10. Why?
Money
People
Suppliers
Customers
Distribution
5% 95%
Source: Birch (1979)
11. 1 Planning
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scientific business strategy
12. Business Plan?
Yes!
No!
21%
79%
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scientific business strategy
Source: Bhide (2000)
13. ânew ventures launched with formal written
business plans do not outperform ones
launched without them.â
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scientific business strategy
Source: Lange, Mollov, Pearlmutter, Singh and Bygrave (2007)
14. Low levels of planning
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scientific business strategy
Source: Dencker, Gruber, Shah (2009)
15. High levels of planning
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scientific business strategy
Source: Dencker, Gruber, Shah (2009)
16. 1 Planning
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scientific business strategy
17. 1 Planning
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scientific business strategy
36. Casual Thinking
Cook Book
Outcome
Hire Staff
Vision
Buy Ingredients
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scientific success strategy
37. Market Research?
88%
12%
Yes!
No!
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scientific business strategy
Source: Inc. 500 Magazine (2010)
38. 27 Entrepreneurs
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scientific business strategy
39. 3to
40 start ups
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scientific business strategy
40. 12 to
43 yrs experience
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scientific business strategy
41. $200 million to
$6billion
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scientific business strategy
42. 1 IPO
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scientific business strategy
43. AMAR BHIDE
"OK, I need to know which of their various groups of students,
trainees, and individuals would be most interested so I can
target the audience a little bit more. What other
information...I've never done consumer marketing, so I don't
really know. I think probably...I think mostly I'd just try to...I
would...I wouldn't do all this, actually. I'd just go sell it. I don't
believe in market research. Somebody once told me the only
thing you need is a customer. Instead of asking all the
questions, I'd try and make some sales. I'd learn a lot, you
know: which people, what were the obstacles, what were the
questions, which prices work better. Even before I started
production. So my market research would actually be hands-
on actual selling."
Source: Sarasavathy (2007)
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scientific business strategy
44. AMAR BHIDE
"Ultimately, the best test of any product is to go to your target
market and pretend like it's a real business. You'll find out soon
enough if it is or not. You have to take some risks. You can sit and
analyze these different markets forever and ever and ever, and
you'd get all these wonderful answers, and they still may be
wrong. The problem with the businessman type is they spend a
lot of time with all their great wisdom and all their spreadsheets
and all their Harvard Business Review people, and they'd either
become convinced that there's no market at all or that they have
the market nailed. And they'd go out there big time, with a lot of
expensive advertising and upfront costs, because they're gonna
overwhelm the market, and the business would go under."
Source: Sarasavathy (2007)
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scientific business strategy
45. 2 Begin with the End in Mind
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scientific business strategy
46. 2 Begin with the End in Mind
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scientific business strategy
48. Effectual Thinking
Meal 1
Knowledge of
Cooking
Meal 2
Ingredients
on Hand
Meal 3
Equipment
Meal 4
Available
People I Meal 5
Know
Meal 6
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scientific success strategy
49. Effectual Thinking
Course
Match
FaceMash
Partner
Friends
Customer
Students
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scientific success strategy
50. AMAR BHIDE
Seeking Combing Your
Resources Resources
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scientific business strategy
51. 3 Risk Taking
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scientific business strategy
52. Managers Thinking
High
RISK
Low
Low High
RETURN
Source: Saravathy (1998) paulshawsmith
scientific business strategy
53. Managers Thinking
High
RISK
Low
Low High
RETURN
Source: Saravathy (1998)
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scientific business strategy
54. Entrepreneurs Thinking
High
RISK
Low
Low High
RETURN
paulshawsmith
scientific business strategy
Source: Saravathy (1998)
55. Entrepreneurs Thinking
High
RISK
Low
Low High
RETURN
Source: Saravathy (1998)
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scientific business strategy
56. 3 High Returns
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scientific business strategy
57. 3 High Returns
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scientific business strategy
58. âWhen we started the airline 25 years age this year. I went to Boeing. I
AMAR BHIDE
remember the telephone call.
âHello this is Richard Branson, wonder whether you could sell me a
second hand 747?â
âWhat is the name of your business?â
âVirgin.â
âWhat do you do?â
âWe have a record company and have great bands like the sex pistols the
rolling Stones.â
And then there was a long pause, and instead of putting the phone down.
He said, âWe will send a salesman over and as long as your airline goes
further than your name suggests we will let you have a plane.â
The key point there is we said to Boeing we donât know if this is going to
work. We realise that this is risky, and we want to be able to hand the
plane back after 12 months if it doesnât work out. And that is the element
of protecting the downside and that is the critical thing.
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scientific business strategy
Source: Wall Street Journal Video, 2009-10-15
59. Size
R50 million - â01
R30 million â â98
100 employee â â97
â92 â Gotcha, Wrangler Agencies
& Biotribe factory Time
Source: Saravathy (1998)
60. Size
R50 million
Chinese Imports - â01
R6 to R13 to dollar
R30 million â â98
100 employee â â97
â92 â Gotcha, Wrangler Agencies
& Biotribe factory Time
Source: Saravathy (1998)
61. Having lost my business so suddenly, I was now setting up a
licensing base and succeeding in spreading my risk across a
number of products, licensees and manufacturers. We have
the brands, they have the factories. With this licensing
model, we find the best manufacturers and negotiate a
win/win partnership with them â I provide the product
ideas and brand knowledge and they produce products they
are already successful at making, but under our brand.
Together we have a thriving business.
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scientific business strategy
62. R160 million â â09
Size
R50 million
Chinese Imports - â01
R6 to R13 to dollar
R30 million â â98 2 employees â â05
100 employee â â97
â04 â 20 Licenses
â92 â Gotcha, Wrangler Agencies â01 â Licensing model
& Biotribe factory Time
Source: Saravathy (1998)
63. With the benefit of hindsight, I know now that back in
2001 the business I had built was hugely exposed to
external risks. Today, I would not employ that many
people. I would not make and distribute so many diverse
products from just one facility. It makes far more sense to
outsource production to manufacturing and distribution
experts who have all the expertise and channels in place. I
would, and do, take forward cover on any international
forex importing and exporting we do. I keep overheads to
an absolute minimum and maintain tight control over all
financial aspects of the business.
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scientific business strategy