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Intrapreneurship

Syllabus

And Assignments

Intrapreneurship Spring 2011

Engineering & Technology Management Department Portland State Univ.

Prof. Paul R. Newman Ph.D.

All materials in this syllabus copyright Portland State

University 2011, and may not be reproduced in any

form without written permission.

Intrapreneurship

Intrapreneurship Spring 2011

Engineering & Technology Management Department Portland State Univ.

Prof. Paul R. Newman Ph.D.

-All pages in this document Copyright 2011 PSU

Prof. P. R. Newman Ph.D. Contact information: Telephone: +1-503-351-0939 (Cooper Mountain Research) Fax: +1-503-297-3040 e-mail: [email protected] Office Hours: After class or by arrangement. Course Overview & Learning Objectives: COURSE DESCRIPTION The development of new products and services is fundamental to sustaining a company‘s long-term competitive advantage. The efforts of the individual or team of intrapreneurs who are responsible for this activity become even more complex when the activity must be carried out inside an existing on-going business. This course explores a procedural framework that can be used, along with typical issues often encountered such as resources, timing, political conflicts, bureaucracy, and other obstacles that must be overcome to succeed in developing products within a company. Class activities include written homework based on readings from two texts, Intrapreneuring in Action, by Pinchot and Pellman, and Essentials of Entrepreneurship and Small Business Management by Thomas W. Zimmerer and Norman M. Scarborough, along with selected case studies, and finally a student team project to develop a business plan proposal for a new product or service to be presented to ―senior management.‖ Along the way, the team will also learn techniques to develop a 2-3 minute ―elevator pitch‖ to quickly and succinctly present the concept to a company senior manager. Student teams will participate in assembling a business plan and a strategy for a simulated business, and then giving a formal presentation to the class. COURSE OBJECTIVES -- After completing the readings, lectures and assignments the student will be able to:

Understand what an intrapreneur is, what the benefits are, the risks, and the responsibilities

Learn how to manage a startup business or service within an existing company in ways that allow it to succeed, to make a profit and to continue to grow.

Understand the mechanics of putting together a business plan and presenting it for a new company.

See how it is possible to overcome various financial, economic and political barriers and succeed with a new idea in an existing corporate environment.

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Required Textbooks –

1. Intrapreneuring in Action, by Gifford Pinchot and Ron Pellman, Published by Barrett Koehler, San Francisco, 1999, Paperback ISBN 978-1-57675-061-2

2. Essentials of Entrepreneurship and Small Business Management by Thomas W. Zimmerer and Norman M. Scarborough, Pearson Prentice Hall, 4th edition, 2005, ISBN 0-13-149178-4

Textbooks are available through the PSU bookstore or online at Amazon.com REQUIRED READING MATERIALS –

1. Entrepreneurs and Intrapreneurs in Corporations. By: Teltumbde, Anand. Vikalpa: The Journal for Decision Makers, Jan-Mar2006, Vol. 31 Issue 1, p129-132, 4p; (AN 20500312)

2. On the way to creativity: Engineers as intrapreneurs in organizations; Hanns C. Menzela, Iiris Aaltiob, Jan M. Ulijna; Technovation 27 (2007), Pp 732–743

3. Connect and Develop Inside Procter & Gamble’s New Model for Innovation; Larry Huston, Nabil Sakkab; Harvard Bus. Rev., March 2006, R0603C

4. The Ten Commandments of Intrapreneurs, Mark Robinson, Management, Dec 2001, Pp 95-98 5. Managing in the Whitespace, Maletz, M.C., Nohria, N., Harvard Bus. Rev., Feb. 2001, R0102G, 11p 6. DuPont Tyvek(R): Commercializing a Disruptive Innovation, Jeffery, Mark; Cooper, Robert;

Buchanan, Scott, 01/01/2006 HBS Number: KEL194 7. Want to Make Money off Your Innovation? Watch the Cash Curve: Knowledge@Wharton,

(http://knowledge.wharton.upenn.edu/article.cfm?articleid=1672) 8. The 12 Different Ways for Companies to Innovate, Mohanbir Sawhney, Robert C. Wolcott and Inigo

Arroniz, MIT Sloan Management Review, SPRING 2006 VOL.47 NO.3 9. The Art of Woo': Selling Your Ideas to the Entire Organization, One Person at a Time:

Knowledge@Wharton (http://knowledge.wharton.upenn.edu/article.cfm?articleid=1823) 10. Joline Godfrey and the Polaroid Corporation, Nancy A Kamprath, Melinda B. Conrad, HBSP 9-492-

037, Rev April 4, 2000 11. Emerging Business Opportunities at IBM (A); DAVID A. GARVIN, LYNNE C. LEVESQUE, Harvard Bus.

