Entrepreneurship-1 To Edulink

MKTM033
THE ENTREPRENEURSHIP
REPORT
ENTREPRENEURSHIP
WEEK -1
Entrepreneurship Australian Institute of Management

About the Module
Entrepreneurship Australian Edulink

Institute of Management 2
Aims of the Module
• To demonstrate and develop the knowledge,

skills and attitudes of successful entrepreneurs
required in the evaluation of business
opportunities and the planning of new ventures in
the modern complex business world.
• To create and develop 'professional standard'
New Venture proposals, embodying innovative
solutions and drawing upon key concepts covered
in the module and prior skills and experiences.
Key topics and focus (indicative content)
• WK1 Module Introduction
• Entrepreneurship, barriers and triggers
• The mindset and behaviours of enterprising individuals
• Self analysis and the entrepreneurial mindset
• WK2 Opportunity Analysis
• Sources of Opportunity
• Evaluating an opportunity
• Researching and writing an opportunity analysis report
• WK3 Researching the New Venture
• Developing a viable concept
• Researching and planning the new venture
• The role of creativity and innovation
• WK 4 The Business Plan
• Resourcing and Funding
• Operations Plan
• Financial Plan
• WK5 Growing your Venture
• Growth Strategies
• Market and Product Development
• Marketing Strategies
• Diversification
Learning outcomes
• On successful completion of the module, participants will
be able to:
• Knowledge and Understanding
• a) Analyse the critical debates about the role of
entrepreneurs and entrepreneurship in the delivery of
business innovation.
• b) Evaluate the management efficacy of alternative
approaches and tools in identifying, selecting and managing
emerging opportunities.
• c) Demonstrate a critical understanding of the 5555
involved in developing a sustainable New Venture.

Learning outcomes
• Subject - Specific Skills
• d) Apply a critical- enterprising mind-set and elements of
entrepreneurial 'best-practice' to the task of creating a New Venture
proposal.
• e) Provide a comprehensively researched and detailed analysis of
emerging opportunities within a specific business sector and show an
awareness of the contrasting influences.
• f) Write a 'commercial standard' business plan, justifying a New
Venture proposal.
• Key Skills
• g) Collate, organise, critically evaluate and synthesise evidence and
information from a variety of sources including: academic articles,
business reports and case studies.
• h) Solve problems using complex concepts, appropriate tools and
arguments leading to creative solutions and innovative business
approaches.
• i) Engage confidently in academic and professional communication
with others and report on proposals in a clear, autonomous and
Entrepreneurship Edulink
Australian Institute of Management 6
ASSESSMENT STRUCTURE
CONTEXT
This module is delivered face to face, guided tutor, guided learning materials and
guided learning materials form, delivered to student cohort(s) taught by UN staff and by
non-UN staff.
• Assessment Items
Units Weighting Learning Outcomes
• PJ1- Opportunity Analysis 2 40 a,b,e,g,h,i

• PJ2- Business Plan 3 60
c,d,f,g,h,i

Study hours
Study hours
Teaching, learning + assessment activities Study hours
All contact hours: (total) 15
Workshops (3 hours) x 5 15
Independent study hours (total) 135

Online support units x 5 100
Sector and Marketing Intelligence Research 35
Assessment Hours 50
Assessments 50
Total 200

Readings and resources
• Text: Chapter 01
• Core Texts
• Allen, K. (2016). Launching New Ventures, Cengage
• Burns, P. (2014). New Venture Creation, Palgrave Macmillan
• Other Readings:
• Crainer, S. 2014, "Generation Entrepreneur", Business
Strategy Review, vol. 25, no. 2, pp. 41-41.
• Mohamad, N., Lim, H., Yusof, N. & Soon, J. 2015,
"Estimating the effect of entrepreneur education on graduates’
intention to be entrepreneurs", Education + Training, vol. 57,
no. 8/9, pp. 874-890.
• Exploring the Economic Experiment I:
http://miter.mit.edu/articleexploring-economic-experiment-i-h
ypothesis-development/
• Exploring the Economic Experiment II:
http://miter.mit.edu/articleexploring-economic-experiment-ii-h
ypothesis-testing/
• Entrepreneurial Philosophies of Richard Branson (44:06):
https://www.youtube.com/watch?v=23Frvd3pp5Q
• The Entrepreneurial Spirit (14:44):
https://www.youtube.com/watch?v=98XeNvdnklc

