Jeff Bezos Entrepreneurship - Case Study Example

EBP Introduction Entrepreneurship is defined as scanning the environment to identify an opportunity in the market, taking risks to venture in the opportunity, operating and managing the business and ensuring its survival and future inflows of income (Carsrud and Brannback, 2009). Hence, an entrepreneur is one with all characteristics ranging from the business idea to its inception, risk taking, starting, and managing through to survival of the business. Not every person who is in business qualifies as an entrepreneur. In our discussion we have two great entrepreneurs. They are Jeff Bezos and Sam Moore Walton. We will also consider other two entrepreneurs we have discussed in class namely Peter Terret and Bill Day. Both of them have also been able to contribute significantly to entrepreneurship. Jeff Bezos background Jeff Bezos was born in Albuquerque, in New Mexico. He lived in Cotulla in a ranch which his maternal grandfather had acquired after living in Texas as a settler. The grandfather was regional director of the Atomic Energy commission in Albuquerque before he retired to the ranch. In his early life, Jeff displayed his abilities in mechanics as he even tried dismantling his crib with a screw driver (Kelly, 2001). His scientific abilities were evidence at one time when he rigged an electric alarm to keep his younger siblings away from his room. His scientific interest increased when he went to high school and fell in love with computers (Gibbons, 1994). He developed through to the university where he graduated with a degree in computer science and electrical engineering. Jeff is the founder of the famous Amazon.com. Jeff Bezos’ behavior Jeff Bezos’ behaviour is one that is paramount in every successful entrepreneur. Jeff was, very observant and had an eye or detail while he scanned the environment around him. This is one of the major and initial characteristic of entrepreneurs. He observed the increasing usage of internet and he saw an opportunity which he started exploring. Jeff was analytical in nature and believes that it is not wise to just jump to any opportunity that comes without a complete analysis of the pros and cons. Jeff reviewed and analyzed the top twenty mail order businesses and evaluated them to conclude which one could be conducted more efficiently over the internet than the ordinary methods which were in use at that time. He is a forecaster. He starts his business by testing the feasibility and at the same time planned improvements in the business. For example, he first had to set up a site and then run it. The testing showed that it worked well across various computer platforms (Gibbons, 1994). He was profit oriented and sought to increase market share as quickly as possible. He also expanded his business to a big store which he would call the world largest anything store not only for books but for all things - Wal Mart. Jeff Bezos’ source of motivation Jeff Bezos’ needs and motivations include his interest in the computer industries. From his early child life, he showed great interest in mechanics and later in his high school he fell in love with the computers. He is also motivated by the vast knowledge in the field of computers and internet. The need and passion to apply his knowledge in a field has definitely pushed him to great professional heights. After the business is set and stable he continues to be motivated by the need to maintain status quo and the reputation he has build for long (Kuratko, 2008). Jeff’s entrepreneurial essence is motivation that drives him towards success and hunger for excellence which he achieves owing to his wide knowledge of the computer industry. Sam Moore Walton background Sam Moore Walton was born in Kingfisher, Oklahoma in the United States of America. Sam majored in economics when in college and later worked as ROCT officer before he left to join the army in preparation for world war two. It is after the war that he purchased a variety store named Ben Franklin which marked his start of business life. Ultimately he founded Sam-Malt stores. Sam Moore Walton behavior Sam Moore Walton behavior is one of a business minded investor. To start his business he borrowed some money from his father in law and then added to some he had saved from the army during the world war two. Walton is also knowledgeable in business and entrepreneurial skills. He is an observer and comes up with a competitive edge in the market by making sure that he sells at lower prices than others to attract customers (Brannback and Carsrud, 2009). His stores also remained open even much later than other stores especially during Christmas season, indicating clear business acumen. He is also calculative as he makes merchandise by buying in volumes which allowed him to bargain for discounts and low cost. This would later translate in huge profits due to increased sales. Walton is big hearted and determined. He does not associate his success with circumstances and he stands high above all of them. At one instance after the landlord refused to renew his lease with intentions to buy the business which he later did, Walton started his business else where and due to his business skills became successful even in a challenging scenario. Sam Moore Walton’s source of motivation Sam Moore Walton’s needs and motivation is highly exhibited by his desire to move out of poverty and conquer