“According to Timmon’s framework there are three components for a successful new business: the opportunity, the entrepreneur (and the management team, if it’s a high-potential venture), and the resources needed to start the company and make it grow.” (Bygrave and Zacharakis, 2011).
Using relevant literature, critically analyse this statement which means at least giving justified arguments which both agree and disagree with the concept in the definition above.
Individual Written Presentation
Develop an effective business plan for launching a new product and obtaining financial and managerial support from potential backers. Prepare ten power point slides to explain the key issues that you would highlight and emphasise in a presentation of your business concepts including the questions that you would expect from potential investors and your considered answers to them.
Entrepreneurship is a significant determinant of the social and economic development of the nation. It positively benefits the social and material welfare of the communities, individuals and country (Allahyary and Meigounpoory, 2013). The benefits of entrepreneurship may include, economic growth of the country, motivation and job satisfaction among employees that leads to enhance level of productivity, creating opportunities for employment which in turn will increase the standard of living of the people of its country. As per the GEM (Global Entrepreneurship Monitor), there are two kinds of entrepreneurship namely necessity and opportunity based and both are connected with each other.
According to William Bygrave and Andrew Zacharakis, entrepreneurship is the spirit of free venture as it signifies the beginning of new business that provides vitality to the market economy. As per the Jeffery Timmons framework, “there are three major contributors of a successful business, namely, opportunity, the entrepreneur and the resources that are required to start and expand the company”. In this report, this statement will be critically analyzed with the help of available literature. This report brings together both the positive and negative argument regarding the statement. This report begins with the discussion on the Timmons framework to get an insight of the details of his framework as it is crucial to be able to appraise it accurately. After the report will be concluded, then a business plan will also be developed to seek financial and managerial support for the launch of a new product.
William Bygrave and Andrew Zacharakis define an entrepreneur “as an individual who identifies an opportunity and create a team/organization to pursue the identified opportunity”. As per them, men who belong 25 to 34 years of age group are actively engaged in entrepreneurial activities than women (Altman and Zacharakis, 2003). A person who has strong internal locus of control and is a risk taker and posses managerial skills are said to have entrepreneurial qualities. William Bygrave and Andrew Zacharakis used the Timmons framework and identified three crucial factors which contribute towards the success of the business. They are opportunity, entrepreneur/the management team and resources. Now, we will discuss each of these three factors in detail.
According to William Bygrave and Andrew Zacharakis, there are many misconceptions regarding new ventures. One of them being, that you need a unique idea to start a business which is not true. Instead, Bygrave and Zacharakis argue that an individual just need to identify the opportunity, develop a business idea revolving around the identified opportunity and meticulously implement that idea and then create successful business. Once an individual recognizes the opportunity (it must be attractive) then he need to assess the external environment and identify an appropriate time to launch the business to run the business successfully (Brem, 2011). Time is a crucial deciding factor. The next crucial factor is to gauge the growth potential and capital requirement to execute the idea and the durability of the business idea.
An entrepreneur is the only vibrant force that put together all the components of the entrepreneurial process. In order to start a new venture, identification of business opportunity and idea generation is not enough (Zeng, Bu and Su, 2011). An individual need to identify the whether he possess the required management and entrepreneurial skills or not. To be able to start and sustain a new business, an individual needs to be creative, growth oriented and innovative. He must possess the confidence and knowledge to make use of the business idea effectively and turn them into useful goods and services. He must possess the ability to take risks to be able to generate profits from their business idea (Ko and Liu, 2015). He needs to put in a lot of efforts and engage at all levels of the business right from identifying the target market, carrying out the market research and making forecast about the future market trends, assessing the availability of various technology and selecting the best suitable technology for their business. They are the ones who establish a vision and create a team of talented people and inspire them to run the organization and work towards achieving the vision of the company (Park and Krishnan, 2010). As per the Timmons framework, creating an effective team is vital aspect of the entrepreneurial process. The entrepreneur needs to strategically put together a competent and experienced management team who can look after all the day to day operations of the business and skilled enough to tackle any uncertain event. This team will drive the company towards the path of expansion and success.
When an individual plans to start a new venture, he must also appraise various resources that will be required to set up and run the business. A start up is always uncertain of its future, thus an entrepreneur tries to keep the initial overhead costs as low as possible and tries to improve the productivity while keeping a minimum ownership of capital assets to keep the initial invest low and grow their business (Kuratko, 2011). There are many resources required such as funds, land, labor, technologies etc.
