Entrepreneurship and Small Business

Description

This new edition of the market-leading textbook by Paul Burns offers an unrivalled holistic introduction to the field of entrepreneurship and valuable guidance for budding entrepreneurs looking to launch their own small business. Drawing on his decades of academic and entrepreneurial experience, the author takes you on a journey through the business life-cycle, from the early stages of start-up, through progressive growth, to the confident strides of a mature business. Combining cutting-edge theory with fresh global examples and lessons from real-life business practice, this accessible and explorative textbook will encourage you to develop the knowledge and skills needed to navigate the challenges faced by today's entrepreneurs. Entrepreneurship and Small Business will help you to: - Learn what makes entrepreneurs tick with brand new Get into the Mindset video interviews and an exploration of entrepreneuial character traits - Seamlessly incorporate multimedia content into your learning with the new Digital Links platform accessed via your smart device - Understand how worldwide events can impact small businesses through incisive analysis of the effects of the COVID-19 pandemic - Grasp how entrepreneurship differs around the globe, with over 100 Case Insights and new examples from a diverse range of countries and industries - Ensure your understanding of the entrepreneurial landscape is up-to-date, with new chapters on recruiting and managing people, and on lean methodologies and business model frameworks. This is the ideal textbook for students taking undergraduate and postgraduate Entrepreneurship or Small Business Management courses, as well as for MBA students. BRIEF CONTENTS LONG CONTENTS INDEX OF CASE INSIGHTS LIST OF FIGURES LIST OF TABLES PREFACE TO THE FIFTH EDITION NEW TO THIS EDITION WHO THIS BOOK IS AIMED AT TEACHING AND LEARNING RESOURCES Textbook and lectures Entrepreneurs’ quotes Case insights Video interviews Explore further links Group discussion topics Student activities Start-up activities Flashcards and chapter quizzes References ABOUT THE AUTHOR ACKNOWLEDGEMENTS TOUR OF THE BOOK GET INTO THE ENTREPRENEURIAL MINDSET MEET THE ENTREPRENEURS DIGITAL RESOURCES Resources to help instructors teach with the book include: Resources to help students deepen their learning include: PART 1 ENTREPRENEURSHIP 1 ENTREPRENEURSHIP: THE SOCIAL AND BUSINESS REVOLUTION Contents Learning outcomes THE NEW NORMAL Case insight 1.1 Melanie Perkins and Canva CRAFTING THE NOTION OF ENTREPRENEUR NEW VENTURES AND SMALL BUSINESS NEW VENTURES AND SMALL BUSINESS Sole traders and partnerships Owner-managed businesses Growth business Case insight 1.2 Joseph Cyril Bamford and JCB Small and medium-sized enterprises (SMEs) BARRIERS AND TRIGGERS TO ENTREPRENEURSHIP WHAT IT TAKES TO BE AN ENTREPRENEUR Case insight 1.3 Florence Kennedy and Petalon Explore further 1.1 ENTREPRENEURIAL AND START-UP CAPITAL Financial capital Human capital Social capital Case insight 1.4 Ambareen Musa and Souqalmal MEASURING ENTREPRENEURIAL ACTIVITY Explore further 1.2 Case insight 1.5 Jack Ma and Alibaba GLOBAL ENTREPRENEURSHIP MONITOR (GEM) Explore further 1.3 THE DEMOGRAPHICS OF ENTREPRENEURSHIP Education Gender Explore further 1.4 Immigrants and ethnic minorities Case insight 1.6 Lowell Hawthorne and Golden Krust SOCIAL ENTERPRISE CONFLICTS WITHIN SOCIAL ENTERPRISE