Assessment Strategy
• You are required to undertake two assessments for this module, outlined above.
Assessments will be available to students via NILE on a timely basis, and will test the
understanding and application of key entrepreneurship concepts and practice. Project 1
constitutes 40% of the overall grade & assessment Project two 60%. More details are
given under the assessment tab on the NILE site.
• University of Northampton Harvard referencing system is used always for the
recording & citing of all academic theory. It is an important academic skill & principal to
follow and observe. Students must familiarise themselves with Harvard referencing and
make the time to understand & apply it.
• Assignments should be accurately and appropriately referenced. Marks may be deducted
for poor or inadequate referencing. The work submitted must be authentic and
original, in other words, the assignment should be your own work.
• Where there is concern over the authenticity of an assignment, it will be referred to
the Faculty Academic Integrity Officer (FAIO). Work that has been plagiarised will
be dealt with very severely. You may fail the complete module if you cheat.
• All completed work must be submitted Electronically through the NILE site for the
Module. Details will be issued in due course.
Assessment Strategy
• It is important that you plan your time professionally, and comply with assignment
submission dates as these are non-negotiable. Extensions will not normally be given. If an
extension is given it will only be in exceptional circumstances and be a maximum of two
weeks. Lost work, crashed computer, poor time management, are NOT valid reasons for an
extension.
• If you are unable to submit your assignment by the required date and have legitimate
grounds you will need to make an application through the university mitigating circumstances
policy, details of which are outlined on the university web site.
• Assessment will be made on the sound understanding and effective application of new
venture creation stages. It is expected that overall presentation, style and quality of writing,
referencing, use of tables, diagrams and charts, will be of ‘reasonable’ standard. As such, the
assignment takes physical presentation into account.
• Models, data and theories that are central to your answer should be situated in the main
body of the answer, supporting models and data should be presented in appendices. It is,
however important to draw the reader’s attention to the appendices when the information there
supports arguments being made in the main body of the assignment.
• As postgraduate level you should be able to interweave appendices and the main text in a
way that your main argument can be understood without reading the appendices. The
appendices should allow the reader to understand the points made in more detail. If the
appendices are not used to support the arguments/key points made in the main text they will not
be read.
Academic Obligations
• Students who enroll on a course at The University of Northampton are
expected to fulfil the academic requirements for the course and meet any
associated forms of professional or vocational conduct.
• These include:
• attendance at all scheduled lectures, seminars and other similar teaching
sessions
• participation in and engagement with all scheduled teaching sessions,
including completing appropriate preparatory work
• providing prompt explanations for unavoidable absence from such
sessions
• Where a student is found not to be meeting these requirements she/he will
be subject to the procedure for Failure to meet Academic Obligations.

University policies and procedures
• University policies and procedures
• The Academic Registry intranet site can be accessed by accessing the
university web site on www.northampton.ac.uk and then clicking on
‘Academic Registry’ under ‘Schools and Departments’.
• This contains information on University policies relating to issues such
as:
• Academic regulations and appeals
• Mitigating Circumstances procedures – crucial to consult and use if you
think you cannot submit an assignment on time or cannot sit an exam for
a legitimate reason
• Academic Misconduct, Misrepresentation and Cheating
• You must abide by The Student Code of Conduct including your
academic obligations as a student, details of which are outlined on the
University website.

Lecture -1-Week -1
• About Entrepreneurship, Entrepreneurs,
barriers and triggers ,the mindset and
behaviours of enterprising individuals etc.

Key topics and focus (indicative content)
WK1 - Module Introduction
1. Entrepreneurship, barriers and triggers

2. The mindset and behaviours of enterprising
individuals
3. Self analysis and the entrepreneurial mindset

About Entrepreneurship
• Entrepreneurial skills such as identifying
opportunities to develop new products, services
and ventures is a desirable management and
leadership competence in the current dynamic and
complex business environment.
• This module will enable students to explore their
entrepreneurial potential and develop an
entrepreneurial mindset that involves creative and
innovative thinking.
• Entrepreneurship led innovation provides
organizations with competitive advantage and
sustained superior performance in the market or
industry they operate.
• This module allows students to apply
entrepreneurial concepts to find a new business idea,
develop a new venture in a chosen sector through
opportunity analysis and development of a strategic
business plan.
•
• The module gives participants an
entrepreneurial perspective with respect to
identifying, analyzing, planning activities from
the initial idea generation phase to the
development of a strategic business plan of a
new venture.

