SMEs & Entrepreneurship in Competitive Economy PDF

SMEs & The Role of Entrepreneurs in a Competitive Economy www.wileybusinessupdates.com Chapter 5&6 Copyright  2019 John Wiley & Sons, Inc.  Learning Objectives Discuss why most businesses are small...

SMEs & The Role of Entrepreneurs in a Competitive Economy www.wileybusinessupdates.com Chapter 5&6 Copyright  2019 John Wiley & Sons, Inc.  Learning Objectives Discuss why most businesses are small businesses. Explain franchising. 1 6 Determine the contributions of small businesses to the economy. Outline the forms of private business ownership. 7 2 Discuss why small businesses fail. Describe the public and collective ownership of business. 8 3 Describe the features of a successful business plan. Discuss organizing a corporation. Identify the available assistance for small businesses. 9 Explain what happens when businesses join forces. 4 10 5 Copyright  2019 John Wiley & Sons, Inc.  Learning Objectives 3 1 Define entrepreneur 5 Identify the characteristics of entrepreneurs Identify the different 2 categories of entrepreneurs 6 Summarize the process of starting a new venture Explain why people choose Explain intrapreneurship 3 entrepreneurship as a career 7 path 4 Discuss the environment for entrepreneurs Copyright ©2019 John Wiley & Sons, Inc.  Most Businesses are Small Businesses 4  99.7% of all U.S. companies are small businesses  Small businesses generated 63% of new jobs over the last decade  Small businesses employ almost half of all private sector workers  Small businesses are a launching pad for entrepreneurs and encourage the prevalence of women and minorities  Small businesses hire 37% of tech workers and scientists  Minority Business Development Agency (MBDA) Copyright  2019 John Wiley & Sons, Inc.  What is Small Business in TURKEY 5 KOBI (Small and Medium Enterprise)=Companies that have revenues less than 125million Turkish liras and have less than 250 personnel. Micro enterprise: less than 10 employee and 3 million TL revenue per year Small enterprise: less than 50 employee and 25 million TL revenue per year Medium enterprise: less than 250 employee and 125 million TL revenue per year https://www.mevzuat.gov.tr  SME Statistics – Turkey 2020 6 There are 3.3 million SMEs in Turkey SMEs accounted for 99.8% of the total number of enterprises; accounted for 72% of employment, 49.2% of personnel costs, 49.4% of turnover, 42.7% of production value and 41.3% of factor cost and value added SMEs accounted for 36.4% of total exports and 24% of imports. While the total number of patent applications of SMEs was 1,563 in 2020, 332 patents were registered in the same year. In SME scales, medium-sized enterprises ranked first with 570 patent applications and 162 patent registrations. https://data.tuik.gov.tr/Bulten/Index?p=Kucuk-ve-Orta-Buyuklukteki-Girisim- Istatistikleri-2020-41129  What is Small Business? 7  The Small Business Administration defines a small business to be a firm that is independently owned and operated and is not dominant in the field  Manufacturing: fewer than 500 workers  Wholesalers: fewer than 100 workers  Construction firms: up to $36.5 million in annual sales  Agricultural business: less than $750,000 Copyright  2019 John Wiley & Sons, Inc.  Typical Small-Business Ventures 8 Along with her husband, Bond, founder and CEO of Rifle Paper Company, started the stationery company from her garage apartment in Winter Park, Florida with just $10,000. Copyright 2019 John Wiley & Sons, Inc.  Typical Small-Business Ventures 9 Copyright  2019 John Wiley & Sons, Inc.  Major Industries Dominated by Small Businesses 10 Copyright  2019 John Wiley & Sons, Inc.  Home Based Businesses 11  50% of small businesses operate from an owner’s home  Allows for more control of business  Allows for more control of personal time  Keeps start-up and operating expenses low (office space can be costly)  E-commerce and mobile commerce, tools to build new relationships outside local areas, and to increase market share  Owner can feel isolated and business has less visibility to customers Copyright  2019 John Wiley & Sons, Inc.  Contributions of Small Business 12  Create new jobs  Create new industries  Encourage innovation (new goods and services)  Businesses with fewer than 500 employees represent over half of the nation’s GDP  Account for ($440 billion out of $1.3 trillion) in exports  Offer customized services Copyright  2019 John Wiley & Sons, Inc.  Creating New Jobs 13  Small businesses:  Make tremendous contributions to the U.S. economy and to society as a whole.  