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Enterprise Framework PPT Slides
Enterprise Framework PPT Slides
Enterprise Development
and Entrepreneurship
A Resource Pack for Bioscience
Lecturers and students
By Zoë Dann and Jeff Gaskell
(Version June 06)
Funded by the Centre for Bioscience
Study Pack Guide
Self Awareness
Idea/Concept
Generation
Idea/Concept
Selection Proposal
Intellectual The
Property management
Rights team
The pitch
A Framework for Enterprise Development and Entrepreneurship 7
Study pack content
Self awareness
Idea/Concept
Generation
Idea/Concept
selection Proposal
• Pharmaceutical
• Biotech
• Medical Devices and Diagnostics
• Industrial
• Agri
• Non-Food crop and
• Marine Biotechnology
• ‘Traditional’ Biotechnology
– Conventional techniques used for centuries to
produce beer, wine, cheese, bread and in the
treatment of sewage
• ‘New’ Biotechnology
– Genetic modification by recombinant DNA and
cell fusion techniques and the modern
development of traditional biotechnological
processes. New Biotechnology revolution
began in 1970s, 1980s
Intrapreneurship is entrepreneurship by
employees in existing organisations
Unlimited liability
• Sole traders
• Partnerships (can also have Ltd. status)
Co-operative
• Owned and controlled by members, incorporated
under the Industrial and Provident Societies Act
• Regulated by FSA
2. Early stage
3. Late stage
Technology Transfer
Entrepreneurial Traits
and Motivation
Learning outcomes
By the end of this session students should
be able to:
• Recognise the typical aptitudes and motivations
of entrepreneurs and difficulty in evaluating them
Self awareness
Idea/Concept
Generation
Idea/Concept
selection Proposal
Rewards of Entrepreneurship
Profit Freedom
Independence
Financial gain
proportionate to Power to make own Escape from
personal achievement decisions undesirable situation
Personal Personal
Satisfaction Fulfilment
Enjoyment of a Contribution to the
satisfying way of life community
Personal
Attributes
• Innovation
• Determined
• External focus Source: Stokes, 2002
• Independence • Inspiration
• Interest • Involvement
• Insight • Instigation
• Ideas • Insistence
• Invention • I - will
Step I Characteristic
A Recognition Independence
Insight
B Formulation Interest
Ideas
Invention
C Initiation Inspiration
Involvement
D Development Instigation
and Growth Insistence
I - will
A Framework for Enterprise Development and Entrepreneurship 73
Mapping the ten ‘I’ characteristics
Plotting overall average scores for a sample of 20 successful
entrepreneurs. Indicated by
1 Independence 1
2 Interest 10 2
3 Insight
4 Ideas 9 3
5 Invention 0
6 Inspiration 8 4
7 Involvement
8 Instigation 7 5
6
9 Insistence
10 I will
A Framework for Enterprise Development and Entrepreneurship 74
Criticism of psychometric tests
Big Bang
Major Strategy
Opportunistic
Shift eg Switch To Add New New Products
E.Business Brands Or Styles In Existing
To Range Markets
Suppliers
Supplier
Buying
Power
New
Potential Entrant
Industry Substitute
Threat
Substitutes
Entrants Threat Rivalry
Buyer
Buying
Power
Buyers
Environmental scanning
– PESTEL analysis
What is environmental scanning?