Thus, after discussing all the three factors of Timmons Model, it can be said that this model reflects that entrepreneurship is a dynamic procedure. It starts when an entrepreneur identifies an opportunity which decides the size and type of team required and other resources requirement such as funds, technologies and labor to make to most out of the identified opportunity (Whitehead, 2011). As per Bygrave and Zacharakis, there needs to be a perfect balance between these three factors in order to make the business a success. They further stated that this framework can be used to effectively assess the prospective opportunity by identifying the size, structure and demand of the market, and the margin breakdown of the new venture.
According to Minniti, the Timmons model of entrepreneurship offers a flowing boundary to the procedure of entrepreneurship. The model forms the foundation of the process in the entrepreneur’s capability to identify opportunities, acquire the resources and develop an efficient management team. As per Minniti, the Timmons model provides a holistic view of the process of entrepreneurship. It highlights the how the three factors are interrelated for the success of the business. Any changes in any one of the three factors will affect the other two factors directly. For instance, if an entrepreneur is not able to scout for required resources than mere identification of opportunity will not lead the business towards success (Zarei, Nasseri and Tajeddin, 2011). Minniti also emphasizes that the model illustrates the ability to balance the three factors by the entrepreneur. He further states, that there is risk when the entrepreneurs is not able to maintain a balance between all three factors.
According to Bygrave and Zacharakis, there is another important element that has been highlighted in the Timmons model, i.e. the significant role of creativity, communication and leadership (Bygrave and Zacharakis, 2011). According to them, the model illustrates that the leadership quality of the entrepreneur is crucial in the expansion of the entrepreneurial process. The model reflects the importance of the responsibility that the leader has, i.e. to effectively balance the three components of the entrepreneurship process and create a perfect fit between these components.
As per Smith, Mathews & Schenkel, the leader is also responsible for the formulation of an effective vision and communicating this visualization to the entire team or organization to be able to achieve its goals. If the vision is not clear to the team or of there is ambiguity in the understanding of the vision due to ineffective communication of the vision, then the success of the new venture is doubtful and it may instead create other problems within the team and the company (Scally, 2015). According to them, the entrepreneur shoulders the responsibility of motivating the team and creating an efficient working environment and he needs to be creatively handling all this. He needs to continuously improve and experiment with the process to create the best fit. According to Minniti, the entrepreneurship model of Timmons can be observed as triangle that consists of opportunity, resources and the management team with the entrepreneur footing outside the triangle and attempting to create equilibrium between these factors.
According to researchers, the Timmons Model of entrepreneurial process is normative in nature. The three components of the model forms the basis and the entrepreneur needs to maintain a balance between these factors by using his creativity, leadership and effective communication in the uncertain external environment (Wahl and Prause, 2013). However, according to the researchers, there are many factors that can lead to the failure of the startup company. Few of these factors are external in nature and cannot be controlled by the entrepreneur and few are in control of the entrepreneurs as they are internal in nature. Few of the factors are the inability of the founder to instill trust among people about his business idea and therefore not able to persuade people to be a member of his management team (Tracey, Phillips and Jarvis, 2011). Other factors include unoriginal business idea, or choosing a very narrow market segment that is already saturated. Other factors that may impede the success of the new venture can be the inflexibility of the founder in his strategies. When a venture is in the initial phase it is crucial for the entrepreneur to incorporate flexibility in all its operation to expand the business and make it a success. The new venture faces the risk of failure even when the company uses up its capital rapidly resulting in burn out. Because of this, the firm requires additional sources of fund which may be very risky at the initial stage of any new start up (Zhou and Rosini, 2015). Research’s also suggests that when the investors of the company managed poorly, it might lead the company to fall apart because although the investors are knowledgeable, they should not be permitted to take operational decision because only an entrepreneur can take appropriate decision to achieve its vision (Technology Entrepreneurship and Policy: In Memory of Bruce A. Kirchhoff, 2011). That is why many researchers have identified the core competencies that an entrepreneur must have in order to balance all three factors of Timmons model of entrepreneurship process. Few of the traits that are required by the entrepreneurs are, good interpersonal skills to build social relations, ambitious, risk taker, focused, creative and must poses the ability to influence and motivate its team to achieve the organizational goals. He must be able to generate profits from his idea.