Part -1 Learning objectives
• Provide a definition of entrepreneurship
• State the key elements of entrepreneurship
• Be able to discuss factors influencing pursuit of opportunities
• Understand the roles played by resources, the environment and
the organisation.

Defining entrepreneurship
• Entrepreneurship stems from the French word entreprendre
meaning ‘to undertake’ or ‘to take in one’s own hands’
• Entrepreneurship as a term was first used during the Industrial
Revolution
• It described the new phenomenon of the individual who
formulated a venture idea, developed it, assembled resources
and created a new business venture

Towards a definition of entrepreneurship
• Entrepreneurship is difficult to define because it is a
multi-faceted phenomenon spanning a number of academic
disciplines
• Defining entrepreneurship:
• ‘The process brought about by individuals of
identifying new opportunities and converting them into
marketable products or services’

The key elements of entrepreneurship
• There are five generally agreed conditions that are necessary
for entrepreneurship to occur:
– An individual (the entrepreneur)
– A market opportunity
– Adequate resources
– A business organisation
– A favourable environment

The key elements of entrepreneurship

Entrepreneurship
• Entrepreneurship takes variety of forms in
• Small and large firms,
• New firms and established ones
• Formal and informal economy
• Legal and illegal activities
• Innovative and conventional biz ventures
• All regions and economic sub sectors

Entrepreneurship
• Importance of Entrepreneurship is well
illustrated in the Asia-Pacific region
• Transformation of this region and the
emergence of newly industrialised economies
in the past two decades such as Hong
kong ,Singapore, south Korea ,Malaysia and
Thailand are largely due to entrepreneurial
activities

Entrepreneurship
• More recent transformations are India and
china
• India after liberalization – mood changed to
biz friendly rules and can do optimism
• China’s privately owned SMEs now account
for two thirds of the economy

Entrepreneurship process

Institute of Management
The Entrepreneur
• Cornerstone of the entrepreneurial process
• Perceives, pursues and exploits opportunities
• Four factors are considered to influence the way entrepreneurs
perceive and pursue opportunities:
- Active search of opportunities
- Entrepreneurial alertness
- Prior knowledge
- Social networks

Entrepreneurs
• John Rockefellar – formed Standard Oil
• James Watt-workable steam engine
• Thomas Edison-brought benefits of electricity
through new appliances
• Sri Lankan Entrepreneurs?
• Upali Wijewardena
• A Y S Gnanam
• Sena Yaddehige
DIFFERENCE BETWEEN ENTREPRENEUR AND
ENTREPRENEURSHIP
31

Let us look at the key elements of
entrepreneurship

The Opportunity
• A situation where a new product, service or process can be
introduced and sold at greater than its cost of production

Resources
• Financial
• Physical
• Human
• Technological
• Social
• Organisational

The Organisation
• Entrepreneurship can take place in diverse environments:
• New independent start-ups
• Corporate ventures
• Franchises
• Joint ventures
• Business acquisitions

Environment
• Community level
• Population density: number of organisations in an industry
• Strength of the relationship between these organisations
• Societal level
• Cultural norms and values
• Government activities and policies

WHY PEOPLE BECOME ENTREPRENEURS?
• Opportunity to gain control over one’s own destiny
• Opportunity to reach one’s full potential
• Opportunity to benefit financially
• Opportunity to contribute society and be

recognized for one’s effort 37

Enterprise is formed as a result of entrepreneurship
AN ENTERPRISE: characteristics
38

WHY ENTERPRISES?
• Data developed and provided by the National Federation of Independent
Business Foundation and sponsored by the American Express Travel
related Service Company Inc.
• Prior Job 45%
• Family business 6%
• Friends/relatives 5%
• Personal Interest/Hobby 16%
• Chance happening 11%
• Suggestions 7%
• Education/ Courses 6%  Other 4%
• The trigger Event
• Bygrave (1989) discussed entrepreneurship as a process that
involved triggering event, innovation, implementation, and growth.39
• In the triggering event stage he suggested that there were sociological,
personal, and environmental factors that led to entrepreneurship.
Entrepreneurship Edulink
Australian Institute of Management
WHY ENTERPRISES?
• THE TRIGGER EVENT

