Business Opportunities for Entrepreneurs and support organizations to develop Entrepreneurs

Prof. Vidhya Srinivas

New opportunities for Entrepreneurs

Free entry into world trade. Improved risk taking ability. Governments of nations withdrawn some restrictions Technology and inventions spread into the world. Encouragement to innovations and inventions. Promotion of healthy completions among nations Consideration increase in government assistance for international trade. Establishment of other national and international institutes to support business among nations of the world. Benefits of specialization. Social and cultural development

Challenges
Problems of raising equity capital Difficulty in borrowing fund. Throat-cut completions endangered existence of small companies. Problems of availing raw-materials. Problems of obsolescence of indigenous technology Increased pollutions Ecological imbalanced. Problems of TRIPS and TRIMS. Exploitation of small and poor countries, etc.

Business Opportunities
Small and Medium Enterprises Family Owned Enterprises Next Gen Enterprises Women Entrepreneurs Developing SME S to Large Corporations Social Entrepreneurship Rural Entrepreneurship Off shoring

Micro Small & Medium Enterprises

The Government of India passed in June 2006 an act regarding the Micro , Small , and Medium Enterprises . The Micro , Small and Medium Enterprise Development Act ,2006 (MSMEDA ) The Act accomplishes many long -standing goals of the government and stakeholders in the MSME sector .

Definition of MSME
The Act decisively defines the MSMEs by the level of by Plant and Machinery (P&M ) investment. The categorization also makes allowances for the inherently smaller investments of Service enterprises.

 The new definition has expanded the P&M limits ; now each enterprise level encompasses larger investments than before . The new categorization is as follows : Micro Manufacturing : P&M* Less than Rs 25 lacs Micro Service : Equipments* Less than Rs10 lacs

Small Manufacturing : Less than Rs 5 crore Small Service : Less than Rs 2 crore Medium Manufacturing : Less than Rs 10 crore Medium Service : Less than Rs 5 crore *Original cost excluding Land and building and furniture, fittings and such items, specifically excluded

Loans not exceeding Rs. 20.00 Lacs granted to Retail Trade would henceforth be part of Small Service Enterprise under MSME.

Small and Medium Enterprises

Evolution of SME s judicious use of foreign exchange for import of capital goods and inputs labour intensive mode of production employment generation Non concentration of diffusion of economic power in the hands of few (as in the case of big houses) discouraging monopolistic practices of production and marketing finally effective contribution to foreign exchange earning of the nation with low import-intensive operations. It was also coupled with the policy of de-concentration of industrial activities in few geographical centers.

SME s Objectives
High contribution to domestic production Significant export earnings Low investment requirements Operational flexibility Location wise mobility Low intensive imports Capacities to develop appropriate indigenous technology Import substitution Contribution towards defense production Technology oriented industries Competitiveness in domestic and export markets

Limitations of SME
Low Capital base Concentration of functions in one / two persons Inadequate exposure to international environment Inability to face impact of WTO regime Inadequate contribution towards R & D Lack of professionalism

Major Sectors in which SME s presence

Food Processing Agricultural Inputs Chemicals & Pharmaceuticals Engineering; Electricals; Electronics Electro-medical equipment Textiles and Garments Leather and leather goods Meat products Bio-engineering Sports goods Plastics products Computer Software, etc.

Flourishing SME s In Maharashtra

Western Maharashtra: Pune, Kolhapur, Satara, Nasik, Ahmednagar Konkan Region: Ratnagiri, Sawantwadi, Kudal Marathwada : Aurangabad, Nanded, Latur, Beed Vidharbha: Nagpur, Amaravati Greater Mumbai: Thane, Belapur, Navi Mumbai

Defining Family Enterprises

Family Business like beauty tends to be in the eye of the beholder. There is no consensus on the definition of Family Enterprise. The common elements in defining Family Business can be:
 Percentage of share capital owned by the family.  Number of generations of owning families involved in the business  Direct descendents of the founder having Management/Ownership control

Key Elements of Governance Structure in a Family businesses

Family and its Institutions Family Council & Assembly The Board of Directors The CEO or The top management

Happy families are alike, Every unhappy family is unhappy in its own way . Tolstoy in Anna Karenia

Global Significance of family Businesses

 Family companies employ more than half of the world s industrialized workforce.  They produce 65% of the GNP in the USA  World s most famous brand are from family firms Marriot, Disney, Ford, Nestle  Family firms are 5% more profitable than their non-family competitors.

Merits and Demerits of Family Businesses

Merits  High level of respect and trust  Continuity of Business tradition and values  Operational flexibility in decision making process  Sense of identity, pride and legacy. Demerits  Lack strategically planned Management succession Only 30% of Family Businesses have written strategic plans UN Business report 2003  Informal channels of communication  Emotional Involvement

Critical issues for Family Businesses Future

Succession Participation Compensation and Ownership Harmony Responsibility Professional Management Succession or transition process is the ultimate test for family businesses.

Transitions The Acid Test

Only 5% of Family Businesses in the world are going concerns in 3rd Generation Survey by J P Morgan Transition involves both management and ownership Family firms are minefields of complex relationship and competing norms.

What is the way out?

Strategies for success in family Businesses

Firm Foundation Meritocracy Open Communication Innovative Processes The Implementation of the above strategies demands

Fresh Ideas Innovative thinking Peer Learning and Dynamic Positive Change Entrepreneurship is the way out

The success stories

Wal-Mart, Ford, Samsung, LG, Motorola

The entrepreneurial trait Involving Employees and Customers as Shareholders.

