Business planning unit 2

sybms sem3

1. Unit 2 Intrapreneur –Concept and Development of Intrapreneurship Women Entrepreneur – concept, development and problems faced by Women Entrepreneurs, Development of Women Entrepreneurs with reference to Self Help Group Social entrepreneurship–concept, development of Social entrepreneurship in India. Importance and Social responsibility of NGO’s . Entrepreneurial development Program (EDP)– concept, factor influencing EDP . Option available to Entrepreneur. ( Ancillarisation , BPO, Franchise, M&A)

2. intrapreneur An intrapreneur is an employee who is given the authority and support to create a new product without having to be concerned about whether or not the product will actually become a source of revenue for the company .

3. ESTABLISHING INTRAPRENEURSHIP IN THE ORGANIZATION Step 1 The first step is to secure a commitment to intrapreneurship in the organization by top, upper, and middle management. Without top management commitment , the organization will never be able to make the necessary changes. Once top management has committed to intrapreneurship for a sufficient length of time, the concept is introduced throughout the organization. This is effectively accomplished through seminars. General guidelines need to be established for intrapreneurial venture development. Next, intrapreneurial leaders need to be identified, selected, and trained.

4. Step 2 Ideas and general interest areas should be identified, along with the amount of risk money that is available . The overall expectations and target results should be established, specifying time frame, profitability requirements, and impact of the organization . A mentor/sponsor system needs to be established.

5. Step 3 A company needs to use technology to make itself faster and more flexible. Technology has allowed small companies to act like they are big ones . Large companies can use technology to make them responsive and flexible.

6. Step 4 The organization can use a group of managers to train and share their experiences with other members. These sessions should be conducted one day per month for a specified period of time. Information about intrapreneurship and about the company’s specific activities should be well publicized.

7. Step 5 : The organization needs to develop ways to get closer to its customers by tapping the data base, hiring from smaller rivals, and helping the retailer. Step 6 : An organization must learn to be more productive with fewer resources. With middle management cutbacks, more control has been given to lower levels of the organization. The span of control should be increased .

8. Step 7 : The organization needs to establish a strong support structure. Because they do not immediately affect the bottom line, intrapreneurial activities can be overlooked and receive little funding. These ventures require flexible, innovative behavior, with the intrapreneurs having total authority over expenditures and access to funds. Step 8 : The support must involve trying the rewards to the performance of the intrapreneurial unit. This encourages team members to work harder and compete more effectively. The equity portion of the compensation is particularly difficult to handle . Step 9 : The organization needs to implement an evaluation system that allows successful units to expand and unsuccessful ones to be eliminated.

9. Examples of intrapreneurs Facebook Idea :  Originally called the “awesome button,” the Facebook Like button was first prototyped in one of Facebook’s infamous hack-a-thons. Benefit:  Facebook has never released statistics based on the like rate and certain time frames. But to all of us in the computer using world it is pretty evident how the invention of the like button affects us on a daily basis. Companies like Facebook, who are constantly innovating and changing, are some of the most successful out there.

10. Sony Idea :  Ken Kutaragi , a relatively junior Sony Employee, spent hours tinkering with his daughters Nintendo to make it more powerful and user friendly. What came from his work is one of the most recognizable brands in the world today, The Sony Playstation . Benefit:  Many Sony bosses were outraged at his work, thinking that gaming is a complete waste of time. Luckily someone in a senior position saw the value in the product and thankfully so, because now Sony is one of the world leaders in the prosperous gaming industry. This shows that company leaders should always be open to innovation—no matter how farfetched and pointless it may seem.

11. Basis for comparison Entrepreneur Intrapreneur Meaning Entrepreneur refers to a person who set up his own business with a new idea or concept. Intrapreneur refers to an employee of the organization who is in charge of undertaking innovations in product, service, process etc. Approach Intuitive Restorative Resources Uses own resources Use resources provided by company Capital Raised by him Financed by company Enterprise Newly established An existing one Dependency Independent Dependent Risk Borne by the entrepreneur himself. Taken by the company. Works for Creating a leading position in the market. Change and renew the existing organizational system and culture. Difference between Entrepreneur and I ntrapreneur

12. Women entrepreneur Women entrepreneur may be defined as a woman or group of women who initiate, organize, and run a business enterprise. In terms of Schumpeterian concept of innovative entrepreneurs, women who innovate, imitate or adopt a business activity are called “women entrepreneurs ”

