Entrepreneurship: Strategies and Resources / Edition 1 available in Hardcover
- Pub. Date:
- McGraw-Hill Higher Education
|Publisher:||McGraw-Hill Higher Education|
|Edition description:||Older Edition|
Table of Contents
|Chapter 1||A Framework for Entrepreneurship||1|
|Entrepreneurship and Your Future||2|
|What Is Entrepreneurship?||5|
|Where Is Entrepreneurship?||7|
|The New Entrepreneur||9|
|Dimensions of Entrepreneurship||10|
|Organization of the Book||18|
|A Final Word||20|
|Chapter 2||Resources and Capabilities||24|
|Identifying Attributes of Strategic Resources||26|
|A Psychological Approach||38|
|A Sociological Approach||41|
|Chapter 3||The Environment for Entrepreneurship||50|
|Schematic of the New Venture's Environment||51|
|Processes of Business Environment Analysis||53|
|Political and Governmental Analysis||55|
|Sources of Opportunity||67|
|The Threat of Substitutes||76|
|Rivalry Between Firms||79|
|Chapter 4||Entrepreneurial Strategies||89|
|Entrepreneurship and Strategy||90|
|Isolating Mechanisms and First-Mover Advantage||101|
|Strategy and Industry Environments||106|
|Evaluating Strategy and Entrepreneurial Opportunities||118|
|Chapter 5||The Business Plan||126|
|Why Write a Business Plan?||127|
|Elements of the Business Plan||130|
|Critiquing the Plan: Questions Likely to Be Asked||146|
|Format and Presentation||149|
|Appendix 5A||The Del Cano, Inc., Business Plan||154|
|Chapter 6||The E-Entrepreneur||177|
|Where Are the E-Entrepreneurs?||179|
|Who Are the E-Entrepreneurs?||183|
|Winners and Losers||189|
|The Resource-Based View and E-Entrepreneurship||191|
|Business Models and Strategies||204|
|What Have We Learned?||213|
|Chapter 7||Foundations of New Venture Finance||218|
|Determining Financial Needs||219|
|Sources of Financing||227|
|New Venture Valuation||240|
|Appendix 7A||The Initial Public Offering (IPO) Process||250|
|Chapter 8||Securing Investors and Structuring the Deal||253|
|Structuring the Deal||264|
|Legal and Tax Issues||274|
|Appendix 8A||Investment Agreement Outline||289|
|Appendix 8B||Negotiable Terms to a Financial Agreement||290|
|Chapter 9||Creating the Organization||293|
|The Top Management Team||295|
|Building an Enduring Organization||306|
|The Organization's Boundaries||312|
|Entrepreneurial Performance: The Balanced Scorecard||316|
|The Entrepreneurial Workplace||320|
|Most Successful Human Resource Practices||325|
|Chapter 10||Corporate Venturing, Networking, and Franchising||331|
|Networking and Alliances||342|
|The Franchising Alternative||352|
|Background and Purpose||365|
|Development and Production||370|
|Management and Organization||376|
|Critical Risks and Contingencies||380|
|Summary and Conclusions||381|
|Scheduling and Milestones||381|
|Case 2||Tellme Networks: Dial Tone 2.0?||394|
|Company Background: "Netscapees"||394|
|Development of Tellme||395|
|Overview of the Voice Portal Market||396|
|The Future of Tellme||397|
|Case 3||Stamps.com: Bringing Electronic Postage Online||406|
|What Is Online Postage?||406|
|Who Is Stamps.com?||407|
|Drawing the Battle Lines||408|
|Waging the War||410|
|Winning the Standards War||411|
|Recognizing Stamps.com's Weaknesses||412|
|The Next Front||413|
|Case 4||Rubio's: Home of the Fish Taco (A)||420|
|The Fast-Food Industry||420|
|The Rubio's Concept||426|
|A Look to the Future||429|
|Case 5||Rubio's: Home of the Fish Taco (B)||435|
|The Restaurant Industry||435|
|The Rubio's Concept||440|
|A Look to the Future||443|
|Case 6||Suzy's Zoo||456|
|The Greeting Card Industry||457|
|Suzy's Zoo Today||458|
|Case 7||TiVo: Television the Way You Want It||465|
|A Revolution in the Television Industry||465|
|Standards in the Industry||471|
|An Uncertain Future||471|
|Case 8||LiveREADS: Valuing an E-Book Start-Up||478|
|Reading and a New Frontier||478|
|Once Upon a Time, There Was LiveREADS...||478|
|Let's Make a Deal||479|
|Making the Leap||480|
|The Burgeoning E-Book Market||481|
|Competing and Distributors Formats, Publishers||482|
|Selling Out? Acquisition Becomes an Option||483|
|Getting Money "the VC Way"||484|
|Case 9||Windsor Industries, Inc.||489|
|Profit Potential and Resource Requirements||490|
|Economics of the Business||493|
|Manufacturing and Operations Plan||495|
|Strategy and Plans||496|
|Organization and Key Management Personnel||496|
|Critical Risks, Problems, and Assumptions||497|
|The Financial Plan||497|
|Case 10||Sony PlayStation 2: Trojan Horse in the Living Room?||499|
|Sony Company Overview||500|
|Recent Sony Initiatives||501|
|Gaming Industry Trends||501|
|Trojan Horse: Capturing Convergence||503|
|Kutaragi's Next Steps||505|
In this third edition of Entrepreneurship: Strategies and Resources, I have tried to improve upon the foundation set in the first and second editions. This book is designed to be friendlier to the user, beginning with its new design and softcover. A number of new features will help make the text easier to read and understand. Dozens of new examples and minicases, called "Street Story," have been added. International examples and applications are integrated throughout the book.
