MIS-303 Suggestion
Chapter-01
1. What is Entrepreneurship? Describe the entrepreneurial process.
Answer: Entrepreneurship refers to the act of individuals taking the initiative to bring together resources in innovative ways
and being willing to take risks and bear uncertainties to create something new of value. It involves the process of identifying
opportunities, creating a business plan, acquiring necessary resources, and managing the resulting enterprise.
The entrepreneurial process:
1.
2.
3.
4.
Opportunity Identification: This is the phase where an entrepreneur identifies a potential opportunity for a new venture.
Market size and the length of the window of opportunity are important factors in assessing the risks and rewards
associated with the opportunity. Window of opportunity is the time period available for creating the new venture.
Business Plan: Once an opportunity is identified, the entrepreneur develops a business plan. This plan outlines the
future direction of the business and how it will be executed.
Determination of the required resources: The entrepreneur evaluates the resources required to pursue the opportunity.
This includes assessing existing resources and identifying any additional resources needed. It is crucial to accurately
estimate the resources required and consider the risks associated with inadequate or inappropriate resources.
Management of the resulting Enterprise: After acquiring the necessary resources, the entrepreneur implements the
business plan and manages the resulting enterprise. This involves establishing a management style and structure,
identifying key success factors, and implementing a control system to address any problems that may arise.
Throughout the process, entrepreneurs need to think in an entrepreneurial mindset. This involves being able to rapidly
sense, act, and mobilize, even in uncertain conditions. Cognitive adaptability is also important, as it allows entrepreneurs
to be dynamic, flexible, and engage in the process of generating multiple decision frameworks to respond to changes in
their environment. Learning from failure is another crucial aspect, as it enables entrepreneurs to grow and improve by
analyzing and understanding the causes of failure and making necessary adjustments.
2. What are the differences between a Businessman and an Entrepreneur?
Answer:
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3. Describe how entrepreneurs think.
Answer: Entrepreneurs think in unique ways that enable them to navigate the challenges and uncertainties of the business
world. Here is an explanation of how entrepreneurs think:
1.
2.
3.
4.
Effectuation: Entrepreneurs focus on achieving specific goals and figure out how to make them happen. They are
action-oriented and take proactive steps to bring their ideas to fruition. They emphasize taking control of the situation
and shaping outcomes rather than predicting and analyzing all possible scenarios.
Cognitive Adaptability: Entrepreneurs exhibit cognitive adaptability by being flexible and able to adjust their thinking
based on the situation. They understand that the business landscape is constantly changing, and they need to adapt
their strategies and approaches accordingly. This adaptability allows them to quickly sense what's going on, take action,
and adjust their thinking in uncertain environments.
Learning from Failure: Entrepreneurs view failure as an opportunity for growth and learning. When they make
mistakes, they use them as valuable learning experiences to improve their future decisions and actions. They analyze
the causes of failure, identify lessons learned, and make adjustments to their strategies and approaches based on those
insights.
Causal Process: Entrepreneurs understand the cause-and-effect relationships in their decision making. They analyze
the factors that influence their outcomes, both positive and negative, and use this understanding to make informed
decisions. They consider how their actions and decisions will impact their goals and the overall success of their
ventures.
4. Describe Ethics and Social Responsibility of entrepreneurs.
Answer: Ethics and social responsibility are important considerations for entrepreneurs as they navigate the business
environment and make decisions that impact various stakeholders. Based on the provided input, here is an explanation of
the ethics and social responsibility of entrepreneurs:
1.
2.
3.
4.
5.
6.
7.
Personal Ethical Code: Entrepreneurs develop their own internal ethical code based on their personal values and
principles. This code guides their behavior and decision-making processes, helping them navigate ethical dilemmas
and make choices that align with their moral compass.
Influence of External Factors: Entrepreneurs are influenced by various external factors, such as peer pressure, social
norms, and pressures from competitors. These factors can shape their ethical decisions and behavior. Different
communities and countries may have different norms and values, which can influence how entrepreneurs perceive and
address ethical considerations.
Business Ethics: Business ethics is the study of behavior and morals in a business context. Entrepreneurs are concerned
with balancing ethical considerations, economic expediency, and social responsibility. They strive to ensure that their
business practices align with ethical principles and contribute positively to society while pursuing economic success.
Fair Resource Deployment: Entrepreneurs have a responsibility to manage their businesses in a way that ensures fair
resource deployment among stakeholders, including employees, customers, suppliers, and society at large. They aim
to avoid exploitation and promote equitable distribution of resources. By identifying discrepancies in the value of
stakeholders' resources, entrepreneurs can enter the market to capture profit while ensuring a more balanced and fair
distribution of resources.
Social Impact: Entrepreneurs recognize the social impact of their actions and decisions. They strive to create businesses
that not only generate economic value but also contribute positively to society. They may pursue social
entrepreneurship, which focuses on addressing social or environmental challenges through innovative business models
and solutions.
Consideration of Stakeholders: Entrepreneurs take into account the interests and well-being of their stakeholders,
including employees, customers, suppliers, and the community. They aim to establish relationships based on trust,
fairness, and mutual benefit. By considering the needs and concerns of stakeholders, entrepreneurs can make informed
decisions that consider the broader impact of their actions.
Continuous Improvement: Entrepreneurs are committed to continuous improvement in ethical practices. They engage
in ongoing reflection, learning, and dialogue to enhance their understanding of ethical issues and develop strategies to
address them. They may seek external guidance, participate in ethical discussions, or adopt ethical frameworks to
guide their decision-making processes.
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5.what is the role of entrepreneurs in economic development?
Answer: Entrepreneurs play a significant role in economic development by driving innovation, attracting investment, and
revitalizing communities. Here is an explanation of the role of entrepreneurs in economic development:
1.
2.
3.
4.
5.
6.
Innovation and Product Development: Entrepreneurs are catalysts for innovation, bringing about changes in business
and society. They identify market needs and develop new products or services to meet those needs. By introducing
innovative solutions, entrepreneurs drive economic growth and create opportunities for advancement.
Investment Attraction: Entrepreneurs play a crucial role in attracting investment to support new ventures. Their
innovative ideas and potential for growth attract financial resources from investors. This investment not only supports
the entrepreneurial ventures themselves but also contributes to the overall economic development of the region or
country.
Economic Wealth Generation: Entrepreneurship, particularly through the process of innovation, leads to the generation
of economic wealth. By developing and commercializing innovative products or services, entrepreneurs contribute to
increased productivity, job creation, and higher incomes. This, in turn, stimulates consumer spending and economic
growth.
Revitalization of Communities: Entrepreneurs can have a positive impact on communities, particularly in areas that
are economically depressed or underserved. Through their entrepreneurial endeavors, they can revitalize these
communities by creating jobs, attracting investment, and fostering economic activity. This revitalization contributes
to the overall development and prosperity of the community.
Inner-City Transformation: Entrepreneurship has the power to transform inner-city areas. Individuals in these areas
often see entrepreneurship as an opportunity to improve their current situations. As entrepreneurs establish businesses
and create employment opportunities, they contribute to the revitalization of inner-city areas, transforming them into
vibrant locations with a thriving entrepreneurial ecosystem.
