Chapter 4: Entrepreneurship in a Changing Business Environment PDF

Chapter 4 Entrepreneurship in a changing business environment  Business environment and entrepreneurship Business may be understood as the organized efforts of an enterprise to supply consumers with goods and services for a profit. Modern business is dynamic. If there is any single word...

Chapter 4 Entrepreneurship in a changing business environment  Business environment and entrepreneurship Business may be understood as the organized efforts of an enterprise to supply consumers with goods and services for a profit. Modern business is dynamic. If there is any single word that can best describe today’s business, it is ‘change’. It is ‘change’ that makes the companies spend substantially on Research and development (R&D) to survive in the market. The number of factors that affect how business is conducted is infinite – They are always present, and always keep changing. Environment includes all the conditions and circumstances that affect the total organization or any of its part.  Business environment and entrepreneurship Environment refers to all forces, which have a bearing on the functioning of business. They can be forces of economic, social, political and technological factors, apart from internal forces of the organization. The business environment poses threats to a firm or offers massive opportunities for potential market exploitation.  Adapting to business environment The success of every business depends on adapting itself to the environment within which it functions. For example, when there is a change in the government polices, the business must make the necessary changes to adapt it to the new policies. Similarly, a change in the technology may render the existing products obsolete, as we have seen that the introduction of computer has replaced the typewriters; the color television has made the black and white television out of fashion. – e.g., the demand for jeans reduced the sale of other traditional wear.  External vs Internal environment ❖ There are mainly two types of business environment, internal and external. ❖A business has absolute control in the internal environment, ❖ whereas external factors that are beyond the control of the business ❖ Therefore, business units must have to adapt themselves to these changes to survive and succeed in business. ❖ Hence, it is very necessary to have a clear understanding of the concept of business environment and the nature of its various components.  Economics: income, distribution Demographics Sociocultural statistical data relating to the Business Attitudes, Preferences, population environment Political/legal Global Tax, Labor Laws, Global markets, Regulations, etc Institutions, Trade Technological Product innovation, Res & Dev Application of knowledge  Economic Systems What goods and What quantity of goods ? services should be produced? ? and services should be produced? All economic systems attempt to answer four basic questions. ? How should goods and services be produced? ? For whom should goods and services be produced? Business environment dimensions Business environment Owners Customers Suppliers Competitors Governments Private creditors Employees Associations  The nature of The availability the environment of resources Four Categories of business environment factors Ways to Incentives to realize value create new businesses  Why and how is business changing During the past 50 years small, efficient, and manageable companies have grown large to become unmanageable bureaucratic organizations. abuspic1 group  Competition Global competition from countries where labor costs were lower, and hungry entrepreneurs sensed opportunity. Poor work ethic (working conditions)is a big concern. Industries are evolving and transforming at a fast pace. Some corporate crash was inevitable. It took television 13 years to reach 50 million viewers. It took the Internet only 5 years to reach 50  Building a competitive edge – Find a market and fill it. – Use the power of publicity. – Don’t just sell; entertain! – Strive to be unique. – Build a community with customers. – Connect with customers on an emotional level. Build trust. Define a unique selling proposition (USP).  Tracking Trends Read many diverse current publications Watch the top 10 TV shows See the top 10 movies Talk to at least 150 customers a year Talk with the 10 smartest people you know Listen to your children and their friends How to Conduct Market Research 1. Define the objective. 2. Collect the data. – Individualized (one-to-one) marketing Primary research Secondary research Data mining 3. Analyze and interpret the data. 4. Draw conclusions and act. apple-logo Apple Example Steve Jobs of Apple Computer toured Xerox in the late 70s and was introduced to graphical user interface. The graphical user interface is a form of user interface that allows users to interact with electronic devices through graphical icons. copying machine for reproducing printed, written, or pictorial matter by xerography. Xerox did not recognize the potential and Jobs did. Today, most PCs operate with an interface descending from this innovation. gateway Computer Technologies Computer technologies were first pioneered by IBM with patents, scientists, and the research and development (R&D) But the minicomputer market was created by entrepreneurs at Digital and the computer workstation at Sun Microsystems. IBM had the lead in technology, but not the entrepreneurial mindset. – Now IBM emphasizes a lot on entrepreneurship.  