Unit #3: Day 1

Opening Activity• Pick up a “Note Sheet” on the

table• Complete the section about your

initial impression of McDonald’s

Unit #3: Day 1

Ray Kroc – A “Fast Food” Genius

• Who is Ray Kroc?– Owner of McDonald’s

• Didn’t reinvent fast food, just did it better

• Found a niche => store consistency

– An Entrepreneur• An individual who runs a business

– Could have been the founder or bought it

Unit #3: Day 1

Ray Kroc - A successful entrepreneur? • Yes/no?

– How do you measure his success?

• What are some characteristics that Ray Kroc exhibited that made him a successful entrepreneur?

– Self-confident– Determined– Creative– Goal-oriented– Had a vision– Able to act quickly

Unit #3: Day 1

1. Define what an entrepreneur is and why do individuals become one?

2. Identify traits of successful entrepreneurs?

3. What are advantages & disadvantages of entrepreneurship?

4. What are types of businesses that entrepreneurs can start/run?

Today’s Questions? Unit #3: Business & Industry Analysis

Unit #3: Day 1

Who is an Entrepreneur? • One who owns and operates a business

venture• One who accepts all the risks• One who tries to identify and meet a need

for a product or service• Examples?

– Bill Gates, Michael Dell, Phil Knight and Sam Walton

– Maybe mom or dad or another family member

Unit #3: Day 1

Are there certain criteria to become an entrepreneur?

• No!!!

• Anyone can become one regardless of background or education

– Ray Kroc dropped out of college

• It involves taking a risk– Entrepreneurs assume risk which makes them

different from employees– Entrepreneurs work for themselves whereas

employees are people who work for someone else

Unit #3: Day 1

Why become an entrepreneur? • Change of lifestyle

• Chase personal dream

• Work for themselves

• Potential financial rewards

Unit #3: Day 1

Advantages of Entrepreneurship • Entrepreneurs are their own bosses

– Nobody tells an entrepreneur what to do – they control their own destinies

• Entrepreneurs can choose a business that interests them

– Many combine hobbies & interests with business

• Entrepreneurs can be creative• Entrepreneurs can make lots of money

– Reap benefits of their hard work – Can go public, be bought out/acquired by another

company, or have high sales

Unit #3: Day 1

Disadvantages of Entrepreneurship • Entrepreneurship is risky

– Most businesses begin operations by borrowing money – takes time for businesses to be financially viable

– All businesses face the possibility of going out of business or losing money

• Entrepreneurs face uncertain and irregular incomes– May make money one month and lose money the next

• Entrepreneurs work long hours– Never really are finished with their jobs

– Receive no paid days off

• Entrepreneurs must make all decisions by themselves– Unless they have partners, they must make all the decisions

alone

Unit #3: Day 1

Types of Businesses Entrepreneurs can Start/Run

1. Manufacturing businesses– Produce the products they sell– E.g., General Motors, Timex watches, etc.

2. Wholesale businesses– Sell products to people other than the final customer– E.g., Sysco food supplier

3. Retail businesses– Sell products directly to the people who consume them– E.g., Target, Wal-Mart, Jewel, etc.

4. Service businesses– Sell services rather than products– E.g., H&R Block tax preparation, Ritz Carlton hotel, etc.

Unit #3: Day 1

McDonald’s Branching Activity• Going to put you into 5 groups• Need to tear off a white sheet of paper up front & a

marker• Draw a tree trunk similar to the one on the board &

label it McDonald’s

• Your objective: Draw as many branches off the trunk that pertains to McDonald’s

• You will spend a couple minutes doing this & then will rotate to the next group’s

• Ultimately, your group will return to your initial drawing and see your fully blossomed McDonald’s tree

