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INTRODUCTION
The word entrepreneur and concepts derived from it such as entrepreneurial, entrepreneurship
and entrepreneurial process are frequently encountered in discussions of the management of new,
old, fast growing and innovative business ventures. Entrepreneurship is what an entrepreneur
actually does. Entrepreneurial refers to the approach they take (process) or engages in.
ENTREPRENEURSHIP MODEL
Entrepreneur/Person
Organisation
Enterprise
Entrepreneurship/
process
Other
Entrepreneur tasks
performed
Environment
generating activities. The recognition of this fact gives us three angles of the approach to the
Entrepreneur namely:(i)
(ii)
(iii)
create.
An individual i.e by means of their psychology, personality and personal characteristics.
ENTREPRENEURSHIP MODEL
Entrepreneurial
Personality
Entrepreneurial
Organisation
Entrepreneurship
Entrepreneur
tasks
Entrepreneurial
Environment
ENTREPRENEURIAL PERSONALITY
We are all different not only in the way we look but also in the way we act and the way we react
to different situations. Personality is defined as the consistent and persistent profile of beliefs,
feelings and actions which make one person/individual different from another. Entrepreneurial
personality is a combination of the person, his skills, styles, motive etc. The Entrepreneur is
centred to Entrepreneurship because without the key individual, there cannot be creative results.
Personality determines the kind of environment the would be Entrepreneur is likely to feel
comfortable in and hence what type of company the Entrepreneur feels comfortable working in.
ENTREPRENEURIAL TASKS
This is a continuous process focused on identifying, creating, winning over and satisfying each
client. The central task of the Entrepreneur is to recognise and exploit opportunities.
Opportunities may come from many sources. However, the Entrepreneur must have the ability
to perceive opportunities where others do not. In conclusion therefore, Entrepreneurial tasks
depend upon the personality of the Entrepreneur, organisational strategies and environment. For
example provision of employment, provision of products, identify innovations, identifying
opportunities, imitation and creativity.
ENTREPRENEURIAL ENVIRONMENT
Entrepreneurship is to a great extent controlled by the environment. The world surrounding
organisations influences or hinders growth of Entrepreneurship and the viability of the enterprise.
The e Entrepreneurial environment is made up of several element or factors such as politicallegal factors, economic factors, social- cultural factors, technological factors, intermediaries,
competitors, customers, etc.
ENTREPRENEURIAL ORGANISATION
The organisational context is the immediate setting in which creating an entrepreneurial work
takes place. It includes the organisation, its structures, systems, work roles e.t.c. These factors
may facilitate or hider creativity and Entrepreneurship. To some extent, its the Entrepreneur
himself who creates an Entrepreneurial organisation. An appropriate organisational context is
one which fits best with a personal vision with a key task to be performed.
ENTREPRENEUR
This refers to a person who identifies an opportunity and exploits it to the benefit of all other
stakeholders.
He is someone who undertakes a business venture, someone responsible for bringing together
F.O.P, someone who is innovative and takes decisions.
ROLE OF ENTREPRENEURS IN THE SOCIETY
Entrepreneurs are very significant because they have an important effect on the world activities
today. They play a critical role in maintaining and developing the global economic order where
we live. Some of the roles they play include:1.
2.
3.
4.
5.
6.
7.
8.
Create employment
Identify business ventures plus development.
Capital mobilisation (Resources)
Render services to the society.
Contribute to growth and development of the society government revenue.
Facilitate political stability
They also act as role models to other people.
e Entrepreneurs bring together economic factors such as raw materials, labour, capital, etc
(resource mobilisation).
9. They provide market efficiency. Efficiency means that resources are distributed in an
optimal way i.e to the satisfaction that people can gain from them is maximised.
10. They accept risks (calculated risks).
11. Processing market information e.g about the product, the industry, the business
stakeholders, etc.
12. Maximising investors returns.
13. Quick recognition and exploitation of opportunities.
14. Introduction of innovations in terms of new products, new services, new ideas, new
companies, new sources of raw materials, etc.
BARRIERS OF ENTREPRENEURSHIP IN UGANDA
1. Political instability
2. Lack of resources
3. Unfavourable government policies e.g high taxes, constraining laws, high interest rates,
etc.
