VIDYA JYOTHI INSTITUTE OF TECHNOLOGY
WEB NOTES
SUBJECT : ENTREPRENEURSHIP AND GOOD GOVERNANCE
BRANCH/ YEAR: MBA II Year III SEM
TOPIC NAME
ENTREPRENEURSHIP
TOPICS COVERED ARE:
- Introduction
- Qualities Of An Entrepreneur
- Functions Of An Entrepreneur
- First Mover Advantages And Disadvantages
By
P. SUNEELABHARATHI
Assistant Professor
MBA Dept.
ENTREPRENEURSHIP
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative. Entrepreneurship is a process through which individuals identify opportunities, allocate resources, and create value. This creation of value is often through the identification of unmet needs or through the identification of opportunities for change. Entrepreneurs see “problems” as “opportunities,” then take action to identify the solutions to those problems and the customers who will pay to have those problems solved. Entrepreneurial success is simply a function of the ability of an entrepreneur to see these opportunities in the marketplace, initiate change (or take advantage of change) and creates value through solutions
Entrepreneurship is the act of being an entrepreneur, which can be defined as "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses
QUALITIES OF AN ENTREPRENEUR:-All successful entrepreneurs have the following qualities:
1) Inner Drive to Succeed:-Entrepreneurs are driven to succeed and expand their business. They see the bigger picture and are often very ambitious. Entrepreneurs set massive goals for themselves and stay committed to achieving them regardless of the obstacles that get in the way.
2) Strong Belief in themselves:-Successful entrepreneurs have a healthy opinion of themselves and often have a strong and assertive personality. They are focused and determined to achieve their goals and believe completely in their ability to achieve them. Their self optimism can often been seen by others as flamboyance or arrogance but entrepreneurs are just too focused to spend too much time thinking about un-constructive criticism.
3) Search for New Ideas and Innovation:-All entrepreneurs have a passionate desire to do things better and to improve their products or service. They are constantly looking for ways to improve. They're creative, innovative and resourceful.
4) Openness to Change:-If something is not working for them they simply change. Entrepreneurs know the importance of keeping on top of their industry and the only way to being number one is to evolve and change with the times. They're up to date with the latest technology or service techniques and are always ready to change if they see a new opportunity arise.
5) Competitive by Nature:-Successful entrepreneurs thrive on competition. The only way to reach their goals and live up to their self imposed high standards is to compete with other successful businesses.
6) Highly Motivated and Energetic: - Entrepreneurs are always on the move, full of energy and highly motivated. They are driven to succeed and have an abundance of self motivation. The high standards and ambition of many entrepreneurs demand that they have to be motivated!
7) Accepting of Constructive Criticism and Rejection :- Innovative entrepreneurs are often at the forefront of their industry so they hear the words "it can't be done" quite a bit. They readjust their path if the criticism is constructive and useful to their overall plan, otherwise they will simply disregard the comments as pessimism. Also, the best entrepreneurs know that rejection and obstacles are a part of any leading business and they deal with them appropriately.
True entrepreneurs are resourceful, passionate and driven to succeed and improve. They're pioneers and are comfortable fighting on the frontline. The great ones are ready to be laughed at and criticized in the beginning because they can see their path ahead and are too busy working towards their dream.
FUNCTIONS OF AN ENTREPRENEUR: -.
These are the functions performed by anentrepreneur.
1)Planning of the project: He is the organizer to conceive the idea of launching the project and to program the structure of business.
2)Management: The entrepreneur is also responsible for the management of business. He tries to have a least cost combination of factors of production.
3)To Face Risks: He faces uncertainly and bears risks in his business uncertainly comprising those risks against which it is not possible to insure. He also faces the risk of other producers may enter the market.
4)Distribution of Rewards: He is responsible of distributing the rewards to all factors of production. He pays the reward in the shape of rent, wage, and interest and bears the risk of profit or loss himself.
5)Sale of Products: An entrepreneur is also responsible ofmarketing, advertising. He wants to maximize his profits by selling his product in the market.
6)Scale of Production: He decided the scale of business in according with theprovision of capital. Then, he takes the decision of what where and how toproduce goods.
7)Joint stock Organization: In a partnership, the entrepreneurial functions aredivided between the partners. But in public limited company, the board ofdirectors takes this responsibility with nationalized enterprise; the entrepreneurialdecisions are left to the government or a body to which government has delegatedits powers.
8)Identifying entrepreneurial opportunity – There are many opportunities in theworld of business. These are based on human needs like food, fashion, education,etc., which are constantly changing. These opportunities are not realized bycommon man, but an entrepreneur senses the opportunities faster than others do.An entrepreneur therefore, has to keep his eyes and ears open and requireimagination, creativity and in formativeness.
9)Turning ideas into action – An entrepreneur should be capable of turning hisideas into reality. He collects information regarding the ideas, products, practicesto suit the demand in the market. Further steps are taken to achieve the goals inthe light of the information collected.
10)Feasibility study – The entrepreneur conducts studies to assess the marketfeasibility of the proposed product or services. He anticipates problems andassesses quantity, quality, cost and sources of inputs required to run theenterprise. Such a blue print of all the activities is termed as a 'business plan' or a'project report'.
11)Resourcing – The entrepreneur needs various resources in terms ofmoney,machine, material, and men to running the enterprise successfully. An essentialfunction of an entrepreneur is to ensure the availability of all these resources.
12)Setting up of the Enterprise – For setting up an enterprise the entrepreneur mayneed to fulfill some legal formalities. He also tries to find out a suitable location,design the premises, install machinery and do many other things.
13)Managing the enterprise – One of the important functions of an entrepreneur is torun the enterprise. He has to manage men, material, and finance and organizeproduction of goods and services. He has to market each product and service,after ensuring appropriate returns (profits) of the investment. Only a properly managed organization yields desired results.
14)Growth and Development – Once the enterprise achieves its desired results, theentrepreneur has to explore another higher goal for its proper growth anddevelopment. The entrepreneur is not satisfied only with achieving a set goal butconstantly strives for achieving excellence.
FIRST-MOVER ADVANTAGES
WHEN to make a strategic move is often as crucial as WHAT move to make
First-mover advantages arise WHEN
- Pioneering helps build firm’s image & reputation
- Early commitments to raw material suppliers, new technologies, & distribution channels can produce cost advantage
- Loyalty of first time buyers is high
- Moving first can be a preemptive strike
- Costs of pioneering are sizable & loyalty of first time buyers is weak
- Rapid technological change allows followers to leapfrog pioneers
- Skills & know-how of pioneers are easily imitated by late movers
- It is easy for latecomers to crack market
FIRST-MOVER DISADVANTAGES
Arise WHEN
- Costs of pioneering are sizable & loyalty of first time buyers is weak
- Rapid technological change allows followers to leapfrog pioneers
- Skills & know-how of pioneers are easily imitated by late movers
It is easy for latecomers to crack market