•CNVs•Family Businesses•Franchises•Non-profits

1. Identify Opportunities ◦ Create vision, designate venture champion, identify

entrepreneurial team2. Refine Concept

◦ Prepare concept and vision statement, draft business plan summary

3. Business Plan4. Determine Form for CNV

◦ CNV, Spin-off, subsidiary, internal project5. Establish CNV

◦ Talent, resources, capabilities transfer from parent company

Chapter 8: Table 8.7

Contrasts between independent ventures and corporate ventures

Types of VenturesTypes of Ventures

88

Technology Ventures: From Idea to Enterprise

May generate financial surplus but may not distribute surplus to officers, investors, employees

Vision is to create social value vs economic value◦ Gugenheim Museum ( http://www.guggenheim.org

) Consumer Cooperative

◦ REI began with 23 fellow climbers in Pacific NW◦ REI has 2 million active members w/63 outlets and

direct sales( http://www.rei.com )

80% of businesses in U.S. are family owned 25% of Fortune 1,000 are family controlled

◦ Anheuser-Busch◦ Cargill◦ Ford Motor ◦ Gallo◦ Archer Daniels Midland◦ NASCAR◦ Pruitt

Advantages Disadvantages

Business Format Franchise◦ Wendy’s, Holiday Inn, My Girlfriend’s Kitchen

Trade-name Franchise◦ Ace Hardware

Product Distribution Franchise◦ Auto Dealers, Caterpillar

Advantages Disadvantages

Advantages Disadvantages

Family focused business Works with part-time operation

◦ Tupperware◦ Mary Kay Cosmetics◦ Amway

Direct Selling Association◦ http://www.dsa.org

Geographic concentration of interconnected companies in a particular field◦ Hollywood◦ Silicon Valley◦ Napa, Sonoma Valley

Likely to find both complementary and competitive capabilities/resources◦ Employees ◦ Infrastructure

Kissimee – Disney World, Epcot, Universal, http://www.floridakiss.com/do/index.php

1982 - 7 Chicago residents died from cyanide laced Tylenol

Managers overrode FDA & recalled at cost of $100 million

3 months, 93% felt J&J had done a good job J&J rated #1 in Fortune’s 300 most admired

U.S. corporations

Manufacturers kept Dalkon Shield on market after product difficulties discovered

9,000 claims involving serious injury Robins eventually filed for bankruptcy

National poll - 58% rated ethical standards of business executives as fair or poor

Time - 76% saw lack of ethics in business as contributing to tumbling moral standards

Street crime costs U.S. $4 billion per year White collar crime costs U.S. $40 billion per

year

CEO

Senior Mgmt

Middle Mgmt

Line Workers

Line Workers

Middle Mgmt

Senior Mgmt

CEO

Flexibility Stability Needs of the Environment

External

Strategic Focus

Internal

BureaucraticCulture

Adaptability CultureFocus on external environment and change to meet customer needs

3M – individual initiative and entrepreneurship

Mission CultureConcerned with serving customers in a

specific market but without the need for rapid change

Harley Davidson

Clan CultureFocus on involvement and participation of the organization’s members

Needs of employees is the best route to productivity

Ben & Jerry’s http://www.benjerry.com Starbucks

http://www.starbucks.com

Bureaucratic CultureInternal focus and a consistency orientation for a stable environment

symbols, heroes, ceremonies

Marine Corps, SDSM&T

Strong adaptive culturethe whole is more important than the partsequality and trust are primary valuesculture encourages risk taking, change and improvement

Economic responsibilities Legal responsibilities Ethical responsibilities Discretionary responsibilities

Free Market Hand of Government Hand of Management

Shareholders◦ primary role of mgmt is to earn profit and dividends

for shareholders Employees

◦ managers from Film Recovery Systems found guilty of murder in death of employee from cyanide poisoning

◦ DuPont spent $1.5 million to renovate child-care facilities

Customers◦ product liability issues (has pendulum swung too far?)◦ quality is the name of the game

Local Community◦ businesses and community are interdependent and have

complementary needs◦ both may function more effectively with high level of

mutual support Society

◦ many business leaders involved in educational reform◦ Nabisco - $30 million to 45 schools with innovative

programs International Community

◦ Union of International Associations in Brussels list of 10,000 world problems

try to satisfy all stakeholders are committed to a higher purpose value continuous learning aim high

Atlantic Richfield, Dayton Hudson, John Deere, Honeywell, Levi Strauss, Motorola, Weyerhaeuser

James O’Toole, Vanguard Management: Redesigning the Corporate Future, 1986.

Social forecasting◦ systematic process of identifying social trends

Opinion surveys Social audits

◦ systematic evaluation of social performance of an organization (Ben & Jerrys)

Issues management◦ process of identifying emerging social issues of

particular relevance to the organization Social scanning

◦ informal issues management

Cover page Table of contents Executive summary Opportunity Ch 2 Strategy Ch 3 , 4 Business Concept 5.3, 6.4, Ch 10 Marketing Plan Ch 11 Organizational Structure Ch 12, 14.3, 5.2 Operations Ch 13, 15 Financial Plan Ch 16, 17 Risks/Milestones Ch 6

Technologies looking for a problem Unclear business model or value proposition Incomplete market analysis Inadequate assessment of risks Gaps in capabilities of management team Lack of focus or sound mission Too many top-down assumptions (1% of

market) Limited confirmation of customer demand Limited performance metrics (ROI, Market

Share) Poor description of revenue and profit

drivers

PeopleTeam, capabilities,

commitment

OpportunityCustomers, Strategy

Business Model

ResourcesFinancial, Physical

Intellectual

DealRisk vs Reward,

Incentives, Ownership

Business

Plan

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