Assessment Of Entrepreneurship And Innovation Portfolios Commerce Essay

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In UK when two people applied for patent on the same invention, the first person to have filed his application will get the patent (Article 54 EPC, 2010). This holds even if the second person did in fact come up with the invention first. The only thing that counts is the filing date.

In USA, a different approach is used. When two people applied for patent on the same invention, a determination is made who invented it first. If the person who filed later is found to have invented earlier, he may be awarded the patent (35 U.S.C. 102 USPTO, 2010). The process of decision who invented first usually involves examining laboratory logbooks, establishing dates for prototypes and so on.

3.2 Grace period:

There is a one year grace period in USA. In the UK and there is no grace period.

In UK, the application will be rejected, if the invention has become publicly available in any way before the patent application was filed (Article 54 EPC, 2010). Publicly available includes giving a lecture about it, showing it to an investor without a non disclosure agreement, selling the invention, publishing in the magazine and so on.

The USA has a grace period for one year (35 U.S.C. 102 USPTO, 2010). This means that the inventor can freely publish his invention without losing patent rights. However, this applies only in USA. If an inventor does so, he automatically loses all potential patents rights in UK.

3.3 Best mode requirement:

In USA patent law requires the inventor to include the best way to practice the invention in the patent application (35 U.S.C. 112 USPTO, 2010). This way, the inventor cannot get a patent and still keep some essential or advantages aspect a secret.

In UK patent law has no such requirement. At least one way of practicing the invention must be included in the application (Article 83 EPC, 2010), but there is nothing that states this way must be the best way, or even a good way.

3.4Publication of patent applications:

In USA patent applications are published 18 months after their filing date, unless they have been withdrawn or they are filed with a non publication request, stating that the application is USA only (35 U.S.C. 122 USPTO, 2010).

This is very similar in the UK, where all patent applications are published 18months after filing date (Article 93 EPC, 2010). If the novelty search has been completed by that time, the search report is included with the publication.

3.5 Rights conferred by a patent:

Any violation of a UK Patent shall be dealt with by national law (Article 64 EPC, 2010).

A patent is a property right which is enforceable in the whole territory of the USA. It allows the patent holder to stop anyone from making, selling or using in USA the patented invention.

3.6 Opposition after grant:

In UK anyone can file an opposition with the EPO within nine months after the grant of a patent, stating why this patent should not have been granted (Article 99 EPC, 2010). The patent holder and the opponent can then debate with each other. Finally, the EPO will take a decision based on facts and arguments presented by both sides.

In USA, they having a re-examination procedure, it does not work the same as an opposition. In a re-examination, anyone can present reasons and evidence to the USPTO to challenge the validity of a granted patient (35 U.S.C. 132 USPTO, 2010). However, it is then the patent holder who engages in a discussion with the USPTO examiner to establish the validity of the reasons.

3.7 Inventive step:

The two most important requirements in European patent law to be patentable is, an invention must be novel and involve an inventive step (Article 56 EPC, 2010).

When comparing with the USA requirement that the invention must be novel and must not be obvious for inventive step (35 U.S.C. 102 and 103 USPTO, 2010).

References

Bently, L. and Sherman, B., 2009. Intellectual Property Law. 3rd Ed. New York: Oxford University Press.

European Patent Convention, 2010. Convention on the Grant of European Patents (European Patent Convention). 14th Ed. [Online].

http://documents.epo.org/projects/babylon/eponet.nsf/0/7bacb229e032863dc12577ec004ada98/$FILE/EPC_14th_edition.pdf

[Accessed on 4/3/2011]

Intellectual Property Office, 2010. Patents, Benefits of Patent Protection. [Online].

Available from:

http://www.ipo.gov.uk/types/patent/p-about/p-benefit.htm

[Accessed on 5/3/2011]

United States Patent and Trademark Office, 2010. United States Code Title 35 - Patent, Patent Laws. [Online].