Two of every three new jobs are created by companies with fewer than 500 employees  Job creation is a company’s age rather than its size  Hiring workers who traditionally have had difficulty finding jobs at larger firms, such as military veterans returning to the workforce, former welfare recipients, and workers with various challenges Copyright 2019 John Wiley & Sons, Inc.  Best Industries for Starting a New Business 14 Copyright  2019 John Wiley & Sons, Inc.  Creating New Industries 15 Michael Dubin is CEO and co-founder of Dollar Shave Club— recently purchased by consumer product giant, Unilever. Dollar Shave Club has adapted to the needs of consumers by offering an online monthly subscription service of body Copyright 2019 John Wiley & Sons, grooming products. Inc.  Innovation 16  Small businesses are adept at developing new and improved goods and services  Innovation is often the sole reason for the founding of a new business.  They also produce more than 16 times more patents per employee than larger firms  Key innovations in the 20th century include the airplane, the personal computer, soft contact lenses, and the zipper.  Innovations in the 21st century include artificial intelligence, machine learning, virtual reality, autonomous vehicles, digital assistants, and cloud computing, Copyright 2019 John Wiley & Sons, Inc.  Small Business Failure 17  7 in 10 businesses will survive at least two years  50% of businesses make it to the five-year mark  By the 10-year mark, 70% of all small businesses have closed permanently Copyright  2019 John Wiley & Sons, Inc.  Reasons Why Small Business Fail 18  Management Shortcomings is most common  Overconfidence, lack of people skills, inadequate knowledge of finance, inability to track inventory or sales, poor assessment of the competition or customer, or simply poor time management or the lack of time to do everything required.  Inadequate Financing  Overestimating funds generated from initial sales  Less money to spend on employees, marketing, inventory, and other business costs  Challenge of meeting government regulation  Taxes Copyright  2019 John Wiley & Sons, Inc. 19 Courtesy of Tennessee Moonshine Cakes Ann Dickerson and her husband, Bill Zack, took a unique cake idea and turned it into a successful business. Copyright 2019 John Wiley & Sons, Inc.  Government Regulation 20  A small firm:  has limited staff and fewer resources to deal with regulatory requirements  Compliance consumes immense amounts of financial capital  On average, spend almost five times more per employee than larger firms do to comply with federal regulations.  Taxes Copyright  2019 John Wiley & Sons, Inc.  The Business Plan: A Foundation for Success 21  Businesses need a plan to succeed  A business plan is a written documentation that provides orderly statement of goals, methods, and standards of measurement  Business plans give an organization a sense of purpose  Identifies the company’s mission, goals, and vision  Analyzes unique advantage, customers, and competition Copyright  2019 John Wiley & Sons, Inc. 22 The business plan is often the document that secures financing for a company and creates a framework for the organization. Business plans identify the firm’s missions and goals. They create measurable standards and outline a strategy for reaching company objectives. Copyright  2019 John Wiley & Sons, Inc.  Business Plan Contents 23  Executive Summary – who, what, where, why, when, and how questions of the business  Introduction of content, purpose, objectives  Financial evaluation of the industry and market conditions, financial forecasts, breakeven, funding  Marketing – target market and marketing plan  Resume of principals – important for financing  Company founders’ mission and vision is addressed  The customers  The competition  An outline of what makes the company unique  Assessment of risks Copyright  2019 John Wiley & Sons, Inc.  Small Business Administration 24  Government agency assisting small businesses  Advocate for small business within the federal government  Financial Assistance  Loan Guarantees through banks  Microloans of up to $50,000  Small Business Investment Companies  SBICs are run by venture capitalists  The SBA helps connect small businesses with government agencies to secure work Copyright  2019 John Wiley & Sons, Inc.  Small Business Investment Companies 25 Small Business Investment Companies (SBICs) are for-profit businesses licensed by the Small Business Administration. Using their own capital, SBICs provide loans to small businesses. FedEx used SBIC financing when it was a small start-up company. Copyright  2019 John Wiley & Sons, Inc.  