Entrepreneurship

organization
Some businesses know what they do well and aim to be
the best in their space without taking many risks. Other
businesses look to find “the next big thing” and create
new products and services. These latter businesses are
known as entrepreneurial organizations.
 E xten sive Market R esearch

 Entrepreneurial organizations don’t always develop

products from internal ideas they have. One of the
hallmarks of an entrepreneurial organization is the amount
of time, staff and money they spend on market research.

 This helps them discover needs that aren’t being met in the
marketplace. They then use this information to create
products and services to satisfy those needs. This helps
ensure there is a demand for what they create, making their
new products and services easier to sell.
Features of Entrepreneurship organization

 Conduct Extensive Market Research.

 Pursue Research and Development

 Freedom

 Promote Internal Communication

 Test the Market

 Copy the Competition

 Create Exit Plans

Pursue Research and Development

 Once entrepreneurial organizations know what the market wants, they begin developing the
products and services that will satisfy these demands.

 In addition to creating new products, entrepreneurial organizations sometimes have to develop new
manufacturing techniques, use materials differently, figure out how to make certain features work
with each other and make sure new products and services are affordable and provide the right
products.

 An example would be fast food companies rushing to make new chicken sandwiches to compete
with Chic-fil-A. After Popeye’s had overwhelming success with their new chicken sandwich,
McDonald’s, Wendy’s and others soon followed suit. In the fitness market, celebrity trainers
continue to introduce new workout programs and exercise equipment to cash in on consumer
demand for health and fitness products and services.
Freedom

 At companies that depend on innovation, management empowers employees so

they can experiment. Managers and teams have more autonomy, according to
BC Campus. Failure is not a reason to fire an employee, because entrepreneurial
organizations understand that they will often put money into more products and
services that don’t launch than do.

 While these types of businesses won’t give employees a blank check, they are
receptive to pitches and proposals and will provide company assistance in the
form of access to the marketing, sales, accounting, production and shipping
departments to help employees test new ideas.
Promote Internal Communication

 Few products can be successful if just one person does all the work to try and
launch it. For this reason, entrepreneurial organizations foster discussions among
employees. They have a more lateral entrepreneurial organizational structure,
rather than a traditional hierarchical, top-down org chart.

 These companies hold weekly or monthly meetings where employees share their
ideas and ask for feedback. They might encourage communication via an internal
newsletter that keeps everyone up to date on what’s going on at the company.
Test the Market

 Before entrepreneurs fully launch a product or service, they often test it using
limited sales efforts. For example, before opening a brick-and-mortar store, they
might try selling a new product using kiosks in malls. A company selling a new
product online might start with an invitation-only web portal. Some companies
launch retail products regionally before going national. A restaurant might hold a
private tasting party or offer a new menu item for a limited time.
Copy the Competition

 Some entrepreneurial companies don’t base their business models on creating

completely new products or service. Companies that follow this form of
entrepreneurial innovation look at companies with successful offerings and try to
improve on them. They might not make many changes, but instead compete on
their ability to sell a similar product for a lower cost, or with free or overnight
shipping.
Create Exit Plans
 Some entrepreneurial organizations have no plans to ever make a profit. They set themselves to
become an attractive takeover or buy-out target of another business that thinks it would be
profitable. If this is the goal for a new company, the leaders will focus on setting up the company
for sale.

 Of course, the company works to make a product or service that will make money, but it can take
years for a business to become profitable. The goal of entrepreneurs who are seeking an early exit
is to demonstrate that they have created something that the market wants, that sales are increasing
and that by a certain date, the company will be profitable. They then sell the business to a group
that has experience managing operations and making profits, rather than developing ideas from
scratch.

 Some small-business owners, such as landscapers, plumbers and restaurateurs, plan to operate their
businesses profitably for many years, but would like to sell them when they are ready to retire,
explains Entrepreneur magazine. During these years, they work to build a brand and business they
can sell, which can be operated by someone else after the sale.