Thus, after the discussion about entrepreneurship and Timmons model, it can be concluded that entrepreneurship is a process that transform ideas into a new business opportunity which has the ability to generate profit. The process can be uncertain. Jeffry Timmons provided a theoretical framework to define the critical factors which lead to the success of the new venture. His model has been appraised by many scholars and researchers as discussed. The model places great emphasis on the responsibility of the entrepreneur as he needs various skills to maintain a balance between three components of success, namely opportunity, resource and team to make the new business a success. The entrepreneur needs to have the potential to work very hard to make the business a success. In order to create a best fit between the factors of Timmons model of entrepreneurship process, the founder needs to communicate the vision effectively to his team members. He must be able to convince experienced people regarding his business idea that it has the potential to generate profit to create a team of experienced and talented people. Timmons model has focused on the role of leadership and coordination in the process. The model provides a systematic tool to understand and analyze the process of entrepreneurship.
Dental Care toothpaste brand is an international customer products company. Company paying attention on the manufacture, distributors and stipulation of household, health care and personal goods, like toothpaste, toothbrushes etc. The business is ideally located for a toothbrush brand, and this company wants to launch there toothpaste in UK market and want their customer to try their new product. The company wants to build their market image in UK market while launching their products.
Vision- The company vision is to keep their customer happy while taking good care of their teeth. The manager in oral health care’s, and carries fit teeth and fresh dazzling smiles to family and persons (Bhalerao and Kamble, 2015).
Mission- The mission of the company is to fulfill their customers’ wants and requirements and to be trust market leaders with proficiency in oral health care contribution superiority, innovation etc.
Goal 1: preserve stability of consumer relationships throughout the exchange by:
Goal 2: preserve market share and sale throughout modify of possession then produce market share to 40% in 18 months. The strategy to accomplish this goal is:
Goal 3: produce a before tax net border of 20% for the next two financial years by:
The main action of the company is the process of the Dental care toothpaste. Business behavior comprises such as purchase, accumulate, and organize, selling and helping our products to our appreciated consumers. There is numeral of toothpaste which business wants to launch such as Medicated toothpaste its medical toothpaste which helps the customers while protecting them from fluoride (Bhalerao and Kamble, 2015).
The mission of the company is to fulfill their customers’ wants and requirements and to be trust market leaders with proficiency in oral health care contribution superiority, innovation etc (Churchley and Schemehorn, 2013). While the amount of toothpastes on the marketplace keeps rising, choose toothpaste doesn't have to be overpowering or puzzling (Bhalerao and Kamble, 2015). By checking the element and making convinced the toothpaste address your exacting requirements, you can uphold a good-looking, fit smile for years to approach
Figure 1: Ownership Structure
Element of Dental care Legal are appreciated as strategic business followers and essential members of the organization team (Ndubisi and Matanda, 2011). Dental care Legal recommends knowledge and opinion in the global business field and in extensive fields of department areas:
Toothpaste is a necessary product customers cannot do not including. For more recognized brands, advertising toothpaste products is quite simple (Bhalerao and Kamble, 2015). On the other hand, if the company desire to launch new toothpaste into the marketplace or desire to enlarge sales of a comparatively new product, then the company must assume some precise but strategic promotion (Marsden, 2001). There are numerous method and gear that can assist company to market efficiently, but the company has to focus in their policy and appraises how the advertising initiative will improve the reliability for their brand and pressure potential customers:
Product Differentiation - The toothpaste market has numerous comparable rival products, and the company have to brand them in such a technique that it position out (Bhalerao and Kamble, 2015). Importantly show company logo and name on the wrapping to increase brand consciousness and transaction.
Work in partnership with Dental Care specialist - Toothpastes are measured health care goods that protector the teeth next to bacteria and other damaging bacteria. Having dentist’sadvice the company toothpaste recovers their brand appreciation (Kumar and Ghodeswar, 2015).
Promotion and Advertising - Depending on their financial plan, company can influence several produce and electronic medium conduit to market their toothpaste goods efficiently. Products ads, which must emphasize the top features of thee toothpaste to magnetizeu tmost concentration, can be positioned with screen medium (Krstic and Becic, 2011).
Geographic area is done on the origin of area, population aspect, urban, or climactic circumstances. Dental Care Company presently does business in excess of countries around the worldwide (Bhalerao and Kamble, 2015). Just about 75% of their sales come from worldwide process, so following in countries exterior of their zone is tremendously imperative (Fraj and Martinez, 2006). They do not advertise the similar products in each nation. For example, in the country they are presently advertising sixteen dissimilar kind of toothpaste; whereas now the company wants to launch their product in UK market, and promoting different range of products. Dental care is very dedicated to their international product, and doesgeneralstudy in arrange to advertise the right products in the UK market and see the response of their customers while using their product (Churchley and Schemehorn, 2013).
