Marketing & Entrepreneuriship - Essay Example

Introduction Economic development can be directly attributed to the level of entrepreneurial activity in a country (Schumpeter 1931; Bird 1989 as cited in Nieman 2003). The essence of entrepreneurship is recognizing and creating opportunity in the market. In order to be successful in a given business venture, an entrepreneur must be skilful in analysing and scanning the environment to establish a gap in the market where there are consumer needs that are not adequately satisfied. In other words, an entrepreneur must add value and needs to be creative by creating an organisational structure that is geared towards needs satisfaction and survival (Lamb et al 2008). It is the duty of the entrepreneur to adapt a marketing strategy that effectively utilises the marketing mix to appeal to a specific group of potential buyers in the target market. Against this backdrop, this essay seeks to critically evaluate factors which determine entrepreneurial success in light of relevant literature and this constitutes the first part of the essay which is divided into two sections. The contributions and limitations of Sarasvathy’s work on effectuation and Burn’s model of start up influences will also be evaluated and the second section is concerned with evaluating the GET test. Recommendations about how to develop and create business ventures as well as enhancing employability will be given at the end. Task 1a In order to critically evaluate the factors which determine entrepreneurial success, it is imperative to begin by explaining the meaning of entrepreneurship in order to gain a clear understanding of the whole concept. Entrepreneurship is loosely defined as the emergence and growth of new businesses (Nieman et al 2003). Timmons (2000) believes that entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled. Small to medium businesses are the dominant forms of business developed by entrepreneurs in the economy and as going to be discussed below, the success of this kind of business can be attributed to many factors. For instance, venturing into mobile business which offers fast foods is a good example of entrepreneurship given that an entrepreneur can capitalise on the opportunity of satisfying the needs of the customers who do not wish to visit restaurants. However, it is not an easy feat to successfully operate in this venture without taking into consideration some of the following factors. Creativity and innovation are the major factors that can lead to the success of small business. Creativity can involve the adjustment or refinement of existing procedures or products, the identification of opportunities and the identification of solutions to problems (Bird 1989). Basically, creativity involves new ideas and every person who establishes an enterprise, adds value and strives to ensure that the enterprise continues to exist and this person is involved in economic creation and chances of succeeding in that venture will be very high. On the other hand, innovation is the utilisation of creative abilities when establishing something. These joint factors immensely contribute to the success of a business venture. Readiness to take risks often involves preparedness to make use of the opportunities identified and successful owners of small businesses are prepared to take the calculated risks and evaluate innovation and risk critically (Nieman 2003). In order for the entrepreneurs to succeed in their ventures, they do not need to take chances but should take calculated risks with regards to their ability to solve problems. Venturing into business involves some risks in itself and it should be the duty of the entrepreneur to be able to calculate the probable results of the risk involved in order to succeed in the business venture. Unsuccessful entrepreneurs on the other hand do not take risks. Leadership in a small to medium enterprise (SME) is different from that in large organisations in that it focuses on different forms of interpersonal behaviour. Leadership is mainly concerned with influencing the behaviour of people towards something (Schultz et al 2004). The entrepreneur is often responsible for almost all the facets of the organisational functions and it is his or her duty to take concerted efforts to ensure that there are good human relations among the customers and the members of the organisation. This can be achieved through team building which will also play a pivotal role in motivating the people who are involved in the running of business such as the employees. On the other hand, successful entrepreneurs realise the importance of business relationships. Establishing a good relationship with the clients is a major contributory factor to the success of the enterprise. Loyalty will be created and there will be chances of the customers returning for business again which is very important for the survival of business. Entrepreneurs who have positive attitude regarding their business will ensure that people will also have a positive attitude towards them. This is a contributory factor to the success of the business venture. This is also closely related to human relations as it contributes to successful entrepreneurship. Commitment to business entails willingness of entrepreneurs to commit their resources to the business and this will greatly help in building self confidence in their business. The success of a business venture in the form of an SME is mainly dependent on involvement of the entrepreneur. Establishing a business venture is not an overnight event but it requires concerted efforts so as to ensure that the business will succeed. Despite setbacks that can be encountered in the business, it is believed that the entrepreneurs who persevere in their efforts in business will stand better chances of succeeding in their business. Sarasvathy (2003) posits to the effect that the effectuation model of entrepreneurship is “much about the construction of new realities by committed stakeholders as it is about accurate perceptions of extant realities.” In other words, entrepreneurship of this kind seeks to begin with given means and seeks to create new ends using non-predictive strategies. In this case, an entrepreneur is influenced to venture into business of some sort on the basis of the level of expertise he has in the same field. The concept of expertise is the