Different Types of Innovation: Entrepreneurship encompasses different types of innovation, including ordinary,
technological, and breakthrough innovations. Each type has the potential to evolve and be developed for
commercialization, leading to economic wealth generation. By embracing and driving these different types of
innovation, entrepreneurs contribute to economic development on various fronts.
Chapter-02
1. Describe the intention to act entrepreneurially.
Answer: The intention to act entrepreneurially is influenced by several factors related to the perception of feasibility and
desirability. Here is an explanation of these factors:
1.
2.
Feasibility: Feasibility refers to the belief that one has the ability to successfully execute entrepreneurial activities.
This belief is known as entrepreneurial self-efficacy. Individuals with high self-efficacy believe in their capabilities,
skills, and knowledge to perform well in entrepreneurial endeavors. They have confidence in their ability to identify
and seize opportunities, manage risks, and overcome challenges. This high self-efficacy motivates them to take action
and pursue entrepreneurial outcomes. On the other hand, individuals with low self-efficacy may doubt their
capabilities, leading to reduced effort and performance in entrepreneurial activities.
Desirability: Desirability reflects an individual's attitude toward entrepreneurial action and their evaluation of the
potential outcomes of entrepreneurship. It encompasses the perceived rewards, benefits, and personal fulfillment
associated with being an entrepreneur. If someone perceives entrepreneurship as an attractive and rewarding path, they
are more likely to have a higher intention to act entrepreneurially. This positive attitude can be influenced by factors
such as the potential for financial success, independence, creative freedom, personal growth, and impact on society.
The intention to act entrepreneurially is strengthened when individuals perceive both high feasibility and high desirability.
When they believe in their capabilities and skills (feasibility) and find the potential outcomes favorable and rewarding
(desirability), their intention to pursue entrepreneurial opportunities becomes stronger.
It's important to understand that the intention to act entrepreneurially is influenced by individual background characteristics.
These characteristics can help determine why some individuals are more likely to engage in entrepreneurship than others.
By examining factors such as education, prior entrepreneurial experience, social networks, personality traits, and cultural
influences, we can gain insights into an individual's likelihood of perceiving entrepreneurial action as feasible and/or
desirable. These insights can shed light on their intention to become entrepreneurs.
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2. Explain how age, education, and work history are related to entrepreneurship.
Answer: Age, education, and work history are important factors that can influence entrepreneurship. Here is an explanation
of how these factors relate to entrepreneurship:
Education: Education plays a significant role in entrepreneurship by providing individuals with knowledge and skills that
are valuable in starting and running a business. Formal education can provide a foundation in business management,
finance, marketing, and other relevant disciplines. It helps entrepreneurs develop critical thinking, problem-solving, and
communication skills that are essential for navigating the challenges of entrepreneurship. However, it's important to note
that having a formal education is not a prerequisite for becoming an entrepreneur. Many successful entrepreneurs have
achieved success without a traditional educational background. While education can increase the chances of recognizing
and capitalizing on opportunities, it does not guarantee entrepreneurial success.
Age: Age is another factor that influences entrepreneurship. Entrepreneurial careers often begin between the ages of 22 and
45. There are specific milestone ages, such as 25, 30, 35, 40, and 45, when individuals are more likely to start their
entrepreneurial journeys. These ages often coincide with life transitions, such as completing education, gaining work
experience, or reaching a point where individuals have accumulated enough resources and experience to pursue their
entrepreneurial aspirations. Generally, male entrepreneurs tend to start their ventures in their early 30s, while women
entrepreneurs often do so in their mid-30s. However, entrepreneurship is not limited to young individuals. Older individuals
may also pursue entrepreneurship later in life when they have accumulated knowledge, experience, and financial stability,
and are looking for new opportunities and fulfillment.
Work History: Work history plays a significant role in the decision to start a new venture and the success of the
entrepreneurial endeavor. Dissatisfaction with one's job or career can be a motivating factor for individuals to start their
own businesses. Previous work experience provides valuable industry knowledge, technical expertise, and understanding
of market dynamics. It equips entrepreneurs with the skills and networks necessary for product development, financing,
marketing, and distribution channels. Entrepreneurial success often relies on the ability to leverage prior work experience
and industry know-how to identify opportunities and navigate challenges. Moreover, previous start-up experience can be a
predictor of future entrepreneurial ventures, as it provides entrepreneurs with valuable expertise, benchmarks for decisionmaking, and confidence in their abilities.
3. Write short notes on any three:
a. Role models
b. Support Systems
c.
Moral-Support Network
d. Professional-Support Network.
Answer:
a. Role Models:
Role models are individuals who have a significant influence on an entrepreneur's career choice and style. They can be
parents, family members, or other successful entrepreneurs. Role models serve as catalysts and sources of inspiration for
aspiring entrepreneurs. They offer guidance, advice, and information based on their own experiences. Role models can also
act as mentors, providing valuable support and helping entrepreneurs navigate the challenges of starting and running a
business.
b. Support Systems:
Entrepreneurs require support systems during the process of starting a new venture. These support systems can be
categorized into moral-support networks and professional-support networks.
c. Moral-Support Network:
A moral-support network consists of family and friends who provide psychological support to entrepreneurs. Spouses play
a crucial role in providing understanding and allowing entrepreneurs to dedicate the necessary time and effort to their
ventures. Friends can offer encouragement, advice, and assistance. Relatives, especially those who are also entrepreneurs,
can provide strong moral support by sharing their own experiences and offering guidance.
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d. Professional-Support Network:
A professional-support network includes mentors, business associates, suppliers, trade associations, and personal
affiliations that offer advice and counsel to entrepreneurs. Mentors are experienced individuals who act as coaches and
sounding boards, providing practical advice and guidance. Business associates, such as clients, consultants, lawyers, and
accountants, can offer valuable insights, connections, and expertise. Suppliers contribute to building a good relationship
and can provide industry-specific information. Trade associations provide overall industry data and networking
opportunities. Personal affiliations, such as participation in clubs, alumni groups, or shared hobbies, can serve as sources
of referrals, advice, and information.
4. Show differences between Managerial Decision Making and Entrepreneurial Decision Making.
Answer:
5. What are the Characteristics of an Entrepreneurial Environment?
Answer: Characteristics of an Entrepreneurial Environment:
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6. What are the steps for Establishing corporate entrepreneurship in an organization?
Answer: Corporate entrepreneurship refers to the practice of fostering an entrepreneurial mindset and encouraging
innovative and creative initiatives within a larger organization.
Steps for Establishing Corporate Entrepreneurship in an Organization:
1. Secure commitment and establish the framework:
- Gain support from top, upper, and middle management levels.
- Create an initial framework that embraces corporate entrepreneurship.
- Identify, select, and train corporate entrepreneurs who will drive entrepreneurial initiatives.
2. Identify ideas and areas of interest:
- Find ideas and areas that align with top management's interests and strategic goals.
- Determine the available risk capital for developing the chosen concepts.
- Set clear program expectations and define target results for each corporate venture.
- Establish a mentor/sponsor system to guide and support corporate entrepreneurs.
3. Utilize technology for organizational flexibility:
- Leverage technology to enhance the organization's flexibility and adaptability.
- Embrace digital tools and platforms that enable agile decision-making and rapid innovation.
