港中大MBA创业金融讲义CNewVentureStrategy.pptVIP

New Venture Strategy Learning objectives What makes a decision strategic Interrelationships between financing decisions and other aspects of new venture strategy Strategic decisions and entrepreneur’s objective of value maximization Decision trees to identify and evaluate real options Games trees when strategic choices depend on rival reactions Henry Ford and the Model T 100 different firms manufacturing and selling automobiles in US in early 1900 From 1908 to 1921, market share of Ford in US 60% and 50% worldwide Why? Mass Production + Innovative marketing and financing plan Purchase parts on credit, assemble automobiles in short period of time and sell them to dealers for cash Henry Ford and the Model T Large scale mass production and positive cashflow that is used to upgrade assembly line and integrate upstream from assembling into manufacturing Model T – example of financial strategy Note the dynamic business environment – General Motors with styling Link between product market strategy and financing strategy more pronounced for entrepreneurial ventures than for established co. What makes a plan or decision strategic Substantial commitment of time and resources Active and reactive Limit the range of future actions that are possible (e.g. Ford’s development of mass production vs customized luxury vehicle) Financing strategy The same three elements of a strategic decision Considerations concerning growth, flexibility and control Financial contract to address info asymmetry between entrepreneurs and investors and to better align the incentives of entrepreneurs and employees with investor interest Product-market strategy and organizational strategy Interdependent with financial strategy Strategic decisions include: Amount of external financing versus capital Target capital structure Staging of cash infusions Product-market strategy and organizational strategy Product strategies: Targeted sales growth rate Product price Product quality Product differentiation Mu