Case insight 1.7 John Bird and SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES 2 THE ECONOMICS OF ENTREPRENEURSHIP AND PUBLIC POLICY Contents Learning outcomes THE ECONOMICS OF ENTREPRENEURSHIP ENTREPRENEURSHIP AND ECONOMIC GROWTH INVENTION, INNOVATION AND CREATIVITY Product/service innovation Process innovation Marketing innovation Case insight 2.1 Charles Babbage Case insight 2.2 Chuck Hull INNOVATION INTENSITY INNOVATION, PROFITABILITY AND GROWTH INNOVATION, FIRM SIZE AND INDUSTRY STRUCTURE Case insight 2.3 James Dyson (1) THE ROLE OF GOVERNMENT IN INNOVATION Case insight 2.4 Vaccitech INNOVATION, LOCATION AND NETWORK EFFECTS Explore further 2.1 Case insight 2.5 Astex Therapeutics SOCIAL AND ENVIRONMENTAL INNOVATION PUBLIC POLICY TOWARDS SMEs POLICY INTERVENTION THE EFFECTIVENESS OF POLICY INTERVENTION Case insight 2.6 Small Business Innovation Research initiative Low tax rates (particularly capital gains tax) Regulation Competition policy Bonus Case SOCIAL ENTERPRISE POLICY Case insight 2.7 Seven Stories SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES 3 THE ENTREPRENEURIAL MINDSET Contents Learning outcomes MINDSET, CHARACTER TRAITS AND COGNITIVE THEORY CHARACTER TRAITS OF ENTREPRENEURS High need for autonomy and independence High need for achievement High internal locus of control High drive and determination High creativity, innovation and opportunism Acceptance of measured risk and uncertainty EVIDENCE ON THE CHARACTER TRAITS OF ENTREPRENEURS Explore further 3.1 MEASURING ENTREPRENEURIAL TENDENCY Explore further 3.2 Case insight 3.1 Julian Thomas and Figaro Brands (1) COGNITIVE THEORY AND BEHAVIOUR System 1 (often referred to as ‘right-brain’ and often intuitively referred to as ‘the heart’) System 2 (often referred to as ‘left-brain’ and often intuitively referred to as ‘the head’) COGNITIVE THEORY AND ENTREPRENEURIAL BEHAVIOUR Creativity and innovation Management and leadership Strategy and decision-making Risk-taking Explore further 3.3 INFLUENCES ON COGNITIVE BEHAVIOUR Case insight 3.2 Adam Schwab and Lux Group Explore further 3.4 THE INFLUENCE OF NATIONAL CULTURE Individualism (versus collectivism) Power distance Uncertainty avoidance ‘Masculinity’ (versus ‘femininity’) Case insight 3.3 Issam Al Harthy and United Events CULTURAL INFLUENCES ON CREATIVITY MEASURING CULTURAL INFLUENCES Explore further 3.5 Case insight 3.4 Jack Cator and Hide My Ass! SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES 4 RECOGNISING BUSINESS OPPORTUNITIES Contents Learning outcomes NEW VENTURE TYPOLOGIES Case insight 4.1 TransferWise Explore further 4.1 CREATIVE COGNITION, DIVERSITY AND CONNECTIVITY Case insight 4.2 Azuri Technologies and M-Kopa Explore further 4.2 Case insight 4.3 Hackathons Case insight 4.4 Fetchr Case insight 4.5 Great Ormond Street Hospital Explore further 4.3 OPPORTUNITY PERCEPTION USING DISCOVERY SKILLS Explore further 4.4 MEASURING CREATIVITY Kirton Adapter-Innovator (KAI) test AULIVE test Case insight 4.7 Julian Thomas and Figaro Brands (2) Case insight 4.6 Henry Ford Herrmann Brain Dominance Instrument (HBDI) CREATING OPPORTUNITY Explore further 4.5 Explore further 4.6 SPOTTING COMMERCIAL OPPORTUNITIES Case insight 4.8 Apple and iTunes Case insight 4.9 Duplays Sports Services Case insight 4.10 Digikala SPOTTING OPPORTUNITIES IN THE VALUE CHAIN TECHNIQUES FOR EXPLORING CHANGING NEEDS Brainstorming PESTEL analysis Futures thinking Mind maps