ENTREP Flashcards
Apple founder
Steve jobs
Microsoft founder
Bill Gates
The term entrepreneur come from the French word
Entrepredre
Entreprende means?
“to undertake”
a reference to individual who have initiated the establishment of a business enterprise.
entrepreneur
The classic work of Joseph Schumpeter
The theory of economic development
He emphasized the role of entrepreneurs in the process of economic transformation on his book called The theory of economic development
Joseph Schumpeter
These individual are also willing to absorb huge risk of using enormous amount of capital in their business ventures
Megaentrepreneurs
They also initiate business enterprises, the ‘value-added’ and profits they make are limited.
Their contributions are minimal and attract few competitors and imitators.
They engage in micro and small businesses as an alternative to formal employment.
Microentrepreneurs
Who wrote Innovations and Entrepreneurship
Peter Drucker
Emphasized the discipline in the process of starting and managing a business.
Innovations and Entrepreneurship
This entrepreneurial disciplines is often referred to as the ____________ _________, which involves several stages from the awareness of an opportunity to the realization of a business idea.
Entrepreneurial Process
Steps of Entrepreneurial Process (5)
- Discovery
- Development of concept
- Organizing resources
- Implementation
- Reaping the returns
refers to the recognition pf a business idea or the detection of opportunities that could make money for the entrepreneur.
Discovery
Gives more details on how the general business idea can be realized.
Development of a business
describes the process of identifying, sourcing, and financing human, nonhuman, and other resources needed for the conduct of Business.
Organizing resources
Process of carrying out of business plan.
Covers a number of activities, including the management of human, physical technological, and financial resources of the business.
Implementation
Pertains to strategies related to the expansion of the business firm.
Reaping the return
Entrepreneurial traits (4)
- Level of education
- Employment status
- Wealth
- Risk appetite
studies have shown that entrepreneurs need some formal education to be able to seize the opportunities presented by inventions, innovation, and other technological developments
Level of education
Individuals who become entrepreneurs in developed countries are usually former employees of companies in the formal sector.
Employment Status
is also an important factor.
Usually megaentrepreneurs source their funds from their own _______ and from their families.
Entrepreneur’s Wealth
Risk is also an important factor in undertaking any business venture.
Risks Are associated with uncertainties in business operations
Risk appetite
Which are planned actions formulated in the mind of individuals which are geared towards the objectives of establishing a business venture from potential business opportunities.
Entrepreneurial Intentions
2 factors that may influence the formations of entrepreneurial intentions:
Internal factors
External factors
Includes mainly the qualities of individuals such as demographics, personal traits, psychological characteristics, individual skills prior knowledge, and social ties.
Internal factors
refer to gender, marital status, age, and employment status of individuals who are likely to form entrepreneurial intentions.
Demographics
there are theoretical bases for the contributions of self-confidence, determinations, and enthusiasm and other positive human qualities in influencing entrepreneurial intentions.
Personal traits
includes a host of qualities, including need for achievement, risk appetite, acceptance for vagueness, self-efficacy, and goal setting.
Psychological Traits
are also significant determinants.
External factors
External factors (2)
Environmental support
Environmental Influence
many studies affirmed the positive effects of government, financial institutions, and training institutions in setting up businesses.
Environmental support
includes regulatory structures, patents, protections of property rights, and competitive environment.
Environmental influence
GEM means:
Global Entrepreneurship Monitor
Covers the intentions, perceptions, activities, and aspirations of entrepreneurs all over globe
Global Entrepreneurship Monitor (GEM)
Types of thinking that influence entrepreneurial decision-making (3)
- Critical thinking
- Creative thinking
- Strategic thinking
refers to the systematic and rational way of providing an answer to a questions
Critical thinking
refers to thought processes that bring about discovery of new ideas. It does not follow a systematic or analytical process since it looks at things from different perspectives.
Creative thinking
involves thought processes that assess current situations that can be useful in the formulations of plans for the future.
Strategic thinking
can be describe as uncertain situations and developments that can increase the probability of loss or business failure.
