunity to practice these essential business communications skills.

Your participation grade will be based on your verbal comments and contributions during case

    discussions and exercises. Please note that meaningful participation requires close reading and

    thorough preparation of each case. Your participation grade is earned through consistent, quality

    comments throughout the semester. The participation ratings are to be based on both the

    quantity and quality of contributions. Evaluation criteria for participation include:

? Do your points reflect creative and analytical interpretations of key information and

    insights from the case? Do they provide new insights?

    ? Do your comments reflect in-depth analysis and application of tools and concepts learned

    in this and other classes?

    ? Are comments/questions thought-provoking and do they spark new conversations/debates?

Each case or lecture topic addresses a different set of strategic issues. To help guide your

    thinking and analysis for each case or topic, please refer to the case and chapter Discussion

    Questions provided in this syllabus under Course Sessions (starting on page 6). In preparing for

    a particular class, please review and develop answers for these discussion questions. Take notes

    when you read/analyze the case and then use them during class discussions.

Always keep in mind that your class preparation cannot be evaluated if you do not volunteer

    comments. If you dont participate in discussions throughout the semester, your participation grade will be zero. Attendance does not count as participation. I expect each student to

    participate every class by making meaningful comments that involves analysis, interpretation, and/or evaluation of the case facts and issues. High quality participation also means being

    constructive and helping move the class discussion forward. Disagreeing with the comments of

    your classmates is expected, as long as you are constructive about it. Also, do not refrain from

    participating for the fear of being wrong.

Your verbal participation will be supplemented with 1-page case write-ups that you will prepare

    throughout the semester (a total of six write-ups). In these case write-ups, you will answer

    specific questions to be provided by the instructor. Write-ups are due at the beginning of the

    class. In preparing your write-ups, use 12-font, single-space, and 1-inch margins on all sides.

A useful advice from your instructor: Do not disengage when group presentations start. I

    continue grading participation. Be attentive and stay engaged by asking presenters thought-

    provoking questions and offering comments during the Q&A.

The first day of class I will take your pictures to learn your names. If you miss this particular

    class, it is your responsibility to bring me a copy of a recent photo. I have an open-door policy,

    so please keep in touch with me regarding your participation grade anytime during the semester.

    Kor-MGMT472-page 3

(2) GROUP CASE WRITE-UP (20 points)

INSTRUCTIONS:

Executive Summary (first page): In one page, discuss the most critical issues faced by Hickory

    Ridge Golf Club. Also, provide a summary of your recommendations.

Analysis:

I. Customer Analysis: How does Hickory Ridge satisfy the first two anchors of good

    opportunity?

    ? What are the needs/wants of golf players? Who are the golf players?

    ? Who are Hickory‘s target customers?

    ? How is Hickory delivering value to its customers? Do Hickory‘s customers have any

    unmet needs or frustrations (speculate when necessary)? How well do you think

    Hickory‘s customers satisfied?

II. Evaluate the Financial Health of Hickory. What are the weak spots in Hickory‘s income

    statement and balance sheet? How can they be improved? (Exhibits 1, 2, & 3; In Exhibit 3, look

    at both 1988 and 1989)

    III. What are the Growth Opportunities for Hickory? Discuss general golf trends and local factors that influence demand for golf courses. Also identify revenue opportunities (Exhibit 3).

IV. Evaluate Competitive Threats for Hickory.

    ? Who are Hickory‘s direct competitors (considering location and other public courses)?

    How does Hickory fare compared to its competitors in pricing? How about in golf

    course quality, snack bar-shop quality, etc.?

    ? Should Hickory worry about other competitors as well? Why, why not?

    V. What are Hickory‘s Operational Problems (i.e., issues regarding running the golf course on a day to day basis)?

    ? Identify, briefly discuss different problems (do not summarize the case!)

    ? Rank order issues in terms of importance.

    ? Group issues as high, medium, and low priority issues (i.e., importance or urgency for the

    issue to be addressed or fixed) and discuss your reasoning for this grouping.

    ? Discuss costs and benefits of the solving these problems.

    See the next page for further instructions ? ? ?

    Kor-MGMT472-page 4

Recommendations: (Save 2-3 pages for recommendations!)

VI. What are Hickory‘s options? What are your Recommendations? Discuss in detail.

    ? Should Hickory use the golf course as a cash cow (with no capital improvements)?

    ? Should Hickory fix all of the operational problems?

    ? Should Hickory fix a subset of the problems, and what would they be? Explain in detail.

    ? Provide a cost-benefit analysis if you recommend that Hickory makes capital

    improvements? Provide and show with calculations the estimated payback period. Also

    discuss how the investments would be financed.

    ? Should Hickory consider changes in its pricing strategy?

    ? Should Hickory make any changes in its financing strategy? (Are they undercapitalized

    and over-leveraged?)

    ? Does Hickory need any changes in management & personnel?

    ? Are there other changes you recommend?

Style and Format:

    ? Case write-ups should be typed using double spacing, 12-point font, and one-inch

    margins on all sides.

    ? Please do not use fancy report covers. Stapling is sufficient. However, the write-up

    should have a simple cover sheet with group number and group members‘ names. Insert

    page numbers.