4. Poor infrastructural facilities e.g telecommunication, road networks, etc.
5. Culture of individuals e.g beliefs.
6. Lack of entrepreneurial skills
7. Unethical behaviour.
8. Poor technological development.
9. Lack of a noble concept/possible concept.
10. Social stigma.
11. Time pressures and destruction/lack of time management.
SOLUTIONS TO BARRIERS (HOW TO OVERCOME BARRIERS)
ENTREPRENEURIAL VENTURES
An Entrepreneurial venture is an enterprise which focuses on innovation and has high potential
for growth and survival. In addition, its also profit oriented.
Classification of Entrepreneurs Two sides
is doing it.
Lack of market awareness.
Lack of financial responsibility and awareness.
Lack of clear focus i.e no planning takes place.
Being optimistic or pessimistic. These two extremes may also cause a failure because
you are not sure whether the venture will take either a short or long period of time.
6. Entrepreneurial incompetences no skills, emotimal activities, no knowledge and no
planning.
7. Neglect, fraud/corruption.
8. Lack of information about your customers, competitors and generally the environment,
government policies, etc.
9. Uncontrollable environmental factors for example climatic factors e.g long droughts,
heavy rains.
10. Cultural attitudes and beliefs, values, norms of the entrepreneur.
11. Changing technology
EMERGENCE OF ENTREPRENEURS
There are several factors that determine emergence entrepreneurs in the global environment
today. There is need to clarify how entrepreneurs emerge. Fro published studies, and expreicnes
re-encountered by entrepreneurs themselves. The formation of the image of an entrepreneur
incorporates factors related to the individual person. These include the following:
1. Personality factors
- Motivation/emotions, behaviour characteristics.
Personality factors may include;
a) Born/made ratio of 50:50
A combination of genetic and environmental influence such as birth order,
experiencing family life (born to be great).
b) Motivation and emotions i.e independence, competitive spirit, challenge et.
c) Behavioural characteristics i.e persistence, determination, risk taking, opportunity
oriented, need to achieve etc.
d) Personality attribute: This is an individuals preferred style e.g interacts and extracts,
receiver or observer, judge/perceiver.
2. Upbringing factors: These may include personal characteristics such as;
a) Age, educational level, place of residence, income, etc.
b) Psychological characteristic i.e. creativity, need for achievement.
c) Women entrepreneurs and the minority. Like man, womens dissatisfaction in their
current jobs and desire for success are major factors promoting them to become
entrepreneurs.
d) Childhood experiences i.e family role models personal extra ordinary experiences i.e
family tragedies such as parents death, serious injury or illness, experience for being
awarded a price, etc.
Pseudo entrepreneurial experiences e.g at an early age, children/kinds making
various products or services, they may print their own money, selling home made
products, baby sitting etc. Childhood experiences are the first steps in becoming a
successful entrepreneur.
3. Migration factors:
People who migrate to foreign lands are more inclined to become self employed. Some of
these may include;
a) Market accessibility e.g textile industry shifting to climax because of the market.
b) Capital accessibility can be a push or pull factor
c) Economic conditions.
d) Business focus e.g change of frame to fit the environment.
e) Support networks.
An understanding of why on established business environment will always had opportunities for
entrepreneurs established business are in a strong position to survive compared to new entrants
because of the gained experience. Despite all this, entrepreneurs do compete effectively against
the established layouts. They identify and exploit new opportunities in the presence of
experienced competitors by thinking there is always a better way of doing things.
There are a variety of reasons why existing business leave gaps in the market that innovative
entrepreneurs can exploit and these include the following;
1. Established business fail to see new opportunities:
Opportunities do not present themselves. They are to be actively sought out. A business
organisation has not only a way of doing things. He does or scanning the environment,
putting in the place the right systems processes accepting and responding to the changing
circumstances and carrying out a business with you. Failure to do so means seeing the world
in a different way.
2) New opportunities are thought to be small;
The value of a new opportunity must be seen as relative to the size of the business which
might pursue/take it on. The chance to gain an extra shilling of business means an increase
in turnover. Therefore, if small opportunities are ignored or atleast not persued vigorously
by existing players/companies, then a new entrant is likely to take it on.