Family Businesses and EntrepreneurshipThe Facilitators

Long term Nature of family firm s ownership Kinship-ties have positive effect upon entrepreneurial opportunity recognition Entrepreneurial activities increase distinctiveness of the Family Firms products. Family run local businesses have entrepreneurial advantages over large corporations.

Family Businesses and Entrepreneurship- The Constraints

Founders desire for lasting legacy Organizational cultures Ethnic heritage of the family Society s regional cultures and historical experiences

Dabur: Case study for family owned Business

Dabur India Limited (DIL) is the third largest FMCG Company operating in India with a turnover of more than Rs. 2,233 crores. It operates under three business categories namely Consumer Care Division (CCD), Consumer Healthcare Division (CHD) and Dabur foods Limited (in July 2007, Dabur announced the de-merger of DFL with DIL).

Dabur: Case study for family owned Business

Dr. S.K Burman started Dabur in 1884 as a small pharmacy. Initially, he prepared Ayurvedic medicines to treat diseases like malaria, plague and cholera that had no cure during that period. It was his dedication, commitment and empathy that made Dabur a renowned name among the masses. And today, after more than 120 years, Dabur is known for its trustworthiness more than anything else.

Dabur: Case study for family owned Business

During this passage of time, Dabur went through several structural and strategic changes to maintain its market strength. The real mass production started in 1896. Early 1900 s saw Dabur emerge as the first company to provide health care through scientifically tested methods. It achieved significant improvements after setting up Research and Development centers and manufacturing automation. The launch of Dabur s Amla hairoil and Chyawanprash was a boon to the expanding business. To keep up with the times, Dabur computerized its operations in 1957. Its Dant Manjan and digestive tablets were widely accepted as well.

Dabur: Case study for family owned Business

However with a large product portfolio in the market, Dabur had to maintain operational efficiency. To make sure it adjusted to the business environment it became a public limited company in 1986 followed by diversification in Spain in 1992. A major change came when Dabur came up with its IPO in 1994. Because of its position, Dabur s issue was 21 times oversubscribed. Dabur further divided its business into three separate groups: Health Care Products Division Family Products Division Dabur Ayurvedic Specialties Limited

Dabur: Case study for family owned Business

In 1998, for the first time in the history of Dabur, a non-family member took charge. Dabur handed over the operations to professionals. Successful implementation of procedures, timely changes and maintaining its essence, Dabur achieved its highestever sales figure of Rs 1166.5 crore in 2000-01. As FMCG sector was struggling with the slow growth in the Indian economy, Dabur decided to take numerous strategic initiatives, reorganize operations and improvise on its brand architecture beginning 2002. It decided to concentrate its marketing efforts on Dabur, Vatika, Anmol, Real and Hajmola to strengthen their brand equity, create differentiation and emerge as a pure FMCG player recognized as a herbal brand. This was chosen after a study with Accenture, which revealed that Dabur was mainly perceived as a Herbal brand and connected more with the age group above 35

Dabur: Case study for family owned Business

Product Category Products HairoilVatika, Amla, Sarso (Anmol coconut) Shampoo Vatika heena conditioning, root-strengthening Anmol-natural shine, silky Baby & Skin Care Vatika fairness, Gulabari, Vatika fairness face pack Janmaghutti, Olive oil, Gripewater, Dabur lal tel Digestive Hajmola range, Hingoli, Pudin hara Health Supplements Chyawanprash, chyawanshakti, Dabur Honey, Glucose Oral Care Babool (rural market), Meswak (unani method), promise, Lal paste, Binaca, Promise Home Care Odomos, Odonil, Odopic, Sanifresh

Dabur: Case study for family owned Business

Brand Rejuvenation With youth forming a major population of India, Dabur decided to revamp its brand identity. Dabur associated itself with Amitabh Bachchan, Vivek Oberoi, Rani Mukherjee and Virender Sehwag for endorsements. New packaging and advertising campaign saw the sales of Chyawanprash grow by 8.5 per cent in 2003-04. The year 2004-05 saw a whole new brand identity of Dabur. The old Banyan tree was replaced with a new, fresh Banyan tree.

Dabur: Case study for family owned Business

The logo was changed to a tree with a younger look. The leaves suggesting growth, energy and rejuvenation, twin colors reflecting perfect combination of stability and freshness, the trunk represented three people raising their hands in joy, the broad trunk symbolized stability, multiple branches were chosen to convey growth, and warmth and energy were displayed through the soft orange color. Celebrating Life was chosen as a new tag that completely summarized the whole essence. The Chairman in his annual report message said, If I were to summarize your Company s performance during the year under review (2004-2005), it would be Pursuit of Profitable Growth .

New Initiatives at Dabur (FOB)

HR Initiatives: ESOPS IT: SAP ERP SCM: e-procurement, Dabur included automation, debottlenecking, Kaizen and wastage control. It set up production units in locations providing tax holidays to reduce cost and improve efficiency

Mission 2011-12
International Markets: UK, Nepal, Egypt, North America New U: Health and lifestyle retailer with Cosmetics, Skin care, Men Grooming, Herbal Skin care, fashion accessories, grooming accessories, confectionery, personal care etc. Extensive Distribution Network

21 opportunities for Business in you could Flourish

Tourism Automobiles Textiles Social ventures Software Engineering Products Franchising Education and Training Food Processing Events and Consulting Recycling Ayurveda and traditional medicine Organic Farming Media Packaging Floriculture Toys Social Media Bio technology Healthcare Energy Solutions