TECHNIQUES FOR EXPLORING PRODUCT/SERVICE INADEQUACIES Analogy Attribute analysis Gap analysis Delphi method Case insight 4.11 Starship Technologies SYSTEMATIC INVENTIVE THINKING Explore further 4.7 FINDING AN IDEA FOR A SOCIAL ENTERPRISE Case insight 4.12 Maggie’s SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 5 RESEARCHING BUSINESS IDEAS Contents Learning outcomes THE IMPORTANCE OF RESEARCH MARKET RESEARCH Desk research Explore further 5.1 Field research DESCRIBING THE MARKET/INDUSTRY MARKET/INDUSTRY LIFE CYCLE Completely new (market paradigm shift) Emerging Growing Mature Declining MARKET/INDUSTRY CONCENTRATION Fragmented Consolidated MARKET/INDUSTRY GEOGRAPHIC EXTENT Local, regional or national Global Case insight 5.1 New-to-the-world industries ESTIMATING MARKET SIZE Case insight 5.2 Savelli (1) ASSESSING MARKET AND INDUSTRY COMPETITIVENESS Explore further 5.2 Case insight 5.3 Cajuu IDENTIFYING COMPETITORS Case insight 5.4 Fintech INDUSTRY FUTURES Case insight 5.5 Industry futures SCENARIO PLANNING Case insight 5.6 Bill Gates and Microsoft SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES MEET THE ENTREPRENEURS PART 2 START-UP 6 LEAN METHODOLOGIES AND BUSINESS MODEL FRAMEWORKS Contents Learning outcomes DESIGN THINKING Explore further 6.1 FIRST-MOVER ADVANTAGE AND RISK LEAN START-UP Explore further 6.2 AFFORDABLE LOSS Case insight 6.1 FBR (Fastbrick Robotics) DEVELOPING A BUSINESS MODEL Case insight 6.2 Dropbox Explore further 6.3 NEW VENTURE CREATION FRAMEWORK Explore further 6.4 BUSINESS MODEL CANVAS Explore further 6.5 LEAN CANVAS Case insight 6.3 Soraya Sikander, ‘artpreneur’ DEVELOPING AND TESTING A BUSINESS IDEA 1. Initial screening 2. Concept development 3. Product/service specification 4. MVP prototype development Case insight 6.4 Galy 5. Market testing 6. Business model development LOW-COST MARKET TESTING AND TRADING Case insight 6.5 FudgePots Explore further 6.6 GO/NO-GO DECISION POINTS Go/no-go decision point 1 Go/no-go decision point 2 Go/no-go decision point 3 SETTING PERFORMANCE METRICS ACCELERATORS AND INCUBATORS Case insight 6.6 Ioncell® Case insight 6.7 StellenBosch LaunchLab SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 7 DEVELOPING THE BUSINESS MODEL Contents Learning outcomes VALUES, MISSION AND VISION Values and beliefs Mission Vision Strategic intent Case insight 7.1 Nin Castle and Reverse Resources ENTREPRENEURS AND PLANNING Explore further 7.1 GENERIC BUSINESS MODELS Low price (low cost) High differentiation High customer focus or intimacy GENERIC BUSINESS MODELS AND COMPETITIVE ADVANTAGE Explore further 7.2 THE NICHE BUSINESS MODEL Case insight 7.2 Morgan Motor Company (1) Case insight 7.3 Tyrrells crisps and Chase vodka INTERNET BUSINESS MODELS Case insight 7.4 Strava Case insight 7.5 Pinterest SECURING SUSTAINABLE COMPETITIVE ADVANTAGE Explore further 7.3 Bonus Case Monzo CHARACTERISTICS OF AN ATTRACTIVE BUSINESS MODEL Case Insight 7.6 Deliveroo, Uber Eats and Just Eat Takeaway.com SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 8 MARKET SEGMENTS AND VALUE PROPOSITIONS Contents Learning outcomes IDENTIFYING TARGET CUSTOMERS DEFINING THE VALUE PROPOSITION Explore further 8.1 MARKETING MIX VALUES AND THE VALUE PROPOSITION Case insight 8.1 The English Pub* (1) Explore further 8.2 SUSTAINABLE ENTREPRENEURSHIP AND CORPORATE SOCIAL RESPONSIBILITY Explore further 8.3 DIFFERENTIATION THROUGH BRANDING Case insight 8.2 The