4. Train interested managers and share experiences:
- Identify managers who can serve as trainers and equip employees with necessary skills.
- Encourage the sharing of experiences and best practices among managers to foster a culture of learning and innovation.
5. Get closer to customers:
- Develop strategies to strengthen the organization's connection with customers.
- Utilize customer databases, hire employees from smaller rivals for fresh perspectives, and support retailers to enhance
customer engagement.
6. Increase productivity with fewer resources:
- Promote an efficiency mindset among employees to maximize productivity.
- Implement lean and streamlined practices to optimize operations and reduce waste.
7. Establish a strong support structure:
- Create a robust support structure that provides necessary resources, funding, and flexibility for entrepreneurial ventures.
- Ensure the organizational structure supports and encourages entrepreneurial initiatives.
8. Tie rewards to performance:
- Link rewards and incentives to the performance of entrepreneurial units within the organization.
- Motivate team members by rewarding their contributions to the success of corporate entrepreneurship efforts.
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9. Finally, implement an evaluation system:
- Establish an evaluation system that allows successful ventures to expand and unsuccessful ones to be eliminated.
- Ensure the evaluation system aligns with the organization's mission statement and strategic goals.
While implementing corporate entrepreneurship, organizations may face challenges such as maintaining long-term
commitment, limited decision-making freedom, and a constrained environment. However, successful companies like 3M,
Hewlett-Packard (HP), and IBM have demonstrated effective implementation of corporate entrepreneurship by allowing
employees to pursue independent projects, recognizing innovation opportunities, and establishing autonomous business
units. By following these steps and learning from successful cases, organizations can establish a culture of corporate
entrepreneurship, drive innovation, and foster growth.
7.Mr. Watson is an intrapreneur; he dreams big and focuses on innovation. What type of person is called an intrapreneur?
What are the similarities and differences between intrepreneur and entrepreneur?
Answer: An intrapreneur is an individual who exhibits entrepreneurial traits and behaviors within an established
organization or company. They are often referred to as "internal entrepreneurs" or "corporate entrepreneurs." Intrapreneurs
possess an innovative mindset and drive to create new ideas, products, or processes within the existing organizational
structure.
Similarities between intrapreneurs and entrepreneurs:
1. Innovation: Both intrapreneurs and entrepreneurs focus on innovation and generating new ideas.
2. Risk-taking: Both intrapreneurs and entrepreneurs are willing to take risks, although the level of risk may vary between
them.
3. Opportunity-seeking: Both intrapreneurs and entrepreneurs actively seek out opportunities for growth and improvement.
Differences between intrapreneurs and entrepreneurs:
1. Organizational context: Intrapreneurs operate within an existing organization, while entrepreneurs typically start their
own ventures outside of established companies.
2. Resource availability: Intrapreneurs have access to the resources, infrastructure, and support of the organization they
work for, whereas entrepreneurs often need to secure their own resources and build their infrastructure.
3. Ownership: Intrapreneurs do not typically own the organization they work for, whereas entrepreneurs are usually the
owners or co-founders of their ventures.
4. Risk profile: Intrapreneurs generally face lower personal financial risk compared to entrepreneurs. Entrepreneurs often
invest their own capital or secure external funding for their ventures, while intrapreneurs operate within the safety net of
an established organization.
5. Impact scope: Intrapreneurs primarily focus on innovating within the existing organizational framework, whereas
entrepreneurs have the flexibility to venture into new industries, markets, or disruptive business models.
6. Autonomy: Entrepreneurs have a high degree of autonomy and decision-making power in their ventures, while
intrapreneurs may have to navigate within the organizational hierarchy and obtain approvals for their initiatives.
Chapter-03
1. How can an entrepreneur generate new entry opportunity?
Answer: An entrepreneur can generate a new entry opportunity in the following ways:
1.
Leverage market knowledge: The entrepreneur's intimate understanding of a market and customers enables them to
identify problems that customers have with existing products. This insight allows them to bring together resources
to provide a solution and create an opportunity.
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2.
Leverage technological knowledge: The entrepreneur's expertise in a technology allows them to adapt and advance
it in ways that open up new commercial applications and opportunities, even if the market applicability was not
originally obvious.
3.
Recombine resources: Entrepreneurs can create valuable and unique combinations of resources by using their own
special experiences and knowledge, which allows them to take advantage of new opportunities in the market.
4.
Search for information: Entrepreneurs can actively gather information to understand if a potential opportunity for
starting a new business is attractive and if there is enough demand from customers.
5.
Assess the opportunity: After identifying a potential new entry, the entrepreneur assesses whether the new product
or market is sufficiently attractive to exploit, based on the information available.
2. How does an entrepreneurial strategy first generate a new entry and then exploit it over time?
Answer: An entrepreneurial strategy generates and exploits a new entry in three stages:
1.
New entry generation: In this stage, the entrepreneurial strategy involves the combination of knowledge and other
resources to create a new entry opportunity. The goal is to develop a bundle of resources that is valuable, rare, and
difficult for others to imitate.
2. New entry exploitation: Once a new entry opportunity is identified and deemed attractive, the entrepreneurial
strategy focuses on exploiting it. This stage involves implementing a specific entry strategy, assessing the risks
associated with the new entry, and organizing the firm in a way that maximizes its performance.
3. Feedback loop: The third stage involves a feedback process that connects the creation and utilization of new
business opportunities back to 1the initial stage. This feedback loop is crucial because long-term success as an
entrepreneur depends on continuously finding and using new opportunities. Without consistently finding and using
new opportunities, the organization's growth may decline as the product or market becomes more established.
3. How does an entrepreneur decide to exploit or not to exploit new entry opportunity?
Answer: An entrepreneur decides whether to exploit a new entry opportunity based on several factors. Here are some
considerations an entrepreneur may consider when making this decision:
1.
2.
3.
4.
5.
6.
Attractiveness of the opportunity: The entrepreneur assesses the attractiveness of the new entry opportunity. This
involves evaluating factors such as market potential, demand, profitability, competition, and growth prospects. If the
opportunity is deemed attractive, the entrepreneur is more likely to choose to exploit it.
Resource availability: The entrepreneur considers the resources required to exploit the new entry opportunity. This
includes financial resources, human capital, expertise, technology, and infrastructure. If the entrepreneur has the
necessary resources or can acquire them, they are more likely to proceed with exploiting the opportunity.
Risk assessment: Entrepreneurs acknowledge that new entry involves making decisions under conditions of
uncertainty. They evaluate the risks associated with the new entry opportunity, including market risks, operational
risks, financial risks, and competitive risks. If the entrepreneur believes they can manage or mitigate the risks
effectively, they may choose to exploit the opportunity.
First-mover advantages and disadvantages: The entrepreneur assesses the potential first-mover advantages and
disadvantages associated with the new entry opportunity. Being the first to enter a market or introduce a new product
can provide advantages such as establishing brand recognition, capturing market share, and setting industry standards.
However, it may also entail risks and challenges, such as educating the market or facing potential imitators. The
entrepreneur weighs these factors when deciding whether to exploit the opportunity.
