SYLLABUS DEEL 1 INLEIDING TOT HET BEDRIJFSBEHEER Marc Goldchstein Diane Breesch Elvira Haezendonck Leo Verschueren Vrije Universiteit Brussel academiejaar 2008-2009 Faculty of economic, political and social sciences and Solvay Management School Page 1
INHOUD INLEIDING, STRUCTUUR VAN CURSUS INDUSTRY DYNAMICS AND PROJECT ASSESSMENT FINANCE MANAGEMENT HUMAN RESOURCES MANAGEMENT Page 2
INLEIDING, STRUCTUUR VAN CURSUS De theorie De doelstelling van deze cursus is de studenten een basiskennis te verschaffen over bedrijfsbeheer en ondernemerschap. Deze cursus bevat bijdragen van een aantal personen, meestal medewerkers van de Vrije Universiteit Brussel. De Professoren Diane Breesch, Elvira Haezendonck en praktijklector Marc Goldchstein hebben het grootste deel op zich genomen. Er zijn tevens bijdragen van Professor Roland Pepermans, en van Hugo Loosvelt en Sonja Haesen van de Technology Transfer Interface, en van Leo Verschueren. In deze cursus komen de volgende elementen aan bod (tussen haakjes de auteur(s) van het onderdeel). We bestuderen de ontwikkeling van industrieën en projecten (Marc Goldchstein) We bestuderen uitgebreid de basisbeginselen van financieel beheer: boekhouden, balans en resultatenrekeningen, ratio analyses. We bestuderen een aantal financiële aspecten zoals BTW, personeelkosten We bestuderen aspecten van financiële en cash planning, we bekijken een voorbeeld van financieel plan. (Diane Breesch) We bespreken de financieringsnoden van opstartende bedrijven, en de financieringsbronnen die ondernemers hiervoor kunnen aanspreken. We verdiepen ons in Venture Capital en Business Angels. (Marc Goldchstein) We bestuderen de basis elementen van marketing: marketing tools zoals de 4P s van de marketing mix, markt onderzoek, verkoop. (Marc Goldchstein) We bestuderen de basisbeginselen van management en organisatie. (Elvira Haezendonck) We focussen ons op Intellectuele eigendomsrechten (Hugo Loosvelt) We bespreken de Human Resource Management dimensie van het bedrijfsbeheer (Roland Pepermans en Leo Verschueren) We eindigen met het effectief opstarten van een (groei)bedrijf in België. Opstartformaliteiten, legale aspecten, Venture Capital en Business Angels, overheidsmaatregelen, steun vanuit universiteiten. (Marc Goldchstein, Sonja Haesen) Vanzelfsprekend is het onmogelijk om elk van deze onderdelen zeer diepgaand uit te werken. Elk van deze onderwerpen verdient een volwaardige cursus. Zo leert een Bachelor/Master in de Toegepaste Economische Wetenschappen deze materie. We verwijzen regelmatig door naar bepaalde cursussen waarin bepaalde onderwerpen verder uitgediept worden. De geïnteresseerde student kan op eigen initiatief de vernoemde cursussen volgen. De syllabus Onderhavige syllabus bevat het eerste deel van het materiaal van de cursus. De rest volgt in een later stadium. U vindt in deze syllabus de volgende delen: Industriële dynamieken en project assessment (Marc Goldchstein (slides) Finance (Diane Breesch) Management (Elvira Haezendonck) Human resources management (Leo Verschueren) Page 4
De cases Een deel van de cursus wordt opgehangen aan de aantal referentiebedrijven. In een aparte syllabus vertellen we het verhaal van één van deze bedrijven. Het betreft hier onder meer Enfocus Software, de Gentse startup begin jaren 90, in de markt van software voor de grafische sector. We volgen dit bedrijf chronologisch over een periode van meer dan tien jaar. In die periode verwordt het éénmansproject tot één van de snelst groeiende en meest winstgevende middelgrote bedrijven van Vlaanderen 1. Artwork Systems, een start-up met een parallelle levensloop, dat Enfocus zal opkopen in 2000, wordt eveneens belicht. Ook worden tijdens de cursus een aantal contrasterende voorbeeldbedrijven besproken:, het biotech bedrijf Ablynx (beursgenoteerde spin-off van de VUB en Het Vlaams Instituut van de Biotechnologie) en Sportopolis, de fitness keten. Over deze bedrijven worden slides via Poincarré uitgedeeld. De cases vormen een belangrijk deel van de cursus. Ze geven een tastbaar beeld van de realiteit van ondernemen en bedrijfsbeheer. De studenten zullen zo tenminste een paar voorbeelden van (succesvol) ondernemen van dichtbij gezien hebben. We hopen hierbij een holistisch beeld van bedrijfsbeheer en ondernemerschap te geven, en tegelijk de diverse dimensies op een tastbare manier aan te brengen. Ook vormen ze de basis om bepaalde theoretische concepten body te geven. 1 Trends Gazelle 2006 : nr 4 in categorie middelgrote bedrijven Page 5
INDUSTRY DYNAMICS AND PROJECT ASSESSMENT Page 5
part 1: understanding industries understanding industries why bother? opportunities arise where industries are changing it is important to assess changes in an industry objectives provide insights in dynamics of change and growth of industries understanding architecture of industries topics industry life cycles industry standards and network effects porters industry forces architects and modules regional clusters 9 creative destruction industry life cycles Joseph Alois Schumpeter, Capitalism, Socialism and Democracy The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates. (This) process of industrial mutation ( ) incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. 11
