Entrepreneurship

CST 492-2

Vihara Jayakody
Department of Computer Science and Informatics
Faculty of Applied Sciences
Going to discuss….
• Introduction to entrepreneurship
• Production and service ventures and capturing opportunities
• Strategies that capture business opportunities
• Product development process
• Marketing and new venture development
• Competitor analysis and implications for market research
• Venture development path and feasibility planning
Evaluation Criteria

Continuous Assessment - 40%

End Semester Examination - 60%
Recommended Readings
• Holt, D.H ,1992, Entrepreneurship: New venture creation. Prentice Hall.

• Kuratko, D.F and Hodgetts, R.H, 2003, Entrepreneurship: Theory, Process

and Practice, 6th Edition or Latest. South Western Collage Publications.
 Session 01

Introduction to Entrepreneurship
 Entrepreneurship
• “Entreprendre” “Entrepreneur”

Persons who undertook

the risk of new ventures.

• Entrepreneurship is one of the main factor of production.

 Entrepreneurship
Definitions….

Entrepreneurship is the dynamic process of creating incremental wealth.

(Robert Ronstadt)

Entrepreneurship is the ability to identify a suitable business idea and

convert it into a practicable business enterprise.
(NIE)

Entrepreneurship is the ability of face to the uncertainties.

(Richard Nantinent)
 Entrepreneurship

• Entrepreneurship is an activity

• that involves the discovery, evaluation and exploitation of

opportunities

• to introduce innovations

• through managing efforts that previously had not existed.

 Entrepreneurship

What is an Entrepreneurship ???

• The capacity to identify an opportunity

• and willingness to develop, organize and manage an

innovative business venture

• along with any of its risks in order to make a profit.

 Entrepreneur
Definitions….
• The entrepreneur is one who undertakes to organize, manage,
and assume the risks of a business.

• Entrepreneur is a person who pays a certain price for a product

to resell it at an uncertain price, thereby making decisions
about obtaining and using resources while consequently
assuming the risk of enterprise.
(Richard Cantillon, 1755)
Definitions….
Entrepreneur
• Entrepreneur is an individual who undertook the formation of an
organization for commercial purposes. He is an economic agent who
transforms the demand into supply.
(Adam Smith, 1776)
• Entrepreneur is a person who possess certain arts and skills of
creating new economic enterprises, yet a person who has
exceptional insight into society’s needs and wants and is able to
fulfill them. (J.B. Say, 1803)
 Entrepreneur
Definitions….
• Entrepreneurs are individuals who recognize opportunities where
others see confusion

• Although no single definition of entrepreneur exists and no one

profile can represent today’s entrepreneur, researches are
providing an increasingly sharper focus on the subject
 Famous Entrepreneurs in the world

Larry Ellison
Richard Branson Oracle
Virgin Groups Bill Gates
Steve Jobs Microsoft
Apple & NeXT
 Famous Entrepreneurs in Sri Lanka

Otara Gunavardena
ODEL
Merril J Fernando Dhammika Perera
Dilmah Janak Hirdaramani
Hirdaramani Group
Ashok Pathirage
Softlogic

Mr. Sumal Perera

Harry Jayawardena Access Group of Companies
 Entrepreneur
Who is an Entrepreneur ???
an entrepreneur is a person,
• who recognize opportunities
• who invents new products
• who starts his own business and manage it
• who takes the risk of starting a new business
• who makes the decisions on what, how and how much to produce
• who creates new satisfaction and new consumer demand.
Characteristics of an Entrepreneur
 Characteristics of an Entrepreneur
• Hard work

Entrepreneurs need a great deal of energy to see a venture

start and succeed. Yet they are not discouraged by the long
hours to achieve their goal.

• Risk taker

Business face and manage risk. Entrepreneurs minimize risk

through research, planning and skill development.
 Characteristics of an Entrepreneur
• Goal-setting

Entrepreneurs are motivated by the excitement of staring a

new business. Once achieved, they seek out new goals or
ventures to try.

• Self-confident

Entrepreneurs believe in themselves. Their self-confidence

takes care of any doubts they may have.
 Characteristics of an Entrepreneur
• Sensitive
Entrepreneurs view problems as opportunities and
challenges.

