Presentation is useful for management students for Entrepreneurship Development Course or those who want to go for entrepreneurial career. Very simple and easy to understand the concepts. A humble effort to present the contents with appropriate examples.

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Lesson Schedule
1 Concept of Entrepreneur, Entrepreneurship and Enterprise
2 Link between Entrepreneurship and Economic Development.
3 Entrepreneur Vs. Intrapreneur, Entrepreneur Vs. Entrepreneurship
4-5 Entrepreneur Vs. Manager.
Factors influencing Entrepreneurship DevelopmentFactors influencing Entrepreneurship Development
- Economic
- Non-economic like individual, environmental, socio-cultural etc.
6-7 Innovations and Entrepreneurship-
-Link between innovation and entrepreneurship,
- Schumpeter’s Theory,
- Peter Drucker’s sources of Innovations.
8 Case Study & Assignment -1
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Learning Objectives (LO):
• To understand the concept of entrepreneur, enterprise & Entrepreneur;
• To introduce concepts of Entrepreneurship;
• To identify the characteristics of a successful entrepreneur;
• To discuss economic & non- economic factors influencing Entrepreneurship
Development;
• To understand correlation between innovation and entrepreneurship
through Schumpeter’s & Peter Drucker’s theory;
• To present the profiles of some successful entrepreneurs to motivate
students to become entrepreneur.
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Video 1
Still you can…if you believe
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'anter prerana’
• Entrepreneur itself is a word
derived from Sanskrit word
'anter prerana' which means
self-motivation.
- Dr. Giri Y. L. 5
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An Entrepreneur can be any-one of any age
Who has an idea and builds a business around that
idea to provide a product or service to as many people
as need it.
They see a need and fill it.They see a need and fill it.
They are passionate about their idea, product or
service.
They are visionaries.
They have a tendency to see opportunity where others
don’t and this often leads them to take risks that most
people wouldn’t.
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An entrepreneur is a personentrepreneur is a personentrepreneur is a personentrepreneur is a person with a dream, originality and daring –
• Who reflects strong urge to be independentindependentindependentindependent,
• Who with determination tries to do something betterdo something betterdo something betterdo something better,
• Who dissatisfied with routine activitiesdissatisfied with routine activitiesdissatisfied with routine activitiesdissatisfied with routine activities,
• Who prepared to withstand the hard lifehard lifehard lifehard life,
• Who determineddetermineddetermineddetermined but patientpatientpatientpatient,
Who shows sense of leadershipsense of leadershipsense of leadershipsense of leadership,• Who shows sense of leadershipsense of leadershipsense of leadershipsense of leadership,
• Who also shows sense of competitivenesssense of competitivenesssense of competitivenesssense of competitiveness,
• Who acts as the bossthe bossthe bossthe boss,
• Who decides as to how the commercial organization shall runcommercial organization shall runcommercial organization shall runcommercial organization shall run,
• Who coordinates all activitiescoordinates all activitiescoordinates all activitiescoordinates all activities or other factors of production,
• Who anticipates the futureanticipates the futureanticipates the futureanticipates the future trend of demand and prices of products,
• Who has the initiative, skill for innovationinitiative, skill for innovationinitiative, skill for innovationinitiative, skill for innovation and who looks for highhighhighhigh
achievementsachievementsachievementsachievements,
• Who puts up new projects that create wealth, open up manyopen up manyopen up manyopen up many
employment opportunitiesemployment opportunitiesemployment opportunitiesemployment opportunities and leads to the growth of other sectors.
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The word 'entrepreneur' is derived from the
Old French word 'entreprendre' which was first
used by the economic theorist Richardused by the economic theorist Richard
Cantillon in 1755 in an essay where he used this
term to describe a person who assumed the
risk of buying goods in the belief that they
could sell them at a higher price at a later time.
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“a person who organizes and manages a business
undertaking, assuming the risk for the sake of the profit.”
“The person who starts a new business or does some
business in a new manner.”business in a new manner.”
- Schumpeter
Although each definition views entrepreneurs from a
slightly different perspective, they all contain similar
concepts, such as newness, organizing, creating, wealth, and
risk taking.
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“Innovation is the specific tool of
entrepreneurs, the means by which
they exploit changes as anthey exploit changes as an
opportunity for different business or
a different service”.
- Peter .P. Drucker
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A successful entrepreneur must be a
person with -
• Creative Thinking,• Creative Thinking,
• Technical Knowledge,
• Clear Objectives,
• Communication Skills, and
• Human Relations.
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1. Entrepreneurs are born
2. They are profit-hungry
3. They are dishonest3. They are dishonest
4. They are favoured by luck.
5. Only rich people can become entrepreneurs
6. It is a monopoly of certain communities
- Dr. Giri Y. L. 12
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The functions performed by an
entrepreneur are as follows –
• Planning of the project: He is the
organizer to conceive the idea oforganizer to conceive the idea of
launching the project and to program
the structure of business.
