Business Entrepreneurship - Research Paper Example

Business Entrepreneurship Table of Contents Introduction 2 Entrepreneurship in the Changing Scenario 3 3 What is Strategic Planning? 5 Strategic Planning and Entrepreneurship 6 The Case of Narrow Car Company 6 6 The Case of Coffee Republic 8 8 Factors Influencing the Strategic Planning in Entrepreneurship 9 Conclusion 10 References 12 Bibliography 13 Introduction The term ‘Entrepreneurship’ evolved in the early 1700s when it was simply termed for the ownership of new businesses. While entrepreneurs were referred to the people who established there own business. However in the modern day perspective, economists tend to describe it to be more than just setting up of a business. To be more elaborated on the term, it dignifies those people who have the potential to bear the risk of establishing a new business. A few other characteristics of an entrepreneur are that he/she develops a unique idea to be marketed. The idea can be in the form of goods or services, in such a manner that is not yet rendered to the community (U.S. Department of State, n.d.). The definition of an entrepreneur nowadays is largely different from that in its initial stage. Today entrepreneurship is termed to be the art and science of creating a new business idea and construct it in a manner to be rendered to the targeted market. To be accounted in this context, the definition as stated by Small Business Advancement National Center in the publication, “Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence” (SBAER, 2005). The thought of entrepreneurship in the 21st century is classified into different categories as per the characteristics that entrepreneurs possess. They are the social entrepreneurship and the business entrepreneurship in a wider perspective. Social entrepreneurs are those who focus to serve the community in an innovative manner without the intention to generate profit. But business entrepreneurs tend to be focused in attaining profit margins by marketing their idea. Hence, it is certain that the philanthropy of business entrepreneurship is constraint to many factors like the legal and regulatory frameworks, the macro-economic environment, the micro-economic environment, and the micro-environment as well. Therefore, the strategic planning from the end of the entrepreneur holds immense significance in the context. Entrepreneurship in the Changing Scenario Earlier the business entrepreneurs were only the adults who were experienced people and acquired enough knowledge to direct their business. But today the sector of business entrepreneurship includes young people and even minors. To be further classified, there are women entrepreneurs, and there are entrepreneurs who are physically disabled. Therefore a considerable change can be easily forecasted in the outlook of business entrepreneurship. With this new changing era the philanthropy is not only developing but is also facing certain challenges which if not met shall lead to failure in the future. A number of opportunities that the business entrepreneurs enjoy in the present scenario are the technological up-gradation, the facility of funding from various sources, continuous demand for new innovations in the market, chance to score overseas, and also the benefit of education. But the thought also faces certain major challenges in the given perspective of 21st century. Such as, the legal constraints and the global competition which influences any rising business entrepreneur to attain the desired goal and sustain there as well. Moreover, in the present day scenario, the business entrepreneurs are even tended to be responsible for providing strength to the economy which makes the journey of business entrepreneurs harder (Moutray, 2008). The characteristic of business entrepreneurship is itself a complex process as termed by many economists and analysts. And it is certainly becoming much more complex due to numerous factors working internally and externally as well, which strongly influence the idea. The external factors are considered to be uncontrollable but on the other hands the internal factors can be easily controlled by the entrepreneurs. This can be done through the implementation of an appropriate strategic planning. To be stated in this context, there are numerous cases where an entrepreneur has suffered a failure. While on the contrary, there are also numerous entrepreneurs who are running their business successfully. For instance, the case of Daniel Platt Limited, the founder, Mr. Daniel Platt recognized the market need of a better engineering to mend the roof tiles during construction. Another case to be referred to this context is that of the Hidden Nation, which was founded by Lee Prescott. The idea that he marketed was the manufacturing of best category frames for BMX circuit according to the market need. Even in the case of Narrow Car Company the importance of proper strategic planning can be observed (Read, 2006). In both the cases, the success factor was the appropriate strategic planning that the founders emphasized on before setting up their venture. On the contrary, as stated above, there are many entrepreneurs who have failed in their entrepreneurship. Such as the case of Coffee Republic which was founded in 1995 by Bobby Hashemi and Sahar his sister. Despite the fact that the founders were able to gain a level of achievement until 