TOPIC 1

OVERVIEW OF ENTREPRENEURSHIP

5/2/2012

Learning Outcomes

At the end of this chapter, students are given the following competencies: Understand how the economic environment influence the selection of new business ventures. Use of relevance information to help screening potential new business venture. Able to use basic SWOT Analysis technique to review options of new business venture.

5/2/2012

Contents      Environmental Screening Analysis of Business Opportunities Selection of Business Opportunities Development of new Business Concept Initial Plan for New Business Ventures 5/2/2012 .

Definition Entrepreneurship: is the process of creating something new with value by devoting the necessary time and effort. 5/2/2012 . and social risks. assuming the accompanying financial. psychic. and receiving the resulting rewards of monetary and personal satisfaction and independence.

WHO ARE THE ENTREPRENEURS?      Paradigm shifters.if you have what it takes People who like to be their own boss People who has experienced a “social disruption”?   5/2/2012 . innovators and opportunists Key change catalysts and agents Wealth and employment creators Economic engine drivers Key actors of the Malaysian Economy   Entrepreneurs are made and not born You can be the entrepreneur .

manage and assume risks of business How people become entrepreneur ? – by design and default.Creative Destruction.    Challenges and rewards for an entrepreneur. Many begins but few make it big. A person who undertakes to organize. Entrepreneurs are created in good and bad economic times .WHY BECOME ENTREPRENEURS?  Definition of an entrepreneur – French word “entreprende” meaning „go between‟ or „enter to undertake‟.  5/2/2012 .

Screening the environment  Country Economic Scenario (Malaysia)      Historical ( 5 years trend) Current economic scenario  GDP growth  Industrial Growth – Manufacturing / Services Promoting Human Capital Knowledge based Industry Agriculture as a viable business Improve delivery services Improve maintenance of Assets R&D and innovation  Other Policy / Priority   Economic Policy   Five Years Plan – RMK -9 Promoted Industry  Biotechnology  ICT  Food – Halal Food  SMEs   5/2/2012 .

tin. palm oil & timber Manufacture of import substitution goods Knowledge Era Technology Era Industrial Era 1980’s 1990’s 2000’s Knowledge Driven Agriculture Era 1960’s 1970’s Labour Driven Labour Driven Investment Driven Productivity Driven Knowledge-based led by Private Enterprises 5/2/2012 .MALAYSIA: A MOST ENTERPRISING CULTURE AND NATION KnowledgeAgriculture-based led by Government Export textile & electronic goods Export high value added electrical & electronic goods based goods & services Export of rubber.

Culture) 5/2/2012 . Social. Health. Political.Screening Environment OPPORTUNITIES THREATS Regional Economic/ Business trend Government Policy / Initiatives ENTREPRENEUR Strength Global Economic/ Business trend Weakness Private Sectors Initiatives Other Issues ( Education.

Step 3 – Analyze specific opportunities which are feasible to venture. community & society.Steps to select new ventures Step 4 – Select one which is suitable to the entrepreneur and develop business concept. evaluating self. Step1 – Identify Customers needs and wants 5/2/2012 . value and culture of the potential target group. Step 2 – Screening environment.

food. health. Needs : something basic which people must have.Step 1 : Identifying customer needs & wants Needs & Wants Products Something physical which can satisfied customer needs and wants. Wants will be fulfill after the basic needs were being fulfilled. basic education. house. Wants: desire to have more than basic needs. protection etcs. Services Non-physical but able to fulfill customer needs and wants 5/2/2012 . Examples: cars. golf club. traveling. jewelry etcs. bigger house. Example: clothing. latest fashions.

rules & regulations. value and culture of the potential target group. community & society. Income. taste.Step 2 : Screening environment. 5/2/2012 Self •Experience •Knowledge & skills •Financial standing •Interest •Networking Community •Norm . Analyze Environment •Population structure. evaluating self. social. preferences •Country export & imports •Local resources and new technology •Industry linkages •Government and Private development projects •Global and Regional development •Currents issues.

Step 3: Analyzing the feasibility of Opportunities Legal perspective Market Competition level Funding Analyze Technology availability Raw material supply Feasibility ? Expertise & manpower Logistic Sustainability Risks Level 5/2/2012 .

Step 4: Select New Ventures Market Competition level / Marketing Plan Operational Plan ( Technology. Supply Chain) Analyze Organizational & Admin. Cash Flow. Plan ( Expertise & manpower ) Viability ? Funding ( working capital. Pay back. Risks Level 5/2/2012 . ROE. fixed assets) Profitability ( ROI.

Prepare Details Business Plan.Step 4 ( cont: ) New venture selected. 5/2/2012 . Execute Plan Monitor and Improvement.

Example business opportunities AGRICULTURE Forestry Fishery Plantation Poultry Veneer Plywood Logging Furniture Sawn timber Fishing Equipment Deep-sea fishing Fish Processing Wholesales/ distributions Clearing plantation Planting Processing Wholesale/ distribution Nursery Poultry farming Processing Wholesales/ Supplies 5/2/2012 .

Industrial Linkages BACKWARD FORWARD OIL INDUSTRY Explorations engineering Steel Fabrications Oil Rigs construction Engineering Servicing Equipment components Petroleum Refinery Petroleum Trading Engine Oil products Hydrocarbon raw material Plastic / resin products 5/2/2012 .

currency value.Business Opportunities High Risks Business Risk •Risk could be transfer – insurance (fire.market forecast quality products. loss etc) •Controlled risk but not 100% . disaster 5/2/2012 . Financial Risk •Liquidity level •Loan •Credit •Currency exchange •Uncontrolled risk : economy recession.

Business and Level of Risks Alternatives Entry Level of Risk Expect Examples ed returns Low Food Stall Tailor Gen. Trading A Easy Low B Medium Medium Medium Mini Market Auto Services Public Transport Constructions Heavy Industry C Difficult High High 5/2/2012 .

    S = Strength W = Weakness O = Opportunity T = Threat   SWOT is use to evaluate new business opportunities. Entrepreneur will choose one which is fit to his /her objective / vision.Conclusion  SWOT ANALYSIS. 5/2/2012 .

SWOT Analysis 5/2/2012 .

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