Learning Objectives
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Discuss the various aspects of today’s economy
Explain the legal factors that are part of the context of entrepreneurship
 Describe the changing world of work and its impact on entrepreneurship
 Discuss the role that social responsibility and ethics play in the context of entrepreneurship
 Explain opportunities and their role in entrepreneurship
 Describe competitive advantage and explain why it’s important
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Issues Affecting
Entrepreneurship in Action
 Characteristics of today’s economy
 Legal factors
 The changing world of work
 Social responsibility and ethics
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Important Characteristics of
Today’s Economy
 What forces are “driving” today’s economy?
 What are the implications?
 What will it take to be successful in this context?
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 The Role of Information
 Technological Trends
 Globalization
 Changing Demographics
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 The Role of Information
– Has set the tone for today’s economy
 Technological Trends
1. Increasing rate of technological change
2. Increasing commercialization of innovations
3. Increasing knowledge intensity
4. Increasing recognition that advanced information technologies are critical
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 Globalization
– The linking of economies and cultures that fosters a business and competitive situation in which organizations have no national boundaries
 Demographics
– The vital statistics of a population
• For example, gender, age, and income levels
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Emerging Demographic Trends
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4.
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The world’s population is growing geometrically and at a very fast rate
The world’s population is getting older and younger at the same time
The world’s population continues on the move
Most of the world’s economically active live in cities and urban areas
The division of the world’s population is categorized into three broad groups
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The Division of the World’s
Population (3 Broad Groups)
 The Poor
– Includes individuals with household incomes of less than $700 per year
– About 1.1 billion people
– Account for 2 percent of the world’s income
 The Middle Class
– Includes individuals with family incomes of between $700 and $7,500 per year
– About 3.5 billion people
– Earn about 33 percent of the world’s income
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The Division of the World’s
Population (cont’d)
 The Consumer Class
– Includes individuals with household incomes above $7,500 per year
– About 1.1 billion people
– Claim about 64 percent of the world’s income
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Implications of the Driving Forces of Today’s Economy
 Continual turbulence and change
 Reduced need for physical assets
 Vanishing distance
 Compressed time
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 Four critical success factors for succeeding in today’s economy
1. The ability to embrace change
2. The ability to be creative and innovative
3. Vision and leadership
4. Total quality culture
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1.
2.
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4.
5.
Relax
Exercise Your Mind
Determine What You Want to do
Look for Ways to Tackle Issues
Look for Ways to do Things Better
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Social Responsibility and Ethics
 Social Responsibility
– The obligation of organizational decision makers to act in ways that recognize the interrelatedness of business and society
 Stakeholders
– Individuals or groups of individuals who have a stake in or are significantly influenced by an organization’s actions
 Ethics
– Involves the rules and principles that define right and wrong decisions
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Possible Organizational
Stakeholders
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Environmental Opportunities
 Opportunities
– Positive external trends that provide unique and distinct possibilities for creating value
 Sources of Opportunity (External Context)
1. The unexpected
2. The incongruous
3. The process need
4. Industry and market structures
5. Demographics
6. Change in perception
7. New knowledge
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Five Categories of Opportunities
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Redesigning Product or Services
Redifferentiating Products or Services
Resegmenting the Market
Completely Reconfiguring the Market
Developing Breakthrough Competitive
Strengths
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Understanding Competitive
Advantage
 Competitive Advantage
– What sets and organization apart; a company’s competitive edge
– Necessary for long-term success and survival
 Three Views on Competitive Advantage
1. The industrial organization (I/O) approach
2. Resource-based view (RBV)
3. The guerrilla view
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