• Management: responsible for the
management of business.
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• Identifying entrepreneurial opportunity –
There are many opportunities in the world of
business. These are based on human needs like
food, fashion, education, etc., which are
constantly changing. These opportunities are not
realized by common man, but an entrepreneur
senses the opportunities faster than others do. An
entrepreneur therefore, has to keep his eyes and
ears open and require imagination, creativity and
informativeness.
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• Growth and Development: The entrepreneur is not satisfied
only with achieving a set goal but constantly strives for
achieving excellence.
• Scale of Production: according with the provision of capital he
takes the decision of what where and how to produce goods.
• Sale of Products: An entrepreneur is also responsible of• Sale of Products: An entrepreneur is also responsible of
marketing, advertising.
• Resourcing – The entrepreneur needs various resources in
terms of money, machine, material, and men to running the
enterprise successfully. An essential function of an entrepreneur
is to ensure the availability of all these resources.
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• Feasibility study – The entrepreneur
conducts studies to assess the market
feasibility of the proposed product or services. He
anticipates problems and assesses quantity, quality,
cost and sources of inputs required to run thecost and sources of inputs required to run the
enterprise. Such a blue print of all the activities is
termed as a 'business plan' or a 'project report'.
• To Face Risks: He faces uncertainly and bears
risks in his business uncertainly comprising those
risks against which it is not possible to insure.
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Trading entrepreneur (Exchange of
goods and services, marketing and brandgoods and services, marketing and brand
building): Undertakes trading activities;
concerned with marketing (Domestic and
international level).
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Industrial entrepreneur (Manufacturer first
and innovator next): Undertakes manufacturing
activities only; new product development etc (textile,
electronics, etc).
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Corporate entrepreneur (Plans, Organise,
Develops and Manages): Interested in management
part of organisation; excellent organising,
coordinating skills to manage a corporate undertaking
(Ambani, Tata families).
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Agricultural entrepreneur (Develop Agri
based activities): Production and marketing of
agricultural inputs and outputs (Dairy,agricultural inputs and outputs (Dairy,
horticulture, forestry).
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• First generation entrepreneur: Innovator, risk
taker, among the firsts in family to enter
business.
• Modern entrepreneur: Modern entrepreneur• Modern entrepreneur: Modern entrepreneur
considers feasibility of business, which can
adapt to change and dynamic market.
• Imitative entrepreneurs are ready to adopt and
are more flexible in copying techniques
developed by others. Mainly belong to
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• Classical entrepreneur: Classical entrepreneur aims
more significance to maximize his economic returns.
• Innovating entrepreneurs are normally aggressive in
collecting information, analyzing and experimenting
attractive possibilities into practice. They are always
creative and bringing innovation in their work.
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The Advisor: This business personality type will provide an
extremely high level of assistance and advice to customers.
Companies built by advisors become customer focused.Companies built by advisors become customer focused.
Entrepreneur example: John W. Nordstrom, Founder Nordstrom
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The Artist: As an artist type will tend to build business
around the unique talents and creativities they have.
Entrepreneur example: Scott Adams, Creator of Dilbert.Entrepreneur example: Scott Adams, Creator of Dilbert.
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The Improver: are focused on using company as a means to
improve the world.
Entrepreneur example: Anita Roddick, Founder of The Body Shop.
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The Visionary: A business built
by a Visionary will often be based on
the future vision and thoughts of thethe future vision and thoughts of the
founder. Such entrepreneur will have a
high degree of curiosity to understand
the world around.
Entrepreneurial example: Bill Gates,
Founder of Microsoft Inc.
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Personality Types of Entrepreneur
The Analyst: Such
entrepreneur is focus on fixing
problems in a systematic way.problems in a systematic way.
Often the basis for science,
engineering or computer firms.
Entrepreneurial example: Gordon
Moore, Intel Founder.
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The Hero: A person who have an
incredible will and ability to lead the
world and business through any
challenge. To be successful, trust on own
leadership skills to help others find their
way.
Entrepreneurial example: Jack Welch,
CEO, GE.
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The Wealth Creation Entrepreneur: This specific
indi-vid-ual cre-ates a busi-ness with the basic goal of reach-ing
the biggest avail-able mar-ket at the same time as mak-ing thethe biggest avail-able mar-ket at the same time as mak-ing the
high-est profit.
These are the guys who build businesses like Google(Sergey Brin),
Microsoft, Sony, Apple, Facebook and so on.
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The Lifestyle Entrepreneur: This individual creates a
business around their passions but their primary goal is not vast
profits but rather a rich and flexible lifestyle.profits but rather a rich and flexible lifestyle.
They are finding much happiness doing what they love to do.