ORGANIZATION OF THE BOOK
Entrepreneurship: Strategies and Resources is organized into three parts. Part I introduces the major themes and theory ofthe book. Chapter 1 describes the roles that new venture creation plays in the international economy, defines entrepreneurship, and shows how three factorsindividuals, environments, and organizationscome together to create the entrepreneurial event.
Chapter 2 sets this textbook apart from others because it casts entrepreneurial phenomena in terms of the predictive theory of the resource-based framework. In this chapter, we present the basic concepts and model of the resource-based theory. There are six types of resources in our theory: financial, physical, technological, human, organizational, and reputational. The theory says that entrepreneurs can create sustainable competitive advantage for their ventures when they possess or can acquire and control resources that are rare, valuable, hard to duplicate, and nonsubstitutable. Here we emphasize the importance of human resources, especially the entrepreneur. We then explain how these resources are a source of profit and rent for the entrepreneur and how the new venture needs to protect these rents and profits through isolating mechanisms and first-mover advantages. Last, we offer a model of resource-based feasibility analysis to guide the student throughout the rest of the book.
Part II Entrepreneurship: Strategies and Resources describes the environment for entrepreneurship. It presents the tools and techniques for analyzing business and competitive conditions and evaluating entrepreneurial opportunities. It is comparable to the strategy formulation phase of corporate strategic management. The purpose of this section is to show how the environment affects, directs, and impinges on the strategy formulation problem in new venture creation. It does this in two ways that can be expressed by the resource-based model: The environment helps determine what is rare, valuable, imitable, and substitutable and it is the source of resources that possess these four attributes. The strategy formulation problem in new venture creation can be Stated as follows: What configuration of resources will provide the new firm with the best chances of achieving a competitive advantage?
Chapter 3 covers the aspects of the macro- and microenvironment that affect entrepreneurship and new venture creation. We present a process model for environmental analysis and then describe a five-element model of the macroenvironment: political, economic, technological, sociodemographic, and ecological factors. Next we offer the elements of the competitive environment. We incorporate the Porter model (5-forces model) into the analysis. We begin by asking two questions of utmost importance to the entrepreneur in the early stages of new venture creation:
- Is the industry the entrepreneur is about to enter an attractive one?
- What are the best ways to compete to increase the chances of creating a high profitability venture?
To address the first question, the chapter depicts an industry's profitability as a function of buyer and supplier power, the threat of substitutes, entry barriers, and the state of interfirm rivalry. Students are shown how to do this analysis in sufficient depth and with limited data by resorting to the basics of microeconomic theory. To address the second question, we discuss the ways that the possession and acquisition of the fourattribute resource base provides the entrepreneur with tools to overcome strong industry forces and exploit weak industry forces. The resource-based model is incorporated into this discussion by demonstrating its applicability as a screening device for new venture ideas. We create and describe a resource-based implementation matrixthe four attributes of sustainable competitive advantage by the six types of resources: financial, physical, technological, reputational, human, and organizational resources.
Chapter 4 presents types of new venture strategies and examines different positions that entrepreneurs take regarding the resources required for their firms. We present the basic entry wedges available to the new venture and develop the set of resource-based strategies. We look at how the industry life cycle influences strategy choice. New ventures can be created successfully across the life cycle, but each poses its special challenges. The chapter concludes with an overview of strategic postures and orientations that entrepreneurs can take.
Chapter 5 presents the major tool for formulating and creating new ventures: the business plan. We offer an in-depth outline for a business plan, including all the key sections and tips on how to structure the plan and the financial proposal for maximum effectiveness. The chapter continues with a discussion of the criteria and techniques for evaluating business plans. At the end of the chapter, we offer proven tips for the format and presentation, writing, and editing of successful business plans. A complete business plan follows the chapters.
Part III of Entrepreneurship: Strategies and Resources makes the transition from the formulation of entrepreneurial strategy to the implementation stage. The section covers strategic choice, implementation issues, and the problems of securing resources.
