entrepreneurship management kiran

8/8/2019 Entrepreneurship Management Kiran

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EntrepreneurshipEntrepreneurship

ManagementManagement


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What is Entrepreneurship?What is Entrepreneurship?

Capacity to take risksCapacity to take risks

Ability to own and organizeAbility to own and organize

Desire and capability to innovate and diversifyDesire and capability to innovate and diversify(Stepanek, 1962)(Stepanek, 1962)


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Who is an entrepreneur?Who is an entrepreneur?

Person conducting own businessPerson conducting own business (Webster)(Webster)

Person who sets up business deals in order toPerson who sets up business deals in order tomake profitsmake profits (Collins Cobuild)(Collins Cobuild)

Organizer of an economic venture, one whoOrganizer of an economic venture, one whoowns, organizes, manages, and assumes the risksowns, organizes, manages, and assumes the risksof the businessof the business (Chandrashekhar)(Chandrashekhar)


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Why entrepreneurship?Why entrepreneurship?

Process of creating something different, withProcess of creating something different, with

value, by devoting necessary time and effort, byvalue, by devoting necessary time and effort, by

assuming the accompanying financial,assuming the accompanying financial,psychological, and social risks, and receiving thepsychological, and social risks, and receiving the

resultingresultingrewards of monetary and personal satisfactionrewards of monetary and personal satisfaction

(Bowen and Hisrich, 1986).(Bowen and Hisrich, 1986).


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Role of the EntrepreneurRole of the Entrepreneur

An innovator who combines technical innovations andAn innovator who combines technical innovations andfinancial finesses.financial finesses.

Important role in producing competitive products,Important role in producing competitive products,

processes, and services.processes, and services.

Generation of new employmentGeneration of new employment

Local and regional economic developmentLocal and regional economic development

Improved allocation of resources and transfer ofImproved allocation of resources and transfer oftechnologiestechnologies


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Entrepreneur as an EconomicEntrepreneur as an Economic

PioneerPioneer Introduction of new goods and productsIntroduction of new goods and products

Introduction of new processes and methods ofIntroduction of new processes and methods of

productionproduction Opening up of new marketsOpening up of new markets

Opening up of new sources of supplyOpening up of new sources of supply

Industrial reIndustrial re--organizationorganization


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Strategic Importance of theStrategic Importance of the

SmallS

mall--S

caleS

ectorS

caleS

ector Significant contributions to national income,Significant contributions to national income,

employment, and export earningsemployment, and export earnings

Value of output over Rs. 5,70,000 croresValue of output over Rs. 5,70,000 crores

Employment of over 17.5 million (> twice the privateEmployment of over 17.5 million (> twice the privatesector; almost as much as all public sector employment)sector; almost as much as all public sector employment)

Exports of over Rs. 54,000 crores (> 35 per cent of allExports of over Rs. 54,000 crores (> 35 per cent of all

exports)exports) (2000(2000--01 figures)01 figures)


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Entrepreneurship and SmallEntrepreneurship and Small

BusinessesBusinesses Entrepreneurship is especially critical in smallEntrepreneurship is especially critical in small

businesses because:businesses because:

Important sources of competition for large firms;Important sources of competition for large firms;

challenge their economic powerchallenge their economic power

Offer a wide range of choice to consumersOffer a wide range of choice to consumers

Sources of innovation and creativitySources of innovation and creativity

Good career opportunities to work in an unstructuredGood career opportunities to work in an unstructuredenvironment of a small companyenvironment of a small company


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Marketing ManagementMarketing Management

Demand variables:Demand variables:

Demographic, social, economic, political, andDemographic, social, economic, political, and

competitive factors in market environmentcompetitive factors in market environment Psychological, social, and economic patterns inPsychological, social, and economic patterns in

customer motivationscustomer motivations

All autonomous factorsAll autonomous factors


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SemiSemi--demand variables:demand variables:

Market segmentationMarket segmentation

Customer behaviorCustomer behavior Only partially under the control of theOnly partially under the control of the

entrepreneurentrepreneur


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Decision Variables:Decision Variables:

Product characteristics and pricingProduct characteristics and pricing

Distribution and personal sellingDistribution and personal sellingAdvertising policiesAdvertising policies

Mostly under the control of the entrepreneurMostly under the control of the entrepreneur


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The essential entrepreneurial function inThe essential entrepreneurial function in

marketing management is to design anmarketing management is to design an

integrated marketing plan, where the demandintegrated marketing plan, where the demand

and semiand semi--demand variables of the market aredemand variables of the market are

related to the product and decision variables ofrelated to the product and decision variables of

the firm.the firm.