Available from:

http://www.uspto.gov/web/offices/pac/mpep/consolidated_laws.pdf

[Accessed on 4/3/2011]

KNOWLEDGE WIKI - ENTREPRENEURIAL BEHAVIOUR

Introduction

For our purposes, entrepreneurs may be broadly defined as people who manage a business with the intention of expanding that business by applying some form of innovation and with the leadership and managerial capacity for achieving their goals, generally in the face of strong competition from other firms, large and small. The overall aim of this unit, therefore, is to provide you with opportunities to consider and reflect on the personal aspects involved in transforming an innovative idea into an entrepreneurial product.

Who is an entrepreneur?

 Entrepreneur is a person who habitually creates and innovates to build something of recognized value around perceived opportunities.

 Entrepreneurship is what drives human lives to change for the better because entrepreneurs put their theoretical innovations into practice.

 For our purposes, entrepreneurs may be broadly defined as people who manage a business with the intention of expanding that business by applying some form of innovation and with the leadership and managerial capacity for achieving their goals, generally in the face of strong competition from other firms, large and small. The overall aim of this unit, therefore, is to provide you with opportunities to consider and reflect on the personal aspects involved in transforming an innovative idea into an entrepreneurial product.

What is entrepreneurial behaviour?

 Entrepreneurial behaviour is the study of human behaviour involved in identifying and exploiting opportunities through creating and developing new ventures. The major goals of research on entrepreneurial behaviour are to explain, predict, and control (shape and change) behaviour at the individual and team level. To achieve these goals, research on entrepreneurial behaviour needs to focus on the concrete enactment of individual or team tasks and activities required to launch and develop a new venture.

Academics have argued that there are many varying reasons why entrepreneurs become entrepreneurs. De Vires (1976) believes that it is a behavioural (Cited in Man, 2006) issue whereby there is a need for autonomy (Gelderen and Jansen, 2006). Schumpeter (1942) argues that it is purely for economic reasons in terms of being money driven (Cited in Hagedoorn, 1996). Deakins and Freel (2003) contribute to the reasoning by stating that it is for sociological reasons.

Vesper (1982) believes that the study of the entrepreneur is actually one step removed from the primary phenomenon of entrepreneurship - the creation of organizations, the process by which new organizations come into existence. This behavioural approach views the creations of an organization as a contextual event, the outcome of many influences (Cited in Gartner, 1988). As per Gartner (1985) approach to the study of entrepreneurship treats the organization as the primary level of analysis and the individual is viewed in terms of activities undertaken to enable the organization to come into existence (Cited in Gartner, 1988).

The actual behaviours of entrepreneurs are critical to new venture creation as it is the actions taken by individuals that give rise to a new organization. Thoughts, intentions, motivations, learning, relationships and intelligence without action do not create a new organization or economic value. Jack and Anderson (2002) argue that new firm creation is not merely an economic process but draws from the social context which shapes and forms entrepreneurial outcomes.

Triggering factors related to external conditions such as the availability of financing, education, labour markets, and quality of existing infrastructure, have all been shown to be important. Among others, Evans and Jovanovic (1989) and Kihlstrom and Laffont (1979) discuss the importance of financial resources and constraints on entrepreneurial decisions.

Entrepreneurial Mindsets

The objective of the entrepreneurial mindsets is that you should frame what you must do to create a genuine win for your organization in terms of growth in both profits and profitability (MacMillan and McGrath, 2001).

Entrepreneurial Working Style:

David Kolb's model (1973) suggests that entrepreneurial success should be mainly determined by the individual's ability to adapt and dominate continual changes in the business environment through exploring new opportunities and learning from past successes and mistakes. In the context of business, the cycle starts with a concrete experience (say, the launch of a new product, landing or losing a major customer, unexpected poor staff performance, a delivery failure, and so on); moves on to the stage of observation and reflection on what has happened and why; then onto making sense of what has happened in the form of a rule or guide for repeating successes or avoiding similar mistakes; and, finally setting up a new situation to test the new insights or rules (thus creating a new experience for the cycle to start again). In practice, Kolb observed that most people display skills along a 'concrete - abstract' dimension and an 'action - reflection' dimension.

References

Deakins, D and Freel, M. (2003). Entrepreneurship and small firms. 3rd ed. London: McGraw-Hill.

