Vision Statement

Vision statements can take many forms. Their main purpose is to articulate the "dream" state of the business.

Vision Statement

To Device a Vision try writing your answers to the following questions:

Why did I start this business? What am I really providing for my customers beyond products and services? If my business could be everything I dreamed, how would it be?

Vision Statement

Yahoo
To enable people to find, use, share, and expand all human knowledge.

Google
To organize the world's information and make it universally accessible.

General Electric
We bring good things to life.

Ford Motors
To become the world's leading consumer company for automotive products and service.

Mission Statement

For any business to succeed it needs to know what its about. The mission statement describes the "what" of your business. It states why your organization is in business and what you are hoping to achieve.

Mission Statement

A typical mission statement contains three components:

The overall purpose of your business what are you trying to achieve, why are you in business. What your business does - products and services it provides. What's important to your business - the values your business lives by.

Mission Statement

Pfizer
We dedicate ourselves to humanity's quest for longer, healthier, happier lives through innovation in pharmaceutical, consumer and animal health products

Purpose: quest for longer, healthier, happier lives Business: pharmaceutical, consumer and animal health products Values: innovation

Mission Statement

Dell Computers
With the power of direct and Dell's team of talented

people, we are able to provide customers with superb value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use

Purpose: provide customers with superb value technology Business: high quality, relevant technology, customized systems Values: superior service and support, easy to buy, easy to use

Exit Objectives
Maximize Value; Reward Loyalty; and Perpetuate the Business.

Exit Strategies
IPO Transfer to a family member Private sale of stock Management Buy out Merger Liquidation

Transfer of Business Triggered by External Events

Life surprises
Death Disability Divorce

Business surprises
Adverse marketplace Competitive challenges Regulatory changes

Strategic Buyers
Beware of under-pricing your firm to a strategic buyer. Value of your firm is driven by their internal needs. Never be the first to mention price when dealing with a strategic buyer.

Terms
All cash Cash down with installments
Recapturing hot assets Personal guarantees of purchase

All deferred Stock for stock, cash and stock Using gifting when selling to family members

Types of Financing Terms

Short-term Demand notes or lines of credit due to be repaid in 1 year or less

Medium-term Repayable in 1 to 5 years Long-term Repayable over more than 5 years

Exit Strategies
Reach Agreement & Obtain Authorization from Owners to Dissolve Your Business Entity. Designate a Leader & Organize a Team Engage Professionals & Consultants as Team Members. Perform a Thorough Review of Business & Identify Problem Areas Prepare a List of Assets & Perform a Physical Inventory Perform a Valuation of the Business Prepare a Detailed Plan & Assign Responsibilities Develop a Schedule for Implementation Release Announcements & Notices

Exit Strategies
Implement the Plan Conclude or Transfer Contract Obligations Close Operations Dispose of & Transfer Assets Settle Accounts Payable & Debt Obligations Prepare Final Financial Statements & Tax Returns File Articles of Dissolution. Prepare & Issue Special Filings, Notices, Informational Returns, & Taxes Receive Tax Clearance Notice. File in financial records. Close Bank Account Store Business Records

Going Public
Advantages of Going Public
Capital Borrowing ability enhanced Raising equity easier Liquidity and valuation Personal wealth Executive compensation

Going Public
Disadvantages of going public
Short term growth pressure Disclosure requirements Pressures to maintain growth Loss of control Restrictions on management Loss of personal benefits

Going Public
Alternatives
Private placements
Restrictive covenant Liquidation covenant

Bank loans

IPO
The first sale of stock by a private company to the public Issued by smaller, younger companies seeking capital to expand

IPOs can be a risky investment

IPO
IPO's both globally and in the US have been under priced The effect of under pricing an IPO is to generate additional interest in the stock when it first becomes publicly traded

IPO
Largest
Industrial & Commercial Bank of China $21.6Bn in 2006
NTT Mobile Communications $18.4Bn in 1998 Visa $17.9Bn in 2008 AT&T Wireless $10.6Bn in 2000

Bankruptcy
A legally declared inability or impairment of ability of an individual or organizations to pay their creditors. Lessons learnt
Bankruptcy protects entrepreneurs from creditors only Separation of entrepreneur and business is not possible even after bankruptcy as he puts in everything he has Act early

ANSOFF Matrix

ANSOFF Matrix
Market Penetration
the firm seeks to achieve growth with existing products in their current market segments, aiming to increase market share.

Market Development
the firm seeks growth by targeting its existing products to newer market segments

Product Development
the firm develops new products targeted to its existing market segment.

Diversification
the firm grows by diversifying into new businesses by developing new products for new markets.

Example Growth Strategies

BBQ tonight
Penetration strategy through advertising Market development through opening a new outlet in Gulshan Product development through having non-bbq items, desserts, drinks etc. Diversification
Backward integration K & N chicken etc. Forward integration HR Horizontal integration Copper kettle

Growth will result in .

Pressure on
Financial resources Human resources Management of employees Entrepreneurs time

Things to manage
Following financial controls are essential in order to have a grasp over the expanding business
Cash flows Inventory Fixed Assets Costs & Profits Taxes

Growth
Licensing Exporting Franchising Contract Manufacturing Joint Ventures Subsidiaries
Acquisitions Mergers

Licensing
Licensor and the licensee Benefits: Appealing to small companies that lack resources Faster access to the market Rapid penetration of the global markets Disadvantages: Other entry mode choices may be affected Licensee may not be committed Lack of enthusiasm on the part of a licensee Licensee may become a future competitor

Exporting
Indirect Exporting Export merchants Export agents Export management companies (EMC) Direct Exporting Firms set up their own exporting departments

Franchising
Franchisor and the franchisee Benefits:
Overseas expansion with a minimum investment Franchisees profits tied to their efforts Availability of local franchisees knowledge

Limitations:
Revenues may not be adequate Limited franchising opportunities overseas Lack of control over the franchisees operations Problem in performance standards Cultural problems

Contract Manufacturing (Outsourcing)

Benefits: Labor cost advantages Savings via taxation, lower energy costs, raw materials, and overheads Lower political and economic risk Quicker access to markets Disadvantages: Contract manufacturer may become a future competitor Lower productivity standards HR and labor issues Issues of quality and production standards

Joint Ventures
Cooperative joint venture Equity joint venture Benefits: Higher rate of return and more control over the operations Creation of synergy Sharing of resources Access to distribution network Contact with local suppliers and government officials

Joint Ventures
Disadvantages: Lack of control Lack of trust Conflicts arising over matters such as strategies, resource allocation, transfer pricing, ownership of critical assets like technologies and brand names

Subsidiaries
Acquisitions and Mergers Benefits: Greater control and higher profits Strong commitment to the local market on the part of companies Allows the investor to manage and control marketing, production, and sourcing decisions

Subsidiaries
Disadvantages: Risks of full ownership Developing a foreign presence without the support of a third part Risk of nationalization Issues of cultural and economic sovereignty of the host country

How Good Teams Go Bad

Free Riding:
what if one person does not pull his/her weight?

Try to understand what is the problem: overwork, motivation, personal issues? How can these be addressed? Most problems start small and quickly snowball. Talk openly and clearly about who is doing how much work. Keep (rough) track of hours worked or effort?

Clashes within teams

Agree on a mechanism for resolving disputes, by voting or require unanimous agreement

Benefits of Internationalization
Efficiency
Global economics of scale Comparative advantage of location

Responsiveness
to customers, key stakeholders

Knowledge leverage
Use people and ideas globally, create knowledge via multinational scope