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Exam 1 Study Guide

by: Dylan Wood

Exam 1 Study Guide MAN 337

Dylan Wood

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Review of readings and in class notes
Entrepreneurship and Innovation
Dr. John Butler
Study Guide
Economics, Entrepreneurship, innovation
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This 6 page Study Guide was uploaded by Dylan Wood on Friday February 19, 2016. The Study Guide belongs to MAN 337 at University of Texas at Dallas taught by Dr. John Butler in Winter 2016. Since its upload, it has received 48 views. For similar materials see Entrepreneurship and Innovation in Business at University of Texas at Dallas.


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Date Created: 02/19/16
 Man 337 Exam 1 Review   4 questions, 25 pts a piece, bring Blue Book What is a quicklook?  to Explain: o if a technology has potential to make $ o where the markets and applications are in which it could make $$ o why someone may pay $$ money for it o how it could get to the point where it is making $$    cxPurpose of a quicklook:  o You can get early feedback into the loops:  Who is interested in paying $$ for the technology  how much value do users and buyers place on technology  what do they need and expect the technology to do  what form do they expect the technology to be in  o So you can mobilize stakeholders  the inventor­ b/c support is crucial  resources­ more technology across bridges  partners­ get the technology to the market   market­ pay $$ for the technology  o Tool’s you will use  info from the inventor   inventor’s suggestion for: primary and secondary research as well as  applications/markets for the technology   From these tools you will produce: interview reports, secondary research  references, and quicklook reports  o Steps of the Quicklook Method  Identify and define the real elements of innovation in the technology  Develop an explanation of the potential benefits the technology can  provide   Determine how far along in development the technology is   Determine the ownership of the IP and how to protect the IP   Examine competitors and competing technologies   Identify and explore potential commercial markets   Find the real challenges to commercializing the technology   Find the real opportunities the technology has in the market place   Draw out the lessons and make recommendations  Schumpeter or Keynes   Classical Economist  o Innovation outside of economic system o innovation is caused by events such as earthquakes, climate, or war o things that influence the economy, but are not part of economics  o had problems with profit as a moral question  Marxism: Marx believed profit was stealing from the workers  o were basic moral philosophers  Keynes o Maintains equilibrium theory  Equilibrium theory is made up of perfect markets, perfect competition, and rationality  o Sound economic theory cannot be based on one event controlling the economy   ex. government spending, interest rates, tax cuts o Monetary events determine demand and with it, economic conditions  ex. government deficits, interest rates, credit volume, and volume of  money in circulation  Assumes that turnover velocity of money is constant and cannot be  changed over the short run by individuals or firms (this is why he focuses  on the long term) o Macro­economy is everything o Individuals/business have little power to direct the economy o Supply as control and demand drives economic phenomena, capital formation,  productivity & employment o No room for entrepreneurship and innovation o Based on three aspects: Rationality, perfect markets, and perfect competition  Schumpeter  o Presents keynesian answers as invalid, or only valid with certain ranges o Micro­economy of the individual has changed velocity of money overnight (this is  short term)  o Healthy economy = dynamic disequilibrium o No such thing as equilibrium, the economy is forever changing  o Schumpter’s model is more realistic than the Keynesian/classical model o biological vs. mechanistic (keynes view)  o Central problem of economies is not being in equilibrium, but rather undergoing  structural change  o Creative Destruction  Move resources and capital from old outdated enterprises to new  enterprises so the econ is in constant flux  Innovator is the true subject of economics   The more an economy advances the more capital formation is required  Morality and Profit o Classical economists present profit to be morally equivalent to a bribe and cannot be morally justified o Schumpters theory goes beyond classical economics  profit is not something stolen from another  profit becomes the only source of jobs for workers and labor income  Profit is actually the cost of staying in business → the cost of surviving  creative destruction  Believes profit is a moral imperative o In equilibrium theory, there is no place for profit   Schumpeter’s argument o money and credit become the lever of control o monetary factors determine economic activity and allocation of resources  ex. deficits, credit, taxes Business Model Generation  A business model creates, delivers, and captures value  The nine basic building blocks show how a company makes money   The building blocks cover four main business areas o Customers o Offer o Infrastructure o Financial Viability   Nine Building Blocks o Customer Segments o Value Propositions o Channels o Customer Relations o Revenue Streams o Key Resources o Key Activities o Key Partnerships  o Cost Structure Entrepreneurship  The Entrepreneur and The Challenge Entrepreneurship wealth creation and job creation Entrepreneur creates a new organization that makes  a positive change Successful