the victims of creative destruction 12 13 pc s sold, in 1000 units 14 15
the industry life cycle a framework to understand the dynamics of growth of: industries digital photography commercial sailing ships information technology gsm fitness centers companies enfocus, sportopolis agfa, polaroid regions wallonia silicon valley performance (adoption) the industry life cycle Maturity Disruption Takeoff Ferment Time/effort 16 MIT Sloan School of Management Technology Strategy Course 2005 Rebecca Henderson a key framework: the industry life cycle què sera, sera Disruption/ Era of Ferment Maturity Dominant design emerges Incremental Innovation 19
stages of business ecosystems pioneering most important challenge: doing something of dramatic value for the customer compared to what exists expansion most important challenge: critical mass business ecosystems must expand to fill their available range identifying and rounding up the most desirable allies available: customers, suppliers, channels authority most important challenge: maintaining authority and uniqueness maturity leaves the industry far more vulnerable to entry renewal or death 20 era of ferment a possible disruptive innovation has occurred no one is sure how the new product can be packaged or sold who will value it how it can be produced/distributed whether there is money in supplying it industry is up for grabs lots of entrants there is enormous uncertainty in many dimensions its fun!!! doing something of dramatic value, compared to what is already available to customers is the sine qua non (moore) the fluid phase abernathy-utterback model, harvard business school, mit sloan school of management technology evolves through periods of incremental innovation, interrupted by periods of radical innovations a radical innovation leads to a fluid phase, where many firms enter and compete on the basis of different product designs eventually firms converge to a dominant design which results in a specific phase. competition shifts to production efficiency and economies of scale before a dominant design emerges learning curves are weak, and it is easy to enter. after a dominant design emerges learning curves become more pronounced later a new radical innovation may occur take-off rapid growth of market dominant design emerges: the way we do things around here key technical components, architecture elements of the business system: how shall we structure the value chain? hard to define ex ante market clears out fight for domination growing the company become challenge succesful paradigms broadly applied, made more repliable, replicable 22
maturity innovation diminishes economies of scale, synergies mergers and acquisitions dimensions of industry life cycle technology s-curves innovation entrants and shake-outs dominant design customer typology ilc dimensions technology s curve graphical representation of the development of a new technology compares some measure of performance with some measure of effort overview 27 28
vectors in time steve jobs on vectors in time inside steve s brain, leander kahney founder and present ceo of apple you can t really predict exactly what will happen, but you can feel the direction that we re going jobs looks for vectors in time : what technologies are coming on the market and which ones are ending their run you decide which horses you want to ride at any point in time you can t be too far ahead, but you have to be far enough ahead, because it takes time to implement. so you have to intercept a moving train we have always been shameless about stealing good ideas good artists copy, great artists steal (picasso) creativity is just connecting things 29 30 radical and incremental innovations Maturity innovation incremental innovation, process innovation Ferment Takeoff Time radical innovation, product innovation, based on different engineering and scientific principles 32
innovation process innovation radical innovation incremental innovation business innovation vs. product innovation henri ford and mass production based on a different set of engineering principles may open up whole new markets and potential applications often creates great difficulties for incumbent firms can be basis for successful entry by insurgent introduces relatively minor changes happens once dominant design has been established typically drives rapid performance improvement exploits the potential of the established design typically reinforces position of incumbent dell business model direct sales to end-users over the internet no channels: no rebates no inventory made-to-order no inventory 33 34 disruption disruption challenges existing organizations severely shifting s-curves disruptive technologies often begin by being inferior to incubent technologies disruptive technologies often are underestimated at birth Cumulate share of sales of photolithographic alignment equipment, 1962-1986, by generation Contact Proximity Scanners S&R (1) S&R (2) Cobilt 44 <1 Kasper 17 8 7 Canon 67 21 9 P-Elmer 78 10 <1 GCA 55 12 Nikon 70 Total 61 75 99+ 81 82+ 35