3) Technology inactivity/ inertia
Opportunities are persued by an innovation and technology is a way to address the need.
Failure for businesses to adopt a new technologies leaves room for new entrants to make the
technological innovation based on customer needs and wants.
4) Cultural influences
Each business has its own way of doing things/carrying out its activities. This is the culture
that influences the way in which it delivers values to its customers. There is need for
organisations/ business to change their organizational culture as the competitive
environment changes so as to meet the new challenges. Failure to do it creates a gap for new
entrants.
5) Government intervention to support new entrants:
Government is responsible for providing economic efficiency and effectiveness. It may
provide support through tax incentives, cheap and accessible loans, technology
development, education, consulting and many others.
2. In appreciation of how the image or symbol of the strategic widow can be used to identify
and exploit opportunities, entrepreneurs carryout the different stages given the nature of
the environment i.e five stages which include;
1. Seeing the window; it scanning for the opportunities/spotting. This involves scanning
the solid wall presented by existing players to find the widows and sport the gaps in
what they offer to the market. This process demands an active approach to
identifying new opportunities to innovating in response to them.
2. Locating the widow; i.e position the venture. This instances developing and
understanding of where the widow is located. This demands an understanding of the
positioning of the new offering in the market place relative of the business can
position itself in the market place to existing players to take advantage of the
opportunity presented.
3. Measuring the widow:
This involves evaluation. The opportunity and recognizing the potential it offers to
create new value. This means findings out how much the opportunity might be
worth. This implies getting facts about the market by measuring its size,
understanding its dynamics and trends, evaluating this impact the innovation might
make in it and ascertaining how much customers might be willing to spend on
measuring the window as also demands that the entrepreneur develops an
understanding of the risks the venture might face.
4. Opening the window: i.e gaining commitment.
Having identified, located and measured the window, the next stage is to open it.
Opening the window means taking the vision into reality i.e actually starting the new
business. Critical to this stage is the need to get stakeholders to make a commitment
to the venture i.e to attract investors and employees develop a new sit of relationships
and establish the venture within the network. Once the window is opened, then the
entrepreneur can more through it by speaking that they are actually started up the
business.
5. Closing the window; i.e sustaining competitiveness
Once the window has been opened and the entrepreneur has passed through, then the
window must be closed again. If it is not, then competitors will follow through and
exploit the opportunity as well. Closing the window to stop competitors following
them means creating long term sustainable competitive advantage for the business
Use
1-5
Travel mkt
3
4
2
2
Qty
1
1
1
2
Comp.
2
1
4
2
Total
6
6
7
6
Stage Three
3. Concept development i.e concept in paper early morning think for bachelors.
4. Strategic marketing/Market strategy
- Colour
- Size
- Texture
- Price
New product strategy
Extension product strategy
Each strategy has costs and implications e.g pricing strategy
-
Promotion customers are not aware of the product i.e advertising depending on the
target market.
Direct market for sales promotion, internet, radio, television, etc. The message must be clear.
-
Distribution strategy i.e from premises to customer whether to use agent, retailers,
wholesalers, co representatives or **
Will the **tion be intensive etc?
Shall we do it ourselves or we need to employ other people
5. Business analysis
- Feasibility and viability i.e do we have the resources both financially and human
-
the product
Marketing
Targeted
mkt
6. Product development
You first come up with a proto type and you give out free samples.
7. Test marketing/ Market testing
- This is done in different markets depending on the objectives of the company e.g one you
testing the quality, size, contents, etc.
- You then come out with the evaluation from the market i.e criticisms.
8. Commercialization/launching of the product
Review the product either on an annual basis depending on the company objective.
Most company products fail because they do not follow their process for example B.B. soda.
Some of the hurdles/problems that entrepreneurs face during product planning and development
process.
1. Limited financial resources.
2. There is hardly any marketing research i.e companies are not willing to listen to customer
grievances and complaints e.g Katwe metal works because there is no immediate contact
with customers.
