Plan for Action Business Planning - ABP Darius Mahdjoubi, Ph.D. <dariusm@mail.utexas.edu> IC 2 Institute of UT-Austin and St. Edward s University Darius Mahdjoubi, 2006 Business Ideation: Inception and Distillation of business ideas The beginning is the most important part of the work. 1) Inception: Articulate the origin of the business idea 2) Distillation: Describe the evolution of the business idea from its inception to specific products (goods and services). 1. Inception & Generation 0f New Business Ideas Specific Product Plato Business Ideation has discussed in more detail in a separate set of slides. This slide summarizes the two stages of ideation: Inception and Distillation. 2 1
Classification Major enterprise activities are classified into 4 main groups: 1. : How to Make 2. Customer/: How to Sell 3. : How to Recruit and Retain Employees 4. Organization: How to Integrate Altogether. and innovation happen in all aspects of enterprise activities. 1) / 2) Customer & 3) (learning and creativity) 4) (change and leadership) and development are not limited to technology. 3 The Map Model / The four aspects of innovation have nonlinear relationship with each other. They are distinct; though they are linked. development often plays the role of linking those to each other. often holds the most visible aspect of innovation and development., however, is not necessarily always the most important aspect of innovation. Examples: Dell, Southwest Airlines, Wal-Mart, Virgin Group. The four aspects of innovation are analogous to the continents of the World 4 2
Ideation and Inception: Articulate the origin of the business idea Distillation (Idea Funnel): Describe the transformation of the business idea into specific products. Map Model: Four aspects of innovation have nonlinear relationships with each other. They are distinct but are linked, like a map overlap each other. development often links them all. 1. Inception & Generation 0f New Business Ideas Product / 5 The Plan The Plan, broadly speaking, articulates the four innovation (development) facets for the specific product concept: 1), 2) Customer, 3) and 4) Organization 3
is categorized into five groups: 1) Product Design/, 2) Process, 3) Equipment, 4) Plant/Factory, and 5) Legal aspects of technology development. Specific Product 1. Product Design/ 2. Process 3. Equipment 4. Plant/Factory 5. Legal aspects of and liabilities of the product Each of the four aspects of innovation is discussed in more detail in separate documents. / 7 Product Design/ Functional aspects: Technical programs, like mechanical engineering, often concentrate on the functional aspects of new products. Form aspects: Art programs often concentrates on the form aspects of new products. -Machine Interface Aspects Ergonomic: Industrial Design, Industrial Engineering. It often concentrates on the physical (body) interactions between humans and machines. User interface: Information Science, and Psychology. It often concentrates on the mental (?) interactions between humans and machines mostly in the context of interaction of users and computers. Factors 8 4
Product Specification Vs. Product Design Product Specification is the description of the distinct features of the product/service. Product Design is about the technical configurations that are able to satisfy the product specifications. The Product Specification of a new airplane may in a text format that describes the desired speed, the load capacity, and range. The Product Design of a new airplane is the drawing format that depicts the actual shape of the airplane that is design to get the desired description. 9 Customer/ Customer/ is categorized into nine groups: 1) Product, 2) Product lifecycle, 3) Customer/ Segmentation), 4) User versus Buyer, 5) Size for each segment, actual and potential 6) Price, 7) Distribution, 8) Promotion (Communication, Advertising, Branding), 9) Competition, and 10) Legal aspects of customer development / 1. Product 2. Product Lifecycle 3. Size (actual and potential) 4. Customer/ Segmentation 5. Users versus Buyers 5. Price 6. Distribution 7. Promotion 8. Competition 9. Legal aspects of customer development 10 5
Side of Venture The main aspects of human resources 1) Founders Personality 2) Background (individual and cultural), 3) Expertise (education, training, and experiences), 4) Perspectives (motivation and inspiration), 5) Capabilities (individual creativity skills, modeling, communication, networking and organizational creativity skills), 6) Needed people for each stage of venture development (Ideation, Survival and Growth), and 7) Legal aspects of human resources development. / 1. Founders Personality 2. Founders Background 3. Founders Expertise 4. Founders Perspective 5. Founders Capabilities 6. Needed people for each stage of venture development 7. Legal aspects of 11 is categorized into the following groups: 1) Business Models, 2) Overall strategy, that may include elements of other aspects of development, such as technology strategy, marketing strategy, and human resources strategy. 3) The organizational structures and charts for each stage of venture development, 4) Legal aspects of organizational development, 5) Leadership and Change. 6) Values, vision, mission and objectives of the venture. (See also Decision Making Based on the Navigation Model) 1.Business models 2.Overall strategy 3. structures, relations and charts 4.Legal aspects of organizational development 5.Leadership and Change Values, Vision, Mission and Objectives / 12 6
Change: Easy or Difficult? This picture represents a deficiency in organization, rather than in technology. innovation is difficult and time consuming! development/change is often the most challenging aspect of innovation. 13 Change: Easy or Difficult? 14 7
For Profit VS Non Profit Organizations For Profit Organizations Overall Goal: Profit-making Values, Vision, Mission, and Objectives consistent with the Overall Goal. Legal Aspects: Registration and Taxation as a For Profit Governance and Auditing: Board of Directors Performance Criteria: Sales/Cost, Return of Investment and Management Non Profit Organizations Overall Goal: Social good. Values, Vision, Mission, and Objectives consistent with the Overall Goal. Legal Aspects: Registration and Taxation as a Non Profit Governance and Auditing: Board of Trustees Performance Criteria: Sales/Cost, Donations? Social Return of Donations? and Management 15 Ideation and : Summary 1. Inception: Describe the origin of the business idea 2. Distillation (Crystallization): Describe transformation of the business idea to specific products 3. Product Specification: Specify the main characteristics of the products. 4. Technological ( ): 1) Product, 2) Process, 3) Equipment, and 4) Facilities and 5) Legal aspects of the product. 5. Customer/ : Articulate: 1) Product, 2) Product Lifecycle, 3) Customers/ segmentation, 4) Potential and actual market size for each segment, 5) price, 6) Distribution), 7) promotion (communication), 8) competition and 9) legal aspects of sales. Articulate the links between technology development and customer development. 6. : Elaborate on the (HR) for each stage of the venture. This section covers the management team and founders, as well the development of key employees by hiring from external sources and by internal training. 7. : Elaborate on the organizational, external and overall aspects of venture development. Elaborate on the vision and mission of the venture. 8. Paradigm of : Elaborate on the Paradigm of applicable to 16 the product. {Discussed in a separate file} 8