Question
This week we discuss Chapter 5 Entrepreneurship and New Venture Management. This topic has increased in popularity and importance in recent years. I think the
This week we discuss Chapter 5 Entrepreneurship and New Venture Management. This topic has increased in popularity and importance in recent years. I think the pandemic will only reinforce this trend. We, as a group, are not unfamiliar with entrepreneurs and have seen entrepreneurship in action in this course. So far in the course we have encountered the following entrepreneurs and their organizations:
Andy Pforzheimer Barcelona Restaurant, Chapter 1.
Mike Boyle Mike Boyles Strength and Conditioning, Chapter 2
Joe Whinney and Debra Music Theo Chocolate, Chapter 3.
Melissa Ben-Ishay Baked By Melissa, Chapter 3.
Mia & Jason Bauer (we didnt meet them) founders of Crumbs Bakery which was then sold in public offering, Chapter 3.
Kari Saitowitz The Fhitting Room, Chapter 4.
In this chapter we meet the Bissell brothers, founders and operators of Bissell Brothers Brewery
Assignment:
Watch the Chapter 5 videos in MindTap:
- Chapter 05: Concept Clip: Business Plan (1:48 minutes)
- Chapter 05: Concept Clip: Debt vs. Equity Financing (1:45 minutes)
- Chapter 05: On the Job Video: Bissell Brothers: Managing Start-Ups (7:28 minutes)
Answer the following questions
1. Why would you consider Peter and Noah Bissell entrepreneurs? Are investors in the brewery entrepreneurs? See the definition (p. 111, in the Introduction to Chapter 5.)
2. As entrepreneurs, how do Peter and Noah Bissell handle risk? (Note that in Chapter 5 we revert to the use of the generic use of the term risk to include Uncertainty as well. Read and think about how they talk about the risks they have taken.
3. What do you think is the driving force at Bissell Brothers Brewing Company? You could also consult their website https://bissellbrothers.com and see their Mission Statement. Click the big down arrow there or see About Us.
4. Which do you think is true of Bissell Brothers? Did they seek a distinctive competence by identifying a niche in an established market? Or did they identify a whole new market? Explain.
5. Joe Whinney built a chocolate factory in an old brewery. Bissells installed a brewery in a space they found and leased. In the introduction to Chapter 5 we read that when Chobani Yoghurt started up, the founder (Hamdi Ulukaya) felt that they needed to sell 20,000 cases per week to survive. Why is it necessary for these businesses to produce in volume? Use Figure 5.3 (a) to explain. (Hint: what is on the vertical axis of the graph?)
6. What percentage of small businesses are engaged in manufacturing (Figure 5.2)? What percentage are engaged in the services industry? Does the answer to #6 help explain the difference in magnitude between these two numbers?
7. On p. 122 (section 5-2c) about writing a business plan, it says Business plans should also account for the sequential nature of much strategic decision making in small businesses. I noticed that in the video Peter Bissell says twice that they got investors on board and then obtained a bank loan. Why might this sequence be important in their business plan?
8. First mover advantage (p. 121, section 5-2B) is defined as any advantage that comes to a firm because it exploits an opportunity before any other firm does. When did the Bissell brothers feel they had to act quickly and decisively to take advantage of an opportunity before anyone else did even though it meant additional cost in the short run?
9. Why is management advice (p. 125, section 5-3c) particularly important to entrepreneurs? Do you think the Bissell brothers are open to learning?
10. Intro to Chapter 5 mentions that Chobani received an SBA loan (p. 125 Section 5-3b) to help purchase a yoghurt factory that had been closed. Go to SBA.gov and name at least one program currently offered by SBA to help small businesses. Can management advice be obtained through the SBA?
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