Transcript Advanced Venture Business

New Business
Creation I
ビジネス創造論Ⅰ
From idea to investment
Jay Andrew Smith ([email protected])
Associate Professor
Inamori Academy, Kagoshima University
Spring/Summer 2008
NBC1 2008, (c) 2008 Jay A. Smith
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Class 1: Introduction to
Venture Business,
Industry Analysis & Strategy
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Jay Andrew Smith (44)
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1963 New Jersey, USA
1985 Rutgers University (Economics経済学, Physics 物理学)
1989 Harvard Business School (MBA 1989) 日本に始め来ました
1990 Management Consultant (NY, NJ, Tokyo)
1992 Venture Business (IT, Internet, email)
1998 Investment Banker (SF, LA, SV, NY, LV)
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Raised $400,000,000 for clients - IPO, Private Investment, M&A
2004 Kagoshima University, Inamori Academy Professor from 2005
日本に初めて来たのは1989年
4月2008年？
日経平均株価 ３９，０００単位 円
Dow Jones Indus. ２，７５０点
Ｂｕｓｈ 総理大臣
＿＿＿
竹下 大統領 and 宇野 and 海部
 ＿＿＿
 ＯＳ＝ DOSV
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NBC1 2008, (c) 2008 Jay A. Smith
１２，９００円
１２, ３００点
Ｂｕｓｈ
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Student Introduction
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From Kagoshima？ ___% Other ____%
Course of Study
 Electrical
 Chemical
 Bio
 Fisheries
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Mechanical
Medical
Nano
Other
Lived or studied abroad?
Speak English Well?
First Business Course?
Has “Good” Business Idea?
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Venture Business English (1)
assets
資産
sales channel
販売ルート
liabilities
責任
product
プロダクト／製品
sales
販売
market
市場
marketing
マーケティング
application
適用／応用
market segmentation
市場細分化
capital
資本／資産
finance
財政／財務
idea
考え
accounting
会計
control
統制
entrepreneur
起業家
administrator
管理者
stock
株
industry
産業
investor
投資家
competitor
競争相手
business model
ビジネスモデル
sustainable
支持できる
strategy
戦略
competitive advantage
競争優位
financial analysis
財務分析
substitute product
代替製品
pro-forma
形式上
taxes
税
cash flow
キャッシュフロー
economics
経済学
innovation
革新／変革
anticipation
予想
customer
顧客
adaptation
適応
distributor
ディストリビューター
momentum
運動量
synthesize
総合する
supplier
製造者／提供者
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Revised Class Schedule
4/15(火)16:10-17:40
4/22(火)16:10-17:40
5/13(火)16:10-17:40
5/27(火)16:10-17:40
6/3 (火)16:10-17:40
6/10(火)16:10-17:40
6/17(火)16:10-19:20
6/24(火)16:10-17:40
7/1 (火)16:10-17:40
7/8 (火)16:10-19:20
7/15(火)16:10-17:40
7/22(火)16:10-19:20
① Intro to Venture Business & Industry Analysis
② Intel Case Study
③ Sales & Marketing
④ Sales & Marketing Case Study
⑤ Marketing Project Presentations
⑥ Ideas and Innovation
⑦⑧Product & Service Presentations / Finance & Accounting
⑨ Finance & Accounting (continued)
⑩ Business Models & Plans
⑪⑫Elevator Pitches / Investment & Valuation
⑬ Presentation Workshop & Review
⑭⑮Presentations 2 Classes
Final Report: Team Business Plan Paper By July 29 (火）
Office Hour:
Ｔｕｅｓ： 13:30-15:00 VBL 2F 電話285-3630
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[email protected]
6
Making a Successful
Venture Business
Idea
Entrepreneur Team
Capital
Yen/ $
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Business
Model &
Strategy
R&D,
Production,
Operations
Sales &
Marketing
Strategic
Partners,
Suppliers,
Distributors Early
Users,
Supporters
Customer
Markets
7
All Parts Work Together
Business &
Technology
Environments
Opportunity
Social &
Government
Environments
Business
Strategy
Marketing
Strategy
Operations
Strategy
• Organization
• Human Resource
• Production
• R&D
Finance
Strategy
• Leverage
• Asset Utilization
• Make/buy
• Lease/own
Do strategies support, fit each other, have flexibility, balance/manage risk?
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Famous Venture Business Successes
Bloomberg
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Silicon Valley Seminar
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10 Students
September
5-6 days
IT, Biotech
VC, Lawyers
Stanford
Berkeley
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Japan & Silicon Valley, California
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Japan & Silicon Valley, California
Japan
140,000,000日本人
377,835 sq km
。
磐梯山 N37 38’
California
40,000,000外国人
411,015 sq km
。
SF空港 N37 37’
SF
太
平
洋
Silicon
Valley
SJ
LA
SF=San Francisco (サンフランシスコ)
SJ=San Jose (サン・ホセ)
Hawaii ・・
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Silicon Valley
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1849 California Gold Rush
San Francisco 800人=>24,000人
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1970~ Silicon Rush
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Berkeley
Oakland
Silicon Chip
Fairchild Semiconductor, Intel
Mix 4-5 million人