innovation trajectory At any time, there are typically a range of competing technologies that are candidates for each application Each of these technologies can be characterized in terms of its key parameters Each technology typically has a performance envelope, which defines the trade-offs inherent in the technology Over time, technologies follow an innovation trajectory, a vector or function that describes how they have evolved and may evolve, either over time or in response to effort invested in their development rate of change direction the importance of imitation! example: it adoption in sweden the ability to imitate: build on existing competencies 37 38 entrants and shake-out entrants and shake-out fermentation phase/ fluid phase: many entrants competition between entrants is initially secondary take-off shake-out buy or be bought not always the case that new technology is introduced by newcomer competentce-enhancing innovation Number of US car manufacturers 300 250 200 150 100 50 0 1890 1900 1910 1920 1930 1940 1950 1960 40
innovation and corporate competencies michael tushman, harvard business school there are two types of radical innovations from the perspective of an incubent firm competence enhancing: makes use of the firms existing knowledge, skills, abilities, structure, design, production processes, plants, equipment... (makes use of the firms existing business model) competence destroying when it undermines the usefulness of these things some examples competence destroying agfa and digital photography desktop publishing and prepress system vendors competence enhancing emi and cat scanners replacing turbofans by jet engines why incubents often miss the boat no incentive to introduce new technology they have investments in existing technology new products will cannibalize existing sales managers do not see the technology as a threat or opportunity they can improve the performance of their technologies they face organizational obstacles to change their core technology new business incompatible with their business model the innovators dilemma market leader have hard time do redirect resources from its customers requests 41 42 jobs on xerox jobs got demo of xerox alto in 1979 mouse, point-and-click i thought it was the best thing i ve ever seen in my life within 10 minutes it was obvious to me that all computers would work like this some day despite dozens of demonstrations xerox executives didn t see the potential basically they were copier heads and they had no clue about a computer or what it could do so they just grabbed defeat from the greatest victory in the computer industry. they could have owned the entire computer industry dominant design 43
standards network effects complementary assets marketing skills dominant design dominant design microsoft pc industry in units sold per year 45 46 the pc software business Top Ten PC software Publishers 1984-2001 1984 2001 MicroPro international 60.000.000 Microsoft Corp 23.845.000.000 Microsoft Corp 55.000.000 Adobe 1.266.378.000 Lotus 53.000.000 Novell 1.103.592.000 Digital Research 45.000.000 Intuit 1.076.000.000 VisiCorp 43.000.000 Autodesk 926.324.000 Ashton-Tate 35.000.000 Symantec 790.153.000 Peachtree 21.700.000 Network Associates 745.692.000 MicroFocus 15.000.000 Citrix 479.446.000 Software Publishing 14.000.000 Macromedia 295.997.000 Broderbund 13.000.000 Great Plains 250.231.000 customer typology total 354.700.000 total 30.778.813.000 47
customer profiles customer s curve 100 90 80 70 60 50 40 30 20 10 0 innovators early adopters early majority late majority laggards die hards innovators need every new product besta testers need for customisation, mission critical not price sensitive early adopters appreciate value of novelty base buying decision on intuition and technical elements early majority practicality; references, need for service, training, support... crossing the chasm late majority not confortable with new products laggards avoid new products 49 50 different customers visionairies think and spend big pragmatists prudent my definition of take-off : when not wanting to be the first is replaced by not wanting to be the last customers have different needs see part on entrepreneurial marketing the chasm arises when the early market is saturated and the mainstream market is not ready to adopt. there is no-one to sell to crossing the chasm crossing the chasm, marketing and selling technology products to mainstream customers geoffrey moore 1991 mission-critical users for whom the technology is of major strategic importance colruyt and radio frequency identification (rf-id) vtb/touring wegenhulp and wireless data communications willing to invest high roi strategic importance (de laagste prijs) capabilities to absorb new technology 51 52
