An Entrepreneurial Case - Assignment Example

AN ENTREPRENEURAL CASE QUESTION Is Sid an entrepreneur Entreprenuer.com defines an entrepreneur as a person who takes the initiative to risk financially and thus initiate, operate and manage a business. Simply put, an entrepreneur coordinates and takes responsibility for all risks incurred in a business venture (Entreprenuer.com, 2008). Entrepreneurship is the practice that is all about taking the risk and placing financial and professional security at stake for the sake of an uncertain business venture (Knight, 1967). Sid Stevens is definitely an entrepreneur who sought to do the basic business management functions in an extraordinary way. The most obvious reason for branding him as one is that he sought and recognized an opportunity in the niche market took a risk and organized his resources (Harper, 2003; pp 10). He realized that ladders were used in everyday setting thus he created a set of rails that went attached to the ladder would increase the safety levels. This was a new product that is handled well would transform into a profitable venture. By so doing, he hoped to attain financial freedom and provide a better life for his family. He is an entrepreneur as he was future oriented and had a vision that by investing in his business venture, his financial status would be improved and he would spend more time with this family. The only way one can determine his future is by investing in it. He was willing to sacrifice in the short run to reap benefits in the long run. He spent time in developing an idea that had never been tried before but this did not mean that it could not be achieved (Harper, 2003). Sid mobilized at his all the capital resources at his disposal due to his innovative nature. The general blueprint of his entrepreneurial strategy was rather simple and centralized as Sid wanted to simply sell his product to the local market as he had previous interactions with them (Economic Expert, 2008). Sid Stevens was market driven and was well aware that his success was pegged on the satisfaction of his customers. He was ready to modify his approach to be synonymous with the market demand when there was a demand for different rail specifications. He also managed to create employment and this had an impact on the economy in the long run due to the accelerator and multiplier effects on the economy. Sid Stevens was committed to being the best in his venture and his frustration with his employees on their compromise on quality was unending. He has a strong sense of business ethics that guided his desire to provide quality products. Despite the challenges and frustrations, his resilience in the pursuit of success was undeterred. Initially, his wife, the banker and his former employer expressed their skepticism on the viability of the project. However, Sid's optimism on the possibility of what the future held saw him remain true to his cause (Knight, 1967). Once it took off, he was a focused and effective decision maker as any delay in the decision making process will compromise the business. QUESTION 2: The Beermat Entrepreneur notes that four cornerstones are necessary for an entrepreneurial endeavor to succeed. What cornerstones did the Ladder Rail venture have, and which were missing What could Sid have done to fill in these gaps in his business The Beermat entrepreneur demands that ha potential entrepreneur profiles himself so as to determine if one should embark on an entrepreneurial venture or to team up with an actual entrepreneur as a corner stone of a new company or as a member of the dream team of a more established company. A cornerstone is an individual with expertise in certain business areas such as management, leadership, public relations, recruitment, marketing and finance. The four cornerstones according to the Beer Mat entrepreneur are involved in finance, technical operations, business' sales and delivery. These individuals are instrumental in the overall well being of the company as they have the technical know how to deal with specific issues and contribute to the long run strategy development. These cornerstones elevate the business from being entirely centered on software and spreadsheets to be all about emotion and personal judgment. The cornerstones are instrumental in ensuring that the management strategy in place is relevant enough to ensure that the business is driven forward (Southton and West, 2002). Sid Steven was the technical and service cornerstone of his business due to the considerable experience he gained from his work at the roofing company. Sid had a good sales person who could serve as a cornerstone. He however did not have the financial cornerstone and this played a role in the unsteady development of his business. He Finance cornerstone is very important as he is informed about the management of information such as accounts. Sid desperately needed the services of this cornerstone as the business in a control position for the cash and cost control. The finance cornerstone would be in a position to assess the viability of any decisions to be made and thus assist Sid in the decision making process. He would have assisted in the crafting of a strategic business model that would be synonymous with changes in the business market. Importantly he would play a crucial role in the development of strategies to raise more finances (Southton and West, 2005). Sid would thus benefit form hiring the services of a finance person to help in filling the gaps in this business. QUESTION 3: What are Sid's ten largest business management weaknesses 1. Sid failed to communicate with this staff. The organizational objectives, polices, strategies were unknown to the staff therefore there was no clear direction. 2. Sid's business strategy failed to maintain his market and to attract potential clients. It was also limited and in the event of success, his strategy would be ineffective at dealing with the competition. 3. Sid's business plan did not have a SWOT analysis that would have shown the balance between the opportunities and the threats while highlighting the strengths and weaknesses of his business venture (Longenecker, 2006; pp 66 -67). 4. Sid's marketing strategy was neither powerful nor customer focused. The marketing tools and methods that he opted for did not have long term effects on the clients. 