Entrepreneurship Innovation and New Ventures - Assignment Example

What is entrepreneurship? Entrepreneurship is the practice undertaken to venture into new business or the act of reviving existing businesses with an aim of capitalizing on the newly discovered opportunities. This practice is driven by an entrepreneur who owns a firm, ventures into it and focuses on its development. Entrepreneurship is considered to be a tough proposition since most of the new businesses do not take off. As a result, entrepreneurial activities differ on the basis of which type of business involved in. The act of entrepreneurship is normally associated with uncertainty, particularly if it concerns with the creation of something new that has no existing market. The ability of entrepreneurs to embrace opportunities irrespective of the available resources is perceived to be a significant aspect in entrepreneurship. However, successful entrepreneurship requires the business owners to be resourceful and continuously search for ways of obtaining the needed resources such as capital in order to achieve the situated objectives. Majority of the management experts support that a vast number of entrepreneurs are driven by the desire to control their own life, and thus limited to entrepreneurship. Today, people are well-informed about the importance of entrepreneurship as it can examined that they are no longer confining themselves to a single business, but emerging as serial entrepreneurs. Although, entrepreneurship involves the ability to come up with new businesses, it can stimulate both innovation and invigorate the local markets. However, the challenge in developing countries remains to search for the aspects of entrepreneurship that can meet the various needs of the poor (Shane & Venkataraman, 164). Why are existing entrepreneurial opportunities discovered and exploited by certain individuals (entrepreneur) and not by others? Opportunity recognition is a basic research concern in entrepreneurship development. It is has been considered as the main entrepreneurial capability. Furthermore, the recognition ability is perceived to be a source of entrepreneur’s competitive advantage as well as a significant component in entrepreneurship education. The entrepreneurial opportunity recognition and its associated exploitation mechanisms are the key constructs that fall into the unique domain of entrepreneurship, and thus should be viewed as the central focus of business research. The primary activity and goal of entrepreneurship is the creation of new venture and new venture that is presented as a process. Therefore, opportunity recognition should be at the initial stage of the entrepreneurship process. Empirical study indicates that the capability to identify opportunities is associated with the human capital variables such as education, individual work experiences and entrepreneurial experience, previous knowledge of the customer problems as well as experiential knowledge (Ucbasaran et al., 68). This ability is also a cognitive task that enables some people, though not others, to effectively identify business opportunities to venture in. Such Individuals have the capacity to identify opportunities because they uniquely possess diverse forms of knowledge or the human capital that aid them in venturing into the new business of their choices (Venkataraman, 132). Which entrepreneurial traits suggested from the behaviorist approach have received wide attention in the literature and show a high level of validity? Based on the behavioral approach and exploration of theoretical issues associated with opportunity recognition, the traits of serial entrepreneurs is highly considered relevant due to the fact that opportunity recognition has been considered as a key trait that most serial entrepreneurs appear to be very competent at. Such entrepreneurs normally become skillful towards act of opportunity recognition. They become more “fine tuned” in order to identify the various business opportunities in a more consistent way than inexperienced entrepreneurs. This implies that serial entrepreneurs have the potential of knowing how and where to acquire useful information, make interpretations as well as analyze such information so as to come up with sound business decisions, and thus decide on when and how to perform appropriately (Lumpkin, Hills & Shrader, 86). What are the different components of creativity? (Creative thinking skills, knowledge, motivation) The components of creativity are at times generalized as personal, motivational, social or environmental, affective and cognitive that includes the basic knowledge, attractiveness to complexity, perceptiveness, originality and open-mindedness. Effective components of creativity should include elements such as risk-taking, curiosity, humor and the ability to be independent (Taplin, 244). The major elements of creativity are interrelated, and a result each of them has a direct influence to the other as illustrated below. From the above illustration, it can be analyzed on the basis of innovation and creativity sources that explicit decision on creativity requires meta-cognitive awareness of a creative process so as to enhance the long-term creative outcomes. Therefore, motivation as additional element to the basic knowledge as well as thinking skills is emerges to be an essential aspect to creativity. This implies that a creative person is fundamentally motivated by the work itself rather