The%20Context%20of%20Entrepreneurship

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The Context of Entrepreneurship
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Learning Objectives

• Discuss the various aspects of todays economy
• Explain the legal factors that are part of the
  context of entrepreneurship
• Describe the changing world of work and its
  impact on entrepreneurship
• Discuss the role that social responsibility and
  ethics play in the context of entrepreneurship
• Explain opportunities and their role in
  entrepreneurship
• Describe competitive advantage and explain why
  its important

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Issues Affecting Entrepreneurship in Action

• Characteristics of todays economy
• Legal factors
• The changing world of work
• Social responsibility and ethics

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Important Characteristics of Todays Economy

• What forces are driving todays economy?
• What are the implications?
• What will it take to be successful in this
  context?

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Driving Forces of Todays Economy

• The Role of Information
• Technological Trends
• Globalization
• Changing Demographics

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Driving Forces of Todays Economy

• The Role of Information
• Has set the tone for todays economy
• Technological Trends
• Increasing rate of technological change
• Increasing commercialization of innovations
• Increasing knowledge intensity
• Increasing recognition that advanced information
  technologies are critical

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Driving Forces of Todays Economy

• Globalization
• The linking of economies and cultures that
  fosters a business and competitive situation in
  which organizations have no national boundaries
• Demographics
• The vital statistics of a population
• For example, gender, age, and income levels

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Emerging Demographic Trends

1. The worlds population is growing geometrically
   and at a very fast rate
2. The worlds population is getting older and
   younger at the same time
3. The worlds population continues on the move
4. Most of the worlds economically active live in
   cities and urban areas
5. The division of the worlds population is
   categorized into three broad groups

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The Division of the Worlds Population (3 Broad
Groups)

• The Poor
• Includes individuals with household incomes of
  less than 700 per year
• About 1.1 billion people
• Account for 2 percent of the worlds income
• The Middle Class
• Includes individuals with family incomes of
  between 700 and 7,500 per year
• About 3.5 billion people
• Earn about 33 percent of the worlds income

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The Division of the Worlds Population (contd)

• The Consumer Class
• Includes individuals with household incomes above
  7,500 per year
• About 1.1 billion people
• Claim about 64 percent of the worlds income

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Implications of the Driving Forces of Todays
Economy

• Continual turbulence and change
• Reduced need for physical assets
• Vanishing distance
• Compressed time

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Critical Success Factors

• Four critical success factors for succeeding in
  todays economy
• The ability to embrace change
• The ability to be creative and innovative
• Vision and leadership
• Total quality culture

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Developing Your Creativity

1. Relax
2. Exercise Your Mind
3. Determine What You Want to do
4. Look for Ways to Tackle Issues
5. Look for Ways to do Things Better

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Legal Factors
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Social Responsibility and Ethics

• Social Responsibility
• The obligation of organizational decision makers
  to act in ways that recognize the
  interrelatedness of business and society
• Stakeholders
• Individuals or groups of individuals who have a
  stake in or are significantly influenced by an
  organizations actions
• Ethics
• Involves the rules and principles that define
  right and wrong decisions

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Possible Organizational Stakeholders
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Environmental Opportunities

• Opportunities
• Positive external trends that provide unique and
  distinct possibilities for creating value
• Sources of Opportunity (External Context)
• The unexpected
• The incongruous
• The process need
• Industry and market structures
• Demographics
• Change in perception
• New knowledge

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Five Categories of Opportunities

1. Redesigning Product or Services
2. Redifferentiating Products or Services
3. Resegmenting the Market
4. Completely Reconfiguring the Market
5. Developing Breakthrough Competitive Strengths

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Understanding Competitive Advantage

• Competitive Advantage
• What sets and organization apart a companys
  competitive edge
• Necessary for long-term success and survival
• Three Views on Competitive Advantage
• The industrial organization (I/O) approach
• Resource-based view (RBV)
• The guerrilla view