entrepreneurs will create a service or product that satisfies the everyday needs of  individuals  An Opportunity is a favorable juncture of circumstances with a good chance for success or progress job of the entrepreneur to locate new ideas and put them into action Entrepreneurship  may be described as the identification and exploitation of previously unexploited opportunities can consist of innovation or the introduction of creative change  Entrepreneurial Activity based on Innovation and Technology Capitalism and enterprise are about having a dynamic economy and innovation Three factors comprise entrepreneurial action  1. a person or a group who is responsible for the enterprise 2. the purposeful enterprise  3. initiation and growth of the enterprise  Four Types of Entrepreneurship  1. Incremental Venture  The founding and management of a routine business exhibiting modest novelty       2. Innovative Venture  The initiation and operation of a business based on an innovation      3. Imitative venture  The identification and imitation of a novel business or venture      4. Rent­seeking venture  The founding of a business that utilizes standards, regulations and laws to share in  some of the values of an existing enterprise  IF YOU MAKE SOME MONEY PEOPLE WILL SUE YOU  Four steps to starting a business 1. The founding team or individual has the necessary skills or acquires them  2. The team identifies the opportunity that attracts them and matches their skills. They  create a solution for the opportunity  3. They acquire ( or possess) the financial and physical resources necessary to launch the  business by location investors and partners 4. They complete an arrangement or contract with their partners, investors, and within the  founder team to launch the business and share the ownership and wealth creation  Five Characteristics of an attractive opportunity  1. Timely­ a current need or problem  2. Solvable­ a problem that can be solved in the near future with accessible resources 3. Important­ the customer will pay for the solution and allow the enterprise to profit  4. Context­ a favorable regulatory and industry situation  5. Profitable Eight Elements of Entrepreneurship 1. Initiate and operate a purposeful enterprise 2. Operate within the context and industrial environment at the time of initiation  3. Identify and screen timely opportunities  4. Ability to accumulate and manage knowledge and technology 5. Ability to mobilize resources­financial,physical, and human  6. Ability to assess and mitigate uncertainty and risk associated with the initiation of the  enterprise  7. Entrepreneurial Capital and the Value of a Venture One measure of the quality of entrepreneurial capability is entrepreneurial capital (EC) , which is a combination of entrepreneurial competence and entrepreneurial commitment:  Entrepreneurial Capital=entrepreneurial competence  Entrepreneurial Terror  Butler Rules  Summary There is no way to prepare for entrepreneurial terror­ no college course or training will prepare  you for this special hell. But you aren’t alone, and the rewards are worth it.  The Third Market: Engines of America Summary  Entrepreneurs have created a new marketing entity: The Third Market­not “large” not “small”,  but most emphatically ignored by Corporate American and government. But that will change int  he decade ahead.  Lesson The big companies that make up Corporate America must make sure their marketing plans  include the Third market, the entrepreneurial companies that give the American economy its life. The Secret Revolt  Summary  Research tells us that the Third Market­ the Entrepreneurial Market­buys almost half of all  business to businesses products and services; creates almost all the new jobs and is different in mindset from “small” and “large”. Size is immaterial . Lesson For any company selling a product of service, the Third Market is an enormous untapped and  undiscovered marketing opportunity.  Are Entrepreneurs Born or Made? Summary  There is overwhelming evidence that entrepreneurs are born, not made; that they are  genetically empowered with hunter genes handed down through countless generations. The  implications are mind­boggling. Just think what it may mean for corporate management to know  in advance who may have a natural propensity for entrepreneurship. However, it’s disquieting to know that children may be diagnosed as being impaired with disorder, and medicated just  because they inherited hunter genes, and must function in a world of farmers.  Lesson Entrepreneurs are born­not made­but this for freedom is the spark that ignites.  Are you a Buccaneer or a Farmer? Summary  There are two kinds of entrepreneurs­ buccaneers and farmers. It’s not important which you are, but it’s absolutely necessary that you know which you are. The transition from buccaneer to  farmer is a ydifcitul journey­ few entrepreneurs make it.  Lesson It’s better to be happy buccaneer than a miserable farmer.  Entrepreneurial Transition  Summary  There are four distinct and different phases in a entrepreneurial life.  First: The Genius Second: Benevolant Dictator  Third: Disassociated Director  Fourth: Visionary Leader  It’s absolutely necessary that entrepreneurs know where they are in order to be prepared for the next phase. But beware of phase three­ most entrepreneurs don’t make it through the potential  disastrous stage.  The Decision Making Process Summary  The process of making decisions must change as an entrepreneur goes through the four  phases. If you don't’ chang e the process you are doomed.  Lesson As you grown, adjust the process with which you make decisions. 


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