than external recognition driven by a passion for his or her field of entrepreneurship. What are the factors that can affect creativity? (Encouragement of creativity, autonomy, resources, pressures, mental block) The get-up-and-go and persistence are the key factors to creative accomplishment. This suggests that an individual’s internal sense of the self and capability to manage the ups and downs of faced in the business, cutting-edge thinking are as well significant components of creativity. However, creativity cannot be easily achieved, but largely relies on intrinsic motivation and on people to be enthusiastic, inspired as well as knowledgeable (Wickham, 26). Among the environmental factors that affect creativity include encouragement of creativity that involves the open flow of information and the support for some new ideas at the entire levels of an organization. Autonomy within daily conducts of also affects creativity in terms of individual ownership and control of work. In addition, Resources such as information and the available materials affects creativity process. Finally, pressures both positive and negative challenges in relation to the workload pressures have an effect on creativity as illustrated below. What do creativity, innovation and entrepreneurship have in common? The entrepreneur's "secret" for value creation within the marketplace involves the application of creativity and innovation in order to solve problems as well as to exploit opportunities that people create every day. As a result, entrepreneurs are required to be always on the guard against paradigms or the preconceived ideas on the really understanding of the world. This is in terms of how it should be as well as on how it is expected to operate since they are hindrances to creativity. Successful entrepreneurs normally go beyond their conventional wisdom as they ask themselves the "Why not ...?" questions. This suggests that success even during survival within the existing fiercely competitive and global environment calls for entrepreneurs to strike their creativity as well as that of their respective employees in a consistent manner. Innovation is the capacity of entrepreneurs to apply some creative solutions to various problems and opportunities in order to improve or enrich people's lives. In this case, entrepreneurship is summarized as the result of a more disciplined, methodical process of applying the technique of creativity and innovation to the various needs and opportunities within the marketplace (Wickham, 46). What are the different of incremental innovation and disruptive innovation? Incremental innovation is basically the subsequent version of either a product or service. The incremental ideas are comparatively easy to obtain. As entrepreneurs edge continually closer to the leading radical end of the continuum, they awaken the disruptive ideas that significantly transform an industry or a given marketplace. In addition, forces most competitors to adjust their varying views of the contemporary world. This identifies disruptive ideas as those that cannibalize entrepreneurs’ existing products, marketplaces or radically change their market as well as industry. Most of the Incrementalists examine that disruptive innovation is on no account ready for the conventional until the enduring implementers come along. On the other hand, disrupters argue in disagreement that non-linear discontinuities drive society forwards in such a way that implementation alone would by no means be in a position to operate (Lyons, 26). What are the different legal structures a business can operate under and how do they differ from one another? (Sole proprietorship, partnership, company) The two commonly faced issues by start-ups or entrepreneurs are intellectual property and legal structure of a business. A number of various business structures with varying and important aspects are in existence such as sole proprietorship, general partnerships, limited liability companies and corporations. Sole proprietorship is the simplest of the legal business structure that is owned by one person and incurs fewer expenses in order for it to be set up. General partnership is practiced as an association between two or more individuals operating a business to seek profits. It has a pass-through taxation with owners personally directly liable for any debts of the business. However, corporations are the most common type of business entity among the larger companies. What is the different between a patent, a trademark and an industrial design? A patent is defined as a grant provided by the federal government to an inventor that offers him or her with exclusive rights to venture into a business for a period of 20 years. On the other hand, a trade is a distinctive word, trade dress or simply a symbol that a given company identifies itself with its products as well as distinguishes them from other goods and services, serving as a company’s signature within the marketplace. Industrial design is related to the visual features of configuration, ornament or the decorative elements of a company’s object, purposely aimed at catching the eyes of viewers. Though industrial design office may not evaluate the aesthetic quality of various characteristics, it assesses its originality. Which is better- debt or equity funding? Give reasons for your answer. (Focus on debt & equity in entrepreneurship and their balancing) The entrepreneur finds him or herself with two