Other Specialized Assistance 26  Set-Aside Programs  23% of Government Contracts for small business  Assistance in Financing Government Procurement – Central Contractor Registration  Local Assistance - Business Incubators  Local community initiatives to share resources for small start-ups SCORE Counselors to America’s Small Business Small Business Development Centers (SBDC) Copyright  2019 John Wiley & Sons, Inc.  Private Investors 27  Small-business owners soon look for greater sums of money in order to continue operating and eventually grow  Venture capital is money invested in the small business by another business firm or group of individuals in exchange for an ownership share  Venture capitalists look for companies in which to invest  Focus is on technology trends: Digital health, consumer and enterprise digital technologies, cloud computing, cybersecurity, and life science investments  Venture capitalists usually have strict requirements for a solid business plan  Venture capital firms are concentrated in Silicon Valley (CA), Ann Arbor (MI), NY, Boston, Washington, D.C., Seattle, and Copyright  2019 Austin (TX) John Wiley & Sons, Inc.  Opportunities for Women & Minorities 28  Number of women and minority-owned businesses has far outpaced the national average  More than 40% of U.S. businesses are owned by women (9.4 million firms)  Women and minorities still face challenges  Smaller scale operations  Challenges finding investors  Access to capital  Federal contracting opportunities for WOSB’s (women owned small businesses) have been expanded Copyright  2019 John Wiley & Sons, Inc.  Opportunities for Women & Minorities 29 Michele Hoskins created financial stability for herself by commercializing a family syrup recipe passed on to her by her great- great-greatgrandmother. Her product is now in over 8,000 stores. Copyright  2019 John Wiley & Sons, Inc.  Minority-Owned Businesses 30 Copyright  2019 John Wiley & Sons, Inc.  The Franchising Alternative 31  Using another company’s established business model  A contractual agreement between a manufacturer or another supplier and a dealer to produce and market the supplier’s good or service  Fastest growth: quick service restaurants, retail products, personal services, and lodging  Example: McDonald’s, 7-11, Subway  Entrepreneur Franchise 500 Copyright  2019 John Wiley & Sons, Inc.  Franchising Agreements 32  Franchising agreements exist between franchisee (purchaser of the franchise) and franchisor (firm whose products/services are sold by the franchisee)  Involve initial startup fee plus royalties  759,000 businesses  18 million jobs  Near $1 trillion in sales  Franchising overseas continues to grow Copyright  2019 John Wiley & Sons, Inc.  Franchising 33 International franchises have become more common. Baskin- Robbins has stores in over 50 countries, including Australia, China, Japan, Russia, and Vietnam. Copyright  2019 John Wiley & Sons, Inc.  Benefits and Problems of Franchising 34 ADVANTAGES DISADVANTAGES  Prior performance record  Franchise fees  Recognizable company  Future royalty payments name (brand)  Linked to reputation and  Proven business model management  Tested program  Franchise agreement management restrictions  Savings through volume  Tight control purchases Copyright  2019 John Wiley & Sons, Inc.  Forms of Private Ownership 35  Every business is organized according to one of three categories of legal structure:  Sole Proprietorship (86%)  Partnership (7%)  Corporation (7%)  Benefit Corporation  Others: Employee-owned corporations, Family-owned businesses, Not-for-profit organizations Copyright  2019John Wiley & Sons, Inc.  Types of Corporations 36  Domestic, foreign, alien  S Corporation  Limited Liability Companies  Employee-Owned Corporations  Not-for-Profit Corporations Copyright  2019 John Wiley & Sons, Inc.  