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Market ResearchMarket Research

Marketing success depends on design of a distinctiveMarketing success depends on design of a distinctivemarketing planmarketing plan

A small entrepreneur should not try to compete on aA small entrepreneur should not try to compete on a

productproduct--toto--product basis with large firms (same goodsproduct basis with large firms (same goodsto same customers thru same channels at same prices !!)to same customers thru same channels at same prices !!)

Instead, try to doInstead, try to do something different.something different.


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Operations ManagementOperations Management

Process of designing and utilizing the physicalProcess of designing and utilizing the physicalresources of the firm to maximize theresources of the firm to maximize theoperational capabilities of the companyoperational capabilities of the company

Product/ service designProduct/ service design

Process designProcess design

Job designJob design

Job standardsJob standards


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Operations ManagementOperations Management

The entrepreneurs smaller firm generally has toThe entrepreneurs smaller firm generally has to

provide specialized, fewprovide specialized, few--ofof--aa--kind products andkind products and

personalized services, without the benefits ofpersonalized services, without the benefits of

mass production and mass distributionmass production and mass distribution


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Financial ManagementFinancial Management

1. Effective utilization of the assets1. Effective utilization of the assets-- current(shortcurrent(short--term)term)and capital (longand capital (long--term)term)

2. Provision of funds to support those assets2. Provision of funds to support those assets

3. Use of current liabilities, intermediate loans, and3. Use of current liabilities, intermediate loans, andcapital debt or equitycapital debt or equity

4. Difficult for smaller companies to compete, in4. Difficult for smaller companies to compete, in

finance, with larger firms, simply because they lackfinance, with larger firms, simply because they lackmoney.money.


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Finances needed for:Finances needed for:

1. New investments in product development1. New investments in product development

2. Expansion of markets2. Expansion of markets

3. Process improvements, etc.3. Process improvements, etc.

Conserve available funds by preparing detailed financialConserve available funds by preparing detailed financialplans, e.g. cash budgets, capital investment analysis,plans, e.g. cash budgets, capital investment analysis,

shortshort--term plansterm plans


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Finding additional funds from sources asFinding additional funds from sources as

1. Current liabilities1. Current liabilities

2. Bank loans2. Bank loans

3. Equity investments3. Equity investments

4. Retained earnings4. Retained earnings

5. Venture capital proposals5. Venture capital proposals

6. Angel funding proposals6. Angel funding proposals


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Product DevelopmentProduct Development

Improvements in design of existing productImprovements in design of existing product

Inventions of new productsInventions of new products

Lack resources for full R&D facilityLack resources for full R&D facility

Must use available capabilities efficientlyMust use available capabilities efficiently

Outsourcing of R&D and innovationOutsourcing of R&D and innovation

Technical feasibility, market feasibility, developmentTechnical feasibility, market feasibility, development

time and cost, manufacturing capability, and strategic fittime and cost, manufacturing capability, and strategic fit


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Organizational ManagementOrganizational Management

and Controland Control Smaller companies go thru identifiable stages ofSmaller companies go thru identifiable stages of

growthgrowth

Increased specializations in tasks of staffIncreased specializations in tasks of staff

Increased delegation on part of founderIncreased delegation on part of founder

Increased systematization and formalization ofIncreased systematization and formalization ofinformation reporting and accountinginformation reporting and accounting

proceduresprocedures


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Formation and GrowthFormation and Growth

Formal and legal procedures of formationFormal and legal procedures of formation--memoranda and articles of associationmemoranda and articles of association

Sole proprietorshipSole proprietorship

PartnershipPartnership

Private limitedPrivate limited

Public listingPublic listing

CooperativeCooperative


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Formation and GrowthFormation and Growth

Purchase of a small companyPurchase of a small company-- identify, screen,identify, screen,

evaluate, negotiate, and structure paymentsevaluate, negotiate, and structure payments

Consolidation of a new companyConsolidation of a new company-- intenseintenseconservation of cash, firm limitations onconservation of cash, firm limitations on

expenses, continual examination of companysexpenses, continual examination of companys

strategy.strategy.


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ConclusionsConclusions

Entrepreneurship is a challenging and rewardingEntrepreneurship is a challenging and rewardingprofessionprofession

Need to concentrate on market analysis, financialNeed to concentrate on market analysis, financial

resources, and technology managementresources, and technology management

Cannot compete directly with the big guys, so needCannot compete directly with the big guys, so needto be ingenious and innovative in all entrepreneurialto be ingenious and innovative in all entrepreneurialfunctionsfunctions

entrepreneurship management kiran

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