Why entrepreneurship is important
8-1
Unscheduled Quiz 5
Do you want to take the unscheduled quiz/contest?
If you design and fly a paper plane and the paper plane reaches
a distance further than Dr. Wangs paper plane
You get 6 points
You get 0 points if your plane falls at a shorter distance than Dr.
Wangs plane
You can select and use only one piece of paper/no trial run
If you withdraw from the contest, you get 3 points
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Entrepreneurship
the creation of new value by an existing
organization or new venture that involves the
assumption of risk.
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Recognizing Entrepreneurial Opportunities
New value can be created in:
Start-up ventures
Major corporations
Family-owned businesses
Non-profit organizations
Established institutions
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Entrepreneurial Opportunities
Start-ups
Current or past work experiences
Hobbies that grow into businesses or lead
to inventions
Suggestions by friends or family
Chance events
Change
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Entrepreneurial Opportunities
Established firms
Needs of existing customers
Suggestions by suppliers
Technological developments that lead to new advances
Change
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Entrepreneurial Opportunities
Opportunity recognition
the process of discovering and evaluating
changes in the business environment, such
as a new technology, socio-cultural trends, or
shifts in consumer demand, that can be
exploited.
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Opportunity Analysis Framework
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Exhibit 8.1
Entrepreneurial Opportunities
Discovery phase
the process of becoming aware of a new
business concept.
May be spontaneous and unexpected
May occur as the result of deliberate search
for new venture projects or creative solutions
to business problems
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Opportunity Recognition Process
Opportunity evaluation phase
involves analyzing an opportunity to
determine whether it is viable and strong
enough to be developed into a full-fledged
new venture.
Talk to potential target customers
Discuss it with production or logistics managers
Conduct feasibility analysis
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Characteristics of Good Opportunities
Attractive Achievable
Durable Value
creating
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Those planes which beat Dr. Wangs can compete for a higher score!
If you design and fly a paper plane and the paper plane reaches a distance further than ALL OTHER PLANES designed by those who beat Dr. Wangs paper plane
Winner get 6 points X 2(number of total wins) (The plane becomes more valuable because it is the best product)
You get 0 points and lose your previous 6 points if your plane is not the winner (winner takes all)
You must compete one-on-one with another player (well have a tournament!)
You spend 6 points for a new plane for every contest (operating your business needs money)
Every fly consumes the paper(6 points) including trial run
You can borrow points/issue debts from your classmates/lenders who didnt take part of the previous game and pay interests (points) back. Your debt is secured by your current class participation points and needs to be paid even if you lose
You can accept points from your classmates as investments. The points you accept translate into ownership of your venture. Your investors share your winning points proportional to their investment and lose their investment/points if you dont win the contest.
Do you want to sell your winning plane at the price that Dr. Wang offers you?
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Entrepreneurs
Identify opportunities
Gather resources to support the venture
Lead to compete
Succeed or fail
Sources of Capital for Start-Up Firms
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Exhibit 8.2
Entrepreneurial Resources
Human capital
Social capital
Government resources
Small Business Administration
Government contracting
State and local governments
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http://www.sba.gov/
Entrepreneurial Leadership
Launching a new venture requires a
special kind of leadership
Courage
Belief in ones convictions
Energy to work hard
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Entrepreneurial Leadership
Three characteristics
Vision
Dedication and drive
Commitment to excellence
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Entrepreneurial Leadership
Vision may be entrepreneurs most
important asset
Ability to envision realities that do not yet exist
Exercise a kind of transformational leadership
Able to share with others
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Entrepreneurial Leadership
Dedication and drive are reflected in hard
work
Patience
Stamina
Willingness to work long hours
Internal motivation
Intellectual commitment to the enterprise
Strong enthusiasm for work and life
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Entrepreneurial Leadership
To achieve excellence, entrepreneurs
must
Know the customer
Provide quality products and services
Pay attention to details
Continuously learn
Surround themselves with good people
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Example: 10 Management Lessons
Its all about
perseverance
Understand the value of
mentorship and teamwork
Stick to your niche
Stay on top of news that
affects your clients
Communication is key
Capitalization is crucial
Communicate
unwavering honesty and
integrity
Stay on top of the curve
Take ownership in your
clients success
Never stop marketing
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http://entrepreneur.com/
Entrepreneurial Strategy
Best strategy for the enterprise will be
determined to some extent by
A viable opportunity, sufficient resources, and
skilled and dedicated entrepreneurial team
Other conditions in the business environment
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Entry Strategies
Pioneering new
entry
a firms entry into an
industry with a radical
new product or highly
innovative service that
changes the way
business is conducted.
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https://www.youtube.com/watch?v=Rb58FvEz2zohttps://www.pandora.com/
Entry Strategies
Imitative new entry
a firms entry into an industry with products or
services that capitalize on proven market
successes and that usually has a strong
marketing orientation.
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Entry Strategies
Adaptive new entry
a firms entry into an industry by offering a
product or service that is somewhat new and
sufficiently different to create value for
customers by capitalizing on current market
trends.
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Examples of Adaptive New Entrants
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Exhibit 8.3
Elements of a Blue Ocean Strategy
Create uncontested market space
Make the competition irrelevant
Create and capture new demand
Break the value/cost tradeoff
Pursue differentiation and low cost
simultaneously.
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Generic Strategies
Overall cost leadership
Simple organizational structures
More quickly upgrade technology and
integrate feedback from the marketplace
Make timely decisions
that affect cost
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Generic Strategies
Differentiation
Use new technology
Deploy resources in a radical new way
Focus
Niche strategies fit the small business mold
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Combination Strategies
Entrepreneurial firms are often in a strong
position to offer a combination strategy
Combine best features of low-cost,
differentiation, and focus strategies
Flexibility and quick decision-making ability of
a small firm not laden with layers of
bureaucracy
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Competitive Dynamics
Competitive dynamics
Intense rivalry, involving actions and
responses, among similar competitors vying
for the same customers in a marketplace.
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Model of Competitive Dynamics
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Exhibit 8.4
Why Do Companies Launch New Competitive Actions?
Improve market position
Capitalize on growing demand
Expand production capacity
Provide an innovative new solution
Obtain first mover advantages
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Threat Analysis
Threat analysis
A firms awareness of its closest competitors
and the kinds of competitive actions they
might be planning.
Market commonality
Resource similarity
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Five Hardball Strategies
Devastate rivals profit sanctuaries
Plagiarize with pride
Deceive the competition
Unleash massive and overwhelming force
Raise competitors costs
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Types of Competitive Actions
Strategic actions
Major commitments of distinctive and specific resources to strategic initiatives.
Tactical actions
Refinements or extensions of strategies usually involving minor resource commitments.
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Likelihood of Competitive Reaction
How a competitor is likely to respond will
depend on three factors
Market dependence
Competitors resources
The reputation of the firm that initiates the
action (actors reputation)
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Choosing Not to React
Forbearance
a firms choice of not
reacting to a rivals
new competitive
action.
Co-opetition
A firms strategy of
both cooperating and
competing with rival
firms.
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Extra credit
What do you learn from the entrepreneurial paper plane game from the perspective of entrepreneurship? (maximum 10 points)
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