ENT 530 (JUNE 2012)

QUESTION 1

a) The entrepreneurial process is a process of pursuing a new venture that involves more than
just problem solving in a typical management position. An entrepreneur must find, evaluate,
and develop an opportunity by overcoming the forces that resist the creation of something
new. The process has four phases:

Identification and evaluation of the opportunity

Development of the business plan
Determination of the required resources
Management of the resulting enterprise

b) The process has four phases:

Identification and evaluation of the opportunity

Development of the business plan
Determination of the required resources
Management of the resulting enterprise

Opportunity identification and evaluation is a very difficult task. Most good business
opportunities do not suddenly appear, but rather result from an entrepreneurs alertness to
possibilities, or in some case, the establishment of mechanism that identify potential
opportunities. Although most entrepreneurs do not have formal mechanisms or identifying
business opportunities, some source are often fruitful: consumers and business associates,
members of the distribution system, and technical people. Often, consumers are the best
source of ideas for new venture.

A good business plan must be developed in order to exploit the defined opportunity. This is a
very time consuming phase of the entrepreneurial process. An entrepreneur usually has not
prepared a business plan before and does not have the resources available to do a good job.
A good business plan is essential to developing the opportunity and determining the
resources required, obtaining those resources, and successfully managing the resulting
venture.

The resources needed for addressing the opportunity must also be determined. This process
starts with an appraisal of the entrepreneurs present resources. Any resources that are
critical need to be differentiated from those that are just helpful. Care must be taken not to
underestimate the amount of variety of resources needed. The downside risks associated
with insufficient or inappropriate resources should also be assessed.

After the resources are acquired, the entrepreneur must use them to implement the
business plan. The operational problems of the growing enterprise must also be examined.
This involves implementing a management style and structure, as well as determining the
key variables for success. A control system must be established, so that any problem areas
can be quickly identified and resolved. Some entrepreneurs have difficulty managing and
growing the venture they created.
Question 2

a) Entrepreneurial self-efficacy - Conviction that one can successfully execute the

entrepreneurial process.
Perceived desirability - The degree to which an individual has a favorable or unfavorable
evaluation of the potential outcomes

b) There are 8 dimensions that the focus and practice within entrepreneurial and traditional
firm may differ. These dimensions are practice differently.
strategic orientation
- focus on those factors that are inputs into the formulation of the firm's strategy (driven by
perception opportunity)
commitment to opportunity
- commitment to taking action potential opportunities (revolutionary with short duration)
commitment of resources
- focus on how to minimize the resources that would be required in the pursuit of a particular
opportunity (many stages with minimal exposure)
control of resources
- focus on how to access others resources (episodic use or rent of required resources)
management structure
- organic focus has few layers of bureaucracy between top management and the customer and
typically has multiple informal network (flat with multiple informal networks)
reward philosophy
- one that compensates employees based on their contribution toward the discovery/generation
and exploitation of opportunity (based on value creation)
growth orientation
- focus on rapid growth, risk is accepted to achieve growth
entrepreneurial culture
- the environment of a particular organization (promoting broad search for opportunities)

Question 3
a) A window of opportunity is a short time period during which an otherwise unattainable
opportunity exists. After the window of opportunity closes, the opportunity ceases to exist.
Since good deals on real estate, business offers, etc. do not exist forever, the window of
opportunity is the ideal time to act.

b) Advantages being first mover

- No competition
- Gain competitive advantage through control of resources
- Technological leadership
Question 4

a) 1. Focus Groups? These are the groups of individuals providing information in a structural
format. A moderator leads a group of people through an open, in-depth discussion rather than
simply asking questions to solicit participant response. Such groups form comments in open-end
in-depth discussions for a new product area that can result in market success. In addition to
generating new ideas, the focus group is an excellent source for initially screening ideas and
concept.

2. Brainstorming? It is a group method for obtaining new ideas and solutions. It is based on the
fact that people can be stimulated to greater creativity by meeting with others and participating
in organized group experiences. The characteristics of this method are keeping criticism away;
freewheeling of idea, high quantity of ideas, combinations and improvements of ideas. Such
type of session should be fun with no scope for domination and inhibition. Brainstorming has a
greater probability of success when the effort focuses on specific product or market area.

