ENTREPRENEURS AND THEIR ROLE IN THE ECONOMY

An entrepreneur is a managed risk-taker who sees opportunities and allocates resources to implement ideas for the benefit of self and/or others

Intrapreneur is an enterprising person but who works for others

Three basic questions asked:

What resources are to be used?

What/How resources is to be produced/processed?

For Whom?

THE ENTREPRENEUR BELIEVES HE/SHE

KNOWS WHAT THE CONSUMER WANTS

OR NEEDS.

ENTREPRENEURIAL ACTIVITY MAY RESULT IN INEFFICIENT USE OF A COUNTRY’S RESOURCES!

As a result…

Up to 80% of Start-up businesses fail within the first five years

Entrepreneurial activity results in a wide variety of similar goods and services (Toasters, chocolate bars, cars, cereal, insurance, etc)

Useless products are produced

Entrepreneurs are:

Sensitive to the wants and needs of the consumer

Will respond quickly to these wants and needs

Benefits from Entrepreneurship

Increased competition

Job provider (large organizations downsizing, it is the smaller businesses that continue to hire)

Are a major source of new innovations (small businesses do not invent, they innovate modify/change something that already exists)

Opportunities Vs. Ideas

An opportunity is an area of general interest to an entrepreneur (Usually someone else’s problem or concern) eg. Household safety for children

Idea is a specific means of addressing the opportunity area eg. Gates at the top of stairs, plastic plugs for sockets

International

Competitiveness,

Productivity, and Quality

Chapter 3

Establishing a Global Presence

What kinds of economic and social factors would attract international business to Canada?

How can an unprofitable international business improve its chances of becoming profitable?

Global Presence and Canada

Global/International presence plan should answer these questions

Which product will lead the way as the company launches or “rolls out” an international business initiative?

Which markets should be entered first?

What is the best way to enter these markets?

How rapidly should the company expand internationally?

Global Presence and Canada

Globalization of world’s economy

It is recognized internationally for its reliability, its fairness and integrity standards

May have a negative connotation (non-democratic, unsafe working conditions, lack of environmental protection, political upheaval)

Global Presence and Canada

Canada’s global presence gives us access to capital and markets World Wide

Capital: the money or other assets that are available for investment purposes

If expanding internationally a company needs to develop a strong global presence

Global Presence and Canada

International = a few countries

Global = many countries

Going global can either make or break an organization

Global Presence and Canada

International = a few countries

Global = many countries

Going global can either make or break an organization

Global Presence and Canada

Need to establish: distribution offices, manufacturing facilities, hiring local staff, toll-free telephone number, website, e-commerce, marketing over the Internet

To minimize risks and maximize profits, develop a plan that answers:

1) Which product lead way?

2) Which market to lead way?

3) What is the best way to enter the market?

4) How fast to expand internationally?

Global Presence and Canada

Pursue opportunities and meet challenges adapt to local markets

Competitive Advantage

Is achieved when companies and countries outperform their competitors around the world by improved/superior products, better pricing, higher quality, better service, uniqueness, and profit

Access to markets and distribution channels is important

Competitive Advantage

Can be measured by market share and performance with suppliers, customer demand and loyalty, distribution, service, resources, and financial indices

Canada ranks ___

Gross Domestic Product

GDP – The total value of all goods and services produced in a country during a specific period.

GDP per capita – Total GDP divided by the number of people n the country.

Means Canada is not as productive, not as internationally competitive; reasons due to manufacturing, R&D, technology

Competitiveness is often linked to R&D spending

Achieving competitive advantage?

How do we achieve competitive advantage?

Through greater economic utility, or usefulness

Economic utility: is a producer’s ability to satisfy the needs and wants of the customer; form and place utility

Factors affecting Canada’s

competitiveness

Quality and quantity of natural resources

Strength of the country’s currency and it’s exchange rate

Infrastructure in the country

Research and Development

Workforce Characteristics

Societal Characteristics

Entrepreneurship

Government Involvement

Competitive Advantage

Opportunity Cost – The forgone alternative

Calculates in financial terms, the benefits of the next best opportunity that was forgone or not taken.

When one country has a lower cost in producing at a lower opportunity cost than another country, it is said to have COMPARATIVE ADVANTAGE.

ABSOLUTE ADVANTAGE – If a country can produce the good at a lower cost or with a higher rate of productivity

Assignment

In a group of four choose a product/service that you can invent or innovate and sell it to the class.

You can do it in a form of a skit, commercial, poster.

After your presentation I will be asking you the following questions:

How are you gaining competitive advantage over your competitors?

Which resources will you be using?

How will create presence in Canada? How will you create global presence?