Sch. Pub. 9-304-075, Rev Feb 28, 2005 Harvard Bus. School Publications are available for purchase on line at: http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=cp&c=c26323 The remaining publications are available through the PSU library. Optional Supplemental Readings –

1. The Four Models of Corporate Intrapreneurship, Robert C. Wolcott and Michael J. Lippitz, Reprint 49115; Fall 2007, Vol. 49, No. 1, pp. 75-82

2. Innovators Break the Rules—Trust them Available at Knowledge at Wharton: http://knowledge.wharton.upenn.edu/articles.cfm?catid=14&articleid=334

3. Crossing the Chasm, by Geoffrey Moore, Harper Collins, 1999, ISBN 0-06662-002-3 4. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant

(Hardcover), by W. Chan Kim (Author), Renée Mauborgne (Author); Harvard Business School Press; 1 edition (February 3, 2005), ISBN- 978-1591396192

5. Payback: Reaping the Rewards of Innovation (Hardcover), by James P. Andrew (Author), Harold L. Sirkin (Author), John Butman (Author), # Publisher: Harvard Business School Press; 1 edition (January 9, 2007), ISBN: 978-1422103135

6. Intrapreneuring: Why You Don't Have to Leave the Corporation to Become an Intrapreneur (Paperback)by Gifford Pinchot, Harpercollins (May 1986) ISBN: 978-0060913359

Highly

Recommend

ed

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1672


http://knowledge.wharton.upenn.edu/articles.cfm?catid=14&articleid=334

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STANDARDS FOR COMPLETING ASSIGNMENTS -- Submissions --Your completed assignments are due on the officially designated day for submitting assignments. This date will coincide with each lecture for that unit. Late Policy --You are expected to turn in assignments on time, and have not made other arrangements with the instructor, you will receive a grade of ―0‖ for the assignment. If assignments are turned in late, you will lose 1 full grade each week it is late. As there are a limited number of class sessions and class participation is a significant portion of your grade, you are expected to attend every class. If you expect to miss more than one session, you should not take this course.

Plagiarism --You should note that using information without attributing it to its source constitutes plagiarism. In this course, you will do research and use a variety of media to complete assignments. If material is quoted directly from any source, the source must be cited in your deliverable. (Check with the professor if you are unsure of the citation formatting or placement.) The source of non-quoted information or statistics used in support of any point must also be cited, including information from websites and other online sources. Any submission that is not properly documented will receive a grade of ―0.‖ You are expected to express your answers to the questions in the assignments primarily in your own words. Copying text word for word as a response is simply not acceptable unless it is properly referenced, and backed up with additional interpretation in your own words. DO NOT COPY ANSWERS TO QUESTIONS DIRECTLY FROM THE TEXT BOOK OR OTHER READING MATERIALS!!! YOUR PAPER WILL BE REJECTED AND YOU WILL RECEIVE A GRADE OF ―0‖.

Preparation --You will be expected to prepare for class by reading the assigned materials and completing the work as assigned. Although you are expected to be familiar with all the concepts and terminology introduced in the readings, you will not be required to memorize detailed information. You must be able to intelligently discuss the patterns, concepts, strategies, etc. described in each chapter of the text. You must also be familiar with the historical case study monographs. You are expected to listen to the lectures each week, understand the concepts that are presented and contribute to the class discussion. Material presented during the lecture parallels the text and the historical studies, but frequently contains additional material not covered in these sources. Finally you will be expected to play a significant role in a team exercise, creating a plan to develop a product or service into a potential real business inside an existing company. Written Assignments --There are reading assignments from both the text and selected case studies. The entire 11 units worth of written assignments are to be turned in on the assignments due date. Late homework will be accepted only with the above-mentioned penalty unless you have previously made arrangements with the instructor. Exams --There are no examinations for this course. Your grade will be determined as follows/ EVALUATION – The course evaluation will be determined as follows –

50% Individual Written Assignments 40% Team Business Plan

10% Class Discussion Participation

This course is not graded according to the number of pages, the number of words, or what font you use to write your papers. The answers to some questions may only require several sentences. Other questions may require a more extensive discussion. The actual volume of words is not the issue. Instead we are concerned with ideas, concepts, and communication; your grade will reflect your ability to understand ideas and communicate them to the rest of the class and to the professor in writing, as well as your participation in the classroom discussions and the team project.