3. Problem inventory analysis? It is a method for obtaining new ideas and solutions by focusing
on problems. This analysis uses individuals in a manner that is analogous to focus groups to
generate new product areas. However, instead of generating new ideas, the consumers are
provided with list of problems and then asked to have discussion over it and it ultimately results
in an entirely new product idea.

b) Opportunity Assessment Plan

The first section develops the idea, analyzes competitive products and companies,
and identifies the unique selling propositions.

The second section focuses on the marketits size, trends, characteristics, and
growth rate.

The third section focuses on the entrepreneurs and management teams skills and
experience.

The final section develops a time line indicating the steps to successfully launch the
venture.

Question 5

a) 4 growth Strategies

Diversification (New Products/New Market)

Diversification is a high-risk growth strategy, largely because both the products and the
market are unproven territory for the entrepreneur. Though trailblazing emerging products
and markets can be exhilarating, it can also be terrifying given the fact that neither you nor
anyone else can rely on prior experience for reassurance. But if innovation is one of your
company's defining characteristics, a diversification strategy will eventually become second
 nature. To achieve growth, you will need to be realistic about the risks you face and crystal
clear about what you hope to achieve.

Market Development (Existing Products/New Market)

A more common scenario is one in which a small business owner attempts to develop a new
market for their existing products and services. The new market can be geographical (e.g.
foreign export) or an untapped segment of a domestic market. It's even possible to develop a
new market for existing products by adjusting the product's packaging or expanding the
product's distribution channels. In any event, a market development growth strategy
requires a working knowledge of existing markets and the ability to gaps in the marketplace
that can be exploited to your advantage. If your marketing skills are not up to the task, you
will need the assistance of a skilled marketing professional to achieve growth in your new
market.

Product Development (New Products/Existing Market)

A growth strategy based on product development is the mirror image of a market
development strategy. Instead of pioneering a new market with existing products, you
attempt to roll out a new product(s) in a market with which you are already familiar. Many
small business owners are more comfortable working in this kind of scenario because they
already possess an awareness of prevailing market conditions. However, a product
development strategy can be just as challenging as a market development strategy because it
often requires the business to develop new abilities and continuously adapt the products
until they achieve marketplace success.

Market Penetration (Existing Products/Existing Markets)

Businesses that find themselves in a situation that involves neither new markets nor new
products are forced to grow through a market penetration strategy, a strategy that is
designed to give the business a greater percentage of market shares. This type of strategy
usually seeks to gain a competitive edge through pricing, marketing, or other initiatives.
Additionally, market penetration can be achieved by increasing customer usage through
loyalty programs and incentives targeting your existing customer base.

b)
Question 6

a) To finance your company's start-up and growth with the assistance of or input from others.
When you're thinking about how to raise money, one of the first things you should consider
is bootstrap financing--using your own money to get your business off the ground. This is one
of the most popular forms of internal funding because it relies on your ability to utilize all
your company's resources to free additional capital to launch a venture, meet operational
needs or expand your business. Bootstrap is a situation in which an entrepreneur starts a
company with little capital. An individual is said to be boot strapping when he or she
attempts to found and build a company from personal finances or from the operating
revenues of the new company.

b) Franchising is the practice of the right to use a firm's business model and brand for a
prescribed period of time. The word "franchise" is of Anglo-French derivationfrom franc,
meaning freeand is used both as a noun and as a (transitive) verb. [1]For the franchisor, the
franchise is an alternative to building "chain stores" to distribute goods that avoids the
investments and liability of a chain. The franchisor's success depends on the success of the
franchisees. The franchisee is said to have a greater incentive than a direct employee
because they have a direct stake in the business.

Joint Ventures is a business arrangement in which two or more parties agree to pool their
resources for the purpose of accomplishing a specific task. This task can be a new project or
any other business activity. In a joint venture (JV), each of the participants is responsible for
profits, losses and costs associated with it. However, the venture is its own entity, separate
and apart from the participants' other business interests.