Chapter-1.pptx
- 1. Entrepreneurship And The Entrepreneurial Mind-Set Chapter 1
- 2. Definition of Entrepreneurs Today Entrepreneurship is the process of creating something new and assuming the risks and rewards. Four aspects of being an entrepreneur today: Involves creation process. Requires devotion of time and effort. Involves rewards of being an entrepreneur. Requires assumption of necessary risks.
- 3. Entrepreneurs Versus Inventors Inventor: Creates something for the first time; highly driven and motivated by his or her own work and personal ideas. Differentiating characteristics of an inventor: Education. Level of experience. Problem-solving skills. Level of self-confidence. Willingness to take risks. Ability to tolerate ambiguity and uncertainty. View of monetary benefits in measuring success.
- 4. The Entrepreneurial Process Four distinct phases: Identify and evaluate the opportunity. Window of opportunity. Develop a business plan. Determine the resource requirement. Manage the resulting enterprise.
- 5. The Nature of Entrepreneurship Entrepreneurial Opportunities Those situations in which new goods, services, raw materials, and organizing methods can be introduced and sold at greater than their cost of production. Existing product for new market New product for the existing market New product for new market Entrepreneurial Action Action through the creation of new products/processes and/or the entry into new markets, which may occur through a newly created organization or within an established organization. Entrepreneurial Thinking Individuals’ mental processes of overcoming ignorance to decide whether a signal represents an opportunity for someone and/or reducing doubt as to whether an opportunity for someone is also an opportunity for them specifically, and/or processing feedback from action steps taken.
- 6. Figure 1.1: Entrepreneurial Action
- 7. How Entrepreneurs Think Entrepreneurs in particular situations may think differently when faced with a different task or decision environment. Given the nature of their decision-making environment, entrepreneurs need to sometimes: Think structurally Engage in bricolage Effectuate. Be cognitively adaptable.
- 8. Think Structurally Superficial Similarities Exist when the basic elements of the technology match the basic elements of the market. Structural Similarities Exist when the underlying mechanisms of the technology resemble the underlying mechanisms of the market.
- 9. Bricolage Entrepreneurs making do by applying combinations of the resources at hand to new problems and opportunities. This involves taking existing resources and experimenting, tinkering, repackaging and/ or reframing them so they can be used in a way for which they were not originally designed or conceived.
- 10. Causation and Effectuation According to Professor Saras Sarasvathy (Darden, University of Virginia), entrepreneurs tend to use an effectuation process more often than a causal process. Causal Process Starts with a desired outcome. Focuses on the means to generate that outcome. Effectuation Process Starts with what one has (who they are, what they know, and whom they know). Selects among possible outcomes.
- 11. The Causation Process (1of 3) The causation process has been typified by and embodied in the procedures used by Philip Kotler’s Marketing Management. Market: “Consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want” (1991: 63).
- 12. The Causation Process (2 of 3) Given a product or a service, Kotler suggests a procedure for bringing the product/service to market: Analyze long-run opportunities in the market. Research and select target markets. Identify segmentation variables and segment the market. Develop profiles of resulting segments. Evaluate the attractiveness of each segment. Select the target segment(s). Identify possible positioning concepts for each target segment.
- 13. The Causation Process (3 of 3) Given a product or a service, Kotler suggests a procedure for bringing the product/service to market: Select, develop, and communicate the chosen positioning concept. Design marketing strategies. Plan marketing programs. Organize, implement, and control marketing effort. This process is called the STP (segmentation, targeting, and positioning) process.
- 14. Principles of Effectuation (1of 2) Implications of effectuation for the entrepreneur are explained in terms of five basic principles: 1. Patchwork/Crazy quilt: Means-driven action, emphasizes creation of something new with existing means rather than discovering new ways to achieve given goals. 2. Affordable loss: Prescribes committing in advance to what one is willing to lose rather than investing in calculations about expected returns to the project. 3. Bird-in-hand: Involves negotiating with any and all stakeholders who are willing to make actual commitments to the project; determines the goals of the enterprise.
- 15. Principles of Effectuation (2 of 2) 4. Lemonade: Prescribes leveraging surprises for benefits rather than trying to avoid them, overcome them, or adapt to them. 5. Pilot-in-the-Plane: Urges relying on and working with people as the prime driver of opportunity and not limiting entrepreneurial efforts to exploiting factors external to the individual. Entrepreneurial Mind-Set Involves the ability to rapidly sense, act, and mobilize, even under uncertain conditions.
- 16. Cognitive Adaptability Describes the extent to which entrepreneurs are: Dynamic. Flexible. Self-regulating. Engaged in the process of generating multiple decision frameworks. Focused on sensing and processing changes in their environments and then acting on them. Reflects in an entrepreneur’s metacognitive awareness.
- 17. Entrepreneur Background and Characteristics Education Age Work History Role Models & Support systems Moral Support Network Professional Support Network
- 18. Sustainable Entrepreneurship Entrepreneurship focused on preserving nature, life support and community (sustainability) in the pursuit of perceived opportunities to bring future products, process and services into existence for gain (entrepreneurial action) where gain is broadly constructed to include economic and noneconomic benefits to individuals, the economy and society (development)