Different kinds of Innovation The dynamic business environment requires that innovation become a way of life. Innovation does not only involve technology. It can represent unique distribution strategies – Amazon.com – Pricing strategies (McDonalds and Starbucks).  Distribution innovation during the COVID-19 ❖The COVID-19 pandemic has made a significant impact on our daily lives, creating a “new normal.” ❖ What used to be normal, connecting face-to-face to conduct business, socialize with friends and family, physical classes have turned digital. ❖ COVID-19 has influenced customer spending habits, the workplace, the economy, and more ❖ Many of us are working from home, with video conferences replacing classrooms Firms are working hard to attract creative problem solvers  New Industries Think of new industries that did not exist a generation ago; – personal computing, – voice mail, cellular phones, – internet shopping, – digital entertainment. hp-laptop-computers-2 phone business-2 Some Examples in USA Since 1980, the United States has added more than 34 million new jobs Fortune 500 companies lost more than 5 million jobs. In the United States about 600,000 to 800,000 new businesses are started each year. business tweezers What lies a head??? So where is our future in the new millennium? Is it nanotechnology? Nanotechnology could manipulate each individual atom of an object creating products that are cleaner, stronger, lighter, and more precise. But, the practical applications of nano technology to manufacture consumer goods may be one to two decades away. vegetables diamond Some promises Eventually, we will be able to replicate anything including diamonds, water, and food. Famine could be eliminated through fabrication of food. How Entrepreneurs Can Succeed in changing environment? 4. Plan and manage effectively 3. Assemble an expert team to execute the business concept 2. Test the opportunity in the marketplace business-women Business opportunities with challenges Great business ideas are all around us. Opening your eyes to trends that will effect the future business environment. How do we recognize these trends? Look at things around that bug you. What do you not have that you need? Customer satisfaction in a changing world 79% of unhappy customers tell others about their experiences. – 48% of shoppers say they won’t patronize stores where they know others have had negative experiences. – For every complaint, a company receives, 17 other complaints go unspoken. – Disgruntled customers often post their experiences online. Address comments and complaints!  story Internet What about the Internet? A recent Internet usage survey shows 72% of Americans have gone online at least once during a 30-day period. How much time you go online and for what purpose? What are the things you observe that can be turned into business idea?  From collectibles to cars, buy and sell all paypal_logo kinds of items on eBay Success stories What about e-Bay? Success of one segment creates opportunities for services and products. Pay Pal, an on-line payment service, was launched in October of 1999. July 2002, eBay purchased Pay Pal for 1.5 billion dollars.  Real estate The recent high volume real estate trade offers incredible opportunity. The demand for home inspectors for radon, for example, grew exponentially siness%2520people%252025 Knowledge in demand Management consultants continue to be high in demand due to changing technology and a trend toward outsourcing of services. E-learning and training is growing, since technology has improved the ability to deliver quality content to office workstations school classes  Expectations from in knowledge society for development Increased demand for higher education In Turkey alone, out of 1.9 million applicants only 0.4 million can be placed in higher education institutions. (2014) Deficit, both as regards teaching staff and researchers, limited financial capacity (which does not keep in line with requirements) Emerging employment fields require new human resource profiles. In 2025, 27% of the population in Europe will be over 65 years old. In 2025, 30 Million more manpower will be in demand in Europe The high ratio of young population is an advantage for developing countries in Eurasia, if adequate education opportunities could be provided. At post graduate level: Innovative research High-quality leading-edge research capacity Scientific proficiency International publications and networking Providing solutions for industrial problems.  Key questions about innovation, technology and business environment ❖Being innovative requires continued creativity ❖How Important is the Internet to Small Business? ❖ Online business fastest growing business in the Corona era. ❖Whether to invest in new technology or not; ❖Which technology to invest in? ❖ Whether the people in the organization will be able to adapt to the new technology; ❖When to adopt new technology? and ❖How to implement the new technology?