a summary business challenges Maturity Takeoff execution ability to manage growth excellence in marketing, finance, alliances... Ferment validation of customer needs and benefits of business model of team 53 54 charting industry life cycles performance market penetration description of industry life cycle competing industry life cycles status of technology einde industry life cycles status of demand status of business ecosystem possible scenario s Industry life cycle chart time, effort 55
network effects network effects and standards value to consumer Products with threshold network effects Products with extensive network effects source: mit technology strategy 2005 & 2007 conventional product Actual (or anticipated) size of the installed base 71 network effects dominant design microsoft pc industry in units sold per year 72 73
network externalities lock-in, switching costs leo van hove, advanced IT Metcalfe's Law the value of a network goes up as the square of the number of users 10 users => $100; 100 users => $10.000 direct (or demand) network externalities generated through a direct physical effect of the number of purchasers on the utility of the good phones, fax machines, SMS, e-mail,... indirect (or supply) network externalities one user's adoption has no direct effect on the utility of other users, but has lagged effects 'hardware/software' systems: more Macs sold => more software => utility of hardware leo van hove, advanced IT switch from Ford to GM: relatively painless Windows to Linux: very costly: change software, learning costs the total cost of installing an Enterprise Resource Planning (ERP) system such as SAP was eleven times greater than the purchase price of the software due to the cost of infrastructure upgrades, consultants, retraining programs, and the like These switching costs are endemic in high technology industries and can be so large that switching suppliers is virtually unthinkable, a situation known as lock-in types of lock-in Contractual commitment Durable equipment and aftermarkets Brand-specific training Information and databases Specialized suppliers Search costs Loyalty programs 74 75 standards high-tech businesses are built on systems, with interfaces, which may be standards products are part of larger and more complex systems systems are comprised of sub-systems and components sub-systems and components are integrated, made compatible, through interfaces products are comprised of multiple (sub-)systems interfaces can be customized or standardized, as compatibility standards electric power roads color television air travel video cassettes cellphones(1) personal computers 56k modems cellphones(2) documents some standards battles dc (edison) vs ac (westinghouse) width, side of the road, signage mechanical (cbs) vs electronic (rca) door on front left, jetways/airbridges, taxi ways betamax(sony) vs vhs (matsushita+) several co-existing standards windows vs mac os k56flex (rockwell/lucent) vs x2 (us robotics/3com) vs v.90 tdma (ericsson/at&t) vs cdma (qualcomm) vs gsm (eu+) vs phs pdf (adobe) vs reader/ (microsoft) 76 77
present standards battles my experience with standards (battles) low-power wireless mobile operating systems mobile tv web content high definition content documents mobile broadband zigbeevsz-wave (zensys) vs isa-sp100 symbian (nokia and others) vs windows mobile (microsoft) vs linux vs iphone vs google mediaflo(qualcomm) vsdvb- vsdmb flash (adobe) vs silverlight(microsoft) blu-ray (sony) vs hd-dvd (microsoft) (over) opendocument vs openofficexml (microsoft) vs pdf wimaxvsieee 802.20(?) vs lte mac vs. pc margin, profit vs. market share, volume short term view vs. strategic insight de vadsige koningen : incentives to kenya, with partner... open mac performance vs. modularity, standards, ecosystem quadtree compression vs. ccitt group iv better technology. vs standard mobitex vs sms better technology. vs standard volume volume volume! postscript, pdf publishing the standard and still making money on the products adobe is a respected business ecosystems leader 78 79 what triggers standards battles, and what are the outcomes? types of compatibility standards how important are network effects, how much consumers value broad compatibility two (or more) businesses or business ecosystems vying for dominance tipping fight to the death truce convergence comprise two (or more) no tipping duopoly or oligopoly 80 82