Entertainer Case insight 8.3 Zound Industries BRANDING THE FIRM’S VALUES BRAND NAME AND LOGO BUILDING THE BRAND Explore further 8.4 Case insight 8.4 Cotton On Group SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 9 DEVELOPING THE MARKETING MIX Learning outcomes Contents DIFFERENTIATION THROUGH DESIGN Case insight 9.1 Apple and design ROUTES TO MARKET UNDERSTANDING CUSTOMERS AND CONSUMERS CHANNELS OF DISTRIBUTION PRICING DECISIONS Case insight 9.2 Lara Scobie, ceramicist PRICING DECISIONS AND VOLUMES PRICING DECISIONS AND CONTRIBUTION MARGINS Case insight 9.3 UK Sofa-beds PRICING ‘KNOWLEDGE PRODUCTS’ Case insight 9.4 Fortnite: Battle Royal PRICING DECISIONS AND COMPETITIVE REACTION Bonus Case Xtreme SnoBoards (1) DEVELOPING THE MARKETING PLAN Case insight 9.5 Flying Tiger Copenhagen (1) SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 10 SALES AND MARKETING COMMUNICATIONS Contents Learning outcomes THE CUSTOMER JOURNEY Stage 1: Launch Stage 2: Take-off Stage 3: Growth USING COMMUNICATIONS MEDIA SOCIAL NETWORKS AND MEDIA Explore further 10.1 Case insight 10.1 Curtis Waters and TikTok GUERRILLA MARKETING Case insight 10.2 Instant Pot Explore further 10.2 PUBLICITY AND PUBLIC RELATIONS (PR) ADVERTISING Explore further 10.3 Case insight 10.3 Avi Schiffmann Case insight 10.4 Influencers IDENTIFYING PROSPECTS RADICAL INNOVATION: PROSPECT CHARACTERISTICS Innovators (2.5%) Early adopters (13.5%) Early majority (34%) Late majority (34%) Laggards (16%) RADICAL INNOVATION: MESSAGES INCREMENTAL INNOVATION: MESSAGES DEVELOPING SELLING SKILLS DEVELOPING A COMMUNICATIONS CAMPAIGN Stage 1 (launch) Stage 2 (take-off) Case insight 10.5 Lush Stage 3 (growth) SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 11 SETTING THE LEGAL FOUNDATIONS Learning outcomes Contents SAFEGUARDING A BUSINESS IDEA Explore further 11.1 INTELLECTUAL PROPERTY (IP) LAW Explore further 11.2 Patent Trademark™ Explore further 11.3 Registered design® Case insight 11.1 Xmi Case insight 11.2 Trunki Copyright© LEGAL FORMS OF BUSINESS Explore further 11.4 Sole traders Partnerships Companies and corporations PARTNERSHIPS, STRATEGIC ALLIANCES AND JOINT VENTURES Case insight 11.3 Specsavers (1) Partnership Strategic alliances Joint venture FRANCHISING Explore further 11.5 Case insight 11.4 Flying Tiger Copenhagen (2) LEGAL FORMS OF SOCIAL ENTERPRISE IN THE UK Explore further 11.6 Unincorporated associations Trusts Charitable social enterprises Community benefit societies (BenComs) Community interest companies (CICs) Charitable incorporated organisations (CIOs) PRIVATE OR SOCIAL ENTERPRISE? Case insight 11.5 Examples of social enterprise CORPORATE GOVERNANCE TAXATION Value added tax (VAT) Corporation tax Income tax for sole traders and partnerships Local taxes Income tax due from employees Charities Explore further 11.7 SUMMARY GROUP DISCUSSION TOPICS START-UP ACTIVITIES 12 DEVELOPING THE OPERATIONS PLAN Contents Learning outcomes MANAGING OPERATIONS PLANNING OPERATIONS CRITICAL SUCCESS FACTORS KEY OPERATING ACTIVITIES AND THE BUSINESS MODEL IDENTIFYING KEY ACTIVITIES RETAIL BUSINESS Explore further 12.1 Case insight 12.1 J&B Wilde and Sons INTERNET-BASED BUSINESS Explore further 12.2 Case insight 12.2 Boohoo Case insight 12.3 Sephora MANUFACTURING BUSINESS Explore further 12.3 Project Jobbing Batch Line Continuous GUIDELINES TO REDUCE WASTE SERVICE BUSINESS PROJECT PLANNING AND CRITICAL PATHS Case insight 12.4 wiGroup