Seminar: A sustainable business model for growth

Topic Number: 11

Principles of Business

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OverviewOver time as your business expands you will need to consider how best to scale up your enterprise in a sustainable way. This seminar is divided into two parts the first is exploratory in nature where you will spend time on www.startups.co.uk and www.theguardian.com/sustainable-business.

Your first task is to gain an appreciation for the types of challenges you and your business model might face when scaling up. Thereafter, you need to choose an established business from the website and discuss what you can learn about their journey that you can use in your business. The focus should be on creating a win-win business model.

The second half of the seminar will look at how you to create an engagement and communication strategy to get all your internal stakeholders from across the business behind the plan. Finally, you will assess your ethical stance on key issues relating to bribery and corruption when expanding your business in a foreign country.

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Learning outcomes of this seminar

• Develop and demonstrate a robust, scalable business model that can be deployed in your business

• Evidence how the model creates a win-win situation for all stakeholders concerned

• Develop an engagement and communication strategy for internal employees

• Highlight and articulate your businesses ethical stance on key issues relating to bribery and corruption whilst abroad

Agenda for this seminar

Develop an engagement and communication strategy for internal employees

Highlight the approach you would take to bribery and corruption when moving your company abroad

Choose an established “sustainable” business and discuss what you can learn from their journey to apply to your own business

Gain an appreciation for the type of issues you may face when scaling up your business

Structure for the session

You will have 15 minutes to

discuss each question

We will have a de-brief at the end of each 15 minutes to hear your thoughts on each area

Feel free to ask questions but please do not have separate conversations ‘we are all in

this together’!

A word from Richard Branson

If somebody offers you an amazing opportunity but

you are not sure you can do it, say yes – then learn how

to do it later!

Gain an appreciation for the type of issues you may face when

scaling up your business

Scaling a business from a cottage industry is challenging! Lets hear from the Founder of Innocent

View video: http://startups.co.uk/richard-reed-on-scaling-innocent-drinks-video/

Issues and challenges with scaling a business

Spend 10 minutes on www.startups.co.uk and come up with 3 key challenges when scaling a business

Business Model Trade-Offs & Considerations

Strategic

Operational Financial

Source: Slack et al, 2012

Operational Considerations

Source: Slack et al, 2012

Costs/Budget

Timing Resource

Key questions

• Do you speculatively invest in resources before you need it?

• Do you pitch for work that you know you do not have the resources for?

• Where do you house your scaled up manufacturing facilities? Store stock?

The Trade-off Triangle

Operational Considerations

To lead or lag demand?

Strategic Considerations: Expand where?

Financial Considerations

How much additional funding

do we need?

Do we go for equity or debt

financing?

How can we access funding? On what terms?

Do you have a suitable business

case?

Choose an established

“sustainable” business and discuss what you can learn

from their journey to apply to your own

business

Lets take a look at solar power in the East & West

Source: Guardian, 2014

A growing industry with more investment

Source: Renewables Global Status Report, 2013

Yet challenges prevail in the UK

When it comes to domestic market growth, and building a national solar industry, the UK is very much in the "jury out" category at the

moment. This is partly because of an internal battle of ideas between solar believers and those who envision the UK as a "gas hub", on the

road to which solar is a distraction that might put off investment in UK fracking.

Commercial rooftops way to go?

Enormous vacant,

functionless, roof space available

Save money

by using roof tops

Big push by the Dept of Energy &

Climate Change

To increase scale…

Influence government policy

Make it more accessible to businesses

Source: Guardian, 2014

A greater challenge in India? Frontier Markets

With more than 32,000 villages continue to lack power, the absence of electrification represents a particular concern. Even those villages

that have grid access, power outages represent a frequent frustration.

An extensive product range

Distribution is key

Market Understanding

Source: Guardian, 2014

Develop an engagement and communication

strategy for internal employees

Think about the issues with mandatory learning in organisations

…goes to everyone…

Exactly the same message…

…at the same time…

…in the same way…

…no wonder.

Illustrations: Wikipedia.org

A four stage process

What to say… Who to say it to…

When to say it… What channel to use…

Illustrations: Wikipedia.org

A four stage process: What to say?

• Key messages only

• Be concise

• Be grabbing

• Be relevance

• Be human

• Be transparent

Illustrations: Wikipedia.org

A four stage process: Who to say it to?

• Know your audience

• Determine what motivates your audience

• Tailor your message

• A need to know basis

Illustrations: Wikipedia.org

A four stage process: When to say it?

Illustrations: Wikipedia.org

A four stage process: What channel to use?

View video: https://about.yammer.com

Yammer• Appropriate channel for

message

• Engagement and accessibility is key

• Multi-channel approach

• Use tech to your advantage

• Measure channel metrics

Highlight the approach you would take to bribery and

corruption when moving your

company abroad

Explain the types of Bribery & Corruption

Corruption occurs where the integrity of a person, government, or company is manipulated and compromised for their own personal gain.

There are two main types of corruption:

Political corruption - the dysfunction of a political system or institution in which government officials, political officials or employees seek illegitimate personal gain through actions such as bribery, extortion, cronyism, patronage and embezzlement

Corporate corruption - bribes are offered to agencies, institutions or individuals to win a contract

Illustrations: SFO, 2014

Definitions of Bribery & Corruption

Here are some definitions on some corruption-related terms that you may have heard of:Bribery - giving or receiving something of value to influence a transactionIllegal gratuity - giving or receiving something of value after a transaction is completed, in acknowledgment of some influence over the transactionExtortion - demanding a sum of money (or goods) with a threat of harm (physical or business) if demands are not metConflict of interest - where an employee has an economic or personal interest in a transactionKickback - a portion of the value of the contract demanded as a bribe by an official for securing the contractCorporate espionage - theft of trade secrets, theft of intellectual property, or copyright piracyCommission/fee - used by a UK company or individual to obtain the services of an agent/agency for assistance in securing a commercial contract

Illustrations: SFO, 2014

Consider the scenarios

• Give a bribe to someone to get your business set up in a foreign country quicker?

• Offer a free product to someone who can get your shipment through customs quicker?

• Offer to do someone a favour in your home country if they return it in theirs?

• Provide a ‘kick-back’ if an individual helps to win a contract in another country?

• Would you accept a gift from a supplier for giving them a piece of business?

End of Seminar

Note: This recording is for your personal use only and not for further distribution or wider review.

© Pearson College 2013