Assignment Sample on Entrepreneurship Theory and Practice
Q1 a) Creation and Discovery contexts of entrepreneurial opportunities
Entrepreneurial opportunities refer to the situation where the service and the products can be sold at a high price where the price of products is not that high. This provides an opportunity for the entrepreneurs to make an intense profit by taking action according to the situation. Creation theory of Entrepreneurship and Discovery theory of Entrepreneurship are two theories that can be used by the entrepreneurs and the concept is evaluated below.
Creation theory of Entrepreneurship
The creation theory of entrepreneurship defines its realization via a venture and on the other side, it explains entrepreneurial value creation. This theory mainly highlights the creation of organisations (Packard, 2017). This theory focuses on the assumption that the opportunities are basically created by the entrepreneur and they cannot be recognised by an individual entrepreneur. In this context, an individual can tolerate uncertainty but not risk. The creation context is based on charisma and also this is able to interact with the decision that can be incremented. From the context of decision making, it can be explained that creation theory gives importance to the affordable loss. Regarding the HR practices, this recruits flexible and general human capital from the social network that already exists (Monllor and Murphy, 2017). In the context of creation theory, the marketing mix (product, price, promotion, and place) can be changed fundamentally in order to get the value of new market opportunities. There are chances of sustainability as this theory is able to provide an opportunity for learning tactics for future development. There can be uncertain decisions for recusing risks and their lack of opportunities for the entrepreneurs from the perspective of independence (Packard, 2017). This theory involves an evolutionary realist philosophy.
Discovery theory of Entrepreneurship
The Discovery theory of entrepreneurship is different from the creation theory. This theory indicates the opportunity to identify the opportunities by an entrepreneur. Also, this theory is able to consider different entrepreneurs who have different capabilities of identifying freedom (González, Husted, and Aigner, 2017). Discovery theory provides an opportunity to bear the risk as this is an important part of a startup. Hence the entrepreneurs are independent to take the decision and there is the application of realist philosophy. On the other side, there is an opportunity for taking risky decisions. From the perspective of leadership, here the discovery theory focuses on the experienced people who are well known to the particular field. On the other side, in the context of decision making, the theory provokes the use of risky data collection tools, risky decision-making tools. Regarding the HR practices, this theory of entrepreneurship recruits people from specific human capital. The strategy stays unchanged and relatively completed. This theory includes external financial resources such as venture capital firms and as well as banks. In the context of marketing strategy, this theory is able to change in the marketing mix that explains how the opportunities can manifest (Foss and Klein, 2017). Also, this theory creates a speed that explains that entry may have sustained competitive advantages.
Firm-level capabilities or strategies
The firms can use market orientation, collaboration, and technological strategies for effective exploitation of opportunities.
1. Marketing or market orientation
Market orientation can be considered as an approach to a company where it gives priority to discovering the desire of the customers. On the other side, this finds out the need in the market as well. Market orientation is productive for creating new products in the market. On the other side, this helps to satisfy the customers by fulfilling the needs (Ramoglou and Tsang, 2017). Here the target market can be critical for the entrepreneurs and the opinion of the customers can be a component for the R&D (research and development) for the new products. Market orientation is basically a customer-centered approach that is useful for designing the product. Sometimes the entrepreneur used a process of data analysis for finding information about the market. The knowledge of the market is able to find out factors to deal with the challenges in the market. There can be effective exploitation of opportunities by using market orientation because this includes multiple advantages (López-Cabarcos et al., 2019). Market orientation is able to make customer service better. Here the concern of the customers is able to generate better service. On the other side, this helps to improve brand loyalty and promote business in the challenging market.
Market orientation is beneficial for the success of the companies and makes sure that the promotion of the product in the market is effective. On the other side, here the exclusive marketing strategy helps to promote business in the unknown demographic scale and this is useful for enhancing customer retention (Celec and Globocnik, 2017). Market orientation fulfills customers’ desires by setting proper costs by undertaking the practical costing. This Market orientation is determined to fulfill the expectations of the potential customers in the most exclusive way. Apart from that, impractical ideas of market orientation are able to provide long-term development strategies. Due to the current changes in business from the context of market conditions, regulations, science, and technology, this market orientation can be effective as exploitation of opportunities.
