Entrepreneurship: Carlos Slim and Jack Ma - Coursework Example

Entrepreneurship: Carlos Slim and Jack Ma Entrepreneurship is characterized by various features including critical decision making processes regarding the business activities or practices one engages in. There are various theories that have been devised to address the concept of entrepreneurship. The major focus of the theories is to improve the functionality of the entrepreneur to achieve competence and attain success in their businesses. The characteristics of a successful entrepreneur differ immensely depending on the nature of business one is involved in, and the amount of capital or the size of business enterprise that the entrepreneur runs. Theoritically, no explanation of entrepreneur remains sufficient; however, according to the definition offered by the Small Business Association, and entrepreneur is an individual who puts together an enterprise and accepts or recognizes the risks to make profits that are linked to the business. In one way or another, entrepreneurs are considered to be managers who facilitate greatly in the production process. They are considered to be the main agents of production in any economy, and the fundamental entrepreneur’s quality is having the potential to make valid and reasonable judgment. The entrepreneurs are responsible for assessing the most favorable economic opportunities and utilizing these opportunities to attain business success regardless of the surrounding business environments. This paper aims at investigating the functionality and applicability of entrepreneurship theories to the success of two entrepreneurs; Carlos Slim and Jack Ma. This will be achieved through comprehensive analysis of the entrepreneur theories, and how the arguments presented in the theories can help in the improvement of the entrepreneurial businesses. The tactics that these two businessmen used to get to their current position in the global business world will be investigated, and the measures to their success evaluated. The characteristics of a successful entrepreneur evident in these individuals will be analyzed to affirm the importance of developing some business traits to business performance. An evidence-based conclusion will be drawn regarding the common traits and differences in features evident between Jack Ma of China and Carlos Slim of Mexico. The decision of using these two entrepreneurs was arrived at following their backgrounds, and the moves or innovations they made in rising from normal entrepreneurs to globally recognized rich people. Their operational strategies that enabled them to rise up the ladder to richness are helpful to the current entrepreneurs because it allows them to see the sense of good reasoning and importance of making significant decisions in business enterprises. Carlos Slim Carlos Slim is a Mexican businessman and currently ranked as the world's richest person for the period between 2010 and 2013. He has numerous companies in Mexico, and much of his investments are directed towards the field of communication, real estates, airlines, and finance. Additionally, his other business fields of interests include the media, technology and retailing. Currently, Slim is the chairman and CEO of the telecommunication companies such as Telmex and America Movil. The American Movil accounted for approximately US$49 billion of his wealth by the end of 2010 (Coster, 2007: npag). He has remained one of the richest people across the world for a decade now, with his wealth increasing every second with hundreds of dollars. Jack Ma Jack ma is considered as the richest man in China after he released Alibaba in the world’s biggest IPO. He was reported to be having approximated fortune of $ 25 billion. He was just an English teacher, but his efforts and commitment in innovation significantly helped him to get to his current position through his discoveries and innovations in the technological sector; the internet. Ma had a vision, and this immensely contributed to his approach of seeing the internet’s big potential in linking businesses acrossthe great population of China. Together with his wife, they pooled together with 17 friends, contributed and started a company. The combination of ideas between Ma and his business partners significantly helped in the improvement of the business that they had initiated of developing various internet applications that can allow people to conduct businesses online. According to Ma, the bigger the problems, the greater the business opportunities that arise, and effective utilization of the opportunities brings forth competent results. The fact that China’s infrastructure was not well developed created a business opportunity for Ma and his group because currently, approximately 80% of investors and business people are using Alibaba to market, promote, sell and buy products and services online. Business Environments of China and U.S.A In order to understand the role of entrepreneurship to the success of businesses, it is essential to consider the background of the environment where the two businesses started their journey to success in the business sector. Considering the country China, which is the home of Jack Ma by birth and where his business career started; there are various issues that are realized from the social, political and economic perspective. From the political side, China is a democratic country, an indication that its political powers are subjected to individual who the citizens chose through elections. The fact that the people elect their leaders is sufficient to show that the country’s political systems are stable and reliable. This creates a good foundation for business ventures because the investors are assured of political stability (Murmann, 2003: 56). They are also sure that the government will support all businesses that are not harmful to the public, and this can be used as a basic principle that led to Jack Ma developing interests in investing in China. The security systems in the country are stable, and this is influenced by improvement in technology in the country which enables the security agents to detect, investigate and arrest criminals. The military of the country is strongly equipped with strong and superior weapons to protect the country from