Features of entrepreneurship

Entrepreneurship consists of following features.

1.Creation of new venture.
Entrepreneurship is concerned with creation of
new venture with new ideas. Generally, such
ventures start as a small business .Such ventures
satisfies needs in the market. They produce
something new of value. They create new market
and new customers
2.Hard work
Entrepreneurship requires hard work and
commitment through devotion of time and efforts.
Hard work with enthusiasm is needed to make new
work. A business plan is developed .Resource
requirements are determined and acquired. The new
venture is effectively managed. Most entrepreneurs
start as owner-managers. They have high level of
energy.
3.Assumption of risk.
Entrepreneurship involves assumption of risks. Risk
implies possibility of loss. It is awareness about
available alternatives but ignorance about their
consequences. New ventures tend to have high risk
and high failure rate.
 The risk involved in entrepreneurship are:
 Financial risk
 Career risk
 Social risk
 Psychic risk-Deep sense of personal failure if the
business fails.
4.Reaping of rewards
Entrepreneurship results in reaping of rewards. They
can be monetary benefit in terms of profit. They can
be non monetary in terms of personal satisfaction, self
development, fame ,reputation, and independence in
work.
They fulfill the personal need of the
entrepreneur to be one”s own boss. They are
the symbol of achievement. They provide
opportunities to make contribution toward
social well being and get social recognition.
Monetary reward serve as symbol of
achievement.
 Chapter-1
Entrepreneurship
Meaning of entrepreneurship
Entrepreneurship is the process of creating new
ventures. It requires assumption of risks and
reaping of rewards. It brings together resources.
It provides option for self employment
opportunity for others.
It is a mind set of creativity and risk taking. It is
the process of identifying opportunities. It brings
together factors of production to exploit those
opportunities. It aims for innovation, profitability
and growth.
 Entrepreneurship process
The entrepreneurship decision process
consists of following stages.
1. Conduct opportunity analysis
2. Develop business plan
3. Set-up the venture
4. Acquire financial resources
5. Implement business plan
 Role of Entrepreneurship in
Economic development
1.capital formation
Capital formation refers to the addition made to the
stock of capital goods. In present time capital
formation includes even human capital. Capital is
regarded as prerequisite of economic development.
The entrepreneurship promotes capital formation by
mobilizing the idle saving of the people. Specially,
entrepreneurs, by investing their own savings and
informally mobilizing the saving of their friends and
relatives contribute to the process of capital
formation.
 2.Employment creation
Entrepreneurship creates a new venture.
Various types of employees are required both in
management and technical works of enterprise.
In industries both skilled and unskilled
manpower are required for product planning
and development. Similarly trade and auxiliaries
of trade like banking insurance transportation
etc are the source of employment. The
development of entrepreneurship is helpful to
solve the unemployment problem of nation.
 3.Balanced development
Entrepreneurship development ensures the
national integration. The entrepreneurs
operate business in the different parts of the
country on the basis of the availability of
resources. This helps to achieve the objective
of balance regional development or reducing
regional disparity of the government. Similarly
entrepreneurs induce backward and forward
linkages. They establish backward linkages
with the suppliers and forward linkages with
the distributors.
 4.Equitable distribution
Entrepreneurs stimulate equitable
distribution of wealth, income and political
power. By starting risky new ventures and
running them successfully, they reduce
concentration of wealth ,income and political
power in the hands of big houses and global
enterprises. Local ownership and control is
ensured. Self empowerment increases.
 5.Revenue generation
Entrepreneurship is the most important
source of government revenue. The
development of industries and commercial
activities contribute more to maximize
government revenue . Government imposes
various taxes to business concerns like
custom duty, value added tax, royalties
income tax etc. These revenues are used for
the betterment of administrative work and
also in development work.
 6.Export promotion
Entrepreneurs develop new products to cater
to the needs of foreign markets. They tailor
their products to the changing needs and
preferences of foreign customers. Exports
bring valuable foreign exchange. It is needed
to maintain equilibrium in balance of
payments. Exports are essential for economic
development . Entrepreneurs also facilitate for
import substitution.
 7.Industrialisation
Entrepreneurship activities are the prime
source of industrialization in developing
countries . Such activities provide
employment opportunities. Underemployed
people in agriculture move to industries.
People learn new skills and earn more
income. Products become cheaper and of
good quality. New products are invented and
marketed .New technology develops.
Entrepreneurship is a cause and economic
development is an effect.A healthy economy
is characterized by new ventures.
 Development of Entrepreneurship