2. Collaboration
Collaboration strategies are effective exploitation of opportunities. Here the collaboration strategy involves four effective dimensions that are useful for the effective exploitation of opportunities (Göttling-Oliveira-Monteiro, and Vázquez-Rodríguez, 2019). This mainly includes how the company is performing, the strategies of the company, the work culture of an organisation, and the other arrangements. Here the work performed in the company includes multiple successful criteria. It basically reviews the work process in a company. On the other side, stakeholders’ benefits are identified. The gaps are found by monitoring the achievements and also the three importance of team relation that is effective for exploitation of opportunities.
Apart from the context of strategy, there is the implementation of better vision, aim, and goals that are useful for bringing success to the organisation. Collaboration helps in setting joint objectives.
From the context of arrangements, there is the involvement of the resources, here the collaboration strategy helps to get the resources during the emergency situation, and here the companies are able to get the essential raw material or the Human Resource from their collaborative partners (González, Husted, and Aigner, 2017). On the other side, this arrangement has multiple areas of responsibilities that are useful as a collaborative strategy. The risk management factors are also involved in this arrangement section.
The cultural factors in collaborative strategy Involve effective leadership strategy that helps to guide the employees in an organisation for better performance, on the other side, collaborative strategy is effective to build trust among the team members and it gives strategic growth to the future. Apart from all these factors, there is the existence of mutual benefit in collaborative strategy where both the parties get affected by helping each other. Also, this reduces confusion during the function of a project in a company. Here the ultimate benefit goes to the entrepreneurs in the company.
3. Technological
Technological strategies that can be used in the effective exploitation of opportunities. In this current era, science is able to develop technology and on the other side, technology is able to develop the business. Using technological strategy is effective for enhancing the business as this is against the traditional business process (Weerakoon et. al., 2020). Including technological strategy in the company is able to improve the value. It can be described that technology strategy is effective as an innovative strategy. An entrepreneur can use technology strategy as this developed strategy is able to fulfill almost every need of the organisation. This improves the future of a company by keeping a record of every task. The profit and loss can be measured by using this technological strategy. The responsibilities of the employees can be measured by using this strategy. On the other side, they are able to improve organisational work culture by educating the employees in the organization. On the other side, this helps to improve the training and recruiting process (González, Husted, and Aigner, 2017). The entrepreneurs get benefited from this technological strategy as this helps to improve the mission and goals of a company. On the other side, technological factors are effective for research about the market in order to establish an effective business strategy. It is known that the customers are the essential part of an organisation, here the customers need it most important. Hence the technological strategy is able to identify the customers’ needs as well. Multiple websites like Facebook, Instagram, YouTube, and tweets are able to identify the current trend and without an effective technology strategy, it would have never been possible (Foss, and Klein, 2017). Hence, the business and the entrepreneurs get strategic influence by the technological strategy.
Q1 b) Five dimensions of entrepreneurial orientation
According to Lumpkin and Dess (1996), the five dimensions of entrepreneur’s orientation refer to a risk-taking process, proactiveness in the firms, innovativeness in the work process, competitive aggressiveness, and autonomy. Here the three firm-level capabilities can be benefited in the context of market orientation, Collaboration, and Networking. In these below sections, three dimensions of entrepreneurial orientation have been discussed which will be helpful for reflecting on the extent to which attitudes and behaviors will consist. Here the autonomy refers to the tendency for inventing new ideas in order to achieve a marketplace in the competitive atmosphere (Celec and Globocnik, 2017). On the other hand, competitive aggressiveness refers to the activity that directly challenges the competitive rivalries in the market without avoiding them. Also, innovativeness is the process that involves multiple ideas including creativeness, experiment as well as the process of the ideas. Proactiveness can be described as the tendency for anticipating opportunities and also this acts for the future benefit of the organisation. Proactiveness works slowly on the existing product in the market. Lastly, risk-taking is the factor that includes bold activity in the organization (Al Mamun et. al., 2017). Here the entrepreneurs take bold decisions for the betterment of a company and this can be considered as a risk factor because the chances of failure are high. Five dimensions of entrepreneurial orientation are able to make a strong entrepreneurial orientation within a company.
