The document discusses entrepreneurship and its role in economic development. It defines entrepreneurship as undertaking innovations and transforming them into economic goods. Entrepreneurs take risks and play a significant role in creating jobs, developing new technologies, and solving social problems. Their activities help generate wealth and drive economic growth. The document also outlines several ways in which entrepreneurship contributes to economic development, such as through employment generation, increasing national income, promoting regional development, and improving standards of living. Intrapreneurship within organizations is also discussed as a form of internal entrepreneurship.

1. Entrepreneurship is the act of being an entrepreneur, which can be defined as "one who
undertakes innovations, finance and business acumen in an effort to transform innovations into
economic goods".
For Frank H. Knight and Peter Drucker , entrepreneurship is about taking risk. The behavior of the
entrepreneur reflects a kind of person willing to put his or her career and financial security on the
line and take risks in the name of an idea, spending much time as well as capital on an uncertain
venture.
Concept of entrepreneurship:
Entrepreneurs play a significant role in the development of the economy. An entrepreneur affects
the lives of many people as it creates new job, provides the product, develops the technology, and
provides feasible solutions to the existing social and environmental problems. Entrepreneurship
creates wealth for the person and for the country. It is the most powerful force of the economy.
Today, the business environment and technological advancements present complex challenges to
an individual’s entrepreneurial drive and determination. Most entrepreneurs prefer to outsource
projects to save on operating cost. They even outsource the most critical process of their
manufacturing or business operations
Role of entrepreneurship in economic development.
Entrepreneur: An entrepreneur can be regarded as a person who has the initiative skill and
motivation to set up a business or enterprise of his own and who always look for high
achievements. He is the catalyst for social change and works for the common good. They looks for
opportunities, identifies them and seizes them mainly for economic gains. An action oriented
entrepreneur is a highly calculative individual who is always willing to to undertake risks in order
to achieve their goals.
***Need for Entrepreneurship Development : Economic development essentially means a process
of upward change whereby the real pr capita income of a country increases over a period of time
.Entrepreneurship has an important role to play in the development of a country. It is one of the
most important inputs in economic development. The number and competense of entrepreneurs
affect the economic growth of the country.
The economic history of the presently advanced countries like USA, Russia and japan supports the
fact that economic development is the outcome for which entrepreneurship is an inevitable cause.
The crucial and significant role played by the entrepreneurs in the economic development of
advanced countries has made the people of developing and under developed countries conscious
of the importance of entrepreneurship for economic development. It is now a widely accepted
fact that active and enthusiastic entrepreneurs can only explore the potentials of the countries
availability of resources such as labour, capital and technology.
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2. The role of entrepreneurs is not identical in the various economies. Depending on the material
resources, industry climate and responsiveness of the political system, it varies from economy to
economy. The contribution of entrepreneurs may be more in favourable opportunity conditions
than in economies with relatively less favourable opportunity conditions.
Entrepreneurship and Economic Development : Entrepreneurship helps in the process of
economic development in the following ways :
1) Employment Generation :Growing unemployment particularly educated unemployment is the
problem of the nation. The available employment opportunities can cater only 5 to 10 % of the
unemployed. Entrepreneurs generate employment both directly and indirectly..
2) National Income :National Income consist of the goods and services produced in the country
and imported. The goods and services produced are for consumption within the country as well as
to meet the demand of exports. The domestic demand increases with increase in population and
increase in standard of living. The export demand also increases to meet the needs of growing
imports due to various reasons.
3) Balanced Regional Development :The growth of Industry and business leads to a lot of Public
benefits like transport facilities, health, education, entertainment etc. This helps in the
development of backward regions.
4) Dispersal of economic power :Industrial development normally may lead to concentration of
economic powers in a few hands. This concentration of power in a few hands has its own evils in
the form of monopolies. Developing a large number of entrepreneurs helps in dispersing the
economic power amongst the population. Thus it helps in weakening the harmful effects of
monopoly.