 Earliest period

 In this period Marco Polo attempted to

establish trade routes to the Far East .
He made a common contract with a
money person to sell his goods.
 Middle ages
In this age,the term entrepreneur was used to
describe both an actor and a person who managed
large production projects.

17th century
The re-emergent connection of risk with
entrepreneurship developed in the 17th century, with
an entrepreneur being a person who entered into a
contractual arrangement with the government to
perform a service or to supply stipulated products.
  18th century
In the 18th century the person with capital was differentiated
from the capital provider . One reason for this differentiation
was the industrialisation occurring through out the year.

19th and 20th centuries


In the late 19th and 20 th centuries entrepreneurs were
frequently not distinguished from managers and were viewed
mostly from economic perspective. The function of
entrepreneur is to perform or revolutionize the pattern of
prodution by exploiting an invention or producing an old one
in a new way.
 21st century
The concept of entrepreneur is further refined when
principles and terms from a business , managerial
and personal perspective are considered.
Under this definition, entrepreneurship is defined
as a kind of behaviour that includes:
 Initiative taking
 The organizing and reorganizing of social and e
conomic mechanism to turn resources and
situations to practical account.
 The acceptance of risk of failure.
Basic elements of responsibility of
entrepreneurs
Devisable but discretionary acts the
Discretionary contributes to societal good (e.g.
philanthropic works)

Ethical Ethical expectation of a company to

responsibility operate (e.g. acts necessary to
maintain license)
Legal Obligations to fulfill economic
responsibility mission within the confines of the
law
Economic Responsibility to produce goods and
responsibility services that society wants at profit
Basic elements of responsibility of entrepreneurs
Economic responsibility
• Fundamental responsibility of entrepreneurship is to
produce goods and services that society wants, and sell
at profit.
• Some agree that under free enterprise system, creating
jobs, shareholder value , and good and services- and
doing this in a law abiding manner are all inherent
ways in which business contributes to society
•Managers focus on anything than profit they risk
creating enterprise with many creating enterprise with
many function that ends up with no clear
accountability
Basic elements of social responsibility
Legal responsibility
• Obligation of business to fulfill its economic mission
within the confines of the law
• Local, national, international law set out the rules by
which corporations play, and over time has prescribed
what companies clan and cannot do with employment,
environmental protection, corruption, human rights,
product safety
• Companies do exercise influence on what is passed as
a law
•If government is too harsh on companies business will
invest elsewhere
Basic elements of social responsibility
Ethical responsibility
•Environmental issues found their ways into marketing
strategies and industries focused on environmental
technologies emerged
• Improved environmental performance could have
positive impact on financial bottom line
• Sustainability- ability to sustain high quality of life
for current and future generations requires companies
to rethink what they produce and how they do so
• Example Fairtrade ensures that certified products
meet certain fairtrade standards include minimum
price to growers, wages
Basic elements of social responsibility

Discretionary responsibility
•Discretionary responsibility are one such as
philanthropy, which a company can assume even if
there are no clear cut societal expectations
•Corporate responsibility is what lies beyond the law
and an important area of discretionary responsibility
has been idea of ‘giving back’ to the society
 Chapter-2 - Entrepreneur

Characteristics of entrepreneur
 Risk bearer
 Organizer
 Innovater
 High achiever
 Dynamic agent
 Motivator
 Future oriented
 Tolerence for ambiguity
 Fundamental issues in
Entrepreneurship

 Managing E-commerce
 Responding to globalization
 Managing workforce diversity
 Balance work life needs
 Improving quality and productivity
 Improving people skills
 Empowering employees
 Managing change
 Improving ethical behavior
 Role models and support
systems
 Moral support networks
 Individuals who give psychological support
to an entrepreneur.
 Spouses__ Most entrepreneurs indicate that
their spouses are their biggest supporters
and allow them to devote the excessive
amount of time necessary to the new
venture.
.
 Freinds_They also play key roles in a moral
support network.
 Relatives_ They can also be the strong source
of moral support,particularly,if they are also
entrepreneurs.

