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Introduction to Entrepreneurship
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Chapter Objectives
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1. Explain entrepreneurship and discuss its importance. 2. Describe corporate entrepreneurship and its use in established firms. 3. Discuss three main reasons people decide to become entrepreneurs. 4. Identify four main characteristics of successful entrepreneurs. 5. Explain five common myths regarding entrepreneurship.
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Chapter Objectives
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6. Explain how entrepreneurial firms differ from salary-substitute and lifestyle firms. 7. Discuss the changing demographics of entrepreneurs in the United States. 8. Discuss the impact of entrepreneurial firms on economies and societies. 9. Identify ways in which large firms benefit from the presence of smaller entrepreneurial firms. 10. Explain the entrepreneurial process.
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall 1-3
Introduction to Entrepreneurship
According to the 2010 GEM There is tremendous study, 7.6% of Americans interest in are actively engaged in entrepreneurship in the starting a business or are U.S. and around the world. the owner/manager of a business that is less than * GEM= Global three years old. Entrepreneurship Monitor)
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Table 4 - Sector Distribution of Early Stage Entrepreneurial Activity and Established Business in 2010 (Malaysia)
Established Business 8 14 5 72 99
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Extractive sectors: Agriculture, forestry, fishing, and all mining Transformative sectors; Construction, manufacturing, transportation, communication, utilities and wholesale Business services; Finance, insurance, real estate and all business services Consumer Services; Retail, motor vehicles, lodging, restaurants, personal services, health, education and social services, recreational services
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall 1-6
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Over 25 years period, the percentage of entrepreneurs as compared to working citizens is less than 26%. In fact the percentage showed a downward trend whereby only 20.9% is the number of entrepreneurs against total working citizens compared to 25.1% in 1982. This showed that citizens of Malaysia are not interested in conducting self-business especially the women.
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The numbers of male entrepreneurs have exceeded women entrepreneurs by over 1 million people for the period of 1982 to 2008, except for the year 1982 (988,800 persons) and 1984 (948,300 persons). During the same period, the number of women entrepreneurs is less than 500,000 except in 2007 (525,400 persons) which translated to a gap of 44 to 47% lower than male entrepreneurs. (Department of Statistic, 2009)
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What is Entrepreneurship?
Academic Definition (Stevenson & Jarillo)
Entrepreneurship is the process by which individuals pursue opportunities without regard to resources they currently control.
W. Gibb Dyer, Jr. (BYU) The founding of new businesses is the essence of entrepreneurial activity.
What is Entrepreneurship?
Cantillon (1700s) Say (1803) Knight (1921) Schumpeter (1934) Kirzner (1973) Gartner (1988)
Israel Kirzner
Entrepreneur is an arbitrageur He or she discovers previously unknown market opportunities Key characteristic is entrepreneurial alertness
Recognize Opportunities
Evaluate
Exploit
See also Amar Bhides article The Questions Every Entrepreneur Must Answer in case packet.
Market Attractiveness
Industry Attractiveness
Sustainable Advantage
Corporate Entrepreneurship
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Corporate Entrepreneurship
Is the conceptualization of entrepreneurship at the firm level. All firms fall along a conceptual continuum that ranges from highly conservative to highly entrepreneurial. The position of a firm on this continuum is referred to as its entrepreneurial intensity.
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Corporate Entrepreneurship
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Entrepreneurial Firms
Proactive Innovative
Conservative Firms
Take a more wait and see posture Less innovative
Risk taking
Risk averse
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Financial rewards
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Product/Customer Focus
A second defining characteristic of successful entrepreneurs is a product/customer focus. An entrepreneurs keen focus on products and customers typically stems from the fact that most entrepreneurs are, at heart, craftspeople.
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall 1-24
Execution Intelligence
The ability to fashion a solid business idea into a viable business is a key characteristic of successful entrepreneurs.
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Young Entrepreneurs
Interest among young people in entrepreneurial careers is high. According to a Harris Interactive survey, 40% of people eight to 21 years old said theyd like to start their own business someday. A total of 59% of the 8- to 21- year olds said they know someone who has started their own business.
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Job Creation
Small businesses are the creators of most new jobs in the U.S., and employ half of all private sector employees. According to a Kauffman Foundation survey, 92% of Americans say entrepreneurs are critically important to job creation.
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall 1-33
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Step 1
Step 2
Developing Successful Business Ideas
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Step 3
Step 4
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