Chapter 1 Flashcards
Define innovation
The specific tool of entrepreneurship by which entrepreneurs exploit change as an opportunity for a different business/service.
Define entrepreneurship
The process of creating something new through committing resources and enduring risks in order to achieve rewards
Define sustainable competitive advantage
An organizations ability to remain ahead of its competitors by doing business that’s sets an organization apart from its competitors
Define Nascent Entrepreneurs
Individuals who think about starting their own business but haven’t set their ideas into action
Nieman and Nieuwenhuizen types of entrepreneurs
Basic survivalist - person who operates as until they have a formal sector job
Pre - welfare based entrepreneurship where profit maximization is not important
Subsistence - person involved in independent income generating activities as a small scale vendor
Micro - formal sector entrepreneurship with 0-10 employees
Small scale - formal sector 11-49 employees
Necessity - starting a business cause they have no other choice
Lifestyle - places lifestyle above all else in their choice of career
Tenderpreneur- affirmative action placing emphasis on supporting black eco empowerment
Nieman and Nieuwenhuizen continued
Social entrepreneurs- a person with a deep desire to improve, change prevailing and detrimental socio-economic, educational, environment and health conditions. They are not interested at heart by possible profit but driven by social conscience and social responsibility
Serial entrepreneurs - high risk entrepreneurs that conceptualize and execute numerous business models to either sell or invest in.
Solopreneur - An individual who operates alone and manages all aspects of the business by themselves. Made possible by technology
The Entrepreneurial Process(Hisrich, Peters, Shepherd)
4 distinct phases
Identification and evaluation of the opportunity
Development of the business plan
Determination of the business plan
Management business of the resulting enterprise
The entrepreneurial process
Idea generation
Opportunity evaluation
Business plan development
Determination of required resources
Formation and management of business
Growth and harvest
Step 1 - Idea generation
When a concept of a p/s, either brand new or an improvement of an existing p/s must be brought to life by the entrepreneur. The best source of ideas would be consumers.
Step 2 - Opportunity Evaluation
most critical element as it allows entrepreneur to assess whether the specific p/s has the returns needed compared to the resources required.
Process involves looking at the length, real and perceived value and risks and returns.
Step 3 - Developing a business plan
Involves the planning of the business by formulating business types, strategies and objectives and defining the target customers and the vision of the business.
Target customers are a set of potential buyers who are your focus as you design your company’s solution.
The vision of the business is the manner in which it wants to be known and thought of .
Step 4 - Determine the resources required
This step involves looking at your current resources and evaluating if they are just helpful or critical and looking at the variety of resources needed and the risks associated with insufficient or inappropriate resources should also be assessed. In addition the step also includes developing alternative suppliers.
Step 6 - formulation and management of the business enterprise
This step involves implementing the business plan and assessing operational problems of the growing enterprise by implementing a management style and structure as well as determining the key variables for success. In addition, a control system must be established so that any problem areas can be quickly identified and resolved.
Step 7 - Growth and Harvesting
This step involves harvesting the sustainable cash flow from an existing customer base that can be critical to ensure the growth of a new or different business sector.
The micro environment
This consists of the business itself and the factors that contribute to its strengths and weaknesses that are in direct control by the manager. The manager should ensure that the weaknesses are reduced and to build on the strengths .
