Unit01entrepreneurshipdfrisklhjroiuwen.pptx

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ENTREPRENEURSHIP
Course Code :8503  Unit # 01

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OBJECTIVES
Entrepreneurial Process
Entrepreneurship in Global Perspective
Factors for Starting a New Enterprises
Personal Attributes
Environmental Factors
Other Sociological Factors
Evaluating Opportunities for New Businesses
Ingredients of a Successful Business

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Entrepreneurship:
 Entrepreneurship( en·tre·pre·neur- ship): In Urdu( ‫م‬ ‫م‬ ‫کارجوئی‬
‫ہ‬ ‫۔‬
‫جوئی‬ ) in Arabic Riadatal'Aemal‫تجاري‬ &‫األعمال‬ ‫رجل‬ & ‫األعمال‬ ‫ريادة‬:
The management guru Professor Peter F. Drucker in his book
“Innovation and Entrepreneurship” gives the basic details of
Entrepreneurship as: The word entrepreneur originates from the
French word, “Entreprendre”, which means "to undertake."
The Merriam-Webster Dictionary presents the definition of
an entrepreneur as one who organizes, manages, and assumes
the risks of a business or enterprise
 The most obvious example of entrepreneurship
is the starting of new businesses keeping in mind
all risks.

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So Entrepreneurship is defined as the capacity and
willingness to develop, organize and
manage a business venture along with any of
its risks in order to make a profit.
In economics, entrepreneurship combined
with land, labor, natural resources and capital can
be produce profit.
Entrepreneurial spirit is characterized
by innovation and risk-taking, and is an essential
part of a nation's ability to succeed in an ever
changing and
increasingly competitive global marketplace.

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 Personality: in terms of possessing resilience, tenacity,
opportunity spotting, and risk taking.
 Attitude: having awareness of the importance of customer focus,
the application of creativity and imagination, defined personal
standards and values, the perception of enterprise as a positive
activity.
 Skills: such as the ability to network, to think strategically, to gain
access to resources, business knowledge and acumen, interpersonal
skills and people management capabilities.
 Motivation: personal drive and ambition, the desire to make an
impact, the need for achievement or self-satisfaction, a desire for
status, to create and accumulate wealth, and social responsibility.
Entrepreneurship is the makeup of an
entrepreneur as follows:

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Schumpeter's View of Entrepreneurship: Austrian economist
Joseph Schumpeter's definition of entrepreneurship placed
an emphasis on innovation, such as:
new products
new production methods
new markets
new forms of organization
 Wealth is created when such innovation results in new
demand.
 From this viewpoint, the function of the entrepreneur as one
of combining various input factors in an innovative manner
to generate value to the customer with the hope that this
value will exceed the cost of the input factors,
 Thus generating superior returns that result in the creation
of wealth.

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• So the Entrepreneurship in today
era is defined as: “Entrepreneurships
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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Entrepreneurship vs. Small Business:
 Entrepreneurial ventures differ from small
businesses in these ways:
1- Amount of wealth creation - rather than
simply generating an income stream that
replaces traditional employment, a successful
entrepreneurial venture creates substantial
wealth, typically in excess of several million
dollars of profit.
People use the terms "entrepreneur" and "small
business owner" synonymously.

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Entrepreneurship vs. Small Business:
2- Speed of wealth creation : while a successful small
business can generate several million dollars of profit over a
lifetime, entrepreneurial wealth creation often is rapid; for
example, within 5 years.
3- Risk : the risk of an entrepreneurial venture must be high;
otherwise, with the incentive of sure profits many
entrepreneurs would be pursuing the idea and the opportunity
no longer would exist.
3- Innovation : entrepreneurship often involves substantial
innovation beyond what a small business might exhibit.
This innovation gives the venture the competitive advantage
that results in wealth creation. The innovation may be in the
product or service itself, or in the business processes used to
deliver it.

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Who is an Entrepreneur?
Individual who takes risks and starts something new
or An individual developing something unique and
innovative.
One who creates a new business in the face of risk
and uncertainty for the purpose of achieving profit
and growth by identifying opportunities and
assembling the necessary resources to capitalize on
them.