5 Counties (SF,SM,SC,CC,A)
 外国人： 1st/2nd/3rd世代
America, Europe, India, China,
MidEast, Russia, Japan
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Stanford, UC Berkeley, UCSF,
Santa Clara , 他大学
Lawrence Livermore
Government Research Labs
Kagoshima Univ.
Silicon Valley Office
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Birthplace of Silicon Valley
1938
David
Bill
Packard & Hewlett
367 Addison Ave, Palo Alto
in David Packard’s Garage
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1938: R&D begins on 1st product
audio oscillator
1939: Formal partnership Jan 1.
Decide name with a coin toss.
Sales: $5369. Employees: 2
14
Not So Famous
Venture Business Successes (M&A)
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TriVida
“Third life” together for management team
 Personalization software
 Sold to BeFree.com 1999
 BeFree IPO 1999
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SpinPop - Electric Lollipop
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John Osher
“Serial Entrepreneur”
Motorized lollipop
Low-cost motor usable in mouth
High-priced electric toothbrush already
 Low-priced spin toothbrush
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SpinBrush Company
Sold to P&G
for $475 million
(475億円)
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Most Venture Ideas Don’t Succeed
Bubble
IPO
Profitable
Sales – Costs > 0
Sales /
Funding
Business
Start-up
Idea
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Making a Successful
Venture Business
Valuable
Idea
Entrepreneur Team
Capital
Yen/ $
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Business
Model &
Strategy
R&D,
Production,
Operations
Sales &
Marketing
Strategic
Partners,
Suppliers,
Distributors Early
Users,
Supporters
Customer
Markets
17
Successful Venture Business
Create Value by Solving Problems
Company
Sony
 FedEx
 Google
 eBay
 Microsoft
 Intel
 Bloomberg

Problem/Opportunity/Desire
Big radios not portable
This has to get there overnight
I can’t find good information
I have old stuff you will pay for
Not everyone is a programmer
These computers are too big
I need best, timely info to invest
(financial companies can be great early customers)
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Problems Become Opportunities
人間に必要なのは困ることだ。
絶体絶命に追い込まれたときに
出る力が本当の力です。
本田宗一郎
“What people need is problems.
The power that emerges when faced with a
problem, where you would lose everything,
is your true power.”
Souichiro Honda
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Today’s Global Issues
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Pollution
Hunger
Oil Shortage
Population Growth
Military Spending
Population Aging
Religious Fundamentalism
China Rising (supplier, consumer, politics, military)
Other __________
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Japan Issues
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Economic Recession
Government Bureaucracy
Small land area/population
Employment dislocations
Oil Shortage
Population Aging
China Rising (supplier, consumer, politics, military)
Humidity
Other __________
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Making a Successful
Venture Business
Idea
Entrepreneur
Team
Capital
Yen/ $
NBC1 2008, (c) 2008 Jay A. Smith
Business
Model &
Strategy
R&D,
Production,
Operations
Sales &
Marketing
Strategic
Partners,
Suppliers,
Distributors Early
Users,
Supporters
Customer
Markets
22
Drucker on Entrepreneurs
The entrepreneur always
searches for change,
responds to it and
exploits it as an opportunity.
- Peter Drucker
起業家は常に変化を捜し、
それを機会として利用し、対処する。
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Peter Drucker – Business Guru
(1909-2005)
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NBC1 2008, (c) 2008 Jay A. Smith
Pioneer of management thinking
Over 30 books on management
Drucker Institute
The Peter F. Drucker Masatoshi
Ito Graduate School of
Management (Claremont Univ.)
Leader to Leader Institute
24
Apple’s Computers Then & Now
First Apple Computer
iPod 6G
160,000,000KB HD
8KB RAM in 16 Chips
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Microsoft Should Not Exist

IBM dominated PC
market
 IBM
thought hardware
was most important
 IBM now has no PC
hardware at all

Microsoft didn’t create
its own first software
仮定とは危険なものである。
アガサ・クリスティ
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Bill Gates (~1985)
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“The Stone Age didn’t end because they ran out of stones.”
石器時代はそれらが石を使い果たしたので終わらなかった
--------------Analog Age---------------------------------------
control
Bio Gene
Age Age
organic
energy/info
transfer
material
Electrical Electronic Quantum
Age
Age?
Age
Mechanical Age
Stone Bronze
Age
Age
Animal
Power
• 動物
• 人間
Plastics
Age
-2000
-4000年
energy
Digital Age
Solar
Power
• wind/water
• plants/ fire
network
0
1800
Coal/Oil
Power
Nano
Age?
1900 2000年
Nuclear
Power
Renewable
-Sun
-Wind/tide
-Plants
Wired -> Wireless
The speed of change is accelerating.
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Entrepreneurs are Innovators
Kazuo Kashio
（theme: apply electronics, digital)
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Entrepreneurs Create New Models
“You never change
things by fighting the
existing reality. To
change something,
build a new model that
makes existing models
obsolete.”
既存の現実の問題に
よって決して事を変えて
はいけない。 問題を変
えるために、既存のモ
デルを時代遅れにする
新モデルを造りなさい。
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Company Success Factors
Company
=
Success
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f
(company, industry)
30
Industry Analysis
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In which industry does the company participate?
How big is the industry?
How much is the industry growing?
How is the industry changing?

