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exam entrepreneur

exam entrepreneur

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Published by guisn

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Published by: guisn on May 13, 2009
Copyright:Attribution Non-commercial


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Explain the process of innovation as described bySchumpeter. What are the relevancies of innovationto entrepreneurial business?
Schumpeter introduced the term ‘creative destruction ’. Hesaid that the innovation and technological change of a nationcomes from the entrepreneurs. In other words, he believed thatthese individuals are the ones who make things work in theeconomy of the country.According to Schumpeter there are 4 phases of innovationwhich are:
Invention: is a new
or a new product.
Creativity: is the
generation and expression
of newideas. Use something in a different way to attract thecostumer with differential. (Creativity is not the same asinnovation)
Innovation is how new idea will be accepted in amarketplace with success. How to make this new productor service to be
commercial. (
invention is not the sameas innovation)
Diffusion: when
become successful
 In addition some examples can be described:Google is an innovator for new type of industrial organisationwhich transformed the concept of search engine. It is in themarket over 10 years and it has been accepted worldwide andfollowed as reference for the competitor.Easyjet is big in promoting their brand and running advertisingpromotion to attract more customers. They need high seatoccupancy to be economic, they are inventing with pricingencouraging costumers to search for very low prices (a bargainhunters). They have been growing with the internet in order toavoid queue and to facilitatecostumers’ life.According to Schumpeter the
five types of innovation
- New product- New process- New market- New source of supply of raw material- New type of industrial organisationInnovation needs to be systematic by analyzing opportunities,starting small, keeping it simple and focussed, identifyingniches and aiming for leadership. And it is also define newmarkets. To summarize a successful innovation requires highconcentration of the entrepreneur’s strengths and must have areal economic or social impact.As known the three main pillars of entrepreneurial business aregrowth, innovation and strategic management. Therefore showsthat to be a successful entrepreneur the innovation model needto be applied.
As known trait theory
is regarding to the personality of theentrepreneurs.
So an individual can be assessed according to theimportance of his personality characteristics such as:
- Need for achievement (build or achieve something significant)- Independence (the ability to process on their own)- Internal locus of control (the achievement is a consequence of their own hard work)
- Energy and motivation (the capacity in work long hours for thesuccess of the business.)- Resilience (it is the capacity not to give-up when facingobstacles.)- Flexibility ( to be able to adapt the unexpected)- Willingness to take calculated risks (never make decisionwithout working out properly)- Ambiguity (not knowing what will impact the business.)
Social Theory
It is linked with the outside influences on the entrepreneur andthe business. E.g. family background, education, age,..) thelevel of education is important to establish a successfulbusiness.Another influence is the family background which can beexemplified with the case of Hilary Andrews owner of Mankind,a man cosmetic website. She faced various obstacles for thedevelopment of her entrepreneurial business but she wasresilient, self motivated, flexible and had need for achievement.
Describe the different parts that a business plan iswritten for?What are the principles components of the plan?Describe some of the benefits that arise from theplanning process and the mistake that companymay make when preparing a plan ?
Business plan is a document that captures the effort by thefounder to gather information about the business to create neworganization and exploit opportunities. It is written for thefounder know where the business is ( nature and details of the

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