    ? The write-up should be around 10-12 pages, double-spaced (including cover, executive

    summary, and financial analysis). It should not exceed 14 pages. If it does, you have

    summarized the case, go back and refocus.

    Example Division of Labor

Executive Summary (Person 5)

    Customer Analysis (Person 1)

    Financial Health (Person 2, Person 4)

    Competitive Threat (Person 3, Person 4)

    Growth Trends and Opportunities (Person 1)

    Operational Problems (Person 2, Person 3)

Recommendations (incl. financial analysis) (Person 1, Person 2, Person 3, Person 4, Person 5)

    Late Papers: Late papers will receive a deduction of two letters grade from the grade they would have received had they been on time. That means a late paper can receive a grade no

    higher than a C. Late papers are accepted only within 7 days following the original deadline.

    Kor-MGMT472-page 5

(3) GROUP CASE PRESENTATION (20 points)

The objective of these presentations is to enhance your ability to:

    ? Identify and critically analyze the issues in the case

    ? Present your analysis and specific recommendations in a persuasive style

    ? Utilize visual aids to support the presentation

    ? Think on your feet while interacting with the audience

Specific assignment of cases to groups is shown below. You will have 30 minutes for the

    presentation (not including the Q&A session). Your group will have the primary responsibility

    for presenting the case. Therefore, you should:

    ? Define the strategic issue(s)

    ? Conduct an in-depth analysis of the case

    ? Develop specific recommendations

    ? Provide an update on the case firm. (The firm‘s strategic directions, products,

    achievements, struggles, etc. since the case ~ approx. 3-4 slides)

For the update, do not exclusively rely on company website. Use USC library online databases

    (e.g., Business Source Premier, Small Business Resource Center, Lexis Nexis) to find articles

    about the firm (published after the case date). Submit two articles you used for the update.

At the end of the presentation, the group will answer the questions from class and the instructor.

    I will take the rest of the class time for discussion about the case. The specific aspects of the

    case your group is expected to analyze are provided in class sessions.

Evaluation Criteria:

    - Substance of Presentation 15.00 points

    - Use of visual aids: Clarity, readability, organization 1.00 points

    - Persuasiveness: Credibility, eye contact 1.00 points

    - Management of time 1.00 points

    - Equal division of presentation material 1.00 points

    - Ability to answer questions, think on feet 1.00 points

    Total 20.00 points

CASE PRESENTATION ASSIGNMENTS

    Groups Case

    1 Peanut Butter Fantasies

    2 IceDelights

    3 Digital Divide Data

    4 Whole Foods Market, Inc.

    5 Ben & Jerry‘s and Unilever

    6 Zipcar

    7 Nantucket Nectars

    Kor-MGMT472-page 6

    Important Requirements and Tips for Case Presentation:

? A paper copy of all transparencies and exhibits must be provided to me before the

    presentation. Failure to do so will result in loss of 0.5 points. Power Point handout prints

    (3 slides per page) are sufficient.

    ? Use of POWER POINT (for overheads, charts) is required. Use the similar font type

    and background in all overheads.

    ? All members of a group are expected to participate equally in the presentation. That

    means each member should do same amount of work and use equal time to present.

? Presenters should avoid merely reading out presentation material. You can use note cards,

    but reading from your notes sentence by sentence is not appropriate.

? Presentations are professional. Please wear business or business casual attire.

? Do not spend too much time reviewing company history. Focus on the current and future

    issues, and discuss company‘s history only when it is relevant to the current/future

    strategy and to your specific recommendations.

? Highly Recommended Option: If you want to get developmental feedback on your

    presentation, email me your group presentation file 3-4 days before the presentation day.

    I will reply back and send my comments and suggestions to you within two days, which

    should leave you another day or two to fix the problems and improve your presentation.

    In the past, the groups which took advantage of this opportunity did much better in their

    presentations. So, I am happy to make this option available to you.

? All group members should contribute to recommendations. Delegating recommendations

    to one person is like a team of detectives pursuing different cues and putting a member in

    charge of solving the murder mystery without any field work and evidence.

? Please note that your grade on the group presentation will be a group grade. If there are

    any free riding problems, first talk to your group about them. The group should

    communicate openly and professionally with the non-contributing members and let them

    be aware of the situation. If the problem persists, let me know about it. I will ask the

    group to evaluate contributions of every member. Strong negative feedback from group

    members results in reduction in a student‘s presentation grade. This principle applies to

    all group assignments.

    (4) EXAMS I AND II (20 points each) The exam will be closed book/notes. Exams will entail questions that will require an

    understanding of the concepts and tools taught in class. Exams will also ask you to apply these

    concepts and tools to analyze and solve the problems presented in cases. Thus, it is highly recommended that you attend class regularly and take notes during lectures and case discussions.

