11 Corporate Innovation & 7 Business Plan And Financials Flashcards
Disruptive innovation
Product/service taking root in simple application for neglected segment, then growing until replacing established competitors
DIFFERNCE BW START-UP AND COMPANY: Why disruptive innovation happens
- Start-ups: search new business models
- Companies: execute on known business models
Why difficult for successful companies to innovate?
- Too comfortable with market share and profitability
- Internal processes not aligned with longer cycles of innovation
- Investment too risky
- Mgt tools and incentives favor short-term revenues
What mistake do companies make in the way they view themselves
As single institution w/ single business model
Optimal: ambidextrous organization
Both executing existing business and searching for newness
Two types corporate innovation
Closed/internal vs open/external
Examples closed/internal vs open/external corporate innovation
closed/internal:
- internal R&D/innovation
- corporate accelerator
open/external:
- innovation team
- corporate VC arm
- external accelerator
Is L’Oreal and Founder’s Factory Beauty Tech accelerator closed or open corporate innovation?
Open
How companies generate innovative ideas (3 types, with examples)
Bottom up
- suggestion box
- e-platform
Top down
- ideation events
- design thinking on strategic topics
External
- hackathons
- open call for ideas
BCG six innovation model (name, explanation)
- Creator: knows best, visionary
- Solution builder: listening
- Leverager: do it best
- Explander: steal share
- Defender: protecting turf - slow changing sectors
- Fast follower: react rapidly
Innnovation thesis: What’s the usefulness
Gives direction to move forward in integrated coherent way, facilitating implementation of innovation strategy (integrate current business and innovation)
Elements innovation thesis
- Future of industry
- Which areas/tech invest in
- Which areas/tech not invest
Formula innovation thesis
We see the ____ industry moving into this, this & this direction, in the future we see ourselves as being a reference in ______ (these pillars) by doing this _____.
Innovation portfolio
Framework: help make good investments to create innovation inside company -> putting innovation strategy into practice
Horizons investment portfolio
- Core
- Adjacent
- Transformational
Closed/open innovation @ L’Oréal
Closed
- R&D
- innovation lab
- internal accelerator
Open
- innovation team
- corporate VC fund
- external accelerator
Innovation thesis L’Oréal
We see the beauty industry moving into a more tech-based direction and in the future we see ourselves as being a reference in tech used in the beauty industry.
We are going to accomplish this by attracting innovation through in-house accelerators but also the Founder’s Factory.
3 innovation focus areas of L’Oréal
Product
- best products w/ best molecules -> bets performance
Customer
- keeping up with trends in touch points: communication, selling
Tech
- cutting edge technology: product, customer service, value chain
Innovation portfolio of L’Oréal
Core
- R&D
- innovation lab and internal accelerator
Adjacent
- corporate VC fund
Transformational
- Partnership
founder’s factory
Station f
3 factors success L’Oréal
1) top mgt: involved in innovation
2) strategy: vision of future and strategy to be in that future
3) partnerships: realizes can’t generate all ideas by themselves
Internal (3 ex) vs external (4 ex) stakeholders
Internal
- employees, mangers, owners
External
- suppliers, customers, society, shareholders
Is business plan just financial plan? What is it there for
No, not just financial plan, but to get credibility from outside
3 jobs of business plan
Vision, roadmap, communication
4 points in the vision part of business plan
- Vision + mission
- Target market
- Competition
- Revenue/profitability
Roadmap element of business plan (which 3 strategies)
- Marketing strategy
- Sales forecast
- Operational plans
Communication part of business plan (2 parts)
- Convey business concept to stakeholders
- Viability of business (support from stakeholder)
6 key contents business plan
- Company description
- Market analysis
- Offer
- Marketing/sales
- Operational plan (day-to-day to deliver product)
- Financial projections
Elevator pitch
Concise speech summarizing business idea (30 sec - 2 min)
Business plan: company description (2)
- mission, vision, values
- personnel/shareholding structure
Business plan: market analysis (5)
- Industry landscape
- Target market
- Competitive environment
- Market size, growth
- Customer demographic, purchasing behaviour
Business plan: Offer (product/service) (4)
- Features, benefits, value proposition
- Functionality
- Pricing
- Unique selling point (USP)
Business plan: marketing/sales strategy
- they are methods to do what?
- 3
Methods to attract, acquire and attain customers
1. Target market segments
2. Marketing channels
3. Promotions
Business plan: operational plan
- what is it mainly
- 5
Day-to-day operations to deliver product
1. Product/service delivery
2. Supply chain mgt
3. Quality control
4. Inventory mgt
5. Customer service
Business plan: financial projections (3) + what they all do
Forecasted (3-5 y)
- income statement
- cash flow statement
- balance sheet
—> detailing rev, expenses, profits, cash flow
Formula elevator pitch
We are (name)… and we help (target customer segment)… do (value - what product does for customer)….
We are better than the competition bcs (differentiation or comp advantage)
Stakeholders
Interest in organisation/project -> affected by/affect actions of business
Financial planning: 3 key figures
- Revenue
- Net invome (revenue-cost)
- Burn rate ( how fats going through cash)
acronym for gaol setting in financial planning
Specific
Measurable
Achievable
Realistic
Time-bound
3 most important financial statements
- Income statement
- Balance sheet
- Cash-flow statement
6 elements financial planning
- Goals/plan launch
- Start-up costs (investment)
- Monthly expenses
- Revenue
- Cash-flow projections
- Financing needs
Estimating revenues: bottom-up approach
Sales (prod capacity/estimated sales) x selling price
Estimating revenues: top-down approach
Market size (region) x market share
Estimating operating costs: bottom-up approach
- production capacity
- add up individual expenses (materials, labor, marketing, OH)
- write down individual cost/lump sum
- multiply with production
- total
Estimating operating costs: top-down approach
1) estimated revenue
2) industry benchmarking: apply average cost ratios of comparable firm (materials, labor, marketing, OH)
- write percentages
- apply to revenue
- total
3 elements cash flow projections
- Investing activities
- Operating activities
- Financing activities
Six stages of start-up funding
- Pre-seed stage: ideation, market research
- Seed stage: financial support, verify hypothesis
- Early stage: VC, MVP, establish customer base
- Growth stage: scale, diverse funding
- Expansion stage: self-sufficient, other market segments, acquisitions?
- Exit stage: selling?
Pitching to investors - 8 slides
- Opening slide (brand, one liner)
- Sell problem
- Solution
- Market opportunity
- Traction (growth)
- Business model
- Team
- Ask for what ur looking for