Alignment with strategic goals: The entrepreneur considers the alignment of the new entry opportunity with their
overall strategic goals and vision. They evaluate whether the opportunity aligns with their core competencies, longterm objectives, and growth plans. If the opportunity fits well within their strategic framework, the entrepreneur is
more likely to proceed with exploiting it.
Personal motivation and passion: The entrepreneur's personal motivation and passion for the opportunity play a role
in the decision-making process. If the entrepreneur is genuinely enthusiastic about the new entry opportunity and
believes in its potential, they may be more inclined to exploit it.
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4. What are the advantages for an entrepreneur to be a first mover?
Answer: Some of the key advantages for an entrepreneur to be a first mover include:
1.
First movers can develop a cost advantage by moving down the experience curve and benefiting from economies
of scale and learning effects over time.
2.
First movers face less competitive rivalry initially as the market is growing rapidly and competitors are focused
on meeting new demand rather than taking market share.
3.
First movers can secure important distribution channels and suppliers before competitors.
4.
First movers are better positioned to satisfy customers by securing attractive segments, establishing their product
as the industry standard, and adapting to changes in customer needs over time.
5.
First movers gain expertise through early participation by learning from early products, monitoring market
changes, and building networks.
6.
First movers may be able to establish customer loyalty, build switching costs, and protect product uniqueness to
erect barriers to entry. This can extend their lead time of limited competition.
5. What are the disadvantages for an entrepreneur to be a first mover?
Answer: Some of the key disadvantages or risks for an entrepreneur to be a first mover include:
1. Environmental instability: The industry may be unstable, making it difficult for first movers to predict what will lead to
success. Changes in demand or technology can put them in a disadvantageous position.
2. Customer uncertainty: Customers may be unsure about a new and innovative product, which can slow down its adoption
if they do not have a reference point.
3. Short lead time: If there are no barriers to entry like customer loyalty or patent protection, competitors can quickly enter
the market and erode any advantages the first mover had.
4. Higher costs: First movers often must invest more in research and development and other initial costs compared to later
entrants, leading to higher expenses.
5. Technological uncertainty: The technology chosen by first movers may become outdated when superior options are
adopted by later entrants, diminishing their advantage.
6. Organizational inertia: Successful first movers may struggle to adapt their organization's routines and resources to
changes in the market, making them vulnerable.
7. Liabilities of newness: As new organizations, first movers face challenges such as learning new tasks, conflicts over
roles, and limited communication networks.
In essence, while there are significant potential first-mover advantages, there are also risks or disadvantages related to
uncertainty, short lead times, inertia and the liabilities of newness that entrepreneurs need to consider. Weighing up these
pros and cons is important in deciding when to enter a new market.
6. What are the risk reduction strategies for new entry opportunity?
Answer: Some of the key risk reduction strategies for a new entry opportunity include:
1.
Narrow market scope: Focusing on a specific and specialized market segment allows for customization and in-depth
knowledge. This can help reduce competition from larger companies that cater to broader markets. However, it also
increases the risk of relying heavily on that particular market segment.
2.
Broad market scope: Taking a portfolio approach by offering different products or services to various market segments
helps reduce the risk of changes in customer demand. However, it also means facing more competition from a wider
range of competitors.
3.
Imitation strategies: Copying proven business formulas like franchising, or using "me-too" approaches, leverages
established demand and practices to reduce risk and costs. However, imitation has limits.
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4.
Intellectual property protection: Patents, copyrights, trademarks, and trade secrets can protect unique aspects of the
new entry from imitation. This sustains competitive advantage.
5.
Building customer loyalty: Efforts to establish the product and build loyalty make it harder for future entrants to
compete for the same customers.
6.
Developing switching costs: Reward programs, such as loyalty programs, that encourage customers to stay with a
business by offering incentives, can make it expensive for them to switch to another company in the future. This
discourages new competitors from trying to attract those customers.
7.
Securing distribution channels: Developing exclusive relationships with key suppliers and distributors leaves fewer
options for future entrants.
7. What do you mean by imitation strategies? Write different types of imitation strategies.
Answer: Imitation strategies refer to the copying of practices from other successful firms to reduce the risks and costs
associated with new entry. Several types of imitation strategies:
1.
Franchising: Franchising is when someone buys the rights to use a successful business model from a franchisor. For
instance, becoming a McDonald's franchisee. By doing this, they can benefit from the well-known brand, products,
expertise, and successful methods of McDonald's. It helps reduce the risks involved in starting a new business.
2.
"Me-too" strategies: This involves copying products that already exist on the market and attempting to differentiate
through minor variations. For instance, imagine there's an ice cream shop that wants to be successful. They might look
at other popular ice cream shops and copy things like how the shop looks, the flavors they offer, and the promotions
they run. However, to stand out, they would choose a different location for their shop.
3.
Adaptation for new markets: This involves taking an existing product or service that is unprotected by intellectual
property rights and introducing it to a new market not currently served. The product itself is imitation but the market
targeted is differentiated.
The key benefit of imitation strategies is reducing the risks, costs and uncertainties associated with research and
development, demand creation and establishing legitimacy. By not having to reinvent the wheel, an imitator can overcome
the liabilities of newness faster. However, imitation strategies cannot form the entire basis of competitive advantage. Some
unique, hard-to-imitate elements are still needed.
8. Write short note:
a. New Entry b. Window of opportunity c. Search cost d. Error of commission e. Error of omission
Answer:
a. New entry: Offering a new product to an established or new market, offering an established product to a new market, or
creating a new organization. Newness represents differentiation but also challenges like uncertainty.
b. Window of opportunity: The period when the environment is favorable for entrepreneurs to exploit a particular new
entry. The window may close as the environment changes. Faster search comes with the risk of missing the window.
c. Search cost: The costs in both money and time associated with an entrepreneur searching for more information to assess
the attractiveness of a new entry opportunity. Longer search periods improve information but have search costs.
d. Error of commission: Error of commission refers to a situation where a person or a business makes a mistake by taking
action on a new opportunity that they thought would be beneficial, but it turns out to be less appealing than they expected.
As a result, they experience negative consequences. The costs incurred are a result of their decision to pursue that
opportunity in the first place. In simpler terms, it means making a wrong move by going after an opportunity that doesn't
turn out as good as anticipated, and it ends up costing them in various ways.
e. Error of omission: The negative outcome from not taking advantage of a new opportunity, which later turns out to be
more valuable and appealing than expected, is called an error of omission. The costs associated with this error are the
potential gains that were missed by not pursuing the opportunity. In simpler terms, it means making a mistake by not going
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after a promising opportunity that could have brought significant benefits. As a result, you end up losing the potential gains
that could have been achieved by taking advantage of that opportunity.
Chapter-04
1. Think of yourself as an entrepreneur, how can you identify various sources of ideas for new ventures?
Answer: Sources of Ideas for New Ventures:
a.
Consumers: Gathering information and feedback from consumers can provide valuable insights and ideas for new
ventures.
b.
Existing products and services: Analyzing existing products and services in the market can inspire new ideas for
innovative ventures.
c.
Distribution channels: Exploring different distribution channels can uncover opportunities for new ventures.
d.
The federal government: Keeping an eye on government initiatives, policies, and funding programs can lead to ideas
for new ventures.
e.
Research and development: Staying updated on the latest research and development advancements can help you
come up with new and exciting business opportunities.
f.