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Course Schedule: Classes will meet from 5:30pm to 9:10pm Friday evenings in Fourth Avenue Building room 40-08 on the main campus of Portland State University. Check with the ETM Department Office or the web site for details concerning the specific classroom ABOUT THE PROFESSOR – PAUL R. NEWMAN, PH.D., Adjunct Professor, ETM Department, Maseeh School of Science & Engineering, PSU Dr. Newman has over 22 years of senior management experience in high-technology companies such as Rockwell International Corporation, JBL Professional and Electro Scientific Industries. His educational background in solid-state physics has enabled him to make a number of significant technical contributions to these companies as evidenced by his 43 technical publications and 4 US patents. Over the years, his technical career evolved into one of positions of increasing management responsibility, strategic planning, and finally responsibility at the executive level. At Rockwell, Dr. Newman was promoted from Member of the Technical Staff to Group Manager, to Principal Scientist where he functioned as an internal consultant connecting the resources of the Corporate R&D Lab to the needs of the Operating Divisions. At JBL Professional, Dr. Newman was Vice President of R&D, and was responsible for launching over 30 new products, reducing product development cycle time and improving overall product quality. He was the Director of Applied Technology for Electro Scientific Industries; a position that gave him responsibility for planning both long and short term strategic R&D for the company. Currently Dr. Newman is President of Cooper Mountain Research, Inc., an independent consulting firm focused on the strategic management of science and technology. In addition to teaching for Portland State University, he also has taught for the Maastricht School of Management in China and Vietnam, is an adjunct professor at the State University of New York at Stony Brook (teaching at their outreach program in S. Korea), and the Department of Management in Science & Technology at the Oregon Graduate School of Science & Technology. Dr. Newman obtained his BS degree in physics from Antioch College, his Doctorate in physics from Michigan State University, and did Post Doctoral work at the University of Pennsylvania‘s Laboratory for the Research on the Structure of Matter.

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Spring 2011 Pre-Lecture Activities—The Assignment

Learning Objectives: At this point, the objective is to form teams, assign roles for each team member, and begin to decide on a product or service that your team will develop into a business

An additional objective is to have each student read the text book and any supplementary materials and answer some written questions to assure that the material is understood.

Assignments to be completed BEFORE class lectures begin, BEFORE you read any of the materials and turned on the first day of class along with the Unit 1 assignment below:

Individual Written Homework Assignments: Write a 3-5 page essay addressing the following questions:

1. Without doing ANY reading, at this point, how would you define an ―intrapreneur?‖

2. What kinds of people do you imagine within an organization are likely to become intrapreneurs? What characteristics do they have?

3. At this point in your career, do you have any experience or intentions to become an intrapreneur?

4. What do you personally hope to take away from this course?

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Unit 1 Friday, Apr 1(!)–--- Innovating inside the Organization—The ―Intrapreneur”

Learning Objectives: After completing this unit, you will be able to:

Understand what an intrapreneur is and the relationship with the more general term of ―entrepreneur.‖

Understand that Intrapreneurship comes with a responsibility.

Understand that intrapreneurship has benefits…and drawbacks

Homework Assignment to be completed by Fri 4/1 Assigned Reading:

1. Essentials of Intrapreneurship Chapters: 1-The Foundations of Entrepreneurship

2. Entrepreneurs and Intrapreneurs in Corporations., By: Teltumbde, Anand. Vikalpa: The Journal for Decision Makers, Jan-Mar2006, Vol. 31 Issue 1, p129-132, 4p; (AN 20500312)

Answer the following questions based on the reading assignment:

1. In your own words, based on the text Essentials of Entrepreneurship, define ―entrepreneur.‖ What kind of people become entrepreneurs? (20 pts)

2. Next, in Essentials of Entrepreneurship, gives an extensive list of the characteristics of an ―entrepreneur.‖ What is the relationship between an intrapreneur and an entrepreneur, and which 2-3 characteristics do you think are the most important to success as an intrapreneur? Why? (20 pts)

3. From the list of benefits to becoming an intrapreneur, which ones in your opinion are the most valuable? Explain your choice. (20 pts)

4. Considering the drawbacks or potential risks to intrapreneuring, as outlined in both readings, which one or two seems to be the highest risk, particularly inside an existing company, to you? Explain why. (30 pts)

5. Often faced with a lack of resources, cultural biases, and a radical disruptive new idea, Intrapreneurs must make a decision right at the beginning. As a manager, how would you view an employee who in that situation a)simply drops the idea and concentrates on his ―regular job‖ versus b)an employee who accepts the challenge and the risks and goes forward with the idea? Explain your answer. (10 pts)

Team Assignment: (To be carried out tonight) 1. Form teams of 5~10 students to a team. 2. Hold a team meeting; pick the ―President‖, and other

Officers or functions for your new company. 3. Pick a name for the company. 4. Select a product that someone on the team has worked

on or that the team can ―invent.‖ This will be used throughout the class as part of the team assignment to develop an intrapreneurial business that will be presented in Unit 10.

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Unit 2 Fri Apr 8 How do I start? Hatching Ideas and moving into innovation

Learning Objectives: After completing this unit, you will be

able to understand: Ways to begin the creative process and

come up with new product/service ideas The concept of intellectual property (IP)

and how to protect it in the US and in other countries

Ways to strengthen the impact of your new product/business by involving the customer

Team Assignment (Due at the end of tonight’s class):

1. Establish a rough estimate for what and where the potential market for your product/service is. Assume you are going to plan for the first 5 years of your company‘s operation. (Do not do any detailed market estimates at this time)

2. Prepare a 2-3 minute ―Elevator Pitch‖ (A short story describing your product that could be told to a senior executive while you a riding the elevator with him from floor 1 to floor 8). Elect someone on your team to give the ―pitch‖ in front of the class.