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New laws (e.g., pollution)
New technology
Industry profitability?
Structurally attractive industry?
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What industries?

Toyota
Auto, Motor Vehicle, Transportation Equipment

Suntory
Beer, Liquor, Soft Drink, Beverage

Disney
Movie, Theme Park, TV, Entertainment

ANA
Airline, Hotel, Travel, Leisure

Sony
Consumer Electronics, Music, Movie, Entertainment

Yahoo
Internet Provider, Ecommerce, News, Media, Advertising
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Product/Service
Areas
Application or
32
Broader Category
How Big is
The Industry?
一年間
47,993,000,000,000円
輸送 (自動車,船 …)
48兆円
日本 (2004):
〔円）
Government
82,110,900,000,000
Defense（陸軍） 4,876,400,000,000
- Personnel
2,165,400,000,000
-Equipment
880,600,000,000
National Defense Agency,
Ministry of Finance
www.stat.go.jp
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Consumer Electronics (2003)
70
Million Un its
60
DVD Player
Video Player
LCD TV
Color TV
Microwave
Washing Machines
Refrigerators
50
40
30
20
10
0
1980
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1990
2000
2003
(Japan Production, 2003 METI)
34
Consumer Electronics (2003)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
DVD vs Video
DVD Player
Video Player
LCD TV
Color TV
Microwave
Washing Machines
Refrigerators
1980
1990
2000
2003
(Japan Production, 2003 METI)
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Japan PC Market 2003
IBM 7%
Toshiba 8%
Hitachi 5%
HP 4%
Others 15%
Sony 9%
Dell 10%
NEC 21%
Fujitsu 21%
Total = 10 million units
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Industry Life-Cycle
SALES
Emerging
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Growing
TIME
Maturing
Declining
37
Industry Life-Cycle Stages
E G M D
Emerging
Growing
Example
IP電話
Growth
Rate
Starting
(2 mil ->22 mil)
2002 2007
Product/
Rapid
Technology Changes
Customers
1st
Timers
Maturing
Declining
Digital
Camera
Auto
Analog
Camera
Increasing
Slowing
Decreasing
Process Incremental Little
Investment
Changes Changes
Patterns
Building
Positions
New
Competition
Positions Building
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Smart,
Price
Focus
Decreasing
Increasing
Some
exiting
38
Venture Companies Often Start in
or Create Emerging Industries
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New products/services
Unproven market
Little market info
First-time buyers
Know-how developing
Technology changing
“Rules” not set
Structure unsettled
Future uncertain
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Growth, Market Share & Competition
Market share=company’s % of industry sales
 Growing industry is often less competitive

 If
the industry doesn’t grow companies must take
customers from other companies to grow.
Sales
Co. A
50%
Co. A
50%
Co.
Co.BB
50%
2004
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Co. A
70%
Co.
Co.BB
50%
Co. B
30%
2005
2006
40
Industry Structure
4 Cs
Competitors
競争相手
Suppliers
COMPANY
製造者
Venture
Businesses
Often enter here
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Substitutes
代替製品
Channel
Customers
販売ルート
顧客
Collaborators
th
協力者/協業者 “5 C”
41
Example: ヤマト急便
Competitors
Suppliers
ヤマト急便
Channel
Customers
Substitutes
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Example: ヤマト急便
UPS
佐川、UPS,
郵政省
Vehicles,
Fuel, IT
ヤマト急便
Fax, Car
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7-11,
Family
Mart,
0120
Homes,
Offices
Others???
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Company
Who are we? Why are we here?
 What are our goals?
 What are our strengths?
 What are our weaknesses?
 What are our key competitive advantages?
 What is our market position?
 What is our strategy?
 What is our business model?

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Suppliers
How many?
 How big?
 Relative Strength
 Importance/Value (e.g., keitai strap vs. LCD screen)
 Derived Demand

Kyocera
IC Chip
Package
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Intel Processor,
MS Windows,
Sharp LCD
PC
User
45
Channel
How your product service gets to customer
 Direct – company’s own network

 Sales
Force, Mail, Telemarketing, Vending,
Some Internet/Catalog, Company Store

Indirect – via one or more other companies
 Sales Agents,
VAR (value added resellers),
Stores (department, convenience, supermarkets,
Some Internet/Catalog (e.g. Askul)
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Collaborators

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Partners, helpers, advisors, experts
Directly or indirectly help the company
Examples
 Industry
experts, user groups, educators, advisors
 Industry or trade groups
 Government, NPOs, universities
 Complementary product/service providers


Software makers for hardware
Computer magazines, manuals, websites
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Competitors
Who are they?
 How many?
 What are their goals & strategies?
 What are their (relative) strengths?
 What are their (relative) weaknesses?
 More competitors leads to lower prices

 (except
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maybe in Japan)
48
Substitutes
How else can customer achieve goal?
 What are the advantages/disadvantages?