examples adobe adobe twice decided to make architectural information openly available postscript and pdf in both cases they became dominant designs it is quite the inverse of protection of intellectual property! they succeeded because no major competitor arose to grab market share adobe is generally respected as serious business partner pdf is now a formal open standard known as iso 32000, maintained by the international organization for standardization 83 84 key assets in standards battles prior adoption installed based from previous era postscript technological innovation deliver superior performance pdf timing, being first-to-market get there early, establish momentum, learn adobe: vision, deep pockets intellectual property rights strength in complements influence overall system level performance pdf and enfocus reputation credibility, players expectations are that you will win so you are more likely to adobe 85 standards forums what are the costs involved in participation? who are the participants? incumbents or insurgents customers or producers what is the intellectual property regime? disclosure and licensing -what is reasonable rights held by non-participants what is the process by which decisions are made? consensus voting how is compliance enforced? 86
product architecture architects and modules technology strategy course massachusetts institute of technology michael a m davies 2 may 2007 92 ibm system/360 first modular computer, conceived as a family of computers different sizes suitable for different applications same instruction set standard interfaces for peripherals design rules and decentralized development central processor control office defines rules each team full control over hidden elements wildly successful, drove other players out of the market but undermined ibm s dominance in the long run - through emergence of plugcompatible modules 93 architect for system innovations, may require broad scope of activities at the outset create design rules, define visible information convince people this architecture will prevail as modularity established, lead the evolution of the business ecosystem module player conform to the architecture, interfaces and test protocols established by others master the hidden information involved rely on superior execution 94
not modular... apple and standards apple strategy: maintain tight control over hardware, software and the services they access first mac only opened with special screwdriver, no expansion slots was unsuccessful strategy for previous 30 years modularity and scale: intel / windows / pc manufacturers / ecosystem of add-ons stability and ease of use vs. economies of scale 95 96 the whole widget it is the right approach for present day: the digital entertainment age jobs wants to make complex devices like computers and smartphones into truly mass-product products for that he needs to control all aspects of the customer experience example: ipod designing and manufacturing devices; operating systems, application software, internet application; marketing, brand name... apple is the only company that controls the whole widget: hardware, software, developer relations, marketing. it turns out that this is apple greatest strategic advantage the return of vertical integration: the whole product end-to-end solution the whole widget 97 architectural knowledge knowledge about ways in which components link together into coherent whole and are interdependent tends to become embedded as tacit knowledge communication channels, information filters and problemsolving strategies two different sorts of knowledge component knowledge knowledge about each of the core design concepts how they are implemented in a particular component within a product specialized and focused, can be mastered by an individual or a small team constant focus once dominant design established 98
is it an interesting industry? porters 5 industry forces 100 porter (shane) 101 102
regional network effects: clusters the innovator silicon valley silicon valley stretches over about 100 kilometer between san josé towards san francisco core silicon valley does not include san francisco and the bay area, culturally and economically both are closely linked inbabitants: silicon valley 2.44 million san francisco 750.000 bay area around 4 million. (USA: 300 million) in size and population the greater bay area is in the same order of magnitude as flanders. mediterranean climate venture capital investment is estimated at $7.1 billion in 2004. (belgium 2005: 475 million euro) silicon valley s share of national venture capital investment has continued to grow every year to 35% by 2004 (for 1,3% of the population). some figure according to the united states census bureau, of the 280 defined metropolitan areas, the san francisco bay area has the highest median household income in the nation with $62,024 (40% above national average). 105 106