5) Better standards of living : Entrepreneurs play a vital role in achieving a higher rate of economic
growth. Entrepreneurs are able to produce goods at lower cost and supply quality goods at lower
price to the community according to their requirements. When the price of of the commodities
decreases the consumers get the power to buy more goods for their satisfaction. In this way they
can increase the standard of living of the people.
6) Creating innovation : An entrepreneur is a person who always look for changes. apart from
combining the factors of production, he also introduces new ideas and new combination of
factors. He always try to introduce newer and newer technique of production of goods and
services. An entrepreneur brings economic development through innovation.
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3. Entrepreneurial Process - A Framework
There are many ways to organize the effort of planning, launching and building a venture. But
there are a set of fundamentals that must be covered in any approach. We offer the following as a
way to break down the basic activities necessary.
It is useful to break the entrepreneurial process into five phases: idea generation, opportunity
evaluation, planning, company formation/launch and growth. These phases are summarized in this
table, and the Opportunity Evaluation and Planning steps are expanded in greater detail below.
1. Idea Generation: every new venture begins with an idea. In our context, we take an idea to be a
description of a need or problem of some constituency coupled with a concept of a possible
solution.
2. Opportunity Evaluation: this is the step where you ask the question of whether there is an
opportunity worth investing in. Investment is principally capital, whether from individuals in the
company or from outside investors, and the time and energy of a set of people.
3. Planning: Once you have decided that an opportunity, you need a plan for how to capitalize on
that opportunity. A plan begins as a fairly simple set of ideas, and then becomes more complex as
the business takes shape. In the planning phase you will need to create two things: strategy and
operating plan.
4. Company formation/launch: Once there is a sufficiently compelling opportunity and a plan, the
entrepreneurial team will go through the process of choosing the right form of corporate entity
and actually creating the venture as a legal entity.
5. Growth: After launch, the company works toward creating its product or service, generating
revenue and moving toward sustainable performance. The emphasis shifts from planning to
execution. At this point, you continue to ask questions but spend more of your time carrying out
your plans.
Intrapreneurship : refers to employee initiatives in organizations to undertake something new,
without being asked to do so."
An intrapreneur is a person who has an entrepreneur skill set but works within an organization,
enterprise, or venture. This could be within an organization that seeks the dynamism of forward
thinking employees or incubation companies.Hence, the intrapreneur focuses on innovation and
creativity, and transforms an idea into a profitable venture, while operating within the
organizational environment.
Thus, intrapreneurs are Inside entrepreneurs who follow the goal of the organization.
Intrapreneurship is an example of motivation through job design, either formally or informally.
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4. Employees, such as marketing executives or perhaps those engaged in a special project within a
larger firm, are encouraged to behave as entrepreneurs, even though they have the resources,
capabilities and security of the larger firm to draw upon.
***Intrapreneurship describes the process of developing new products, services, and lines of
business within an existing company. It is perhaps best understood as a form of internal
entrepreneurship that takes place with the encouragement and support of management. An
employee who takes responsibility for developing an innovative idea into a marketable product is
known as an intrapreneur
Eg : Emily Hwengere wrote in the Financial Gazette. "Without intrapreneurs who can identify and
exploit new opportunities, organizations will naturally die." One of the most commonly cited
intrapreneurship success stories is 3M Corporation, which has a policy that allows employees to
spend 15 percent of their working hours developing their own business or product ideas. This
policy led to the creation of Post-It-Notes and other successful products by 3M employees.
***
UNIT-2
Who is an entrepreneur?
An entrepreneur is a person who develops a new idea and takes the risk of setting up an
enterprise to produce a product or service which satisfies customer needs.
“All entrepreneurs are business persons, but not all business persons are entrepreneurs”
Characteristics of entrepreneur:
1.Initiative
An entrepreneur takes actions that goes beyond job requirements or the demand of the situation
2.Opportunity seeking
An entrepreneur is quick to see and seize opportunities. He/she does things before he/she is asked
to work by people or forced by situation.
3.Persistence
An entrepreneur is not discouraged by difficulties and problems that come up in the business or
his/her personal life. Once she sets a goal she is committed to the goal and will become
completely absorbed in it.
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5. 4.Information seeking
An entrepreneur undertakes personal research on how to satisfy customers and solve problems.
