Professional Documents
Culture Documents
ENTREPRENEURSHI
P
Muhammad Atiq
ENTREPRENEURSHIP
Stevenson and Jarillo (1990, p. 23) define
entrepreneurship as the process by which individuals
either on their own or inside organizations pursue
opportunities without regard to the resources they
currently control
ENTREPRENEURSHIP
Stokes et al. (2010) take a step further and define
entrepreneurship as a societal phenomenon or process of
change, comprising the following three behavioural
components:
1.The identification, evaluation, and exploitation of an
opportunity.
2.The management of a new or transformed organization so
as to facilitate the production and consumption of new goods
and services.
3.The creation of value through the successful exploitation of
a new idea (i.e. innovation)
ENTREPRENEURSHIP
Thus, entrepreneurship can be defined as a process of
producing something of value in the face of uncertainty,
which is novel and transformational, through the formation
of a new organization or inside an existing organization by
identifying, evaluating, and exploiting an opportunity
Entrepreneurship is essentially a value creation process
The end product of this process is a new product
Entrepreneurship requires innovation, taking risks and
being pro-active
ENTREPRENEUR
Entrepreneur is a French word, which means taking the initiative to
bridge (Schaltegger and Wagner, 2011)
ENTREPRENEUR
Bygrave and Zacharakis (2010 , p. 49) define entrepreneur as
someone who perceives an opportunity and creates an
organization to pursue it
But not all opportunities that are discovered are exploited, and not all
individuals who have discovered an opportunity decide to exploit that
opportunity
Shane and Venkataraman (2000) offer two reasons for this:
(1) the nature of opportunity
(2) the characteristics of the individuals who have discovered the
opportunity
FORMS OF ENTREPRENEURSHIP
Micro Enterprises represent the poorest entrepreneurs mostly in
rural areas and city slums
Need more finances and support from the government/NGOs
Small and Medium Enterprises According to SBP, employing
20-250 persons and sales turnover not exceeding Rs. 400 million
on an annual basis
Corporations has a legal entity of its own and has greater
impact on national wealth, innovation and employment
Social/Sustainable Enterprises not for profit enterprise driven
by a motivation to bring social/environmental change
State Owned Enterprises (SOEs) majority owned and controlled
by the Government but exhibiting significant entrepreneurial
behavior
WHY INNOVATE?
Change is inevitable (customer tastes and
preferences, cultural values, technology, legislation,
competitive landscape, sources of supplies,
demographics, economic conditions)
INNOVATE?
WHY INNOVATE?
Innovation is the lifeblood of organisations because it affects
their longevity
TYPES OF INNOVATION
Schumpeter (1934) referred to entrepreneurship as the
process of creative destruction
He identified five types of innovation:
the creation of a new product or modification in its quality
the development of a novel method of production
the development of a new market
securing a new source of supply
creation of a new organisation or a whole new industry
TYPES OF INNOVATION
TYPES OF INNOVATION
Product Vs. Process Innovations
Radical Vs. Incremental Innovations
TYPES
TYPES OF
OF INNOVATION
INNOVATION
Product Vs. Process Innovations
Product innovations represent the outputs of an
organisation, which are apparent to the general public
Product innovations help an organisation in penetrating
existing markets or creating new ones
Process innovations are oriented towards improving the
effectiveness and efficiencies of production
Most often, such innovations are not apparent to the
general public
TYPES
TYPES OF
OF INNOVATION
INNOVATION
Radical Vs. Incremental Innovations
Radical innovations are exceptionally different from
existing products
Represent new to the world, new to the market or new to
the firm innovations
Incremental innovations involve adaptations and
refinements to existing products
Radical innovations are, most often, followed by a series
of incremental innovations
TYPES OF INNOVATION
TYPES OF INNOVATION
Competence enhancing Vs. Competence destroying
Innovations
If an innovation builds on the firms existing knowledge
base, it is competence enhancing innovation
TYPES OF INNOVATION
TYPES OF INNOVATION
Open Vs. Closed Innovations
open innovation is the use of purposive inflows and outflows
of knowledge to accelerate internal innovation, and expand the
markets for external use of innovation, respectively
(Chesbrough, 2003)
INNOVATION IN DEVELOPING
COUNTRIES
Developing countries are characterised by the
presence of large numbers of individuals who have
low disposable income (Prahalad and Hart, 2002)
INNOVATION IN DEVELOPING
INNOVATION IN DEVELOPING COUNTRIES
COUNTRIES
Therefore in developing countries, the major issue is
not the identification of new customers, but the
