Entrepreneurship and Innovation - Question 1

You are thinking entrepreneurially, getting focused and planning to open a bakery at a retail site nearby in a few months.

Identify and describe the stages of development for this new bakery venture, starting with the stage it is currently in and predicting the stages it will go through once opened, and then over a few years. Use examples to illustrate the priorities and activities for the bakery in each stage of the venture development cycle. (10 marks)

Before opening a bakery shop entrepreneur needs to decide whether he or she wants to operate as a retail baker or a wholesale baker. After deciding what type of business entrepreneur want to operate, the bakery undergoes the following stages throughout its life:

  1. Development stage: As the business is during its planning process, the entrepreneur decides what type of bakery he or she wants to open, development stage includes detailed planning and implementation of the business plan. What sets a business plan successful from other business plans as it includes a course of business lifespan including a contingency plan. During this stage, the entrepreneur needs to decide whether they will be operating an online store, counter service, specialty service, or dine-in service. Entrepreneur drafts the marketing strategy, structure of the bakery, market analysis, business offering, and financial projections through the development stage.
  2. Start-up stage: Here, the entrepreneur decides the future course of operation of the bakery. This stage is extremely risky as one wrong decision, affects the business within a few years. Adaptability will be the key to successfully running the bakery, during this stage entrepreneur will finalize the location, hire a staff, train them, obtain a permit and license to run the business, seek investment money, and arrange the equipment’s and dishes required to run the bakery. After finalizing the requirement, the entrepreneur will open his bakery, while making various changes according to customer’s need and experience slow growth.
  3. Growth stage: At this stage bakery will be successfully established, and the entrepreneur will be having a secured income while struggling to manage a new customer base. Cash flow should be improving at a rapid rate to cover the current expenses and profits will be increasing slowly. Thus, the entrepreneur must focus on managing the profit value and financial statements during growth. As the new customer increases, the entrepreneur should prioritize hiring new help and installing more equipment to meet the demands. 
  4. Expansion: Now the bakery must be successfully established within the location. Now entrepreneurs must look forwards to diversity in the bakery, plan which month generates more revenues and what time of year income is slow, and diversity accordingly. The entrepreneur must focus on marketing, acquiring competitors, and look forwards to move to a new location.
  5. Maturity Stage: Here the bakery must be at the top of its industry and has matured. Yet the bakery must be having slow growth as opposed to expansion stage, and the bakery must be relying on profits earned through the tenure. This is where the entrepreneur needs to adopt a new strategy to emerge as are a market leader or think of exiting the industry. Here entrepreneurs need to prioritize managing negative cash flow and expanding or exiting the business (Harvard Business review,n.d).

Entrepreneurship and Innovation - Question 2

You are the owner of the bakery business discussed in question 1. After a while you start to take a strong interest in understanding the financial aspects of the enterprise.

Is it important for a business owner to be able to read and understand their balance sheet, income statements and cash flow statement? Explain your answer using the bakery example business from question 1. (10 marks)

Financial literacy is a crucial component for running a successful business. Having sound knowledge in the financial statement helps the entrepreneurs to make future decisions of the business, in this case, our bakery. Thus, motivating the staff to work more towards the vision inspired by the entrepreneur. During the initial stage, understanding in financial aspect helps the entrepreneur to make future projections of the bakery, team, and help in providing them a measurable, effective, and achievable vision (Cornwall, Vang & Hartman, 2019).

Having sound knowledge in cash flow statements helps the entrepreneur to understand areas of deviation, which product category is less preferred by the customers, and expenses relating to the procurement of raw materials are at a satisfactory level or not. Thus, leading to gaining control over the operations. Engaging with the basics of accountancy will help the baker and entrepreneur to understand the challenges during the business lifecycle and help them to create a better plan to solve it.

During the middle of the business, having a sound understanding of the financial statements will help the entrepreneur to create his or her measuring tool to determine the accuracy of the projections. Sale and income expenditure will help the entrepreneur to make future projections of the bakery relating to expansion, divarication, or dilution. A comparison of past and current sales will help the entrepreneur to predict future revenues and future trends in the bakery as well as trends in customer preferences. Sound knowledge in bookkeeping will help the entrepreneur to make future projections and finding any deviations in it( Worrell,2014). Understanding the regular taxes, manufacturing, and procurement of raw materials will be achieved through the accounting system.

During the later stage of the business, financial understanding reduces the complexity of running the bakery, and make it simpler for the entrepreneurs and staff to achieve the goals and targets ( Worrell,2014).