He/she knows that different people have different capabilities that can be of help to them. He/she
seeks relevant information from his/her clients, suppliers, competitors and others. He/she always
wants to learn things which will help the business to grow.
5.Demand for quality and efficiency
An entrepreneur is always competing with others to do things better, faster, and at less cost
he/she strives to achieve excellence.
6.Risk taking
Are you afraid of uncertainties? Then you cannot be an entrepreneur. Entrepreneurs are not high
risk takers. They are also not gamblers; they calculate their risks before taking action. They place
themselves in situations involving moderate risk so they are moderate risk takers.
7.Goal setting
An entrepreneur sets meaningful and challenging goals for him/herself. An entrepreneur does not
just dream. Him/she thinks and plans what he/she does. He/she is certain or has hope about the
future.
8.Commitment to work
An entrepreneur will work long hours after into the night just to be able to keep his/her promise
to his/her client. He/she does the work together with his/her workers to get a job done. He/she
knows how to make people happy to work for him/her due his/her dynamic leadership.
9.Systematic planning and monitoring
An entrepreneur plans for whatever he/she expects in the business. He/she does not leave things
to luck. He/she plans by breaking large tasks down into small once and puts time limits against
them. Since and entrepreneur knows what to expect at anytime he/she is able to change plans
and strategies to achieve what he/she aims at.
10.Persuasion and networking
An entrepreneur acts to develop and maintain business contacts by establishing good working
relationship. Uses deliberate strategies to influence others.
Indian Entrepreneurs- role models
Dhirubhai Ambani
A proud son of this glorious state of Gujarat, and a man with long ties with this wonderful city of
Ahmedabad, was the greatest example of this spirit of entrepreneurship!
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6. In a short span of less than 25 years, and without even the benefit of a formal education,
Dhirubhai Ambani built Reliance, a first generation enterprise, into one of the world’s 200 most
profitable companies!
He started out in life, working as a mere petrol pump attendant in Aden, Yemen. He had no
technical knowledge, of any of the businesses he wished to create in India.
He had just five hundred rupees in his pocket, a vision of what he wanted to achieve, an intrinsic
faith in the latent demand potential of the Indian markets, a belief in the capabilities of Indian
people, and a burning desire to succeed!
The end result? He created Reliance, a Rs. 75,000 crore enterprise, in a single lifetime!
Azim H. Premji
In a world where integrity purportedly counts for naught, Azim Hasham Premji symbolizes just
that. The 55-year-old Wipro chairman made international waves in 2000 ever since his group
became a Rs 3,500-crore empire with a market capitalization exceeding Rs 500,000 million! If any
stargazer had been foolish enough to predict in 1966 that a 21-year-old Indian at Stanford
University would one day achieve all this, he'd have been laughed out of business. At that
juncture, Premji was forced to discontinue his engineering studies in the States due to the
untimely death of his father. Returning to India to take charge of a cooking oil company, the youth
infused new life into the family's traditional mindset and trade.
Despite all the success, the media-shy Premji maintained a low profile, letting his work do all the
talking. Until early last year the media broke the story that Azim Premji had become the second-
richest man in the world… In spite of his billions, however, he still travels economy class and stays
in budget hotels.
N.R.Narayana Murthy
An Indian IT chief who's really made it big without dropping his ethical precepts by the wayside is
Nagawara Ramarao Narayana Murthy, Chairman of Infosys. Born in 1946, Murthy's father was a
schoolteacher in Kolar district, Karnataka, India. A bright student, Murthy went on to acquire a
degree in Electrical Engineering from Mysore University and later studied Computer Science at the
IIT, Kanpur, India.
The Infosys legend began in 1981 when Narayana Murthy dreamt of forming his own company,
along with six friends. There was a minor hitch, though-he didn't have any seed money. Luckily,
like many Indian women who save secretly without their husband's knowledge, his wife Sudha-
then an engineer with Tatas-had saved Rs 10,000. This was Murthy's first big break.