 Time,
Cost
 Quality, Effectiveness
What does it cost customer to switch?
 Are there new technologies coming?

Foot
Horse
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Train
Car
Plane
49
In Class Exercise
Competitors
Suppliers
___ Company
Channel
Customers
Substitutes
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5 Industry Forces Affect Profitability
Profit = Price – Costs
cost
Supplier
Power
New
Current
Competitor Competitor
Entry
Rivalry
price
Buyer Power
Channel / Customer
Company
price
Substitutes
NBC1 2008, (c) 2008 Jay A. Smith
price
51
5 Industry Forces
(Michael Porter, HBS)

Buyer Power (Customer /Channel)
 How

Supplier Power


How many, how big, how important to us, us to them
Current Competitor Rivalry


How many, cost structure, capacity, positioning, exit costs
New Competitor Entry
 Ease

many, how big, how valuable, how sensitive
of entry, cost of switching, technology change
Substitute Products/Services
 Advantages/disadvantages,
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cost of switching
52
Keiretsu Effect on Structure
Group company, suppliers
& sometimes channel
work together, keeping
out competitors,
Suppliers
Kyocera
Example
日本電気、
三菱電気、etc.
X
+
Competitors
Mitsubishi Group
Company
Customers
Substitutes
Intel, Fairchild OK, also 松下
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Channel
53
Homework (next class 4月22日）
Intel Case Study
 Just
read it…we will discuss in class …
think about the company, industry structure,
and the decisions made.
 Japanese and/or English versions
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Suggested Readings

www.venturesmith.us

www
 siliconvalley.com
 inc.com
 bfi.org
 youtube.com
 answers.com
 nikkei.co.jp

startupjournal.com
wired.com
economist.com
skype.com
worldlingo.com
dreamgate.gr.jp
Books
 肩をすくめるアトラス byアイン・ランド
 宇宙船地球号操縦マニュアルちくま学芸文庫 by バックミンスター フラー
 会議が変わる6つの帽子 by エドワード・デ ボーノ
 ヴァージン―僕は世界を変えていく by リチャード ブランソン
 日本を創った12人 by 堺屋 太一
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Class 2
Industry, Strategy, Business
Model (continued)
Intel Case Study
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Announcements
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4 C’s & 2 S’s Review
Competitors
Suppliers
___ Company
Substitutes
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Channel
Customers
Collaborators
th
協力者/協業者 “5 C”
58
4 Cs + 2s – The Players

Company (us)


Customer (goal)


Who, Current, Future, Advantages, Position
Substitutes (other choices for customer)


Sales Team, Distributors, Service, Support, Partners
Competition (them)


Who? How many, How strong, How important, Wants & Needs
Channel (path)


Mission, Goals, People, Structure, Strategy, Model
What, Advantages, Costs, New Technologies
Suppliers (inputs)

Who, How many, How strong, How important to us,
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5 Forces Affect Industry Profitability
Profit = Price – Cost
cost
Supplier
Power
New
Current
Competitor Competitor
Entry
Rivalry
price
Buyer Power
Channel / Customer
Company
price
Substitutes
NBC1 2008, (c) 2008 Jay A. Smith
price
60
5 Forces

Buyer Power (Customer /Channel)
 How

Supplier Power


many, how big, how valuable, how sensitive
How many, how big, how important to us, to them
Current Competitor Rivalry
 How
many, cost structure, capacity, positioning, exit
costs

New Competitor Entry
 Ease

of entry, cost of switching,
Substitute Products/Services
 Advantages/disadvantages,
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cost of switching
61
Today’s Drucker
A business has 2 basic functions:
marketing
and
innovation.
Peter Drucker
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Intel Case Study

Big idea, new technology/business area:
 semiconductors,

IC chips
Company is more than its products
 “Platform”
(product series, same technology
base)
Technology Innovation
 Marketing Innovation
 Strategic Choices
 Sustainable Competitive Advantage

NBC1 2008, (c) 2008 Jay A. Smith
63
Intel 1968-1977 Case

“Trying to do things nobody else could”
– Robert Noyce (co-inventor integrated circuit IC)
Gordon Moore (creator of “Moore’s Law)
 Andy Grove joined, took personal “risk”
 First 2 DRAM products not successes
 3rd product 1103 became world leader,

 90%
of Intel revenues (concentrated)
NBC1 2008, (c) 2008 Jay A. Smith
64
Intel
AMD, TI, Cyrix
Motorola
Competitors
日本のDRAM
IBM
Direct
Equipment (sole/dual)
Kyocera, etc
Suppliers
Intel
Channel
Customers
Licensees
-IBM
-Others
Compaq
Dell
Packard Bell
C
H
A
N
N
E
L
E
N
D
U
S
E
R
RISC
Substitutes
NBC1 2008, (c) 2008 Jay A. Smith
Software
collaborators
Providers
• OS
• Application
65
Intel DRAM Strategy

Strategy: push product design, be first to market
 Design
& process technology leader
 Investment in plant & equipment
 Costs drop over production volume (scale) growth
 Prices drop with competitive capacity
 DRAM generally not protectable with patents
 Japanese started introducing products more rapidly