internal and external attacks. The aspect of stable security provides a better background for businesses, and this follows the fact that business environments need to be secure to the investors, clients, and property. Jack Ma used the opportunity presented by the security of the country to launch his company and invest a huge amount of money without the fear of theft. Additionally, the nation specializes in agricultural products that are not only produced for domestic use but also for exports. The country has various tourism attraction sites which boost the economy of the country due to the increased revenue that the country collected from the tourism sector. This offered Jack Ma and his group a better chance to capture clients of their software or internet applications in the country to enhance business (Stokes, Wilson &. Mador, 2013: 37). The country conducts international trade, and this observation is supported by the fact that the country exports some of its agricultural products, chemicals and minerals among other commodities. At the same time, the country imports some commodities for trade. This implies that the country is open for foreign relations and trade. The trade barriers in the country are reduced as people are free to trade in the country provided the products they trade in are legal and accepted by the cultures of the country. The country signs trade treaties with developed countries such as U.S.A. as a way of boosting its economy. The administration of the country understands the need of allowing foreign investments in their country, and to the lives of common Chinese. The country is evident to be participating in regional economic integrations, and this is facilitated by the reduced trade barriers and policies between the country and the neighboring territories. This understanding was an opportunity to Jack Ma because his business was no to benefit just the local investors but also the international community through e-commerce and related internet supported businesses. On the other hand, U.S.A. is also a democratic country where the leaders are selected on the rule of the majority. The political systems are well defined, and the security systems are tight and strong. For instance, the fact that Slim was one of the sponsors of President Obama during the campaign suffices to show how political systems may influence businesses (Porras, 2007: npag). Currently, the government of America is sponsoring mobile phones to the poor, and since they are originating from the companies managed and run by Slim, an illustration that government of the country works together with business enterprises. Considering the aspect of the social and cultural environment, different cultures define the norms and beliefs that are followed by the American. These Mexican cultures enable them to make decisions that are ethical, moral and acceptable by the larger community and the world at large. Mexicans are active in various cultural activities such as sporting, dancing, and traditional celebrations. This loyalty to the traditions and cultures has enabled Mexico to be selected among many to host various international sporting events. The technological sector of USA can be considered to be increasingly advancing due to the innovations that are continually made in the nation. The fact that it has close trade and developmental ties with China is enough to pose the argument that its technological developments are greatly facilitated and supported by China. The infrastructure of the country is well defined with smooth and effective transport and communications systems in various parts of the country. Industrialization level in the country is high, and this is supported by availability of raw materials in the country such as agricultural products and mineral commodities. The population of the country is high, and this allows the industries to have access to cheap and readily available labor. Technological advancements in the country have also enabled industrialization because it facilitates to skilled manpower and quality machinery that contribute to the production of high-quality products and services. Information Communication Technology (ICT) is greatly improved in the country, and this is supported by digital improvements and innovations that are made in the nation to support social, political, economic and religious sectors. The aspect of having technologies that are supportive to businesses such as those evident in U.S significantly helps companies and corporations such as those owned and managed by Slim. However, it is through integration of appropriate entrepreneurial skills and experiences that Slim is able to take advantage of the opportunities that are revealed in his line of business to attain competence and proficiency. It is essential therefore to consider some of the theories of entrepreneurship and how the two investors utilized them to attain competence and success in their business ventures. Economic Theories of Entrepreneurship These theories were established in the 1700s by individuals who had investigated various issues involved in small businesses, and the risks that are expected from the business practices. The theories tend to be criticized for failing to recognize the dynamic, open nature of systems, and more importantly ignoring the unique nature. The theories are also criticized for downplaying the diverse context where businesses take place. However, the two investors are not observed to negative perceive the economic theories because they initially investigate the economic gaps that are present in the business environment and invest in them. They value the element of open nature of market systems and greatly utilize the nature of entrepreneurial activity, and this has greatly enabled them to beat their competitors in their industries, through in one way or another their major business focus is on the line of technology (Nathaniel, 1979: 23). There are various organizations in the countries where the investors established or aim at establishing their businesses, and the upcoming companies in these countries may be tempted to produce a product using different brand name. Currently, the products and services offered by companies run by the investors might face competition from organizations in