Explore further 12.4 THE OPERATING PLAN Case insight 12.5 Mamanpaz SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITY START-UP ACTIVITIES 13 MANAGING RISK Contents Learning outcomes RISK AND ‘UNKNOWN-UNKNOWNS’ GENERIC RISK MANAGEMENT STRATEGIES Case insight 13.1 Gordon Ramsay Partnering and other forms of alliance Keeping fixed costs low and profit margins high Generating strategic options Case insight 13.2 Best Fruit A RISK MANAGEMENT FRAMEWORK FOR KNOWN RISKS IDENTIFYING RISKS ASSESSING RISKS Case insight 13.3 Food-ATM MITIGATING RISKS Case insight 13.4 TechHub MONITORING RISKS Explore further 13.1 Case insight 13.5 Eurostar FINANCING RISK CRITICAL SUCCESS FACTORS AND STRATEGIC OPTIONS Case insight 13.6 Flying Tiger Copenhagen (3) COGNITIVE REACTIONS TO RISK MANAGEMENT Case insight 13.7 Covid-19 pandemic SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 14 RECRUITING AND MANAGING PEOPLE Contents Learning outcomes PEOPLE, PEOPLE, PEOPLE RECRUITING PEOPLE The skills profile The job description The person specification Explore further 14.1 ATTRACTING A VENTURE TEAM SHARED COGNITION IN THE VENTURE TEAM USING PROFESSIONAL ADVISORS Accountants Lawyers/attorneys Business consultants Explore further 14.2 Recruitment consultants SELECTING THE VENTURE TEAM Belbin team roles Five-Factor personality test Herrmann Brain Dominance Instrument (HBDI) Explore further 14.3 DEVELOPING THE VENTURE TEAM Case insight 14.1 Darktrace ORGANISATIONAL STRUCTURE: SPIDER’S WEB ORGANISATIONAL STRUCTURE: HIERARCHY Matrix structure Organic structure HIERARCHY AND CONTROL Quadrant 1 Quadrant 2 Quadrant 3 Quadrant 4 Case insight 14.2 Specsavers (2) CONTROL, AUTONOMY AND MOTIVATION Explore further 14.4 Direction Space or slack Boundaries Case insight 14.3 BP and Deepwater Horizon Support SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 15 FINANCIAL FORECASTS AND CONTROL Contents Learning outcomes FINANCIAL OBJECTIVES UNDERSTANDING PROFIT UNDERSTANDING THE BALANCE SHEET UNDERSTANDING CASH FLOW UNDERSTANDING BREAKEVEN Case insight 15.1 Hays Travel FORECASTING SALES AND COSTS PREPARING FINANCIAL FORECASTS Forecast income statement Forecast cash flow statement Forecast balance sheet FORECAST BIAS FINANCIAL RATIO ANALYSIS Profit management Asset management Liquidity Gearing SETTING AND MONITORING PERFORMANCE TARGETS KEY FINANCIAL METRICS CONTROLLING PERFORMANCE AS THE BUSINESS GROWS Case insight 15.2 The English Pub*(2) USING FINANCIAL INFORMATION FOR DECISIONMAKING Should I incur an additional expenditure? Which are the most profitable product lines? Where should I focus my limited resource? What does breakeven mean when I have a portfolio of products? Bonus Case Xtreme SnoBoards (2) SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITY START-UP ACTIVITIES MEET THE ENTREPRENEURS PART 3 GROWTH 16 FROM ENTREPRENEUR TO LEADER Contents Learning outcomes THE CHALLENGES OF GROWTH: COMMERCIAL ENTERPRISE THE CHALLENGES OF GROWTH: SOCIAL ENTERPRISE Stage 1 Stage 2 Stage 3 Case insight 16.1 Adrenaline Alley LEADERSHIP AND MANAGEMENT DEFINING THE ROLE OF LEADER PERSONAL ATTRIBUTES OF LEADERS Strategic thinker Emotional intelligence Trustworthy Authentic Explore further 16.1 BUILDING SHARED ORGANISATIONAL VALUES THE CULTURAL WEB Case insight 16.2 James Dyson (2) MEASURING ORGANISATIONAL CULTURE Explore further 16.2 BUILDING A SHARED VISION THE ROLE OF STORYTELLING LEADERSHIP STYLE AND CONTINGENCY THEORY