The business allows them to work extremely flexible hours,
travel the world.
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The Social Entrepreneur: A social entrepreneur is someone
who recognizes a social problem and uses entrepreneurial principles
to organize, create, and manage a venture to make social change.to organize, create, and manage a venture to make social change.
They often operate through non-profits or charities but increasingly,
they are doing so from a private standpoint.
Ex: Social entrepreneurs is Muhammad Yunus, founder and manager of Grameen
Bank in India, who was awarded a Nobel Peace Prize in 2006. He invented the
concept of Micro finance banks by giving small loans to poor people, even
beggars and yet still managing a 95% repayment from borrowers.
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Drone Entrepreneur
• Drone Entrepreneurs suffer losses, as they refuse to make any
modifications in the existing production methods.
• They struggle to exist, not to grow.
• They are straggler as they continue to operate in their traditional way
and resist changes.
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– Area: Rural and Urban entrepreneur;
– Gender/Age: Men and Women entrepreneur;
– Scale: Small and Large scale entrepreneur;– Scale: Small and Large scale entrepreneur;
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1. Dare to Dream: People wonder if
having unrealistic dreams is foolish.
• His reply: Dreams can never be• His reply: Dreams can never be
realistic or safe. If they were, they
would not be dreams. But one must
have strategies to execute dreams &
struggle to transform them into
reality.
- Dr. Giri Y. L. 35
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2. Set Clear Goals: Define what you
stand for as early as possible & do
not compromise for any reason. Younot compromise for any reason. You
can’t enjoy the fruits of success if you
have to argue with your own
principles.
- Dr. Giri Y. L. 36
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3. Never loose your Zest &
Curiosity for Learning: He
personally spend ten hours a weekpersonally spend ten hours a week
on reading , or he find himself quickly
outdated.
- Dr. Giri Y. L. 37
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4. Strive for Excellence: In the world
of tomorrow, and with globalization,
just being good is not good enough.just being good is not good enough.
One needs to excel in whatever one
does.
- Dr. Giri Y. L. 38
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5. Build Self Confidence:
Remember, no one can make you feelRemember, no one can make you feel
inferior without your permission.
- Dr. Giri Y. L. 39
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6. Learn to work in a Team: The
challenges ahead are so complex that
no individual will be able to faceno individual will be able to face
them alone. Team work results in
efforts & in turn, more & better
results.
- Dr. Giri Y. L. 40
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7. Take Care of Yourself: The stress
a young person faces today while
beginning his/her career is the samebeginning his/her career is the same
as what the last generation faced at
the time of retirement. Along with
alternates, physical fitness is also
important. So jog daily.
- Dr. Giri Y. L. 41
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8. Persevere: It can make miracle happen.
9. Have a Broader Social Vision: While9. Have a Broader Social Vision
earning is important, we must use the
same for the larger good of the society.
10. Never Let Success go to your Head
- Dr. Giri Y. L. 42
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An entrepreneur is a person who starts an enterprise. He searches for
change and responds to it.
A number of definitions have been given of an entrepreneur-
• The economists view him as a fourth factor of production along
with land labour and capital.with land labour and capital.
• The sociologists feel that certain communities and cultures promote
entrepreneurship like for example in India we say that Gujaratis and
Sindhis are very enterprising.
• Still others feel that entrepreneurs are innovators who come up with
new ideas for products, markets or techniques.
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To put it very simply an entrepreneur is someone who
perceives opportunity, organizes resources needed for
exploiting that opportunity and exploits it.
Computers, mobile phones, washing machines, ATMs,Computers, mobile phones, washing machines, ATMs,
Credit Cards, Courier Service, and Ready to eat Foods are all
examples of entrepreneurial ideas that got converted into
products or services.
- Dr. Giri Y. L. 44
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Video 2
The Story Of Turtle And Rabbit (The New Version)
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Entrepreneurship can be described as a
.
Entrepreneurship is a creative activity. It is the
ability to create and build something from practically
nothing.
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According to Peter Drucker Entrepreneurship
is defined as ‘
’
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• Entrepreneurship is meant “the function of
seeing investment and production
opportunity, organizing and enterprise to
undertake a new production process, risingundertake a new production process, rising
capital, hiring labour, arranging for supply
of raw materials and selecting top
managers for day to day operations of the
enterprise.”
- Higgins
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•• EntrepreneurshipEntrepreneurship refersrefers toto
.
• Entrepreneurship may be regarded as .
• It is a
- Dr. Giri Y. L. 49
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• A continuous process of economic development;
• An element to economic development;• An element to economic development;
• Essentially a creative activity or an innovative function;
• A risk taking factor which is responsible for an end result;
• Generates employment;
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There are three steps in the process of
Entrepreneurship as follow –
1) Implement the innovative activity,
2) Strategy formulation and adoption and
3) Monitoring the activities by adopting solutions
for problem.