the industry that produce substitute products because the firms’ products and services are unique. There are numerous organizations in U.S.A. and China that are specialized in production of technological products, and the fact that there is increase in the number of social events in the countries that allow foreign consumers to have access to their products is enough to argue that the two investors have significant opportunities for expansion. It is also observed that the competitors combine both locally-based and foreign organization, and this is supported by the observation that U.S. and China technological organizations are also targeting the business events to elevate the sale of their products because the targeted population will be high. These foreign competitors of both investors integrate production of high-quality products and integration of appropriate marketing strategies as their entry strategies. This implies that though the two individuals are considered to be the richest people in their respective countries; they face competition from other companies which are emerging in their industries. Resource-Based Theories These theories strategize in drawing evidence-based argument regarding the success of the entrepreneur with respect to the resources or capital that they use initially to start businesses. Jack Ma was just an English teacher, an indication that the capital that he had to start his business was not enough (Praag, Mirijam & Hans, 1995: 513-40). In order to address the financial issue, he collaborated with his wife and other 17 friends to contribute funds to start up a company. This is an indication that the resources that an individual has, determines the nature of businesses they launch and the region of reach of the commodities offered by the firms they start. Considering the position of Jack Ma’s Companies in Chinese market on internet and technological services, it can be argued that the Ma integrates several practices that help the firms gain competitive advantage, and consequently fit in new markets. The company produces high-quality internet services, which are advantageous and beneficial to the consumers who make their purchases of products and services online not only in China, but also to other parts of the world. In China, due to advancement in technology, it is expected to integrate ICT in its product promotion, and this enables the Ma’s company to reach numerous consumers in China since most of the targeted population in the country is IT literate and use the internet frequently. Therefore, the marketing strategies used by Ma’s company are better as compared to those of the competitors, and this allows it to fit in the Chinese technological market (Soota, 1998: 220-226). This situation of Jack Ma’s utilization of the resource-based theory is similar to that of Carlos Slim, whose initial starting capital for his businesses was not huge, but after saving and getting financial help from financial organizations, he was able to establish and expand. Psychological theories These theories focus in the individual and mental element of the individual entrepreneur. The theory offers entrepreneurs a notion that they can succeed in whatever activity they get involved in, thereby positively driving them into action. People who have strong internal locus of control influence the external world positively, thus enabling them to utilize their activities positively. The personality characteristics are ranging from imagination and flexibility to optimism drive entrepreneurial character and performance. The clients of commodities offered by companies run by Slim and Ma are obliged to understanding the type of a product from the advertisement techniques that the companies use. Consumer decision-making is greatly influenced by the promotion strategies that organizations use to market their businesses, and since the companies integrates appropriate marketing strategies, the consumer behavior is expected to align the company’s expectations. Consumer decisions are directly influenced by the psychological perception of the consumers. Differentiation of the products and services (businesses) is the major segmentation strategy that the investors use in introducing their businesses in the new markets. This follows the legal authorization of the use of the trademark of the businesses, an indication that no other organization is allowed to produce the same kind of products or services as the companies. This guarantees the investor's continuity and reduction of competition in the home country and across the world. Sociological/Anthropological Theories The sociological theory creates an understanding that for entrepreneurs to be successful, they must understand the social networks and ethnic identification factors among other factors that affect businesses such as social-political environment factors. On the other hand, the anthropological model supports the fact that business people need to investigate and understand how cultural forces such as social attitudes and behaviors of entrepreneurs. It is observed that the Slim’s andMa’s business strategies are directed towards gaining market share, and this follows the fact that there are other emerging companies and organizations in the technological industry that are bringing competition to their firms. The fact that the investors reaches various clients from different regions in their home countries and across the world is enough to argue that there are some organizations which are attempting to try producing the same technologies is an indication that there is high chance of competition. The sale of the product is greatly determined by various elements such as the cultural and social dimensions, and the marketing techniques that the company uses. The quality of production and product promotion approaches from both Slim’s and Ma’s organizations are high, and this contributes immensely to the increased sales that are evident to the product as compared to other companies specializing in the same industries. The product promotion and marketing techniques that the investors use to reach its targeted clients and customers with the products are effective and efficient. This follows the observation that the company is able to reach consumers and users from