affordability of products that companies produce and
market there (Anderson and Markides, 2007)
INNOVATION
INNOVATIONIN
INDEVELOPING
DEVELOPING
COUNTRIES
COUNTRIES
BOP markets consist of the nearly 4 billion people, or 70% of
the worlds population, that live on less than two dollars a
day (Webb et al., 2010, p. 555)
INNOVATION
IN DEVELOPING
DEVELOPING
INNOVATION IN
COUNTRIES
COUNTRIES
Examples of BoP approach in Pakistan:
Search
Select
Implement
Capture
INNOVATION AS A CORE
BUSINESS PROCESS
The key lies in building the capability within the firm to be
prepared for and proactively deal with innovation opportunities
presented by such discontinuities
This translates into developing alternative routines for
discontinuous innovations
MANAGING SERVICES
INNOVATION
Services may appear different because they are often less
tangible
However, the same innovation model also applies to services
Services innovations are easier to imitate because there are
fewer or no barriers at all
Thus, the competitive advantage is quickly swept away by the
imitating firm
Service providing companies focus on the personalisation of
service experience so as to achieve customer loyalty
MANAGING SERVICES
INNOVATION
Nowadays, manufacturing also includes a sizable service
component with core products being offered together with
supporting services
For many complex products, manufacturers recognise that their
customers want to buy some service attribute which is embodied
in the product
Having demand-side knowledge is critical to success in services
innovation
Service businesses may not have a formal R&D department but
they do undertake this kind of activity to deliver a stream of
innovations
SOURCES OF INNOVATION
SOURCES OF INNOVATION
Users as Innovators
Users of a product often give their feedback and suggestions
which can serve as ideas for further innovations
Lead Users active and interested users who want to see new
innovative solutions to their problems
Lead users often team up with the innovating organisation to cocreate products as in the case of Sunsilk Co-creations
Some organisations create communities of lead users who identify
existing problems in the product and their potential solutions as in
the case of open source softwares
SOURCES OF INNOVATION
Watching Others
Learning from other organisations and adapting it to your context
Reverse engineering products and imitating technology
Benchmarking making structured comparisons with others to try
and identify new ways of carrying out particular processes
Working in collaboration with leading MNCs and get to know their
processes and routines
The case of mobile phone manufacturers
SOURCES OF INNOVATION
Recombinant Innovation
Crossovers transferring old ideas in new contexts which may
seem common and ordinary in the original context but new and
exciting for another context
Mostly done by MNCs
Pepsis snack products; Cokes pulpy orange; P&Gs pampers;
Toyota Corolla/Camry
SOURCES OF INNOVATION
Regulations
Regulations are pervasive in our lives, e.g. food safety laws, oil
marketing laws, drug laws, broadcasting laws, labour laws,
pollution control laws, driving laws
The legal statutes governing an industry are known as regulations
for that industry
Regulations restrict certain things and open up new ones
The opposite of regulations deregulation has inspired hypergrowth in many sectors including but not limited to telecoms,
media, IT, islamic banking etc.
SOURCES OF INNOVATION
Futures and Forecasting
Imagining and exploring alternative trajectories to the dominant
version in everyday use
Scenario planning, prototypes, concept models are some of the
tools used to explore employee and user reactions to game
changing situations
Royal Dutch Shell is famous for the use of scenario planning
SOURCES OF INNOVATION
Need Pull
Innovation requires some form of demand if it is to succeed
Innovators need to develop a clear understanding of needs and
find ways to meet those needs
Understanding consumer behavior vis--vis how they actually use
the product is essential to ensure a steady stream of innovations
Need pull innovation is more important at the maturity stage in the
industry/product life cycle
SOURCES OF INNOVATION
Knowledge Push
Innovation is done first and then need is created through
advertising or other marketing mechanisms
Products which are purely the result of scientific research and
development
For example, antibiotics, fibre optic cable, photocopier, Sony
walkman, smart phones
Innovation
Organisation Structure
Another important role of top management is to create such
organisational structures and processes which foster innovation
and provide a shared meaning to innovation inside an
organisation
Structure sets the reporting relationships, order and also
clarifies the role of each organisational member
Organisational may either be tall, hierarchical (mechanistic)
with many layers of management or it may be organic with few
layers of management