1 ENTREPRENEURSHIP

Question 1

What is the definition of an entrepreneurial event?

Answer 1

The creation of a new organization to pursue an opportunity.

Question 2

What are the three main steps in the entrepreneurial process?

Answer 2

Identifying, evaluating, and exploiting opportunities.

Question 3

What is the difference between Kirzner’s and Schumpeter’s opportunities?

Answer 3

Schumpeter’s Opportunity:

Originates from imbalances caused by innovation.
Entrepreneurs take proactive actions, creating entirely new opportunities.
Focuses on "creative destruction", where existing markets, products, or systems are disrupted through new combinations of resources.
Destroys market equilibrium, introducing radical changes.
Relies on new information or technology.
Highly innovative, often bringing groundbreaking ideas to life (e.g., Tesla revolutionizing the auto industry with electric cars).
These opportunities are rare and require significant creativity and vision.

Kirzner’s Opportunity:

Arises from imbalances or mistakes made by other market participants.
Entrepreneurs take reactive actions, spotting and seizing overlooked opportunities.
Focuses on discovering inefficiencies or unmet needs in the market, rather than creating something entirely new.
Promotes market equilibrium by optimizing and addressing gaps.
Relies on existing information, such as market trends or pricing errors.
Less innovative, often involving incremental improvements (e.g., reselling underpriced products or refining supply chains).
These opportunities are frequent and typically easier to identify.

Question 4

What are sources of business opportunity?

Answer 4

• Information assymetries (errors by other market players)
• Exogenous shocks (technologicial, political, social change)
• Change of offerings (new materials, productions, organization…)
• Change in demand (change in purchasing behaviour)
• Prior entreprenurial activities
• Incongruencies