13. Features of women entrepreneur Sense of Responsibility : Women Entrepreneur feel a deep sense of personal responsibilities for the outcomes of ventures they start . Imagination : Women entrepreneur have a good sense of imagination, fantasy and creativity. They always remain innovative and thinking for the new. Persistence : Women entrepreneur have strong desire to convert their dream into reality. They prefer to achieve self-determine goal. High level of Optimism : Women entrepreneur generally succeed in their venture due toheir confidence in their ability and a high level of optimism. Attribute to work hard : Enterprising women have further ability to work hard. The imaginative ideas have to come to a fair play. Hard work is needed to build up an enterprise. Flexibility : Due to feminine nature, women entrepreneurs have their ability to adapt to the changing demands of their customers and their businesses. Organizing Capacity : Women are good managers. That is why women entrepreneurs know how to put the right people and resources together to accomplish a task or to achieve a goal.  

14. Problems faced by women entrepreneurs Family ties :Women in India are very emotionally attached to their families. They are supposed to attend to all the domestic work, to look after the children and other members of the family. They are over burden with family responsibilities like extra attention to husband, children and in laws, which take away a lots of their time and energy. In such situation, it will be very difficult to concentrate and run the enterprise successfully. Male dominated society : Even though our constitution speaks of equality between sexes, male chauvinism is still the order of the day. Women are not treated equal to men. Their entry to business requires the approval of the head of the family. Entrepreneurship has traditionally been seen as a male preserve. All these put a break in the growth of women entrepreneurs. Lack of education : Women in India are lagging far behind in the field of education. Most of the women (around sixty per cent of total women) are illiterate. Due to lack of proper education, women entrepreneurs remain in dark about the development of new technology, new methods of production, marketing and other governmental support which will encourage them to flourish.

15. Social barriers : The traditions and customs prevailed in Indian societies towards women sometimes stand as an obstacle before them to grow and prosper. Castes and religions dominate with one another and hinders women entrepreneurs too. In rural areas, they face more social barriers. They are always seen with suspicious eyes. Shortage of raw materials : Neither the scarcity of raw materials nor availability of proper and adequate raw materials sounds the death-knell of the enterprises run by women entrepreneurs. Women entrepreneurs really face a tough task in getting the required raw material and other necessary inputs for the enterprises when the prices are very high. Problem of finance : Women entrepreneurs have  to struggle a lot in raising and meeting the financial needs of the business. Bankers, creditors and financial institutes are not coming forward to provide financial assistance to women borrowers on the ground of their less credit worthiness and more chances of business failure. They also face financial problem due to blockage of funds in raw materials, work-in-progress finished goods and non-receipt of payment from customers in time.

16.  Low risk-bearing capacity : Women in India are by nature weak, shy and mild. They cannot bear the amount risk which is essential for running an enterprise. Lack of education, training and financial support from outsides also reduce their ability to bear the risk involved in an enterprises. Limited mobility : Moving alone and asking for a room to stay out in the night for business purposes are still looked upon with suspicious eyes. Sometimes, younger women feel uncomfortable in dealing with men who show extra interest in them than work related aspects. Lack of entrepreneurial aptitude : Lack of entrepreneurial aptitude is a matter of concern for women entrepreneurs. They have no entrepreneurial bent of mind. Even after attending various training programmes on entrepreneur ship women entrepreneurs fail to tide over the risks and troubles that may come up in an organizational working. Limited managerial ability : Women entrepreneurs are not efficient in managerial functions like planning, organizing, controlling, coordinating, staffing, directing, motivating etc. of an enterprise. Therefore, less and limited managerial ability of women has become a problem for them to run the enterprise successfully.

17. Strategies for the development of women entrepreneur VOCATIONAL EDUCATION :The first measure would be to provide education, particularly vocational and technical education to girls. The curriculum should be restructured to include accountancy, management, computer science, small scale industry, entrepreneurial development, etc. ENTERPRENERURIAL MOTIVATION AT SCHOOL LEVE L:The girls at the school level should be inspired to adopt entrepreneurship. Generally, women dream to become job seekers rather than job makers. To motivate the women, a coordinated effort should be made among the educational institutions, government departments, and the business world. ACCESSIBILITY TO INFORMATION :  All possible access to information should be provided for women entrepreneurs. Government agencies, association of women entrepreneurs, NGO’s and universities should assume responsibilities in this regard. SEPARATE PUBLICATION :  Separate publication should be brought out and distributed to women entrepreneurs on subsided rate in order to create awareness and encourage them to avail of the benefits offered to them. Media should be used to give maximum information for promoting the cause of women entrepreneurs. ACCESS TO TECHNOLOGY :  Access to technology is low for women entrepreneurs. Due to lack of finance and information they cannot have proper tools and equipments to improve the products. SIMPLE FORMALITIES :  Efforts should be made to simplify the procedures, formalities, rules and regulation etc. in matters regarding registration and getting assistance from different departments and government agencies. 100% FINANCE :  Banks and financial institutions should offer 100% loans without collateral security to qualified technocrats. Similarly term loans and working capital loans should be sanctioned liberally on different terms 

