What is Entrepreneurship?

Entrepreneurship has traditionally been defined as the process of

designing, launching and running a new business, which typically begins
as a small business, such as a startup company, offering a product,
process or service for sale or hire.[1] It has been defined as the
"...capacity and willingness to develop, organize, and manage a
business venture along with any of its risks in order to make a
profit."[2] While definitions of entrepreneurship typically focus on the
launching and running of businesses, due to the high risks involved in
launching a start-up, a significant proportion of businesses have to
close, due to a "...lack of funding, bad business decisions, an economic
crisis -- or a combination of all of these"[3] or due to lack of market
demand. In the 2000s, the definition of "entrepreneurship" has been
expanded to explain how and why some individuals (or teams) identify
opportunities, evaluate them as viable, and then decide to exploit
them, whereas others do not,[4] and, in turn, how entrepreneurs use
these opportunities to develop new products or services, launch
newfirms or even new industries and create wealth.
Evolution of Entrepreneurship?
Various scholars have written extensively on the origin of
entrepreneurship. What is interesting is that most of the scholars who
wrote about the origin of entrepreneurship are either economists or
historians. Basically, the concept entrepreneur is derived from the
French concept “entreprendre” which literarily is equivalent to the
English concept “to undertake”. From the business point of view, to
undertake simply means to start a business
What is Strategic Planning?
Strategic planning is the art of creating specific business strategies,
implementing them, and evaluating the results of executing the plan, in regard
to a company’s overall long-term goals or desires. It is a concept that focuses
on integrating various departments (such
as accounting and finance, marketing, and human resources) within a
company to accomplish its strategic goals. The term strategic planning is
essentially synonymous with strategic management.

 
The concept of strategic planning originally became popular in the 1950s and
1960s, and enjoyed favor in the corporate world up until the 1980s, when it
somewhat fell out of favor. However, enthusiasm for strategic business
planning was revived in the 1990s and strategic planning remains relevant in
modern business.

CFI’s Course on Corporate & Business Strategy is an elective course for

the FMVA Program.

Strategic Planning Process

The strategic planning process requires considerable thought and planning on

the part of a company’s upper-level management. Before settling on a plan of
action and then determining how to strategically implement it, executives may
consider many possible options. In the end, a company’s management will,
hopefully, settle on a strategy that is most likely to produce positive results
(usually defined as improving the company’s bottom line) and that can be
executed in a cost-efficient manner with a high likelihood of success, while
avoiding undue financial risk.

The development and execution of strategic planning are typically viewed as

consisting of being performed in three critical steps:

1. Strategy Formulation

In the process of formulating a strategy, a company will first assess its current
situation by performing an internal and external audit. The purpose of this is
to help identify the organization’s strengths and weaknesses, as well as
opportunities and threats (SWOT Analysis). As a result of the analysis,
managers decide on which plans or markets they should focus on or abandon,
how to best allocate the company’s resources, and whether to take actions
such as expanding operations through a joint venture or merger.
Business strategies have long-term effects on organizational success. Only
upper management executives are usually authorized to assign the resources
necessary for their implementation.

2. Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets

or goals related to putting the strategy into action, and allocate resources for
the strategy’s execution. The success of the implementation stage is often
determined by how good a job upper management does in regard to clearly
communicating the chosen strategy throughout the company and getting all
of its employees to “buy into” the desire to put the strategy into action.

Effective strategy implementation involves developing a solid structure, or

framework, for implementing the strategy, maximizing the utilization of
relevant resources, and redirecting marketing efforts in line with the strategy’s
goals and objectives.

3. Strategy Evaluation

Any savvy business person knows that success today does not guarantee
success tomorrow. As such, it is important for managers to evaluate the
performance of a chosen strategy after the implementation phase.

Strategy evaluation involves three crucial activities: reviewing the internal and
external factors affecting the implementation of the strategy, measuring
performance, and taking corrective steps to make the strategy more effective.
For example, after implementing a strategy to improve customer service, a
company may discover that it needs to adopt a new customer relationship
management (CRM) software program in order to attain the desired
improvements in customer relations.

All three steps in strategic planning occur within three hierarchical levels:
upper management, middle management, and operational levels. Thus, it is
 imperative to foster communication and interaction among employees and
managers at all levels, so as to help the firm to operate as a more functional
and effective team.

Some important strategic planning issues to consider

Growing a business can pose some considerable personal challenges to the owner or manager, whose
role can change dramatically as the business grows.

Effective strategic planning involves considering options that challenge the way that business has been
done up to this point. It may be that decision-making in some areas will be handed to others, or that
processes which have worked well in the past will no longer fit with future plans.

It can be tempting for owners or managers to overlook alternatives that are uncomfortable for them
personally, but to disregard your options on these grounds can seriously compromise your strategic plan
and ultimately the growth of your business.

Examples of the kind of issues that tend to get overlooked by growing businesses include:

 The future role of the owner - for example, it may be in the best interests of the business for the owner to
focus on a smaller number of responsibilities, or to hand over all day-to-day control to someone with
greater experience.
 The location of the business - most small businesses are located close to where the owner lives. But as a
business grows it may make sense to relocate the business -for example, to be closer to greater numbers
of customers or employees with certain skills.
 Ownership structure - growing businesses in particular should ensure that they get this right. The more a
business grows, the more sophisticated it needs to be about meeting its financing needs. In many cases,
the best option is for the owner to give up a share of the business in return for equity finance - but this can
be emotionally difficult to do.
In the final analysis, it is the owner of the business who decides the strategic plan. Growing a business is
not something done "at all costs". However, an honest assessment of the options allows for any decisions
made to be as informed as possible.