Evans, S and Jovanovic, B. (1989). An Estimated Model of Entrepreneurial Choice under Liquidity Constraints. The Journal of political economy. 97 (4), p808.

Gartner, W. B. (1988). "Who Is An Entrepreneur"? Is The Wrong Question. Entrepreneurship theory and practice. 13 (4), p47-67.

Gelderen, M. V. and Jansen, P. (2006). Autonomy as a start-up motive. Journal of Small Business and Enterprise Development. 13 (1), p23-32.

Hagedoorn, J. (1996). Innovation and Entrepreneurship: Schumpeter Revisited. Industrial and Corporate Change. 5 (3), p883-896.

Jack, S. and Anderson, A. (2002). The effects of embeddedness on the entrepreneurial process. Journal of business venturing. 17 (5), p467.

Kihlstrom, E. and Laffont, J. (1979). A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion. The Journal of political economy. 87 (4), p719.

MacMillan, I. and McGrath, G. (2001). The entrepreneurial mindset. Manitoba business. 23 (3), p42.

Man, T. W. Y. (2006). Exploring the behavioural patterns of entrepreneurial learning. Education & training. 48 (5), p309-321.

BLUE FOX RESTAURANT - BUSINESS PLAN

Introduction

Blue Fox, a Hyderabad based medium size restaurant serving healthy, contemporary style food. The restaurant located at Road No. 11 Banjara Hills in Hyderabad (Blue Fox, 2011).

The restaurant goal is that of a multi-faceted success. Our first responsibility is to the financial well being of the restaurant. We will meet this goal while trying to consider;

The effect of our products on the health and well being of our customers

The impact that our business practices and choices will have on the environment, and

The high quality of attitude, fairness, understanding between management, staff, customers and vendors.

Awareness of all these factors and the responsible actions that result will give out efforts a sense of purpose and meaning beyond out basic financial goals.

Future Plan - If the business is meeting its projections by 2 years, we will start exploration for a second location and develop plans for the next unit. Our five year goal is to have 3 restaurants in the greater Hyderabad.

Product/Service

Blue Fox restaurant will be offering a menu of food and beverages with a distinctive image. The unique selling point of product/service is providing healthy and nutritious food, and also customer can purchase the food in 3 ways (seat-in, take away, and home delivery).

12.1 The Menu - The Blue Fox menu is moderate sized and moderate low priced offering of ethnic and Indian items with a common theme - healthy, flavourful and familiar.

Our goal is to provide healthy (low fat, low cholesterol) and nutritious food.

12.2 Production - Food production and assembly will take place in the kitchen of the restaurant. Fresh vegetable, meat and dairy products will be used. The chef will exercise strict standards of sanitation and quality production.

12.3 Service - There will be three ways a customer can purchase food. They may sit down at one of the 200 seats in the dining room and get full service from a wait person. A separate takeout counter will service those who wish to pick up their food. Delivery will be available at certain times and to a limited area.

Market Research

Like any business, before opening a restaurant we investigate well the market, trying to know what the preferences and tastes of consumers, and making sure that we will have enough demand for our restaurant a success (Stokes and Wilson, 2010).

Primary Research - Surveys

As part of our market analysis (CCED, 1994), we created a checklist for doing surveys to find out the local market area (Appendices 4), competition (Appendices 5), and location (Appendices 6). We conducted surveys to people travelling through the area where we open the restaurant.

Secondary Research

Studies on consumer eating and drinking patterns are available from various sources. Some of the sources of industry trends are listed below.

National Restaurant Association of India (NRAI)

The federation of Hotel & Restaurant Associations of India (FHRAI)

International Foodservice Manufacturers Association (IFMA)

HVS - Global Hospitality Services

Industry Publications

13.1 Size of Market -

Demographic and economic statistics will help you determine the restaurant sales potential of the market area you plan to serve. By comparing these statistics with those of other areas and the state you will be able to evaluate the strength of your market area.

