EXERCISES: WEEK 2 (Chapter 1 (ii))

Answer all the questions below:

1. What are the key characteristics of successful entrepreneurs? Provide examples.

Successful entrepreneurs often share a set of key characteristics that help them thrive in
competitive and uncertain environments. Here are some of the most important traits, along with
examples:

1. Creativity and Innovation

They possess a strong desire to create something new and solve problems in unique ways,
fostering innovation and growth. For example, Sara Blakely invented Spanx by redesigning
women's shapewear with a unique idea.

2. Risk Taking Propensity

They are willing to take calculated risks and embrace uncertainty, knowing that failure is a
possibility. For example, Richard Branson entered the airline industry without experience,
launching Virgin Atlantic.

3. Adaptability and Resilience

Entrepreneurs can quickly adapt to changing circumstances and bounce back from setbacks.
For example, Reed Hastings, co-founder of Netflix, shifted the company from DVD rentals to
streaming and later into original content production to stay ahead of market trends.

4. Problem-Solving Skills

They possess strong problem-solving abilities and are adept at finding innovative solutions. As
an example, we could use Brian Chesky (Co-Founder of Airbnb). As a new company, Airbnb
struggled getting users and attention to list on their services. People weren’t booking rooms
and listings were unappetizing. After that, the team led by Chesky understood that the problem
lay in the poor-quality images being presented. They went out to New York, rented a camera,
and took pictures of the hosts, thereby doing the work that was expected from professionals.
This greatly increased bookings. As it turns out, imagery is vital.
 2. How do economic factors influence entrepreneurship?

Economic factors play a major role in shaping the success or failure of entrepreneurial ventures.
They influence how easily entrepreneurs can start, grow, or sustain a business. Such as:

1. High unemployment

Some people turn to self-employment during long periods of joblessness. After a recession, for
instance, self-employed individuals may turn to performing rather of sitting idly, home-based
caregiving, or opening small shops to sustain themselves.

2. Lack of Job Opportunities

In regions with few formal employment options, people are often driven to create their own
jobs through entrepreneurship. For example, In many rural or developing areas, individuals
may open local shops, start farms, or offer services like repairs or tailoring when corporate jobs
are unavailable. In parts of Africa and South Asia also, many young people become
entrepreneurs by starting small businesses due to limited access to formal employment.

3. Pursuit of Financial Gain

Some individuals are motivated to become entrepreneurs to improve their financial situation or
achieve upward mobility. For instance, A person might start an online business, open a
restaurant, or launch a tech startup with the goal of earning more than a typical salary job could
offer.
 3. What differentiates social entrepreneurship from conventional
entrepreneurship?

Aspect Social Entrepreneurship Conventional Entrepreneurship

Main Goal Solving social, environmental or Making profit and maximizing
community problems returns
Success Social impact and positive change Financial growth and business
Measured By performance
Profit Use Often reinvested into the cause or Distributed to owners/shareholders
community or reinvested for expansion
Motivation Creating a better world or Personal wealth, innovation, market
addressing inequality or injustice opportunity
Target Underserved or marginalized Paying customers or profitable
Audience communities market segments
Examples Muhammad Yunus (Grammen Mark Zuckerberg (Facebook- social
Bank- microloans for the poor) media platform monetized)

4. Why is risk-taking an essential trait for entrepreneurs?

There are many reasons why risk-taking a fundamental quality for entrepreneurs is:

1. Opportunity Creation: Oftentimes, businesses must take big risks during attempts to
capture what they consider new opportunities. Many of the greatest business ideas come
from diving into seemingly uncharted or outlandish markets which provide high reward
but come with significant risk as well.
2. Innovation and Growth: There is always some form of uncertainty linked to starting a
business or developing a new product. Taking a risk is almost always guarantees an
opportunity to innovate through new technology, trends, business models, or other out-
of-the-box solutions that disrupt the market.
3. Competitive Advantage: Taking calculated risks allows entrepreneurs to gain an upper
hand in their industry. The sheer determination to attempt things that most are afraid to
tackle often allows for breakthroughs and nontraditional business niches.
 5. How does technology drive the rise of digital entrepreneurship?

The advancement of technology has significantly helped in the development of digital

entrepreneurship, since it enables different business frameworks, market expansion, and offers
new tools for business operations. Below is the contribution of technology:

1. Accessing Entrepreneurs Globally: Technology improves the interaction between the

entrepreneurs and the global audience. The internet allows businesses to operate outside
their geographical zones, accessing customers from every corner of the world. This
greatly increases the market potential and customers for digital entrepreneurs.
2. Saving Businesses Money: Technology helps reduce the overhead costs that come with
starting and running a business. For instance, Cloud computing eliminates expensive
physical infrastructures. With the use of inexpensive software tools and digital services,
entrepreneurs can set up businesses with low initial investments.
3. Digital Marketing: Entrepreneurs can promote their businesses with the aid of social
media, search engine optimization, and email marketing. These marketing tools are
more cost effective and have broader reach thus enabling digital entrepreneurs to meet
their objectives.
 6. What are the advantages and challenges of franchising entrepreneurship?