• The ability to identify and interpret strong and
weak signals from the trading environment
• An essential skill…
– When looking for new enterprise
opportunities
– To ensure the survival of established
businesses
Environment
Infrastructure E.g. Tsunami, green products
E.g. More roads, cheap flights
broadband
Demographics
Social Business E.g. aging population
E.g. Discerning customer,
greater disposable income
Technology
Political
E.g. Internet,
E.g. Employment law Economic ‘genetic engineering’
e.g. Low Interest rates, Taxes
A Framework for Enterprise Development and Entrepreneurship 97
The PESTEL framework
• Scanning the trading environment can be used to
categorise and measure the shifting forces that
continually act on all traders
Political forces
Economic forces
Social forces
Technological forces
Environmental forces
Legal and regulatory forces
A Framework for Enterprise Development and Entrepreneurship 98
The PESTEL framework
The PESTEL forces act and influence at a number
of different geographical levels:
• Employment legislation
• Foreign trade regulation
• Government political orientation and stability
• Government policy to creating new knowledge
• Lobbying mechanisms
• Monopoly policy
• Taxation policy
• Business cycles
• Capital availability
• Credit control
• Commodity and raw material cost & availability
• Government economic policy
• Energy costs and supply continuity
• Exchange rates
• Interest rates
• Unemployment and workforce skill levels
Creative swiping
Creative swiping
• A technique advocated by Tom Peters for stealing
good (unprotected) ideas from competitors. The
accumulation of lots of these ideas creating a
uniqueness and differentiation for the ‘stealing’
enterprise
• In his words:
“Uniqueness… comes from an accumulation of thousands
of tiny enhancements”
Typically:
• 40% get through the initial screening process
• 18% are supported through a subsequent
selection procedure by in house ‘champions and
• 4% may be realised commercially
• Market factors
– Well identified need for the product
– Reachable, receptive customers
– Significant value created by product or service or
customer
– Long life of product
– Emerging industry not highly competitive
– Significant market size
– Significant growth rate
• Competitive advantage
– Low cost producer?
– Moderate to strong control over prices costs and
channels of supply
– Barriers to entry i.e.. Factors that prevent new entrants
into the market
– Have or can develop proprietary information or
regulatory protection
– Have or can develop, a good response/lead time
advantage
– Proprietary or exclusive legal or contractual advantage
– Contacts and networks
• Economics
– Good return on investment
– Low investment requirements
– Time requirement to break even or to reach positive
• Management capability
– Management team with diverse skills and proven
experience
• Fatal flaws
– No circumstance or development that could, in and of
itself, make the business unsuccessful
Self awareness
Idea/Concept
Generation
Idea/Concept
selection Proposal
Source: www.ecbp.org/glossary.htm
Milestones
Gantt charts
Responsibility charts
Team meetings
What are milestones?
Source: http://www.wiley.co.uk/
A Framework for Enterprise Development and Entrepreneurship 135
What is a Gantt chart?
Source: www.smartdraw.com/tutorials/gantt/index.htm
A Framework for Enterprise Development and Entrepreneurship 137
What is a responsibility chart?
Source: http://web.mit.edu
Source: http://web.mit.edu
Source: http://web.mit.edu/
Concept
c r a
selection
Technical
c c r
Feasibility
Patent Search
r c a
a r a
etc
Source: www.mindtools.com/CommSkll/RunningMeetings.htm
Intellectual The
Property management
Rights team
The pitch
A Framework for Enterprise Development and Entrepreneurship 150
What is IPR and why is it
important?
Why consider Intellectual
Property Rights (IPR)?
• Bioscience entrepreneurs need to consider what
intellectual property can be protected and where,
as soon as they begin to develop their business
idea and considering their business and
marketing strategy
• IPR offer significant competitive advantage and in
the context of this learning pack includes:
– Patent registration to protect the invented product or
process
– Trade mark registration to protect the identifying
product or process marks
• Prior art
– Published documents anywhere in the world and
common general knowledge in the field of technology of
invention before the priority date of patent application
• Priority date
– Date an invention’s validity is assessed – normally first
time an application for the invention is filed anywhere in
the world. In US date of actual invention is used
• Person skilled in the art (PSA)
– A skilled technician or worker in a field of knowledge
who is aware of all common lab/workshop techniques
and general knowledge in the field
The specification
The detail of the invention must be very specific
and comprehensive. Including descriptions of:
• All the features that could be incorporated.
Surplus ones can be deleted from latter stages of
application procedure
• Advantages of the invention over previous
products or processes
• How the invention can be put into practice.
