Question 2

Discuss the various aspects of today’s economy, including the driving forces, the
implications, and the critical success factors.

1. Driving Forces

o Technology: New inventions (like apps, websites, and robots) allow

businesses to serve customers faster and cheaper.

o Globalization: Products and services can reach people all over the world,
increasing competition but also creating more opportunities to sell.

o Changing Consumer Demands: People’s tastes and needs change quickly,

so businesses must stay flexible and creative.

2. Implications (What These Changes Mean for Businesses)

o Increased Competition: Because of easy access to markets, more

companies compete for the same customers.

o Need for Innovation: Businesses must keep coming up with new ideas or
improving existing products to stay ahead.

o Risk and Uncertainty: Fast changes can create risks (for example,
technology becoming outdated quickly).

3. Critical Success Factors (What Businesses Need to Succeed)

o Adaptability: Being ready to change plans if the market or technology shifts.

o Skilled Workforce: Having workers who are well‐trained and can handle new
tasks or use new technology.

o Strong Customer Focus: Listening to what customers want and constantly

improving products or services to fit their needs.

uestion 3

Briefly describe the diagram in the perspective of: “Entrepreneurial Strategy—

Generating and Exploiting New Entries.”

Imagine the process in three stages:

1. Stage 1: New Entry Generation

 o You start by gathering resources, such as knowledge (what you know) and
other materials (money, equipment, people).

o These resources form a resource bundle—a set of tools or assets you can
use.

o Next, there’s an assessment of the new entry opportunity, where you study
if your business idea (new entry) is likely to succeed.

2. Stage 2: New Entry Exploitation

o You create a risk reduction strategy to handle any possible problems (like
competition, financial worries).

o You build an organization: this could mean setting up your company

structure, hiring staff, and assigning tasks.

o You pick an entry strategy, deciding how to introduce your product or

service (for example, launching in a local market first or going online).

o You measure firm performance, which is basically checking if you’re making

profits, reaching customers, and improving over time.

3. Stage 3: Feedback Loop of Resources

o After you try out your ideas, you learn what worked well and what didn’t.

o You use that knowledge and other resources again, feed it back into your
business, and possibly come up with new ideas or improved methods.

o This feedback helps you repeat the cycle, creating better opportunities in the
future.

Table 2.3: Characteristics of an Entrepreneurial Environment:

1. Organization Operates on Frontiers of Technology

o The company uses or develops the newest, most advanced technology to

create innovative products or services. They are not afraid to experiment with
cutting‐edge ideas.

2. New Ideas Encouraged

 o Employees are free to suggest fresh concepts or improvements. The
organization values creativity and wants people to think outside the box.

3. Trial and Error Encouraged

o Trying new methods (even if some fail) is seen as a good way to learn.
Mistakes can be okay as long as they lead to better solutions in the future.

4. Failures Allowed

o The company understands that not every idea will succeed. Rather than
punishing failure, they use it as a chance to learn valuable lessons and
improve.

5. No Opportunity Parameters

o There aren’t strict limits on what kinds of opportunities to explore. People

have freedom to chase various ideas without strict rules that might hold
them back.

6. Resources Available and Accessible

o The necessary tools, funding, and support are provided so that teams can
work effectively. Whether it’s equipment, training, or money, it’s made
available when needed.

7. Multidiscipline Teamwork Approach

o People from different backgrounds and skill sets work together, creating
teams that can look at a problem from many angles and come up with
stronger solutions.

8. Long Time Horizon

o The company plans and invests for the future rather than focusing only on
short‐term gains. They give projects enough time to develop and succeed.

9. Volunteer Program

o Opportunities may exist for employees (and sometimes people outside the
organization) to volunteer their time or skills. This can help foster community
spirit and bring in fresh perspectives.

10. Appropriate Reward System

 • Good work and successful ideas are recognized—maybe through bonuses,
promotions, or public praise. Rewarding people encourages them to keep
innovating.

11. Sponsors and Champions Available

• There are mentors or higher‐level managers willing to support and guide new ideas
or teams. These sponsors help remove barriers and advocate for projects.

12. Support of Top Management

• Leaders at the highest level believe in entrepreneurship and innovation. They give
permission, resources, and encouragement for new ventures to flourish.

Table 2.4: Leadership characteristic of a corporate entrepreneur:

1. Understands the Environment

o Knows what’s happening in the market, what competitors are doing, and how
customers’ needs change. Uses this knowledge to guide decisions.

2. Is Visionary and Flexible

o Has a clear, long‐term goal but can adapt plans when new information or
situations arise. Balances big dreams with practical changes.

3. Creates Management Options

o Develops different strategies or backup plans. Rather than betting everything

on one approach, they have multiple paths they can follow.

4. Encourages Teamwork

o Fosters cooperation by making sure people work well together, share ideas,
and help each other achieve common goals.

5. Encourages Open Discussion

o Creates a safe space for everyone to speak up, share opinions, and discuss
new ideas without fear of being criticized.

6. Builds a Coalition of Supporters

o Brings together a group of people who believe in the project and actively
support it. These supporters help push ideas forward.
 7. Persists

o Keeps going even if there are challenges or failures. Instead of giving up at the
first setback, they learn from mistakes and continue working toward
success.

Figure 3.2 – “The Decision to Exploit or Not to Exploit the New Entry Opportunity”:

1. Search & Knowledge

o Search means looking out for new ideas or possibilities in the market.

o Knowledge refers to the information or experience an entrepreneur already

has or can gather about that opportunity.

2. Level of Information on New Entry

o This is how much you really know about the new idea—such as market
potential, costs, risks, and possible profits. The better your information, the
easier it is to decide.

3. Window of Opportunity Still Open

o Every idea has a time frame in which it can succeed before competitors
catch up or the market changes. If this “window” is still open, you might have
a chance to make a profit or stand out.

4. Preference for Error (Omission or Commission)

o Error of Omission: Missing out on a good chance because you’re too

cautious.

o Error of Commission: Taking action that later fails.

o Each entrepreneur tends to be more comfortable with one or the other. Some
would rather try and fail (commission), while others prefer to play it safe and
possibly miss an opportunity (omission).

5. Comfort with Making Decisions Under Uncertainty

o Entrepreneurs must decide even when they don’t have perfect information.
This box shows whether someone feels okay taking a risk or needs more
certainty.

6. Go/No‐Go Decision
o Finally, based on all the above factors—knowledge, timing, risk preference,
and comfort level—the entrepreneur chooses whether to move forward
(“go”) or stay out (“no go”).