next >>. 2 entrepreneurial small businesses are the mainstay of economies around the world
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What is Entrepreneurship?
Entrepreneurship can be practiced by individuals or companies.
entrepreneurship
the process of starting up a new company or business
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Individual Entrepreneurs
When an entrepreneur starts a business, one of four results can occur:
entrepreneur
a person who starts a new business
1. The company survives but stays small.
2. The company grows and becomes a major corporation.
3. The company is purchased and merges with another company.
4. The company fails, which is the most common result.
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Advantages of Entrepreneurship
Innovation and frustration can motivate individuals to start new businesses.
An entrepreneur is a risk manager, not a risk taker.
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Advantages of Entrepreneurship
Advantages ofEntrepreneurship
Self-Direction andSelf-Reliance
FlexibilityPotentialProfits
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Advantages for Others
In the United States, small businesses and entrepreneurial operations provided nearly 75 percent of all new jobs in the 1990s.
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Advantages for Others
Most new products and services reach the market through entrepreneurships.
Small business ownership is an alternative to corporate America.
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Disadvantages of Entrepreneurship
Disadvantages of Entrepreneurship
Long hours and complete responsibility for the business
Owners at work or at home worrying about work
Complete responsibility including potential for liability lawsuits
Complete financial risk
Potential problems with employees
Potential loss of personal funds and investment
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Intrapreneurship
The primary advantages of intrapreneurship involve financing and expertise.
intrapreneurship
the process of starting a new business that is spun off from an existing business
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Intrapreneurship
A corporation has access to both internal and external capital.
A corporation has access to well-skilled and knowledgeable employees.
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Entrepreneurial Trends The world’s cultures include both individualistic (self-oriented) and collectivist (group-oriented) cultures. Within all types of cultures, research has shown that many people would prefer to be their own bosses.
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Global Entrepreneurship
A domestic company’s owner or management team may decide to engage in global entrepreneurship.
global entrepreneurship
the process of selling new products, starting a new operating division, or starting up a new company in another country
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Ability to Compete
A company should consider its ability to compete globally on four different levels.
Country Level Company Level
Industry Level Product Level
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A company must examine the target country’s natural, human, and capital resources.
A company must analyze the success of its industry within the target country.
A company must have enough capital, staff, and relationships with companies in the target country.
A company must consider competing products that already exist in the target country.
Ability to Compete
Country-Level Ability
Industry-Level Ability
Company-Level Ability
Product-Level Ability
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Benefits of Global Entrepreneurship
Gain increased sales
Enter new and potentially profitable markets
Smooth out sales by selling out-of-season goods overseas
Smooth out sales by selling older versions of products overseas
Benefits of Global Entrepreneurship
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Risks of Global Entrepreneurship
A government could take over the company, or the government might change laws affecting the business.
Political or Country Risk
Economic risks include higher interest rates and rising unemployment.
Economic Risk
There is a greater risk of losing money when recovering an investment; or getting the money back, takes a long time.
TimeRisk
Certain products can be risky if they are not accepted, or if competition is strong.
ProductRisk
Recovering an investment in a business and making a profit can take several years.
Financial (or Cost) Risk
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International Support
The World Bank helps countries develop and participate in international trade.
The World Bank also supports joint ventures with companies or governments.
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International Support
International exchange organizations include:
The Asian Development Bank (AsDB)
The European Bank for Reconstruction and Development (EBRD)
The Inter-American Development Bank (IDB)