3. What is the key IP element crucial to your new business that must be defensible?

Homework Assignment to be completed before 4/8/2011 Assigned Reading: 1. Intrapreneuring in Action; Preface, Introduction, Chapt 5 2. Essentials of Intrapreneurship, Chapters: 2- Inside the

Entrepreneurial Mind: From Ideas to Reality 3. On the way to creativity: Engineers as intrapreneurs in

organizations; Hanns C. Menzela, Iiris Aaltiob, Jan M. Ulijna; Technovation 27 (2007), Pp 732–743

Answer the Following questions based on the reading assignments:

1. From the list of barriers to creativity (again referred to in both readings) which ones do you think are the most serious? Why? (10 pts)

2. Explain in your own words what a ―patent‖ is. What does it entitle the patent holder to do? Visit the PRC Patent Office Web site at http://www.sipo.gov.cn and contrast the following about Chinese patents with those of US patents which may examined at http://www.uspto.gov . (If you are not from the US or China, feel free to visit the patent organization in your own country instead of China)

a) What types of things can you patent? b) If you are working for a company and file for a patent that is eventually granted, who owns the patent? c) What does a patent entitle you to? d) How long does a patent remain in effect? (30pts)

3. In Essentials of Intrapreneurship, what do you think are the most important aspects of thinking up new ideas? What is important in choosing which one you will take further? Do you have experience using any of these suggested techniques? (20 pts)

4. Last week we saw close parallels between the entrepreneur and the intrapreneur. On the Way to Creativity, our case study this week, points out significant differences between the two. State in your own words what these are, particularly in terms of what motivates the 2 different kinds of people. (20 pts)

5. On the Way to Creativity talks frequently about the intrapreneurial supportive culture that needs to be created within a business to foster turning engineers into intrapreneurs. Explain what tensions exist in most companies between intrapreneurial activities and on-going operational activities. What specific areas are often in conflict between the two? (20 pts)

http://www.sipo.gov.cn/

http://www.uspto.gov/

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Unit 3 Fri April 15 Marketing, Advertising and Profit—Setting the stage for a new business

Learning Objectives: After completing this unit, you will be able to understand:

The principles of building a ―guerilla marketing plan‖ and why it is important to a startup business with limited resources

How to gain primary and secondary market information

The process of gaining a competitive advantage and how to bring real value to your customer.

How to define a unique selling position

Pricing strategies and COGS targets

Team Assignment (Due at the beginning of next class.) 1. Define the ―value‖ statement that your

product or service will bring to the customer. What is it that you believe will cause the customer to want to buy your product?

2. Explain what your marketing strategy will be to bring the product initially to market, then grow the business for the next 5 years.

3. Establish a preliminary company revenue

target for each year, along with an average selling price per unit and how many units you will sell in each year (A forecast)

4. Answer each of the questions on P. 249 of Essentials of Entrepreneurship for your business. Add one additional question: ―How will this new business both benefit and be aligned with my parent company?‖ (Remember you are starting a new business within an existing company!)

Homework Assignment to be completed before 4/15/2011 Assigned Reading:

1. Essentials of Entrapreneurship, Chapters: 6- Building a Powerful Marketing Plan

2. The Ten Commandments of Intrapreneurs, Mark Robinson, Management, Dec 2001, Pp 95-98

Answer the Following questions based on the reading assignments: 1. On P 191 (P.286 of 5th Ed) of Essentials of

Entrepreneurship, the author points out 5 examples of things that lead to poor customer relations. Which ones do you think are common to businesses (either consumer or business-to-business) here in Portland? (If you are not from the US, feel free to use your country as an example) Which one is the most important to avoid? (20 pts)

2. If you are starting a new business (P.291 of 5th Ed), why do you think customer ―convenience‖ is important? What sorts of things can you do for your new business to make it ―convenient‖ to the customer? (20 pts)

3. In your own words (DO NOT COPY!!) define what the Unique Selling Position (USP) means (P. 249 in 4th ed., 284 of 5th Ed). Give an example for the company or organization that you currently work in or have worked in. (Hint: you may want to answer the questions in the list on P 249 of 4th ed, or read section on competitive advantage in 5th edit on P85). (20 pts)

4. In Ten Commandments, the author comments on the ways the external environment can affect a company‘s pursuit of Intrapreneurship. With respect to stable and hostile external environments, explain in your own words, why stable environments are less stimulating for Intrapreneurship and hostile ones are more so. Do you agree with the author‘s point of view? (20 pts)

5. Throughout Ten Commandments, the author refers to various aspects of developing a ―sustainable competitive advantage in the marketplace.‖ Tell what this is, and comment on the relative difficulty of doing this in fast changing markets. (10 pts)

6. Note that the ―10 commandments for Entrepreneurs‖ also appears in the text, Intrapreneuring in Action, on p153. Consider this list, and indicate which one or two are, in your opinion, the most important, and explain why. (10)

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Unit 4 —Fri April 22 Making it Practical—Building early financial models

Learning Objectives: After completing this unit, you will be able to: Understand the importance of cash to

the successful operation of a business.