The decade until 1991 was a tough period when the couple lived in a one-room house. The second
break came in 1991 when Indian doors to liberalization were flung open… Murthy grabbed the
opportunity with both hands and has never looked back ever since. Today, Infosys is the first
Indian company to be listed on the US NASDAQ.
Simplicity, humility and maintaining a low profile are the hallmarks of this super-rich Bangalorean.
And the man is principled to a fault. Murthy's unprecedented wealth has catapulted him into the
public glare.
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7. Entrepreneur vs Inventor
An entrepreneur and an inventor both have their own financial rewards. Being an inventor takes a
lot of creativity and innovation to be able to come up with an idea that no one has thought of yet;
a unique idea for a product or service that has never been introduced in the market; an idea that
could be the next big thing.
#An entrepreneur, meanwhile, is a business-minded person that can use existing products and
services and customize them according to the specific needs of target market of his business. The
entrepreneur will put his own brand onto the product or service and make it uniquely his own.
*Being an inventor, your ideas could be of use to consumers in the commercial market.
Companies would be willing to buy that idea and make it their own for reproduction. Ideas can be
licensed or be rented by many companies. When you come up with novel idea, protection for the
idea can then be filed in the right government agency. You can then look for a company that will
be interested in your idea and will greatly benefit from it.
# Being an entrepreneur can also be very lucrative. An inventor can decide to market his own idea
if he has the resources to do so. Turning that idea into a reality and a business can be certainly a
challenge. For the first time entrepreneur, a simple idea might be a good way to start because this
would not cost that much money to create.
# An entrepreneur is in control of all his ideas and the way in which he brings those ideas to life
and markets them. An inventor, however, surrenders much of the control of the idea when it is
under license to a company. Running your own business requires complete control. You are in
charge of every aspect of the product, from production, marketing to distribution. There are
financial risks involved in venturing into a business. There is little risk in the licensing of an idea.
One can only gain from it. There is no big investment required in being an inventor.
It is really up to you if you will consider being an inventor or an entrepreneur. You have to weigh
all the advantages and disadvantages before you decide on the path to take. What is important is
that you will be able to convert your idea into something useful and at the same time reap
financial rewards for it.
Domestic Vs International Entrepreneurship:
International entrepreneurship is defined in this study as the development of international new
ventures or start-ups that, from their inception, engage in international business, thus viewing
their operating domain as international from the initial stages of the firm's operation.
*One hundred and eighty-eight new venture firms in the computer and communications
equipment manufacturing industries are classified according to the percentage of their sales in the
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8. international market. Ventures with no sales derived from international activities are considered
“domestic” new ventures, and ventures with sales from international activities comprising greater
than 5% of total sales are considered “international” new ventures.
*Whereas both the domestics and the internationals characterize domestic competition as being
relatively intense, the international new ventures compete in industries with higher levels of
international competition. It is not clear from this research whether the new venture selects an
industry with a high degree of international competition and therefore responds with an
international orientation or, because the new venture has an international orientation, it
perceives or recognizes a higher degree of international competition.
* Domestic new ventures are distinguished by their emphasis on a production expansion strategy
and customer specialization strategy. The production specialization strategy consists of focusing
on limited geographical markets, maintaining excess capacity, and pursuing forward integration.
The customer specialization strategy incorporates the production of a specialty product that is
purchased infrequently. Thus, for both of the domestic strategies, a consistent “closeness”
between the producer and consumer is implied. This may be an important basis underlining the
new venture's decision to compete in an exclusive domestic context.
***
Unit-3
Sources of new ideas for Entrepreneurs
Entrepreneurs frequently use the following sources of ideas:
1. Consumers– the potential consumer should be the final focal point of ideas for the
entrepreneurs. The attention to inputs from potential consumers can take the form of informally
monitoring potential ideas or needs or formally arranging for consumers to have an opportunity to
express their concerns. Care needs to be taken to ensure that the new idea or the needs
represents a large enough market to support a new venture.
2. Existing Companies– with the help of an established formal methods potential entrepreneurs
and intrapreneurs can evaluate competitive products & services on the market which may result in
new and more market appealing products and services.