Focus groups: Conducting focus groups can generate new ideas and help screen and analyze concepts for new
ventures.
g.
Brainstorming: Engaging in brainstorming sessions with a diverse group of individuals can stimulate creative
thinking and generate new venture ideas.
h.
Brainwriting: Using the brainwriting technique, where individuals write down their ideas and pass them on to others
for further development, can generate a variety of new venture ideas.
i.
Problem inventory analysis: Analyzing existing problems and challenges in the market can inspire ideas for new
ventures that provide solutions.
j.
Web 2.0: The emergence of Web 2.0 has created opportunities for new ventures in areas such as consulting, blogging,
online video, mobile applications, and Wi-Fi apps.
2. What are the methods of generating new ideas?
Answer: Methods of Generating New Ideas:
1. Focus groups: Groups of individuals providing information in a structured format, which can generate new ideas and
screen concepts quantitatively.
2. Brainstorming: Engaging in a creative thinking session with a group to generate a wide range of ideas for new
ventures. Rules of brainstorming:
•
•
•
•
No criticism.
Freewheeling is encouraged.
Quantity of ideas is desired.
Combinations and improvements of ideas are encouraged.
3. Brainwriting: Using the brainwriting technique, where individuals write down their ideas and pass them on to others
for further development, can generate a variety of new venture ideas.
4. Problem inventory analysis: Analyzing existing problems and challenges in the market to inspire ideas for new
ventures that provide solutions.
These methods, such as focus groups, brainstorming, brainwriting, and problem inventory analysis, can help entrepreneurs
generate and test new ideas for ventures. By involving individuals in structured discussions, encouraging creative thinking,
and analyzing existing problems, these methods provide avenues for innovative and viable venture ideas.
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3. What are the techniques for an entrepreneur to solve any problem creatively?
Answer: There are several techniques that entrepreneurs can use to solve problems creatively:
1. Brainstorming: This technique involves starting a session with a problem statement and gathering ideas from a group of
people who are not experts in the field. All ideas are recorded without judgment.
2. Reverse Brainstorming: In this method, the focus is on identifying the negative aspects of a product, service, or idea, as
well as finding ways to overcome those problems. It is important to maintain group morale during this process.
3. Gordon Method: This approach is used when individuals are unaware of the problem. By not being influenced by
preconceived ideas and behavioral patterns, new solutions can be developed.
4. Checklist Method: This technique involves creating a list of related issues and using it as a guide to develop new ideas.
5. Free Association: This method involves developing new ideas by making word associations in a chain. One word leads
to another, sparking creative thinking.
6. Forced Relationships: This technique involves looking at combinations of products or elements and generating ideas
based on the relationships between them. It follows a five-step process to generate ideas.
7. Collective Notebook Method: This approach involves group members regularly recording their ideas in a shared
notebook, allowing for collaboration and the development of new ideas over time.
8. Attribute Listing: This technique involves looking at the positives and negatives of a situation or problem and using that
analysis to generate new ideas.
9. Big-Dream Approach: This method encourages thinking without constraints. By letting go of limitations and restrictions,
new and innovative ideas can be developed.
10. Parameter Analysis: This technique involves focusing on parameter identification and creative synthesis. By analyzing
the different parameters of a problem, new ideas can be generated.
These techniques can help entrepreneurs approach problems from different angles and stimulate creative thinking to find
innovative solutions.
4. Define innovation. Write types of innovation with example.
Answer: Innovation is the process of introducing new ideas, products, services, or processes that bring about significant
change and improvement. It involves the application of creativity and problem-solving to create something novel and
valuable.
Types of Innovation:
1. Breakthrough Innovation: This type of innovation involves highly unique and groundbreaking ideas or inventions that
establish new platforms for future developments. They often serve as the basis for further innovations in a particular field.
An example of breakthrough innovation is the invention of the internet, which revolutionized communication and
information sharing.
2. Technological Innovation: Technological innovation focuses on the application of new technologies or the improvement
of existing technologies to create new products, services, or processes. It aims to bring about advancements in technology
and can lead to significant improvements in efficiency, performance, or functionality. A notable example of technological
innovation is the development of smartphones, which combine various technologies such as mobile communication,
computing, and internet access into a single device.
3. Ordinary Innovation: Ordinary innovation, also known as incremental innovation, involves making small improvements
or modifications to existing products, services, or processes. It is driven by market analysis and customer needs, aiming to
enhance the product or service's functionality. An example of ordinary innovation is the continuous improvement of
automobile design and features over time, such as the introduction of electric vehicles or advanced safety systems.
12
5. Define new product from consumers’ and firms’ viewpoint. Write about opportunity recognition process.
Answer: From the consumers' viewpoint, a new product can be classified into three categories based on its impact on
established consumption patterns:
1.
2.
3.
Continuous innovations: These are products that introduce minor changes or improvements to existing products. They
do not disrupt established consumption patterns significantly.
Dynamically continuous innovations: These are products that bring noticeable changes to existing products and require
consumers to make some adjustments in their consumption patterns.
Discontinuous innovations: These are products that introduce revolutionary changes and completely disrupt
established consumption patterns. They require consumers to adopt entirely new ways of using the product.
From the firm's viewpoint, there are two distinctions to consider:
1.
2.
New products: This refers to products that are new in terms of their features, design, or functionality. They may be
variations or improvements of existing products.
New markets: This refers to situations where a firm enters a completely new market with its existing or new products.
This can be the most complicated and risky scenario, especially when combined with the introduction of new
technology.
Opportunity Recognition Process:
Recognizing a business opportunity is crucial for entrepreneurs to grow their business and fill an unsatisfied need.
•
The opportunity recognition process involves the entrepreneur's knowledge, experience, alertness, and
entrepreneurial networks.
•
Successful recognition of meaningful business opportunities enables entrepreneurs to complete product planning,
development, and launch new ventures.
Overall, the opportunity recognition process is driven by the entrepreneur's knowledge and experience, as well as their
ability to be alert to potential opportunities and leverage their entrepreneurial networks. By effectively recognizing and
capitalizing on meaningful business opportunities, entrepreneurs can successfully navigate the product planning and
development process, leading to the successful launch of new ventures.
6. Define product planning. Write product development process.
Answer: Product planning is the process of developing and refining ideas for new products or services. It involves assessing
and evaluating innovative ideas and opportunities to determine their potential for further development. The product
planning and development process consists of five major stages:
1.
Idea Stage: This is the initial stage where potential ideas are generated and screened for further development.
Ideas showing the most potential are selected to move forward.
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2.
Concept Stage: In this stage, the selected ideas are further refined and developed into concepts. The concept is
evaluated to determine its superiority or deficiency compared to existing products or services in the market.
Market opportunities for the concept are also assessed.
3.
Product Development Stage: Once the concept is deemed viable, the product development stage begins. Consumer
reaction to the physical product or service is determined through techniques such as consumer panels. Feedback
from potential customers is collected to identify the virtues and deficiencies of the product.
4.
Test Marketing Stage: After the product is developed, it undergoes test marketing. This stage involves introducing
the product to a limited market to gather feedback and assess its market potential. The performance of the product
is evaluated based on consumer response and market demand.
5.