Unit #3: Day 1

CNBC Video• Going to watch: “Big Mac: Inside

the McDonald’s Empire”• Aired in the Summer of 2007• Gives you a perspective on current

day operations• As you are watching it, write down

some reactions to the material presented on your note sheet

Unit #3: Day 1

Today’s Question Wrap-Up 1. Define what an entrepreneur is and why do individuals

become one?– Individuals who take the risk and go into business for themselves

either to chase a dream or for the potential financial rewards

2. Identify traits of successful entrepreneurs?– Creative, aggressive, determined, goal-oriented

3. What are advantages & disadvantages of entrepreneurship?– Get to be your own boss, potential financial rewards– Have to make all of the decisions, could fail & lose $$

4. Types of businesses entrepreneurs can start?– Manufacturing, Wholesale, Retail and Service

Unit #3: Day 1

Homework • Type up a list of (1) Key Challenges and (2)

Opportunities that you think McDonald’s faces

Unit #3: Day 1

Today’s Questions? From Lesson 1.3 Identify Opportunities

1. What are the advantages & disadvantages of entrepreneurship?

2. What is a SWOT analysis?

Unit #3: Day 1

Refresher

1. Define what an entrepreneur is and why do individuals become one?

– Individuals who take the risk and go into business for themselves either to chase a dream or for the potential financial rewards

Unit #3: Day 1

Identify Opportunities • Pair up with a neighbor and share your

business ideas– Ideas?– Why did you choose these?

• Hobby or interest in• Financial opportunity• Unmet need/want or could fulfill an existing one

better

• So you have the idea, what’s next?– Do research, networking, and perform analysis

Unit #3: Day 1

Identify Opportunities • Research, networking, analysis

– What looking for?• Existing competition• Is there demand for the product• Necessary investment to start the business, labor requirements, etc.• Potential sales and profits

– Sources of information• Business trade magazines • Government publications• Organizations such as the Small Business Administration (SBA) and local

Chambers of Commerce• Talking to entrepreneurs & attending trade shows• Zipskinny.com

– Perform analysis• SWOT

Unit #3: Day 1

SWOT Analysis Example

Our mission is to be the world's premier consumer products company focused on

convenience foods and beverages.  We seek to produce healthy financial rewards to

investors as we provide opportunities for growth and enrichment to our employees, our

business partners and the communities in which we operate.  And in everything we do, we strive for honesty, fairness and integrity.

Unit #3: Day 1

SWOT Analysis Example

How can Pepsi achieve this mission of growth?– New products

– New distribution outlets/increase sales

– Acquisitions• Pepsi did this acquiring Quaker Oats in 2000 for

$14 billion

• By purchasing Quaker Oats, Pepsi got Gatorade but also oatmeal, cereal, etc.

Let’s prepare a SWOT analysis that Pepsi might have done in evaluating this acquisition

Unit #3: Day 1

SWOT Analysis

Strengths Weaknesses

ThreatsOpportunities

Unit #3: Day 1

SWOT Analysis

Strengths

• Gatorade #1 sports drink

• Increased revenue

• Get to be instant market leader

Weaknesses

• Get products don’t need/want

• Expensive

Threats

• Coke’s reaction

• Sponsorship conflicts

• FTC may block

Opportunities

• Can piggy back on Pepsi’s existing distribution channels

Unit #3: Day 1

SWOT Analysis: Wal-Mart International Expansion Example

Strengths Weaknesses

ThreatsOpportunities

Unit #3: Day 1

Today’s Questions Wrap-UpFrom Lesson 1.3 Identify Opportunities

1. Identify traits of successful entrepreneurs?– Creative, aggressive, determined, goal-oriented

2. What are the advantages & disadvantages of entrepreneurship?

– Advantages• Own boss, choose business that interests them, can be creative, and make

lots of money

– Disadvantages• Risky, have uncertain and irregular incomes, work long hours, and have

to make all the decisions yourself

3. What is a SWOT analysis?– Quick analysis used to asses the viability of an idea/ opportunity

Unit #3: Day 1

Homework • None

– Unless you haven’t already read Chapter 1

• Next class will start discussion on Chapter 3

• Test on:– Monday, 3/12 B day class– Tuesday, 3/13 A day class