18. Special schemes for women entrepreneur Seed capital scheme: government provides funds @ 10% to unemployed youths and women.the seed captial provided is 10% to 15% of the total cost of the project. The maximum seed Capital available is 5 lakhs. National equity fund: this scheme is implemented by national bank or state finance corporation.loan is granted for industrial or service oriented business purpose.75% of project cost is is granted by bank towards capital @10% equity loan. Women industires fund scheme: under this scheme women entrepreneurs get 15% seed capital of the total cost of project for starting a new business. T he seed capital money is restricted to rs 1 lakh.the cost of project should not exceed R s 10 lakhs

19. Single window scheme: this scheme is applicable to the project where total expenses are upto 20 lakhs.the loan is to be repaid within the period of 10 years.entrepreneurs share in the project should be 25%. Joint loan scheme: under this scheme,the artisans livinf in the rural areas ,where the populationis upto 5 lakhs get the loan to purchase instruments and working capital.Fnancial assistance is provided 100% upto Rs 50,000 with the minimum rate of interest.loan granted is to be repaid within period of 8 years.

20. Self help groups SHG is a group formed by the community women, which has specific number of members like 15 or 20. In such a group the poorest women would come together for emergency, disaster, social reasons, economic support to each other have ease of conversation, social interaction and economic interaction . Many rural women  are landless laborers and are economically very poor; most of them are illiterates/semi-literates. These women can be organized into self-help groups. The goal of this program is to promote savings- and credit activities, and to promote employment of these women into production units. This will lead to a strong and permanent improvement of their socio-economic conditions in a number of ways

21. Need of self help groups Initiation of savings and credit activities, and promotion of income generating programs in these self-help groups will bring more economic development and independence to these women and their families. Because of the better welfare of these families, more children will be able to attend school instead of being forced into agricultural child labor. The formation of these self-help groups will facilitate discussion of many issues pertaining to their socio-economic, educational and health status. Thus, the formation of this group provides a forum to initiate many participatory activities (including training and awareness camps). This process will also lead to increased confidence in these women, and will help them to gain decision-making status in their society. This will encourage these women to participate and contribute in general social and political matters in their respective villages, including women’s rights.

22. Objectives of self help groups To inculcate the savings and banking habits among members. To secure them from financial, technical and moral strengths. To enable availing of loan for productive purposes To gain economic prosperity through loan/credit. To gain from collective wisdom in organising and managing their own finance and distributing the benefits among themselves. To sensitize women of target area for the need of SHG and its relevance in their empowerment. To create group feeling among women. To enhance the confidence and capabilities of women. To develop collective decision making among women. To encourage habit of saving among women and facilitate the accumulation of their own capital resource base. To motivate women taking up social responsibilities particularly related to women development. It acts as the forum for members to provide space and support to each other.

23. who is a social entrepreneur? Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change . Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps .

24. Examples of social entrepreneurs Aravind Eye Hospital & Aurolab Founded in 1976 by Dr. G. Venkataswamy , Aravind Eye Care System today is the largest and most productive eye care facility in the world. From April 2007 to March 2008, about 2.4 million persons have received outpatient eye care and over 285,000 have undergone eye surgeries at the Aravind Eye Hospitals at Madurai, Theni, Tirunelveli, Coimbatore and Puducherry. Blending traditional hospitality with state-of-the-art ophthalmic care, Aravind offers comprehensive eye care in the most systematic way attracting patients from all around the world.