the difficult life he had experienced in his early years when he was young.. Walton was brought up in a family that was not well to do. At one time in his college life he engaged in odd jobs just to up keep himself and the family (Kuratko, 2008). The desire to become rich motivated him to work even harder by borrowing and managing money for business. His business skill supported this motivation. .The profit that he received from the business motivated him to push regardless of the conditions. Hence, the desire to become rich was the primary motivator and as he started clocking profits, they in turn motivated him further to take bigger risks and become a successful businessman. Entrepreneurial essence of Walton and Jeff On the other hand, Walton’s entrepreneurial essence is totally different from Jeff’s. In his case he tried to struggle out of poverty which has been perpetrated by his family background. He need to make substantial profits to get out of the situation. Thus, the desire and driving force to become rich coupled with application of his business skills indeed qualify as the entrepreneurial essence. In contrast with Jeff’s self actualisation entrepreneurial essence Walton’s essence stems from necessity, a condition of poverty that he was not comfortable with and wanted to change. Difference in their decision processes In Jeff Bezos case, the decision process was complex and long because it started from an idea in the mind, led to observation of the environment and led to testing the options. (Bornstein, 2004). His decisions were based on expertise and he was personally involved with all aspects of business. For example he wrote business plans to acquire legal permits for business. On the other hand, Walton’s decision processes is not complex as compared with Jeff’s’. The business that Walton started was already in existence as opposed to Jeff’s’. Walton wanted to improvise processes by playing on volumes and making profits, there by maintaining the fruitfulness of the venture. However his decisions were futuristic because he worked out projections for future profit and viability of the business. Aspects of personalities The personality of the entrepreneurs has a great influence in the decision process. According to Koller, in his book ‘Risk Assessment And Decision Making In Business And Industry’, personality of the decision maker include experience, skills, education level, reaction to different situations that influence the decision making process (Bornstein, 2004). Jeff’s decision making process though long and complex was carried successfully owing to his knowledge in the field of computer technology and personality traits like originality and innovation. Walton’s personality was influenced by challenges like poverty and deprivation that made him a hard player. Probably because of this, he did not take as many risks as Jeff did, and instead ran existing businesses and excelling. Comparison of the entrepreneurs Jeff and Walton Jeff and Walton have some common characteristics which have made them successful in their business. They have the know-how to venture into businesses. Jeff used his technical knowledge in computer science to start his business which later turned into Amazon.com. Walton used his observation skills to run an already existing business and have a competitive edge in the retail sector in the name of Wal Mart.(Welch, 2004). Both are courageous and aggressive. They venture into business with great passion to succeed regardless of the situation (Pech, 2009). Jeff is not intimidated by complex and long decision process, and rationalizes every business venture. Likewise, Sam Walton was courageous and opened his business elsewhere and still became successful even when the land lord refused to renew his rent in a bid to take the business. (Bornstein, 2004). Both of them have a background that can be attributed to the kind of businesses their venture into, almost like a genetic connection. Jeff’s grandfather worked as director in atomic energy commission, a field related to science which Jeff ventured into. Walton’s father dealt with mortgage business a field of business that seems to be similar to retail business that Walton plunged into. (Pech, 2009). Contrast between Jeff Bezos and Sam Walton Jeff and Sam are both successful entrepreneurs, but great differences exist between them. Jeff seems to be more of an entrepreneur than Walton. The former started a new business from scratch by coming up with a new original idea while the latter purchased an existing business. Jeff fits better in the definition of an entrepreneur than Walton. The driving force to business also brings their differences. Jeff can be said to be driven to the entrepreneurship by the need for self actualization in the field of his interest in computer science, while on the contrary Walton’s driving force is from his dire need and desire to eradicate poverty which has befallen him since childhood (Pech, 2009). Their financial capabilities also display their difference. While Walton’s entrepreneurial decision and process is affected by financial constraints, making him to borrow from his father in law, Jeff’s situation is opposite because he had money from his employment and also big support from his family. A difference is also brought by their creative capabilities (Pech, 2009). Jeff’s creativity is in computer science lands him in foundation of an internet