Risks
categories of risks (2)
- Internal risks
- External risks
ate threats coming from various environments outside the business firm.
external risks
pertain into those emanating from the management of resources of a business enterprise that may imperil its operations.
internal risks
The process of identifying, assessing, and responding to the risks is called ______
risks management
refers to the ability of individuals to be involves in the process of producing several ways of decision-making based on the identification and management of changes in their environment.
Cognitive adaptability
4 major sources of business ideas
- from the product
- From the process
- from the person
- From relationship
Methods for generating or testing new ideas (3)
- Generating business ideas through logical thinking
- Generating business ideas through critical thinking
- Generating business ideas through trends in business environment
the systematic and rational way of providing answer to a question.
Logical thinking
methods that use systematic analysis in generating new ideas (4)
statistical analysis
market analysis
SWOT analysis
Delphi technique.
refers to a systematic analysis of data generated from a survey of individuals.
Statistical analysis
which is undertaken to know the various factors that affect the demand for a particular product or service.
market analysis
s usually undertaken to describe the state of competition within an industry.
SWOT (strengths, weaknesses, opportunities, threats) analysis
is the systematic way of generating ideas from a select group of individuals using various rounds of consultations or sessions.
Delphi technique
refers to thought processes that do not follow systematic or analytical procedures but looks at things from different perspectives.
It uses lateral thinking, which connects ideas and reprocesses them to formulate new ideas.
creative thinking
methods that use creative thinking in identifying business ideas (4)
brainstorming
problem inventory analysis
free association method
checklist method
refers to an unstructured discussion of a group to elicit ideas.
Brainstorming
is similar to brainstorming. It uses the group discussion method to elicit ideas from participants.
Problem inventory analysis
is another technique used in discovering business ideas.
It is a method that has been used in psychology to elicit the unconscious thoughts of individuals by expressing their thoughts associated with words and ideas given by the therapist.
Free association method
Related to free association method is the ________ ________.
It is another
creative way of obtaining business ideas from target participants by listing all possibilities that ideas can be connected to, reprocessed, and associated with. The participants in the discussion group can be asked to list down all possible changes that can be made with an existing product or service.
checklist method
A specific checklist method developed by Alex Osborn is known as
SCAMPER (Substitute, Combine, Adapt, Magnify, Put to other use, Eliminate, and Rearrange)
Who develop SCAMPER
Alex Osborn
In this method, participants are presented with a product or service or an idea and are asked to provide a comprehensive list of how the product or service or idea can be replaced, mixed, differentiated enlarged, applied, removed, and altered.
SCAMPER (Substitute, Combine, Adapt, Magnify, Put to other use, Eliminate, and Rearrange).
can be described as the capacity of individuals to originate new ideas from ideas the individual has been previously exposed.
Creativity
key factors affecting creativity, which can be grouped into four categories
(a) problem solving factors (b) motivational factors
(c) situational factors
(d) organizational factors.
implies that all the factors in each category must be balanced in their interactions, and at the same time all the categories must be balanced in their interactions as well.
The confluence approach
is a procedure of answering a problem with mechanisms and techniques incorporating creativity.
Creative problem solving (CPS)
two important stages in CPS
divergent and convergent thinking processes
six steps are followed in Osborn-Parnes model.
- Setting the objective
- Revisiting the objective
- Identifying the problem
- Looking for a solution
- Selecting a solution
- Accepting the solution
One procedure of creative problem solving is the one developed by
Sidney Parnes and Alex Osborn
According to Cambridge Dictionary, an __________is “a situation or occasion that makes it possible to do something that you want to do.”
From a business perspective, an __________ is “an exploitable set of circumstances with uncertain outcome requiring a commitment of resources and involving exposure to risk”
Opportunity
This involves the identification of an objective that an individual wishes to achieve.
Setting the objective.
This stage involves the search for studies, reports, analyses, and papers related to the objective set.
Revisiting the objective.
Based on the objective set and the review of related studies, the individual has a clearer view on what problem to pursue.
Identifying the problem.
Once the problem has been identified, another series of divergent thinking of generating ideas for the solution of the problem is needed.
Looking for a solution.
