CS443 Course            Introduction To Entrepreneurship                                 p         p                   Spr...
Four basic Types of Business2   Manufacturing: Makes a tangible product.   Wholesale: Buys in bulk From the manufacturer a...
Three Question to Define a Business3    Who will the business Serve?       Who is in the market for your product and servi...
Three elements for Business Definition4  The Offer: what will you sell to your customers?     g                     g     ...
Competitive Advantage5  Competitive advantage. It is whatever you can do better than the competition that                 ...
Competitive Strategy6  Y business will only succeed if you can offer the customers i your market  Your b i         ill l  ...
Strategy VS. Tactics7   Y strategy i the plan f outperforming the competition.   Your t t        is h l for           f   ...
Smart Tactic Example8   S   Surprisingly. a l of software i available f free or low cost on the I        ii l       lot f ...
Competitive Advantage9    S    Successful Companies N d the Following:             f lC        i Need h F ll i          To...
Six Factors of Competitive Advantage10  Q lit C you provide higher quality than competing b i  Quality- Can          id hi...
Naming Your Business11   Wh are you going to name your business?   What                i                 b i     ?        ...
Analyzing your Competitive Advantage12   C   Competitive offers- H d          titi     ff                    ff           ...
Defining the Unit of Sale13  U it of sale, which i one unit of the product or service a b i  Unit f l         hi h is     ...
Cost of Goods Sold and Gross Profit14  C t of Goods Sold of one unit of product-COGS, this is cost associated with  Cost f...
Economy of One Unit- EOU15   EOU i a method f seeing whether your b i         is      h d for      i    h h          busin...
Chapter Assignment…16     Chapter 2, entrepreneurship starting and operation a small business book         Page 56, Questi...
Business Plan Practice (Project Section)…17     Chapter 2, entrepreneurship starting and operation a small business book  ...
18           Q&A…     Creating business from opportunity   Chapter 6   By: Motaz Al-Agamawi
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Essential of Technology Entrep. & Innovation- Chapter six creating business from opportunity

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In chapter six, we are introducing the concepts of how to create business from opportunities.
This course provide the students with a conceptual knowledge regarding the essentials for management practices of a technology-based organization, and the evolution of technology. The topics covered in this course would include: • Introduction to the concept of entrepreneurship. • What entrepreneurs do and their importance to economy • How to seize business opportunity; • Know the process of creativity and difference between invention and innovation • Know how innovation is important as a dimension of entrepreneurship • Critical factors in managing technology; including • The Time Factor (Osborn effect) • Technology Push and Market Pull • The S-Curve of Technology • Technology and Product Life Cycle • The Chain Equation of Technology Innovation • Price Knowledge Gape Relation • Difference between Entrepreneurship and Stewardship Management • Difference between technology leader and followers • Competition and Competitiveness Concepts. • The process of the technological innovation; • Who are the customers; and • How to optimize cost and find finance for your projects • Demonstrate the importance of business plan, including the marketing and financial plans and how to prepare it. • Know the structure and management of a technology organization

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Essential of Technology Entrep. & Innovation- Chapter six creating business from opportunity