Types of Corporations 37 SAHIS SIRKETI –SOLE ENTREPRENEURSHIP Sermaye şarti yoktur. Sadece isletme defteri tutulur. Kurması ve kapatması kolaydır.Kar kullanımına bağlı bir vergi yükü yoktur. Şirket sahibi, tüm borçlardan kişisel varlığı ile sorumludur ve kara göre vergilendiriliyor bu nedenle uzun vadede dezavantajlı. LİMİTET ŞİRKET-LIMITED COMPANY Bir Limited Şirket en az bir gerçek veya tüzel kişi ile kurulur. Hissedarların tüm mal varlığıyla sorumluluğu hisseleri oranında sınırlıdır. Asgari sermaye gereksinimi 10.000 YTL olup şirket halka açılamaz, hisse senetleri borsada işlem göremez. Hisse devrinden elde edilen gelirden vergi öder. ANONİM ŞİRKET-STOCK JOINT COMPANY Anonim şirketler en az 1 gerçek veya tüzel kişi ile kurulur. Sermayenin ¼ unu bankaya yatırmak zorunludur. Sadece yönetim kurulu üyesi olan hissedarların sorumluluğu hisseleri oranında sınırlıdır, yönetimde değilse ortaklığın borçlarla ilgili sorumluluğu yoktur. Asgari sermaye gereksinimi en az 50.000 YTL olup (kayıtlı sermaye sistemini kabul etmiş bulunan halka açık olmayan anonim şirketlerde başlangıç sermayesi en az 100.000 TL) şirket halka açılabilir, hisse senetleri borsada işlem görebilir. Genel Kurul, Yönetim Kurulu ve Denetim Kurulu, Anonim şirketlerin zorunlu organlarıdır. Anonim şirketler, Türk Ticaret Kanunu dışında Sermaye Piyasası Kanunu'na da tabidir. KOMANDİT ŞİRKETLER-COMMANDITE COMPANIES Komandit şirketlerde bazı hissedarların sorumluluğu hisselerinin oranında sınırlı olmakla birlikte bazı üyelerin sorumluluğu sınırsızdır. Tüzel kişi hissedarların sorumluluğu hisseler oranında sınırlıdır. Asgari sermaye zorunluluğu bulunmamaktadır. Hissedarların sorumluluk ve yükümlülükleri  Family-owned 38 Family-owned companies are considered by many to be the backbone of American business. Sam Walton started the family business with Walton’s 5&10 store, which later became Walmart. Copyright  2019 John Wiley & Sons, Inc.  Comparison of Forms of Ownership 39 Copyright  2019 John Wiley & Sons, Inc.  Not-for-Profit Corporations 40 Copyright  2019 John Wiley & Sons, Inc.  Public and Collective Ownership 41  Public (Government) Ownership – a unit or agency of government owns and operates an organization. Parking structures, water systems, turnpike authority.  Collective (Cooperative) Ownership – collective ownership of a production, storage, transportation or marketing organization is a cooperative Copyright  2019 John Wiley & Sons, Inc.  Corporate Management 42  Stockholders acquire stocks in exchange for ownership  Preferred Stock  Common Stock  Board of Directors elected by stockholders to oversee corporation  Corporate Officers & Management  Make major corporate decisions and handle ongoing operations Copyright  2019 John Wiley & Sons, Inc.  When Businesses Join Forces 43  Mergers and Acquisitions (M&A)  Merger – combination of two or more firms to form one company Vertical – manufacturer and large retailer Horizontal – firms in the same industry Conglomerate – combines unrelated firms  Acquisition – procedure in which one firm purchases the other and assumes the obligations of another  Joint Venture – partnership between companies for a specific purpose.  Sometimes a company enters into a joint venture with a local firm, sharing the operation’s costs, risks, management, and profits with its local partner. Copyright  2019 John Wiley & Sons, Inc.  Mergers and Acquisitions (M&A) 44 Copyright  2019 John Wiley & Sons, Inc.  Example: Joint Venture 45 Fiat Chrysler Automobiles has invested in a manufacturing joint venture in India with Tata Motors Limited to produce Jeep vehicles such as this. To date, the two companies are discussing the sharing of engines and transmissions. Copyright  2019 John Wiley & Sons, Inc.  When Businesses Join Forces 46 Copyright  2019 John Wiley & Sons, Inc.  When Businesses Join Forces 47 Copyright  2019 John Wiley & Sons, Inc.  When Businesses Join Forces 48 Copyright  2019 John Wiley & Sons, Inc.  Changemaker 49 Jennifer Hyman is a classic entrepreneur. Known for “fashion in the cloud,” Rent the Runway is an e-commerce company that makes high fashion accessible to the everyday woman interested in renting luxury items like dresses and accessories —at a fraction of their retail price. Copyright ©2019 John Wiley & Sons, Inc.  What is an Entrepreneur? 50  A risk taker in the private enterprise system, who seeks a profitable opportunity, and takes the necessary risks to set up and operate a business  They differ from many small-business owners in their strong desire to expand and grow their business  Entrepreneurs differ from managers through their overriding responsibility to use the resources of the organization to accomplish their goals  Resources: www.entrepreneur.com and www.inc.com Copyright ©2019 John Wiley & Sons, Inc.  Categories of Entrepreneurs 51  Classic Entrepreneurs  Identify business opportunities and allocate available resources to tap those markets  Serial Entrepreneurs  Start one business, run it, and then start and run additional businesses in succession  Social Entrepreneurs  Recognize a societal problem and use business principles to develop innovative solutions  Lifestyle Entrepreneur  Starts a business to gain flexibility in work hours and control over his or her life. Copyright ©2019 John Wiley & Sons, Inc.  