    Kor-MGMT472-page 7

    COURSE SESSIONS

---------------------------------------------------------------------------------------------------------------------

    SESSION #1 Jan 12 Monday Introduction (Lecture 1) ---------------------------------------------------------------------------------------------------------------------

    ? Introduction to the course and syllabus

    ? Students forming their groups (for projects and presentation)

    ? Student pictures are taken

---------------------------------------------------------------------------------------------------------------------

    SESSION #2 Jan 14 Wednesday ---------------------------------------------------------------------------------------------------------------------

Group Survival Exercise

---------------------------------------------------------------------------------------------------------------------

No Class on Monday Jan 19 Martin Luther King Day

---------------------------------------------------------------------------------------------------------------------

    SESSION #3 Jan 21 Wednesday Entrepreneurial Mind (Lecture 2) ---------------------------------------------------------------------------------------------------------------------

Read: Chapter 1 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy

Discussion questions:

    ? Before reading the assigned chapters, how would you answer the question of ―what are

    the most important attributes of successful entrepreneurs?‖

    ? What are the dominant themes that Chapter 1 identifies as attributes of successful

    entrepreneurs? Why do they matter?

    ? What is meant by the apprenticeship concept, and why is it so important to young

    entrepreneurs?

    ? What are the implications of Exhibit 1.8?

    ? What are the implications of what you read in these chapters for your career and future?

    ? How do you stack up against the six entrepreneurial mindsets? What do you need to

    develop and improve?

    Kor-MGMT472-page 8

---------------------------------------------------------------------------------------------------------------------

    SESSION #4 Jan 26 Monday Case: Roxanne ---------------------------------------------------------------------------------------------------------------------

    Read: Case Roxanne Quimby (p. 46)

Discussion questions:

    ? Visit www.burtsbees.com

    ? What were the factors that contributed to early success of Burt‘s Bees?

    ? How much of this success was attributed to Roxanne Quimby? What were some of her

    strengths and weaknesses as an entrepreneur?

    ? Why is Roxanne considering to move her business to North Carolina? Why is location so

    important?

    ? How important is it to grow the business beyond $ 3million? What will she be giving up?

    ? How will the products be positioned and differentiated in the ―new‖ company?

    ? Was moving to North Carolina the right choice?

    ? What are her options now? What should she do?

    ? What have you learned from this case?

---------------------------------------------------------------------------------------------------------------------

    SESSION #5 Jan 28 Wednesday Entrepreneurial Opportunity & Venture Team

     (Lecture 3)

    ---------------------------------------------------------------------------------------------------------------------

    Read: Chapter 8 The New Venture Team

Discussion questions:

    ? Why should entrepreneurs think big?

    ? How can you identify new business opportunities?

    ? What type of changes in the environment should entrepreneurs take notice?

    ? When does an entrepreneurial idea also constitute a solid business opportunity?

    ? What are attributes of high potential opportunities in contrast to low potential

    opportunities?

    ? Why is the venture team so important in entrepreneurial process?

    ? What is meant by team philosophy and attitudes? Why do they matter?

    ? What are the most critical issues a lead entrepreneur should consider regarding the

    entrepreneurial team?

    ? What are some of the common pitfalls in team building?

    ? What are the critical rewards, compensation, and incentive issues in putting a team

    together? Why are these so crucial and difficult to manage?

    ? How does the lead entrepreneur allocate stock ownership and options in the new venture?

    ---------------------------------------------------------------------------------------------------------------------

    Kor-MGMT472-page 9

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    SESSION #6 Feb 2 Monday Case: Jim Poss

    ---------------------------------------------------------------------------------------------------------------------

Read: Case Jim Poss (p.70)

Discussion questions:

    ? Visit www.bigbellysolar.com/

    ? What is Jim‘s product/business idea? How does this product deliver value? What

    problems does it solve?

    ? Are the benefits to the customer identifiable, repeatable, and verifiable?

    ? Is the payback to customer less than one year? Is this a high potential opportunity?

    ? Outline different work experiences Jim Poss have had over the years. What types of

    skills and network ties has he developed?

    ? What are Jim‘s interests and educational background? Is there a good fit between the

    entrepreneur and the business idea?

    ? What are different entrepreneurial qualities of Jim Poss? How does he compare to

    Roxanne Quimby?

    ? What is a provisional patent? Why is patenting so essential?

    ? How did Jim get his first customer? How did he get feedback?

    ? How good are the growth/profitability prospects of this opportunity?

    ? What additional markets should Jim consider to boost sales?

    ? What have you learned from this case?

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    SESSION #7 Feb 4 Wednesday Market Analysis and Financial Attractiveness

     (Lecture 4)

    ---------------------------------------------------------------------------------------------------------------------

Read: Chapter 3 The Entrepreneurial Process

Discussion questions:

    ? How do we assess market attractiveness?

    ? What is Porter‘s Five Forces Industry Analysis? What are the Five Forces?

    ? What are entry barriers?

    ? What are the conditions that elevate the bargaining power of suppliers?

    ? What are the conditions that elevate the bargaining power of buyers?

    ? What are the conditions that elevate the level of rivalry in the industry?

    ? What are the conditions that elevate the threat of substitutes?

    ? How can firms position themselves creatively against the threatening industry conditions?

    Can you think of several examples?

    ? How do we assess financial attractiveness of a new venture?

    ? What are key profitability ratios and what do they mean?

    Kor-MGMT472-page 10

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