5. Sid lacked financial control that eventually spiraled out of control. 6. Sid did not have a contingency plan that would enable the company to adjust to environmental changes. This would have helped when the company failed to break even. 7. Sid's market research was not conclusive enough as it failed to highlight the pricing determinants. While his offer of $40 was reasonable, his most steady clients would only purchase the product at a lower price. 8. Sid was ignorant of the fact that he did not have all the solution and thus tried to solve all the problems by himself. He should instead have sought for help from experts. 9. Sid's leadership failed to manage his employees effectively and this eventually caused problems in his establishment. They were aware of his incapability in dealing with them and this further fuelled their inappropriateness. 10. Sid failed to take time off to strategize and to reorganize himself. This would have enabled him to be in perspective about what was happening at with his business. QUESTION 4: Sid appears to have spent limited time on either the marketing plan or its execution. What was missing from his initial marketing plan What creative methods could you suggest to assist Sid Steven's marketing plan failed to accomplish its objective of securing considerable competitive advantage which would have enabled him to understand his competition, his clients and by so doing, develop a relevant approach to the market (Gerson, 1993). The following details were missing from his initial marketing strategy: The marketing strategy was not research and failed to exploit the marketing options available to the company. It was narrow and lacked the fundamental components of a marketing strategy. It lacked a clear description of what was crucial in the delivery of the strategic objectives and no clarification on the financial implications. It did not describe the company's position in respect to its market, value creation and overall performance. This means that there was no situational appraisal and it failed to address the varying needs of the segments and markets it targeted. It did not address the impact of Information Technology which would have been useful in service delivery and ensuring that the organization remains customer oriented. To improve on his marketing strategy, Sid could incorporate the following ideas. Firstly, introduce a keep in touch marking plan that would involve the sending of newsletters and season cards to existing and potential clients. Within these, he could incorporate testimonials from satisfied clients. Secondly, use press releases and articles tat would highlight on progress on his product and related matters. This would make him appear professional and credible. Thirdly, networking is a cost effective and beneficial way of letting others know about an existing business. By following the three foot rule which encourages one to engage in conversation with anyone within a 3 foot distance from himself, business is bound to improve. He should also join local business associations that encourage interaction and sharing among like minded professionals. Fourthly, a company website would expose his business to unlimited potential clients round the clock. He could also convert his vehicles into full time moving billboards. He could design uniforms for his staff and put up fliers at strategic points. These are bound to be worthwhile expenses. QUESTION 5: The case ends with Sid still left with tough choices to make. What steps would you propose to help Sid, given his current challenges Sid is faced with a dilemma that is every entrepreneur's nightmare; to quit or to surge on. When Sid embarked on his business venture, he was aware of the fact that it would not be a simple undertaking. He had rightly identified a business opportunity, was endowed with the necessary skills, ad a strategy and managed to get the financing for the venture. Sid needs to implement the following strategies to ensure that he does not go under: First of all, Sid must come up with a strategic plan that must be SMART; specific, measurable, attainable, results oriented and time bound. This will ensure that his business has a clear direction as far as its clients and competition goes. He should solicit the services of an auditor and hire a financial analyst to establish the underlying problems with his business and to assist in the evaluation of the value of his business. He must design a new business plan that would enable him discover new possibilities within his business, identify, manage and eliminate threats to his business. Sid must design an effective marketing strategy that would help him achieve a competitive advantage over his clients. He must develop effective customer service strategies that would enable him retain and attract potential clients. He must develop a staff evaluation system as a way of assessing the performance of individuals. This will enable him to separate the good workers from the others, create a sense of accountability and to identify the individual problems of the staff. He must learn how to effectively manage people. He must establish an effective accountability system to deal with wayward personnel. Finally, he must sustain the optimism and momentum with which he had started the business as the most successful entrepreneurs are those who stood the test of time and remained dedicated to their ventures to build a stable business organization. WORKS CITED Economic Expert (2008). Entrepreneurship. Retrieved from the World Wide Web on the 5th August, 2008 from http://www.economicexpert.com/a/Entrepreneurship.html Gerson, Richard. Marketing Strategies for Small Businesses. Crisp Learning, 1993 Harper, Steven. The McGraw-Hill Guide to Starting Your Own Business. NY: McGraw-Hill Professional, 2003. Knight, Frank. A descriptive model of the intra-firm innovation process. Journal of Business of the University of Chicago, vol: 40, 1967. Longenecker, Justin Gooderl. Small Business Management: An Entrepreneurial Emphasis. Mason: Thomson South-Western, 2006. Southton, Mike and West, Chris. The Beermat Entrepreneur: What you Really Need to Know to Turn a Good Idea into a Great Business. London: FT Prentice Hall, 2005. Read More