Is the industry capital intensive?
Objectives
• Examine industry structure, with a focus on
capital intensity, in the context of
entrepreneurial industry status
• Explore the impact of capital intensity on
your success as an entrepreneur
Exploring industry structure
• With industry conditions framing
knowledge and demand factors, it’s
important to understand industry status
– Industry status addresses industry lifecycle and
industry structure with an emphasis on growth
opportunities and industry evolution
• By studying industry structure, aspiring
entrepreneurs can assess the industry’s
timeliness for new entrepreneurial entrants
The Opportunity Analysis Canvas
TM
Industry
Condition
Entrepreneurial
Motivation
Competition
Industry
Status
Entrepreneurial
Mindset
Opportunity
Identification
Industry lifecycle
Industry structure
Entrepreneurial
Behavior
Value
Curve
Macroeconomic
Change
Defining industry structure
“the nature of barriers to entry and
competitive dynamics within the industry”
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•
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Capital intensity
Advertising intensity
Company concentration
Average company size
Capital intensity defined
• Refers to the amount of money required to
enter and compete in the industry
– An industry that is expensive to enter has high
capital intensity
• (i.e., automotive manufacturing)
– Industries that are inexpensive to enter have low
capital intensity
• (i.e., a website providing movie reviews)
How can aspiring entrepreneurs
participate in commercial cleaning?
• Start a commercial cleaning company
• Start a technology company
– Develop an online training platform to support
new commercial cleaners
– Develop an online platform to support the
marketing and business operations of commercial
cleaners
– ?
Summary
• By studying industry structure, aspiring
entrepreneurs can assess the industry’s
timeliness for new entrepreneurial entrants
– And better understand how to compete
• Low capital intensity presents a more
affordable opportunity for new entrants to
enter and compete effectively
– Also presents a lower barrier to entry for current
and near-future competitors