Chapter 2.pptx managerial process skill

7/29/2019 Chapter 2.pptx managerial process skill

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Deepika Agarwal


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Why does it matter? What is it? Some examples . . .

McDonalds (New Venture / Franchising)

Polaroid (Technology)

FedEx (Business model)
http://www.mcdonalds.com/corp/about/mcd_history_pg1.htmlhttp://www.mcdonalds.com/corp/about/mcd_history_pg1.html


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Entrepreneurship as a means of hope forprosperity and an increase in living standard The last great period when entrepreneurs

transformed the American economy was in the late1800s

In fact, most of the 1997 Fortune200 were alreadyamong the largest corporations in 1917

197 of the 200 largest companies in America werestarted by entrepreneurs

Many of these entrepreneurs were first generationAmericans


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Opportunity Where knowledge, skills, abilities and motivations

meet favorable market characteristics

Risk Absolute . . . sinking the boat

Relative . . . missing the boat

Resources & Capability

Process, not person: Balance is key . . .


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Opportunity Resources

Team

Communication

Business Plan

Fits and Gaps

CreativityLeadership

Capital Market ForcesUncertainty

AmbiguityExogenous Forces

Founder


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OPPORTUNITY


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Entrepreneurship begins with an opportunity

Money, contacts, networking,

Lots of ideas, few opportunities that fit yourneeds!

Opportunity first, Cash last


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A person with both business skills andtechnical knowledge. Scientific approach to problems Willing to delegate Broad view of strategy Diversified marketing approach Longer planning horizon

Sophisticated accountingand financial control

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Having intimate knowledge of customers needs

Market driven

Obsessed with value creation and enhancement


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Calculated risk taker

Risk minimiser

Risk sharer- e.g. partners, creditors, suppliers

and customers. Tolerance of uncertainties and lack of structure

Tolerance of stress and a conflict

Ability to resolve problems and integrate solutions


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Introduction

Opportunity in professional

life

Domestic detergent market Innovative formulation

Attained market share in the

premium detergent segment

Risk - Cheapest brand in the

market


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Achievements

Udyog Ratna award

Outstanding Industrialist of the Eighties

Chairman of the Development Council for Oils,Soaps & Detergents


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Opportunities

Growth

Grabbed the internet

market Understanding users needs

Risk

Microsoft Internet explorer

Google Chrome


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Harvey Firestone founded Firestone Tire &Rubber company (1950-60s)

Monument success for 7 decades Its culture and operations reflected the vision

of its founder, Harvey Firestone, who insistedon treating customers and employees as partof the Firestone family.

The Firestone country club was open to all

employees, regardless of rank, and Harveyhimself maintained close friendships with thetop executives


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They saw the Big Three Detroit automakers astheir key customers

Goodyear and the other leading U.S. tiremakers as their competitors, and they sawtheir challenge as simply keeping up with thesteadily increasing demand for tires


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A French company, Michelin, introduced theradial tire to the U.S. market. Based on abreakthrough in design, radials were safer,longer-lasting, and more economical than

traditional bias tires.


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Ford declared in 1972 that all its new cars would haveradials, it was clear that they would dominate the U.S.market

Firestone swiftly took action: it invested nearly $400millionmore than $1 billion in todays dollars inradial production, building a new plant dedicated toradial tires and converting several existing factories.

It clung to its old ways of working rather thanredesign its production processes, it just tinkeredwith them even though the manufacture of radialtires required much higher quality


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By 1979, Firestone was in deep trouble. Itsplants were running at an anemic 59% ofcapacity

The company surrendered much of its shareof the U.S. market to foreign corporations,and it suffered through two hostile takeoverbids Bridgestone, a Japanese company, in1988.


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Know your customers better Keep updating

Once a success does not mean always asuccess

Active Inertia-???


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There is no return without a risk.

Good projected risks often go unnoticed.

Well run projects appear to be almost effortless,but a lot of work goes into running a project well. Ifdecision makers would have cared about risk thenthey wouldnt have had reached the heights.


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It thus shows that opportunity obsession is avery important characteristic of anentrepreneur.

Entrepreneurship is a way of thinking,reasoning and acting that is opportunityobsessed.


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Strong Medium Weak

High DesirableProtect position:- Invest to grow- Concentrate on

maintainingstrength

DesirableInvest to build:- Challenge for

leadership- Build on

strengths

-

Reinforcevulnerable areas

Build selectively:- Specialize

around limitedstrengths

- Overcomeweaknesses

-

Withdraw ifsustainablegrowth is notpossible

Medium DesirableBuild selectively:- Emphasize

profitability byincreasingproductivity

- Build up ability tocountercompetition

Manage forearnings:- Protect existing

strengths- Invest to improve

position only inareas where riskis low

Limited expansionor harvest:- Look for ways to

expand withouthigh risk

- Minimizeinvestment andfocusoperations

Low Protect & refocus:-Defend strengths-Seek ways toincrease earningswithout speedingmarkets decline

Manage forearnings:- Protect position- Minimize

investment

Divest:- Sell when

possible tomaximize cashvalue


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Chapter 2.pptx managerial process skill

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