• Displacement trigger: people who migrate to different countries or
places due to many reasons become entrepreneurs.
• Eg: Refugees who settle in countries
• Culture trigger: Change in the entrepreneurial culture may give
opportunities for people to start businesses Eg: Enterprise Sri Lanka
and change happening in the business sector
• Opportunity trigger: An entrepreneur sees and opportunity and he goes
for the business believing that “ if I don’t go for it somebody will do it”
• Crisis trigger: if someone’s entrepreneurial talent or ability has been
suppressed or buried due to many reasons.
40
• Eg: Husband dies and wife start a business

12 Signs You Have an Entrepreneurial Mindset
• 1. You take action.
• Barbara Corcoran, founder of The Corcoran Group and co-star of
TV’s Shark Tank, says people who have a concept but not necessarily a
detailed strategy are more likely to have that entrepreneurial je ne sais
quoi. “I hate entrepreneurs with beautiful business plans,” she says.
• 2. You’re scared.
• “Many entrepreneurs judged as ambitious are really insecure
underneath,” Corcoran says. When evaluating potential investments,
she adds, “I want someone who is scared to death.” Those who are
nervous about failing can become hyperfocused and willing to do
whatever it takes to succeed. If you feel insecure, use that emotion to
drive you to achieve your business goals.

• 3. You’re resourceful.
• “One of my favorite TV shows growing up was MacGyver,” confides Tony Hsieh, lifelong entrepreneur and
CEO of Las Vegas-based Zappos, “because he never had exactly the resources he needed but would somehow
figure out how to make everything work out. Ultimately, I think that’s what being an entrepreneur is all
about.” It’s not about having enough resources, he explains, but being resourceful with what you do have.
• 4. You obsess over cash flow.
• Prior to founding Brainshark, a Waltham, Mass.-based provider of sales productivity software, Joe Gustafson
bootstrapped a venture called Relational Courseware. “All I ever thought about was cash flow and liquidity,”
he admits. “There were seven times in [the company’s] eight-year history when I was days or hours away
from payroll and didn’t have enough cash to make it.”
• How did he respond? “In the early days, you could step up and put expenses on your personal credit card, but
that can only go so far,” he says. “You need cash.”
• 5. You don’t ask for permission.
• Stephane Bourque, founder and CEO of Vancouver, British Columbia-based Incognito Software, says true
entrepreneurial types are more likely to ask for forgiveness than permission, forging ahead to address the
opportunities or issues they recognize.
• “Entrepreneurs are never satisfied with the status quo,” says Bourque, who discovered he was not destined for
the corporate world when his new and better ways of doing things were interpreted as unwanted criticism by
his bosses. Now, he says, “I wish my employees would get into more trouble,” because it shows they are on
the lookout for opportunities to improve themselves or company operations.
• 6. You’re fearless.
• Where most avoid risk, entrepreneurs see potential, says Robert Irvine, chef and host of Food Network’s Restaurant:
Impossible. True ’treps are not afraid to leverage their houses and run up their credit card balances to amass the funds
they need to create a new venture. In some ways, he says, they are the ultimate optimists, because they believe that
their investments of time and money will eventually pay off.
• 7. You welcome change.
• “If you have only one acceptable outcome in mind, your chances of making it are slim,” cautions Rosemary
Camposano, president and CEO of Silicon Valley chain Halo Blow Dry Bars. She says that if you are willing to
listen, your clients will show you which of your products or services provide the most value.
• Her original vision for Halo was part blow-dry bar, part gift shop, “to help busy women multitask,” she explains. But
she quickly learned that the gift shop was causing confusion about the nature of her business, so she took it out and
replaced it with an extra blow-dry chair, and things took off. Smart entrepreneurs constantly evolve, tweaking their
business concepts in response to market feedback.
• 8. You love a challenge.
• When confronted by problems, many employees try to pass the buck. Entrepreneurs, on the other hand, rise to the
occasion. “Challenges motivate them to work harder,” says Jeff Platt, CEO of the Sky Zone Indoor Trampoline Park
franchise. “An entrepreneur doesn’t think anything is insurmountable … He looks adversity in the eye and keeps
going.”
• Candace Nelson, founder of Sprinkles Cupcakes, agrees. Despite naysayers who questioned her idea for a bakery in
the midst of the carb-fearing early-2000s, she persevered and now has locations in eight states. In fact, she was one
of the first entrepreneurs in a business that became an ongoing craze, sparking numerous copycats.