25. Shri Mahila Griha Udyog Lijjat Papad Shri Mahila Griha Udyog Lijjat Papad is a Women’s organization manufacturing various products from Papad , Khakhra , Appalam , Masala, Vadi , Gehu Atta, Bakery Products, Chapati , SASA Detergent Powder, SASA Detergent Cake ( Tikia ), SASA Nilam Detergent Powder, SASA Liquid Detergent. The organization is wide-spread, with it’s Central Office at Mumbai and it’s 67 Branches and 35 Divisions in different states all over India. The organization started of with a paltry sum of Rs.80 and has achieved sales of over Rs.300 crores with exports itself exceeding Rs.12 crores. Membership has also expanded from an initial number of 7 sisters from one building to over 40,000 sisters throughout India. The success of the organization stems from the efforts of it’s member sisters who have withstood several hardships with unshakable belief in ‘the strength of a woman’. Jaswantiben J amnadas P opat

26. Development of social entrepreneurship in india “Social entrepreneurs are driven by social as well as financial goals whereas nonprofit organisations work purely for social purpose” Social entrepreneurs play the role of change agent in the social sector, by : Adopting a mission to create and sustain social value Recognizing and relentlessly pursuing new opportunities to serve that mission Engaging in a process of continuous innovation,adaptation and learning Acting boldly without being limited by resources currently in hand

27. Importance of social entrepreneurship

28. Non Governmental Organizations (NGOs) In India A Non Governmental Organization (NGO) is any non-profit, voluntary citizens' group which is legally constituted, organized and operated on a local, national or international level. 

29. Activities of ngo’s Create awareness Protect human rights Encourage rehabilitation Gainful employment Combat man made crisis Protect environment

30. Functions of NGOs with respect to Entrepreneurial Scenario Entrepreneurial Development Programme (EDP) Counseling Development of Infrastructure Construction of Housing Facility Supporting Innovation and Pilot Projects Providing Technical Assistance

31. Challenges to ngo’s Need for honest and dedicated persons. Need for transparency to create confidence. A proper personnel policy Protect the interest of the people rather than members Transparent and easy to operate mechanism.

32. CRY Non-profit organization in India that aims to restore children's rights in India. Established in 1979   It was started by  Rippan Kapur It focuses mainly on the 4 basic rights: Survival, Development, Protection Participation It stands for C hild R ights and Y ou Type: Grass root level NGO

33. SEWA It stands for S elf E mployed W omen's A ssociation Headquartered in Ahmedabad, Gujarat, India Type: Intermediate NGO It is an organisation of poor, self-employed women workers who earn a living through their own labour or small businesses. SEWA’s area of concerns are: Member’s Employment Better Income Food and Nutrition Safety and Security Housing Literacy Organizational Strength Self Reliance Established in 1972

34. Entrepreneur development program EDP may be defined as “a programme designed to help an individual in strengthening his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his 1 entrepreneurial role effectively . It is necessary to promote this understanding of motives and their impact on entrepreneurial values and behavior for this purpose.

35. Objectives of edp To enhance quality of entrepreneur To develop human skills To develop communication To develop conceptual skills To familiarize with project formulation To develop leadership skills To familiarize with market situations To instill Ethical values

36. Methods of edp

37. Content and curriculum of edp General introduction to entrepreneurship : The trainees are provided with the general introduction to entrepreneurship qualities , theories,role of entrepreneurs etc. Motivation training : It aims at inducing and increasing the need for achievement among the participants or trainees. Support system and procedure : The training programme enables the ttrainees to know various aspects like institutions providing support to entrepreneurs, incentives and financial help. Fundamentals of project feasibility study : The trainees are provided with guidelines on the effective analysis of feasibility of a particular project.

38. Plant visits : Arranges for plant visits to familiarize the trainees with real business situations. Legal formalities : The entrepreneurs must know all the laws related to business. Conceptual skills Corporate communication Principals and functions of management Leadership skills

39. Factors to be considered in edp’s Objectives of EDP Methods of EDP Selection of trainees Content and curriculum of EDP Infrastructure facilities :Training institutes be well equipped with boarding,lodging,conference rooms, guest speakers etc Support from stakeholders : institutions, government authorities, business organizations Follow up

40. Entrepreneurship development institutions National institute for entrepreneurship and small business development : The NIESBUD was set up in 1983 as an apex institution in the field of entrepreneurship development tp promote support and sustain entrepreneurship and small business through training, education and consultancy services. Small industries development organization : SIDO provides support in the areas of credit,marketing,technology and infrastructure to small industries.it provides economic information services and advises government in policy formulation for the promotion and development of small industries

41. Entrepreneurship development institute of India : It is an autonomous and not for profit institute, set up in 1983,is sponsored by the IDBI bank ltd,ICICI Bank Ltd and SBI.EDI has helped set up twelve state level exclusive entrepreneurshipp development centers and institutes. National Small Industries Corporation : it was established in 1955.it has been working to promote the growth of small scale industries and industry related small scale services in the country. District Industries Centers : the DICs scheme was started on may 8,1978 with a view to provide integrated administrative framework at the district level for promotion of small-scale industries in rural areas.

