Advanced entrepreneurship - intrapreneurship & entrepreneurship - Essay Example

? Advanced Entrepreneurship – Intrapreneurship and Entrepreneurship New Product Launch The purpose of this paper isto launch an innovative new product (hypothetical) in its industry through intrapreneurship describing the strategies employed, factors considered and challenges one would have likely faced in the process. The second part of the paper also explores how different the approach would have been and the changes in the marketing environment if the product had been introduced into the market by way of entrepreneurship. The main purpose of the activity is to shed light on the difference between intrapreneurship and entrepreneurship in a practical setting. Research for this paper has been conducted chiefly from the internet as well as some available course material and the strategies detailed in the same have been compiled based on real case studies as well as the theory studied during the course. Part 1: Product Idea Product The product chosen for the purpose of this activity is a P2P (peer to peer software) file transfer client similar to the ‘Torrent’ clients encountered today with modification that it is used exclusively for the exchange of licensed audio and video files. There is currently no player in the industry that offers original DVD videos of movies and series recently out of cinemas licensed by the proprietor for free. Piracy through other P2P clients poses a high risk to the (downloader and the distributor of such illegal media) being prosecuted by the EFA when discovered and also causes considerable losses to the industry. The innovation in the product lies in the fact that a good quality print of the media is available for free to any user, which negates the requirement for piracy. The revenue losses incurred by the proprietor of the media (in DVD sales) can be recovered through placement of advertisements in the media.1 Introduction into the Market The approach selected to introduce this new product (dubbed VideoGenie) into the market is Intrapreneurship. Developing software of this caliber as well as maintaining a team that can service clients and develop business, coordinate licensing deals, insert advertisements into videos, maintain servers for downloaders and publicize the product would require a huge infusion of capital. Despite that, there is no guarantee of the product becoming profitable in the first year after its launch. Therefore, it seems more sensible to find a company to fund its development and launch and bear the losses rather than invest one’s own money into it. To decide how the product is introduced into the market, one has to consider the demographic and psychographic profile of the target group / audience. Target Audience Demographic Profile Since the medium for distribution of the product chosen is the internet, there are no geographic constraints. The age group of the target audience will range from 16 to 45 years as the target audience needs to comprise cinema / series/ sitcom enthusiasts who are savvy enough to use the internet for downloading these files. There is no barrier relevant to the occupation, marital status or gender of the target group. Psychographic Profile The customer targeted by this product includes cinema/ series buffs and a patron of any form of entertainment that is currently sold on DVD (and is plagued by piracy). The customer should be internet savvy, have an internet connection that allows frequent and heavy downloads and intent on saving money (i.e. reluctant to spend on purchasing the DVD). The customer should also be an opinion leader among his / her friends to increase word-of-mouth publicity of the product. The product also targets people who are averse to using pirated media and are afraid of legal action taken by intellectual proprietors for the same. The distribution of the software can best be done over the web. Since the software will be available for free and it provides licensed versions of videos that would otherwise be downloaded illegally, it makes most sense to distribute it through advertisements on websites that facilitate illegal downloads (i.e. www.isohunt.com, www.thepiratebay.org, www.torrentz.com, www.mininova.org). It can also be distributed through advertisements on the websites of resource partners whose videos are being offered for download through the software (such as Disney, Marvel Studios, DreamWorks, and Warner Bros. etc.). The use of social media such as Facebook. Twitter, Youtube, Flickr, Tumblr, Blogspot, Myspace etc. should also be considered to develop a brand image and a positive attitude towards the brand and product. Advatages and Disadvantages There are several benefits and shortcomings of the approach chosen to introduce the product mentioned. These have been detailed below. Advantages By choosing to introduce VideoGenie through intrapreneurship, there is a ready capital available for the project and therefore, the risk of the venture is borne chiefly by the company and not by the innovator. Having a company to fund the project also considerably increases the funds available for development of the product, increasing the chances of its success in the market (Hell, 2011). Also, the company’s brand image and reputation will be lent to the product, strengthening its position in the market as well as giving it a higher starting platform (as happened in the case of XBOX which was intrapreneurially developed in Microsoft) (Brahmbhatt, 2006). Also, the developer of the software will obtain a more prestigious position in the company for having added value to the company. Disadvantages There are many shortcomings of choosing this approach to introduce the product as well. For starters, since the company funds the project, the intellectual property rights will remain with the company. Also, interference from the higher management might cause some undesirable modifications in the product. The innovator is also left at the mercy of the company’s higher management who decide whether or not the idea is marketable. Another challenge posed by this approach is the fact that the innovator cannot divert all his / her attention to developing the product. They will be required to do this along with their regular duties as employees of the company. This in turn could slow down the product development and also result in development of an inferior product. Part 2: Business Model Bringing the Intrapreneurial product into the Market through Entrepreneurship Had VideoGenie been brought to the market through entrepreneurship, there would have been a huge difference in the environment for development and marketing of the product. For starters, there would be far lesser funds at the disposal of the entrepreneur to develop the product and market it. The time available for development of the product would also be shorter owing to the necessity to generate returns on the entrepreneur’s investment faster. The product and brand would have to start from scratch without any brand image or reputation and therefore require an economical yet highly effective marketing strategy for the product to succeed in the market. Had this been the scenario with VideoGenie, a wholly different strategy would have been required to address the situation. The innovator would have to risk the prospect of intellectual property theft, losses if the product fails in the market, losses due to any bugs / errors in the software after the launch and a long wait for the project to break even and generate returns. The project would require a huge investment either through debt or equity, a dedicated team of coders to develop the software, a marketing team to develop business, find sponsors for the project and resource partners to tie up for licensed distribution of videos and promote the software. It would also require logistics such as office space, computers, furniture, internet, telephone connections etc. In short, it would require at least a good coder, a good marketing executive, a manager of day to day operations and also a leader to ensure coordination between these teams and motivate them towards the common goal. The only way such an initiative could succeed would be if the company had the resources to invest in the venture and found the right partners to carry them through the initial lean phase. The entrepreneur would need to focus on long term gains rather than short term benefit and concentrate on the quality of the product rather than the development time. The entrepreneur would also need to be willing to take a huge risk and able to motivate his partners / employees to stay focused on the project despite all the hardships that will be faced in the near future (APS Consulting Group, 2008). References Kotler P and Keller K (2007). Marketing and Management Twelfth Edition. New Jersey. Pearson Prentice Hall. Takahashi D, Roberts E, Sahlman W and Billington J (2010, September 01). Intrapreneurship. Retrieved from http://www.michaelgoldman.com/intrapreneurship.htm. Hell K (2011). Intrapreneurship. Reference for Business – Encyclopedia of Business, 2nd ed. Retrieved from http://www.referenceforbusiness.com/encyclopedia/Int-Jun/Intrapreneurship.html APS Consulting Group (2008, October 31). Entrepreneurship vs Intrapreneurship. Retrieved from http://apsblog.com/site/entrepreneurship/entrepreneurship-vs-intrapreneurship Brahmbhatt K, Intrapreneur or Entrepreneur? Kintya Technology. Retrieved from http://www.kintya.com/blog/2006/01/intrapreneur_or.html Footnotes 1 A regular DVD video has an aspect ratio of 16:9. Since most screens can support up to 16:10 aspect ratio, this leaves space above and below the video for an ad by a sponsor. Since these ads will be viewed by every person watching the video, the reach of the new medium will justify the cost of the advertisements. Read More