2000, but the company dramatically failed in the next year (Kunz, 2004). What is Strategic Planning? From the business perspective, strategic planning has been generally defined as a tool to define the path for the organization to help it attain its desired position. To be more precise, strategic planning helps the organization to determine its tasks and plan accordingly, right from the initial stage in order to achieve its optimum position. However, there are certain other analysts who define strategic planning as a process involving all the functions of the organization and factors influencing its operations to plan the final success strategy. It involves the assessment of micro and macro economic factors, indentifying the mission of the organization, determining the objective of the entrepreneur, and suggesting a plan to drive the operations of the organization in a well-structured form. Therefore, strategic planning not only helps the organization to control its operations and functions, but also helps to pursue a sustainable position in the market. Moreover, it becomes crucial in the starting stage of a business or entrepreneurship because it provides a tool to assess the external environment and an idea of a new business a strong base (Policastro, n.d.). Figure 1. Strategic Planning Process (Bingham, 2010). Strategic Planning and Entrepreneurship During the initial stage of a venture, business entrepreneurs face a major challenge in planning and landing the idea in a well structured manner. And as this stage is stated to be the most crucial for a business to succeed or fail creates a remarkable significance on the matter. Hence the entrepreneur needs to plan and emphasize on the issue of a well designed strategic outlook in order to secure its desired goal. The importance of strategic planning can be better observed in the two cases, i.e. the case of The Narrow Car Company and that of The Coffee Republic. These two companies had an impressive growth in the starting years. But at the end of its sixth year, the Coffee Republic has stepped down, while the Narrow Car Company is still on a growth. The reason for this difference is in the implementation of a strong strategic planning. The Case of Narrow Car Company The Narrow Car Company was founded by Hugh Kemp, who was a professional in motor industry for a long period of 25 years and had an experience in the field. The company was incorporated in the year 2004. With his long experience in the field, the founder recognized the opportunity of a new kind of vehicle which provided the comfort of a car along with the excitement of a bike ride. After a long wait of nearly eighteen months Hugh received a financial support of $57,000 from the UK government grant scheme and was able to produce his idea in real, which was named as the Naro Car. The features of the car were entirely related to the analyzed market demand. It had the comfort of a four wheeler, a certain capacity to carry loads similar to a small car, along with safety which is highly prioritized in the particular sector. In addition the product also had the capability to serve roll-control facilities to its users which was unique by its nature. Moreover, the product was served at a very low price which the middle income group of the economy could perceive easily. To be precise, the strategy was to serve a unique product which was the need of the market with a package of benefits to attract the potential customers which lead it to development and success (Read, 2006). The Case of Coffee Republic Coffee Republic was established by Sahar and Bobby Hashemi in the year 1995 with an aim to serve quality coffee bars to the customers of the UK. The company at its first stage witnessed a steep growth and got registered itself in the London Stock Exchange in 1997. In its initial stage the company had a blend of flavors to serve the customers, as there was only a handful of quality coffee chain in the UK. After realizing the passion of coffee among the UK nationals, both the founders applied there idea to establish a quality coffee chain in the UK (Coffee Republic, n.d.). Despite incurring huge profits and getting expanded with over 80 stores all around the UK and Europe, the company failed due to its faulty strategic planning. The strategies that were adapted by the company were much more concentric on the issue of expansion rather than a stable growth. The company authorities also lagged in considering the rising competition in the community. Moreover the increasing cost and tax expenditures were also proving to be a burden to the company. As a result, by the end of 2002 the company’s share price had fallen, debt increased, and tax losses increased. However, after the period, the company’s strategies were reconstructed in order to provide it a rebirth (Kunz, 2004). Therefore as can be easily revealed from the illustrated cases, the importance of strategic planning in the context of business entrepreneurship has a considerable significance. However, there are also certain limitations that a rising business entrepreneur often faces while establishing a new venture. Factors Influencing the Strategic Planning in Entrepreneurship Strategic planning can be influenced in an initial stage of the entrepreneurship due to many factors. For instance, the deficiency of the entrepreneur to understand the influencing factors in the market which can lead to