01-Entrepreneurship in the Twenty-First Century

8/8/2019 01-Entrepreneurship in the Twenty-First Century

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Part IPart I Entrepreneurship in theEntrepreneurship in the

TwentyTwenty--First CenturyFirst Century

Chapter 1Chapter 1 -- The EntrepreneurialThe EntrepreneurialRevolutionRevolution

Chapter 2Chapter 2 -- Entrepreneurship: AnEntrepreneurship: AnEvolving ConceptEvolving Concept

Chapter 3Chapter 3 -- Intrapreneurship:Intrapreneurship:Developing CorporateDeveloping CorporateEntrepreneurshipEntrepreneurship

Copyright (c) 2004 by South-Western, a division of Thomson Learning. All rights reserved.


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The Entrepreneurial RevolutionThe Entrepreneurial Revolution

Wealth is created only by doers in the arena whoWealth is created only by doers in the arena who

are marred with dirt, dust, blood and sweat.are marred with dirt, dust, blood and sweat.

Who know high highs and low lows.Who know high highs and low lows.They fail more than succeed, when they fail, theyThey fail more than succeed, when they fail, they

fail at least with style and grace.fail at least with style and grace.

They occupy a unique place, the doersThey occupy a unique place, the doersThey are EntrepreneursThey are Entrepreneurs

as said by Joseph Mancusoas said by Joseph Mancuso


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EntrepreneursEntrepreneurs

Challenging The UnknownChallenging The Unknown

Entrepreneurs are individual who recognizeEntrepreneurs are individual who recognizeopportunities where others see chaos oropportunities where others see chaos or

confusionconfusionCatalysts for changeCatalysts for change

Compared to Olympic championsCompared to Olympic champions

They create jobs at a breathtaking paceThey create jobs at a breathtaking paceEntrepreneurs face uncertainty andEntrepreneurs face uncertainty andambiguity, reach the highlands of successambiguity, reach the highlands of success


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Entrepreneurship:Entrepreneurship:A PerspectiveA Perspective

Entrepreneurship is more than the mere creationEntrepreneurship is more than the mere creationof businessof business

seeking opportunity, taking risks, having theseeking opportunity, taking risks, having the

tenacity to push an idea into a spl perspectivetenacity to push an idea into a spl perspectiveIt is integrated concept that permeates anIt is integrated concept that permeates an

individuals business in an innovative wayindividuals business in an innovative way

It become the dominant force todayIt become the dominant force today


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Our Entrepreneurial EconomyOur Entrepreneurial Economy

The Environment for EntrepreneurshipThe Environment for Entrepreneurship

Entrepreneurs are the pioneers of today'sEntrepreneurs are the pioneers of today'sbusiness success.business success.

Sense of opportunity, drive to innovate andSense of opportunity, drive to innovate andcapacity for accomplishment become standardcapacity for accomplishment become standard

There is revolution happening in many countriesThere is revolution happening in many countries

Critical contributors to economic growth thruCritical contributors to economic growth thrutheir leadership, management, innovation,their leadership, management, innovation,research, job creation, productivity and formationresearch, job creation, productivity and formationof new industry.of new industry.


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Predominance of New VenturesPredominance of New Ventures

in the Economyin the Economy New business incorporations averagedNew business incorporations averaged

600,000600,000per yearper year

807,000 new small firms were established in807,000 new small firms were established in1995, an all1995, an all--time recordtime record

Small business (< 500 employees) employSmall business (< 500 employees) employ

53% of the private work force and account for53% of the private work force and account for47% of sales and 51% of private sector gross47% of sales and 51% of private sector gross

domestic product (GDP)domestic product (GDP)


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Entrepreneurial Firms ImpactEntrepreneurial Firms Impact

Entrepreneurial firms make two indispensableEntrepreneurial firms make two indispensable

contributions to the economy:contributions to the economy:

First, they are an integral part of theFirst, they are an integral part of therenewal process that pervades and definesrenewal process that pervades and defines

market economies.market economies.