Chapter 6 is an entirely new chapter called "The E-Entrepreneur." It explores the special nature of electronic entrepreneurship and the impact the Internet has had on entrepreneurs and start-ups everywhere. We examine who is likely to be an e-entrepreneur and what makes Internet start-ups likely to succeed. Within the framework of the resource-based theory, we conclude that you must be able to do something that provides you with a competitive advantage. We then take a look at the underlying strategies that e-entrepreneurs can employ for their firms. Finally, we evaluate a number of e-commerce models that have been tried during the e-commerce boom.
Chapter 6 in the first and second editions covered entrepreneurship and marketing. We still think there is important information in this chapter, but it will be included in the auxiliary material for the instructor.
Chapter 7 introduces the elements of entrepreneurial finance. We discuss how financial resources can and cannot be a source of advantage for the new venture. Then we show how the venture can determine its financial and cash flow needs. After reviewing the types and sources of potential financing, we present three methods of new venture valuation. The chapter has an appendix: a brief introduction into the process of going public.
Chapter 8 shows how entrepreneurs actually obtain investors and structure the financial deal. We look at the characteristics of various types of investors and how to appeal to their needs. The basic elements of the deal structure are presented, and then more advanced elements, such as phased financing and the use of options, are introduced. The chapter concludes with a review of the legal and tax issues raised by seeking outside investors. This chapter has two appendices: an outline of a typical investment agreement and a description of the negotiable terms to a financial agreement.
Chapter 9 examines the creation and development of the organization. We begin with a discussion of the top management team and provide guidelines for effective top management processes. We do the same for boards of directors. Then we discuss the design of the new venture. Two new sections have been included in Chapter 9. The first is a summary of the research from Collins and Porras's Built to Last. We feel that the time to begin to think about building an enduring organization is right at the start of the venture, and the Built to Last concepts have great insight into the entrepreneurial problem. The second is an introduction to the dimensions of the balanced scorecard. We explore these in the context of entrepreneurial performance and show that performance is not just financial, but a set of indicators across four dimensions. The balanced scorecard can be a system of management for the entrepreneurial TMT. Last we offer a vision of the entrepreneurial workplace. We discuss how culture, ethics, and personnel practices can help make organizations unique and, therefore, provide a competitive advantage.
Chapter 10 discusses corporate entrepreneurship (intrapreneurship) and the factors that lead to successful intrapreneurship and those that hinder large corporations from being entrepreneurial. The second section discusses the possible networking and alliance formation that entrepreneurs can use to enhance their strategies, resources, and market position. The third section discusses franchising. We discuss what elements make a business concept a legitimate franchise opportunity, and what factors potential franchisees should evaluate before buying a franchise. For both sections, we offer guidelines for effective decision making.
The third edition of Entrepreneurship: Strategies and Resources provides several features that are designed to aid the learning process:
- Chapter outlines at the beginning of each chapter inform the students about, what they should know about entrepreneurship when they complete the reading.
- Chapter objectives blueprint concepts the student should understand upon completion of the chapter.
- E-Notes capsulize important entrepreneurship concepts for the student in a boxed format throughout each chapter.
- Theory-based text enables the student to analyze, evaluate, and predict the prospects for various business concepts and plans and make recommendations that increase the venture's chances.
- Practical applications and guidelines are offered in all the chapters to show the student how to deal with the real world of entrepreneurs, markets, and competitors.
- Street Story is the name of our boxed series of minicases. Each chapter contains these real-life examples drawn from the pages of the business press. Each Street Story illustrates the application of good theory to everyday new venture creation.
- Tables and figures throughout the book help illustrate difficult points and summarize the material for the student.
- Extensive references at the end of each chapter provide documentation for all of the arguments offered and enable the student to follow up with additional reading.
- End-of-chapter case and questions provide the basis for stimulating discussion. Adapted from real situations described in the business press, these short cases are provocative illustrations of what can go right and what can go wrong in the process of new venture creation.
- Key terms are listed at the end of each chapter so that the student can be familiar with the language in use of entrepreneurship.
- Chapter discussion questions can provide the basis of classroom debate as well as be used for written assignments.
- Chapter exercises are designed for two purposes. The first is to aid the student in the development of his or her own business plan. The exercises guide the students to complete the portion of their plan covered in the chapter. Chapter exercises can also lie used to complement the classroom experience by having the student go out into the business community to observe entrepreneurship first hand.
- End-of-text cases provide an in-depth learning exercise for the student. We have prepared 10 cases for analysis. The cases deal with the problems and opportunities of new venture creation, of securing resources, of building reputations, and of operating in a competitive market. The instructor's manual offers a comprehensive teaching note for each case.
- Name and subject indexes at the end of the book aid in finding topics and key people and companies.
- State-of-the-art design makes the book more readable and enhances learning.