Entrepreneurship as a Career 52  A recent report finds that 27 million working-age Americans, are starting or running new businesses  The past two decades have shown a heightened interest in entrepreneurial careers  People choose entrepreneurship for many reasons:  Dissatisfaction with traditional work  To fill a gap in goods or services they could use themselves  Financial necessity  Heightened publicity surrounding celebrity entrepreneurs Copyright ©2019 John Wiley & Sons, Inc.  Entrepreneurship as a Career 53 While in college, Jessica Matthews started Uncharted Play, whose main product is a soccer ball called SOCCKET, which stores energy that can be used later to power electrical appliances and lamps. Copyright ©2015 John Wiley & Sons, Inc.  Why People Become Entrepreneurs 54  Being Your Own Boss: Freedom to make decisions and self-management  Financial Success: Being first to bring an idea for a superior product to market can translate to financial gains as creators of wealth  Job Security: Working for a large company does not guarantee job security  Quality of Life: Freedom to decide when, where, and how to work Copyright ©2019 John Wiley & Sons, Inc.  The Environment for Entrepreneurship 55  Globalization  Education  Demographic & Economic Trends  Information Technology Copyright ©2015 John Wiley & Sons, Inc.  Globalization 56  Figure 6.3 shows the levels of entrepreneurship activity in various countries  Factor Driven Economies  Cameroon, Uganda, Botswana  Efficiency Driven Economies  Ecuador, Peru, Chile, and Thailand  Innovation-Driven Economies  Qatar, Trinidad and Tobago, USA, and Australia Copyright ©2019 John Wiley & Sons, Inc.  The Environment for Entrepreneurs (cont.) 57  Education  U.S. colleges and universities: entrepreneurship majors  Universities are helping students launch businesses  Teaching entrepreneurship to young people  Information Technology  Technology has provided entrepreneurs tools to compete  Entrepreneurs have used IT to revolutionize industries  Demographic and Economic Trends  Aging of U.S. population  Increasingly diverse ethnic groups  Growth of two-income families Copyright ©2019 John Wiley & Sons, Inc.  The Environment for Entrepreneurs (cont.) 58 Table 6.1 shows a common dilemma that entrepreneurs in college face—the impulse to leave college once the entrepreneur bug has bitten them. Copyright ©2019 John Wiley & Sons, Inc.  Characteristics of Entrepreneurs 59 The eight traits summarized in Figure 6.3 are especially important for people who want to succeed as entrepreneurs. Copyright ©2019 John Wiley & Sons, Inc.  Entrepreneurial Characteristics 60  Vision - An overall idea for how to make their business idea a success.  High Energy Level - A willingness to work long and hard  Need to Achieve competitive drive and desire to excel  Self-Confidence – Optimism and fearlessness, they see opportunities where others might not. Copyright ©2019 John Wiley & Sons, Inc.  Entrepreneurial Characteristics 61  Tolerance for Failure - Not easily discouraged.  Creativity –Overcoming difficult problems and situations.  Tolerance for Ambiguity – Uncertainties taken in stride.  Internal Locus of Control - Control of their own destiny, not blaming others or outside events for their successes or failures. Copyright ©2019 John Wiley & Sons, Inc.  Entrepreneurial Characteristics 62 Entrepreneurs need to have a vision—how to make their business idea a success. Russell Simmons is one of the top African-American entrepreneurs in the country. His Rush Communications entertainment empire includes music, film, fashion, and even financial services. Copyright ©2015 John Wiley & Sons, Inc. Figure 6.5 Quiz for Small-Business Success 63 Copyright ©2019 John Wiley & Sons, Inc.  Starting a New Venture 64  Considerations for choosing an idea for your business: Find something you love to do and are good at doing Determine whether your idea can satisfy a need in the marketplace Do what makes you happy and be true to yourself Copyright ©2019 John Wiley & Sons, Inc.  Choosing a Business Idea 65  Consider the following guidelines:  Many entrepreneurs who start new businesses invent new products or processes, can also apply for a patent. Copyright ©2019 John Wiley & Sons, Inc.  Buying an Existing Business 66  Established businesses may be less risky than starting a new one  Employees and suppliers are in-place to serve established customers  The company’s good or service is well known in marketplace  Necessary permits and licenses are already secured  In some cases, financing may be easier for an existing business Copyright ©2019 John Wiley & Sons, Inc.  