Understand cash flow and the importance of accounts receivable and accounts payable

Be able to forecast and understand how difficult that may be in fast changing industries

Understand Operating metrics like inventory turns.

Team Assignments: (Due at tonight’s class! Please work on this out of class)

1. Figure out a preliminary plan for bringing the product to market. Consider especially the 4 phases indicated in Cash Curve. Consider how you will develop the product, bring it to market, advertise, scale up etc. Draw a preliminary ―Cash Curve‖ for your business.

2. Fill out a preliminary ―Income Statement‖ going forward 5 years. (Use actual numbers if you have them, or make them up in the case where you don‘t.) Try to make them realistic as possible. Go as far as the top line (revenue), ASP (Average Selling Price), Number of Units Sold, COGS (Cost of Goods Sold), and Gross Margin. Leave all operating expenses etc blank for the moment except for R&D and sales & marketing.

Homework Assignment to be completed before 4/27/2011: Assigned Reading:

1. Essentials of Intrapreneurship, Chapters: (4th Ed.-- 8- Integrated Marketing Communications & Pricing Strategies, 9- Managing Cash Flow) (5th Ed.—10- Pricing Strategies, 11- Creating a Successful Financial Plan, 12- Managing Cash Flow)

2. Want to Make Money off Your Innovation? Watch the Cash Curve: Knowledge@Wharton, (http://knowledge.wharton.upenn.edu/article.cfm?articleid=1672)


1. Explain in your own words (DO NOT COPY!!!) the meaning of: cash, cash flow, and profit. (20 pts)

2. What is the cash cycle and why is it critical to a new business? (10 pts)

3. Explain what ―accounts receivable‖ are and indicate how you can speed up the collection of funds that are owed to your business. (10 pts)

4. Explain ―accounts payable‖ and how you might want to stretch out your payments. Why might you not want to do it? (10 pts)

5. What is bartering and is it a potential way of getting essential services? (10 pts)

6. Why should you avoid carrying too much inventory, either finished goods or incoming material? What can happen in particular in a fast changing technology market? (10 pts)

7. In Watch the Cash Curve, explain what the ―cash curve‖ is and draw one for a theoretical product showing things like a)initial investment, b)first sale c)time to profitability d)harvest period and e)end of product lifetime. (20 pts)

8. Explain how companies that do not plot a cash curve may either end up taking on too much risk or alternately they may take on too little risk to achieve any real growth. (10 pts)



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Unit 5 Fri April 29—Intrapreneuring within the organization- White Space & Black.


How to Implement Intrapreneurship and Nurture Creativity

Managing Organizational Changes that begin to allow initiative

The impact of Chance and a


1. Intrapreneuring In Action, Chapters: 12- Diagnosing Your Climate for Innovation 13- Improving your Climate for Innovation

2. Managing in the Whitespace, Maletz, M.C., Nohria, N., Harvard Bus. Rev., Feb. 2001, R0102G, 11p.


1. Referring to the Whitespace Case Study, tell in your

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nurturing environment on the success of new ideas

The importance of risk taking

Understand that Intrapreneurship comes with a responsibility.

Understand that intrapreneurship does not always occur within the formally defined organizational structure

Understand the Whitespace & the Blackspace

Team Assignment (Due tonight! Please work on this out of class!)

1. Put your preliminary business plan to the 3 tests: Reality Test- Can your company

really carry out the plan? Consider things like the ―ramp up‖ (growth of the company) to full production levels—Will it cause you to have to hire people at an enormous rate? How will you perform every step needed to design, test, manufacture, ship and sell your product?

Competitive Test- How will you win against the competition? How will you defend against competitors?

Value Test- What is the real reason customers will by your product and pay what you ask?

2. State the specific long-term goals, and short-term objectives for your business.

3. Consider the matrix on P. 168 of price versus perceived quality. Where is your product positioned in the matrix?

own words, what the ―White Spaces‖ and the ―Black Spaces‖ projects are. (20 pts)

2. The authors refer to the White Space as the exciting world where creativity and innovation really happen. Is it wise to just ―let it happen‖ or in other words to avoid any kind of management in the White Space? What are the dangers of operating without managing… and potential benefits if you do manage? (10 pts)

3. What are the 4 challenges that managers who wish to operate in the White Space are faced with and why are they so important to success? (10 pts)

4. When should you move projects from the White Space into the Black Space? Should every project be moved this way or are there some that should remain in the White Space? Why? (20 pts)