Commercialization: If the product successfully passes the test marketing stage, it moves into the
commercialization stage. This is the final stage where the product is launched into the market for widespread
distribution and sales. The product enters the product life cycle, which includes stages of introduction, growth,
maturity, and decline.
Throughout the product planning and development process, evaluation criteria are established at each stage to carefully
screen and assess the product's progress. These criteria should be comprehensive and quantitative enough to effectively
evaluate the product's suitability for further development.
7. If you were to launch your own e-commerce business, what product or service would you offer? Describe your target
audience and the unique value proposition you'd bring to the market.
8.
Explain why every entrepreneur should create a business plan, as well as the benefits of developing a plan.
Answer: Every entrepreneur should create a business plan because it provides several benefits and advantages for their
venture. Here are some reasons why entrepreneurs should develop a business plan:
1.
Strategic Direction: A business plan helps entrepreneurs define their goals, objectives, and the overall direction of
their business. It provides a roadmap for the entrepreneur to follow and guides decision-making processes.
2.
Funding and Investment: A well-developed business plan is essential when seeking funding or investment for the
business. It demonstrates to potential investors or lenders that the entrepreneur has thoroughly researched and
planned their venture, increasing the likelihood of securing financial support.
3.
Market Analysis: Developing a business plan requires entrepreneurs to conduct a comprehensive market analysis.
This analysis helps entrepreneurs understand their target market, competition, and industry trends, enabling them
to make informed decisions and develop effective marketing strategies.
4.
Financial Planning: A business plan includes financial projections and forecasts, allowing entrepreneurs to assess
the financial viability of their venture. It helps in estimating startup costs, revenue projections, and potential
profitability, aiding in financial planning and budgeting.
5.
Risk Assessment: By creating a business plan, entrepreneurs can identify potential risks and challenges that their
venture may face. This allows them to develop contingency plans and strategies to mitigate these risks, increasing
the chances of success.
6.
Communication and Collaboration: A business plan serves as a communication tool, allowing entrepreneurs to
effectively convey their vision, mission, and strategies to stakeholders, employees, and partners. It facilitates
collaboration and alignment among team members.
7.
Monitoring and Evaluation: A business plan provides a framework for monitoring and evaluating the progress of
the venture. Entrepreneurs can compare actual performance against projected goals and make necessary
adjustments to ensure the business stays on track.
Overall, developing a business plan is crucial for entrepreneurs as it helps them clarify their vision, attract funding, make
informed decisions, and navigate the challenges of starting and growing a successful business.
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Chapter 5
1. Write the factors contributing to international expansion. Or why do an entrepreneur expand to other countries?
Answer: Factors contributing to international expansion include:
1.
Market opportunities: Entrepreneurs can find new and diverse markets internationally, which increases their potential
for growth and finding customers.
2. Globalization: The world is becoming more interconnected, and international expansion allows entrepreneurs to take
advantage of the global marketplace where national borders are less significant.
3. Economic benefits: International markets can offer higher profitability and revenue generation compared to domestic
markets. International trade and investment have historically grown faster than domestic economies.
4. Competitive advantage: Expanding internationally helps entrepreneurs reach new customers, access resources, and
benefit from economies of scale. It also allows them to diversify their operations and reduce reliance on a single
market.
5. Technological advancements: Rapidly evolving technology enables entrepreneurs to connect with customers and
conduct business across borders more efficiently. Communication, logistics, and e-commerce advancements make
international expansion easier.
6. Government policies and trade agreements: Favorable government policies and trade agreements can incentivize and
facilitate international expansion. Regional trade agreements and trading blocs create larger markets and reduce trade
barriers.
7. Access to resources: International expansion provides entrepreneurs with access to new resources such as talent,
capital, technology, and raw materials. Different regions offer unique strengths and advantages that can enhance
competitiveness.
8. Risk diversification: Expanding into multiple markets helps mitigate risks associated with operating in a single market.
Diversification spreads business risks across different regions, reducing vulnerability to economic downturns or
localized risks.
9. Innovation and learning: International expansion exposes entrepreneurs to new ideas, perspectives, and business
practices. Adapting to different cultural, legal, and economic environments fosters innovation, creativity, and
adaptability.
10. Scalability and long-term growth: International expansion offers the potential for scalability and long-term growth.
Accessing larger markets and diversifying revenue streams can help entrepreneurs build sustainable and resilient
businesses.
It's important to note that these factors may vary depending on the specific industry, market conditions, and individual
business strategies.
2. What is an opportunity assessment plan? Write the sections of opportunity assessment plan.
Answer: An opportunity assessment plan is a plan that helps evaluate the potential of a business idea or opportunity. It
consists of several sections that analyze different aspects of the opportunity. The sections of an opportunity assessment
plan are as follows:
1. Product/Service Description:
•
•
•
•
•
•
Describing the product or service in detail.
Identifying the market need for the product or service.
Highlighting the unique aspects or features of the product or service.
Analyzing the competitive products available in the market and their features.
Identifying the companies operating in the same market space.
Defining the unique selling propositions of the product or service.
2. Market Analysis:
•
•
•
Assessing the size, trends, characteristics, and growth rate of the target market.
Describing the market need that the product or service fulfills.
Examining any available market research data related to the identified need.
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•
•
•
Considering potential patents that could be obtained for the product or service.
Analyzing the size and characteristics of the domestic and/or international market.
Evaluating the growth rate of the market.
3. Entrepreneur and Management Team Assessment:
•
•
•
•
•
Discussing the entrepreneur's excitement about the opportunity.
Explaining how the product or service idea aligns with the entrepreneur's background and experience.
Identifying the business skills that the entrepreneur possesses.
Identifying the required business skills for the opportunity.
Considering whether the entrepreneur knows someone who has the needed skills.
4. Timeline and Resource Planning:
•
•
•
•
•
Creating a timeline that outlines the necessary steps for launching the venture.
Determining the sequence of activities and their expected order.
Estimating the time and money required for each step.
Calculating the total amount of time and money needed.
Identifying potential sources of funding for the venture.
Overall, an opportunity assessment plan helps entrepreneurs evaluate the viability of an opportunity and make informed
decisions about whether to pursue it or wait for a better opportunity.
3. Write information sources used by entrepreneurs to identify appropriate opportunities.
Answer: Entrepreneurs use various sources of information to identify appropriate opportunities for their businesses. Here
are some key information sources commonly used:
1.
2.
3.
4.
5.
6.
7.
8.
General Information Sources: SCORE and Small Business Development Centers provide free online and in-person
assistance, training, and mentoring for entrepreneurs. The Small Business Administration (SBA) offers resources,
tools, and a step-by-step guide called the Small Business Planner.
Web-based Tools and Resources: The U.S. Chamber Small Business Center provides start-up assistance through online
tools and resources, including a start-up toolkit. Websites like FastTrac ,Active Capital,Collegiate Entrepreneurs'
Organization (CEO, c-e-o.org), Consortium for Entrepreneurship Education (entre-ed.org), and Ewing Marion
Kauffman Foundation (kauffman.org) offer educational programs, information, and resources for entrepreneurs.
Industry and Market Information: Databases such as Plunkett, Frost and Sullivan, Euromonitor, Gartner, and Gale
Directory Library provide industry-specific data, market research, trends, statistics, and information on companies and
brands.