• Imaginative

Entrepreneurs are creative. They imagine solutions to

problems that encourage them to create new products and
generate ideas.
 Characteristics of an Entrepreneur
• Flexible

Entrepreneurs must be flexible in order to adapt to changing

trends, markets, technologies, rules and economic
environments.
Entrepreneurial Skills
A skill is the ability to do something specific or to translate knowledge into action.

Research Skills
Entrepreneurs need to identify what they need to know and use research
techniques to obtain it.
Entrepreneurial Skills
Management Skills
Management skills for entrepreneurs involve planning, organizing, leading and
controlling. These are then applied towards their personal, financial and material
goals.

Relationship skills
Running a business means building good relationships with staff, suppliers and
customers.
Entrepreneurial Skills
Gathering Information
Reliable and relevant sources of information may include.
Eg: Books, periodicals, databases, internet, consultants, professionals, schools…etc.

Using Information
After information is acquired it needs to be sorted into relevant database that answers
the entrepreneur’s initial questions. These questions may lead the entrepreneur to
look at new ventures.
Importance of an Entrepreneurship
Importance of an Entrepreneurship
 Create new businesses

 Add to national income

 Create social change

 Community development

 Economic development

 Increase standard of living of the people

• Identify the opportunities that entrepreneur can be
fail.
Chances to fail the entrepreneur ;

• Management mistakes • Growth without control

• Lack of experience • Poor location

• Poor financial control • Improper inventory control

• Weak marketing efforts • Incorrect pricing

• Failure to develop strategic plans • Not learning through failure

• Opportunity is a situation where an entrepreneur can offer a product or service to earn
profit.

• Potential entrepreneurs must always be alert to the opportunities in the external and
internal environments in which they live.

• The most effective sources of entrepreneurial opportunities are,

Trends Industry and market changes
Unexpected occurrence Demographic changes
 What is an opportunity?
 What are the sources of opportunity?
Sensing entrepreneurial opportunities
It is a process of,
• perceiving the opportunities from the problems and needs of
people and society

• or create business opportunities (by innovating new products or

services that are not already in existence)

• synthesize the available information

• analyze the pattern emerging out of this information

• arrive at creative solutions to meet the needs or resolve the

problems.
Factors that play a key role in sensing of entrepreneurial
opportunities

i. Problems
When a problem exists and an idea leads to a solution to resolve
that problem, it emerges as a business opportunity.

Most often an innovative solution to a problem leads to an

entrepreneurial business opportunity.
Factors that play a key role in sensing of entrepreneurial
opportunities
ii. Change
A change in social, legal, technological aspects etc. leads to new
business opportunities.
Factors that play a key role in sensing of entrepreneurial
opportunities
iii. Inventions
Creation of new products or services leads to new business
opportunities.

It can also be innovative improvements to an existing product or

service.
Factors that play a key role in sensing of entrepreneurial
opportunities
iv. Competition
Competition often results in emergence of new and better ideas
that result in new business opportunities.

To dominate the market and to overcome the competition from

the competitors, entrepreneurs rely on new and improved ideas.
→ Needs and problems exist in every wake of life.

→ Various sources like magazines, journals, books, seminars, trade

shows, family members, customers, friends etc. help in getting
information that helps in evolution of basic ideas.
→ Bring together various sources of information and knowledge,
and analyze it to the best possible extent.
→ The analysis helps in the identification of the right opportunity to
start a new business.
Creativity in innovating a solution and vision

• The entrepreneur should be able to creatively identify an idea to

generate a valuable solution to a problem.

• Once the solution is identified their vision to convert the solution

in to business opportunity help them to move forward,
overcoming all the obstacles.
Needs and problems will lead to a potential business
opportunity
• The ability to develop new ideas and discover new ways to solve problems and issues using
available opportunities.

• Creativity is a process that can be developed and improved.

• Creativity is a distinct way of looking at the world that is often illogical.

• The creativity process involves seeing relationships among things that others have not seen.

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 Are you creative ????

