Transcript The Nature & Importance of Entrepreneurship

THE NATURE & IMPORTANCE
OF ENTREPRENEURSHIP
Chapter 1
“Being an entrepreneur and creating a new
business venture is analogous to raising childrenit takes more time and effort than you ever
imagine and it is extremely difficult and painful
to get out of the situation.”
..Oprah Winfrey
Who is an Entrepreneur?
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Someone who brings resources, labor, materials and other assets into
combination that makes their value greater than before.
Someone who introduces changes, innovations.
Someone who is driven by the need to experiment, accomplish,
escape authority of others.
Someone who finds better ways to utilize resources, reduce waste
and produce jobs for others.
An aggressive competitor.
Thus Entrepreneurship..
“ is the process of creating something new with value
by devoting the necessary time and effort, assuming
the accompanying financial, psychic and social risks,
and receiving the resulting rewards of monetary and
personal satisfaction and independence.”
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Are Entrepreneurs born or made ???
The Entrepreneurial Process
“ is the process of pursuing a new venture, whether it be new
products into existing markets, existing products into new markets
and/or the creation of a new organization.”
Identification
& evaluation
of opportunity
Development
of business
plan
Determination
of required
resources
Management
of the resulting
enterprise
Phase 1 – Identify & Evaluate the Opportunity
“ Opportunity identification is the process by which an entrepreneur
comes up with the opportunity for a new venture.”
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Opportunities are identified mostly through informal mechanisms
such as consumers, business associates, channel members, technical
people etc.
Window of Opportunity- The time period available for creating the
new venture.
Phase 1 – Identify & Evaluate the Opportunity
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Evaluation process involves looking at the length of opportunity, its real &
perceived value, its risks and returns, its fit with personal skills and goals of
entrepreneur, and its uniqueness or differential advantage in its competitive
environment.
- What market need does it fill?
- What personal observations have you experienced or recorded with regards to
that market need?
- What social conditions underlies this market need?
- What market research data can be assembled to describe this market need?
- What patents might be available to fulfill this need?
- What competition exists in this market? How would you describe the behavior of
this competition?
- Where is the money to be made in this activity?
Phase 2- Develop a Business Plan
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The description of the future direction of business is
called a business plan.
Time consuming but essential for developing the
opportunity and determining the resources required,
obtaining those resources and successfully managing
the resulting venture.
Phase 3- Determine the resources
required
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Starts with the appraisal of present resources and grading of
resources required in order of importance.
Next step is acquisition of required resources in timey manner
while maintaining maximum ownership.
Identification of alternative suppliers.
Phase 4 – Manage the enterprise
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Management function requires the entrepreneur to use acquired
resources for implementation of business plan.
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Dealing with operational problems
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Determining management style and structure.
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Establishing control system
Aspects of Entrepreneurial Process
Identify & evaluate
opportunity
Develop business
plan
Resources required
Manage the
enterprise
-Opportunity
assessment
- Creation & length
of opportunity
- Real & perceived
value of opportunity
-Risks & returns of
opportunity
-Opportunity versus
personal skills &
goals
-Competitive
environment
-Title Page
- Table of Contents
- Executive Summary
- Major section
1. Description of
business
2. Description of
Industry
3. Technology Plan
4. Marketing Plan
5. Financial Plan
6. Production Plan
7. Organization
plan.
8. Operational Plan
9. Summary
- Appendix
-Determine resources
needed
- Determine existing
resources
- Identify resource
gaps and available
suppliers
- Develop access to
needed resources.
-Develop
management style,
- Understand key
variables for success.
- Identify problems
- Implement control
system
- Develop growth
strategy.
Role of Entrepreneurship in Economic development
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Boosts per capita output and income.
Initiates and constitutes changes in the structure of business
and society.
Stimulates product evolution process ( process for developing
and commercializing an innovation.
Iterative synthesis: The intersection of knowledge and social
needs that starts the product development process and leads
to a marketable innovation.
How to bridge the gap between science & marketplace?
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Government as an innovator: A government that is active in
commercializing technology. It could be done through Technology
transfer. A process that commercializes the technology in the labs into
new products.
Corporate Entrepreneurship: refers to entrepreneurship within an
existing business. Existing businesses have the financial resources,
business skills and marketing and distribution system to commercialize an
innovation that is why the entrepreneurial spirit in organizations is
getting popular.
Independent Entrepreneurship: refers to creating new organizations
and bringing new products and services to the market by individual
entrepreneurial spirit.
Review & Discussion
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What is role of government in entrepreneurship?
What specific steps should the government take?