  1. 1. CS443 Course Introduction To Entrepreneurship p p Spring 2009, Modern Science & Arts University Chapter Six: Creating Business from OpportunityInstructor:Al-Motaz Bellah Alaa Al-AgamawiChapter Source, “chapter Two: entrepreneurship starting and operating a small business”book, by Steve Mariotti, 2007, Pearson Education, Inc. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  2. 2. Four basic Types of Business2 Manufacturing: Makes a tangible product. Wholesale: Buys in bulk From the manufacturer and sells smaller quantities to theretailer. Retail: Sells one piece at a time to consumers . Se ces: Sells a g b e p oduc o co su e . Services: Se s intangible product to consumer. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  3. 3. Three Question to Define a Business3 Who will the business Serve? Who is in the market for your product and service? What will the business offer to customers? what are the product or service business will sell? How will the business provide the product or service it offer? What are the primary actions and activities required to conduct this business? Buying or developing or manufacturing the product Identifying its potential customers and selling the product to them Producing and delivering the product or service Receiving Payment Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  4. 4. Three elements for Business Definition4 The Offer: what will you sell to your customers? g g y g Target Market: Which Segment of the consumer market are you aiming to serve? Production and Delivery Capability: How will you provide your offer to yourtargeted customers? Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  5. 5. Competitive Advantage5 Competitive advantage. It is whatever you can do better than the competition that ywill attract customers to your business. Can you supply your product a t a lower price than other businesses serving your market? Can you attract more customers than your competitor by offering better quality or some special service? Find Your Competitive Advantage by Thinking about What Consumers Need Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  6. 6. Competitive Strategy6 Y business will only succeed if you can offer the customers i your market Your b i ill l d ff h in ksomething more than the competition does. Once you are clear about your competitive advantage , or core competency, yourbusiness decisions will start to fall into place. Your competitive strategy combines your business definition with your competitiveadvantage. A competitive advantage must be sustainable, meaning that you can keep it going. If you decide to beat the competition by selling your product at a lower price , your advantage will not l t l d t ill t last long if you cannot afford t continue at th t price. t ff d to ti t that i Small business owners should realize that price alone is probably not going to work advantage for long. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  7. 7. Strategy VS. Tactics7 Y strategy i the plan f outperforming the competition. Your t t is h l for f i h ii Your tactics are the ways in which you will carry out your strategy. If your tactics attract enough customers to make a profit . you will have found astrategy for achieving a competitive advantage. To find a competitive advantage. think about everything your business will offer.Look at your: Location Product D i Design Price Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  8. 8. Smart Tactic Example8 S Surprisingly. a l of software i available f free or low cost on the I ii l lot f f is il bl for f l h Internet. FFreesoftware is called freeware and is free for one of two reasons: The individual who developed it is eager to share it with others. A company wants to start you using the program so you will be interested in buying other; related merchandise. Apple used this strategy effectively with QuickTime multimedia software and Microsoft used it with the Internet Explorer Web browser. Freeware does not include upgrades or technical support. The supplier of affreeware program gambles th t people who use it will like it so much th t th will bl that l h ill lik h that they illdecide to pay for the program that includes those upgrades and support . Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  9. 9. Competitive Advantage9 S Successful Companies N d the Following: f lC i Need h F ll i To sell to a market that is large and growing. To sell to a market where the competition is able to make a profit. To sell to a market where the competition is succeeding but is not so powerful as to make it impossible for a new entrepreneur to enter the market. To sell a product or service that solves problems consumers may have with the competition. To sell a product or service at a competitive price that will attract customers. If all of th ll f these are in place, you need to do the f ll i i l d t d th following: Understand the needs o f your customers. Have a sustainable competitive advantage. Deliver a product or service that meets your customers needs at a fair price. l d h d f Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  10. 10. Six Factors of Competitive Advantage10 Q lit C you provide higher quality than competing b i Quality- Can id hi h li h i businesses? ? Price- Can you offer a lower price than your competition? Location- Can you find a more convenient location for customers? Selection- Can you provide a wider range of choices than your competitors? Service- Can you provide better; more personalized customer service? Speed/Turnaround Speed/Turnaround- Can you deliver your product or service more quickly than thecompetition? Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  11. 11. Naming Your Business11 Wh are you going to name your business? What i b i ? This is a very important decision. The name of your business will be the first impression you make on customers. Ideally, it will convey your competitive advantage to your market. Keep it simple: The best name is one that tells customers what the company dues,sells,sells or makes."Naming the company is the first move of many in which you should keepth customers needs first and fthe t d fi t d foremost i mind." t in i d " Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  12. 12. Analyzing your Competitive Advantage12 C Competitive offers- H d titi ff ff ih h f l di How does your offer compare with those of your leadingcompetitors? What are the key features of each? Unique Selling Proposition- Based on that comparison, what is your unique sellingproposition USP? This will require a comparison of offers and identifying what is unique about yours that your competition cannot or will not match. Cost Structure- What is different about your business activities, and the cost ofdoing business, from that of your competitors? Overall, are you at a cost advantageor di d t disadvantage? ? To be successful you must have a unique selling proposition that will attractcustomers to buy from you. Second, you must have a cost structure that sufficient. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  13. 13. Defining the Unit of Sale13 U it of sale, which i one unit of the product or service a b i Unit f l hi h is i f h d i ll business sells.Entrepreneurs usually define their unit of sale depending on the type of business: Manufacturing: One order (any quantity, 100 watch) Wholesale: A dozen of an item. Retail: One item Services; One hour of service time. If business sells combination of differently priced items (ex. Restaurant), then theunit of sale is more complicated. In this case we can use the average sale per tcustomer: Average Gross Profit per customer = Average sales per customer – Average cost of sale per customer. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  14. 14. Cost of Goods Sold and Gross Profit14 C t of Goods Sold of one unit of product-COGS, this is cost associated with Cost f G d S ld f it f d t COGS thi i t i t d itheach unit of sale Cost of material used to make the product Cost of Labor used to make the product. In services its name is Cost of Service Sold- COSS.Costs of goods sold can be thought of as the cost of selling "one additional unit." Ifyou buy watches and then resell them, your COGS per unit is the price you paid for t h O k COGS l l t fit b bt tione watch. Once you know your COGS, you can calculate gross profit by subtractingCOGS from revenue. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  15. 15. Economy of One Unit- EOU15 EOU i a method f seeing whether your b i is h d for i h h business idea might b profitable. id i h be fi bl If one unit of a sale is profitable, the whole business will be profitable too. Total Revenue = Total # units sold * unit selling price Total COGS = Total # of units sold * unit cost price (price which you purchase withfrom your supplier). Total Gross Profit = Total Revenue – Total COGSCost of Labor must be calculated in the EOU. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  16. 16. Chapter Assignment…16 Chapter 2, entrepreneurship starting and operation a small business book Page 56, Question 3 56, Page 56 Application Exercise Question Page 56, Exploring Online Question Assignment Deadline: Next Week. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  17. 17. Business Plan Practice (Project Section)…17 Chapter 2, entrepreneurship starting and operation a small business book Page 59,60 Unit One Business Plan Practice Assignment Deadline: Week After Next. Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
  18. 18. 18 Q&A… Creating business from opportunity Chapter 6 By: Motaz Al-Agamawi
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