• 9. You consider yourself an outsider.
• Entrepreneurs aren’t always accepted, says Vincent Petryk, founder of J.P. Licks, a Boston chain of ice-cream shops.
They may be seen as opinionated, quirky and demanding—but that is not necessarily a bad thing. “They are often
rejected for being different in some way, and that just makes them work harder,” Petryk says. Case in point: Rather
than copying what most other ice-cream shops were doing, including buying from the same well-known suppliers,
Petryk forged his own path for J.P. Licks, developing made-from-scratch desserts in bold flavors.
• 10. You recover quickly.
• It’s a popular notion that successful entrepreneurs fail fast and fail often. For Corcoran, the trick is in the speed of
recovery: If you fail, resist the urge to mope or feel sorry for yourself. Don’t wallow; move on to the next big thing
immediately.
• 11. You listen.
• Actress Jessica Alba, co-founder and president of Santa Monica, Calif.-based The Honest Company, which sells
baby, home and personal-care products, notes that “it’s important to surround yourself with people smarter than you
and to listen to ideas that aren’t yours. I’m open to ideas that aren’t mine and people that know what I don’t, because
I think success takes communication, collaboration and, sometimes, failure.”
• 12. You focus on what matters (when you figure out what matters).
• “Entrepreneurs fall down and pick themselves up until they get it right,” says Micha Kaufman, co-founder and CEO
of the fast-growth online freelance marketplace Fiverr. During Fiverr’s launch, instead of trying to deal with “an
endless number of potential challenges,” Kaufman and his team focused on “the single biggest challenge every
marketplace has: building liquidity. Without liquidity, there is no marketplace.”

ANALYSIS OF ENTREPRENEURIAL MIND SET

Problems entrepreneurs and enterprises face
• 1. Integrity.
• 2. Cash, Borrowing, and Resource Management.
• 3. Increased selection and competition.
• 4. Marketing and Customer Loyalty.
• 5. Uncertainty.
• 6. Regulation
• 7. Problem Solving and Risk Management.
• 8. Finding the right staff.

The remedy for enterprise problems
The remedy for problems are known and include:
• a better education and training (to improve the lack of
managerial and marketing skills),
• an improvement of the services provided to nascent
entrepreneurs (to improve the lack of information on business
start-up and address the difficulty in obtaining finance), and
• a reduction of 'red tape' and taxes (to curtail compliance
costs).
• Last, but not least, nascent entrepreneurs themselves should
be more self-confident and persevering when they face the
hard reality of establishing their own business.

Summary
• Four factors that influence entrepreneurship are: the
Entrepreneur, the Resources, the Organisation and the
Environment.
• All are multi-faceted constructs in their own right.
• Individuals considering a career in entrepreneurship must the
ability to actively seek and recognise opportunities.

Discussion 1.1
• It is often said that entrepreneurship consists of ‘economic
experiments’. Would you agree with this statement? Detail the
economic experiment that may be occurring in your
prospective business or work place?
• Can entrepreneurship be taught and learned? Think of
someone you know who’s a successful entrepreneur. Was it an
in-born talent, or an acquired skill? Explain your rationale.

Discussion 1.2
• Explain the concept of creative destruction giving one real-
world example that you have seen or have read about.
• Do you think opportunities are created or discovered? Provide
an example that supports your view.

Creative destruction
• The term is used in a variety of areas including
economics, corporate governance, product
development, technology and marketing.
• An example of creative destruction is when
day transportation changed from a horse and
buggy to the automobile

• Netflix is an amazing digital success story.
Starting out almost 15 years ago as a
predominantly DVD subscription service,
Netflix was able to pivot along the way and
take advantage of rapidly evolving mobile
technology and ever-improving internet speeds
to become one of the largest video distribution
networks on the planet.