Second, they are the essential mechanismSecond, they are the essential mechanism

by which millions enter the economic andby which millions enter the economic and

social mainstream of any society.social mainstream of any society.


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Trends in Research and EducationTrends in Research and Education

1.1. The entrepreneurial and managerial domains areThe entrepreneurial and managerial domains are

not mutually exclusive but overlap to a certainnot mutually exclusive but overlap to a certain

extent. Former is more opportunity driven, latter isextent. Former is more opportunity driven, latter is

resource and conservation drivenresource and conservation driven

2.2. Venture financing, including both venture capitalVenture financing, including both venture capital

and angel capital financing as well as otherand angel capital financing as well as other

innovative financing techniques, emerged in theinnovative financing techniques, emerged in the

1990s with unprecedented strength feuling1990s with unprecedented strength feuling

entrepreneurship.entrepreneurship.


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3.3. Intrapreneurship (that is, entrepreneurshipIntrapreneurship (that is, entrepreneurship

within large organizations) and the need forwithin large organizations) and the need for

entrepreneurial cultures have gained muchentrepreneurial cultures have gained much

attention during the past few years.attention during the past few years.

4.4. Entrepreneurial entry strategies have beenEntrepreneurial entry strategies have been

identified that show some importantidentified that show some important

common denominators, issues, and tradecommon denominators, issues, and trade--offs.offs.


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5.5. More research on the psychological aspectsMore research on the psychological aspectshas emerged.has emerged.

6.6. The risks and tradeThe risks and trade--offs of anoffs of anentrepreneurial career have been subject ofentrepreneurial career have been subject ofkeen research interest.keen research interest.

7.7. Women and minority entrepreneurs haveWomen and minority entrepreneurs have

emerged in unprecedented numbers.emerged in unprecedented numbers.8.8. The entrepreneurial spirit is universalThe entrepreneurial spirit is universal

around the world in the past few years.around the world in the past few years.


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9.9. The economic and social contributions ofThe economic and social contributions of

entrepreneurs have been shown to makeentrepreneurs have been shown to make

immensely disproportionate contributions toimmensely disproportionate contributions to

job creation, innovation and economicjob creation, innovation and economic

revival than large companies.revival than large companies.

10.10. Entrepreneurial education has become oneEntrepreneurial education has become one

of the hottest topics at U.S. business andof the hottest topics at U.S. business andengineering schools.engineering schools.


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The Age of GazellesThe Age of Gazelles

A gazelle is a businessA gazelle is a business

establishment with at least 20%establishment with at least 20%

sales growth every year (for fivesales growth every year (for fiveyears), starting with a base of atyears), starting with a base of at

least $100,000.least $100,000.


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GazellesGazelles -- InnovationInnovation

Gazelles are leaders inGazelles are leaders in

innovation.innovation.

Gazelles produce twice as manyGazelles produce twice as many

product innovations perproduct innovations per

employee as do larger firms.employee as do larger firms.


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GazellesGazelles -- GrowthGrowth

By the year 2010, demographersBy the year 2010, demographers

estimate, 30 million firms will existestimate, 30 million firms will exist

in the United States, up significantlyin the United States, up significantlyfrom the 22.5 million firms existingfrom the 22.5 million firms existing

in 2000.in 2000.


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GazellesGazelles -- SurvivalSurvival

The common myth is that 85% of allThe common myth is that 85% of all

firms fail in the first year.firms fail in the first year.

The more accurate statement is thatThe more accurate statement is that

about half of all startabout half of all start--ups lastups last

between 5 and 7 years.between 5 and 7 years.


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Emerging Trends: Internet andEmerging Trends: Internet and

EE--CommerceCommerce U.S. businesses spent 85.7 billion on buildingU.S. businesses spent 85.7 billion on building

up their Internet capabilities in 1999.up their Internet capabilities in 1999.