3. Wrong ideas are taken at sometimes.
4. Lack of skills and competences e.g technical skills, communication skills.
5. Competition with the environment e.g other competitors activities i.e no bench marking
because a competitor may launch the product when you are still on the way e.g monitors
Ngoma was intercepted by New Visions Bukedde on launch by giving free papers.
6. Government policy and company laws and regulations.
Factors that lead to failure of New products
1.
2.
3.
4.
5.
itself.
6. Poor marketing strategies in terms of pricing, promotion, advertising messages etc.
Qn: Design a service development system
BUSINESS START UP STRATEGIES
For every business venture, the founder believes that they have either recognized an opportunity
unnoticed by others or they can do something better in a more innovative way than the existing
supplier. Entrepreneurs may decide or may be driven by direct personal experiences to start up
the business. They take on the following strategies.
1. Invention: Entrepreneurs start from scratch to formulate a business venture. While its true
that small firms are more effective than large ones at coming up with ideas, its also true that
most brilliant new ideas dont make good business.
2. Spotting a gap in the market: This involves taking a business concept that works well in
other places and finding a new and under supplied or under competed market in which to
start up. In practice, this is probably the most common way into business. The chances of
success when starting up in this way are greatly improved when the founder knows and
understands the markets, products and services involved.
To maximise market share e.g Shell buying Agip petrol stations country wide.
To reduce the cost of establishing a new company and therefore buy up an existing company.
To maximise the overall performance of the company e.g shareholders wealth.
,
.
,
.
An entrepreneur should produce a well written statement explaining rational behind the reasons
to buy before he/she starts looking for possible companies.
Entrepreneurs analyse and describe what an ideal purchase is by explaining the following key
issues while determining what they are buying;
1.
2.
3.
4.
5.
ACQUISITIONS
Acquisitions are alternatives to organic growth available to an entrepreneur. The entrepreneur
decides to add other businesses to his/her venture so as to grow by acquiring them. There are
three methods of acquisition available to an entrepreneur. These differ in the way in which the
integrated venture is in relation to the value chain addition.
1. VERTICAL INTEGRATION
This involves acquiring a business or firm which is either above or below within the firms/
entrepreneurs value addition chain e.g forward integration i.e acquiring your distribution
outlets from customers or backward integration i.e acquiring the suppliers business.
2. LATERAL INTEGRATION
This is where an entrepreneur acquires the business which is at the same level of value
addition within the chain e.g from juice to acquire a car business.
3. UN-RELATED ACQUISITION
This occurs when the integrated business is not a supplier or a distributor or a competitor. E.g
Aga Khan.
ADVANTAGES OF ACQUISITION TO THE FIRM
1. Reduction in costs depending on the nature or type of intergration. E.g operational cost,
2.
3.
4.
5.
DISADVANTAGES
1. Competitors may retaviate e.g Mango plus UTL against MTN.
2. The company may face diseconomies of scale because costs of production may increase as
well as prices and taxes.
3. Human Resource may be a problem because you may require people with experience and yet
the acquired firm has inexperienced people.
4. Unpredictable environmental factors during the acquisition process.
5. The purchase price is the return on the investment may be to low as compared to the
purchase price.
6. Inherited customer base may not be the most desirable and changing the firms image may be
difficult.
7. Building the companys image and layout may not conform to the standards as per the
acquisition.
WAYS HOW TO MANAGE AN ACQUISITION
1. Having a strategic plan: This should be prepared in advance.
2. Howl management and staff meetings on the first day to ensure effective communication.
3. Set limits of authority, reporting relationships and any other networks should be clearly set.
LOCATION OF AN ENTERPRISE/VENTURE
Plant/business/venture location is the decisionmade by an entrepreneur to establish the venture in
a particular area. This decision is affected by many factors.
FACTOR THAT AFFECT THE CHOICE FO LOCATION FOR A VENTURE
1.
2.
3.
4.
5.
2.
3.
4.
5.
activities.
9. Entrepreneur are born not made. Discuss
Approach
Family background ** side.
Migration
Employment history made order
etc
10. Competitive techniques to adopt.
- There is no wrong answer here;
e.g brading
-
Logo
Price
Quality etc