different parts of the world. This is achieved due to the understanding that the investors have towards the influence of the marketing and promotion approaches to the society and the community expectations from such organizations managed by the investors. With the advancement in technology and realization of the importance of ICT in promotion of products, the investors are able to reach the targeted populations with relevant information regarding the product and any changes made if any. It has also been confirmed that the advancement in technology in the production and technological sectors has significantly helped in the improvement of the quality of production among other factors. Technology in China and U.S.A. is in favor of the investors as compared to technology in other countries, and it is the obligation of the managers to weigh various issues between the nations apart from technology. It is through understanding the psychological theories that the investors have been able to understand various needs of their targeted consumers or clients, hence attaining competence and proficiency in their activities. Opportunity-Based Theory According to the opportunity-based theory, entrepreneurs succeed at seeing and taking advantage of possibilities created by the social, technological and cultural challenges. When business people realize the needs of the larger population of their targeted groups, they tend to offer services and products that meet their needs. Considering the situation presented in the operations and performances of Slim and Ma, it can be argued that the major focus of businesses is to increase the sales of products and services, and more importantly reach various markets across the world where the sale of the product will be higher (Dolan, 2012: npag). As for-profit investors, Slim and Ma have genuine and evidence-based objectives which are specific, measurable, achievable, realistic and time framed. In entering any of the new markets that the following are some of the objectives that the investors share in common and which drive them to attain competitive advantage over their competitors, thus making them the richest people in their respective countries and across the world. These objects are directly connected to the opportunity-based theory because the investors investigated the business gaps and opportunities and invested in fixing the gaps: a. The investors aimed at achieving highly defined and concrete market share from the markets that they entered. This was possible through comprehensive analysis of the markets in the countries that the investors intended to enter; U.S.A. and China. b. They focused on long-term marketing in the sense that once the investors entered the markets, they should focus in expanding and growing in the same country. The limitation of short-term marketing is that once the consumers like a product, they intend to keep using the product and in case the producer’s focus is short-term planned; the consumers will be left graving for the product. It is essential therefore for the organizations to consider integrating long-term plans for any markets that they finally enter (Kummerle, 2005: 42-49). c. Slim and Ma aimed at attracting wider range of target groups irrespective of age, class or location. This was achieved through integration of product differentiation as a way of making the product and services unique and attractive to the targeted groups. d. The investors strategized on product and service differentiation, price regulation depending on the production costs and the income of the targeted groups, and integrating ICT in marketing and promoting the product. Implementation of these measures not only acted as competitive advantages for the investors, but also boasted the sale of the products and services greatly. The success of the investors and increase in sale of the product or service they offer is determined by different factors, and these are with inclusion of the promotion strategies used and the managerial strategies that are incorporated in the organizations producing the products and technological services. It has been observed that internal environment factors of organizations such as the financial stability of the firms and the marketing approaches used significantly influences the performance of the firms. External environmental factors such as the competitors and legal systems have also been confirmed to have severe influence to the operations and performance of firms. Generally, there are numerous entrepreneurial characteristics that are common between Carlos Slim and Jack Ma, and these are with inclusion of passion and motivation. Both never got bored by their passion, and they stayed restless until they achieved their dreams. They took high risks in the sense that they were ready to dive deep into a future of uncertainty. Ma and Slim possessed the character of hard-work and disciplined dedication, and this is confirmed the confidence and dedication of their projects. They also have the trait of adaptability and flexibility because irrespective of the challenges that they encountered in their initial stages of conducting businesses, they never gave up. They are good planners, and are evident to be individuals who are always prepared to take the exit. References Coster, H. 2007. "Carlos Slim Helu Now World's Second-Richest Man". Forbes. Dolan, K. 2012. "The World According To Slim". Forbes – Billionaires 2012 Kummerle, W. 2005. “The Entrepreneur’s Path to Global Expansion,” Sloan Management Review 46: 42-49. Murmann, J. P. 2003. Knowledge and Competitive Advantage: The Co evolution of Firms, Technology and National Institutions. New York: Cambridge University Press, p. 56 Nathaniel, L. H. 1979. “Entrepreneurship and Economic Development: The Problem Revisited,” Journal of Economic Literature 17: 23 Porras, A. 2007. "Mexico's wealthiest mogul spurs controversy". Hispanic Link Praag, C. Mirijam, V. & Hans, V. O. 1995. "Determinants of Willingness and Opportunity to Start as an Entrepreneur," Kyklos, 48:4, 513-40 Soota, A. 1998. "Information Technology: The Knowledge Industry," Independent India: The First Fifty Years, Delhi: Oxford University Press, 220-226. Stokes, D., Wilson, N. &. Mador, M. 2013. Entrepreneurship. New York: Willy & Sons, 37 Read More