Entrepreneurship and Innovation - Question 3

You have been participating as a senior manager in a strategic planning process at your service-based organisation. The CEO says the new strategic plan must involve making intrapreneurs out of every staff member. At the last planning meeting, all the senior managers agreed that the new strategic plan and its operational branches need to express the new entrepreneurial mission and serve to guide staff on changing their behaviours to become intrapreneurial, thus helping the company to innovate and excel. Every manager has to bring their ideas to the next meeting. You currently feel unsure about intrapreneurship.

To prepare for the next meeting, develop a detailed explanation of intrapreneurship, analysing its advantages and potential disadvantages. Then name and describe at least five tactics your organisation might apply that signal an intrapreneurial philosophy. (10 marks)

Intrapreneurship can be defined as a process of empowering the employees of the organisation by assigning them power to act like entrepreneur of the company. Intrapreneurs are self-motivated, action-oriented personnel who takes decisions for the benefit of the organisation, while risk and loss associated with the project being beared by the company (Park et.al, 2014)t. The main difference between entrepreneurship and intrapreneurship is that entrepreneurs are the leader of the organisation whose objective is to create socio-economic impact within the organisation whereas intrapreneurs are the employees within the organisation, whose objective is to create competitive and sustainable organisation within the industry.

The concept of Intrapreneurship comes with many advantages and disadvantages. Its Advantage includes; sense of motivation within the intrapreneurs, as they are encouraged to provide an innovative solution to every problem while providing the right working environment. Stability as each member of the organisation strive towards excellency to improve the product or service of the organisation, by this way organisation and employees enjoys the economic stability. Benefits of intellectual property rights if any intrapreneur creates a successful and profitable product or service (Aina& Solikin, 2020).

Whereas its disadvantages include; As intrapreneurs works towards improving the operations and products or services of the company, they are awarded with pre decided rewards, instead of offering them profit share. If an idea of the intrapreneur fails due to many reasons, they are discredited by entrepreneurs in future. They are not considered for leading future operation which leads to demotivation and stain in their career. Intrapreneurs are made to sign non-disclosure agreement and non-compete agreement, which defines in ability to take credit of his or her own innovation and will always be owned by the company.

There are 5 ways organisation can implement intrapreneurship philosophy:

  1. Empower Employees: Empowering an employee to act as an intrapreneur and giving them charge to take decision their own will lead to improved job performance and increased effectiveness. Allowing the intrapreneurs to create innovative ideas, take charge of the project and provide solutions, sufficient resources and training will result in more confident and empowered workforce.
  2. Employees relationship: Entrepreneurs need to prioritize the relationship with the entrepreneurs. Which mean giving due attention to their ideas and suggestions, after work hour activities to create a bond by organisation’s workforce or spending time together. This cultivate a sense of belonging by the intrapreneur within the organisation.
  3. Encourage employee towards out of comfort zone: Encourage employee to involve in projects outside their daily task, thus developing them during the process and making them feel involved during the project. Thus, making employee confident.
  4. Fix problem as they arrive: When issue arise, make intrapreneurs feel supported by entrepreneurs by addressing and assisting in solving the problem immediately. It the problem is not identified early; it might lead to company failure.
  5. Encourage healthy competition: Encourage entrepreneurs and intrapreneurs to have healthy sense of competition within the organisation, to improve the participation by employees within the organisation as well a inculcating leadership quality in employees (Duradoni & Di Fabio,2019).

Entrepreneurship and Innovation - Question 4

Explain the three major components of a value proposition. Using a rideshare or Uber-type enterprise as an example, justify how these three components need to come together for an enterprise to succeed. (10 marks)

A value proposition is a value statement, that reflects the value reflected by the organization in its product or services. It is the factor that sets the organization distinct from its competitors (Payne, et.al, 2017).

The major component of the value proposition includes:

  1. Target Market: The primary component of the value proposition includes, identifying the ideal target market for the company. The target market is those market which consists of a group of potential customers which will help the company to generate more sales. For it, businesses need to have a clear idea of who will be the potential customers and what are their needs. For example, the target market of Uber services includes students and young professionals who are softcore loyal and easy going. 
  2. Specific Value: The second component of value proposition includes, value the company is offering to its customer via its products or services. The company must have a clear vision regarding what they are going to sell to its target customer and how they will choose them over their competitors. 

Uber offer value to its customer by offering various range of services to its customers such as Uber Pool, Uber Black, Uber X, Uber XL, and many more to address various customer segments.

  1. Customer connection: The third component of value proposition includes; meeting customers’ needs with the company’s product or service offering. This element aims to establish a relationship with the customer by appealing to their emotions which leads to the creation of brand loyalty. 

