Entrepreneurs In Action Exam 1

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entrepreneurship

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The process whereby an individual or group of individuals use organized efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness regardless of personal resource

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Intrapreneurship

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the process of using organized efforts and means to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness

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Small Business

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• Independently owned, operated, and financed
• Has fewer than 100 employees
• Doesn’t engage in new or innovative practices
• Has relatively little impact on its industry

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Entrepreneurial Ventures

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• An organization pursuing opportunities
• Characterized by innovative practices
• Main goals are profitability and growth
• Willingness to take risks

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Richard Cantillon

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coined term entrepreneur

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jean baptiste say

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proposed that the profits of entrepreneurship were separated from profits of capital ownership

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joseph schumpeter

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described entrepreneur as someone who is an innovator and someone who creatively destructs

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peter drucker

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described the entrepreneur as someone who maximized opportunity

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The entrepreneurial process

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• Exploring the Entrepreneurial Context (Ch.2)
• Identifying Opportunities and Possible Competitive Advantage (Ch.2)
• Opportunities are positive external trends or changes that provide unique and distinct possibilities for innovating and creating value
• Competitive advantage is what sets an organization apart; it’s competitive edge; even not-for-profit organizations need it!
• Starting the Venture (Chs.3, 4, 5)
• Managing the Venture (Chs. 7,8)

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Types of entrepreneurs

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entrepreneur
novice entrepreneur
habitual entrepreneur
nascent entrepreneur
international/global entrepreneur
cultural entrepreneur
arts entrepreneur
social entrepreneur

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Personality of entrepreneur

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• High level of motivation
• Abundance of self-confidence
• Ability to be involved for the long term
• High energy level
• Persistent problem solver
• High degree of initiative
• Ability to set goals
• Moderate risk taker
• Proactive personality

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Proactive personality

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describes an individual who is more prone to take actions to influence his or her environment

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Characteristics of today's economy

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Role of information
globalization
demographics

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Role of inofrmation

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almost instant availability of almost any type of information
telecommuters
virtual organizations

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globalization

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the linking of economies and cultures that fosters a business and competitive situation in which organizations have no national boundaries

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demographics

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the vital statistics of a population

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change

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any alteration in external context or internal organizational factors

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vanishing distance

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the world is an entrepreneur's customer, as well as a competitor

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compressed time

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organizations required to be alert to change if they want to retain marketplace advantage

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four success factors

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1. ability to embrace change
2. ability to be creative and innovative
3. vision and leadership
4. total quality culture

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Vision

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a broad comprehensive statement of what an entrepreneur wants his/her organization to become; what the org. stands for/believes in, why it exists

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Total Quality culture

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All resources and capabilities are directed at the pursuit of greater quality in all parts of the organization

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Changing world if work

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1. nature of the work one does
2. organizational setting within which work takes place

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social responsibility

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the obligation of organizational decision makers to act in ways that recognize the interrelatedness of business and society

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Stakeholders

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individuals or groups of individuals who have a stake in or are significantly influenced by an organization’s actions and who, in turn, can influence the organization

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Ethics

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involves the rules and principles that define right and wrong decisions and behaviors

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True/false: Entrepreneurs showed to generally have less ethical standards than corporate managers

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false

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Environmental opportunities

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• The unexpected (success or failure)
• The incongruous
• The process need
• Industry and market structures
• Demographics
• Change in perception: one’s view of reality
• New knowledge

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Opportunities

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positive external trends that provide unique and distinct possibilities for creating value

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Competitive advantage

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• What sets an organization apart; a company’s competitive edge
• Necessary for long-term success and survival

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Three views on competitive advantage

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1. The industrial organization (I/O) approach (external view)
2. Resource-based view (RBV) (internal view)
3. The guerrilla view

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The industrial organization (I/O) approach (external view)

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CA arises out of the org.’s ability to look at important external factors, analyze those factors for potential opportunities and then base organizational decisions on what was discovered

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Resource-based view (RBV) (internal view

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CA depends on developing/acquiring and exploiting unique organizational resources (“whats”) and capabilities (“hows”)

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The guerrilla view

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radically surprising competitors with actions that keep them off balance

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sources of Generating Ideas

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• Personal interests and hobbies
• Work experiences, skills, abilities
• Products and services currently available
• External environmental opportunities

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Environmental Scanning

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The screening of large amounts of information to detect emerging trends

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Creativity

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the ability to combine ideas in a unique way or to make unusual associations between ideas

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brainstorming

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an idea generating process for developing creative solutions that encourages as many alternatives as possible

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focus groups

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provide information about proposed products or services in a structured setting

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Feasibility study

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A structured and systematic analysis of the various aspects of a proposed entrepreneurial venture designed to determine its workability

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Evaluating entrepreneurial ideas

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minimize risk while maximizing return
make best use of limited resources
decide what is important
identify strengths and weaknesses of ideas

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Researching competitors

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• The industry perspective (same product/service)
• The marketing perspective (different industry/same customer need)
• The strategic groups perspective (groups of competitors with same strategy)

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funding options

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Entrepreneur's personal resources
angel investors
financial institutions
venture capital
initial public offering
business development programs
other sources ( shark tank)

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Angel investors

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private investors; wealthy individuals who offer financial backing usually in high-risk/high-reward opportunities in return for an equity stake in the business

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Venture capital

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external equity funding provided by professionally managed pools of investor money

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Initial public offering

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investment vehicle that is the first public registration and sale of a company’s stock

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Business development programs

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eg. Business incubators