 Professional support network

 Individuals who help the entrepreneurs in
business activities.They can be_
 Mentors_ A mentor is a coach,a sounding
board and an advocate.

 Business associates_This group can be

composed of self employed individuals who
have experienced starting a business.

 Suppliers_A new venture needs to establish a

solid track record with suppliers in order to
build a good relationship and to ensure
adequate availability of materials and other
supplies.
 Trade associations_ Trade associations can
help keep the new venture competitive.

 Personal affiliation of the entrepreneur

 Establishing(Corporate entrepreneurship)
intrapreneurship in an organisation

 Management commitment-The top level

management must be willing to create an
environment for intrapreneurship. They
must be willing to change the traditional
styles and adapt new approaches.
 Support from top management-In order to
secure support from top management
 areas of their interest have to be
identified.
 Technology

 Training
 Customer oriented
 Cost effective-An organization interested
in promoting intrapreneurship needs to
develop capabilities to be more productive
with limited resources.
 Managerial vs.Entrepreneurial
decision making
 Strategic orientation
The entrepreneurs Strategic orientation
depends upon his or her perception of the
opportunity. whereas managers strategic
orientation is mostly opertional and
implementation of plan.
 Commitment to opportunity
Entrepreneurs are pressured by the need for
 action, short decision windows, a willing
ness to assume risk and has a short time
span in terms opportunity commitment.
Managers commitment is usually for long
time span, too long in some instances.
 Commitment of resources
An entrepeneur is used to having resources
commited at periodic intervals that are often
based on certain task or objectives being
 reached. Managers are rewarded by
effectively administrating the resources,
under their control.
 Control of resources-
 Administrators utilizes and control the
resources whereas entrepreneurs provide
the resources as per the need.
 Management structure
 Entrepreneurial intention
(feeling)within organisation
 Locus of control-An attribute indicating the
sense of control that a person has over life.
Internal and external.
 Feeling about independence
 Need for achievement-McClelland investigated
that a high achievement leades individual
to engage in entrepreneurial behavior.
 Risk taking - Financial, Social, Psychological.
Risk taking is indeed one aspect of being an
entrepreneur.
 Chapter-3
New entry
 New entry refers to –
 Offering a new product to an
established or new market.
 Offering an established product to a
new market,
 Or creating a new
organisation(Regardless whether the
 product or the market is new to
competitiors or customers. Newness
represents on the one hand , something
rare , which can help differentiate from
competitiors . On the other hand Newness
creates number of challenges for
enterepreneurs . For example Newness
can increase entrepreneurs uncertainty over
the value of the new product and place a
greater strain on the resources necessary
for succesful exploitation.
 Generation of new entry
opportunity
1)Resources as a sources of competitive
advantage.
The resources must be valuable, rare and
inimitable.
 Valuable-When it enables the firm persue
opportunities
 Rare- When it is possessed by few.
 Inimitable-When replication of this
combination of resources would be difficult
for competitior.
 It requires-
 Market knowledge- Market knowledge
refers to the entrepreneur’s possesion
of information , technology , skill that
provide insight into a market and its
customers.
 Technological Knowledge- Technological
knowledge is also a basis for generating
new entry opportunities .It also refers
to the entrepreneurs possession of
information , technology and skill that
provide insight into ways to create new
knowledge . Technological knowledge might
lead to a technology that is the basis for
technology.
Assessing the attractiveness of a new
entry opportunity.

 Information on a new entry

 Prior knowledge and information search
 Window of opportunity
 Decision to exploit or not to exploit the
new entry opportunity.

Entrepreneurial strategies involves-

 Create the market demand
 Efficiently produce the product.
 Build a reputation
 Develop customer loyalty
Entry strategy for new entry
exploitation
 Entrepreneur believes that they are the
first to introduce new product or the
first to create new market. Being first
can result no of advantage that can
enhance performance .These include-
 First movers develop a cost
advantage
 First movers face less competitive
rivalry.
 First movers can secure important
Channels.

