Experiential Exercises

Identifying a Social Entrepreneurship Opportunity

Directions. Read the following scenario and then perform the listed activities. Your instructor may want you to perform the activities as an individual or within groups. Follow all of your instructor’s directions carefully.

The president of your university has contacted your group in an effort to improve its outreach programs. In particular, the president would like your group to make a short presentation describing the concept of social entrepreneurship. In addition, the president would like your group to identify three potential social entrepreneurship opportunities that your university can evaluate and potentially exploit. These opportunities might involve only the local community or might also apply to other portions of the country or world.

You and Your Career

Earlier in the appendix, we mentioned that many new businesses begin operations each day. Think about the role of entrepreneurship in your career. Have you given any thought to owning your own business one day? If you had not previously thought about becoming an entrepreneur, do the concepts in this appendix help you identify potential entrepreneurial opportunities? How do the risks of being an entrepreneur compare to the risks of being a manager in a large company? Finally, if you are planning to interview for a position in an established company, do you think your entrepreneurial ambitions might influence the company’s perceptions of you as a potential employee? Why or why not?

Building Your Management Skills Portfolio

Your Management Skills Portfolio is a collection of activities specially designed to demonstrate your management knowledge and skill. Be sure to save your work. Taking your printed portfolio to an employment interview could be helpful in obtaining a job.

The portfolio activity for this appendix is Serving Up Drinks at BK. Study the information given here and complete the exercises that follow. 56

Top management at Burger King has contacted you to help them enhance their business. In particular, executives at Burger King worry that the company’s focus on food means that it is not making as many profits as it could if it increased sales of drinks.

Given the success of companies such as Starbucks, some of Burger King’s competitors, such as McDonald’s, are changing their menus to compete more effectively with Starbucks. McDonald’s claims that its new line of espresso drinks represents the most significant menu change for the company since it started serving breakfast in the 1970s. Sonic has also started selling coffee-based beverages in addition to the many shakes and fruit slushes already on the menu.

Burger King would like you to identify, evaluate, and form methods of exploitation for the company regarding selling drinks. Answer the following questions pertaining to the entrepreneurship process.

  1. A2-10. Identify a specific opportunity in the marketplace regarding drinks. It could be a new drink, a new line of drinks, a new type of retail outlet, or another type of opportunity.

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  2. A2-11. Evaluate this opportunity using feasibility analysis. In particular, focus on how customers might respond to the new opportunity, indicate how industry competitors are already exploiting this opportunity, and describe Burger King’s ability to exploit this opportunity.

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  3. A2-12. How do you suggest that Burger King exploit this opportunity? Does the company have enough money to easily follow your suggestion(s), or should the company pursue financing options? (Use the company’s website to obtain more information if necessary.)

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MyManagementLab: Writing Exercises

If your instructor has assigned this activity, go to mymanagementlab.com for the following assignments:

Assisted Grading Questions

  1. A2-13. Describe the main components of entrepreneurship.

  2. A2-14 Distinguish among the different types of opportunities.

Endnotes

  1. 1. S. Stevenson, “Patagonia’s Founder Is America’s Most Unlikely Business Guru,” WSJ Magazine, http://online.wsj.com/article/SB10001424052702303513404577352221465986612.html#ixzz2BZeYduu0, last updated April 26, 2012; Patagonia, “Company Info: Our History,” http://www.patagonia.com/us/patagonia.go?assetid=3351, accessed May 12, 2012.

  2. 2. Scott Shane and S. Venkataraman, “The Promise of Entrepreneurship as a Field of Research,” Journal of Management 25, no. 1 (2000): 217–226.

  3. 3. Webster’s College Dictionary (New York: Random House, 1996).

  4. 4. Scott Shane, “Prior Knowledge and the Discovery of Entrepreneurial Opportunities,” Organization Science 11, no. 4 (2000): 448–469. See also: J. C. Short, D. J. Ketchen, J. R, C. L. Shook, and R. D. Ireland, “The Concept of ‘Opportunity’ in Entrepreneurship Research: Past Accomplishments and Future Challenges,” Journal of Management 36 (2010): 40–65; “Characteristics of an Entrepreneur,” http://www.scribd.com/doc/18197794, accessed May 10, 2012.

  5. 5. Robert Fairlie, “Kaufman Index of Entrepreneurial Activity,” Ewing Marion Kauffman Foundation (2005).

  6. 6. Scott Shane and S. Venkataraman, “The Promise of Entrepreneurship as a Field of Research,” Journal of Management 25, no. 1 (2000): 217–226.