• The success of Netflix is an excellent example of “creative
destruction,” a term originated in the 1940s by economist Joseph
Schumpeter, who described it as the “process of industrial
mutation that incessantly revolutionizes the economic structure
from within, incessantly destroying the old one, incessantly
creating a new structure.
• This process of creative destruction is the essential fact about
capitalism.” In fact, Netflix has been so disruptive to existing
industries, that its impact is now being referred to by some as the
“Netflix effect.”
• Here are a few examples of the “Netflix effect” and the
industries that have been “Netflixed.”
THE ENTREPRENEUR
AND
THE OPPORTUNITY
PART
Aim High2
Part Two: The Venture Creation Process

• Text:
• Other Readings:
• Hoque, N., Khan, M.A. & Mohammad, K.D. 2015, "Poverty
alleviation by Zakah in a transitional economy: a small
business entrepreneurial framework", Journal of Global
Entrepreneurship Research, vol. 5, no. 1, pp. 1-20.
• Shan, B., Cai, L., Hatfield, D.E. & Tang, S. 2014, "The
relationship between resources and capabilities of new
ventures in emerging economies", Information Technology and
Management, vol. 15, no. 2, pp. 99-108.

• Entrepreneurs are Important for the Economy:
http://www.investopedia.com/articles/personal-finance/101414
/why-entrepreneurs-are-important-economy.asp
• Entrepreneurial Ecosystem in Italy:
http://paperity.org/p/59216342/entrepreneurship-new-venture-
creation-key-elements-of-the-entrepreneurial-ecosystem
• Entrepreneurial DNA (17:37):
https://www.youtube.com/watch?v=fsU9N6A18sY
• The Art of Entrepreneurship (15:51):
https://www.youtube.com/watch?v=owjBY-WWGmE

Learning objectives
1. Gain an understanding of the process of new venture creation
2. Discuss whether entrepreneurs discover or create
opportunities
3. State the key differences between these two perspectives.
4. Understand the factors governing the pursuit of opportunities

The process of new venture creation
• Not all individuals have the potential to launch a business
venture ...
• Of those that do, not all will attempt a founding ...
• Of those who attempt, not all will succeed in founding

Individuals and opportunities
• Do entrepreneurial opportunities happen regardless of the
insight of entrepreneurs?
OR
• Do entrepreneurs create opportunities by their actions?

The discovery perspective
• Successful entrepreneurs perceive opportunities which exist as
a result of inefficiencies in the allocation of resources or
competitive imperfections in a market or industry
• This perspective follows a causal approach to entrepreneurship

The role of the entrepreneur in the
discovery perspective

The creation perspective
• Opportunities are created by the actions, reactions and
enactment of entrepreneurs, who proactively consider
innovative ways of producing new products or services
• As new stakeholders become involved with the venture brings
on board new means and new goals

Key differences between discovery
and creation theory

The decision to exploit entrepreneurial
opportunities
• The decision to exploit an opportunity depends upon the joint
characteristics of the individual and the nature of the
opportunity
• Opportunity cost: the cost of passing up one investment in
favour of another

The decision to exploit entrepreneurial
opportunities
A number of techniques are available to assist decisions relating
to pursuing opportunities:
- Risk- return analysis
- Real options
- Affordable loss

Summary
• Two dominant views of the concept of ‘opportunity’ exist: the
discovery perspective and creation perspective
• The discovery perspective suggests opportunities are the result
of market inefficiencies and misallocation of resources
• The creation perspective suggests that entrepreneurs marshal
resources to pursue discovered opportunities
• There are various techniques for assessing opportunities

Discussion 1.4
• What are the central factors necessary for
entrepreneurship to thrive in a country?
• Think of a country you have visited or read about where
you’d advocate starting a business venture.
• Would those factors influence your decision to launch a
venture there? Why, or why not?
• What are the main benefits of entrepreneurship to the
community and to society? In what ways, if any, has
your home community benefitted from
entrepreneurship?
Individual and Personality Traits
• Most favourable factors - Ability to recognize start-up
opportunity, ability to take risk and ability to organize the
resources for start-up
• Least favourable factors - No specific
• Conclusions - To sum up the argument,findings revealthat
entrepreneurs in Italy possess individual and personality
traits favoring entrepreneurship. The findings are in line
with recent reviews and evaluations of entrepreneurship
personality research suggesting that personality traits of
entrepreneurs are important for entrepreneurship.