Competitive Company and Product Information: Resources like Business Source Complete, Hoovers, and Mergent
offer information on competing companies, products, and industry reports.
Government Sources: The U.S. government provides valuable information through census reports, export/import
authority (UN Comtrade), NAICS and SIC codes, and various government websites.
Search Engines: Using specific keywords related to industry, market, and associations can help entrepreneurs find
relevant information.
Trade Associations: Trade associations provide industry data, market surveys, and information on domestic and
international activities within specific industries.
Trade Publications: Domestic and international publications specific to industries provide editorial content, insights
on trends, companies, trade shows, and local perspectives on markets and competition.
These sources offer entrepreneurs a wide range of information and resources to gather insights, make informed decisions,
and identify appropriate business opportunities.
4. Define International Entrepreneurship? How does it differ from Domestic Entrepreneurship?
Answer: International entrepreneurship: "The process of an entrepreneur conducting business activities across national
boundaries. It may consist of exporting, licensing, opening a sales office in another country, or something as simple as
placing a classified advertisement in the Paris edition of the International Herald Tribune. The activities necessary for
ascertaining and satisfying the needs and wants of target consumers take place in more than one country."
16
In essence, international entrepreneurship involves executing the entrepreneur's business model in more than one country.
The key differences from domestic entrepreneurship are:
1.
International decisions are more complex due to uncontrollable factors like economics, politics, technology, and
culture which vary across countries. Domestic entrepreneurs deal with only one country and economic system.
2.
International entrepreneurs must deal with different levels of economic development, currency valuations,
regulations, banking systems etc. which affects every aspect of the business plan. Domestic plans do not have to
account for these variations.
3.
Politically and legally, international entrepreneurs face differing degrees of risks, laws, property rights, contract
enforcement etc. across countries. Domestically, there is more consistency and predictability.
4.
Culturally, aspects like language, social structure, religion, business customs etc. vary significantly across
countries creating communication challenges and complexities that domestic entrepreneurs don't encounter.
5. Write the motivational factors for which an entrepreneur enters International Entrepreneurship.
Answer: Motivational factors that drive entrepreneurs to engage in international entrepreneurship include:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Profits: The potential for higher profits is a significant motivation for going global. However, the actual profits obtained
may not always match the expected profitability due to costs, underestimation of expenses, and losses resulting from
mistakes.
Competitive pressures: Entrepreneurs may enter international markets to compete with rivals and gain a competitive
edge.
Unique product(s) or service(s): Having unique products or services can be a motivation for expanding internationally
to reach new customers and markets.
Excess production capacity: If a business has excess production capacity in its domestic market, it may seek
international markets to utilize that capacity and increase sales.
Declining home country sales: When the domestic market experiences a decline in sales, entrepreneurs may explore
international markets as an alternative source of revenue.
Unique market opportunity: Entrepreneurs may identify specific market opportunities in foreign countries that are not
present in their home country.
Economies of scale: Expanding internationally can provide opportunities to achieve economies of scale, such as
reducing production costs through larger production volumes.
Technological advantage: If an entrepreneur's technology or product has become obsolete in the domestic market, there
may be opportunities to sell in foreign markets where the technology is still relevant.
Tax benefits: Entrepreneurs may consider international expansion to take advantage of favorable tax conditions in
foreign countries.
In addition to these motivations, entrepreneurs may also go global to avoid increased industry regulations or societal
concerns, leverage lower costs in foreign countries, and establish a global presence that allows for more diverse product
offerings and competitive advantages.
6. Write foreign market selection approach.
Answer: Foreign market selection involves a five-step approach to help entrepreneurs decide which international markets
to enter. Here is a simplified explanation of each step:
1.
2.
3.
Develop indicators: Identify important factors that can help determine the attractiveness of a foreign market. These
indicators can include past sales, competitive research, experience, and discussions with other entrepreneurs. They
should cover areas such as market size, market growth, and product indicators.
Collect and compare data: Gather data for each indicator using both primary research (original information collected
for specific needs) and secondary research (existing published data). Make sure the data is comparable and reliable,
considering factors like comparability, availability, accuracy, and cost.
Establish indicator weights: Assign weights to each indicator based on its importance in predicting foreign market
potential. This step involves considering the significance of each indicator and its relevance to the business. The
assignment of weights can vary between entrepreneurs and requires careful thought and internal discussion.
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4.
5.
Analyze the data: Carefully examine and question the results of the collected data. Look for any errors and
inconsistencies. Conduct a what-if analysis by changing weights or variables to understand how the results may vary.
Select the market: Based on the analysis, rank the foreign markets under consideration. Select the most suitable
market(s) for entry based on the rankings. This decision will guide the selection of an entry strategy and the
development of a marketing plan.
By following this approach, entrepreneurs can make more informed decisions about which foreign markets to enter and
develop effective strategies for entering and succeeding in those markets.
7. Write some entry strategies for a new entrepreneur entering in international business.
Answer: For a new entrepreneur entering international business, there are different strategies they can consider:
1. Exporting:
•
Indirect Exporting: Selling products through a foreign purchaser or export management firm, reducing knowledge
and risk for the entrepreneur.
•
Direct Exporting: Selling products through independent distributors or the entrepreneur's own overseas sales
office for more involvement.
2. Nonequity Arrangements:
•
•
•
Licensing: Allowing a foreign manufacturer to use patents, trademarks, or technology for a royalty payment, suitable
when not entering the market through exporting or direct investment.
Turn-Key Projects: Building a facility in an underdeveloped country, training local staff, and then handing it over to
local owners.
Management Contracts: Contracting management techniques and skills to a foreign purchasing company.
3. Direct Foreign Investment:
•
•
•
Minority Interests: Holding a minority ownership position in a foreign venture for gaining experience or accessing
raw materials.
Joint Ventures: Forming a third company with a local partner, useful for obtaining local knowledge or rapid entry into
a market.
Majority Interest: Purchasing over 50% of equity in a foreign business for managerial control while maintaining local
identity.
4. Mergers:
•
Horizontal Merger: Combining firms producing similar products in the same area for economies of scale.
•
Vertical Merger: Combining firms in successive production stages for stability and control.
•
Product Extension Merger: Acquiring companies with related activities but non-competing products.
•
Market Extension Merger: Combining firms selling the same products in different geographic markets.
•
Diversified Activity Merger: Conglomerate merger [A company that owns several smaller businesses whose products
or services are usually very different] involving unrelated firms.
Factors Influencing Mergers:
•
Economies of Scale: Increasing efficiency in production, coordination, and administration.
•
Taxation: Utilizing unused tax credits through the combination of profitable and loss-making firms.
•
Complementary Resources: Combining resources for better innovation, technology, or a competitive advantage.
Regardless of the chosen strategy, a successful entry into the global market often requires the development of a global
business plan, differing somewhat from a domestic business plan.
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8. Write the barriers to International Trade.
Answer: Barriers to international trade are obstacles that make it difficult for countries to engage in trade with each other.
Here are some barriers to international trade mentioned in the given input:
1. Tariffs: Tariffs are taxes or fees imposed on imported goods, which increase their cost and make them less competitive
compared to domestically produced goods.