Buying a Franchise 67 A less risky way to begin a new business than establishing an entirely new firm A franchise usually means better brand recognition Firms in franchises showing growth include those targeting children and parents, such as photography, tutoring, and security Franchise fees can be costly Copyright ©2019 John Wiley & Sons, Inc.  Buying a Franchise 68 Buying a franchise, such as a Fleet Feet Sports store, offers entrepreneurs a less risky way to begin a business than starting an entirely new firm. Copyright ©2015 John Wiley & Sons, Inc.  Creating a Business Plan 69 In the past, many entrepreneurs did not always create a business plan when starting a new venture Although flexibility is crucial for any startup, particularly in quickly changing markets, planning is essential Entrepreneurs typically solve problems as they arise, and change course as necessary If seeking funds from outside sources, some planning is necessary Part of the planning effort includes research needed to create a business plan, or a road map of sorts Copyright ©2019 John Wiley & Sons, Inc.  Business Plan Resources 70 Copyright ©2019 John Wiley & Sons, Inc.  Finding Financing 71  Finding financing remains a key issue for most startups  Seed capital, funds to launch a company, is a key issue for most startups  There are two types of financing:  Debt Financing – money borrowed to be repaid  Equity Financing – a share of ownership is exchanged for money supplied Copyright ©2019 John Wiley & Sons, Inc.  Startup Funding Sources 72 Copyright ©2019 John Wiley & Sons, Inc.  Debt Financing 73  Money borrowed that must be repaid  Sources include: banks, finance companies, families & friends, and credit cards  Very few startups are financed through bank loans, which are difficult to secure in today’s environment  Applying for a bank or SBA-backed loan requires careful preparation, planning and analysis  Entrepreneur’s credit history will be important  A professional and detailed business plan is necessary  A track record of profits may make it easier to obtain bank financing Copyright ©2019 John Wiley & Sons, Inc.  Equity Financing 74  Entrepreneurs exchange a share of ownership in their company for money supplied by investors  Sources of equity financing include family and friends, business partners, venture capital firms, and private or angel investors  Venture Capitalists  Business organizations or groups of private individuals that invest in early-stage, high-potential growth companies  Angel Investors  Wealthy individuals who invest money directly in new ventures in exchange for equity, are a larger source of investment capital for start-up firms Copyright ©2019 John Wiley & Sons, Inc.  Equity Financing 75 Some entrepreneurs find creative ways to obtain equity financing. Gavin McClurg’s venture, Offshore Odysseys, is a sailing expedition aboard a catamaran named Discovery. Investors buy timeshare segments for between $20,000 and $80,000 on the journey, during which they might swim, snorkel, kite surf, or paraglide in beautiful, remote parts of the world. Copyright ©2015 John Wiley & Sons, Inc.  Equity Financing 76 Copyright ©2015 John Wiley & Sons, Inc.  Government Support for New Ventures 77  Federal, state, and local governments support new ventures  The SBA, state and local agencies, and business incubators all offer information, resources, and access to financing  Enterprise Zones - Entrepreneurship is also encouraged through specific geographic areas designated for economic revitalization  Enterprise zones encourage investment, often in distressed areas, by offering tax advantages and incentives to businesses  Government Legislation  Immigration Act of 1990 Copyright ©2019 John Wiley & Sons, Inc.  Intrapreneurship 78  Promoting innovation within the organizational structures of established companies  An idea to promote creativity and innovation in order to maintain a competitive advantage in a fast-changing business climate  Skunkworks is a form of intrapreneurship whereby an employee conceives of an idea and convinces management to provide resources for potential commercialization  3M, along with the Coca-Cola Company, GE, Google, and IBM encourage their employees to take risks and pursue their own ideas. Copyright ©2019 John Wiley & Sons, Inc.  SMEs & The Role of Entrepreneurs in a Competitive Economy www.wileybusinessupdates.com Chapter 5&6 Copyright  2019 John Wiley & Sons, Inc.