 First movers are better positioned to satisfy

customers.
 First movers gain expertise through
participation.
 Learn from the first generation of product
and improve.
 Monitor changes and participate in the
market.
However,first movers do not always prosper.
 Risk reduction strategies for
new entry exploitation
1)Market scope strategy
2)Limitation strategy
1)Market scope strategy
 Scope is a choice by entrepreneur about
which customer groups to serve and
how to serve them.
 It involves-
 1. Narrow scope strategy
 It offers a small product range to a
small number of customer groups in
order to satisfy a particular need.
 A narrow scope strategy focuses the
firm on producing customized
products , localized business operations
and high level of craft man ship .
Such outcome provide the basis for
differentiating the
 firm from larger competitiors who are
more oriented towards mass production
and the advantages that are derived from
that volume.
 By focusing on a specific group of
customers , the entrepreneur can build up
specialized expertise and knowledge that
provide an advantage over companies that
are competing more broadly.
 The high end of the market typically represents
a highly profitable niche that is well suited to
those firms that can product customised
products, localised business operations and
high level of craftmanship .
 However, a narrow scope strategy does not
always provide protection against competition.
 Broad scope strategy
 It can be thought of as taking a’ portfolio approach to
dealing with uncertainties about the attractiveness of
different market segment.
 By offering a range of products across many
different market segments, , the entreprener can
gain an understanding of the whole market by
determining which products are most profitable.
Unsuccessful products and market segments can be
dropped and resources are concentrated on those
products markets that show the greatest promise.
 The entrepreneur can cope with market
uncertainty by using a broad scope
strategy to learn about the market through
a process of trial and error.

 Therefore, a narrow scope strategy offers

a way of reducing some competition
related risks but increases the risks
associated with market uncertainties.
 imitation strategy
Imitation strategy is another strategy for
minimizing risk of down side loss associated
with new entry. It involves copying the
practices of other firms whether those firms
are in the industry being entered or from
related industries. Under this strategy firm
does not need to be valuable,rare or inimitable
on every aspect of the firm’s
operation.Entrepreneurs may simply find it
easier to imitate the practices of a successful
firm than to go through the process of a
systemetic and expensive search.
Franchising is an example of imitation
strategy of new entrants firm. An
entrepreneur might enter the fast food
industry by franchising a Mc donalds store
in a new geographical location. This
entrepreneur is imitating the business
practices of other Mcdonal store. In
Franchaising, Manufacturer or sole
distributor gives exclusive rights of local
distribution to independent retailor in
return for their payment of royalties.
 Chapter 4-Creativity
 Creativity is the generation of new idea that
improve efficiency and effectiveness . It is
the ability to discover new ways of looking
at problems and opportunities . It is
thinking new things. It is generating new
Ideas, insights and opportunities .It is the
result of free, unbiased, and unconventional
thinking
 It has two aspects-Process and people
 Creativity process
 It takes creative approach which is not
orderly or sequential.
 It challenges and rejects the conventional
and routine ways of doing things.
 Lots of ideas are generated to solve the
problem.
 It always look for a better way for solving
the problems.
 It looks at problem from diverse
perspectives.
 Steps in creativity process
 Knowledge accumulation
It is conscious search for knowledge. It
involves investigation and information
gathering to get various perspectives on
the problems.
 Incubation
It involves sleeping on the
problem.Subconscious mind starts
working on the knowledge accumulated in the
first step. Incubation can be induced by –
 Engagement in routine mindless activities
 Regular exercise
 Playing games, such as sports, puzzles
 Meditation and yoga
 Relaxation on regular basis
3.Idea experience-
Idea experience can be speeded
up by-
 Prolific thinking
 Working in a leisurely
environment
 Taking breaks while working
 4.Evaluation and Implementation
Evaluation is done by-
 Increasing energy level with proper
exercise,diet and rest
 Education in business planning process
 Testing of idea with knowledgeable
process.
 Noticing hunches and feeling.
 Implementation-The idea that pass the test
of evaluation are implemented.
Developing creativy
1)Recognizing Relationship
Creativity development requires weeing
new and different relationships among
objects, process, materials,technologies
and people.
2)Developing functional perspective
Creativity development requires a
functional perspective towards things and
people.
3)Using brains
Creativity development requires the use
of both right and lefts hemisphere of
brain. Right brain helps to analyze,
imagine things and synthesize
information.The left brain hemisphere
helps to anlyse,verbalize and unse
rational approaches to problem solving.
4)Eliminating muddling mind sets
Various mental habits block creativity a
And creat muddling mindsets. Adults generally
use 2 to 10 percent of their creative thinking due
to following featurs:
 Either/thinking-Change brings uncertainty and
ambiguity in personal lives. Either/or thinking
muddles creativity.
 Security hunting-The creative persons take
calculative risk to create better things.
Security hunting muddles creativity.
 Sterio typing- Sterio types are abtractions
that people febricate. Actions and decions
based on steriotyping muddle creative
thinking.
Probability thinking-Overreliance on
probability thinking for decision making
disorts reality and muddles creativity.It
prohibits taking of calculated risks.
Innovation
It is doing new things. It is the process by
which entrepreneurs converts opportunities
into marketable ideas. creativity discovers new
ways of looking at problems and opportunities.
Innovation applies creative solutions to those
problems and opportunities to enrich people
lives.
It transforms the new idea into process or
product of a business venture.It is action
oriented and customer based. Invention is
mother of innovation.