2. Subsidies: Subsidies are financial assistance given by governments to domestic industries, which can distort trade by
giving those industries an unfair advantage over foreign competitors.
3. Import quotas: Import quotas limit the quantity of a particular product that can be imported into a country. This restricts
the amount of foreign goods that can enter the market and protects domestic industries from competition.
4. Voluntary export restraints: These are agreements between countries where one country voluntarily limits its exports to
another country. This can be used as a way to avoid violating trade agreements while still protecting domestic industries.
5. Trade blocs and free trade areas: Countries may form trade blocs or free trade areas, which are groups of nations that
reduce or eliminate trade barriers among themselves but maintain barriers against non-member countries. Examples include
NAFTA and the European Community.
6. Local content regulations: Some countries require a certain percentage of a product to be produced locally in order to be
sold in their market. This can force entrepreneurs to establish production facilities in those countries to comply with the
regulations.
These barriers to international trade can increase costs for entrepreneurs, limit their ability to sell products in certain
markets, and influence their decisions on where to establish production facilities.
Chapter 6
1. Define patent and its classifications.
Answer: Patent - Grants holder protection from others making, using, or selling similar idea; issued by the Patent and
Trademark Office (PTO). In exchange for disclosure of the invention, the government grants the inventor exclusivity
regarding the invention for a specified amount of time.
Patents are contracts between the government and inventors that grant exclusive rights to the inventor for a specified period
of time in exchange for disclosing their invention. The patent gives the owner the right to prevent others from making,
using, or selling the invention. There are three main types of patents:
1.
2.
3.
Utility patents: These patents protect new, useful, and non-obvious processes, machines, compositions of matter, and
articles of manufacture. They have a term of 20 years and can be extended if FDA approval is required. Utility patents
require filing fees and provide broad protection for the invention.
Design patents: Design patents protect the ornamental design or appearance of an article of manufacture. They last for
14 years and provide the inventor with the right to exclude others from making, using, or selling an article with the
same design. Design patents have lower filing fees compared to utility patents and are useful for protecting the visual
appearance of products.
Plant patents: Plant patents are granted for new varieties of plants. They have the same provisions as utility patents
and represent a limited area of interest. Plant patents are less common compared to utility and design patents.
The patents are issued by the Patent and Trademark Office (PTO), which also administers other programs and services for
entrepreneurs, such as filing patents and trademarks. There have been discussions about patent reform, including the
adoption of a "first to file" system where the first person to file a patent application is granted the patent, regardless of the
date of the invention.
2. SARBANES-OXLEY ACT
Answer: The Sarbanes-Oxley Act, also known as SOX, was created to prevent corporate scandals and make sure that public
companies are more careful with their finances. It was passed in 2002. The law says that CEOs, who are the top leaders of
companies, have to take responsibility for their company's financial statements. They also have to put in place systems to
control their company's finances and make sure everything is done properly. The law is also meant to stop fraud, which is
19
when someone tricks others for their own benefit. It even makes it a crime to try to influence auditors, who are the people
who check a company's financial records. However, some people think that the law was made too quickly and is not very
clear. This can make it expensive for companies to follow the law, and it might discourage new companies from becoming
public, which means selling shares of their company to the public. The law also affects companies from other countries
that are listed on stock exchanges in the United States. This can cause conflicts with the laws in their home countries.
Right now, private companies don't have to follow all the rules of the Sarbanes-Oxley Act, but there might be more rules
for them in the future. Entrepreneurs, who are people who start their own businesses, can limit their responsibility by having
a board of advisors. But venture capitalists, who invest money in start-up companies, might want a more formal board of
directors. The goal of the Sarbanes-Oxley Act is to make sure that companies are run well and are accountable for their
actions. However, people have different opinions about how it affects start-ups and smaller companies.
3. What is Technology Park? Describe the driving forces behind eco-preneurship.
Answer: A technology park is a designated area where various technology-based companies, research institutions, and
organizations are located in close proximity to foster innovation, collaboration, and economic development. Technology
parks provide a supportive environment for startups and established companies to access resources, infrastructure, and
networking opportunities. These parks often offer specialized facilities, such as research labs, incubators, and shared office
spaces, to support the development and commercialization of new technologies.
Eco-preneurship, with a focus on environmental sustainability, is driven by several key factors:
1. Environmental Concerns: The growing awareness of environmental problems, such as climate change, pollution, and
resource depletion, has led to a greater sense of urgency to find sustainable solutions. Eco-preneurs are motivated by a
desire to address these issues and make a positive impact on the environment.
2. Market Demand: Consumers are increasingly seeking environmentally friendly products and services. There is a growing
market for eco-friendly alternatives to traditional goods and services, such as renewable energy, organic food, and
sustainable fashion. Eco-preneurs recognize this demand and see it as an opportunity to create successful businesses.
3. Cost Savings: Many eco-friendly practices, such as energy efficiency and waste reduction, can save money in the long
run. Eco-preneurs understand that adopting sustainable practices can lead to cost savings through reduced resource
consumption, improved efficiency, and lower operating expenses.
4. Policy and Regulations: Governments around the world are implementing policies and regulations to encourage
sustainable practices and reduce environmental impact. These policies can create opportunities for eco-preneurs by
providing incentives, grants, and favorable market conditions for sustainable businesses.
5. Innovation and Technology: Advances in technology have made it easier and more cost-effective to develop and
implement sustainable solutions. Eco-preneurs leverage these innovations to create new products, services, and business
models that are more environmentally friendly and efficient than traditional alternatives.
4. Write short note:
a. Intellectual Property b. Insurance c. Licensing d. Trade Secrets e. Copy rights. f. Trademarks g. Patent
h. Patent Infringement
Answer:
Intellectual Property:
Intellectual property refers to creations of the mind, such as inventions, designs, literary and artistic works, symbols, names,
and images, which are protected by law.
Insurance:
Insurance is a risk management tool that provides financial protection against potential losses or damages. It involves the
transfer of risk from an individual or organization to an insurance company in exchange for regular premium payments.
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Licensing:
Licensing is the process of granting permission to another party to use or exploit a specific intellectual property, such as a
patent, trademark, or copyrighted work, in exchange for agreed-upon terms and conditions.
Trade Secrets:
Trade secrets are confidential and valuable business information, such as formulas, processes, customer lists, or marketing
strategies, which give a competitive advantage to a company. They are protected through non-disclosure agreements and
other legal measures.
Copyrights:
Copyrights are legal protections granted to the creators of original works, such as literary, artistic, musical, or dramatic
works, giving them exclusive rights to reproduce, distribute, and display their works.
Trademarks:
Trademarks are distinctive signs, such as names, logos, or symbols, used to identify and distinguish the goods or services
of one company from those of others. They provide brand recognition and protection against unauthorized use by
competitors.
Patents:
Patents are legal protections granted to inventors for their inventions, providing exclusive rights to make, use, and sell the
invention for a limited period. They encourage innovation and prevent others from using patented technology without
permission.
Patent Infringement:
Patent infringement occurs when someone uses, makes, sells, or imports a patented invention without the permission of
the patent holder. It is a violation of the exclusive rights granted by the patent and can result in legal consequences and
financial damages.
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