  7. 7. Matt Hayward, Dean Shepherd, and Dale Griffin, “A Hubris Theory of Entrepreneurship,” Management Science 52, no. 2 (2006): 160–172. To learn more about how entrepreneurs’ friends influence their ultimate entrepreneurial success, see: J. Lerner and Malmendier, “With a Little Help from My (Random) Friends: Success and Failure in Post-Business School Entrepreneurship,” The Review of Financial Studies 26 (2013): 2411–2452.

  8. 8. A. C. Cooper and C. M. Daily, “Entrepreneurial Teams,” in D. L. Sexton and R. W. Smilor, eds., Entrepreneurship (Chicago: Upstart Publishing Company, 2000), 127–150.

  9. 9. G. N. Chandler and S. H. Hanks, “An Examination of the Substitutability of the Founders’ Human and Financial Capital in Emerging Business Ventures,” Journal of Business Venturing 13 (1998): 353–369.

  10. 10. D. Ucbasaran, A. Lockett, M. Wright, and P. Westhead, “Entrepreneurial Founder Teams: Factors Associated with Member Entry and Exit,” Entrepreneurship Theory & Practice (2003): 107–128.

  11. 11. C. M. Beckman, M. D. Burton, and C. O’Reilly, “Early Teams: The Impact of Team Demography on VC Financing and Going Public,” Journal of Business Venturing 22 (2007): 147-173.

  12. 12. This discussion is based on J. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper & Row, 1934).

  13. 13. Based on data from Matthew Hayward, Dean Shepherd, and Dale Griffin, “A Hubris Theory of Entrepreneurship,” Management Science 52, no. 2 (2006): 160–172; H. G. Parsa, John Self, David Njite, and Tiffany King, “Why Restaurants Fail,” Cornell Hotel and Restaurant Administration Quarterly 46, no. 3 (2005): 304–322; Scott A. Shane, “Failure Is a Constant in Entrepreneurship,” New York Times, July 17, 2009, http://boss.blogs.nytimes.com.

  14. 14. Joanne Silberner and Renee Montagne, “Coronary Stent Procedures Very Common,” National Public Radio, transcript, http://www.npr.org, accessed February 12, 2010; A. Weintraub, “Heart Trouble,” BusinessWeek (October 29, 2007): 54.

  15. 15. Jonathan Eckhardt and Scott Shane, “Opportunities and Entrepreneurship,” Journal of Management 29, no. 3 (2003): 333–349.

  16. 16. Scott Shane, “Prior Knowledge and the Discovery of Entrepreneurial Opportunities,” Organization Science 11, no. 4 (2000): 448–469; S. Venkataraman, “The Distinctive Domain of Entrepreneurship Research: An Editor’s Perspective,” in J. Katz and R. Brockhaus, eds., Advances in Entrepreneurship, Firm Emergence, and Growth (Greenwich, CT: JAI Press, 1999).

  17. 17. Alexander Ardichvili, Richard Cardozo, and Sourav Ray, “A Theory of Entrepreneurial Identification and Development,” Journal of Business Venturing 18 (2003): 105–123; J. Tang, K. M. Kacmar, and L. Busenitz, “Entrepreneurial Alertness in the Pursuit of New Opportunities,” Journal of Business Venturing 27, no. 1 (2012): 77–94.

  18. 18. David E. Gumpert, “An Amish Entrepreneur’s Old-Fashioned Approach,” BusinessWeek, http://www.businessweek.com, accessed April 20, 2010.

  19. 19. Alexander Ardichvili, Richard Cardozo, and Sourav Ray, “A Theory of Entrepreneurial Identification and Development,” Journal of Business Venturing 18 (2003): 105–123; Scott Shane and S. Venkataraman, “The Promise of Entrepreneurship as a Field of Research,” Journal of Management 25, no. 1 (2000): 217–226.

  20. 20. G. Hills, G. T. Lumpkin, and R. P. Singh, “Opportunity Recognition: Perceptions and Behaviors of Entrepreneurs,” Frontiers of Entrepreneurship Research (Wellesley, MA: Babson College, 1997), 203–218. For a more detailed discussion of opportunity recognition, see: J. Pierre-Andre and I. P. Vaghely, “Are Opportunities Recognized or Constructed? An Information Perspective on Entrepreneurial Opportunity Identification,” Journal of Business Venturing 25, no. 1 (2010): 73–86.

  21. 21. Alexander Ardichvili, Richard Cardozo, and Sourav Ray, “A Theory of Entrepreneurial Identification and Development,” Journal of Business Venturing 18 (2003): 105–123.

  22. 22. Scott Shane, “Selling University Technology: Patterns from MIT,” Management Science 48, no. 1 (2002): 122–137.