Once enough options are given from the divergent thinking process, a convergent evaluation process of weighing the significance, relevance, and feasibility of these options is undertaken.
Selecting a solution.
In our chosen problem, we have selected a solution.
Accepting the solution
A preparatory stage, during which the individuals assesses his knowledge of the market.
Precondition
This is the gestation phase, during which entrepreneurial intentions and ideas are generated, using logic, creative thinking, or both.
This is the gestation phase, during which entrepreneurial intentions and ideas are generated, using logic, creative thinking, or both.
This is the gestation phase, during which entrepreneurial intentions and ideas are generated, using logic, creative thinking, or both.
Conception.
This third stage provides the individual a hunch that can serve as an opportunity for business.
Visioning
This stage involves the evaluation on whether the idea can be realized or not.
Assessment
The last phase suggests the production of a prototype.
Realization
recognition of business opportunities is influenced by three major factors:
(a) market awareness
(b) entrepreneurial readiness
(c) connections.
refers to personal exposure to market and its components including customers and suppliers.
Market awareness
on the other hand, refers to a variety of features of an individual to start a business venture.
Entrepreneurial readiness
Business opportunity recognition is heightened when the individual has a diversity of networks.
connections
elements in opportunity assessment:
product
market
cost
profitability
capital requirements
risks
commitment.
A business opportunity is primarily the potential of introducing a new product or service to the market.
Product or Service.
This element in the assessment process refers to the appraisal of the characteristics of the market.
Market Opportunity.
A product which may be considered valuable by consumers may not be affordable
Costing and Pricing
Part of the assessment process is the extent of profitability of a product or service.
Profitability
In any business venture you will need inputs in the production process
Resource Requirements
are also called raw materials that need further processing
Intermediate inputs
two types of inputs used in production
intermediate inputs and factor inputs
are called the processing inputs which include labor, capital, and technology.
Factor inputs
Any business enterprise will face risks in the course of its operations. _____ are uncertain situations that can increase the probability of loss or failure of a business venture.
Risks
The last element in the process of entrepreneurial assessment relates to the commitment of the individual to pursue the realization of its business idea.
Entrepreneurial commitment
The rational approach is also called
It uses systematic procedures in proceeding with the implementation of a business opportunity.
is usually applicable for business ideas that require substantial initial investments or those that are undertaken by what we refer to as Schumpeterian entrepreneurs.
traditional approach
The alternative pathway is called the __________ _______. It starts with the recognition of an opportunity and proceeds directly to the grabbing of the opportunity after sensing that it can be done.
intuitive approach
This refers to the formation of business ideas.
Idea stage
The refinement of ideas and visualization of an idea that can serve as business opportunity
Concept stage.
After the visualization of the idea the business idea is concretized with the production of a prototype.
Product development stage.
At this phase the product or service is introduced in the market after a series of evaluation and feedback from potential customers.
Test marketing stage
This phase is also referred to as the product life cycle.
commercialization
With a positive feedback after a series of market testing, the product is formally introduced in the market.
Introduction
With a successful marketing campaign the product is recognized by the market.
Growth
At this stage the product is widely accepted with the emergence of brand loyalty and patronage from its target market.
Maturity
Once the market for the product has been saturated and innovation possibilities for it have been fully explored, the product may start to lose its market power.
Decline
is a document that describes the various external and internal elements involved in starting a business or in expanding an existing venture, amidst a dynamic business environment.
business plan
Business plans are important because of the following reasons, among others:
(a) it helps determine whether a proposed or existing business venture is viable given its target market
(b) it guides the entrepreneur in mobilizing the resources needed by the business
(c) it serves as a tool in helping get financing for the business.
serves as a road map for managing the business
identifies the resources needed to operate and grow the business
allows the entrepreneur to anticipate potential business risks
Entrepreneur
allows the lender to assess whether the entrepreneur will be able to meet debt and interest payments
provides information about collateral or tangible assets that can be secured for the loan
lender
allows the investor to gauge whether projected returns are acceptable
investor
the four Cs of credit
character
cash flow
collateral
equity contribution
A critical piece of information for any aspiring entrepreneur is the potential market for his product or service.
Market Information