3. Distribution channels– members of the distribution channels are familiar with the needs of the
market and hence can prove to be excellent sources of new ideas. Not only do the channel
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9. members help in finding out unmet or partially met demands leading to new products and
services, they also help in marketing the offerings so developed.
4. Government– it can be a source of new product ideas in two ways firstly, the patent office files
contain numerous product possibilities that can assist entrepreneurs in obtaining specific product
information, and secondly, response to government regulations can come in the form of new
product ideas.
5. Research & development– Entrepreneur’s own R&D is the largest source of new idea. A formal
and well-equipped research and development department enables the entrepreneur to conceive
and develop successful new product ideas
Creative problem solving is the mental process of creating a solution to a problem. It is a special
form of problem solving in which the solution is independently created rather than learned with
assistance.
Creative problem solving always involves creativity.
To qualify as creative problem solving the solution must either have value, clearly solve the stated
problem, or be appreciated by someone for whom the situation improves.
The following formalized and well-known methods and processes combine various creativity and
creative-problem-solving techniques:
 TRIZ, which is also known as Theory of Inventive Problem Solving (TIPS), was developed by
Genrich Altshuller and his colleagues based on examining more than 200,000 patents. This
method is designed to foster the creation and development of patentable inventions, but is
also useful for creating non-product solutions.
 Mind mapping is a creativity technique that both reframes the situation and fosters
creativity.
 Brainstorming is a group activity designed to increase the quantity of fresh ideas. Getting
other people involved can help increase knowledge and understanding of the problem and
help participants reframe the problem.
 Edward de Bono has published numerous books that promote an approach to creative
problem solving and creative thinking called lateral thinking.
 The Creative Problem Solving Process (CPS) is a six-step method developed by Alex Osborn
and Sid Parnes that alternates convergent and divergent thinking phases.
The product development process
1. Idea Generation ;
o Ideas for new products can be obtained from basic research using a SWOT analysis
(Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends,
company's R&D department, competitors, focus groups, employees, salespeople,
corporate spies, trade shows, or Ethnographic discovery methods (searching for user
patterns and habits) may also be used to get an insight into new product lines or
product features.
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10. o Idea Generation or Brainstorming of new product, service, or store concepts - idea
generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to
support your ideas in the Idea Screening Phase (shown in the next development step).
2. Idea Screening
o The object is to eliminate unsound concepts prior to devoting resources to them.
o The screeners should ask several questions:
 Will the customer in the target market benefit from the product?
 What is the size and growth forecasts of the market segment/target market?
 What is the current or expected competitive pressure for the product idea?
3. Concept Development and Testing
o Develop the marketing and engineering details
 Investigate intellectual property issues and search patent data bases
 Who is the target market and who is the decision maker in the purchasing process?
 What product features must the product incorporate?
 What benefits will the product provide?
 How will consumers react to the product?
 How will the product be produced most cost effectively?
 Prove feasibility through virtual computer aided rendering, and rapid prototyping
 What will it cost to produce it?
o Testing the Concept by asking a sample of prospective customers what they think of
the idea. Usually via Choice Modelling.
4. Business Analysis
o Estimate likely selling price based upon competition and customer feedback
o Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock
equation
o Estimate profitability and break-even point
5. Beta Testing and Market Testing
o Produce a physical prototype or mock-up
o Test the product (and its packaging) in typical usage situations
o Conduct focus group customer interviews or introduce at trade show
o Make adjustments where necessary
o Produce an initial run of the product and sell it in a test market area to determine
customer acceptance
6. Commercialization (often considered post-NPD)
o Launch the product
o Produce and place advertisements and other promotions
o Fill the distribution pipeline with product
o Critical path analysis is most useful at this stage
***
UNIT-4
A business plan is a formal statement of a set of business goals, the reasons why they are believed
attainable, and the plan for reaching those goals. It may also contain background information
about the organization or team attempting to reach those goals..
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11. A business plan is a written description of your business's future. That's all there is to it--a
document that describes what you plan to do and how you plan to do it. If you jot down a
paragraph on the back of an envelope describing your business strategy, you've written a plan, or
at least the germ of a plan.
