Entrepreneurship Basics

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Questions and Answers

What is the primary role of entrepreneurs in capital formation?

To increase the idle savings of the public

To reduce the national resources

To create wealth without investment

To mobilize public savings through industrial securities (correct)

What is the result of entrepreneurs' efforts to locate and exploit opportunities?

Decrease in per capita income

Stagnation in economic growth

Improvement in per capita income (correct)

Reduction in national resources

What is the purpose of intellectual property laws in entrepreneurship?

To provide exclusive business rights to ideas (correct)

To reduce the costs of research and development

To share ideas without any protection

To copy ideas cheaply

What would happen if an entrepreneur does not protect their ideas?

Their ideas would be copied – cheaply Signup and view all the answers

What is the role of entrepreneurs in economic development?

To initiate and sustain the process of economic development Signup and view all the answers

What is provided to entrepreneurs in exchange for sharing their ideas?

Limited monopolies Signup and view all the answers

What is the key to successful domestic and international entrepreneurship?

Identifying a market need and developing an idea to satisfy it Signup and view all the answers

What is international entrepreneurship?

The process of an entrepreneur conducting business activities across national boundaries Signup and view all the answers

Which of the following is a source of information for entrepreneurs?

Government sources Signup and view all the answers

What is the purpose of the ideation process?

To satisfy a specific market need Signup and view all the answers

What is one way to identify an appropriate business opportunity?

Identifying a market need and developing an idea to satisfy it Signup and view all the answers

What is an example of international entrepreneurship?

Exporting goods and services to other countries Signup and view all the answers

What is the main characteristic of a Term Key Project in international business?

A foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners. Signup and view all the answers

What is the primary difference between a Minority Interest and a Majority Interest in Foreign Direct Investment?

The percentage of equity held by the investing entrepreneur in the foreign venture. Signup and view all the answers

What is the main purpose of a Management Contract in international business?

To provide management techniques and skills to a foreign company. Signup and view all the answers

What is an example of a Horizontal Merger?

A merger between two companies that produce the same type of product in the same geographic area. Signup and view all the answers

What is the main benefit of Foreign Direct Investment (FDI) for the host country?

It leads to the transfer of technology and management skills to the host country. Signup and view all the answers

What is the main characteristic of a Joint Venture in Foreign Direct Investment?

It is a partnership between two firms that share the equity in a third company. Signup and view all the answers

Study Notes

Entrepreneurial Leadership

Leadership is essential to entrepreneurship, and it's up to the entrepreneur to take the idea and turn it into actions and products to capitalize on the opportunity.
The entrepreneur must take the lead for their ideas to come to fruition.

Intellectual Property Rights

Intellectual property laws provide exclusive business rights to ideas, allowing entrepreneurs to capitalize on them.
Protecting ideas prevents them from being copied, and once an idea is in the public domain, it may no longer be a competitive advantage.
Governments provide limited monopolies in exchange for sharing ideas, making up for research and development costs.

Role of Entrepreneurship in Economic Development

Entrepreneurs initiate and sustain economic development by:
- Mobilizing idle savings of the public through industrial securities, leading to productive utilization of national resources.
- Increasing the rate of capital formation, essential for rapid economic growth.
- Locating and exploiting opportunities, improving per capita income.

International Entrepreneurship

Successful domestic and international entrepreneurship involves developing an idea that has a market for the new product/service.
Information sources for identifying opportunities include:
- General information sources
- Industry and market information sources
- Competitive company and product/service information
- Government sources
- Search engines
- Trade associations
- Trade publications

Methods of International Business

International entrepreneurship involves conducting business activities across national boundaries.
Methods include:
- Exporting
- Licensing
- Opening a sales office in another country
- Term key projects
- Management contracts
- Foreign Direct Investment (FDI)
- Joint Venture
- Minority Interest
- Majority Interest
- Merger (including horizontal, vertical, and other types)

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Description

Test your knowledge of entrepreneurship fundamentals, including leadership and intellectual property rights. Learn how to turn ideas into actions and protect your business concepts.