other examples a narrow belt in the u.s. northeast and the eastern part of the midwest dominated u.s. manufacturing up until the mid fifties 64 percent share of manufacturing employment sialkot's stainless steel cluster in pakistan, together with tuttlingen in germany dominate the world surgical instrument market. porter (1998) lists some 30 clusters in the us the auto cluster in detroit, insurance in hartford, and aircraft equipment and design in seattle, hollywood,... petrochemical clusters in antwerp diamond trade clusters in antwerp graphic arts in belgium 107 clusters factors that trigger the emergence of clusters local demand prior existence of supplier industries natural resources innovative firms chance events. once a cluster is formed a self-reinforcing cycle promotes its growth support of local public and private institutions initial transitory advantages get "locked in" within the cluster. agglomeration economies attracting new specialized firms to locate within the cluster and gain from increasing returns to scale. 108 characteristics the existence of a large pool of individuals with specialized skills reduced search and hiring costs requisite quality skill set is easily available individuals with skills are attracted to the cluster existence of firms providing specialized inputs high levels of technological spillovers and innovation due to proximity since information flows are easier locally than over distances. factors that lead to innovation in clusters. existence of sophisticated buyers access to specialized suppliers gives high levels of flexibility and are able to implement innovations more rapidly high levels of competition and peer pressure within the cluster act as an important stimulus for innovation. characteristics trust and the related concept of social capital deals in valuable diamonds are sealed by a handshake on the diamond exchange when trust breaks down, unwritten rules must be codified and third parties brought in to resolve differences. under certain conditions clusters slow technological innovation resource diseconomies insular competitive practices lock-in in ageing technology 109 110
The VIB incubation model VIB: Institute without walls Research labs in different Flemish universities >1000 Researchers and technicians Central hq: technology transfer, patenting, developing business plans VIB steers the process of spin-outs: Strategic choices Evaluation of many projects Timely filing patents the VIB approach Incubate a project until full maturity Professional approach involve various experts Interact with industry to test the waters Network with investors end part 1 111
objectives part 2 canvassing the venture provide during this course series of frameworks on which a project can be canvassed used in order to: describe the project identify its strengths, weaknesses, opportunites and threats (swot s) define its strategy identify critical success factors where will you make the difference? where should you not fail? -> get a grasp of the challenges of a venture 2 overall summary 5 frameworks in this part industry life cycle performance criteria venture value chain project complexity uniqueness, complementary assets and sustainability later other relevant elements for a project are discussed business ecosystem team aspects marketing plan financial plan business model busines plan framework 1: industry life cycle 3
charting industry life cycles industry life cycle analysis addressablke market description of industry life cycle competing industry life cycles total long term addressable market delimitation, quantification: size, value description of industry life cycle competing, complementing industry life cycles status of demand status of technology status of business ecosystem possible scenario s status of technology demand users business environment complementary technologies startups business model (validated?) Industry life cycle chart time, effort possible future scenarios 5 6 life cycle disruption PDF replaces Postscript, TIFF- IT, and proprietary formats as standard file format in graphic arts PDF has potential to be technically superior market penetration demand key customers validated PDF technology substantial sales growth major workflow system vendors work on integrating PDF offering PDF is (semi public) standard the PDF-in-prepress industry life cycle as of today very limited penetration: <5% of files are PDF several PDF related startups PDF business projects by incubents substantial network effects from overall adoption of PDF (internet, email): cost, ease of use, familiarity with product further standardisation underway: PDF/X clearly identifiable market: fairs, magazines, guru s... major PDF marketing push by Adobe technology PDF is clearly the most promising technology PDF 1.3 contains minimal prepress features; rest will follow in next releases Enfocus adds major prepress features other developers business ecosystem PDF is talk of the town on Seybold, DRUPA printers and publishers aware of quaity issues framework 2: performance envelopes time generalised adoption of PDF outside prepress conclusions PDF in graphic arts is very promising market Enfocus should prepare for take-off actions Enfocus should invest in: abillity to grow sales and marketing resources, channels, networks Adobe: technology leader, potential competitor, marketing partner,... future scenario s file exchange standards 1999 key threat: Adobe product development, support Adobe relationship most probable: rapid and wide adoption of PDF other formats may develop (Microsoft) 8