Leader and task Explore further 16.3 Leader and group Leader and situation or context Explore further 16.4 Case insight 16.3 Amazon and meeting protocols Decision-making in meetings LEADERSHIP PARADIGMS Transactional leadership Transformational leadership Visionary leadership Dispersed leadership Explore further 16.5 ENTREPRENEURIAL LEADERSHIP Case insight 16.4 Steve Jobs and Apple SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 17 DEVELOPING STRATEGY AND THE BUSINESS PLAN Contents Learning outcomes PENETRATING THE MARKET UNDERTAKING A STRATEGIC REVIEW AND PIVOTING Bonus Case Xtreme SnoBoards (3) Case insight 17.1 AudioBoom Pivoting STRATEGY DEVELOPMENT Case insight 17.2 Google Glass Case insight 17.3 Uber COPING WITH CRISES Explore further 17.1 Case insight 17.4 The London School* REASONS FOR WRITING A BUSINESS PLAN DIFFERENT PLANS FOR DIFFERENT AUDIENCES Explore further 17.2 STRUCTURE AND CONTENT OF A BUSINESS PLAN Cover Table of contents Executive summary (1–2 pages) Business details (1–2 pages) Industry and market analysis (2–3 pages) Customers and value proposition (2–3 pages) Marketing strategy (3–4 pages) Operations plan (2–3 pages) Management team and company structure (1–3 pages) Resources (1–2 pages) Financing (1–2 pages) Financial projections (1-page summary, plus detailed appendices) Risks, critical success factors and strategic options (1 page) Key milestones (1 page) Appendices TIPS ON HOW TO WRITE A BUSINESS PLAN BUSINESS PLANS FOR SOCIAL ENTERPRISES Case insight 17.5 Net-Works™ SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITIES 18 SCALING AND GROWTH STRATEGIES Contents Learning outcomes PRODUCT/MARKET EXPANSION MARKET DEVELOPMENT Case insight 18.1 Monkey Music SELLING INTERNATIONALLY Sales agents and distributors Licences and franchises Joint ventures Subsidiary Explore further 18.1 PRODUCT/SERVICE DEVELOPMENT Product/service modification Product/service expansion Case insight 18.2 Brompton Bicycle Product/service extension New product/service development DEVELOPING A PRODUCT/SERVICE PORTFOLIO CASH FLOW, RISK AND THE PRODUCT/SERVICE PORTFOLIO DIVERSIFICATION Unrelated diversification Related diversification DIVERSIFICATION AND STOCK MARKETS DIVERSIFICATION AND PRIVATE SHAREHOLDER VALUE Diversification creep Case insight 18.3 Nokia Entrepreneurial product/market portfolios Market dominance DIVERSIFICATION AND CORPORATE ACQUISITION Explore further 18.2 Case insight 18.4 Lenovo THE ENTREPRENEURIAL CONGLOMERATE Case insight 18.5 Amazon SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES START-UP ACTIVITY 19 FINANCING THE BUSINESS Contents Learning outcomes SOURCES OF FINANCE AND THEIR USES SOURCES OF FINANCE FOR SOCIAL ENTERPRISES Explore further 19.1 SME FUNDING SME FUNDING IN DEVELOPING COUNTRIES Case insight 19.1 Grameen Bank Solidarity lending Bonus Case Solar Power Company Group (SPCG) BANK LOANS AND OVERDRAFTS AGENCY THEORY AND INFORMATION ASYMMETRY IS THERE DISCRIMINATION IN LENDING? Gender discrimination Ethnic discrimination ANGEL AND VENTURE FINANCE Explore further 19.2 Case insight 19.2 Savelli (2) CROWDFUNDING Peer-to-peer (P2P) lending platforms (e.g. Zopa, Lending Club) Rewards platforms (e.g. Kickstarter, Crowdfunder) Case insight 19.3 Kickstarter Equity crowdfunding platforms (e.g. Crowdcube SyndicateRoom) Case insight 19.4 Crowdcube Explore further 19.3 Case insight 19.5 Co Cars and Ethex EQUITY INVESTMENT CRITERIA Return and