The term ‘entrepreneur’ has attracted several definitions ever since it was first defined by Richard Cantillon, a French economist. All definitions, however, when generalized define an entrepreneur as a person who creates new capital or products or services, through a risk bearing venture. Entrepreneurship is the act commited by an entrepreneur. Strategy is the means to get to a certain predetermined end. Entrepreneurial strategy can therefore be defined as a means devised by which an entrepreneur can use in his ventures and be successful. Drucker 2001 defines entrepreneurial strategy as the practices to be carried out by the entrepreneur, outside the business (at the market place).
Identify and briefly describe the major stages of entrepreneurial strategy
There are four major strategies; fustest with the moistest, creative imitation, finding a niche and changing the economic characteristics of a product.
Being Fustest with the mostest
This involves the entrepreneur starting his venture at a leadership position. This means a totally new line of business. As such, the risk is very high but the rewards will also be very high if the venture succeeds (Drucker, 2001).
Hit them where they aint
This strategy involves creative imitation and entrepreneurial judo. Creative imitation involves taking advantage of the success of others. The new product, however, should rectify the disadvantage of the existing product to satisfy the client. This will most likely put the new product at a leadership position. Entrepreneurial judo aims to attain a leadership position and usurp the existing leader from the market segment (Drucker, 2001).
Finding and occupying ecological niche
This strategy demands innovation by the entrepreneur. The entrepreneur has to find a real niche market to explore. The business venture should develop a very high level of skill before the niche market is flooded and also aim to build its brand based on a specialized knowledge of a market (Drucker, 2001).
Changing economic charecteristics
This involves creating the real needed utility by the customer, knowing what the customer is willing to pay for and how much and creating value for the customer.
What is a no equity arrangement? Define the two major types of no equity arrangements: licensing and turn-key projects, and give at least one advantage and disadvantage for each
A non-equity arrangement is a method of entering into a foreign market which involves exporting and licensing. A turnkey project is where a firm agrees beforehand to fully design, construct and equip a facility on behalf of another company, then it will give the “key” to the purchasing company when the facility is complete and ready for use. It is mainly used by businesses in the global operations who want to venture into a new market. The advantage of turnkey projects is that it allows the business to go around the foreign direct investment barrier in some countries. Its disadvantage is that the firm may end up attracting and creating competitors because of this maneuver (“Management of Multinational Corporations,” 2012).
Licensing is used by businesses where engineered and manufactured products are involved. It is a process where one company sells the right to manufacture or engineer a product to another company. Its advantage is that the licencee saves the licensor company the cost of launching into the new market. The disadvantage is that the licensor company may lose technological know-how to the other company (“Management of Multinational Corporations,” 2012).
Business plan progress can and should be measured throughout the year. Discuss three controls that help track progress
There are several ways of measuring business plan progress. The following are just three of them;
The use of tracking software that allows one to enter large quantities of data which he will compare with previous data to see the progress or regress made
The use of benchmarks. These are short term goals of the business. Achieving these not only brings a sense of accomplishment but also help to measure progress made.
Spreadsheets and timetables . These makes the business owner to easily identify the progress made as well as what needs to be done. Spreadsheets can be made for different departments of the business to monitor their progress (“How to Track Business Progress”, n.d).
References
Drucker, F. P (2001). The essential Drucker. Harper Collins
How to Track Business Progress. Retrieved from
http://www.ehow.com/how_2175388_track-business-progress.html
Management of Multinational corporations (2012). Retrieved from
http://www.icmrindia.org/courseware/Management%20of%20Multinational%20Corporations/MNCs-DS5.htm