Dental Care Company takes a taste out of stain (Bhalerao and Kamble, 2015). The company needs to be a top creator and dealer of toothpaste products in UK market. Competitors of this toothpaste brand can be Colgate, P&G etc. With a vision to promote their oral goods to their target marketplace, the company has been capable to utilizea variety of marketing strategies approach. In line with over the line promotions, the company use TV, radio and paper poster and many more. As well, the company also endorses their goods in well-known magazines and internet poster ads (Bhalerao and Kamble, 2015).
When a company launches a new product in the market then they have to strategize many factors before launching that product. The company has to look in all the matters like costing of the product the initial start to the final packaging of the product then they have to fix the price of the product then the company need to decide and approach their target market accordingly (Leopold, and Laing, 2012).
Whenever a company launches their product they have to look into the costing and pricing of the product so that none of them exceeds and create problem for both the company and also for the consumers. As this company is launching their new product in the market with a little variety i.e. this toothpaste is a medicated one and has been approved by the doctors so the company has to look more keen while making and packaging the whole product and then they decides the price of the product. Toothpaste is one of those product which is been bought by everyone so the company have to fix the price accordingly (Nieuwoudt, 2015).
After fixing the costing and pricing then the company have to look into the sales. For that the company needs to make a marketing plan with the help of that they have to reach to their customers. The company will have to project their products in such a way that their sales will increase and their product will also be successful (Feng, and Papatla, 2012).
For making marketing plan the company have go through the market research and marketing mix in one of that tool which will help in making the marketing plan for launching the product.
The 4 P’s of marketing mix are-
Product- As the product is medicated toothpaste the company has to show the medicated value and benefits the customers will be getting after using that tooth paste.
Promotion- When the company will be promoting the product then they will have to promote in such a way specially the benefits the customers will gain after using the products.
Place- The place of the promotion should be in such a place that all people can reach that place. As tooth paste is one of those products which will be use by each and every category pf people.
Price- Though the product is a medicated one then also the price need to reasonable so that the price can be within everyone’s reach.
So, with the help of the marketing mix the company can plan that how they will be launch their product so that they can easily reach to their customers and also be one of the successful running product like the other products of that company.
In the business operation section all the operation sections be it human resource, operations management or the service everything can be known. Both the internal and the external operation of a company come under the business operation.
In the operational section the all the operations of the company can be seen like the making of the product and how the supply chain of that company works which helps to reach the products to the customers without any problem and delay. Working of the machines is also under the operational section of the company (Shen, and Shum, 2012).
Service provided by the company need to be the best or else it will be a very bad impact for the company and it will also ruin the good name of the company in the market. The company will have to keep in their notice that there is always demand of their product and along with that the company will also have to keep on supplying their products to the retailers and dealers who are selling their products to their customers. So, the company has to full details of their products and also need to take the feedbacks from their retailers about their product and if there is any lack the company have to overcome those (Cornelissen, and Cienki, 2012).
In a company the personnel section is one the important section. The personnel section looks after all the demands of their employees working in their organization to see that whether they are having any problems or not. As if the employees are not comfortable in the organization then the end result will reflect on the product and this will not at all acceptable by the company. Along with that the personnel section looks after that the workers are working correctly or not and also their salary and wages (Tariq, and Wahid, 2011).
The whole operations of the business can be explained with the help of Timmons model of the business process. The company will be able to understand their resources and also the opportunities which they will be getting from the market and according to that with the help of the resources present in the organization and with their teams of the employee the company can fill the gap which was there (Zikmund, and Griffin, 2012).
In the financial management of the company the main section is the revenue, cost and expenditure the company and also the products which are there in the market. The financial section of the company helps in making their budget then all the revenues and expenditures can be decided.
The revenues and the expenditures of the company will help in the customers and also the employees to understand the financial positions of the company and after making the yearly budget plan the company segregate that how much they need to spend on their product and according to that the company will also have to earn the revenue and profit from the market. As the other products of this company are already successful in the market so the company will also have to make their financial plan accordingly. As the company is already in the market and now they are launching a medicated tooth paste in the market so the budget of their plan need to be around 1000 pound in which they will have to over up all their expenses (Kaplan, and Haenlein, 2011).
In the financial projections the company will have to project their financial plans in such a way that the company can make a good profit from the market after they launch their product into the market so that their these product also becomes successful like their other products in the market.
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