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Part IPart I Entrepreneurship in theEntrepreneurship in the
TwentyTwenty--First CenturyFirst Century
Chapter 1Chapter 1 -- The EntrepreneurialThe EntrepreneurialRevolutionRevolution
Chapter 2Chapter 2 -- Entrepreneurship: AnEntrepreneurship: AnEvolving ConceptEvolving Concept
Chapter 3Chapter 3 -- Intrapreneurship:Intrapreneurship:Developing CorporateDeveloping CorporateEntrepreneurshipEntrepreneurship
Copyright (c) 2004 by South-Western, a division of Thomson Learning. All rights reserved.
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The Entrepreneurial RevolutionThe Entrepreneurial Revolution
Wealth is created only by doers in the arena whoWealth is created only by doers in the arena who
are marred with dirt, dust, blood and sweat.are marred with dirt, dust, blood and sweat.
Who know high highs and low lows.Who know high highs and low lows.They fail more than succeed, when they fail, theyThey fail more than succeed, when they fail, they
fail at least with style and grace.fail at least with style and grace.
They occupy a unique place, the doersThey occupy a unique place, the doersThey are EntrepreneursThey are Entrepreneurs
as said by Joseph Mancusoas said by Joseph Mancuso
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EntrepreneursEntrepreneurs
Challenging The UnknownChallenging The Unknown
Entrepreneurs are individual who recognizeEntrepreneurs are individual who recognizeopportunities where others see chaos oropportunities where others see chaos or
confusionconfusionCatalysts for changeCatalysts for change
Compared to Olympic championsCompared to Olympic champions
They create jobs at a breathtaking paceThey create jobs at a breathtaking paceEntrepreneurs face uncertainty andEntrepreneurs face uncertainty andambiguity, reach the highlands of successambiguity, reach the highlands of success
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Entrepreneurship:Entrepreneurship:A PerspectiveA Perspective
Entrepreneurship is more than the mere creationEntrepreneurship is more than the mere creationof businessof business
seeking opportunity, taking risks, having theseeking opportunity, taking risks, having the
tenacity to push an idea into a spl perspectivetenacity to push an idea into a spl perspectiveIt is integrated concept that permeates anIt is integrated concept that permeates an
individuals business in an innovative wayindividuals business in an innovative way
It become the dominant force todayIt become the dominant force today
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Our Entrepreneurial EconomyOur Entrepreneurial Economy
The Environment for EntrepreneurshipThe Environment for Entrepreneurship
Entrepreneurs are the pioneers of today'sEntrepreneurs are the pioneers of today'sbusiness success.business success.
Sense of opportunity, drive to innovate andSense of opportunity, drive to innovate andcapacity for accomplishment become standardcapacity for accomplishment become standard
There is revolution happening in many countriesThere is revolution happening in many countries
Critical contributors to economic growth thruCritical contributors to economic growth thrutheir leadership, management, innovation,their leadership, management, innovation,research, job creation, productivity and formationresearch, job creation, productivity and formationof new industry.of new industry.
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Predominance of New VenturesPredominance of New Ventures
in the Economyin the Economy New business incorporations averagedNew business incorporations averaged
600,000600,000per yearper year
807,000 new small firms were established in807,000 new small firms were established in1995, an all1995, an all--time recordtime record
Small business (< 500 employees) employSmall business (< 500 employees) employ
53% of the private work force and account for53% of the private work force and account for47% of sales and 51% of private sector gross47% of sales and 51% of private sector gross
domestic product (GDP)domestic product (GDP)
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Entrepreneurial Firms ImpactEntrepreneurial Firms Impact
Entrepreneurial firms make two indispensableEntrepreneurial firms make two indispensable
contributions to the economy:contributions to the economy:
First, they are an integral part of theFirst, they are an integral part of therenewal process that pervades and definesrenewal process that pervades and defines
market economies.market economies.
