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Questions and Answers
Which entrepreneurial trait reflects a belief that an individual can control their destiny?
Which entrepreneurial trait reflects a belief that an individual can control their destiny?
Which trait is characterized by the ability to find non-conventional solutions to problems?
Which trait is characterized by the ability to find non-conventional solutions to problems?
What term describes the systematic change aimed at transforming an economic system to improve production methods?
What term describes the systematic change aimed at transforming an economic system to improve production methods?
Which trait involves going beyond the requirements of a task?
Which trait involves going beyond the requirements of a task?
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Which characteristic is essential for identifying opportunities and achieving a successful venture?
Which characteristic is essential for identifying opportunities and achieving a successful venture?
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Which of the following environments do managers have full control over?
Which of the following environments do managers have full control over?
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What does SWOT analysis primarily help organizations assess?
What does SWOT analysis primarily help organizations assess?
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Which of the following is NOT a characteristic of the general environment?
Which of the following is NOT a characteristic of the general environment?
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What is the main focus of creativity as defined in the content?
What is the main focus of creativity as defined in the content?
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Which aspect of the business environment can managers influence but not control?
Which aspect of the business environment can managers influence but not control?
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In the VRIO framework, strengths that add value and are rare contribute to what kind of advantage?
In the VRIO framework, strengths that add value and are rare contribute to what kind of advantage?
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Which of the following types of creativity involves creating new tangible objects?
Which of the following types of creativity involves creating new tangible objects?
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What primarily defines the task environment in a business context?
What primarily defines the task environment in a business context?
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What is the primary purpose of a business plan?
What is the primary purpose of a business plan?
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Which section is included in the outline of a business plan?
Which section is included in the outline of a business plan?
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What is one key benefit of preparing a business plan?
What is one key benefit of preparing a business plan?
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Which of the following is NOT a functional plan typically included in a business plan?
Which of the following is NOT a functional plan typically included in a business plan?
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Who are the potential audiences for a business plan?
Who are the potential audiences for a business plan?
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What is a key difference between technology and science in the context of innovation?
What is a key difference between technology and science in the context of innovation?
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What is the first step in the New Product Development process?
What is the first step in the New Product Development process?
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Which of the following is NOT a benefit of innovation?
Which of the following is NOT a benefit of innovation?
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Which phase involves filtering ideas generated during the creative process?
Which phase involves filtering ideas generated during the creative process?
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What is essential for commercializing an invention?
What is essential for commercializing an invention?
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What does business analysis in new product development assess?
What does business analysis in new product development assess?
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How does innovation contribute to national economic growth?
How does innovation contribute to national economic growth?
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What is often the primary motivation behind idea generation in product development?
What is often the primary motivation behind idea generation in product development?
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What is a primary purpose of test marketing?
What is a primary purpose of test marketing?
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What is included in feasibility studies?
What is included in feasibility studies?
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Which of the following aspects is NOT considered in market feasibility?
Which of the following aspects is NOT considered in market feasibility?
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What is an essential factor when selecting markets for test marketing?
What is an essential factor when selecting markets for test marketing?
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What is one of the first steps in the product development process?
What is one of the first steps in the product development process?
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During commercialization, which aspect is primarily refined?
During commercialization, which aspect is primarily refined?
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What primarily distinguishes a feasibility study from other types of studies?
What primarily distinguishes a feasibility study from other types of studies?
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What should a new product's pricing consider?
What should a new product's pricing consider?
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Study Notes
Entrepreneurial Traits
- Entrepreneurs are goal-oriented and work towards achieving their targets.
- They are opportunity-driven, constantly seeking and exploiting opportunities.
- They are responsible and dedicated to completing tasks to the best of their abilities.
- They possess problem-solving and team-building skills.
- They take initiative and go beyond task requirements, exploring new frontiers.
- They have an internal locus of control, believing that their destiny is in their own hands and not shaped by external forces.
- They have a high tolerance for ambiguity, comfortable working in situations with unclear solutions and taking risks.
- They demonstrate integrity and consistency, possessing strong ethics and being honest and truthful.
- They exhibit creativity and innovation, finding unconventional solutions to problems and commercializing them.
- They have self-efficacy, a strong belief in their ability to perform tasks and achieve their goals.
- They are persuasive, able to influence the responses, attitudes, or behavior of others through communication.
Schools of Thought on Entrepreneurship
- The Venture Opportunity School argues that the ability to identify opportunities and demonstrate creativity and innovation determines entrepreneurship.
- The Strategic Formulation School emphasizes the importance of strategic planning and management in achieving success in venture creation.
Industrialisation
- Industrialisation is the process of transforming an economic system from rudimentary production methods to more complex manufacturing processes.
- It involves systematic change aimed at reshaping the productive forces of a country.
- It entails innovating existing production systems by addressing their weaknesses.
- It focuses on producing goods and services that meet customer needs.
- Industrialisation involves developing new technologies, including equipment, production processes, products, and services.