Use of three dimensions of entrepreneurial orientation
For designing the policy and structure of the company three dimensions of entrepreneurial orientation are discussed below.
1. Autonomy
Autonomy can be something that challenges the competition in the market. Here an entrepreneur can embrace new challenges in the market for developing their product in the company. In order to invest something in the company, it is essential to challenge the market leaders (Covin, and Wales, 2019). For showcasing the challenges, the new company can use an effective slogan or tout. For example, Microsoft uses a statement notes, “We take on big challenges, and pride ourselves on seeing them through.” During launching Xbox gaming system to showcase their challenge to developing companies like Sony and Nintendo.
2. Innovation
Innovation will be used by the entrepreneurs in the market which will be creative and different from the other similar products in the market. 3M can be an example as this is able to solve problems in a strategic way. It can be said that an entrepreneur can implement experienced people in the organization who can give productive and creative ideas for the development of existing products. Also, the expected people can provide ideas for inventing new products in the market according to the need of customers (Achtenhagen, 2020). It has been found that 3M has more than 7000 researchers who work as employees for developing their thousand products. Also during the year 2010, 3M was awarded around 600 patents. Hence it can be said that it will be effective for an entrepreneur to extend their business in a new region.
3. Competitive aggressiveness
Competitive aggressiveness is effective for challenging the companies who sell similar products in the market. An entrepreneur can use this orientation for highlighting the mission statement of the company (Achtenhagen, 2020). As an example it has been Found that Nike uses the mission statement “To experience the emotion of competition, winning, and crushing competitors” in order to challenge other companies in the market such as Reebok and Adidas.
References
Al Mamun, A., Kumar, N., Ibrahim, M.D. and Bin, M.N.H., 2017. Validating the measurement of entrepreneurial orientation. Economics & Sociology, 10(4), pp.51-66.
Celec, R. and Globocnik, D., 2017. Benchmarking firm-level resources, capabilities, and postures driving export performance of SMEs. Naše gospodarstvo/ Our economy, 63(1), pp.47-58
Covin, J.G. and Wales, W.J., 2019. Crafting high-impact entrepreneurial orientation research: Some suggested guidelines.
Foss, N.J. and Klein, P.G., 2017. Entrepreneurial discovery or creation? In search of the middle ground. Academy of Management Review, 42(4), pp.733-736
González, M.F., Husted, B.W. and Aigner, D.J., 2017. Opportunity discovery and creation in social entrepreneurship: An exploratory study in Mexico. Journal of Business Research, 81, pp.212-220.
López-Cabarcos, M.Á., Srinivasan, S., Göttling-Oliveira-Monteiro, S. and Vázquez-Rodríguez, P., 2019. Tacit knowledge and firm performance relationship. The role of product innovation and the firm level capabilityes. Journal of Business Economics and Management, 20(2), pp.330-350.
Monllor, J. and Murphy, P.J., 2017. Natural disasters, entrepreneurship, and creation after destruction: A conceptual approach. International Journal of Entrepreneurial Behavior & Research.
Packard, M.D., 2017. Where did interpretivism go in the theory of entrepreneurship?. Journal of Business Venturing, 32(5), pp.536-549.
Ramoglou, S. and Tsang, E.W., 2017. In defense of common sense in entrepreneurship theory: Beyond philosophical extremities and linguistic abuses. Academy of Management Review, 42(4), pp.736-744.
Weerakoon, C., McMurray, A.J., Rametse, N. and Arenius, P., 2020. Knowledge creation theory of entrepreneurial orientation in social enterprises. Journal of Small Business Management, 58(4), pp.834-870.
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