Second, they are the essential mechanismSecond, they are the essential mechanism
by which millions enter the economic andby which millions enter the economic and
social mainstream of any society.social mainstream of any society.
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Trends in Research and EducationTrends in Research and Education
1.1. The entrepreneurial and managerial domains areThe entrepreneurial and managerial domains are
not mutually exclusive but overlap to a certainnot mutually exclusive but overlap to a certain
extent. Former is more opportunity driven, latter isextent. Former is more opportunity driven, latter is
resource and conservation drivenresource and conservation driven
2.2. Venture financing, including both venture capitalVenture financing, including both venture capital
and angel capital financing as well as otherand angel capital financing as well as other
innovative financing techniques, emerged in theinnovative financing techniques, emerged in the
1990s with unprecedented strength feuling1990s with unprecedented strength feuling
entrepreneurship.entrepreneurship.
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Trends in Research and EducationTrends in Research and Education
3.3. Intrapreneurship (that is, entrepreneurshipIntrapreneurship (that is, entrepreneurship
within large organizations) and the need forwithin large organizations) and the need for
entrepreneurial cultures have gained muchentrepreneurial cultures have gained much
attention during the past few years.attention during the past few years.
4.4. Entrepreneurial entry strategies have beenEntrepreneurial entry strategies have been
identified that show some importantidentified that show some important
common denominators, issues, and tradecommon denominators, issues, and trade--offs.offs.
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Trends in Research and EducationTrends in Research and Education
5.5. More research on the psychological aspectsMore research on the psychological aspectshas emerged.has emerged.
6.6. The risks and tradeThe risks and trade--offs of anoffs of anentrepreneurial career have been subject ofentrepreneurial career have been subject ofkeen research interest.keen research interest.
7.7. Women and minority entrepreneurs haveWomen and minority entrepreneurs have
emerged in unprecedented numbers.emerged in unprecedented numbers.8.8. The entrepreneurial spirit is universalThe entrepreneurial spirit is universal
around the world in the past few years.around the world in the past few years.
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Trends in Research and EducationTrends in Research and Education
9.9. The economic and social contributions ofThe economic and social contributions of
entrepreneurs have been shown to makeentrepreneurs have been shown to make
immensely disproportionate contributions toimmensely disproportionate contributions to
job creation, innovation and economicjob creation, innovation and economic
revival than large companies.revival than large companies.
10.10. Entrepreneurial education has become oneEntrepreneurial education has become one
of the hottest topics at U.S. business andof the hottest topics at U.S. business andengineering schools.engineering schools.
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The Age of GazellesThe Age of Gazelles
A gazelle is a businessA gazelle is a business
establishment with at least 20%establishment with at least 20%
sales growth every year (for fivesales growth every year (for fiveyears), starting with a base of atyears), starting with a base of at
least $100,000.least $100,000.
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GazellesGazelles -- InnovationInnovation
Gazelles are leaders inGazelles are leaders in
innovation.innovation.
Gazelles produce twice as manyGazelles produce twice as many
product innovations perproduct innovations per
employee as do larger firms.employee as do larger firms.
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GazellesGazelles -- GrowthGrowth
By the year 2010, demographersBy the year 2010, demographers
estimate, 30 million firms will existestimate, 30 million firms will exist
in the United States, up significantlyin the United States, up significantlyfrom the 22.5 million firms existingfrom the 22.5 million firms existing
in 2000.in 2000.
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GazellesGazelles -- SurvivalSurvival
The common myth is that 85% of allThe common myth is that 85% of all
firms fail in the first year.firms fail in the first year.
The more accurate statement is thatThe more accurate statement is that
about half of all startabout half of all start--ups lastups last
between 5 and 7 years.between 5 and 7 years.
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Emerging Trends: Internet andEmerging Trends: Internet and
EE--CommerceCommerce U.S. businesses spent 85.7 billion on buildingU.S. businesses spent 85.7 billion on building
up their Internet capabilities in 1999.up their Internet capabilities in 1999.