5. In Intrapreneuring in Action, the authors discuss ―risk tolerance‖ and indicate what can happen when an organization ―punishes‖ people for failing at risky business projects. Explain what the consequences for the company are, particularly in terms of its competitiveness in the market. (20 pts)

6. Explain the limitations imposed by requiring a new business team to design around only using internal suppliers, and what the implications are for competitiveness of the product/service in the market. (10 pts)

7. The text explains that when attempting to develop a complex new product or service it is important to be able to draw on ―cross functional teams.‖ Explain what having the ―Ambassador Syndrome‖ can do to the efficiency of such a team. Are there ways to eliminate this phenomenon? (10 pts)

Unit 6 Fri May 6—Avoiding Premature Disasters—Making sure you get on the right path


The balance sheet and various performance metrics

The Income Statement and how you can tell a company‘s operating ―health‖

How to operate effectively in a corporate environment

Homework Assignment to be completed before 5/6/2011 Assigned Reading: 1. Intrapreneuring In Action, Chapters:

7—Avoiding Typical New Prod. Mistakes 8 – Intrapreneuring within a structured Development Process

2. 'The Art of Woo': Selling Your Ideas to the Entire Organization, One Person at a Time: Knowledge@Wharton (http://knowledge.wharton.upenn.edu/article.cfm?articleid=1823)


1. Go to the Lenovo Web site and look at the balance



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Team Assignment (Due tonight!)

1. Continue to add to the preliminary ―Income Statement‖ going forward 5 years. Focus now on things like the operating expenses: R&D, Advertising etc. Assume 14% for General & Administrative (G&A) expenses. Pay particular attention to what years you want to heavily promote the product, what years you will be developing the product, and then which years you want to ―harvest‖ or make money from all your investments.

2. Indicate exactly how you intend to produce the product, ship it to market, and sell it.

3. Indicate how much you need in terms of investment, and how much cumulative profit you will have earned in 5 years. Calculate the ROI (Return on Investment) or how much your investment will have earned at the end of 5 years

4. For your product, consider the following issues:

Will the product be developed in white or black space?

How does the product align with the company‘s ―strategic intent?‖

What could be potential obstacles to be overcome

At this point how will your team actually accomplish the business?

What resources will be needed to accomplish the various stages?

Are any unique and if so how will you access them?

sheet for Lenovo‘s PC business (Where did it get that business?) at http://www.pc.ibm.com/ww/lenovo/investor_relations.html

State the following for 2007: Total Assets Total Liabilities Total Equity

Do you consider this balance sheet for Lenovo to be a good one? Is the company profitable? At the same web site, click on ―Income Statement‖ and

examine the Income Statement for 2007. What is the Gross Margin in %? Considering that most high-tech companies need to earn at least 30% gross margin to be considered ―healthy‖, do you consider Lenovo healthy?

Examine the net profit margin. A good net profit margin should be close to 10%. How do you find Lenovo‘s profit margin?

Examine the top line, revenue, over the years, 2006-2007. What can you say about the growth in revenue?

What is Lenovo‘s (Total Liability) Debt to Equity (or Net Worth) Ratio for the year 2007? Is this good? (20 pts) 2. In The Art of Woo, consider the 5 potential barriers

that can prevent your new product/service from even getting started. Which ones in your opinion are the most important, and how would you advise a team to avoid or overcome them? (20 pts)

3. The author in Woo points to is "egocentric bias," or "focusing on yourself instead of your audience.‖ What are the consequences of this, and what would your advice be to someone giving a critical presentation to a corporate audience in terms of what to do, and what to avoid. (20 pts)

4. In Intrapreneuring in Action the text points out that appointing the team leader for a new product/service development team always is a risk. Explain what is needed to increase the chances of success, and why getting the wrong type of person in that position can cause the project to fail.

5. Explain what ―Strategic Alignment‖ is and why it is important to both the Intrapreneur and the host company. (20 pts)

Unit 7 Fri May 13 --Assembling your Business Plan


How to formulate a strategy for a new business

Design products according to the customer‘s benefit.


1. Essentials of Entrepreneurship, Chapters: (4th Ed.--11-Crafting a Winning Business Plan) (5th Ed.—3- Designing a Competitive Business Model & Building a Solid Strategic Plan & 4- Conducting a Feasibility Analysis and Crafting a Winning Business Plan)

2. The 12 Different Ways for Companies to Innovate, Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz, MIT

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The difference between ―total market‖ and the ―accessible market‖

The Innovators ―Radar Screen‖

Planning products to be competitive

Team Assignment (Due tonight)

1. Put your preliminary business plan to the ―12 Dimensions‖ Radar screen test. Note where your strong points are…and where your weaknesses are.

2. Define your company‘s ―mission statement‖ which specifically gives the purpose of the parent company (You may have to make this up).

3. State the specific long-term goals, and short-term objectives for your new business venture.

4. Consider the matrix on P. 168 of price versus perceived quality. Where is your product/service positioned in the matrix?

