Entrepreneurship
The dynamic process of vision, change, and creation. It
requires an application of energy and passion toward the
creation and implementation of new ideas and creative
solutions. Essential ingredients include the willingness to
take calculated risks – in terms of time, equity, or career; the
ability to formulate an effective venture team; the creative
skill to marshal needed resources; the fundamental skill of
building a solid business plan; and, finally, the vision to
recognize opportunity where others see chaos, contradiction,
and confusion.
© 2002 by Prentice Hall
1-1
Age of Gazelles
A business firm with at least 20 percent
sales growth each year, starting with a
base of at least $100,000.
High growth
Leaders in Innovation
© 2002 by Prentice Hall
1-2
Importance of Newtworking
 Who?
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Friends
Contacts
Professional Associations or Groups
Memberships
 Why?
 Build Resource Base
 Future Reference
 Mentoring
 How?
 Maintain Contact Resource File
 Join Organizations
 Attend Meetings, Forums, and other Events
© 2002 by Prentice Hall
1-3
CEO in Terms of Entrepreneurship
Create Endless Opportunities
Catch Every Obstacle
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1-4
A New Generation of Entrepreneurs
They are comfortable with new technologies
They welcome change
They think differently
They are independent
More interested in business ownership than
any previous generation
Many have entrepreneurial heroes
© 2002 by Prentice Hall
1-5
Basic Risks Entrepreneur’s Face
Financial
Career
Family and Social
Psychic
© 2002 by Prentice Hall
1-6
Characteristics of Entrepreneurship
 Creation
 Innovation
 Resource leveraging
 Organization building
 The pursuit of gain
 Risk & uncertainty
© 2002 by Prentice Hall
1-7
Creation
 New products or services
 New methods or technologies
 New markets targeted and opened
 New sources of supply and resources
 New forms of industrial organization created
© 2002 by Prentice Hall
1-8
Characteristics of Entrepreneurs
Then . . .
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Small business founder
Boss
Lone Ranger
Secretive
Self-reliant
Seat-of-the-pants
Snap decisions
Male ownership
Idea-driven
Trade knowledge
 Automation and efficiency
© 2002 by Prentice Hall
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1-3
Characteristics of Entrepreneurs
. . . and Now
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© 2002 by Prentice Hall
True entrepreneur
Leader
Networker
Open
Inquisitive
Business plan
Consensus builder
Mixed & dispersed ownership
Execution-driven
Business knowledge
Innovation
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1-3
Sam Walton’s 10 Rules of Business
1.
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10.
Commit to your business and believe in it.
Share profits with partners and employees.
Motivate partners - challenge them and keep score.
Communicate everything.
Appreciate associates with well-chosen words.
Celebrate successes.
Listen to everyone and get them talking.
Exceed customers’ expectations.
Control expenses.
Break all the rules (Rules 1- 9 are not for everyone).
© 2002 by Prentice Hall
1-11
5 Dimensions of Quality
Transcendent Approach
 Question the nature of things
Product-based Approach
 Product attributes are key
User-based Approach
 Quality is in the eye of the beholder
Manufacturing-based Approach
 Conformance to standards is key
Value-based Approach
 Cost-value relationship is key
© 2002 by Prentice Hall
1-12
Dimensions of New Venture Creation
Individual
Characteristics
Environment
New
Venture
Creation
Organization
Environmental
Constraints
© 2002 by Prentice Hall
1-13
Dimensions of New Venture Creation:
Individual Characteristics
Personal resource base:
 Need for achievement
 Locus of control
 Propensity for taking risk
 Knowledge
New
Venture
Creation
 Experience
 Reputation
© 2002 by Prentice Hall
1-14
Dimensions of New Venture Creation:
Individual Characteristics (cont’d)
Sociological factors:
 Perceptions of desirability
 Perceptions of feasibility
 Role models and mentors
New
Venture
Creation
 Entrepreneurial parents
 Networks and contacts
© 2002 by Prentice Hall
1-15
Dimensions of New Venture Creation:
Individual Characteristics (cont’d)
Demographics:
 Age
 Gender
 Education
© 2002 by Prentice Hall
New
Venture
Creation
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Dimensions of New Venture Creation:
Organization
Strategies:
Generic strategies
 Overall cost leadership
 Differentiation
 Focus
Functional level strategies
New
Venture
Creation
 Financial
 Marketing
 Organizational
© 2002 by Prentice Hall
1-17
Dimensions of New Venture Creation:
Organization (cont’d)
Strategies:
Primary entry wedges
 New product or service
 Parallel competition
 Franchise entry
Minor entry wedges
New
Venture
Creation
Isolating mechanisms
Culture
© 2002 by Prentice Hall
1-18
Dimensions of New Venture Creation:
Environment
Resources in the environment:
 Venture capital availability
 Availability of financial resources
 Presence of experienced entrepreneurs
 Technically skilled labor force
 Larger urban areas
 Large industrial base
 Accessibility of suppliers
 Accessibility of customers
 High occupational and industrial differentiation
 Proximity of universities
 Availability of land or facilities
 Accessibility of transportation
 Attitude of the area population
 Availability of supporting services
© 2002 by Prentice Hall
New
Venture
Creation
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Dimensions of New Venture Creation:
Constraints in the Environment
Barriers to entry:
 Governmental influences
 Rivalry among existing competitors
 Pressure from substitute products
 Bargaining power of buyers
New
Venture
Creation
 Bargaining power of suppliers
© 2002 by Prentice Hall
1-20