42. Options available to entrepreneur

43. ancillarisation An  ancillary  unit is defined as an Industrial undertakings having investment in fixed assets, in plant & machinery whether held on ownership or on hire purchase not exceeding Rs . 100 crore  & engaged in ; M anufacturer of parts & components, sub-assemblies, tooling or intermediates & R endering of service or proposing to supply or render not less than 50 % of his production or service to one or more other industrial undertaking for production.

44. Advantages of ancillarisation Minimize investments of setting up of  large units as the required   as the required production can be sourced a lower at rate with same quality through subcontracting from an ancillary unit Ancillary units JITconcept helps the large co.s to bring down the inventory level and saves a lot of money. Sourcing is economical from ancillary units that are normally located near the co. Ancillary units work with the parent co.s in the process & product development

45. Disadvantages of ancillarisation Delay in payments puts ancillary co.s in big trouble. If the parent co. is big then the ancillary co. finds it diffucilt to take any legal action When parent co.s revise the specification ancillary units are some times not given the expected support for adopting the higher technology, not given suficient time to bring changes in the technology to match that of parent co. Multiplication of suppliers makes the ancillary units operate below BEP(Break evn point) as a result these units incur losses because of capacity unutilisation .

46. Business process outsourcing Business process outsourcing (BPO) is the contracting of a specific  business task , such as payroll, human resources (HR) or accounting, to a third-party service provider. Usually , BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain their position in the marketplace . Two categories BPO is often divided into are  back office   outsourcing , which includes internal business functions such as billing or purchasing, and front office outsourcing, which includes customer-related services such as marketing or tech support.

47. Advantages of bpo Speed and efficiencies of outsourced business processes are enhanced Organizations using BPO get access to the latest technology Freedom and flexibility to choose the most relevant services for the company's operations Quick and accurate reporting Save on resources related to staffing and training

48. Disadvantages of bpo P oor services Exploitation of emloyees Employee turnover Problem of sensitive information

49. franchise A franchise is a type of  license  that a party ( franchisee ) acquires to allow them to have access to a business's (the  franchiser ) proprietary knowledge, processes and  trademarks  in order to allow the party to sell a product or provide a service under the business's name. In exchange for gaining the franchise, the franchisee usually pays the franchisor initial start-up and annual  licensing fees .

50. Advantages of franchising to franchisor Franchisor gets royalty from franchisee for the use of rights and resources The franchisor gets goodwill in the local as well as international markets Reduces burden on the franchisor to manage a number of outlets or stores in a number of areas spread across several countries It helps to face global competition with less efforts and cost It enables the franchisor’s country foreign exchange due to Royalties received from foreign countries

51. Advantages to the franchisee This type of contract enables the franchisee to obtain package of rights and resources from a famous franchisor, and as it improves goodwill of franchisee. The franchisee can have access to technology and other resources of the franchisor,which can help to improve efficiency of the franchisee’s firm. The franchisee’s marketing work becomes easier due to the reputation of franchisor. It helps to bring in professionalism in the franchisee’s firm,as the franchisor provides training to the franchisee’s staff

52. Mergers A merger refers to a combination of two or more companies into one company. Due to merger only one company survives and the other company ceases to exist. The merger takes place for a consideration which the acquiring company pays either cash or by offering its shares. Example: Audi is a merger in 1932 of four companies Audi, Wanderer,Horch and DKW.

53. examples

54. Advantages of mergers Research and Development Operational Efficiency Entry in world Markets Economies of Scale Competitive Advantage

55. Acquisitions An acquisition is a  corporate action  in which a company  buys  most, if not all, of another firm's ownership stakes to assume control of it . An acquisition occurs when a buying company obtains more than 50% ownership in a  target company . As part of the exchange, the acquiring company often purchases the target company's stock and other assets, which allows the acquiring company to make decisions regarding the newly acquired assets without the approval of the target company’s shareholders . Acquisitions can be paid for in cash, in the acquiring company's stock or a combination of both.