Smaller ventures use the Internet for a varietySmaller ventures use the Internet for a varietyof operations, including customerof operations, including customer--basedbased
identification, advertising, consumer sales,identification, advertising, consumer sales,
businessbusiness--toto--business transactions, ebusiness transactions, e--mail, andmail, andprivate internal networks for employees.private internal networks for employees.
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The EThe E--Commerce ChallengeCommerce Challenge
Electronic commerce (eElectronic commerce (e--commerce)commerce)--
the marketing, promoting, buying,the marketing, promoting, buying,
and selling of goods and servicesand selling of goods and serviceselectronically, particularly via theelectronically, particularly via the
InternetInternet-- is the new wave inis the new wave in
transacting business.transacting business.
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Advantages and Challenges of EAdvantages and Challenges of E--
Commerce for Entrepreneurial FirmsCommerce for Entrepreneurial FirmsAdvantages:Advantages:
Ability of small firms to compete with other companies bothAbility of small firms to compete with other companies bothlocally and nationally.locally and nationally.
Creation of the possibility and opportunityCreation of the possibility and opportunity Convenient and easy way of doing business transactions.Convenient and easy way of doing business transactions.
An inexpensive wayAn inexpensive way
Higher revenuesHigher revenues
Challenges:Challenges: Avoiding being a victim of fraudulent activities online.Avoiding being a victim of fraudulent activities online.
Assuring securityAssuring security
Managing upgrades and Handling the costs required toManaging upgrades and Handling the costs required tomaintain the site.maintain the site.
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Developing a Web SiteDeveloping a Web Site
Attractive and Useful.ButAttractive and Useful.But
Managing the increasedManaging the increasedvisitors traffic, Building avisitors traffic, Building a
website, hosting itwebsite, hosting it
Marketing the WebsiteMarketing the Website
StickinessStickiness
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Use of Internet SitesUse of Internet Sites
Company InformationCompany Information
Corporate image buildingCorporate image building
Product informationProduct information AdvertisingAdvertising
MarketingMarketing
Customer communicationsCustomer communications
93%93%
89%89%
80%80%78%78%
77%77%
76%76%
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Most Important Factors forMost Important Factors for
Customers to do Business OnlineCustomers to do Business OnlineUserUser--friendly and easy to navigatefriendly and easy to navigate
Good previous experiencesGood previous experiences
Fast response timeFast response time
Relevant and updated contentRelevant and updated content
Bargain pricesBargain prices
54%54%
36%36%
36%36%
27%27%
15%15%
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Emerging EEmerging E--Commerce StrategiesCommerce Strategies
33--P Growth ModelP Growth Model
1.1. PresencePresence
2.2. PenetrationPenetration
3.3. ProfitabilityProfitability
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Emerging EEmerging E--Commerce StrategiesCommerce Strategies
Another StrategyAnother Strategy
ReachReach
RichnessRichness
AffiliationAffiliation
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Entrepreneurial OpportunitiesEntrepreneurial Opportunities
Free enterprise is the economic basis for allFree enterprise is the economic basis for all
entrepreneurial activityentrepreneurial activity
The opportunities are unlimitedThe opportunities are unlimited
Consider the following facts Consider the following facts
Self employment growth rateSelf employment growth rate
Home based businessHome based business
Number of new firmsNumber of new firms
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SelfSelf--Employment, 1966Employment, 1966--20062006ThousandsThousands
2,0002,000
4,0004,000
6,0006,000
8,0008,000
10,00010,000
12,00012,000
14,00014,000
AgricultureAgriculture
NonNon--agricultureagriculture
2,1362,136
5,9915,991
8,1278,127
1,6461,646
5,7835,783
7,4287,428
1,4471,447
7,8817,881
9,3279,327 1,5181,518
8,9718,971
10,49010,4901,5191,519
10,09610,096
11,61511,615
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