Business plans can help perform a number of tasks for those who write and read them. They're
used by investment-seeking entrepreneurs to convey their vision to potential investors. They may
also be used by firms that are trying to attract key employees, prospect for new business, deal
with suppliers or simply to understand how to manage their companies better.
So what's included in a business plan, and how do you put one together? Simply stated, a business
plan conveys your business goals, the strategies you'll use to meet them, potential problems that
may confront your business and ways to solve them, the organizational structure of your business
(including titles and responsibilities), and finally, the amount of capital required to finance your
venture and keep it going until it breaks even.
Sound impressive? It can be, if put together properly. A good business plan follows generally
accepted guidelines for both form and content. There are three primary parts to a business plan:
The first is the business concept, where you discuss the industry, your business structure,
your particular product or service, and how you plan to make your business a success.
The second is the marketplace section, in which you describe and analyze potential
customers: who and where they are, what makes them buy and so on. Here, you also
describe the competition and how you'll position yourself to beat it.
Finally, the financial section contains your income and cash flow statement, balance sheet
and other financial ratios, such as break-even analyses. This part may require help from
your accountant and a good spreadsheet software program
Though business plans have many different presentation formats, business plans typically cover
five major content areas:
Background information
A marketing plan
An operational plan
A financial plan
A discussion of the decision making criteria that should be used to approve the plan.
Some of these content areas may be more or less important depending on the kind of business
plan. There is no fixed content for a business plan. Rather the content and format of the business
plan is determined by the goals and audience. A business plan should contain whatever
information is needed to decide whether or not to pursue a goal.
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12. organizational plan: Process of identifying an organization's immediate and long-term objectives,
and formulating and monitoring specific strategies to achieve them. It also entails staffing and
resource allocation, and is one of the most important responsibilities of a management team
An organizational plan is basically a “to do” list for an organization. It lists out the plan of work,
programs, and organizational growth over a period of time - six months, a year, a five years. They
can be pretty simple to create and use. Writing a plan can just mean getting a clear list of the
types of work that need to be done, the tasks involved, who is responsible for them, and when
they’ll be done. Below is an outline of the steps for creating an organizational plan.
 Set Goals: make sure the goals for your work in each category are clear. Ask yourselves,
“Where do we want to be with this work in a year?”.
 Set Tasks: Next, discuss each goal and talk about all the tasks that need to be done to
achieve that goal. At this point, they don’t have to be in order. Some will be more specific
than others; the more specific the better, in general. You may not know how to reach some
goals, yet; it’s fine to have a task list that looks like “Get fundraising training. Create
fundraising plan and schedule. Carry out plan.”
 Plan a Schedule: When all the tasks are listed, number them to show a general order—
what comes first, what should happen at the same time, what comes last? Then draft a
schedule for the tasks—either when they will be completed, or (for ongoing tasks) when
they will begin. The goal is to set a schedule that is challenging but realistic.
 Choose Responsibilities: Assign responsibilities by asking people to volunteer to be
responsible for goals or tasks. A person’s name next to a task doesn’t mean that they’ll do
it—just that they take responsibility for making sure it gets done
 Support: Brainstorm other individuals and organizations that can provide support,
assistance or advice in helping you carry out particular tasks or achieve general goals.
 Follow through: Come up with a plan to check in, support and encourage people as they
carry out their tasks. This may mean choosing one person to regularly check on the status
of different tasks, or it may be part of reporting back at meetings.
 Plan Evaluation: Finally, set a time to revisit the whole plan as a group to evaluate how
things are going and revise assignments and schedules. This may be a few months or half a
year in the future
A marketing plan may be part of an overall business plan.
Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing
plan contains a list of actions, a marketing plan without a sound strategic foundation is of little
use.