Sloan Management Review, SPRING 2006 VOL.47 NO.3 3. DuPont Tyvek(R): Commercializing a Disruptive

Innovation, Jeffery, Mark; Cooper, Robert; Buchanan, Scott, 01/01/2006 HBS Number: KEL194

4. (Optional) You may want to visit the US Small Business Administration web site at http://www.sba.gov/starting_business/index.html to view more instructions on creating a business plan, as well as some sample plans.


1. Explain in your own words (Do no copy!!) the 3 reasons for making a business plan. Which one do you think is the most important? Why? (10 pts)

2. What is the difference between a feature for a product, and the benefit of the product? Which one is more important in selling? (20 pts)

3. Part of the business plan consists of an estimate of what the market is for your product or service. Explain the difference between ―total market‖ and ―accessible market.‖ Why is it important to state both in your plan? How would you calculate an estimate for ―market share‖? (10 pts)

4. In DuPont Tyvek, the authors mention DuPont‘s 5 issues that the Tyvek project had to address in order to continue through the process of being developed into a marketable business. For each issue, explain what the risk is in NOT satisfying the issue, in other words, what could happen? (20 pts)

5. Michael Porter, distinguished Harvard Professor and acknowledge expert on strategy says that ―…companies should not try to compete simply on the basis of ‗best practices‘, but instead should figure out how to run a different race.‖ In 12 Different Ways, the authors state something very similar. Explain the parallels between these two statements and how you should plan in order to be more successful in your new business. (30 pts)

6. The 12 dimensions of the Radar Screen are a very useful way of analyzing the positioning of your business plan. Note that some are internally controlled, and some are external. What huge external influence does this method seem to ignore? (10 pts)

Unit 8 Fri May 20—Leveraging the plan—Using inside & outside resources to gain your objectives

Learning Objectives: After completing this unit, you will be

able to understand: How to use external resources to leverage

your efforts to develop a new product or


1. Essentials of Entrepreneurship, Chapters: (4th Ed. 15- Leading the Growing Company & Planning for Management Succession)

http://www.sba.gov/starting_business/index.html

Intrapreneurship

service. Government Funds o External R&D o Suppliers o Universities o Cost

How one well know US company, P&G

leverages its innovation efforts. How to assure that a business is

sustainable and will continue to be successful after the initial startup phase.

The significance of being ―agile‖ in a fast

changing economy. Team Assignment:

1. Work on your presentation. Finalize who will present which section and have a practice run through.

2. Make sure you have covered ALL the required items of content!

(5th Ed. 16—Building a New Venture Team and Planning for the Next Generation)

2. Intrapreneurship in Action, Chapters 10, 11 3. Connect and Develop Inside Procter & Gamble’s

New Model for Innovation, Larry Huston, Nabil Sakkab; Harvard Bus. Rev., March 2006, R0603C


1. Leadership and management are both very important elements for a successful business. Explain the difference between the two concepts, and why a good business needs both. (20 pts)

2. One of the things a leader does to motivate his employees is to ―empower‖ them. Explain why there is sometimes a great deal of risk in doing this, but why a good leader would want to do it anyway. How should the leader deal with failures or mistakes on the part of empowered employees? (10 pts)

3. In Intrapreneurship in Action, explain why the middle manager is in a unique position, compared to the senior executive at the top, or the entry-level manager at the bottom, to make contributions to the success of a new product/service development team. (10 pts)

4. Intrapreneurship in Action states the senior managers should try to build ―flexibility‖ into the system. One of the suggested techniques is the ―15% rule.‖ Explain what that is, and how it can be helpful. Should this process be managed? Should intrapreneurs following this rule have to account for their activities? (20 pts)

6. Normally when one thinks about creativity and innovation, we have the image of someone sitting at their desk or workbench dreaming up new ideas. According to Proctor and Gamble there are some drawbacks to that. Explain what their ―connect & develop‖ approach is. What is your opinion of P&G‘s approach? (20 pts)

7. Henry Ford is rumored to have said: ―If I depended on my customers to tell me what new product improvements are needed, I‘d be selling better buggy whips!‖ Are there some potential implications in his statement for those following P&G‘s actions? (20 pts)

Unit 9 Fri May 27 —Team Projects!—Business Plan Presentation

Learning Objectives: After completing this unit, you will be able to understand: The importance of a business plan

Team Projects!!

Each team will have 30-45 minutes to present their Business Plan. The presentation should include a PowerPoint Slide presentation, and you should hand in a hard copy of a short 5 page executive summary of your business. Each member of the team should present at least one segment of the plan.

Intrapreneurship

How to give a business plan

presentation and what elements are important.