  23. 23. Andrew Corbett, “Experiential Learning within the Process of Opportunity Identification and Exploitation,” Entrepreneurship Theory & Practice (2005): 473–491.

  24. 24. M. Csikszentmihalyi, Creativity (New York: HarperCollins, 1996). For more on how information exposure influences how entrepreneurs evaluate opportunities, see: E. Autio, L. Dahlander, and L. Frederiksen, “Information Exposure, Opportunity Evaluation, and Entrepreneurial Action: An Investigation of an Online User Community,” Academy of Management Journal 56 (2013): 1348–1371.

  25. 25. For more information on feasibility analysis, see: R. G. Wyckham and W. C. Wedley, “Factors Related to Venture Feasibility Analysis and Business Plan Preparation,” Journal of Small Business Management 28 (1990): 48–59. To understand how industry and start-up experience influences entrepreneurs’ forecasts, see: G. Cassar, “Industry and Start-Up Experience on Entrepreneur Forecast Performance in New Firms,” Journal of Business Venturing 29, no. 1: 137–151.

  26. 26. Sarah E. Needleman, “Before Launching a Venture, Sample the Waters,” Wall Street Journal, February 8, 2014, http://online.wsj.com; “The Experts: What’s the Best Way to Test a New Business Idea?” Wall Street Journal, April 29, 2013, http://online.wsj.com; Janine Popick, “Got New Ideas? Test Them at a Trade Show,” Inc., November 4, 2013, http://www.inc.com.

  27. 27. This section based on H. T. Keh, M. D. Foo, and B. C. Lim, “Opportunity Evaluation under Risky Conditions: The Cognitive Processes of Entrepreneurs,” Entrepreneurship Theory & Practice (2002): 125–148.

  28. 28. For an exception, see: L. W. Busenitz and J. B. Barney, “Differences Between Entrepreneurs and Managers in Large Organizations: Biases and Heuristics in Strategic Decision Making,” Journal of Business Venturing 12, no. 1 (1997): 9–30.

  29. 29. E. J. Langer, “The Illusion of Control,” Journal of Personality and Social Psychology 32, no. 2 (1975): 311–328.

  30. 30. Clark G. Gilbert and Matthew J. Eyring, “Beating the Odds When You Launch a New Venture,” Harvard Business Review, http://hbr.org, accessed May 2010.

  31. 31. Young Rok Choi and Dean Shepherd, “Entrepreneurs’ Decisions to Exploit Opportunities,” Journal of Management 30, no. 3 (2004): 377–395.

  32. 32. Kara Ohngren, “Business Spotlight: Advantage Fitness Products,” Entrepreneur, http://blog.entrepreneur.com, accessed February 26, 2010.

  33. 33. This discussion is based on Young Rok Choi and Dean Shepherd, “Entrepreneurs’ Decisions to Exploit Opportunities,” Journal of Management 30, no. 3 (2004): 377–395.

  34. 34. For a review of top management teams, see: S. T. Certo, R. H. Lester, C. M. Dalton, and D. R. Dalton, “Top Management Team Demographics, Strategy, and Financial Performance: A Meta-Analytic Review,” Journal of Management Studies 43 (2006): 813–839.

  35. 35. Stephen G. Morrissette, “A Profile of Angel Investors,” Journal of Private Equity 10, no. 3 (2007): 52–66.

  36. 36. R. J. Gaston, Finding Private Venture Capital for Your Firm: A Complete Guide (New York: John Wiley, 1989).

  37. 37. “Angel Investor,” definition, http://www.investorwords.com, last modified 2010, accessed May 4, 2010; “Finding Venture Capital or Angel Investors,” About.com , Small Business Information, November 9, 2009, http://sbinformation.about.com; University of New Hampshire Center for Venture Research, “Angel Investor Market Declines in First Half of 2009,” press release, http://wsbe.unh.edu, accessed October 27, 2009.

  38. 38. PriceWaterhouseCoopers/National Venture Capital Association, “Total U.S. Investments by Year Q1 1995–Q1 2010,” http://www.nvca.org, accessed April 16, 2010.

  39. 39. Stephen G. Morrissette, “A Profile of Angel Investors,” Journal of Private Equity 10, no. 3 (2007): 52–66.

  40. 40. William Kerr, “Venture Financing and Entrepreneurial Success,” Harvard Business Review, http://blogs.hbr.org, accessed May 12, 2010.

  41. 41. Andrew Ackerman, “SEC Moves Ahead with ‘Crowdfunding’ Proposal,” Wall Street Journal, October 23, 2013, http://online.wsj.com; Ruth Simon and Angus Loten, “‘Crowdfunding’ Gets State-Level Test Run,” Wall Street Journal, December 4, 2013, http://online.wsj.com; Caitlin Huston, “How to Prepare for Crowdfunding,” Wall Street Journal, February 3, 2014, http://online.wsj.com.