risk Exit route or liquidity event BANKS AND THE BUSINESS PLAN EQUITY INVESTORS AND THE BUSINESS PLAN Case insight 19.6 BrewDog THE FUNDING LADDER SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITY START-UP ACTIVITIES MEET THE ENTREPRENEURS PART 4 MATURITY 20 MATURITY: SUCCESS AND FAILURE Contents Learning outcomes BORN TO STAGNATE AND DIE Case insight 20.1 Kennedy City Bicycles REASONS FOR BUSINESS FAILURE External influences Economic downturn Bad luck Competition Other opportunities Internal influences Entrepreneurial character Managerial deficiencies Financial resources DECLINE AND FAILURE IN LARGE COMPANIES GROWTH OF BUREAUCRACY DECLINE OF INNOVATION BUSINESS FAILURE – INSOLVENCY IN THE UK Personal insolvency Informal ‘family’ arrangements Formal voluntary arrangements Partnership voluntary arrangements Bankruptcy Company insolvency Refinancing Company voluntary arrangement (CVA) A pre-packaged sale Administration Creditors voluntary liquidation (CVL) Compulsory liquidation Case insight 20.2 Monsoon Accessorize Bonus Case Cobra beer SELLING A SUCCESSFUL BUSINESS Explore further 20.1 SALE OPTIONS Trade sale Management buy-out (MBO) Management buy-in (MBI) Case insight 20.3 Facebook: Instagram and WhatsApp Case insight 20.4 Timberland Floating the company and selling shares VALUING THE BUSINESS Bonus Case Xtreme SnoBoards (4) BEYOND BUSINESS – ENTREPRENEURIAL PHILANTHROPY Case insight 20.5 Titus Salt Case insight 20.6 Bill and Melinda Gates Foundation SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES 21 FAMILY BUSINESS Contents Learning outcomes THE IMPORTANCE OF FAMILY BUSINESS DEFINING A FAMILY BUSINESS Bonus Case Kongõ Gumi Case insight 21.1 Adidas vs Puma THE ADVANTAGES OF FAMILY Case insight 21.2 Florence and James Kennedy CHARACTERISTICS OF A FAMILY BUSINESS Case insight 21.3 Fisherman’s Friend CONFLICT BETWEEN FAMILY AND BUSINESS CULTURES Case insight 21.4 Mars Inc. GENERATIONAL SUCCESSION Stage 1: Owner-managed business Stage 2: Training and development of the new generation Stage 3: Partnership Stage 4: Power transfer Case insight 21.5 Morgan Motor Company (2) RELATIONSHIPS WITH SIBLINGS Case insight 21.6 Ferrero Group RELATIONSHIPS ACROSS THE FAMILY Case insight 21.7 Timpson Group Explore further 21.1 IDENTIFYING AND RESOLVING CONFLICT Bonus Case Everards Brewery THE FAMILY CONSTITUTION SUCCESSION PLANNING Explore further 21.2 Case insight 21.8 Wates Group SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES 22 CORPORATE ENTREPRENEURSHIP AND INTRAPRENEURS Contents Learning outcomes ENTREPRENEURIAL INTENSITY DEFINING CORPORATE ENTREPRENEURSHIP ENTREPRENEURIAL ORIENTATION ENTREPRENEURIAL ARCHITECTURE THE PILLARS OF ENTREPRENEURIAL ARCHITECTURE Leadership and management Culture Structure and systems Strategy Explore further 22.1 KNOWLEDGE AND LEARNING Explore further 22.2 MATCHING ARCHITECTURE WITH ENVIRONMENT INTRAPRENEURS VENTURE TEAMS FACILITATING INTRAPRENEURSHIP Case insight 22.1 3M and the Post-it Note® Explore further 22.3 INNOVATION DEPARTMENTS AND DIVISIONS CORPORATE ACCELERATORS AND INCUBATORS Case insight 22.2 Alphabet and X Development STRUCTURING VENTURE OUTCOMES Box 1 Spin off Box 2 Strategic business unit (SBU) Box 3 Contract or license out Box 4 Integration SUCCESSFUL CORPORATE VENTURING Case insight 22.3 Haier Group Explore further 22.4 SUMMARY GROUP DISCUSSION TOPICS STUDENT ACTIVITIES MEET THE ENTREPRENEURS REFERENCES SUBJECT INDEX