Invested more heavily in production (44% vs. 22%)
 1986 Intel decided to exit DRAM business
 1/3 of R&D, but only 5% of Revs, was small player in market
 Japanese beat Intel on process technology (of commodity)
NBC1 2008, (c) 2008 Jay A. Smith
66
Intel and Microprocessor

1970 CPU chipset order for Busicom calculator
 Technology
development “paid by customer”
 Bought rights for “non-calculator” use

Hard to see future even for Gordon Moore




“…never gave it another thought” – Moore
“We didn’t take it (PCs) seriously” – Grove
Non-sequential forecasting
Sometimes easier for outsider to see
 Exit: By 1984 mid-level managers shifting technology
 Hard to leave business that began company
 Especially for long time senior managers
 Mid-level managers closer to daily business realities
NBC1 2008, (c) 2008 Jay A. Smith
67
Apple/Motorola vs. IBM/Intel



First to Market
Closed architecture
Sole-provider



 Exclusivity

 Proprietary
INTERDEPENDENCE
OF COMPANIES (p.30, 22)
“Value Chain”
1994 Apple/IBM-Motorola PowerPC chip
2006 Apple/Intel
NBC1 2008, (c) 2008 Jay A. Smith
Big, famous name
Standardized, open
architecture


Components
Software
Scale economies
Intel gets benefit of IBM
marketing and strategy
(derived demand)
68
Intel Microprocessor Progression
Chip
(bits)
Year
Introduced
Initial
Price
Licensees
Intel-Chip
Market Share
1978
$360
12
30%
1982
$360
4
75%
1985
$299
1 (IBM)
100%-IBM
1989
$950
?
?
Transistors
8086
(8-bit)
29,000
80286
(16-bit)
134,000
80386
(32-bit)
275,000
80486
(64-bit)
1,200,000
NBC1 2008, (c) 2008 Jay A. Smith
69
386 Changes Everything (1985)

Intel 386 Investments
 $200
million for design
 $800 million for production facilities
 Decides not to license, except IBM

IBM choice allows Compaq entry and Win
 IBM
delays selling, to create more closed
architecture
 Compaq enters Desktop market with Intel 386
NBC1 2008, (c) 2008 Jay A. Smith
70
486 and Wintel Collaboration

Hardware advance precedes software advance
 Microsoft
Operating System (new DOS) not ready for
386
 Need large installed base of hardware for software
upgrade

Emerging collaboration between MS & Intel
 WINdows
+ INTEL = “WINTEL” platform
 Software + Brain

Software investments (past and future)
 Increasing
NBC1 2008, (c) 2008 Jay A. Smith
switching costs
71
“Intel Inside” – Marketing Innovation

Ingredient（材料）/Component（成分） Marketing


Intel is “superior to other chips”




Market maturity, education higher (2nd, 3rd PC)
Buyer Intel preference moved from 60% to 80%
AMD: “it shouldn’t matter which chip” but it DOES
IBM, Compaq resisted, but then gave in




Another example?
Couldn’t fight Intel
Better to have branded “Intel Inside” “premium” chip
6% rebate for use in partner marketing
Fight competitors with technology, marketing, lawyers
and money power (all pointed to same goal)


1997 spent $750 million
More valuable than patent
NBC1 2008, (c) 2008 Jay A. Smith
72
Ending Question
Is the internet
good or bad
for Intel?
NBC1 2008, (c) 2008 Jay A. Smith
73
Some Important Strategic Ideas


Where is the most “value” in a computer?
Success attracts competition, company must protect
against


Technology moved so rapidly that patents became
obsolete


protect by know-how, branding, scale, luck
Small stuff that goes inside other stuff


2005 Intel has 82% of PC processor market
Allows focus, expertise, scale, “piggy-backing”
Thrived on derived demand driven growth and rapid
change
NBC1 2008, (c) 2008 Jay A. Smith
74
Typical Market Positions & Strategies
Position
Goal
Strategy
Leader
Most
Sales
-Grow Market
-Grow Share
Nissan
Challenger
Challenge
Leader
-Target Leader
-Target Small
Mazda
Follower
Grow
Carefully
-Maintain Base
-Grow Quietly
Daihatsu
Niche
Find Safe
Space
Specialize
Toyota
NBC1 2008, (c) 2008 Jay A. Smith
75
Fragmented Industries
(fragment=破片）




Market divided over many
companies
No dominant leader
Largest competitor may only
have a few percent market
share
Examples:







Restaurants
Book stores
Repair shops
Publishing
Pet shops
Hair Salons
Hotels
NBC1 2008, (c) 2008 Jay A. Smith
ラーメン
第一ラーメン
第二ラーメン
第三ラーメン
第四ラーメン
第五ラーメン
第六ラーメン
第七ラーメン
第八ラーメン
第九ラーメン
第十ラーメン
第十ーラーメ
ン
第十にラーメ
76
Fragmented Industry Strategies
Construct formula facility
 Expand geographically
 Increase vertical integration
 Become low-cost producer
 Specialize by product/service
 Specialize by customer type
 Build brand

NBC1 2008, (c) 2008 Jay A. Smith
77
Company
Who are we? Why are we here?
 What are our goals?
 What are our strengths?
 What are our weaknesses?
 What are our key competitive advantages?
 What is our market position?
 What is our strategy?
 What is our business model?

