Is the industry capital intensive?

Objectives• Examine industry structure, with a focus on

capital intensity, in the context of entrepreneurial industry status

• Explore the impact of capital intensity on your success as an entrepreneur

Exploring industry structure• With industry conditions framing

knowledge and demand factors, it’s important to understand industry status– Industry status addresses industry lifecycle and

industry structure with an emphasis on growth opportunities and industry evolution

• By studying industry structure, aspiring entrepreneurs can assess the industry’s timeliness for new entrepreneurial entrants

MacroeconomicChange

Entrepreneurial Motivation

Entrepreneurial Behavior

Industry

Condition

IndustryStatus

Industry lifecycle

Industry structure

Opportunity Identification

ValueCurve

Competition

The Opportunity Analysis CanvasTM

Entrepreneurial Mindset

Defining industry structure

“the nature of barriers to entry and competitive dynamics within the industry”

• Capital intensity• Advertising intensity• Company concentration• Average company size

Capital intensity defined• Refers to the amount of money required to

enter and compete in the industry– An industry that is expensive to enter has high

capital intensity • (i.e., automotive manufacturing)

– Industries that are inexpensive to enter have low capital intensity

• (i.e., a website providing movie reviews)

How can aspiring entrepreneurs participate in commercial cleaning?

• Start a commercial cleaning company• Start a technology company

– Develop an online training platform to support new commercial cleaners

– Develop an online platform to support the marketing and business operations of commercial cleaners

– ?

Summary• By studying industry structure, aspiring

entrepreneurs can assess the industry’s timeliness for new entrepreneurial entrants– And better understand how to compete

• Low capital intensity presents a more affordable opportunity for new entrants to enter and compete effectively– Also presents a lower barrier to entry for current

and near-future competitors