  42. 42. P. Sharma and J. J. Chrisman, “Toward a Reconciliation of the Definitional Issues in the Field of Corporate Entrepreneurship,” Entrepreneurship Theory & Practice 23, no. 3 (1999): 11–27; R. Fini, R. Grimaldi, G. L., Marzocchi, and M. Sobrero, “The Determinants of Corporate Entrepreneurial Intention within Small and Newly Established Firms,” Entrepreneurship Theory and Practice 36, no. 2 (2012): 387, 414.

  43. 43. R. C. Wolcott and M. J. Lippitz, “The Four Models of Corporate Entrepreneurship,” MIT Sloan Management Review (2007): 75–82.

  44. 44. Ibid.

  45. 45. The discussion of these forms of corporate entrepreneurship is based on J. G. Covin and M. P. Miles, “Corporate Entrepreneurship and the Pursuit of Competitive Advantage,” Entrepreneurship Theory & Practice 23, no. 3 (1999): 47–63; D. F. Kuratko, J. S. Hornsby, and J. G. Covin, “Diagnosing a Firm’s Internal Environment for Corporate Entrepreneurship,” Business Horizons 57, no. 1 (2013): 37–47.

  46. 46. M. Troy, “Wal-Mart Tries on Fashionable New Look,” DSN Retailing Today 45, no. 7 (April 10, 2006): 3–4.

  47. 47. Claran Heavey, Zeki Simsek, Frank Roche, and Aidan Kelly, “Decision Comprehensiveness and Corporate Entrepreneurship: The Moderating Role of Managerial Uncertainty Preferences and Environmental Dynamism,” Journal of Management Studies 46, no. 8 (August 2009): 1289–1314.

  48. 48. J. Austin, H. Stevenson, and J. Wei-Skillern, “Social and Commercial Entrepreneurship: Same, Different, or Both?” Entrepreneurship Theory & Practice (2006): 1–22. To better understand the interplay between leadership and social entrepreneurship, see: J. A. Felicio, H. M. Goncalves, and V. C. Goncalves, “Social Value and Organizational Performance in Non-Profit Social Organizations: Social Entrepreneurship, Leadership, and Socioeconomic Context Effects,” Journal of Business Venturing 66 (2013): 2139–2146.

  49. 49. Ibid.

  50. 50. A. Daniels, “Respecting Your Business’s Ethics Policy,” Entrepreneur, November 2002, http://www.entrepreneur.com/article/56740; Grameen Bank, “Professor Yunus Receives Presidential Medal of Freedom,” http://www.grameen-info.org, accessed May 5, 2010.

  51. 51. A. M. Peredo and M. McLean, “Social Entrepreneurship: A Critical Review of the Concept,” Journal of World Business 41 (2006): 56–65.

  52. 52. Rob Matheson, “Cooking Up Innovation,” MIT News Office, June 23, 2013, http://web.mit.edu; One Earth Designs, “About,” http://www.oneearthdesigns.com, accessed February 27, 2014; Katie Hammer, “Removing Indoor Pollution,” Harvard Gazette, August 21, 2013, http://news.harvard.edu/gazette; Liyan Chen, “B Lab Announced ‘Best for the World’ Company List,” Inc., April 17, 2013, http://www.inc.com; Unreasonable Institute, “Our Network: All Fellows, Scot Frank, Fellow 2011,” http://unreasonableinstitute.org, accessed February 27, 2014; Randall Lane, “30 under 30: Social Entrepreneurs,” Forbes, December 17, 2012, http://www.forbes.com.

  53. 53. M. Sharir and M. Lerner, “Gauging the Success of Social Ventures Initiated by Individual Social Entrepreneurs,” Journal of World Business 41 (2006): 6–20.

  54. 54. Ibid.

  55. 55. Caitlin Huston, “Hair Chain Drybar Finds Niche in Affordable Luxury,” Wall Street Journal, November 21, 2013, http://online.wsj.com; Meghan Casserly, “Drybar: How One Woman and a Hair Dryer Became a $20 Million Operation,” Forbes, November 1, 2012, http://www.forbes.com; Kate Rockwood, “Most Creative People 2013: 35 Alli Webb, Founder, Drybar,” Fast Company, June 2013, http://www.fastcompany.com; Drybar, “About Us: Meet Alli Webb and the Team at Drybar,” http://www.thedrybar.com, accessed February 27, 2014.

  56. 56. Company website, http://www.burgerking.com; Jena McGregor, “Room & Board Plays Impossible to Get,” BusinessWeek (October 1, 2007): 80.

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