Every one have thinking power but few would use it.
Everyone is creative

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 Reasons for restrict the creativity of people
• Believing that there are no more solutions for a particular problem

• Anticipating instant results

• Consider about the barriers more than the solutions

• Do not like to change their beliefs and attitudes

• Following rules, regulations and traditions ignorantly

• Fear of mistakes and criticisms

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 How to improve the creativity ?
• Absorb diversity

• Accept failures

• Appreciate creativity

• Encourage curiosity

• Perceive issues as challenges

• Study Creativity

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 Innovation
• Innovation is the process by which entrepreneurs
convert opportunities (ideas) into marketable solutions.

• It is the means by which they become motivator for

change.

• Followings are the four types of innovations, in order of

originality:
 Invention
 Extension
 Duplication
 Synthesis
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 Innovation

• Invention: creation of new product, service or process.

Extension: expansion of a product, service or process already in existence, different
application of a current idea.
Duplication: replication of an existing product, service or process, not simply copying but
adding the entrepreneur’s own creative touch to enhance or improve the concept.
Synthesis: combination of existing concepts and factors into a new formulation.

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 Relationship between
Opportunity, Creativity
and Innovation
 Innovation process starts with a good idea.

 A good idea will be generated by identification of an opportunity.

 The role of creativity thinking may be vital to the development of

that good idea into a marketable product or service.

To be successful entrepreneurs they should have the

ability to identify opportunities, develop that
opportunity (idea) with creativity and do
innovations.
Select and describe one essential characteristic
that you have to improve to be an entrepreneur.
 Production and Service Ventures
Production can identify as the process of
transferring tangible and intangible inputs into an
output.
Production process involves with,
Inputs
Operation
Output
Feedback
The output of the production process can be
classified into goods and services.
 Production process

Input Operation Output

Feedback
 Production and Service Ventures cont.

Goods are items that are tangible which used to

satisfy customer needs and wants, such as books,
pens, salt, food and etc

Services are activities provided by people which used

to satisfy customer needs and wants, such as services
provided by doctors, dentists, barbers, waiters, or
online servers
 Production and Service Ventures cont.

Production ventures produce tangible outputs for the market

place such as, food items, clothes, shoes, furniture, equipment,
tools, computers…etc
service ventures produce intangible outputs such as
accounting, banking, consulting, cleaning, education, insurance,
treatment and transportation services
in order to earn profits through satisfying customer expectations.
Benefits of Entrepreneurship to the Entrepreneur
• Perform diverse activities

• Ability to help others

• Able to use inexperienced challenges

• Earn attractive profit

• Self development

• Self satisfaction
Benefits of Entrepreneurship to the Society
• Utilize local resources

• Regional development

• Introduce new products and services to the market

• Create employment opportunities

• Earn foreign exchange by exporting products and services

• Increase national production

• Economic development

• Create developed nation

Small Scale Business and Entrepreneurship
Small Scale Businesses are the businesses that are conducted
in an independent manner,
under private ownership,
with a relatively small number of employees and
a low sales volume.
Small Scale Business and Entrepreneurship
• Many successful large scale businesses have been started as a
small scale business.
• It is easy for entrepreneurs to make practical use of their creative
skills, and this gives rise to innovations.
• When the market gap is identified, business opportunities can be
exploited.
Small Scale Business and Entrepreneurship
Important of Small Business for economic development
• Increase the employment
• Increase national production
• Reduce variations of income distribution
• Possible to become large scale in future
Small Scale Business and Entrepreneurship
Strengths of small scale businesses
• Can start with a small amount of resources (capital)
• It is easy to adapt to the environment changes
• Special incentives are offered by the government for business activities
• The employees of small scale businesses do not demand much
privileges
• Family members can assist in the business activities
Small Scale Business and Entrepreneurship
Weaknesses of small scale businesses
• Difficult to obtain capital
• Use old technologies
• Operate in limited market.
• Limited experience and knowledge regarding the business and market
Three roles of an entrepreneurs

• Role of the business owner

• Role of the manager

• Role of the leader

Many small scale businesses tend to fail some time after their
start up. What are the reasons behind this failure?
The end…..