basic choices when considering the source for financing the new business. This includes debt or equity as well as pledging a part of an individual's soul or simply giving away a small portion of. A number of the new businesses require the long-term debt or enduring equity capital in order to support main expansion as well as anticipated rapid growth. Borrowing or debt is advantageous because it is a comparatively a simple process that can be arranged. For instance, it does not involve a great deal or much of time nor dilute equity ownership. Research indicates that successful entrepreneurs make use of the Combinations Unlike the oil and water, borrowing or debt, equity, the self-funding as well as external funding is well mixed. It becomes apparent that true entrepreneurs can easily finance the start-ups effectively with debt than equity, although some distinct disadvantages exist. For instance; if entrepreneurs negotiate for some extended credit terms with various suppliers, there is a restriction on their flexibility to make a successful negotiation on prices. As a result, top entrepreneurial companies greatly make use of varying combinations of both debt and equity in determining the most advantageous source for a particular stage of growth in a business in which they are financing. They aim at creating increasingly superior valuations or their profit structures (Lyons, 56). What are the elements of the operations process? (Input> transformation> output) Operations management process concerns the manner in which organizations produce both goods and services. This implies that the essential nature of every operations management is to organize the process in order to get things done or objectives achieved. An operation is defined as a transforming process that converts a set of resources or inputs such as raw materials, customer and information into various services and goods or outputs. The input resources are normally transformed into final goods and services through other renovating resources. Inputs Outputs What are the different dimensions of business growth? (Financial growth, strategic growth, organizational growth) Financial growth suggests that a commercial entity requires both costs and investments to achieve profits or turnover. Therefore, measuring a venture’s success increases within what a business owns in terms of assets and value of a business. Strategic growth concerns the manner in which a business leverages most of its capabilities and resources. It also identifies how a business develops own capabilities in order to exploit a given opportunity. Strategic growth, in addition shows the tangible and intangible assets required by a business so as to create more sustainable and competitive advantages. On the other hand, structural growth changes within an organization of its venture’s internal system. This may take place in the managerial roles and responsibilities, communication links, reporting relationships as well as resource control mechanisms (Wickham, 36) What are the standard exit strategies an entrepreneur can use to harvest a business venture? An exit strategy within a business world refers to how an individual person or a given entity is expected to leave a firm or part of it behind through selling, liquidation or simply complete demolition of an entire organization. According to Lyons, Thomas (2008, 34) emergence exit, selling versus acquisition, ending ownership and brand type are the key standard exist strategies an entrepreneur can possibly use to harvest a business venture. Harvesting a business venture is as much about choosing an exit strategy as deciding when to exit. Explain. An exit strategy needs to be part of every business plan at its onset. It is aimed at keeping a firm from losing its money on a given product that appears to be no longer lucrative. Therefore, creation of a good exit strategy is considered a responsible choice particularly if an item costs more than it profits. As a result, experienced strategic mangers or entrepreneur’s best identifies such times through examining the numbers as well as making their choices based on the fiscal results. This enables them to harvest a business venture of their own choice to maximize their profits and gain a sustainable competitive advantage. Works Cited Lumpkin, G.T, Hills, G.E. & Shrader, R.C. Opportunity recognition (pp. 78-89), in Welsch, H. (ed.). Entrepreneurship: The road ahead. London: Routledge. 2004. Lyons, Thomas W. Exit Strategy: Maximizing the Value of Your Business, 3rd ed. Cape Coral, FL: Sales Gravy Press, 2008. Wickham, P.A. Strategic entrepreneurship, Chapter 20, Prentice Hall. 2001. TAPLIN, S. Serial entrepreneurs: An in-depth look at the phenomenon of habitual entrepreneurs (pp. 240–252), in Welsch, H. (ed.). Entrepreneurship: The road ahead. London: Routledge. 2004. Ucbasaran, D., Westhead, P., and Wright, M. The Focus of Entrepreneurial Research: Contextual and Process Issues. Entrepreneurship Theory and Practice, 25, 57-80. 2001. Venkataraman, S. The Distinctive Domain of Entrepreneurship Research: An Editor's Perspective. In J. A. Katz (eds.). Advances in Entrepreneurship, Firm Emergence and Growth. Greenwich, CA: JAI Press, 3, 119-138.1997. Venkataraman, S. & MacMillan, I.C. Choice of Organizational Mode in New Business Development: Theory and Propositions. In D.L. Sexton and R.W. Smilor (Eds.), Entrepreneurship 2000, Upstart Publishing Company, IL: Chicago, 151-166. 2000. Read More