- Dr. Giri Y. L. 51
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Entrepreneur Entrepreneurship
Refers to a person Refers to a Process
Creator Creation
Visualizer Vision
- Dr. Giri Y. L. 52
Organizer Organisation
Decision Maker Decision Making
Initiator Initiative
Leader Leadership
Motivator Motivation
Risk Taker Risk Taking
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• Entrepreneur is a person who starts an enterprise.
• The process of creation is called entrepreneurship.
• The entrepreneur is the actor and entrepreneurship is the act.
• The outcome of the actor and the act is called the enterprise.
An enterprise is the business organization that is formed and
which provides goods and services, creates jobs, contributes to
national income, exports and over all economic development.
- Dr. Giri Y. L. 54
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Entrepreneur, Entrepreneurship &
Enterprise
- Dr. Giri Y. L. 55
A person A process/activities Object
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• Match the entrepreneur and his enterprise from the following words, which
are all jumbled up
Aditya Birla, Wipro, Hero, Ambani, Karsan Patel, Azimji
Premji, Reliance, Nirma, Airtel, Brijmohan Lall Munjal , BSPremji, Reliance, Nirma, Airtel, Brijmohan Lall Munjal , BS
Nagesh, Shoppers stop, Sunil Bharti Mittal , Madura
- Dr. Giri Y. L. 56
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Entrepreneur Activity
Aditya Birla Madura
Ambani Reliance
Karsan Patel Nirma
- Dr. Giri Y. L. 57
Karsan Patel Nirma
Azimji Premji Wipro
Brijmohan Lall Munjal Hero
BS Nagesh Shoppers stop
Sunil Bharti Mittal Airtel
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Structure, Rules,
Policies, Cultures,
HRS, Communication
System
Personality, Skills,
Experience, Style
Motives
- Dr. Giri Y. L. 58
Perceiving opportunity,
Organizing Resources,
Providing leadership
Availability of Resources,
Infrastructure, Competitive
Pressure, Social Value,
Rules, Safety of Technology
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The industrial health of a society depends on the level of
entrepreneurship existing in it. A country might remain backward
not because of lack of natural resources or lack of capital [as it is
many times believed] but because of lack of entrepreneurial talentsmany times believed] but because of lack of entrepreneurial talents
or it inability to tap the hidden entrepreneurial talents existing in that
society.
Entrepreneurs historically have changed the direction of
national economies, industry or markets- Japan, Singapore, Korea,
Taiwan to name a few.
- Dr. Giri Y. L. 59
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• Entrepreneurship is basically concerned with creating
wealth through production of goods and services.
This results in a process of upward change wherebyThis results in a process of upward change whereby
the real per capita income of a country rises overtime
or in other words economic development takes place.
- Dr. Giri Y. L. 60
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If a region is unable to throw up a sufficient number
of entrepreneurs then entrepreneurs from outer space
usually step in to provide goods and services needed by
the people. However the profits earned by thesethe people. However the profits earned by these
entrepreneurs are usually sent back to their place of
origin. As a result development in that region cannot take
place.
• Dr. M.M. Akhori refers to this practice as ‘The Leech
Effect’.
- Dr. Giri Y. L. 61
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This is a process.
“The process of entrepreneurial development involves
equipping a person with information used for enterprise
building and sharpening his/her entrepreneurial skills”.building and sharpening his/her entrepreneurial skills”.
This is regarded as a tool for –
• Industrialization and
• A solution to unemployment
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• The objective of entrepreneurship development is to
motivate a person for entrepreneurial career &
• To make him/her capable of perceiving & exploiting
successful opportunities for enterprises.
• A trained entrepreneur can motivate & guide others on
how to start a business.
- Dr. Giri Y. L. 63
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Entrepreneurship Development is needed due to following reasons –
• To improve backwardness of the people.
• Economic development of the region.
• To analysis resource utilization.
• Proper utilization of human potentiality.• Proper utilization of human potentiality.
• Special attention to take up new activities.
• To create self-employment and generation of employment
opportunity.
• Better economic gain.
- Dr. Giri Y. L. 64
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• Entrepreneurship plays an important role in the
economic growth and development of nation.
• It is a risk taking activity and challenging tasks,
needs utmost devotion, total commitment and greater
sincerity with fullest involvement for his personal
growth and personality.
- Dr. Giri Y. L. 65
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The entrepreneurial career is not a one day job nor it is
bed of roses. Prosperity and success never come easily.
It takes time and needs hard work.
Therefore, before choosing this path one should be
very careful in knowing about his own self.
Every person has his own potentiality and resource.
If the person cans understand or identify his/her inner
traits then it help him choosing the right path for which
he should look into his beliefs, faith values etc.