• Written description can be supplemented with
drawings
A Framework for Enterprise Development and Entrepreneurship 169
Patent application procedure 3
• Document identification
• Domestic filing data
• Priority data, i.e. the original country filing details
• Technical and classification data including, title, search
report i.e.. Prior art and abstract written by the applicant
giving a full description of the invention
• Identification of the parties. Applicant, inventor, patent
agent. Address information.
• Designated countries. This usually applies to European
Patent Convention or Patent Cooperation Treaty
specifications
• Drawing
Research Phase
• Confidentiality and the law of trade of secrets to
safe guard:
– Research direction and outcomes
– Agreements with research partners
– Confidentiality within the enterprise institution
• Patent law considerations essential with respect
to:
– Publications
– Participation in trade fairs
Research breakthrough
– Outcomes must be kept confidential until patent
application is filed
– A patent filing strategy needs to be adopted
– Associated developments may be protected by industrial
designs and copyright
Development phase
– An IPR licensing strategy is required
– Trade marks may need to be developed
– International patent strategy is required
– Patents may be required to improve original idea
– Cross licensing
Marketing phase
– Monitoring marketplace for infringement and
enforcement
– Continuing evaluation of effective means of
using IPR
– Continuing issues of licensing and valuation
Source: www.dfat.gov.au/publications/biotech/downloads/Module01.pdf
Intellectual The
Property management
Rights team
Market and
Marketing Operational
competitor
strategy strategy
analysis
The pitch
A Framework for Enterprise Development and Entrepreneurship 188
Why look at markets?
• Geographic segments:
– Regionalising to accommodate local tastes
• Demographic segments:
– What consumer characteristics are? (e.g. age,
gender, income)
• Psychographics segments:
– Why do consumers buy? (e.g. lifestyle, social class)
• Behavioral segments:
– Usage occasions
• Kodak single-use cameras from underwater
use to baby pictures and weddings
– Usage Rates
• 80-20 rule, e.g.beer drinkers
– Loyalty Status
• Hard-core loyals: A A A A A A
• Switchers: A B E A D B
• Variety Seekers A B C B A C B
• Against competition
e.g. ‘Pepsi Challenge’ in Pepsi vs Coca Cola
• Position with the competition
e.g. Dixon’s own brand for electronic equipment
• Grab an unoccupied position i.e.market niche
e.g. SMART cars
• Using your endowment
e.g. Number one position - Microsoft
3. Renovation
Saturation
Maturity
2. Stagnation
Growth
Development
1. Decline
Sales Trend Line
Revenue
Stream
Phase 1 2 3 4 5
Suppliers
Supplier
Buying
Power
New
Potential Entrant
Industry Substitute
Threat
Substitutes
Entrants Threat Rivalry
Buyer
Buying
Power
Buyers
Firm A
Firm B
Firm C
Own Firm
• Secondary
– Published information sources available from
libraries in hard copy, disc and more frequently
on-line
– They will include information on markets and
competitors
A Framework for Enterprise Development and Entrepreneurship 216
Planning market research
• Define – What information you need to know
• Carry out – Desk (secondary) research using library
sources
• Biotechnology handbook
– (available from libraries)
• Bioindustry Association website
– http://www.bioindustry.org/
• Patent databases
World Intellectual Property Association
http://www.wipo.int/ipdl/en/resources/links.jsp
• Biotechnology Industry portals and networks
– http://www.europabio.org/
• On line biotechnology publications for business
news
A Framework for Enterprise Development and Entrepreneurship 222
Sources of secondary market related
information: Europe and Worldwide
• Benn’s Media
• Clover Newspaper Index
• Wilings Press Guide
• McCarthy Cards: Indexing national and
regional newspapers
• Trade Associations
• Chambers of Commerce
• Dun and Bradstreet
Intellectual The
Property management
Rights team
The pitch
A Framework for Enterprise Development and Entrepreneurship 233
What is strategy?
What is strategy?