For example, Uber ad copy ‘always get what you want’, helps the brand to establish a relationship with the customer by reflecting a sense of belongingness by the company. By offering on-demand custom ride service by the company, the customer feels a sense of ease to ride with Uber instead of taking a taxi.

These three components are essential in any product or service organization whereas it acts as a bridge to understanding the relationship between the needs of the target market and goals of the organization. The three elements will help the entrepreneur in guiding towards future decisions which will benefit customers and organizations as well (Bryson, 2018). The components act as a draft which helps the entrepreneur to focus on, what type of client’s organizations wants to work with, and what type of marketing information the organization should hold.

Entrepreneurship and Innovation - Question 5

Extending on from the value proposition of the previous question, briefly describe each of the major segments of a traditional business plan for this rideshare or Uber-type enterprise. What are the main differences between ‘traditional’ business planning and ‘lean’ business planning for a business such as this? In addition, discuss which of the two types of business plans, traditional or lean, might suit various business situations for this type of enterprise? (10 marks)

A traditional business plan can be defined as a business plan which includes a detailed analysis of a wide range of area which helps the company to secure finances for the business, make future decisions and defining the target market. A traditional business plan covers the concepts of marketing, finances, and effective utilization of resources which are key concepts to run a business.

A lean business plan can be defined as a one-page business plan, which is frequently updated to build a better business by the entrepreneur. It includes an ongoing planning process, which the entrepreneur improves based on learning from the experiences. From further experiences, entrepreneurs refine the business plan and help in tracking financial performance as the planning undergoes (Rose, 2016).

A start-up like uber can be seen as an example of a lean business planning model, as the company is constantly evolving and making changes in its business operation as per the growing need and demands of the customers. Uber earlier was a taxi service provider which expanded itself to food delivery services in various countries as per the needs (Paley, 2015). Lean planning helps the company to produce business planning documents and pitch drafts that are required during the initial stage of establishment. As compared to a traditional business plan, a lean business plan is faster in terms of planning, concise, and keeps the organization up to date.

A traditional business plan is suitable for business which requires heavy planning, or a detailed draft for loan procurement, or for business which does not require constant changes. The traditional business plan model is generally preferred by brisk and mortar companies, local grocery stores, service restaurants, and manufacturing organizations. Whereas a lean business plan is suitable for business which operates in constantly changing environments such as the technology industry, automobile industry, fashion industry, and many more. These business plans should be adopted according to the needs of the industry (Rose, 2016).

Entrepreneurship and Innovation - Question 6

0ne day you complete a detailed online personality quiz. The results show the most dominant attributes of your personality are the desire to achieve, opportunity orientation, initiative and responsibility. These attributes sound familiar to you from your studies of entrepreneurship.

Explain how these attributes may or may not relate to entrepreneurs. Also explain how these attributes may help or hinder you if you decide to start your own business. Use business and entrepreneur case examples (which could include your own enterprise, or that of others) in helping explain the effects of your attributes on the conduct of business decisions and actions. (10 marks)

Reference for Entrepreneurial Financial Management

Aina, Q., & Solikin, I. (2020). Entrepreneurship and Intrapreneurship: How Supporting Corporate Performance. Review of Integrative Business and Economics Research, 9, 288-297.

Bryson, J. (2020). Strategic planning for public and non-profit organisation (5th ed.). Hoboken, New York: John Wiley & Sons.

Cornwall, J., Vang, D., & Hartman, J. (2019). Entrepreneurial financial management an applied approach (5th ed.). London: Taylor & Francis.

Duradoni, M., & Di Fabio, A. (2019). Intrapreneurial self-capital and sustainable innovative behavior within organizations. Sustainability, 11(2), 322.

Harvard Business review, (n.d). The Five Stages of Small Business Growth. Retrieved from https://hbr.org/05/the-five-stages-of-small-business-growth .

Paley, N. (2015). Developing a Turnaround Business Plan Leadership Techniques to Activate Change Strategies, Secure Competitive Advantage, and Preserve Success. New York: CRC Press.

Park, S. H., Kim, J. N., & Krishna, A. (2014). Bottom-up building of an innovative organization: Motivating employee intrapreneurship and scouting and their strategic value. Management Communication Quarterly, 28(4), 531-560.

Payne, A., Frow, P., & Eggert, A. (2017). The customer value proposition: evolution, development, and application in marketing. Journal of the Academy of Marketing Science, 45(4), 467-489.

Rose, D. (2016). The startup checklist 25 steps to a scalable, high-growth business. New Jersy: Jhon Wiley & Sons.

Worrell, D. (2014). The Entrepreneur's Guide to Financial Statements. California: ABC-CLIO.

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