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Characteristics of Entrepreneurs
• Desire for responsibility
• Preference for moderate risk – risk
eliminators
• Confidence in their ability to
succeed
• Desire for immediate feedback

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Characteristics of Entrepreneurs
• High level of energy
• Future orientation – serial entrepreneurs
• Skilled at organizing
• Value achievement over money
• Tolerance for Ambiguity
• Flexibility

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Entrepreneurial Process
 The process of pursuing a new venture, whether
it be new products into existing markets, and/or the
creation of a new organization.
The process has four Distinct Phases:
I. Opportunity Identification and Evaluation.
II. Development of Business Plan.
III.Determination of Required Resources.
IV. Management of Resulting Enterprise.

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• Extending the areas of activities of business across
the boundaries.
• Exporting: An item produced in a domestic market
can be sold abroad.
• Licensing: In this mode the manufacturer of the
home country leases the right of intellectual
properties, i.e., technology, copyrights, brand name,
etc., to a manufacturer of a foreign country for a
predetermined fee. The manufacturer that leases is
known as the licensor and the manufacturer of the
country that gets the license
id known as the licensee.

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• Mergers & Acquisitions: In Mergers & Acquisitions, a
home company may merge itself with a foreign
company to enter an international business.
• Wholly Owned Subsidiary: Wholly Owned Subsidiary is
a company whose common stock is fully owned by
another company, known as the parent company.
• Joint Venture: When two or more firms join together to
create a new business entity, it is called a joint venture.
• Franchising: In this mode, an independent firm called
the franchisee does the business using the name of
another company called the franchisor.

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• Foreign Direct Investment Theories: Foreign
direct investment (FDI) is an investment made
by a company or individual in one country in
business interests in another country.
• Either establishing business operations or
acquiring business assets in the other country,
such as ownership or controlling interest in
a foreign company.

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 According to the Small Business Administration,
your investigation must be thorough, analyzing
the risks and benefits of the opportunity.
 Review the potential and the pitfalls inherent in
the business to make an informed decision and
increase your chances of success.
Evaluating Opportunities for
New Businesses

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 Self-Analysis:
 Poor management and the owner’s inability to
manage resources.
 Researching the feasibility and zeal of your idea.
 Evaluate your own talents, desires and goals.
 Willingness to take risks along with financial,
personnel and skills.
Financial Components:
 Evaluate own resources to required investment,
purchase and start-up costs needed initially.

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 Portion of personal savings to add to the initial
investment.
 Financing available through the seller, investors and
lenders when evaluating your chances of succeeding.
Market Research:
 Understand and perform an extensive market research to
determine the feasibility of business.
 Gleaned statistics of trends and current
customer buying patterns.
 Need to know the customers, where they are located
and what kind of competition exists in your area.

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Risk Assessment:
 A complete evaluation of a business opportunity.
 Honest appraisal risk assessment and potential risks
inherent help you prepare for possible problems.
 General state of the economy, weather events and your
competition's competitiveness.
Support:
 Evaluate the amount of support expect to receive from family
and the community.
 Attitudes and cultural preferences in community can impact
the ability to grow and sustain in business.
 Evaluate standing on all these fronts to ensure you’ve got the
necessary support to be successful.

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A successful business has a product that people want,
offers unique services, continuously develops new
products and delivers services with minimal problems.
Hire good people to work for a successful business with
advice from a business management.
Ingredients of a Successful Business
1. Leadership
2. Foresight
3. Risk Management
4. Organizational Culture
5. Innovation
6. Employees
7. Accounting/Finance
8. Marketing
9. Efficiency
10. Customer Service
11. Trust
12. Internet/Web Site
13. Legal Protection

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 Many factors that can affect the starting and the
growth process of a business.
 When starting a business you have to think about the
location convenience for your customers
 Getting employees locally will help a great deal on
cutting down the recruitment costs.
 Regardless of the industry, local competition will
always be a concern.
 Many factors that influence the business
world and though some are uncontrollable,
Factors for Starting a New
Enterprises

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Personal Attributes:

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Environmental Factors:
P- Political.
E- Economic.
S- Social.
T- Technological.
E- Environmental.
L- Legal.

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Other Sociological Factors:

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Factors for Starting a New
Enterprises

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You Be The Consultant..
CASE
STUDY

Unit01entrepreneurshipdfrisklhjroiuwen.pptx

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