basic concept underlying the effectuation model. An expert can be described as someone who has managed to attain higher performance in a particular field as a result of the experience gained over the years. Thus, the expert entrepreneur begins with what he or she knows and starts interacting with other people from that step. Available knowledge is used as the basis of embarking on business in this case. Expert entrepreneurs also focus on what they can do and they are not primarily worried about what they ought to do in business. Their expert knowledge is given precedence and the entrepreneurs do not worry about the opportunity costs involved. The effectuation model is means driven rather than goal driven and more emphasis is put on creating something new using the existing means than discovering something new. In other words, experience and expert knowledge are treated as major factors that will contribute to the success of a business venture. It also focuses on what one will expect to lose than the returns. The traits of the entrepreneurs are given priority as they play a major role in development of a business venture. However, a close analysis of this model shows that it has some limitations in as much as entrepreneurship is concerned. Expertise is not the same as success in business. One may have the knowledge, expertise and experience but this will not be a guarantee that he or she will automatically succeed in that business venture. There are many factors that determine the success of a business venture as discussed above. This model overlooks some of them as it emphasises on the aspect of traits of the individuals. Burn’s model of start up influences is mainly concerned with transformational leadership styles in as far as entrepreneurship is concerned (Tucker & Russell 2004). A transformational leader is mainly concerned with innovation and creating new pathways in the organisation to capitalise on any opportunity that may exist. The main goal of a business venture of this nature is change which can lead to greater heights in the organisation. This model is mainly influenced by the notion of motivation which can add up to quality of the welfare of the people in the organisation. In this particular case, the entrepreneurs emphasise new possibilities and vision for the enterprise. The contribution of this model is that leaders influence organisations in various ways especially through seeking new opportunities that can positively contribute to the growth of the organisation. As discussed above, the success of a new business venture hinges on the ability of the entrepreneurs to transform new ideas that can help in satisfying the needs of the consumers in the market. In most cases, there are gaps that exist in the market and it is the role of the entrepreneur to identify these and generate new ideas in attempting to fulfil them. In order to successfully create a new venture, there is need for the entrepreneurs to first identify the gap that exists in the market and establish the opportunities that are available. New ideas should be put in place where creativity and innovation will take precedence in order to transform these new ideas to come up with a business strategy that will appeal to the interests of the targeted consumers. The concept of leadership also plays a major role in influencing the behaviour of the people involved in the business venture as a way of motivating them to have a positive attitude. Creating a new business venture is a process and there is need for the entrepreneurs to take the risk of venturing into business. For instance, the famous McDonald’s Corporation is recognised as a force to reckon with in the fast food industry in the world today and it is a good example of successful entrepreneurship . Raymond Kroc who is the founder of the organisation revolutionised the fast food industry in America by introducing hamburgers, French fries and milk shakes and this organisation was established in 1954. Information obtained from shows that the sophisticated delivery system that was implemented greatly contributed to the success of the organisation. To date, McDonald’s is very popular for its hamburgers and this organisation started from humble beginnings. Task 1b The general enterprise tendency (GET) test has been designed to bring together and measure a number of personal ‘tendencies’ commonly associated with the enterprising person (Durham University 2003). These include: need for achievement, need for autonomy, need for creative tendency, risk taking, drive and determination. Thus, the aim of the test is to measure enterprising tendency rather than entrepreneurial traits. This test can be used in the recruitment and selection process as it lays the foundation of establishing the extent of success in the business venture. Positive growth in the business venture will be used to influence the entrepreneurs to recruit more employees to meet the demands of the market. As a matter of fact, the growth of business is determined by the need to achieve something where concerted efforts will be made to satisfy the needs of the consumers in the market. Opening a business enterprise which involves home delivery of fast foods such as pizzas demands concerted efforts for this business venture to be successful. However, there are various capabilities in approaching this business. First and foremost, identifying and evaluating the idea and the opportunities available is a major capability of making this business venture a success. This business is capable of thriving given that some of the customers do not want to visit the conventional restaurants and this is a gap that needs to be filled. Ideas can be nurtured through involvement of the customers in gathering information pertaining to their needs in a particular product offering which is a capability for the organisation. Essentially, the ideas of the potential customers in the new market determine the success of the initiative to open new business. Another capability of this venture is that the members of the organisation must also be given the autonomy to be part of the decision making process so that they will be able to be creative and contribute to the success of the organisation. During the contemporary period, it can be noted that new information and communication technology has revolutionised the way people conduct their