- Dr. Giri Y. L. 66
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• After identified his/her strength, weakness and ability,
he can make a decision of his choice, whether he will
take up entrepreneurship as a career or not. If yes, then
in which entrepreneurial area.
• Considering this aspect he should always be governed by
three basic qualitative instincts to serve in the world of
uncertainty. These are –
(1) Will,
(2) Zeal, and
(3) Skill.
- Dr. Giri Y. L. 67
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A series of factors have helped to encourage entrepreneurial
activities which also help for economic development of country.
Some of these stimulants are: -
• Supportive government policies & programs.
• Availability of sufficient training facilities.• Availability of sufficient training facilities.
• Increasing focus on capital formation, making capital available to
the entrepreneur to start the new enterprise.
• Collaborative relationship between business & research efforts &
easy transferability of technology to the market place.
• The environment to transform scientific & technical development
in to economically viable projects.
- Dr. Giri Y. L. 68
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Some problems in the growth of
entrepreneurship are as follow –
• Incompetence and poor management,
• Low level of commitment,
• Restrictions imposed by custom and tradition,
• Involvement of high risk,
• Lack of Motivation,
• Lack of infrastructural facilities,
• Lack of communication network
- Dr. Giri Y. L. 69
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Are you prepared to accept it ?
1. Are you prepared to put in hard work for achieving
your goal ?
2. Are you possess a strong will power to face and
overcome the difficulties and setbacks and make the
enterprise successful ?
3. It your family environment congenial to leaving the
traditional family occupation and undertaking a new
venture ?
4. Are you prepared to wait if it take time to set the
results of your efforts ?
- Dr. Giri Y. L. 70
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1) Entrepreneur traits,
2) Creativity,
3) Innovation,
4) Business idea and
5) Growth management
are five of the main concepts of entrepreneurship. There are
lists of characteristics common to entrepreneurs.
- Dr. Giri Y. L. 71
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Entrepreneurship can be partly described
as a combination of creativity followed by
innovation, where creativity is the act of
'thinking' new things, coming up with ideas
and innovation is 'doing' new things or
implementing the newly created ideas.
Creativity is also concerned with new ways
of looking at opportunities and new approaches
to solving problems.
- Dr. Giri Y. L. 72
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Creativity is “the ability to
bring something new into
existence.”existence.”
This definition emphasises the
ability not the activity of bringing
something new into existence.- Dr. Giri Y. L. 73
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Entrepreneurs need ideas to pursue and ideas generally evolve through a
creative process. Here we discuss creative process. There are five stages in
creative process which are mostly used. These stages are as follows –
• Idea Generation,
• Preparation,
• Development,
• Explanation and
• Verification.
- Dr. Giri Y. L. 75
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Idea Generation
The seeding stage of a new idea i.e.
Recognition
Preparation
Conscious search for knowledge i.e.
Rationalization
- Dr. Giri Y. L. 76
Development
Subconscious integration of information i.e.
Daydreaming
Explanation
Recognition of idea as being feasible i.e.
Realization
Verification
Application or test to prove idea has value i.e.
Validation
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For most entrepreneurs, ideas begin with interest in a
subject or curiosity about finding a solution to a particular
problem.problem.
- Dr. Giri Y. L. 77
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Video2
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• In this movie, inspired by a true story, struggle of a man in his
business life is shown; which eventually turn out to be an economy
healing for the country. this movie has participated in a short movie
competition of up-to 5 mins movie on the theme of economy
inspiring the fellow youths to be an entrepreneur just after a stepinspiring the fellow youths to be an entrepreneur just after a step
ahead. And always remember one leader produces many leaders so
that the future would have plenty of job opportunities. only then the
country will see the end of poverty.
- Dr. Giri Y. L. 79
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In preparation stage, entrepreneurs take efforts in order to gather
information and knowledge with respect to idea.
A seed of curiosity has taken form as a focused idea, creative people get
on a conscious search for answers. If it is a problem they are trying to solve then
they begin intellectual journey, seeking information about the problem and howthey begin intellectual journey, seeking information about the problem and how
others have tried to resolve it.
If it is an idea for a new product o service, the business equivalent is
market research e.g. Designers begin engineering new product ideas or
marketers will study consumer buying behaviour.
- Dr. Giri Y. L. 80
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Once idea seeded and given substance through
preparation, is put on a back burner; the subconscious
mind is allowed time to integrate information.
Development is a stage of thinking over idea. This isDevelopment is a stage of thinking over idea. This is
a crucial aspect of creativity because when entrepreneur
consciously focus on problem, he/she behave rationally
to attempt to find systematic resolutions.
- Dr. Giri Y. L. 81
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This is the fourth stage of creative process which
occurs when an idea re-emerges as a realistic creation.
Reaching the explanation stage separates
daydreamers and thinkers from creative people who
find a way to transform value.
This stage is critical for entrepreneurs because
ideas, by themselves, have little meaning.