Here’s a table summarizing the advantages and challenges of franchising entrepreneurship:

Advantages Challenges
Proven Business Model: Established High Initial Investment: Significant
system and processes with a higher upfront costs (franchise fees, equipment,
likelihood of success. real estate)
Brand Recognition: Access to a recognized Limited Control: Franchisees must follow
brand, which leads to faster customer trust. the franchisor’s guidelines, limiting
creativity and autonomy.
Support and Training: Comprehensive Ongoing Royalties and Fees: Regular
training and ongoing support from the payments to the franchisor, reducing overall
franchisor. profits.
Easier Access to Financing: Banks view Market Saturation: Too many franchise
franchise businesses as less risky, making it locations in one area can limit growth
easier to secure financing. potential.
Economies of Scale: Benefit from bulk Dependence on the Franchisor:
purchasing and reduced operational costs. Franchisees are dependent on the success of
the franchisor’s brand and decisions.
 7. What role does government policy play in supporting entrepreneurship?

Government policy is important in relation to fostering entrepreneurship because it focuses on

allowing sustainable business growth, innovation, and motivates business activities. The
following is an explanation of each area that government policies aid in promoting
entrepreneurship:

1. Creating a Favorable Business Environment

Regulatory Barriers and Streamlining: Government policy can relax certain standard operating
procedures. Policies that cut down on unnecessary and time-consuming bureaucracy, make it
simpler to register businesses, and help with licensing off-sets tangentially aid entrepreneurship
by simplifying red-tape restrictions and making it easier generally to start a business. Therefore,
allows entrepreneurs to establish and run their businesses with far lesser hassle and complexity.

2. Access to Funding and Financial Support

Subsidies and Grants: Government have also been supporting or encouraging entrepreneurship
by giving financial aid through grants, subsidies, or loans with lower interest rates. These funds
assist entrepreneurs in making a new business that is not easy because it is hard and challenging
to acquire funds during the initial phases.

3. Education and Training

Entrepreneurship Education: Governments also support the notion of creating people with
entrepreneurial ideas and mindsets by allocating funds into education and training programs
that aim to teach relevant and applicable skills like managing businesses as well as marketing,
finances, and leadership.
 8. How does an entrepreneurial society contribute to economic growth?

1. Economic Growth

Entrepreneurship is a key driver of economic growth. It fosters innovation, creates jobs, and
generates wealth.

2. Increased Productivity

Entrepreneurs are known for their efficiency and productivity. They strive to find innovative
ways to streamline operations and optimise resources.

3. Competition and Innovation

The presence of entrepreneurs fosters competition, encouraging existing businesses to improve

their offerings and innovate.

4. Job Creation

New businesses generate jobs and stimulate the labour market. They provide opportunities for
individuals to gain employment and develop their skills.
 9. Compare and contrast intrapreneurship and corporate venturing.

Differences Similarities
Scope: Corporate venturing differs from Innovation-Driven: Both forms of
intrapreneurship because it relies on entrepreneurship aim at having innovation
collaboration with external entities such as fostered within a company unlike traditional
start-ups, whereas intrapreneurship focuses models.
solely on growing and innovating from
within an existing company.
Ownership and Risk: The relative financial Strategic Growth: Internal process
risk an entity incurs alters with corporate improvements and newly acquired external
venturing having more inherent risk due to technologies or products mark the
investing in external companies compared to boundaries of growth for a business, which is
intrapreneurs who leverage a company’s also a hallmark of both approaches.
resources and are less exposed to risks.
Innovation Focus: As redesigning a service Entrepreneurial Spirit: The emphasis of
or product for better efficiency is done in- both concepts relies on entrepreneurial
house for a company, intrapreneurship attributes skilled in opportunity
focuses on internal innovation while identification, risk taking, and new venture
venturing out looks for innovative execution.
opportunities.
Autonomy: Compared to other external
start-ups or businesses, intrapreneurial
employees have less relative autonomy than
those working with corporate venturing.
 10. Why is education and skills development crucial for fostering entrepreneurship?

Education, coupled with skills development, is extremely valuable for fostering

entrepreneurship because it equips learners with essential tools, skills, and even motivation
needed to create a business and sustain its growth. The functions of education and skills
development find mention in fostering entrepreneurship as follows:

1. Broadening One’s Knowledge Base

Business Proficiencies: Entrepreneurs in the making, need to be educated so that they possess
a sound knowledge of all the business proficiencies including finance, marketing, operations,
personnel management, to name a few. This serves to improve a student’s foundational intellect
which is crucial for the running of a business and making adequate decisions.

2. Enhancing Analytical and Solving Thinking Skills

Creative: Finding out new methods to solve business hurdles is a normal prerequisite in
entrepreneurship. Education aids learners to posses and develop critical thinking which enables
them to solve problems differently and devise new innovative ways to resolve issues.

3. Improvement of Skills

Soft and Hard Skills: An entrepreneur is bound to need some form of skills including (but not
limited to) digital skills, coding, and engineering. Alongside technical skills, soft skills like
leading, marketing, and negotiation are equally vital. Education and development of skills
enable an entrepreneur to master all skills thus being more effective in their work.