firm Amazon while Walton’s creativity in business allows him a firm base for business which became Sam-Malt stores, now Wal Mart. Contrast and comparison with Peter Terret and Bill Day Jeff’s case compares well with Peter Terret’s, the founder of the Rappidmap. Their entrepreneurial capabilities emanate from combination of technology and individual capabilities and exploitation of the opportunities in the environment. They are both knowledgeable in the field of computer science and have original business ideas. They contrast with Sam Walton and with Bill Day, the founder of the Sea Work Company that ran businesses based on their business management skills opposed to the former ones who capitalized on their technological knowhow (Gibbons, 1994). Although Jeff and Terret have original business ideas, Walton and Rapid map are pro at unique leadership skills and hence consider relationship with the employees, fundamental for their success. (Pech, 2009). There are several entrepreneurial theories that explain the entrepreneurs and their characteristics. The Great Person Theory asserts that leaders are born and they have what it takes like energy, self drive persistence among others for business start ups (Cunningham and Lischeron, 1991). Jeff and Peter Terret fit well in this theory because of their inherent business interest from childhood. The Psychological Characteristic Theory postulates that needs acts as drivers and as people tries to satisfy them they become entrepreneurs. Every entrepreneur has a drive. Walton fits in this theory because he had the need to combat poverty and he did so through business ventures. The Classical Theory Of Entrepreneurship asserts that innovation is the most important aspect in business, as observed in case of Jeff and Terret. (Krueger, 2002). The Management Theory asserts that control direction and organization are the major characteristics. Bill Day is a good example because he focused on human relationship that motivated performance and participation of employees. Leadership theory postulates that leaders have abilities to make people them adapt to their directives for success in business. For example, Bill Day manages to capture his employees’ minds by influencing them towards production of the firm. He brings out the correlation between trust build in employees and participation and the final performance which is eventually realized. Please (Pech, 2009). The Entrepreneurship Theory asserts the abilities to identify the competitive edges for success. Walton had strategies to cut costs, play on volumes and make profits and hence is a perfect fit for this theory. Conclusion The stories of the above entrepreneurs seem to be in line the mythical entrepreneurial profile. Passion for success combined with knowledge, experience, technology, and skills, conducive environment are important elements required. The need to scan the environment to test feasibility of a venture or to know what are the limitations of the market are other factors that need to be considered, so as to launch products/ services to satisfy customer needs. The constraints by finances are not seen as a major impediment as far as one has the ability to deal with changing circumstances and make profits. Recommendations For successful entrepreneurship one should first evaluate one’s capabilities to be certain of his area business interest. Jeff and Peter Terret serve a good example as their interest and capabilities are the foundations of their business success. The anticipating entrepreneurs should not put their family background as a factor to consider for success, in their business like evidenced by Sam Walton. Entrepreneurs to be should not be discouraged by the trials and failures that face business before it becomes stable like the case of Sam Walton. The anticipating entrepreneurs can focus on people management for long term success of business like Bill Day, who considered people as the greatest resource and treated them well ensuring trust, participation and performance. (Cunningham and Lischeron, 1991). Finally the anticipating entrepreneurs should know that worst regret is for failing to try an idea in mind and not failing to succeed when the idea is implemented. Like evidenced in the above cases the entrepreneurs never dismissed the slightest ideas but believed and capitalized on them and they succeeded. References Bornstein, F. (2004). Changing the world: How entrepreneurs use the power of new ideas. Oxford: Oxford University Press, (1) 215-265 Brannback, M and Carsrud, A. (2009) Understanding the Entrepreneurial Mind. Springer Press. Cunningham, B. and Lischeron, J. (1991). Defining Entrepreneurship. Journal of Small Business and Entrepreneurship. Canadian Council for Small Business & Entrepreneurship (2) 12 Gibbons, M. (1994). The origin of knowledge of the mindset in entrepreneurs. London; Thousand Oaks Press, (2) 67-72 Kelly, G. (2001). The entrepreneurial mindset. New York: Norton, (1) 46-71 Krueger, F. (2002). Entrepreneurship: critical perspectives on business and management. Taylor Francis, (2) 98-152 Kuratko, D. F. (2008). Entrepreneurship: Theory, Process, and Practice. Cengage Learning, (2) 47-82 Pech, R. (2009). Entrepreneurial courage, audacity, and genius. Sydney: Pearson Education Press Welch, (2004). Capital Structure and Stock Returns. Journal of Political Economy. University of Chicago Press, vol. 112(1), pages 106-131 Read More