- Dr. Giri Y. L. 82
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During this stage, many ideas fall by the wayside as
they prove to be impossible or to have little value.
More often, a good idea has already been developed
or the aspiring entrepreneur finds that competitors alreadyor the aspiring entrepreneur finds that competitors already
exist.
Inventers quite often come to this harsh conclusion
when they seek to patent their product only to discover
similar inventions already registered.
- Dr. Giri Y. L. 83
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• Process by which an idea or invention is translated into a good or
service for which people will pay.
• Innovation involves deliberate use of
- information,- information,
- imagination, and
- initiative
in obtaining greater or different value from resources, and includes
all processes by which new ideas are generated and converted into
useful products.
- Dr. Giri Y. L. 84
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• Innovation results often from the use of a
scientific or technical idea in decreasing the
gap between the needs or expectations of thegap between the needs or expectations of the
customers and the performance of a firm's
products.
- Dr. Giri Y. L. 85
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• Innovation is equally important in developing
new collaborative methods such as
Alliance creation,Alliance creation,
Joint venturing,
Flexible working hours, and
Creation of buyers' purchasing power (i.e. the amount of
goods that money will buy).
- Dr. Giri Y. L. 86
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• Innovations are divided into two broad categories as
follows
1) Evolutionary innovations are brought about by numerous
addition/advancement in technology or processes.
2) Revolutionary innovations (called also discontinuous
innovations) require a good deal of user-learning, often
disrupt his or her routine, and may even require new
behaviour patterns.
- Dr. Giri Y. L. 87
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Continuous or evolutionary innovations result in
an alteration in product characteristics instead of
in a new product, and do not require any user-in a new product, and do not require any user-
learning or changes in his or her routine,
examples are multi-blade shaving razor, fluoride
toothpaste, and laptop computer;
- Dr. Giri Y. L. 88
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Example of Continuous evolutionary innovations
1) In the restaurant industry, menu changes or the emergence
of new restaurants and chains represent continuous
innovation
2) In the television industry, continuous innovation occurred
for years with the steady, gradational enhancements in, and
improvements in pricing and programming for, standard
color televisions.
- Dr. Giri Y. L. 89
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• The term is used in business and technology
literature to describe innovations that improve a
product or service in ways that the market doesproduct or service in ways that the market does
not expect, typically first by designing for a
different set of consumers in the new market and
later by lowering prices in the existing market.
- Dr. Giri Y. L. 90
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Example of Discontinuous or Revolutionary innovations
the emergence of McDonald’s and the fast-food
phenomenon in the 1950’s constituted a discontinuousphenomenon in the 1950’s constituted a discontinuous
innovation, completely changing industry growth rates,
pricing assumptions, consumer perceptions of service
and value, etc.
- Dr. Giri Y. L. 91
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Example of Discontinuous or Revolutionary
Innovations
• The telephone industry experienced only very modest continuous
innovation for decades (e.g., changes in call plans, the advent of the
touch-tone phone to replace the rotary-dial phone, etc.).
• Then the industry experienced a dramatic in the 1990’s with the
emergence of cellular phones with their associated dramaticemergence of cellular phones with their associated dramatic
changes in mobility and convenience.
• Currently, the industry is experiencing yet another discontinuous
innovation with the emergence of VOIP (voice over Internet
protocol), or Internet telephony, which is suddenly and
dramatically changing cost and pricing paradigms and competitive
dynamics in the industry.
- Dr. Giri Y. L. 92
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Schumpeter (1934) states that innovation is a
unique aspect which separates entrepreneurs from
managers. It's stated that this is achieved by
(1) Developing new products or services,(1) Developing new products or services,
(2) Developing new methods of production,
(3) Identifying new markets,
(4) Discovering new sources of supply, and
(5) Developing new forms of organizations.
- Dr. Giri Y. L. 93
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Successful business innovations that drive growth are guided by the following five principles:
• Vision to form new products, business models or processes that make a difference and
create new markets;
• Systematic processes and determination that stimulate creativity and learning to
execute on the vision;execute on the vision;
• Reward and recognition system for teams to take measured risks and experiment;
• Focus on clear and present customer needs, the market facts, and the intangible;
• Growth-oriented leadership that is decisive, inclusive, focused, takes risks, and has
market expertise;
- Dr. Giri Y. L. 94
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Management Innovation
Architectural Innovation
Business Model Innovation
- Dr. Giri Y. L. 95
Business Model Innovation
Product Innovation
Operational Innovation
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• Management Innovation: Management Innovation is at the top in
hierarchy because management innovation has created the most enduring
source of competitive advantage.
• Architectural Innovation: Architectural Innovation is at the second place
in hierarchy level. This is when get a whole industry thinking differently
ex-- what Apple did with iTunes to get all these music companies to
agree to a new digital rights management system.