Socio-cultural context of entrepreneurship
• Most favourable factors - Culture promotion venturing &
risk taking, encouraging creativity & innovation, family
support
• Least favourable factors - Entrepreneurial opportunities for
women and people in certain age categories
• Conclusions - Findings reflect that in Italy - the 9th largest
economy in the world, with 98% of the firms being small
and medium enterprises - the socio-cultural environment
seems to supporting entrepreneurship by encouraging risk
taking, creativity and innovation. The same has been
reinforced in the GEM 2008 Report for Italy
State /Govt. Policies and Programmes
• Most favourable factors - Physical and ICT infrastructure
• Least favourable factors - Special government programs and schemes for start-ups,
tax system, ease of obtaining licences and permits
• Conclusions: government has reinforced Italy‘s commitment towards further

interventions aimed at rapidly simplifying and reducing time and costs involved to
start up a business, as well as at eliminating present digital divide.
• Administrative procedures for enterprise creation are receiving substantial attention.
• Policy wise, in 2010, Italy has taken a number of policy measures aimed at
improving the environment for SMEs and at reducing the administrative burden
resulting from their interaction with the administration. Despite the Government
efforts in improving the scenario, most entrepreneurs still consider the current
reality far from satisfactory.

Access to finance
• Most favourable factors - Availability of funds from family and friends,venture
capital and angel investors
• Least favourable factors - Availability of bank loans and government subsidies
• Conclusions - As revealed by our findings, in Italy financial institutions
(commercial banks in particular) generally do not develop specialized
competencies and procedures to deal with the financial needs of this category of
entrepreneurs.
• Most high-tech ICT start-ups perceive that it is not easy to have access to funding
from private equity, i.e. venture capital funds and angel investors. Presence of
credit constraints from banks is very worrisome, due to the key role allegedly
played by these SMEs in assuring innovation and growth in the economic system.
Even though the findings should be interpreted with caution due to the relatively
small size of the sample, nevertheless they provide an important insight into the
existing financial scenario.
•

Access to Information, opportunity for
knowledge and skill building
• Most favourable factors - Support from industry associations and to some extend
education system encouraging entrepreneurship.
• Least favourable factors - Availability of formal training on entrepreneurship, support
from Universities, incubators and technology parks.
• Conclusions - Development of scientific and entrepreneurship skills must be present
in the curriculum at educational institutions, especially if Italy wants entrepreneurs
driven by opportunity recognition, as opposed to necessity. Italy, being a EU member,
is committed to promoting the teaching of entrepreneurship in their education system.
• However, there is a need of promoting these initiatives more systematically. Italy
being an innovation-driven economy (according to the GEM classification of
countries), successful SMEs entrepreneurship depends heavily on innovation and
R&D. Young technology based SMEs need increased support and collaboration for
R&D and innovation from Universities,technology parks, business incubators (OECD
2009, Science, Technology and Industry Scoreboard).
•

Internationalization of SMEs
• Most favourable factors - Personal attitude towards internationalization and knowledge
of English language
• Least favourable factors - Support from government agencies facilitating new firm
entry and access to financial resources
• Conclusions - SMEs encounter significant challenges in obtaining resources, foreign
market knowledge, over-seas contacts and business opportunities and achieving
organizational viability for developing foreign business (Zaheer 1995; Zaheer 2005;
Crick 2007; Barnes 2006; Kneller & Pisu 2007).
• According to the European Commission Small Business Act factsheet 2010, as far as
indicators measuring internationalization are concerned, Italian SMEs bear higher costs
more and it takes them longer to export and import goods than for the average EU
SME.
• Reflecting the widespread recognition of the importance of internationally-active SMEs
in subnational/regional, national and global economies, Italian government and
business support organizations are taking policy measures to support and enable SMEs
in the internationalization process.

Discussion 1.5
• Entrepreneurs must be willing and able to marshal resources in
order to pursue the opportunity and transform their ideas into
an organisation. The resource-based theory recognises six
types of resources.
• Think of a successful venture and describe its resource set.

Discussion 1.6
• At the start of the fifteenth century, China had all the
technologies necessary to start the Industrial Revolution, but
was unable to capitalise on these technologies due to a lack of
entrepreneurship. Why is that?
• Name a country that didn’t suffer this same outcome?
Explain.

THE ENTREPRENEUR
AND
THE OPPORTUNITY
PART
Aim High-3
Part Three: Profile of an Entrepreneur

Text:
Other Readings:
Baron, R.A. 2006, "Opportunity Recognition as Pattern
Recognition: How Entrepreneurs "Connect the Dots" to
Identify New Business Opportunities", Academy of
Management Perspectives, vol. 20, no. 1, pp. 104-119.
Brush, C.G., Greene, P.G., Hart, M.M. & Haller, H.S. 2001,
"From initial idea to unique advantage: The entrepreneurial
challenge of constructing a resource base", The Academy of
Management Executive, vol. 15, no. 1, pp. 64.