Obtain economic statistics such as business growth trends, eating and drinking place sales and tourism visitation data. Data on market area is available from various sources such as:

Census of India

Institute of Small Enterprises and Development (INSLED)

Small & Medium Business Development Chamber of India

The market area checklist will help us to collect data for evaluate market area (Appendices 4).

According to National Restaurant Association of India (2010), the organised restaurant market in India may grow nearly around Rs 28,000 crore by 2015. The organised restaurant sector currently enjoys 16% market share in the estimated Rs 43,000 Crore restaurant industry. This is likely to increase to 45% of the total pie by 2015, it said.

13.2 Competitors -

Existing market area restaurants can provide valuable information to help us analyse demand and market opportunities. We can assess their competitive strengths and weaknesses and learn from their successes and failures (Appendices 5).

Data for list of restaurants is available from various sources such as:

Yellow Pages

The Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI)

There are over 20 restaurants in the Banjara Hills area that sell food at similar prices. Although this presents an obvious challenge in terms of market, it also indicates the presence of a large, strong potential.

13.3 Suppliers -

Reliable suppliers are an asset to our operation. We develop good relations with local food distributors because it is important for the business. They will be able to pass along vital information that will aid us in our purchasing activities. If we have a good rapport with our suppliers, they will also work harder on our behalf to provide quality products at competitive prices.

Conclusion & Recommendations

Although the restaurant industry is very competitive, the lifestyle changes created by modern living continue to fuel its steady growth. More and more people have less time, resources and ability to cook for themselves. Trends are very important and Blue Fox is well positioned for the current interest in lighter, healthier foods at moderate to low prices.

When it comes to competition advantage Blue Fox will offer an innovative product in a familiar style at a competitive price. Our aggressive plans of takeout and delivery will also give us an advantage to create a good market before the competition can adjust or similar concepts appear. There are 3 major ways Blue Fox will create an advantage over competitors; first one is product identity, quality and novelty; second is high employee motivation and good sales attitude and third is innovative and aggressive service options.

References

Blue Fox. (2011). Branches.

Available:

http://bluefoxrestaurant.com/.

Last accessed 13/04/2011.

BusinessLink. (2011). Prepare a business plan.

Available: http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1087369151&r.i=1073791235&r.l1=1073858805&r.l2=1073859137&r.l3=1073869162&r.s=m&r.t=RESOURCES&type=RESOURCES.

Last accessed 14/04/2011.

Center for Community and Economic Development. (1994). Tourism Business Development Toolbox.

Available:

http://www.uwex.edu/ces/cced/economies/tourism/Restaurant Market Analysis.pdf.

Last accessed 14/04/2011.

HVS. (2004). Restaurant Industry in India - Trends and Opportunities.

Available:

http://www.hvs.com/article/1109/restaurant-industry-in-india-trends-opportunities/.

Last accessed 14/04/2011.

National Restaurant Association of India. (2010). Restaurant market to touch Rs 28,000 cr.

Available From:

http://www.nrai.org/news.asp?id=6.

Last accessed 13/04/2011.

Stokes, D. and Wilson, N. (2010). Small Business Management and Entrepreneurship. 6th ed. Andover: Cengage Learning. p142.

Appendices

Important Assumptions -

The financial plan depends on important assumptions, most of which are shown in the following tables as annual assumptions. Interest rates, tax rates and personnel burden are based on conservative assumptions. Some of the more important underlying assumptions are:

we assume a strong economy, without a major recession

we assume that there are no unforeseen changes in consumers tastes or interests to make out concept less competitive

Appendices 1 - 2 Year Income Statement

The table below shows a statement of income and expenses for Blue Fox restaurant. In this case, the value of the leaseholds interest in the real estate has been removed by subtracting rent paid to the landlord from income. The remaining earnings - before income taxes, depreciation equal to 3,545,650 (Year 1). This is the cash flow available to cover a return of and on the investment in personal property, and a return to the business component of the going concern value of the restaurant.