NBC1 2008, (c) 2008 Jay A. Smith
78
Homework Assignment

Design your own personal “life” meishi
わし
の
めいし
OO枚copies please
Email: [email protected]
1. Your Name (as you want it)
- Nickname (optional)
2. Title (life position)
3. Purpose statement
4. Ideal living place(s)
5. Identifying email address
6. Anything else important
- Logo
- Website
- Business Name
- Cool Phone Number
(any languages that fit)
NBC1 2008, (c) 2008 Jay A. Smith
79
Homework Assignment

Design your own
personal“life meishi”
name
“title”
SAMPLE
logo
Jay Andrew Smith
International Educator
Purpose/goal
Promoting Growth
And Understanding
Around the World
Cool place(s)
New York + San Francisco + Kagoshima + Brugge
[email protected]
Meaningful email/HP address
NBC1 2008, (c) 2008 Jay A. Smith
80
www.vistaprint.jp, ppt, Paint, illustrator, etc. by hand all
OK
Sample Meishi
Kenta Maruyama
Someday Astronaut
Go to Space and Look the
Earth
Kagoshima+Fukuoka+Space?
[email protected]
NBC1 2008, (c) 2008 Jay A. Smith
81
Class 3
Sales &
Marketing
NBC1 2008, (c) 2008 Jay A. Smith
82
Today’s Drucker
The purpose
of a business
is to create and
keep a customer.
NBC1 2008, (c) 2008 Jay A. Smith
83
Marketing Universe


Product/Service (what)
Market (where, who)






Location (U.S.,Japan,鹿児島市)
Gender (male, female)
Age (<21, 21-35, >70,子供…)
Activity (ski, golf, travel)
Preference (和風、洋風、辛口）
Ａｐｐｌｉｃａｔｉｏｎｓ
Ｐｒｏｄｕｃｔｓ
Ｍ
ａ
ｒ
ｋ
ｅ
ｔ
ｓ
Application (how, why)


New application for a keitai
New application for a tree
NBC1 2008, (c) 2008 Jay A. Smith
84
Filling Unmet Needs & Wants

Market Focused - Venture Co.
– this thing is happening, what can I do about it?
 Identifying problems and opportunities
 Reduces market risk (someone needs solution)
 Demand side

Product Focused - Existing Co.
– I have this thing …how can I make it better for my
customers
 Supply side
NBC1 2008, (c) 2008 Jay A. Smith
85
Sales & Marketing
Product/Service
Customers
COMPANY
Money

Sales (Revenue):
 Money
received for selling product or service
 Source of funds for business operations
 Basis for business existence

Marketing: how company gets sales
selection, pricing, promotion and distribution of products/services to
customers
NBC1 2008, (c) 2008 Jay A. Smith
86
Marketing and 4 C’s & 2 S’s
Competitors
Suppliers
___ Company
Substitutes
NBC1 2008, (c) 2008 Jay A. Smith
Channel
Customers
Collaborators
th
協力者/協業者 “5 C”
87
Customers



Who are your customers (or target customers)?
How many potential customers are there?
What are their characteristics?



How do they buy?






Age, sex, wealth, education, hobbies, work, is it one person?
What are their goals, desires, needs, wants?
What do they think about?
Where do they get information? Who influences them?
What is important to decide (price, features)
When do they buy (seasonal products, bonus season)
When do they pay?
Market segment = group of similar customers


Broad market = U.S. Market, Software Market
Narrow market segment = left-handed golfers
NBC1 2008, (c) 2008 Jay A. Smith
88
Example Consumer Market Automobiles
Segmentation & Positioning
Jaguar
In Pink
Takako Tanaka
Wealthy, Single, Women
Jagua
r
Classy
Single Men
Younger Families
Older Families
Older Drivers
NBC1 2008, (c) 2008 Jay A. Smith
Zoom
Volv
o
Safe
For
Toyot
d
aCar
American
O
Single
Women
Wealthy, Single, Men
Mazda
O
O
O O
O
O O
O O O O
O O O
O O O
89
Women, buy ALL the stuff1
Women buy or influence the purchase
of nearly all consumer products
and an increasingly high percentage of
business related products
1 Tom Peters,
author of In Search of Excellence
NBC1 2008, (c) 2008 Jay A. Smith
90
Business Market Segmentation
How Many
1
Microsoft
Fortune
500
Large
Businesses
500
~ 10-20,000
Medium Businesses
Small Businesses
>1 person
9 million
1-person companies
All U.S. Businesses
NBC1 2008, (c) 2008 Jay A. Smith
10 million total
91
Consumer & Business Markets
Google?
Haagen-Dazs
Product
Nike
Uniqlo
Starbucks
Microsoft
Intel
Dell
HP
GE
Sony
Hair Salon
Bloomberg
Amazon
Askul
ヤマト
Service
eBay
Secom
Consumer
Market
NBC1 2008, (c) 2008 Jay A. Smith
Business/Industrial
Market
92
3rd Party Business Model
Product/Service
Customers
COMPANY
Money
Product/Service
User
COMPANY
Money
Other
Service
Sponsor
NBC1 2008, (c) 2008 Jay A. Smith
93
Sales/Buying Cycle
Awareness => Interest => Trial => Purchase =>
Repurchase
Hear About
Again
Curious
Try
Buy
Use
This Exists
Educate are Test
Use itsuccess
Keep
Repeat customers
key to business
Buying
NBC1 2008, (c) 2008 Jay A. Smith
94
Industry/Market Life-Cycle
SALES
Awareness  Interest  Trial  Purchase  Repurchase
Emerging
NBC1 2008, (c) 2008 Jay A. Smith
Growing
TIME
Maturing
Declining
95
Technology Adoption Life Cycle
Financial
Services
Academics
Tech. Fans
Innovators Early
Adopters
Main Market
Early
Majority
Late
Majority
Laggards
Time
Examples- Internet
NBC1 2008, (c) 2008 Jay A. Smith
Geoffrey Moore, Crossing the Chasm
96
4Ps – “Marketing Mix”
Product (what do we make)
 Place (where do we sell it)
 Price (how much we sell it for)
 Promotion (how do we communicate about
it)