Make sure that you cover at least the points that are given in the outline template. The presentation will be graded as follows:

Content (The Product & The Plan): 50% Consistency Does everything integrate & is it believable?): 30%

Presentation Organization & Clarity 20%

Note that your plan should cover at least 5 years and be sure to cover at least the following specific subjects:

1. Vision & Strategic Importance to the existing company (Why we should do this new business!) (10pts)

2. Brief description of the product/service. Be sure to include why the product represents a significant business opportunity. Point out where the product/service leverages internal resources. (20 pts)

3. Indicate the market, technology and financial risks associated with the new business (10 pts)

4. Target Market and Industry (Be sure to include both total market & accessible market) (20pts)

5. Marketing strategy including how you will win in the market, and how you will defend your market share from competitors. Include the ―value statement‖ or why a customer would want to buy your product. Also include the USP (Unique Selling Proposition). (20pts)

6. Operating Strategy including how you will build the business. (20pts) Make sure you cover the following:

Personnel (starting and growth) Resources needed (Both internal and external) Funding (How will you start the business and how

will you sustain it?) Schedule of Key events (Gantt Chart) Product Design Manufacture Shipping Sales

7. Pro Forma Finance Plan (20pts)(Going out 5 years) Income statement Balance Sheet

Unit 10 Fri Jun 3–—Taking the Company Global


The global nature of today‘s business world and how a new company can ―go global‖

The benefits of doing business globally

Homework Assignment to be completed before 5/3/2011 Assigned Reading: 1. Essentials of Entrepreneurship, Chapters:

(4th Ed. 14- Global Aspects of Entrepreneurship) (5th Ed. 15- Global Aspects of Entrepreneurship)


Intrapreneurship

Barriers to international trade

How to sell a product in a foreign country (with different currency) and get paid in your own currency.

1. Examine the list of benefits for taking a business global on P465. From the point of view of a new business that an intrapreneur has created, which is the strongest reason or reasons for the business to global? (10 pts)

2. Thinking about having a global operation as the long-term objective, how could a brand new start up company here in Portland eventually have a market in countries outside US? What would the strategic plan be in terms of market location (where you would actually sell your products) if the goal is to be in world markets in 5 years? (20 pts)

3. If a company plans to sell in a foreign country, but doesn‘t want to hire its own sales force in those countries, what are some ways the company can use to sell its products? (10 pts)

4. Explain in your own words, what a ―tariff‖ is and how countries use it to protect their own industries. (10 pts)

5. One of the things that almost always will cause a country to levy an import tariff is ―dumping.‖ Explain what that is and why countries try to prevent it. (10 pts)

6. Cultural differences often lead to disasters when trying to do business in foreign countries. What are some of the most difficult things culturally that you think a new business will have to overcome in doing businesses in a foreign country like Japan, China, or France (If you are not from these countries, feel free to use your country as an example!)? (10 pts)

7. As of 2003, China has become a member of the World Trade Organization (WTO). What is this organization, and how can it help a Chinese business that wants to go global? (10 pts)

8. If a company wants to sell in a foreign country and get paid, explain the process involving a ―letter of credit‖ by which the foreign buying company can pay a bank in its own country, and the selling company can receive those funds in its country. (10 pts)

Unit 11 Fri Jun 10–—Sustaining the New Business—White or Black Space End Game?


The difficulties of maintaining an agile posture

The benefits of having a corporate culture that can quickly access emerging business opportunities

A more complete understanding of

Homework Assignment to be completed before 6/10/2011 Assigned Reading: 1. Intrapreneuring in Action, Chapter 4 2. Emerging Business Opportunities at IBM (A); DAVID A.

GARVIN, LYNNE C. LEVESQUE, Harvard Bus. Sch. Pub. 9-304-075, Rev Feb 28, 2005

Answer the Following questions based on the reading assignments: 1. In Emerging Business Opportunities, the authors point to

Intrapreneurship

the entire Intrapreneurship process.

the results of an extensive study of why IBM had failed to capitalize on new business opportunities. From the list of 6 root causes, indicate which ones you think are the top 2 or 3 most likely causes for new business venture failures for companies in general (not just IBM) and then indicate how you would advise companies to avoid them. (25 pts)

2. Emerging Business Opportunities describes the process that IBM eventually put into place to make sure they were able to pursue new leading edge opportunities. They were very optimistic about the place that EBO‘s would have in the company. Read carefully and comment on the issues and risks that tended to inhibit executives (Note in particular the comment about ―White space!) from other parts of the company (and outside) from taking on the role of intrapreneur and leading an EBO group. (25 pts)

3. In Intrapreneuring in Action, the authors discuss a litany of issues that a good intrapreneuring program must address. Note in particular what they say about competitors and how most intrapreneuring companies seem to deal with this issue. Do you agree? How would you advise an intrapreneurial team to address this issue? (25 pts)

4. As Intrapreneuring in Action points out, a key issue to the plan is pricing. Explain how two different groups often come up with different values for the ASP (Average Selling Price) for a new product/service:

Marketing/Sales Engineering/Manufacturing

If these two values are different, indicate how you would arrive at a common value for the team, taking into account the very different driving issues for each point of view. (25 pts)

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