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6 steps to launching your own business
Meenakshi Radhakrishnan-Swami |
December 15, 2005
I feel a little like Oliver Twist. Reading the business cases included in Cases In Entrepreneurship, I'm tempted to beg, "Please, sir, some more."
It's not that I'm a glutton for writings on the venture creation process -- honestly, how many of us really are? -- but I do like to see a story through to the logical end. Granted, it's fascinating to know the intricate details of events in interlocking sequence. But I need to know it all: whodunnit? With what motive?
Eric Morse and Ronald Mitchell, though, seem to take a perverse delight in keeping their reader in the dark. They devote pages and pages to case studies on interesting companies like Ben & Jerry's, Frontier Adventure Racing and publishing firm Drawn and Quarterly.
But, just as you start losing yourself in the details of the new business enterprise, following the story much too engrossed to look up even for a second, it screeches to a halt, leaving you splattered against something like: 'Lastly, Gin wondered how e would manage both companies in the coming months.'
"Well?" you ask as you peel yourself off the backend of the case. "How did he manage?" Don't read on to find out.
Now, Cases In Entrepreneurship is one in a series of books drawn from the world's second-largest collection of business cases, housed at the Richard Ivey School of Business at the University of Western Ontario (the largest collection, of course, is at Harvard).
The other books in the series include cases on subjects like business ethics, gender and diversity in organisations and organisational behaviour. Ivey's case bank is huge: over 6,000 titles at last count, with about 200 added every year.
This book combines case studies with overarching text that creates a suitable background and context for the cases. Morse and Mitchell -- professors at Western Ontario and Texas Tech, respectively -- use the first six chapters to explain the six core elements critical in creating a new venture: searching/ idea formulation; idea screening; planning and financing; setup; startup; and ongoing operations and growth. The introductory text is then backed up with complementary case studies.
It's not enough for a prospective entrepreneur to hit upon one winning idea: Morse and Mitchell recommend generating at least 25 venture ideas before whittling the list down to five "potentially viable" options. The searching and screening done, the writers recommend you turn your attention to the planning and financing of the venture, using the 'harvest' system of financing (value is distributed to those who helped create it). Then, on to creating the organisation and starting the actual process of value creation. Which, if done properly, leads the entrepreneur to a cycle of growth.
One of the most interesting cases in the book relates to Ben & Jerry's' decision to enter the Japanese market in 1997. The American ice-cream company was in a quandary: if it delayed any further, it would miss out the summer of '98 ice-cream season, but given the condition of the Japanese economy, did it want to be there in the first place?
Besides, Ben & Jerry's wasn't doing too well: sales were slipping and new growth would have to come from non-US markets. Meanwhile, main rival Häagen-Dazs had established its presence in Japan a decade earlier and had already captured close to half the super-premium ice-cream market.
Several questions needed answering before a decision could be taken. Should Ben & Jerry's ally with Seven-Eleven or Meiji Milk Products for its Japan entry? If Seven-Eleven, should it accede to the retailer's demand and supply ice-cream in personal cups (120 ml) rather than the pint packs that it currently packed? Should it allow customised packaging for Japan, which would do away with not just the funky lettering that distinguished the ice cream cartons, but also the trademark photograph of Ben and Jerry? What about pricing -- who would decide what to charge? And what about the company's quirky do-gooder mission that gave the brand its differentiated appeal in America -- would there be enough scope for it in the Japanese operations?
The case begins with a description of Ben & Jerry's executives sitting down to a traditional Japanese dinner with their counterparts from Seven-Eleven. When it ends, 17 pages later, they're still eating and no closer to a decision.
Morse and Mitchell may not tell you more, but let me conclude the story for you: Ben & Jerry's accepted Seven-Eleven's offer eventually and entered Japan with single-scoop servings in 1998.