The marketing objectives must usually be based, above all, on the organization's financial
objectives; converting these financial measurements into the related marketing measurements.He
went on to explain his view of the role of "policies," with which strategy is most often confused:
"Policies are rules or guidelines that express the 'limits' within which action should
occur."Simplifying somewhat, marketing strategies can be seen as the means, or "game plan," by
which marketing objectives will be achieved and, in the framework that we have chosen to use,
are generally concerned with the 8 P's. Examples are:
1. Price — The amount of money needed to buy products
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13. 2. Product — The actual product
3. Promotion (advertising)- Getting the product known
4. Placement — Where the product is sold
5. People — Represent the business
6. Physical environment — The ambiance, mood, or tone of the environment
7. Process — The Value-added services that differentiate the product from the competition
(e.g. after-sales service, warranties)
8. Packaging — How the product will be protected
***
UNIT-5
Sources Of Finance/Capital:
Most entrepreneurs find money through banks, private investors (friends, family and business
associates), suppliers, customers or professional angel investors. The source you choose
determines how you raise the money as well as how you pay it back. Here's a breakdown of your
options:
Banks are a straightforward source of funds. Many offer small-business loans if you've
already started your business. You'll need a business plan and perhaps a personal
guarantee. The funds are a loan, so you must generate enough cash to cover loan
payments.
Entrepreneurs often raise funds from friends and family. Treat these investors as real
business relationships, however. Demonstrate how you will use the money and how you
will repay it. Will you pay with interest over time? Will you issue stock and return the
investment through an IPO or acquisition? Issuing stock is complicated--you may need a
prospectus and SEC registrations, depending on how much you're raising.
Finding friends and family who will invest in your start-up is straightforward: Start calling.
You're after high-net-worth investors who take personal referrals seriously. The best way
to find them is through personal networking.
Suppliers and customers may also back you. If your product complements a supplier's, they
might invest--for example, if you distribute its music, a record label might want to invest.
Be careful, though: Taking money from a supplier may prevent you from using that
supplier's competitors.
Strategic investors get their return in many forms: increased sales of their own products,
stock sale of your company, advertising through your distribution channels, etc. These
arrangements are rarely made just for a cash return, so the payback can take many forms.
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14. Private angel investors invest much like professional VC firms. You pitch them with a
business plan and financing pitch. They invest for equity and expect a return--IPO,
acquisition or stock buy-back--in three to seven years. Angels can be found through
professional services like Garage.com, through angel groups like Common Angels.comor via
networking. They often meet professional angels while working with their client companies
Venture capital (VC ) is financial capital provided to early-stage, high-potential, high risk, growth
startup companies. The venture capital fund makes money by owning equity in the companies it
invests in, which usually have a novel technology or business model in high technology industries,
such as biotechnology, IT, software, etc. The typical venture capital investment occurs after the
seed funding round as growth funding round (also referred to as Series A round) in the interest of
generating a return through an eventual realization event, such as an IPO or trade sale of the
company. Venture capital is a subset of private equity. Therefore, all venture capital is private
equity, but not all private equity is venture capital.[1]
In addition to angel investing and other seed funding options, venture capital is attractive for new
companies with limited operating history that are too small to raise capital in the public markets
and have not reached the point where they are able to secure a bank loan or complete a debt
offering. In exchange for the high risk that venture capitalists assume by investing in smaller and
less mature companies, venture capitalists usually get significant control over company decisions,
in addition to a significant portion of the company's ownership .
Scope Of Entrepreneurship Development In India
 In India there is a dearth of quality people in industry, which demands high level of
entrepreneurship development programme through out the country for the growth of
Indian economy.
The scope of entrepreneurship development in country like India is tremendous. Especially
since there is widespread concern that the acceleration in GDP growth in the post reforms
period has not been accompanied by a commensurate expansion in employment

We have all the requisite technical and knowledge base to take up the entrepreneurial
challenge. The success of Indian entrepreneurs in Silicon Valley is evident as proof.
 The only thing that is lacking is confidence and mental preparation. We are more of a
reactive kind of a people. We need to get out of this and become more proactive
What is more important than the skill and knowledge base is the courage to take the plunge. Our
problem is we do not stretch ourselves. However, it is appreciative that the current generations of
youth do not have hang-ups about the previous legacy and are willing to experiment.