business. The advent of the internet in particular has made dramatic changes in how the businesses operate as well as the way in which the customers perceive the businesses around them. These changes in communication make it relatively easier to conduct market research with the aim of identifying the needs of the customers. The use of new information and communication technology allows a two way communication channel where it is relatively easy to get feedback from the targeted customers. Information dissemination can be aided through the use of the internet which is a great capability for the organisation to succeed. Through the use of this medium for communication, new opportunities will be created in the market which gives room to the business venture to attract more customers. Through proper use of information and communication technology, it is easy to penetrate the market and it is also easy to reach the customers. It can be noted that the use of new information and communication technology has also greatly contributed in creating other opportunities for the growth of small businesses. Satisfying the needs of the customers is the main objective of business and market research greatly contributes to the success of any business venture. Besides, the use of the internet, telephones can also be used to reach a number of potential customers and orders can be made over the phone which will be very convenient to the customers. This will be a capability of the business enterprise to succeed given that the needs of the customers will be satisfied while they are in the comfort of their homes. Another capability for this business venture is that transport to deliver the orders will be readily available. Efficient modes of transport such as the use of motorbikes will be used in this business venture as a way of attempting to satisfy the needs of the customers. Given that this kind of business will be modelled on the notion of mobility, the availability of transport will be a major capability of the organisation since the deliveries will not be delayed. Entrepreneurs who are concerned about their success know that customer satisfaction and profitability in an organisation are somehow interconnected in that if the organisation promises something to the customers and fulfils it, chances of creating loyalty among them will be high. This will be a great capability of the organisation. In order to successfully develop this venture and enhance employability it is recommended that the following steps are taken into consideration. There is need to identify the opportunity and evaluate the idea behind establishing such a business venture. Entrepreneurship is mainly concerned with identifying an opportunity in the market which is overlooked by large business enterprises. Since this venture will be based on a small scale, the entrepreneur should identify the potential of the business enterprise as well as the risks that are associated with it. Creativity and innovation will be recommended since they will transform the ideas into something that is meaningful with regards to the operations of the organisation that is concerned with satisfying the needs of the customers profitably. It is also recommended that a business plan should be developed before venturing into this kind of business. Planning is considered to be the starting point whenever stabling a new business venture is concerned (Bates et al 2006). In other words, before doing anything in business, there is need determine in advance the goals to be achieved and this will help the entrepreneur to visualise the end result and set objectives accordingly. Therefore, it can be said that planning is the process in which objectives are decided upon and the plans on how to reach them are put together. Planning is very important because it gives the people in the organisation an idea of the direction in which the business will be going. As the adage goes, “failing to plan is planning to fail,” (Bates 2006 p 86). It is recommended that all the decisions to be made should be planned in advance so as to be better positioned to tackle the problems that are likely to be encountered. It is also recommended that there is need to determine the resources required in opening such a business venture. Financial as well as human resources play a major role in determining the success of the organisation. Once these requirements have been fulfilled, the new organisation will be able to employ the required workers on the basis of its capabilities to meet its operating costs as well as to satisfy the needs of the employees. Employees are valuable assets in any organisation as they are the ones who carry out the day to day activities of the tasks involved in the business. During the contemporary period, it can be noted that there is a steady increase in the number of SMEs given that they are operated on a small scale basis. Small business ventures that are operated successfully are capable of creating employment for many people and this will positively contribute to the growth of the economy as a whole. Conclusion Over and above, it can be concluded that entrepreneurship is mainly concerned with establishing a small business venture by an individual. As discussed above, it can be noted that there are various factors that contribute to the success of a business venture as discussed above. In most cases, entrepreneurs are influenced by the situation obtaining on the market to venture into a business which can be regarded as a push factor. Small businesses have been growing at a tremendous rate in many economies as a result of different factors. Opportunities are constantly opening in the market and in most cases, SMEs are not affected badly by large scale economic factors. It has been recommended that entrepreneurs must capitalise on opportunities available in the market and should be prepared to take risk involved. It has also been recommended that for a business venture to be successful, there is need for proper plans outlining the aims and objectives of the organisation to be put in place. References Bates B et al (2005), Business Management, fresh perspectives, Pearson, CT. Bekker F & Staude G (1988), Starting and Managing a small business, JUTA, CT. Bird, BJ (1989), Entrepreneurial behaviour, Glenview, IL: Scott, Foresman & Company. 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