Business Environment
- The business environment encompasses three key environments:
- General Environment: Factors beyond managerial control, characterized by PESTLE (Political, Economic, Social, Technological, Legal, and Ecological) factors.
- Task/Industry Environment: Factors that managers cannot control but can influence, including customers, competitors, and suppliers.
- Internal Environment: Factors that managers have control over, encompassing the organization's resources, such as employees, skills, organizational culture, structure, equipment, and cash.
SWOT Analysis
- Organizations need to make decisions about their continued existence or business continuity.
- These decisions are informed by developments in the environment.
- Organizations need to assess factors that can facilitate growth (Opportunities) and those that could threaten their existence (Threats).
- Understanding an organization's strengths and weaknesses is crucial for assessing opportunities and threats.
- Strengths contribute value, are rare, are inimitable, and enable organizations to gain a competitive advantage (VRIO).
Creativity vs. Innovation
- Creativity is the process of identifying solutions to problems, opportunities, or gaps.
- Innovation refers to applying knowledge to achieve a practical result, often resulting in tangible products or processes.
- Organizations need to invest in knowledge creation through research.
Invention
- Invention is the process of converting an idea into a tangible product or process.
- It requires both science (knowledge about the subject) and technology (the process of converting knowledge into a solution).
Commercialisation
- Commercialisation involves creating demand for an invention, requiring marketing efforts.
Benefits of Innovation
- Innovation leads to improved social standards and an increased knowledge base.
Importance of Innovation
- Innovation drives firm growth by:
- Attracting new customers and markets.
- Enhancing firm competitiveness.
- Increasing firm profitability.
- Enhancing shareholder value.
- Achieving national acceptance.
- Facilitating employee growth.
- It also contributes to national economic growth by:
- Contributing to national GDP.
- Improving a nation's competitiveness.
- Increasing national productivity and income levels.
New Product Development
- The New Product Development process involves several stages:
- Idea Generation: The creative process driven by market gaps, organizational needs, or the desire to create convenience.
- Idea Screening: Vetting ideas generated in the creative phase, using defined criteria such as organizational objectives, resources, capabilities, and impact on existing offerings.
- Concept Testing: Sampling potential customers' views on the new product idea through presentations and seeking feedback.
- Business Analysis: Analyzing the potential impact of the product idea on overall business performance, including costs, sales, and potential environmental changes.
- Product Development: Developing the prototype, ensuring that the product is functional, meets design specifications, and is priced acceptably.
- Test Marketing: Introducing the product in selected markets to assess its acceptance, understand marketing challenges, and gather customer feedback.
- Commercialisation: Refining the budget and finalizing preparations for full-scale manufacturing and marketing.
Feasibility Studies
- Feasibility studies are logical tools used to assess the likelihood of a new operation or product/service launch being successful.
- They involve analyzing possible solutions and recommending the best option to proceed.
- They encompass these aspects:
- Product/Service: Performance, legality, purchasing or production, reliability, and design.
- Skills of Entrepreneur/Venture Team: Skill possession, market understanding, and capability.
- Suppliers: Availability, reliability, and pricing.
Market Feasibility
- Customers: Understanding their profile, purchasing habits, and location.
- Competition: Identifying competitors, their strategies, and their potential reactions.
- Marketing Strategies: Determining advertising spending, selling strategies, promotions, discounts, and credit facilities.
Financial Feasibility
- Total Initial Capital Outlay: Assessing the required investment amount.
- Owner Contribution: Determining the entrepreneur's contribution.
- Financing the Balance: Exploring financing options for the remaining capital.
- Sales to be Generated: Estimating potential revenue.
- Costs of Producing and Operating: Calculating production and operating expenses.
- Profitability: Assessing the potential for profit.
- Worthwhile Investment: Determining whether the investment is justifiable.
What is a Business Plan?
- A business plan is a written document outlining the strategies and elements for starting a new venture.
- It integrates functional plans such as marketing, finance, manufacturing, sales, and human resources.
Why Have a Business Plan?
- A business plan provides value to entrepreneurs, potential investors, and new personnel by:
- Assessing the venture's viability.
- Guiding the entrepreneur in organizing planning activities.
- Facilitating the obtaining of financing.
Information Needs
- Before creating a business plan, a feasibility study should be conducted to identify potential barriers to success.
Outline of a Business Plan
-
Introductory Page:
- Business name and address.
- Names and addresses of principals.
- Nature of the business.
- Statement of financing needed.
- Statement of confidentiality.
-
Executive Summary: (Three to four pages summarizing the entire plan)
- Business concept or model.
- Uniqueness of the business concept.
- Individuals starting the business.
- Revenue generation strategy and estimated amounts.
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Description
Test your knowledge of the essential traits of successful entrepreneurs. This quiz covers key characteristics such as goal orientation, problem-solving skills, and creativity needed for entrepreneurial success. Determine how well you understand what makes an entrepreneur thrive in a competitive environment.