the failure of the venture. For example, the factor of competition, financial resources, cost of manufacturing, and even the marketing techniques. Accordingly, the psychological aspect from the end of the entrepreneur can also result to inefficient strategic planning. To be mentioned, entrepreneurs are often recorded to hire professionals in order to design an appropriate strategic plan for them which would eradicate the limitations that arise in the form of knowledge and skills. But most of the time, entrepreneurs do not show trust or openness in informing the outsider about their objective which at the end leads to a faulty strategic plan (Kuratko, 2008). Conclusion According to the definition stated earlier, that the functions of entrepreneurs, specially the business entrepreneurs are basically concentric towards the identification of the target market opportunities. This is again extended to the initiation in order to utilize the opportunities. This is where the importance of strategic planning comes into being. Firstly, it helps to figure out the current position of the entrepreneur and his/her idea. Second, it helps to determine the ultimate objective to be attained within a specific period (say two to four years). Third, it helps to forecast the environmental opportunities rewarded by the potential market. Fourth, it states the strengths and challenges that the idea shall be facing in the real practice. And last but not the least; it helps to relate all the factors and attributes of the business program and design an appropriate plan. Therefore, the strategic planning creates a strong influence on the operations of a business in its initial stage or the budding stage when the idea requires a certain amount of support from the end of its entrepreneur. To be concluded, strategic planning indeed is quite significance in terms of business entrepreneurship. And it is in this regard that entrepreneurs and professionals have been using different models and processes to relate the concept of strategic planning in order to reward success to the venture. However, there are certain limitations that arise from the end of the entrepreneur and the strategic planning as well. To be illustrated, they can be accounted as the psychological barriers of the entrepreneur and the complexity of the strategic planning process. In addition the procedure to implement a proper strategic plan is time consuming and can be a problem to the entrepreneur to start the business in the desired date. During the planning process it can be also proven that the idea is not that much sustainable or competitive as it needs to be in the given market. This can even result to the termination of the idea or change the idea majorly which shall again be a constraint factor. However, to be remarked in the context, a proper strategic planning has evolved to be one of the most crucial factors that influence business entrepreneurship strongly with the given perspective of the 21st century. References Bingham, S., (2010). Strategic Planning Process. Fox Valley Technical College. Retrieved Online on December 13, 2010 from http://www.fvtc.edu/public/content.aspx?id=1721&pid=2 Coffee Republic, (No Date). History & Future. About. Retrieved Online on December 12, 2010 from http://www.coffeerepublic.co.uk/history-and-future.php Kunz, V., (2004). The Biggest Gamble of My Life. Growth Business. Retrieved Online on December 12, 2010 from http://www.growthbusiness.co.uk/channels/entrepreneurs/business-leaders/30/the-biggest-gamble-of-my-life.thtml Kuratko, D. F., (2008). Entrepreneurship: Theory, Process, and Practice. Cengage Learning. Pg 420-422. Moutray, C., (2008). Opportunities and Challenges for Entrepreneurship and Small Business Owners. Small Business Administration. Retrieved Online on December 12, 2010 from http://www.sba.gov/advo/research/rs332tot.pdf Policastro, M. L., (No Date). Introduction to Strategic Planning. U.S. Small Business Administration. Retrieved Online on December 13, 2010 from http://www.sba.gov/idc/groups/public/documents/sba_homepage/pub_mp21.pdf Read, L., (2006). Four Mini Case Studies in Entrepreneurship. Engineering Subject Centre. Retrieved Online on December 12, 2010 from http://www.engsc.ac.uk/downloads/scholarart/entre-casestudies.pdf SBAER, (2005). Definition of Entrepreneur Today. Publications. Retrieved Online on December 12, 2010 from http://www.sbaer.uca.edu/publications/entrepreneurship/pdf/11.pdf U.S. Department of State, (No Date). Principals of Entrepreneurship. What Is Entrepreneurship? Retrieved Online on December 12, 2010 from http://www.ait.org.tw/infousa/zhtw/DOCS/enterp.pdf Bibliography Botten, N., (2009). CIMA Official Learning System Enterprise Strategy. Butterworth-Heinemann. Brockmann, E. N. & Lacho, K. J., (2008). Strategic Planning: A Practical Primer for the Entrepreneur. Allied Academies International Conference. Retrieved Online on December 13, 2010 from http://sbaer.uca.edu/research/allied/2008-Reno/International%20Conference/21.pdf Journal of Small Business and Entrepreneurship, (2003). Autumn 2003. Canadian Council for Small Business & Entrepreneurship. Kuratko, D. F. & Audretsch, D. B., (2009). Entrepreneurship: Theory and Practice. Strategic Entrepreneurship: Exploring Different Perspectives of an Emerging Concept. Retrieved Online on December 13, 2010 from http://www.entrepreneur.com/tradejournals/article/192851628.html Read More