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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
MacroeconomicChange
Entrepreneurial Motivation
Entrepreneurial Behavior
Industry
Condition
IndustryStatus
Industry lifecycle
Industry structure
Opportunity Identification
ValueCurve
Competition
The Opportunity Analysis CanvasTM
Entrepreneurial Mindset
Defining industry structure
“the nature of barriers to entry and competitive dynamics within the industry”
• 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