Types of innovation
Innovation can be of four types
1)Invention
It is creation of totally new product or
process.it is new to the world. It is
novel,untried and unique. It satisfies needs
that are not being satisfied.
2)Extension
It is new use or different application of an
existing product or process .The product is
modified or improved. The extention can
be in terms of function,use or benefit.for
example,i-pod to i-phone to i-pad
3)Duplication-
It is replication of already existing product or
process.It erepresents copy or imitation.For
example,Godrej to Podrez.
4)Synthesis
It is combination of existing concepts
and factors into a newness
formulation. It combines existing new
ideas together to form a new
application or use.
 Product planning and
development process
 Idea generation
 Idea screening
 Cocept development and testing
 Marketing strategy and business
analysis
 Product development
 Test marketing
 Commercialisation
 Common sources of new
venture ideas
 Consumers
 Existing products and services
 Distribution channels
 Federal government
 Research and development
 Methods of generating ideas
1.Focus group
They are concerned with group of individuals
providing information in a structured
format.For a new product area,entrepreneur
focuses the discussion of the group in either a
directive or a non directive manner. The group
of 8 to 14 participants is stimulated by
comments from other group members in
creatively conceptualising and developing a
new product idea to fullfill a market need. It is
an excellent methods for initially screening
ideas and concepts.
 Brain storming
 The brain storming method allows people to
be stimulated to greater creativity by meeting
with others and participating in organized
group experiences. While using brain storming
these 4 rules should be followed.
 No criticism is allowed by anyone in the
group.
 Free wheeling is encourased, the better the
idea,the better.
 Quantity of idea is encourased.
 Combination and improvement of idea is
 Problem inventory analysis
It is a method for obtaining a new ideas and
solutions by focusing on problems. It uses
individuals in a manner that is analogous to
focus group to generate new product idea. For
this purpose, consumers are provided with list
of problems in a general problem category.
Then, they are asked to identify and discuss
products in this category that have the
particular problem in terms of,
Psychological,sensory .e.taste,activities,buying
usage,
 Creative problem solving
Brain storming
can generate ideas about a problem within a
limited timeframe through the spontaneous
contribution of participants.
Reverse brain storming
It is similar to brain storming except that
criticism is allowed.In fact, the technique is
based on finding fault by asking the question
“in how many ways can this idea fail?”
Brain writing
It is a form of written brain writing.It was
created by Berned Rohrbach at the end of
1960.In this method, Participants write their
ideas on special forms or cards that circulate
within the group.
Gordon method
This method is related with the method for
developing new ideas when the individuals
are unaware of the problem.
 Checklist method
In checklist method, a list of idea is
developed through a list of related issues or
suggestions.The entrepreneur can use the
list of questions or statements to guide the
direction of developing entirely new ideas or
concentrating on specific idea areas.
Free association
In this method,first a word or phrase related
to the problem is written down another and
another with new word is developed.So it is
developing new idea through a chain of
Forced relationship
 It is the process of forcing relationship among
some product combinations.It is developing
new idea by looking a product combinations.
Collective notebook methods
 It is developing a new idea by group members
regularly recording ideas.In this method a