Preparing a road-map of
how to get to where you want to be
Top
Corporate Down
• Cost leadership
– Strives to be the lowest cost compared to its
competitors in the industry e.g. Netto
• Differentiation
– Strives to build customer loyalty by making
products/services that are different from the
competition
• Focus
– Aims to fulfil needs. Wants or interest of a
clearly defined group of people. Niche.
2. Differentiation Strategy
Involves creating an offering
Cost
Differentiation perceived as unique.
Leadership Providing superior value and
Strategy
Market
Internal/Organic Growth
R&D: new and improved
products Acquisition Growth
Exporting and licensing
Expanding capacity: new Outright Purchase
premises, equipment Joint Ventures
Strategic Alliances
Improving efficiency:
making processes faster,
cheaper and more accurate
Advantages
• No financial risk to academic partner
• Low financial return to academic partner
• Can allow commercialisation to take place with different
levels of involvement of academic partner (though most
likely to be limited involvement
Disadvantages
• Unlikely to have control over the commercialisation of the
technology
Advantages
• Can allow researcher to continue academic research or
explore other routes to commercialisation
• Can produce a royalty income stream
• License can be assigned exclusively to one licensee or to
many licensees
Disadvantages
• Requires specialist expensive IPR legislation expertise.
Terms and conditions of the licensing contract are crucial
• Exclusive:
– This type of license gives the licensee exclusive rights to
exploit the technology (including exclusion of the
licensor)
• Non-exclusive:
– Here, the licensor can license the technology to more
than one licensee
• Sole:
– Here, there is only one licensee, but the licensor also
retains the use of the technology
Advantages
• Can be lucrative if the potential of idea has been thoroughly
researched and identified
• Academic researchers could still operate under licence
agreement with new owner
Disadvantages
• Academic originators have no control over the future
commercialisation of IP
Source: BBSRC, 2006
Advantages
• Little/no financial risk to academic partner
• Can allow commercialisation to take place with different
levels of involvement of academic partner
Disadvantages
• Modest financial return to academic partners
• Limited control over the commercialisation of the
technology
Advantages
• The skill sets of alliance partners are used to mutual
advantage, partners concentrate on their strengths
Disadvantages
• Significant effort involved in the search for a alliance
partner
• Requires a great deal of trust between alliance partners
Advantages
• Can offer the most financial and career
development rewards
• The academic founder(s) have more control over
the exploitation of the technology than via other
exploitation route, depending on role chosen in
the company
Research partnerships:
Government/universities/
companies
Early stage
Core
Imprecisely licensing Technology
Defined Status
Fluid Well
Source: Ithaka Life Sciences, 2004 Developed
A Framework for Enterprise Development and Entrepreneurship 255
SWOT analysis
What is SWOT analysis?
• A SWOT analysis is a simple framework aimed at
analysing the strengths and weaknesses of the
organisation in relation to the opportunities and
threats in the present and future environment
• Policies:
– Need to be developed to meet and exceed statutory
requirements
• Planning:
– At strategic and operational level, clarifying purpose and
involvement
• Product/Service:
– Design or for purpose and eventual disposal.