Smaller ventures use the Internet for a varietySmaller ventures use the Internet for a varietyof operations, including customerof operations, including customer--basedbased

identification, advertising, consumer sales,identification, advertising, consumer sales,

businessbusiness--toto--business transactions, ebusiness transactions, e--mail, andmail, andprivate internal networks for employees.private internal networks for employees.


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The EThe E--Commerce ChallengeCommerce Challenge

Electronic commerce (eElectronic commerce (e--commerce)commerce)--

the marketing, promoting, buying,the marketing, promoting, buying,

and selling of goods and servicesand selling of goods and serviceselectronically, particularly via theelectronically, particularly via the

InternetInternet-- is the new wave inis the new wave in

transacting business.transacting business.


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Advantages and Challenges of EAdvantages and Challenges of E--

Commerce for Entrepreneurial FirmsCommerce for Entrepreneurial FirmsAdvantages:Advantages:

Ability of small firms to compete with other companies bothAbility of small firms to compete with other companies bothlocally and nationally.locally and nationally.

Creation of the possibility and opportunityCreation of the possibility and opportunity Convenient and easy way of doing business transactions.Convenient and easy way of doing business transactions.

An inexpensive wayAn inexpensive way

Higher revenuesHigher revenues

Challenges:Challenges: Avoiding being a victim of fraudulent activities online.Avoiding being a victim of fraudulent activities online.

Assuring securityAssuring security

Managing upgrades and Handling the costs required toManaging upgrades and Handling the costs required tomaintain the site.maintain the site.


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Developing a Web SiteDeveloping a Web Site

Attractive and Useful.ButAttractive and Useful.But

Managing the increasedManaging the increasedvisitors traffic, Building avisitors traffic, Building a

website, hosting itwebsite, hosting it

Marketing the WebsiteMarketing the Website

StickinessStickiness


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Use of Internet SitesUse of Internet Sites

Company InformationCompany Information

Corporate image buildingCorporate image building

Product informationProduct information AdvertisingAdvertising

MarketingMarketing

Customer communicationsCustomer communications

93%93%

89%89%

80%80%78%78%

77%77%

76%76%


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Most Important Factors forMost Important Factors for

Customers to do Business OnlineCustomers to do Business OnlineUserUser--friendly and easy to navigatefriendly and easy to navigate

Good previous experiencesGood previous experiences

Fast response timeFast response time

Relevant and updated contentRelevant and updated content

Bargain pricesBargain prices

54%54%

36%36%

36%36%

27%27%

15%15%


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Emerging EEmerging E--Commerce StrategiesCommerce Strategies

33--P Growth ModelP Growth Model

1.1. PresencePresence

2.2. PenetrationPenetration

3.3. ProfitabilityProfitability


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Emerging EEmerging E--Commerce StrategiesCommerce Strategies

Another StrategyAnother Strategy

ReachReach

RichnessRichness

AffiliationAffiliation


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Entrepreneurial OpportunitiesEntrepreneurial Opportunities

Free enterprise is the economic basis for allFree enterprise is the economic basis for all

entrepreneurial activityentrepreneurial activity

The opportunities are unlimitedThe opportunities are unlimited

Consider the following facts Consider the following facts

Self employment growth rateSelf employment growth rate

Home based businessHome based business

Number of new firmsNumber of new firms


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SelfSelf--Employment, 1966Employment, 1966--20062006ThousandsThousands

2,0002,000

4,0004,000

6,0006,000

8,0008,000

10,00010,000

12,00012,000

14,00014,000

AgricultureAgriculture

NonNon--agricultureagriculture

2,1362,136

5,9915,991

8,1278,127

1,6461,646

5,7835,783

7,4287,428

1,4471,447

7,8817,881

9,3279,327 1,5181,518

8,9718,971

10,49010,4901,5191,519

10,09610,096

11,61511,615


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01-Entrepreneurship in the Twenty-First Century