small notebook that easily fits in pocket Is
distributed to the participants. then they
consider the problem and its possible
solutions.,recording idea at least one but
preferably three times a day.
 Attribute listing
 It is an idea finding that requires the
entrepreneur to list the attributes of an item
or problem and then look at each from a
variety of view point.This method develops
a new idea by looking at the positive and
negative view point.
Big dream approach
 It develops new idea by thinking without
constraints. It requires entrepreneur dream
about the problem and its solution.
Parameter analysis
It involves 2 aspects, parameter
identification and creative synthesis.
Parameter identification involves
analyzing variables in the situation to
determine their relative importance.
Through an evaluation of the paramerers
and relationships, one or more solutions
are developed, this solution development
is called creative synthesis.
 E-commerce
In E-commerce,business activity can be
done through the electrocic devices,It
offers the entrepreneur the opportunity to
be very creative and innovative.
Internet is increasingly used by existing
corporations to extend their marketing and
sales channels.
Similarly the use of websites by
entrepreneurial firms has been increasing
at a significant rate.
 Start-ups
Start up of business can be classified into:
1)Lifestyle firm:It is privately held and
usually achieves only modest growth due to
the nature of the business, the objectives of
the entrepreneur and the limited money
devoted to research and development.The
type of this firm may grow after several
years to 30 to 40 employes and have annual
revenue of about $2 million.
 2)The foundation company
The second type of start up the foundation
company is created from research and
development and lays the foundation for a
new business area.This firm can grow in 5 to
10 years from 40 to 400 employees and from
$10 million to $20 million in yearly revenue.
3)High potential venture:It is the one
that receives the greatest investment interest
and publicity.Its growth is far more rapid.After
5 to 10 years company could employ around
500 employees with $20 million to 30 million in
revenue.
 Chapter-5
Identifying and
analyzing opportunity
Nature of international entrepreneurship
International entrepreneurship is the process
of an entrepreneur conduct business activities
across national boundries.It may consists of
exporting, licencing, opening a sales office in
another country.
 Significance of international
entrepreneurship
Better use of resources
International division of labour and
specialisation facilitates better use of
resources. Comparative adavantage can
be realised.
Economies of scale
Large scale prodution and distribution
produces economies of scale. costs go
down.
Employment
Employment opportunities are created
for increasing production and making
effective distribution of products.
Globalisation-
It is the first step to globalisation.It
brings countries together.i
Standard of living
Increased income and greater availability
of products leads to increased standard
of living of people.
 Entrepreneurial entry strategies
into international business
1.Exporting
Usually,an entrepreneur starts doing international
business throuh exporting.
Exporting normally involves the sale and shipping of
products manufactured in one country to a customer
located in another country. There are two general
classification of exporting
Indirect exporting
Direct exporting
2.Non equity arrangement
When market and financial conditions warrant the
change,an entrepreneur can enter into international
business by one of three type of nonequity
arrangements i.e,licencing, turn-key projects and
management contracts.
Licencing- Licencing involves an entrepreneur who
is a manufacturer giving a foreign
manufacturer(licenser)
The right to use a patent,trademark,technology,the
production process etc
Turn-key projects