Estimated Income Statement for the Blue Fox Restaurant for the period of 1yr

Sales (Rs)

Year 1

Year 2

Food sales

10,000,000

12,000,000

Beverage sales

3,500,000

4,700,000

Total sales

13,500,000

16,700,000

Cost of Sales

Food cost

3,500,000

3,800,000

Beverage cost

1,050,000

1,200,000

Total cost of sales

4,550,000

5,000,000

Gross Profit from Operations

8,950,000

11,700,000

Controllable expenses (Rs)

Payroll

2,025,000

2,110,000

Direct operating expenses

1,080,000

1,100,000

Music and entertainment, Advertising & Promotion

270,000

270,000

Utilities

540,000

550,000

Administrative and general expenses

540,000

550,000

Repairs and maintenance

270,000

278,000

Total controllable expenses

4,725,000

4,858,000

Profit before occupancy costs

4,225,000

6,842,000

Occupancy Costs (Rs)

Rent

4,95,020

5,50,000

Property taxes

70,000

74,000

Other taxes

23,330

24,000

Property insurance

91,000

91,000

Total occupancy costs

6,79,350

7,39,000

Profit before interest and depreciation

3,545,650

6,103,000

Interest

58,340

58,640

depreciation

2,33,340

2,33,340

Net Profit

3,253,970

5,811,020

(Adapted from HVS, 2004)

*Note - All figures are shown in Rupees

Appendices 2 - Financial Projections

Start - Up Requirements (Rs)

Cash (working capital)

9,25,000

Lease hold improvements

13,00,000

Licences

3,60,000

Beginning inventories (Food, Beverages and supplies)

3,80,000

Furniture, fixtures and equipment

13,35,000

Opening expenses (insurance, licenses, permits, advertising promotion, deposits, employee training, preopening parties)

7,00,000

Total start up investment required

50,00,000

(Adapted from Business Link, 2011)

*Note - All figures are shown in Rupees

Appendices 3 - Sources and Use of Funds

Uses of Funds

Sources of Funds (Rs)

Start-Up Expenses

Partner's Equity

Loan

Total

Cash (working capital)

4,62,500

4,62,500

9,25,000

Lease hold improvements

2,90,000

10,10,000

13,00,000

Licences

3,60,000

0

3,60,000

Beginning inventories

1,90,000

1,90,000

3,80,000

Furniture, fixtures and equipment

6,67,500

6,67,500

13,35,000

Opening expenses

3,50,000

3,50,000

7,00,000

Total Funds

23,20,000

26,80,000

50,00,000

(Adapted from Business Link, 2011)

*Note - All figures are shown in Rupees

Appendices 4 - Local Market Area

The market area checklist will help us to collect data for evaluate market area (CCED, 1994).

Demographic Characteristics

Population

Age distribution and median age

Gender

Household income distribution

Marital status

Household with children

Education

Economic Characteristics

Eating and drinking place sales

Employment levels

Types of employment

Seasonality and tourism visitation

Driving Out Preference and Lifestyles of Local Residents

Interview with local residents

Observe eating habits in other restaurants

Lifestyle segmentation data provided by marketing data firms

Appendices 5 - Competition

Location

Community traffic patterns

Accessibility

Visibility

Surrounding neighbourhood

Parking availability

Appearance

Exterior appearance and theme

Interior appearance and theme

Cleanliness

Menu

Theme

Variety and selection

Price range and value

Beverage service

Food Quality

Taste

Presentation

Consistency

Service

Days open

Hours of operation

Quality of service

Speed of service

General Information

Number of seats

Banquet facilities

Entertainment

Local reputation

Advertising and promotion

Reviews by food critics

Appendices 6 - Location

Description of immediate area

Residential and commercial profile

Proposed developments

Safety

Proximity to Customers and Competition

Major demand generators (retail, offices, lodging, hospitals...)

List of direct competitors

Accessibility

Proximity to major streets and highways

Parking

Visibility

Visibility from road

Exterior lighting

Other Issues

Environmental issues

Growth patterns of surrounding areas

THE CHALLENGES FAMILY OWNED FIRMS NEED TO ADDRESS TO REMAIN INNOVATIVE

What is a family business?

What would hamper innovation as the family business grows?