• Process:
– Risk associated with all production processes
• Premises:
– Location, size, lease stability suitability
• People:
– Skill training, creation of apt organisational culture, risk
reduction and supervision
• Protection:
– People premise, materials, intellectual property, data
• Procedures:
– Are they apt for organisation, monitored, measured and
evaluated
• Purchasing:
– Continuity of supply, quality standards of suppliers,
manual handling
• Performance:
– Benchmarked against others in sector, measurement of
risk
Intellectual The
Property management
Rights team
Market and
Marketing Operational
competitor
strategy strategy
analysis
The pitch
A Framework for Enterprise Development and Entrepreneurship 270
The marketing mix
The 7Ps
The marketing mix: 7 ‘P’s
Product
The traditional Price
mix elements
Place
Promotion
People
Additional service
organisation specific Process
mix elements
Physical
Comprising of:
Cost of
sales
Sales
Operating
Gross costs
profit
Net profit
Advertising
Personal
Selling
Public
Increases Relations
in
Sales Promotions
Time After
Investment
A Framework for Enterprise Development and Entrepreneurship 281
People
9% Tax problems
Intellectual The
Property management
Rights team
Market and
Marketing Operational
competitor
strategy strategy
analysis
The pitch
A Framework for Enterprise Development and Entrepreneurship 294
Operational planning
Infrastructure
Support Activities
Financial
Human Resources
Management
Primary Activities
Sales
Inbound Outbound
Process & Aftercare
logistics Logistics
Marketing
Source: Porter,1985
Porter’s value chain:
Primary activities
The primary business activities are:
• Inbound logistics: Including purchasing systems, raw
material quality and continuity of supply contingency
• Process: Including administration systems, plant and
equipment maintenance, quality assurance
• Outbound Logistics: Including ordering mechanisms,
customer delivery
• Aftercare: Including complaints and warranty
management
• Sales and Marketing: Including marketing and
communications strategies, sales force management, CRM,
intelligence gathering
Infrastructure
Sales
Inbound Outbound
Process & Aftercare
logistics Logistics
Marketing
Porter’s value chain 2
Infrastructure
Financial
Sales
Inbound Outbound
Process & Aftercare
logistics Logistics
Marketing
Porter’s value chain 3
Infrastructure
Financial
Human Resources
Sales
Inbound Outbound
Process & Aftercare
logistics Logistics
Marketing
Porter’s value chain 4
Infrastructure
Financial
Human Resources
Management
Sales
Inbound Outbound
Process & Aftercare
logistics Logistics
Marketing
Outsourcing
Intellectual The
Property management
Rights team
Market and
Marketing Operational
competitor
strategy strategy
analysis
The pitch
A Framework for Enterprise Development and Entrepreneurship 322
The importance of a strong
management team
Source:
• Board of directors
– Usually five or six members
– Elected by stock holders
– Set and approve management policies
– Consider results on operating results
– Declare dividends
– Brings supplementary knowledge
• Non-executive director
Crisis Growth
Stage Of Organisation
Of Through
Control Coordination
Crisis Growth
Of Through
Autonomy Delegation
Crisis
Growth
Of
Through
Leadership
Direction
Growth
Through
Creativity
Age Of Organisation
Small
A Framework for Enterprise Development and Entrepreneurship 330
Typical CEO start-up package
• Professional advisors
• Consultants
• Advisory board
– Can be an alternative to a board of directors
– Qualified outsiders are asked to serve on the
council
Intellectual The
Property management
Rights team
Market and
Marketing Operational
competitor
strategy strategy
analysis
The pitch
A Framework for Enterprise Development and Entrepreneurship 337
What investors want
Formation
Initial Seed 1st VC
finance finance round
Founders,
Business angels; University
family &
Challenge Funds; specialist
friends
Venture capitalists
Costing start up
Cash flow forecast
Profit and loss forecast
Balance sheet forecast
Break even point
The financial forecast documents
What is it for?
How do we construct one?
What are cash flows for? 1
• Premises requirements
• Operational needs: Tools, equipment,
staffing requirements, marketing, etc
• Administration needs: ICT systems
• Intangible needs: Professional fees etc
• Working capital: Cash in the bank
Cost of Sales
•Raw materials 50,000
•Sub Contract Costs 120,000
170,000
Gross Profit (Sales less Cost of Sales) 330,000
Overheads
•Employment Costs 150,000
•Depreciation 20,000
•Other Operating Costs 80,000
250,000
Profit before interest and tax 80,000
Tax 15,000
Dividends 5,000
Net profit or retained earnings 50,000
Goodwill 5,000
140,000
Stock 10,000
Debtors 20,000
35,000
Loans 23,000
Creditors 7,000
Tax 2,000
32,000
Shareholders 30,000
Reserves 13,000
Income
= Fixed Costs
Selling Price – Unit Variable Costs
Intellectual The
Property management
Rights team
Market and
Marketing Operational
competitor
strategy strategy
analysis
The pitch
A Framework for Enterprise Development and Entrepreneurship 395
The ‘Pitch’ – What is it?