NBC1 2008, (c) 2008 Jay A. Smith
97
Product

What is our product and/or service



Physical/tangible – alarm, software, newspaper, coffee
Intangible – security, insurance, information, experience
Why do people buy it


What does it do?
How is it used?




Does it need something else?
One-time or consumable?
Packaging (box, label, information, customer experience)
Positioning


How different is it (perceived) from other products?
What is my brand image/strength
NBC1 2008, (c) 2008 Jay A. Smith
98
Favorite Products










Product
Company
Target Customer
Packaging
Channel
Competitive Products
Substitutes
Value
Price
Cost
NBC1 2008, (c) 2008 Jay A. Smith
99
Place – Where do I sell?
Choosing the Channel, Supporting It
 How many potential customers are there?
 Can I easily identify customer?
 How expensive is my product?
 How many products can I sell one customer?
 How powerful, or valuable are the resellers?
 Are there many resellers that compete?
NBC1 2008, (c) 2008 Jay A. Smith
100
Favorite Products










Product
Company
Target Customer
Packaging
Channel
Competitive Products
Substitutes
Value
Price
Cost
NBC1 2008, (c) 2008 Jay A. Smith
101
Price Issues

What does it cost to produce? (floor)
 Cars,
Soda, Computers
 Pharmaceuticals, Software


How much value does it have to customer?
(ceiling)
How many can I sell at each price?
 How
many customers are there?
 How much competition is there?
 Is it easy to compare with other prices?
 How much better is my product?

Does price fit with my positioning?
NBC1 2008, (c) 2008 Jay A. Smith
102
Price & Margin
Price to customer
Price to Channel
Cost
NBC1 2008, (c) 2008 Jay A. Smith
103
Product Positioning Promotion
NBC1 2008, (c) 2008 Jay A. Smith
104
Promotion (communications, “selling”)

Advertising

Push (direct mail, email)


Pull (TV, radio, poster, newspaper, some banner ad)






Is each customer readily identifiable?
Can’t readily identify individual customers
Internet can be push or pull
Chirashi?
Public Relations
Investor Relations
Intel Case Examples


Motorola: 13 Wall Street Journal Ads
Intel: 6% rebate = 4% up to 66% of Print, 2% up to 50% of
TV/radio
NBC1 2008, (c) 2008 Jay A. Smith
105
Promotion & Market Segmentation
Promotion Media
Taro Tanaka
Overweight, Athletic,
Beer-Drinking Men,
Who care about their figure
Overweight, Athletic, Beer-Drinking Men
Overweight Athletic Men
Overweight Men
Men
People
NBC1 2008, (c) 2008 Jay A. Smith
Direct Mail
Fitness
Magazine
Targeted
Poster
Football
Broadcast
Train Poster
Night TV
TV
106
Advertisement Discussion
Product/Service
 Target Market
 Medium
 Value Proposition
 “Message”
 Buying Cycle

NBC1 2008, (c) 2008 Jay A. Smith
107
Next Class ６月1日

Dell Online Case Study

Region Goods/Service Marketing Project
www.venturesmith.us
NBC1 2008, (c) 2008 Jay A. Smith
108
Dell Case Issues to Think About
Company History and Choices
 Industry & Competition
 Products
 Customer/Market Segments
 Pricing
 Channel/Operations
 Competitive Advantage
 Case questions & decisions

NBC1 2008, (c) 2008 Jay A. Smith
109
Region Marketing Project





Group project 2-3 people
Pick product/service from Kagoshima or home
region
Pick a target market
Develop company sales/marketing promotion
６月1日 presentation (powerpoint, poster, or other)
 Presentation:
5分
 Q&A and advice: 2-5分
 English Preferred
NBC1 2008, (c) 2008 Jay A. Smith
110
Region Goods/Service Promotion
Project









