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Questions and Answers
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?
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?
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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?
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What does SWOT analysis primarily help organizations assess?
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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?
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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?
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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?
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What is the primary purpose of a business plan?
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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?
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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?
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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?
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Which of the following is NOT a benefit of innovation?
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Which phase involves filtering ideas generated during the creative process?
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What is essential for commercializing an invention?
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What does business analysis in new product development assess?
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How does innovation contribute to national economic growth?
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What is often the primary motivation behind idea generation in product development?
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What is a primary purpose of test marketing?
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What is included in feasibility studies?
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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?
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What is one of the first steps in the product development process?
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During commercialization, which aspect is primarily refined?
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What primarily distinguishes a feasibility study from other types of studies?
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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.
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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.