- Dr. Giri Y. L. 96
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• Business Model Innovation: Business Model
Innovation is at third step in hierarchy of innovation.
Dell, at one time, was a business model innovator.
• Product Innovation: A step down from Business
Model Innovation is Product Innovation that delivers
the next wonderful flat-screen television.
- Dr. Giri Y. L. 97
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• Operational Innovation: At the bottom is
Operational Innovation, the kinds of things that
companies do to run leaner or be quicker or delivercompanies do to run leaner or be quicker or deliver
24/7 customer service. Ex.ATM machines etc.
- Dr. Giri Y. L. 98
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Bases of Difference Entrepreneur Manager
Motive
The main motive of an entrepreneur is to
start a venture by setting up an
enterprise. He/she understands the
venture for his personal gratification.
The main motive of a manager is to
render his/her services in an enterprise
already set up by someone else i.e.
entrepreneur.
Status He/she is the owner of the enterprise.
A manager is the servant in the
enterprise owned by the entrepreneur.
Risk Bearing
Assumes all risks & uncertainty involved
in running the enterprise.
As a servant does not bear any risk
involved in enterprise
Rewards
Reward is profit & which is highly
uncertain
What a manger does is simply to
execute the plans prepared by the
entrepreneur.
Innovation
Himself/herself thinks over what & how
to produce goods to meet the changing
demands. Hence he acts as an innovator
Simply to execute the plans prepared
by the entrepreneur.
Qualifications Needs to possess qualities Distinct qualification
- Dr. Giri Y. L. 99
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Bases of Difference Entrepreneur Intrapreneur
Dependency
Is independent in his/her
operations.
Is dependent on
entrepreneur
Himself raises funds required Funds are not raised by the
- Dr. Giri Y. L. 100
Raising of Funds
Himself raises funds required
for enterprise
Funds are not raised by the
Intrapreneur
Risk
Bears risk involved in the
business
Does not fully bear the risk
involved in the business
Operation Operates from outside
Operates from within the
organisation itself.
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Entrepreneurship is to a great extent controlled by the environment.
The entrepreneurial environment is made up of several elements like-
– Economic,
– Non-Economic
The desire to earn money is no doubt an important motivating force.
But entrepreneurs are motivated not only by profit all the time. Let
us see few factors that inspire entrepreneurs toward
entrepreneurship.
March 20, 2014 102Dr. Giri Y. L.
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• Capital
– Availability of capital facilitates the entrepreneur to bring together the land of one, machine of
another and raw material of yet another to combine them to produce goods.
• Labour
– The quality, rather quantity of labour is also a factor which influences the emergence of
entrepreneurship.
• Raw Materials
March 20, 2014 Dr. Giri Y. L. 103
• Raw Materials
– In absence of raw materials, neither any enterprise can be established nor can an entrepreneur
be emerged. In some cases, technological innovations can compensate for raw material
inadequacies.
• Market
– Monopoly in a particular product in a market becomes more influential for entrepreneurship
than a competitive market.
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Internal Motivating Factors External Motivating Factors
1) Educational Background
2) Family Background
3) Occupational Experience
1) Assistance from Government/non
Government sources
2) Assistance from Financial Institutions
3) Occupational Experience
4) Desire to work independently
5) Desire to branch out
manufacturing
2) Assistance from Financial Institutions
3) Availability of Technology/Raw Materials
4) Unsound units available at cheap price
5) Other factors like –
- Demand of particular product/services
- Started manufacturing to support
trading/distribution business due to short
supply products, etc.
March 20, 2014 104Dr. Giri Y. L.
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Entrepreneurial Ambitions
Study by B. Murthy, M.Chandra Shekhar & M. Gangadharan Rao classified the
factors behind entrepreneurial growth into three categories as follows
1) To make money
2) To continue family business2) To continue family business
3) To secure self-employment/independent living
4) To fulfill the desires of self/wife/parents
5) To gain social prestige
6) Other ambitions-
making of decent living, self-employment of children, desire to do
something creative, provide employment to others, etc.
March 20, 2014 105Dr. Giri Y. L.
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Compelling/Forceful Reasons
1) Unemployment
2) Dissatisfaction with the job so far held
3) Make use of idle funds
4) Make use of technical/professional skills
5) Other -
maintenance of large families, renewal of sick unit started by
father, etc.
March 20, 2014 106Dr. Giri Y. L.
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Facilitating Factors
1) Success stories of entrepreneurs
2) Previous association (experience in the same & other line of the
activity)
3) Previous employment in the same or other line of activity
4) Property inherited/self acquired/wife’s
5) Advice or encouragement of family members/relatives/friends
March 20, 2014 107Dr. Giri Y. L.
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Entrepreneurs are not equally distributed in the population.