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15. Initiatives To Develop Entrepreneurship :
Entrepreneurship Development Institute of India (EDI), an autonomous and not-for-profit
Institute, set up in 1983, is sponsored by apex financial institutions - the IDBI Bank Ltd., IFCI Ltd.,
ICICI Bank Ltd. and State Bank of India (SBI). The Government of Gujarat pledged twenty-three
acres of land on which stands the majestic and sprawling EDI campus.
To pursue its mission further, EDI has helped set up twelve state-level exclusive entrepreneurship
development centres and institutes. One of the most satisfying achievements, however, was
taking entrepreneurship to a large number of schools, colleges, science and technology
institutions and management schools in several states by including entrepreneurship inputs in
their curricula. In view of EDI’s expertise in Entrepreneurship, the University Grants Commission
appointed the EDI as an expert agency to develop curriculum on Entrepreneurship.
EDI’s success led by its strong sense of commitment culminated in recognition of its achievements
by the Government of India and various state governments
At present, there are various organizations at the country level & state level offering support to
entrepreneurs in various ways. The Govt. of India & various State Govts. have been implementing
various schemes & programmes aimed at nurturing entrepreneurship over last four decades. For
example, MCED in Maharashtra provides systematic training, dissemination of the information &
data regarding all aspects of entrepreneurship & conducting research in entrepreneurship. Then
there are various Govt. sponsored scheme for the budding entrepreneurs.
Recognizing the importance of the entrepreneur development in economic growth & employment
generation, Maharashtra Economic Development Council (MEDC) has identified entrepreneurial
development as the one of the focus area for Council activities two years ago.
Various Chambers of Commerce & apex institutions have started organizing seminars & workshops
to promote entrepreneurship. Incidentally, various management colleges have incorporated
entrepreneurship as part of their curriculum. This is indeed a good development. This shows the
commitment of the Govt. & the various organizations towards developing entrepreneurial
qualities in the individuals.
Promoting Entrepreneurship
In India, where over 300 million people are living below the poverty line, it is simply impossible for
any government to provide means of livelihood to everyone. Such situations surely demand for a
continuous effort from the society, where the people are encouraged to come up with their
entrepreneurial initiative.
Encouragement at attitudinal and social level
In the future, innovation and entrepreneurship needs to be encouraged at Social levels,
Governmental levels and Managerial levels. There must be a social attitude that views innovations
with positive attitude and reject an innovation only when it is not acceptable.
Encouragement at physical level
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16. At this level the encouragement will refer to two aspects necessary for entrepreneurship to thrive,
one is the provision of venture capital and the other being infrastructural support. A real example
is Export Processing Zones which are performing extremely well when given the support.
What will be the qualities needed to succeed in this new world?
First and foremost, we need the entrepreneurial spirit. Outside India, this spirit has been very
evident in the IT industry. 35% of the start-ups in Silicon Valley are by Indians. We need to have
similar risk-taking ability within the country as well.
Entrepreneurs need more than technical talent, more than business savvy. What they need is the
indefatigable energy and incurable optimism that enables them to take the road less travelled and
convert their dreams into reality. It is a force that beckons an individual to pursue countless
opportunities. Entrepreneurs must learn how to overcome the risk of failure, or of vulnerability.
The institutions can give them valuable insights and also support them in this.
Future Perspective:
Entrepreneurship as in the past will determine technical innovations, status of social institutions
and political management systems. On the basis of these factors, we can expect the future to be a
place where basic needs will remain and only the wants will change. India will overcome the
barriers of infrastructure; we will also visualize a strong manufacturing and agricultural sector.
Entrepreneurs and not managers will be in demand, as only they will be equipped to find order in
chaos. The focus of entrepreneurial energy will shift from achieving volume sales to fulfill a specific
requirement. Governance will become more transparent and will be willing to accept changes
necessary for growth and development. More autonomy will become the basis of all issues.
The future will see Entrepreneurship as the key driver of economic development Technological
obsolescence will become order of the day and there will be more space for leisure. New
businesses will be credited with providing variety of new jobs in the economy. New and small
business will also develop more than their share of product and service innovation. At one end we
will see the technological upheavals in quick succession and on the other end there will be social
value systems and cultural issues undergoing slow but dynamic transformations
@ please read the text for detail information
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