Another method by which the

entrepreneur can do international
business without much risk is through
turnkey project.It is concerned with
developing and operationalizing
something in a foreign country like build
a factory,train the workers,train the
management etc
Management contracts
Under this,several entrepreneurs have
successfully entered business by
contracting their management
technique and skills. A method for doing
a specific international task is
management contract,
 3.Foreign direct investment
The wholly owned foreign subsidiary has
been a preferred mode of ownership for
entrepreneuship using direct foreign
investment for doing business in international
markets.
FDI can be:
Minority intersts-It is concerned with having
less than 50% ownership position.
Joint ventures
 In join venture,Two companies form a
third company. Joint ventures used by
entrepreneur most often in two
situations-
 When the entrepreneur wants to
purchase local knowledge as well as
already established marketing or
manufacturing facility
 When rapid entry into a market is
needed.
Majority interests
It is having more than 50 percent of the
equity in the firm .
 Mergers
 An entrepreneur can obtain 100 percent
ownership to ensure complete control
 Vertical merger-combination of at least
2 firms at different market levels
 Product extension-combination of at
least two firms with non competing
products
 Market extension-with similar product in
diff geographic market.
 Diversified merger-two totally unrelated
firms.
 Barriers to internatinal trade
1) Protection- Countries want to protect their
countries through creating barrier to international
tradei.e tariff and non-tariff barriers
 Tariff barrier-They provide direct price
protection through custom duties on exports
and imports.
 Non tariff barriers-They provide indirect non
tariff protection on goods imported or exported
through,quota,subsidies i.e.use of public funds
by the government at lower cost.etc
2) Laws and institutions
 Bilateral-They regulate trade between two
countries
 Regional-They regulate trade at a regional.
SAARC,ASEAN
 Multilateral-They regulate International trade
world wide.i.e. WTO
3)Foreign exchange problems
4)Transit problems-In landlocked country
5)Unfair competition,Example Japan and Chaina
6)Government policies
7)Information gap
8)Poor quality control i.e Pasmina,Woolen
 Entrepreneurial Partnering
 Entrepreneurial is one of the best method
for entrepreneur to enter an international
market. A good partner can help the
entrepreneur achieve his or her gals such
as market access,cost sharing or obtaining
core competencies.
 Informatiotn of good partner can be
collected from embassy officials, member
of the countries chamber of commerce
etc.
 Opportunity recognition and
assessment plan
An opportunity assessment plan is not a
business plan . It is done instead of lengthier
more time consuming business plan to see if
opportunity is worth pursuing. It is-
 Shorter
 Focuses on the opportunity , not the venture
 Basis for making the decision.
 Sections
It has four sections.
First section includes-
 A description of product or service
 The market need for the product or
service
 The specific aspect of product or service.
 The competitive product presently
available in the market
 Section-2
This section includes-
 The market need filled.
 The social condition underlining this market
need.
 Any data available to describe this market
need.
 The size, trend and characteristic of the
domestic or international market.
 The growth rate of the market.
 Section-3
The third section focuses on the entrepreneur
and the management team in terms of their
background,education, skill and experience.It
should include answer to the following
questions.
 What is exciting about this opportunity?
 How does product/service idea fit into the
background and experience of the
entrepreneur and the team?
 What business skills and experience are
needed?
 Section-4
The final section of assessment plan develops
a time line indicating what steps need to be
taken to successfully launch the venture by
translating the idea into business entity.
This section focuses on:
 Identify each step
 Determining the sequential of each activity
 Identifying what will be accomplished in each
step
 Determining the time and money required for
each step
 Information sources
There are many sources of information.
They are-
1)General assistance-
SCORE(www.score .org) is a non profit
organisation that provides free on-line and in
person assistance in United states.It involves
training,consulting etc
2)General information sources
Different websites provide general information
of product.
 Such websites are:
 National association of small business
investment
companies(nashic.org.)provides an online
database of small venture database firm
members.
 National venture capital
association(nvea.org)provides information
on the venture capital industry.
 Fast trac(www.fasttrac.org)provides
educational programs.
3)Industry and market information
There are wide variety of databases that
provide industry and market.
It includes:
 Plunkett
 Frust and Sullivan
 Euromonitor
 Gale directory library etc
4)Competitive conpany and product
services information
It includes-
Hoovers
Mergent
5)Government sources
It includes
 Census reports
 Export import authority
 Different websites of government
6) Trade association
7) Trade publication
 Motivations to go global
Motivational factors for going global can
be-
 Profit
 Competitive pressures
 Unique product or service
 Excess production capacity
 Unique market opportunity
 Economies of scale
 Tax benefit
 Foreign markets selection
A systematic process is needed to select the
foreign market.They are:
 Develop appropriate indicator
 Appropriate indicators are developed based on
 Past sales, competitive research, experience
and discussion with other entrepreneur doing
global business.Specific indicator for the
company need to be developed in three global
areas,i.e.overall market size indicator,market
groeth indicator,and product indicator.