According to Lansberg (1999), Sibling conflict is one of the major issue that family owned firms need to address to remain innovative. McAdam & Reid (2001) conducted a measurement of innovation practice within 12 family owned firms across Scotland by using a questionnaire tool, which mainly focus on 5 areas of the organization (citied in Reid, 2006), which are explained below

Leadership -

The general comments from some of the organizations reported that, leaders didn't appear to be working to a clear business plan and leaders didn't take enough time out to think strategically.

People & Culture -

The comments are like, criticism of communication they were rather haphazard, leading to misunderstandings and misinformation and there was a lack of employee involvement in developing new products.

Product & Process -

Some organizations appeared to rely heavily on products which had been long established and did not embrace easily the need to constantly upgrade or introduce new products.

Total Quality & Continuous Improvement -

Some organizations hoped to develop a more systematic approach to provide recognition for the contribution made by employees to total quality & continuous improvement within the organization.

Knowledge & Information -

There was also a general endorsement of the storage and sharing information across the organization.

Based on the responses to the questionnaire suggests that there is need to undertake these actions in a more systematic and holistic fashion to ensure innovative behaviour is enhanced and not hampered.

The family business and the three - circle/development model

(Adapted from Davis, 2001)

According to Gersick, et. al. (1997) the 3 circle model shows three overlapping and interdependent groups. Each group influences the other two, either positively or negatively. Any person involved in the family business system can be located in one spot in the 3 circle diagram. Individuals can be members of one or more groups and each these memberships or roles will influence their views on the business. The overlapping circles define seven interest groups and each interest group has a typical view on key issues such as dividends or the employment of family members.

The importance of creating in each generation a culture based on innovation - responsibility of the leader

Innovativeness refers to a company's efforts to discover new products or service opportunities, and make improvements to existing processes and systems (Hage, 1980 cited in Moss, 2010). Innovative organizations that can share business information openly, champion change and celebrate new ideas and constantly change some things (Ward, 1997).

20.1 A typology of successions

Sibling conflict is one of the major issue that family owned firms need to address to remain innovative. Ward (1991) analysed that family businesses come in three fundamental forms (generations) based on the assumption that ownership is the most useful variable distinguishing among the different family business forms. The first generation is controlling owner business, second generation is sibling partnership and third generation is cousin consortium (Citied in Lansberg, 1999). The framework that Lansberg (1999) describe establishes a conceptual distinction between three types of succession transitions.

The first transitions that involve replacing the senior leadership without changing the fundamental forms of the business - the people change but the authority structure remains the same. The best example is S.C. Johnson & Son, makers of Johnson Wax and the insecticide Raid, which has had a single family member as its leader and controlling stockholder through four successive generations. The company may evolve into a sibling relationship (Johnson, 1988 cited in Lansberg, 1999).

The second type of succession transition involves fundamental changes in the authority and control structure of the system. For example when only one sibling in a partnership is active in management, the ground rules may be easier to define. This type of succession tends to occur in more mature businesses that have around for at least three generations.

The third type of succession occurs when the transition requires a structural change toward greater simplicity. For example, the infusion of fresh capital came from sources such as windfall from the sale of a very successful venture that was owned by one of the cousins or wealth acquired by marriage that allowed the individual to buy the stock.

The key characteristics and key challenges of The Ownership Developmental Dimension, The Family Developmental Dimension, and The Business Developmental Dimension are mentioned in the Appendices.

20.2 Strategic plan for the business

Most family organizations do not have a plan for handing the power to the next generation, leading to great political conflicts and divisions. According to Ward (1987) Planning expands the options and alternatives that a business can pursue. It allows businessmen to anticipate opportunities and pursue potential resources or contacts. Planning expands options and ability to respond to change and also planning generates more information and reduces uncertainty through better understanding.

20.3 Cultural change

Culture change is also one of the factor that family owned firms need to address to remain innovative. Dyer (1991) concluded that the problems facing a family business cannot be completely avoided; therefore they must be managed. To manage these problems requires enlightened leadership. Leaders of family firms must recognize the cultural patterns of their business, and their family. They can understand both the strengths and weaknesses of their cultures and anticipate potential problems and create structures and mechanisms to manage their problems.

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