Product/service:
Company/brand:
Customer target & size:
Promotion message:
Place:
Channel:
Competition:
Price:
Collaborators:
NBC1 2008, (c) 2008 Jay A. Smith
+ ADVERTISEMENT
Sample
111
Promotion Project










Product/service:

Company/brand:

Customer target/size:
Business Model:

Promotion message: 
Place:

Channel:

Competition:

Price:

Collaborators:

NBC1 2008, (c) 2008 Jay A. Smith
Kagoshima fresh tonkatsu
Big Pig Ka-ton
Japanese tourist hotels (200?)
Buy, resell tonkatsu to Custom
Japan’s juiciest tonkatsu
Trade fair, magazine, site visit
Direct
Kumamoto Ton, Nissin
Slight premium
Kagoshima pig farmers 会
112
TM
So Fresh You Think It Can Fly
NBC1 2008, (c) 2008 Jay A. Smith
113
Fit – Is this the Right Match?
Opportunity
 Environment (4Cs)
 Marketing Mix (4Ps)
 Selling/Buying Cycle (Goal)
 Promotion Message & Strategy
 Business Model

NBC1 2008, (c) 2008 Jay A. Smith
114
Suggested Readings

Books







Video




競争の戦略 by マイケル・E. ポーター
日本の競争戦略 by マイケル・E. ポーター , 竹内 弘高
キャズム by ジェフリー・ムーア
フォーカス―市場支配の絶対条件 アルby リース
パーミションマーケティング―ブランドからパーミションへ byセス ゴーディン
ネットビジネス戦略入門 by パトリシア シーボルト
ペイ・フォワード with ケビン・スペイシー
ビッグ・チャンス with ケビン・スペイシー
Glengarry Glen Ross with ケビン・スペイシー
WWW

Entrepreneur.com
NBC1 2008, (c) 2008 Jay A. Smith
115
Class 5:
Dell Online
Case Study
NBC1 2008, (c) 2008 Jay A. Smith
116
Table of Contents – Outlines
Story


[Executive Summary] (should be listed)

Business Opportunity
1.1 Internet is Huge and Spans the Globe
1.2 Exponential Growth Will Continue for Foreseeable Future
1.3 International Commercial Use is Fastest Growing Segment
1.4 Unmet Needs of Target Market
1.5 Pacific Internet Nodes are Key Players
1.6 Technology is Proven


Financial Outlook
4.1 Financial Summary
4.2 Revenue Forecast
4.3 Income Statement
4.4 Cost Structure
4.5 Source and Use of Funds
4.6 Balance Sheet
4.7 Capitalization and Dilution
Risk Management
Business Strategy
2.1 Goals & Objectives (generic title vs. become dominant
provider)
2.2 Buy Existing Nodes
2.3 Deliver Value-Added Products & Services
2.4 Focus on Sales & Marketing
2.5 Consolidate Operations
2.6 Position Against Major Competitors

Organizational Plan (all generic titles)
3.1 Plan of Organization
3.2 Founders and Management Team
3.3 Implementation of Organizational Plan
3.4 Company Values
NBC1 2008, (c) 2008 Jay A. Smith
117
Suggested Reading
Books & Magazines
 Movies

 Wall
Street
 Start-up.com

WWW
 sec.gov
(EDGAR, 10K filings, S-1)
 licensing.org Licensing industry association
NBC1 2008, (c) 2008 Jay A. Smith
118
Course Overview


Introduction to Venture Business
Venture Business Concepts Related to











Industry Analysis, Business Models & Strategy
Sales & Marketing
Finance, Accounting, Control
Strategy, Planning, Management
Operations
Product Development/R&D
HR (Human Resources)
PR IR (Public Relations, Investor Relations)
Business Communication
Case Studies
Projects & Presentations




Marketing promotion presentation (group)
New product or service idea (group)
New business idea “pitch” (individual)
New business plan and presentation (group)
NBC1 2008, (c) 2008 Jay A. Smith
119
Today’s First Drucker:
Profit is not the explanation, cause, or
rationale of business behavior and
business decisions, but rather the test of
their validity.
-- Peter Drucker
利益は、企業行動とビジネス決定の説明、原
因または、理論的根拠ではなく、むしろ、それ
らの妥当性のテストである。
NBC1 2008, (c) 2008 Jay A. Smith
120
Entrepreneur’s Approach





Anticipation（予想）– look ahead
Timing – move quickly, be ready, catch window
Adaptation （適応）– reacts, adjusts quickly to
change
Synthesis （総合する）– puts the pieces together
Momentum （運動量）– keep moving forward
Trust – expect high team loyalty
 Faith & Confidence – future path is unpredictable
121
 Luck – who knows what can happen today?
NBC1 2008, (c) 2008 Jay A. Smith

Entrepreneurs vs.
Administrators




What/where is the
opportunity?
How do I do
something about it?
What do I need?
How can I get needed
things?
NBC1 2008, (c) 2008 Jay A. Smith




What opportunity fits
us?
How do we fit in the
market?
What things do I
control?
How can I reduce
risk?
122