• How useful is the theory of disruptive innovation – Forbes:
http://www.forbes.com/sites/stevedenning/2015/10/15/how-us
eful-is-christensens-theory-of-disruptive-innovation/
• Enabling Open Innovation in SMEs:
http://www.academia.edu/6623057/Enabling_open_innovation
_in_small_and_medium_enterprises_A_dynamic_capabilities_
approach
• Disruptive Innovation – Clay Christensen (59:14):
https://www.youtube.com/watch?v=rpkoCZ4vBSI
• True Business Opportunities (22:44):
https://www.youtube.com/watch?v=75XqZGZUiC0

Learning objectives
• Understand the economist and behavioural theories of
entrepreneurship
• Understand the risks of pursuing entrepreneurship as:
o financial risks
o career risks
o social risks
o health risks

Understanding the profile of an entrepreneur
Two basic schools of thought shape the profile of the

entrepreneur:
• Economists who consider the entrepreneur as an agent who
specialises in certain roles
• Behaviourists who concentrate on the creative and intuitive
character

The roles of entrepreneur: an economic
perspective
The status of the entrepreneur can be analysed in terms of
labour division which explains this function based on certain
roles:
• Risk bearer
• Arbitrageur
• Innovator
• Co-ordinator of scarce resources

The roles of entrepreneur: a behaviourist
approach
The most common characteristics of entrepreneurs were
identified in early studies on entrepreneurship

The roles of entrepreneur: a behaviourist
approach
• Only three of these characteristics have shown a high level of
validity:
– The need for achievement
– The internal locus of control
– The risk-taking propensity

The risks of a career in entrepreneurship
There are four types of risks to consider before embracing a
career in entrepreneurship:
- Financial risks
- Career risks
- Social risks
- Health risks

Financial risks
• Large amounts of own money have to be invested
• Borrowing funds from bankers, venture capitalists, or partners
can reduce financial risks
• Legal structures can help to minimise financial risks

Career risks
• Entrepreneurs need to consider employment options if their
venture fails
• This risk is particularly acute for well-paid specialists and
people close to retirement
• Risks can be minimised by launching a business on a part-time
basis

Social risks
• Starting a business venture requires much of the
entrepreneur’s energy and time impacting on family and
friends
• The decision to set up a venture should therefore involve the
family to reduce conflict potential
• Some societies also have little tolerance for failure e.g. The kia
siu attitude — ‘afraid to lose’ attitude is pervasive in
Singapore

Health risks
• Entrepreneurship is physically and mentally demanding
• Hard to create work/life balance
• There is evidence that entrepreneurs experience higher job
stress and psychosomatic health problems than other people
• Would-be entrepreneurs should make sure that their health can
cope with the demands and challenges of starting and running
a business

Summary
• Two dominant views of the concept of ‘opportunity’ exist: the
discovery perspective and creation perspective
• Two schools of thought exist on the entrepreneurial
perspective in individuals: economists and behaviourists
• Individuals considering a career in entrepreneurship should
consider four types of risk

Discussion 1.8
• Some cynical observers might regard changes of direction (or
pivots) as marks of failure.
• Explain why you agree or disagree with this view.
• What would you need to consider to execute a successful pivot
in your new venture or your work place?
• If a would-be entrepreneur evaluates all the potential risks
before starting a business, does it mean that the business
venture will not fail?
• What are the top three areas of potential risk that you would
never ignore.

Discussion 1.9
• What ‘scarce resources' will you be coordinating in your
proposed new venture?
• What role(s) would you play in the effectuation process?
• Comment on at least two other posts.

END
THANK YOU
www.aim.com.au

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MKTM033

Entrepreneurship Australian Institute of Management

Entrepreneurship Australian Edulink

• To demonstrate and develop the knowledge,

Entrepreneurship Australian Edulink

• PJ1- Opportunity Analysis 2 40 a,b,e,g,h,i

Entrepreneurship Australian Edulink

Independent study hours (total) 135

Entrepreneurship Australian Edulink

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1. Entrepreneurship, barriers and triggers

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• Opportunity to reach one’s full potential

• Opportunity to benefit financially

• Opportunity to contribute society and be

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• THE TRIGGER EVENT

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Part Two: The Venture Creation Process

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