The supply of entrepreneurship depends upon four structures
found in a society or communities. These structures are –
1) Limitation Structure: In this structure, entrepreneur is viewed as the
March 20, 2014 Dr. Giri Y. L. 108
1) Limitation Structure: In this structure, entrepreneur is viewed as the
most important nonstandard individual & such behavioral pattern is
restricted. The society limits specific activities & this limitation structure
affects all the members of a society. It is basically social & cultural in nature.
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2) Demand Structure: It is mainly economic & changes with
economic progress & government policies. It can be improved by providing
material rewards. Such rewards are necessary to lay the foundation for future
social gains. In short, behavior of people can be made entrepreneurial by
March 20, 2014 Dr. Giri Y. L. 109
social gains. In short, behavior of people can be made entrepreneurial by
manipulating certain selected components of the demand structure.
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3) Opportunity Structure: It consists of the availability of
capital, management & technological skills, information
concerning production methods, labour & markets.
March 20, 2014 Dr. Giri Y. L. 110
Opportunity learn & all the activities associated with the effective
planning & successful operation of industrial enterprises are also
covered. This structure is required to increase the probability of
entrepreneurial activity.
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4) Labor Structure: It is concerned with the supply of
competent & willing labor. Labor supply cannot be at par with the
supply of material factors like capital. The supply of labor is
March 20, 2014 Dr. Giri Y. L. 111
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• Caste Origins: Certain religious & castes encourage
the growth of entrepreneurial talent. Some religious
communities like Parsees, Marwaris & Sindhees seem to
March 20, 2014 Dr. Giri Y. L. 112
communities like Parsees, Marwaris & Sindhees seem to
have an likeness for industrial activities or they have
included in themselves a particular culture that fosters
entrepreneurship.
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• Family Background:
This factor includes size of family & economic status of
family. These determine the support which an
entrepreneur gets from his/her family such as –
March 20, 2014 Dr. Giri Y. L. 113
* Zamindar family helped to gain access to political power & presented
higher level of entrepreneurship.
* Joint Family Provided family property to invest & expand the family firm.
* Background of a family in manufacturing provided a source of
entrepreneurship.
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• Education & Technical Background:
Formal education helps to develop entrepreneurial skills like
resourcefulness, initiative & entrepreneurship. Lack of higher education is
not a limiting factor as majority of entrepreneurs lacked in higher education.
March 20, 2014 Dr. Giri Y. L. 114
not a limiting factor as majority of entrepreneurs lacked in higher education.
Most of the young with higher education prefer white collar jobs in
Government/Private Organizations.
But technicians, engineers & other professionals are now coming
forward as entrepreneurs. Most of them entered business neither casually
nor accidentally but after preparation.
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• Occupational Background:
Employed people were more attracted towards
entrepreneurship than those engaged in agriculture.
Majority of entrepreneurs were the unemployed youth
March 20, 2014 Dr. Giri Y. L. 115
Majority of entrepreneurs were the unemployed youth
prior to starting the industrial units.
Thus entrepreneurship not required any particular
occupation what is required is the entrepreneurial spirit &
zeal.
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• Migratory Character:
Majority of entrepreneurs were immigrants (settlers)
having coming from different places within states or
from outside.
March 20, 2014 Dr. Giri Y. L. 116
from outside.
• Types of Industry Started:
• Industrial units in engineering works,
• Units in non-metallic products,
• Plastic works industry,
• Food products, etc.
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• Economic Status:
The average annual earnings increased from grandfather to
father & from father to the entrepreneur himself. This
improvement in economic status must have had a positive
March 20, 2014 Dr. Giri Y. L. 117
impact on entrepreneurs’ activities. Such financial soundness of
past generation creates a sense of security & thereby encourages
towards entrepreneurship.
Some of them start from a scratch & thus become self-made
entrepreneurs.
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• Desire to achieve:
The aim of some persons encourage towards
entrepreneurship. Such aims like –
To attain high status in society,
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To attain high status in society,
To make it a record of successful achievement, &
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• Political Factors
• Business Regulations: Government attitudes towards the
extent & type of rules that it will impose on the conduct of
business can have a major impact on the success.
March 20, 2014 Dr. Giri Y. L. 119
Ex. U. S. auto industry has frequently failed to anticipate
upcoming government regulations concerning safety, gas
mileage & exhaust emissions.
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There are two basic groups of people who can have impact on your business
environment.
1. One is customer &
2. Second is employee.
Customer e.g. Changing attitudes towards health in many countries have led
to profits for the manufacturers of running shoes, but less happy times for
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to profits for the manufacturers of running shoes, but less happy times for
markers of cheesecake.
The social & cultural aspects of the environment may affect what you can
expect from whatever workforce available.
Employee e.g. Two factors that are widely encountered in the U. S. are a
decreasing willingness to work overtime & the decreasing usefulness of
money as a motivator.
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