Entrepreneurship is the process by which individual pursues opportunity without regard to resource they currently control. The importance of entrepreneurship is that they plays a role in both economic and social development. Economically, for instance, formation of new business leads to job creation and has a multiplying effect. Socially entrepreneurship empowers citizens, generate innovation and changes mindsets. 2. Identify four main characteristics of successful entrepreneurs? Passion for business: passion for business is must for any entrepreneur. The passion typically steps from the entrepreneur belief that the business will positively influence people’s life. For example, Bill Gates believes that their product will make difference in people lives and make the world a better place to live in. * Product and customer focus: This quality is exemplified by the late co-founder of APPLE, Steve Jobs who wrote “ the computer is most remarkable thing we ever built, but in the most important thing is to get them in the hands of as many people as possible”.
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Tenacity despite failure: Because entrepreneur are typically trying something new failure rate are usually high. It is important, when developing a new business idea require certain experimentation before success is attained. Setbacks and failure are inevitable. Therefore litmus test for entrepreneur is their ability to persevere through setbacks and failure. * Execution intelligence: the ability to fashion a solid idea into a viable business is a key characteristic of successful entrepreneur. 3. Salary substitute – are small firm that yield a level of income for their owner. Eg; restaurant, dry cleaner, retail store.
Lifestyle firm – provide their owner or owners the opportunity to pursue a particular life style and earn a living while doing so. Eg; golf pros, ski instructors and tour guides. Entrepreneurial firms – bring new products and services to market. Eg; google. Ebay. Starbucks. 4. Identify ways in which large firms benefits from the presence of smaller entrepreneurial firms. * For example; some entrepreneurial firms are original equipment manufactures, producing parts that go into products that larger firms manufacture and sell. Smaller firms produce cutting edge product that benefits larger firms. Smaller firms has also benefit larger firms in terms of efficiency and effectiveness. They form a network that help each other. * Many instance they form a partner to reach mutually beneficial goals. Creation of business partnership allows access in partner’s resource, managerial talent and intellectual capacity which drives up companies growth. Chapter 2 1. Explain difference between opportunity and idea? * opportunity is favorable set of circumstances that creates a need for a new product, service, or business. Externally and internally opportunity. * Idea is a thought, an impression, or a notion.
An idea may of may not meet the criteria of an opportunity. 2. Identify the five steps in the creative process? * Preparation: is the background, experience and knowledge that an entrepreneur brings to the opportunity recognition process. * Incubation: is the stage during which a person considers an idea or thins about a problem. * Insight: it is the flash of recognition. When the idea is born. In business context, this is the moment an entrepreneur recognizes an opportunity. * Evaluation: is the stage of the creative process during which an idea is subjected to scrutiny and analyzed for its viability. Elaboration: is the stage during which the creative idea is put into a final form, which is transformed idea into something valuable such as new product, services or business concept. 3. Explain the purpose of maintaining an idea bank. – Idea bank(or vault) is a physical or digital repository for storing ideas. An example of an idea bank would be a password- protected location on a firm’s intranet that is available only to qualified employees, It many have file for ideas that are being actively contemplated and a file for inactive ideas. Chapter 3 1.
Explain what a feasibility analysis is and why it’s important? * Feasibility analysis is the process of determining if a feasibility business idea is viable. It is important because it determines if an idea is worth pursuing and to screen idea before spending resource on them. 2. Identify three primary purpose of concept testing? * Validate the underlying premise of the product or service idea: this is accomplished by showing the concept test to potential customers and asking them to complete a short questionnaire and offer comments and suggestion on how the idea can be strengthened. Help develop the idea: Based on the result of the initial concept test, many entrepreneur tweak their idea and the show a revised concept statement to another group of potential costumers. This process can be repeated several times to help develop and strengthen the idea. * Try to estimate sales: some type of buying intention question appears in almost every concept test to try to determine how many people will actually buy the product or services. 3. Explain the difference between primary research and secondary research? * Primary research is original research and is collected by the entrepreneur.
In assessing the attractiveness of a market, this typically involves talking to potential customers and key industry participants * Secondary research probes data that are already collected, the source of secondary resource includes industry related research firms, such ad Forrester Research. Chapter 4 1. Explain the purpose of business plan? * the purpose of business plan is that the business plan must be substantive enough and have sufficient detail about the merits of the new venture to convince the reader that new business is exciting and should receive support. . Discuss how business plan can be a dual-use document. * For most new ventures the business plan is a dual-purpose document used both inside and outside firm. Inside the firm, the plan helps the company develop “roadmap” to follow in executing its strategies and plan. Outside the firm, it introduces potential investors and other stakeholders to the business opportunity the firm is pursuing and how it plans to pursue it. 3. Explain how the process of writing a business plan can be as important as the plan itself. Process of writing business plan is as important as plan itself because firm’s business plan is typically the first aspect of a proposed venture that will be seen by an investor. If the plan is incomplete or look sloppy, it is easy for an investor to infer that venture itself is incomplete and look sloppy. It is important to be sensitive to the structure, content and style of business plan before sending it to investor. 4. Identify the advantage and disadvantages of using software packages to assist in preparing business plan. the software package may be helpful in providing structure and saving time, but the information in the plan should still be tailored to the individual business. Entrepreneur should avoid a boilerplate plan that looks as though it came from a “canned” source. Chapter 5 1. Explain purpose of industry analysis? * The purpose of industry analysis is based on 3 questions that entrepreneur must answer before pursuing the idea of starting a firm. First, is the industry accessible, in other word, is it a realistic place for a new venture to enter? Secondly, does industry contain market that are ripe for innovation or are underserved?
Thirdly are there positions in the industry that will avoid some of negative attribute of the industry as a whole? It is useful for new venture to think avoid its position at both the company level and the product or services level. 2. Identify the 5 primary industry type and the opportunities they offer? * Emerging industries: is a new industry in which standard operating procedure have yet to be developed. The firm takes the leadership of an emerging industry often captures a first mover advantage. * Fragmented industries: is one that is characterized by a large number of firms of approximately equal size.
The primary opportunity for start up’s in this industry is to consolidate the industry and establish industry leadership as a result of doing so. * Matured Industries: is an industry that is experiencing slow or no increase in demand, has numerous repeated costumers and has limited product innovation. It provides entrepreneur an opportunity to introduce new produce. * Decline industries: is an industry that is experiencing a reduction in demand. There are several strategies that in entrepreneur apply in declining industries such as leadership and reduction strategy. * Global industry: that is experiencing significant international sales.
Multi-domestic and global strategies are two of the strategies that firms pursue through. 3. Identify 3 groups of competitors a new firm will face? * Direct competitor: These are business that offer product identical or similar to the product of the firm completing the analysis. * Indirect completion: they offer close substitute to the product the firm completing the analysis sells. * Future competitor: companies that are not yet direct or indirect competitor buy could move into one of these roles at any time. Eg; change in Barnes & Nobel ever since Amazon founded.