 Collect data and convert into comparable
 indicator
 It involves collecting data for each of these
indicators and making the data comparable.
 Establish an appropriate weight for each
indicator
 Its involves establishing approapriate weight
for the indicators to reflect its importancein
predicting foreigh market potential.
 Analyze the data
 It involves anlyzing the results.when looking
at the results,the entrepreneurs should
 Select the appropriate market from the
market ranking
 This step involves selecting the appropriate
market to enter as well as follow up the
market so that an appropriate entry
strategy can be determined and market
plan is developed.
 International Versus Domestic

Entrepreneurship
Although international and domestic
entrepreneurs are concerned with
sales,costs and profit what differentiates
domestic from international
entrepreneurship is the variation in the
relative importane of the factors affecting
each decision. Different factors affect the
international and domestic entreprenerial
decision.
 Factors are:
1)Economic Factors
 In domestic business strategy,a single
county at a specified level of economic
development is the focus of their
entreprerneurial efforts.
 Creating a business strategy for a
multycountry area means dealing with
differences in: economic
development,currevcy variation,
government regulation,banking etc,
 Components of economic
factors are
 Fiscal policy
 Monetary policy
 Distribution
 Trends
2) Political-legal envinonment
Some components are-
 Methods of enacting public policy
 Influencers on policy making
 Wars and conflicts
 Government stability and risk
 3)Social environment
 Psychographic-Refers to interests, activities
of consumers.
 Language
 Ethics
 Social structure
4) Technological Environment
 Rate of Technology adoption
 Use of technology
 Pace of technological change
5) Cultural environment
 Custom
 Religion
 Belief
Strategies for managing stress
 Networking
 Getting away from it
 Communication with employees
 Finding satisfaction outside the
company
 Delegating
 Chapter-5
Legal environment tor the
entrepreneurship
Concept of legal environment
It consists of :
 General business legislationi.e.
 Labour legislationi.e.child labour,trade
union,Industrial training and bonus
 Financial legislationi.etaxation,foreign exchange
 Social legislation i.econsumer
protection,environment protection
 Intellectual property right legislation
 Registration of intellectual
property rights
Intellectual property is intangible asset.It
can neighter be seen nor touched.It
consists of patent, trademark, copyright
and trade secrets held by the
entrepreneur. It needs to be registered
and protected.
 Patent
It is a grant from the government that gives
an inventor exclusive right to an invention .
However the invention should be novel, not
obvious and useful.patent can be of three
types:
 Utility patent-It is concerned with process
,for example film developing
 Design patent-It is concerned with articles of
manufacturer,For example Nike shoes
design
 Plant patent-It is for new variety of plant.
 Steps
 Establish the invention’s novelty-The
invention should not be known,used or
described in print.
 Document the device-The inventor should
verify the date on which the idea of invention
was conceived.
 Search existing patents-This is done to verify
the invention is truly new.
 Study search results-The results of search of
existing patents should be studied to
determine that the invention is new.
 Submit patent application-The formal
application describing the invention should
be filed.
 Receive patent-The inventor receives
patent If the application is approved after
patent examintation
 Trade mark
 It is a distinctive word,name,symbol
design or logo that a company uses to
identify and distinguish its products from
competitiors
 Steps-
 It is done by filing an application to
appropriate government
authority.However it should be unique,
 Copy rights
 It is an exclusive property right granted
to authors and originators of literacy of
artistics productions. They can be-
 Literacy work
 Dramatic or musical work
 Pictorial graphic
 Films and audio-vidual works
 Sound recording
 Trade secrets
 They are any information or process of
commercial value that a business
possesses.
 It is not known by the competitors
 The business would loss advantage if it
is obtained by competitors
 The owner takes reasonable steps to
protect it.