Entrepreneurship Assignment for MBA students (MBA quốc tế)

Entrepreneurs in the 21st century face challenges unlike any faced in the past since the dawn of time. Organizations both new and old operate in vastly changing contexts. Some argue it has become more complex and others say it is more complicated. Most seem to agree that complexity in organizations is a lot more difficult to manage than organizations that are complicated. The salient points need to be considered in answering the above assignments are:1.Are the key entrepreneurial terms and concepts defined and backed by evidence and sources?2.How and what is understood by the statements and words? Is there a discussion and evaluation in the context of entrepreneurship?3.What are the challenges facing entrepreneurs and their organisations in general and are specific entrepreneurs and their organisations used as examples? What are the implications for new startups within such contexts?4.What approaches would you recommend to instill innovation and good organisational management considering complexity and complicated and the need for sustainability in entrepreneurship?5.How risks can be mitigated and are those proposals realistic? Were local and foreign examples used to demonstrate an application of those approaches?6.Was there a conclusion drawn linked to the discussion?

1 Entrepreneurial terms and concepts

The concept of entrepreneurship was first established in the 1700s, and the meaning has evolved ever since Many simply equate it with starting one’s own business Most economists believe it is more than that

To some economists, the entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance for profit Others emphasize the entrepreneur’s role as an innovator who markets his innovation Still other economists say that entrepreneurs develop new goods or processes that the market demands and are not currently being supplied An entrepreneur is one who brings resources, labor, materials, and other assets into combinations that make their value greater than before, and also one who introduces changes, innovations, and

a new order

In almost all of the definitions of entrepreneurship, there is agreement that we are talking about a kind of behavior that includes: initiative taking, the organizing and reorganizing of social and economic mechanisms to turn resources and situations to practical account and the acceptance of risk or failure Most economists today agree that entrepreneurship is a necessary ingredient for stimulating economic growth and employment opportunities in all societies In the developing world, successful small businesses are the primary engines of job creation, income growth, and poverty reduction

Entrepreneurship is the dynamic process of creating incremental wealth The wealth is created by individuals who assume the major risks in terms of equity, time and/or career commitment or provide value for some product or service The product or service may or may not be new or unique, but value must somehow be infused by the entrepreneur by receiving and locating the necessary skills and resources

ThaiTuan Group Corporation is one of the leading Vietnamese textile product and fashion services supplying enterprises, and specializing in producing jacquard, plain from polyester, spandex and visco, etc using advanced technologies transferred from Japan and the EU Company’s goal is “To become a leading Asian group in supplying textile products and fashion services With an infrastructure located from Northern to Southern Vietnam, an experienced and skilled workforce, for many consecutive years our products have been recognized as “Vietnam’s Highest Quality Product” and won many records and awards from the Vietnamese government Our company has successfully implemented and maintained the ISO 9000, ISO 14000, SA 8000,

and the 5S international quality control systems ThaiTuan Group Corporation is committed to satisfy its customers with excellent services and products, constantly improving itself to maintain the title " Vietnam’s Highest Quality Product” and at the same time to maintain and develop the THAI TUAN brand in both national and worldwide markets

Although each of these definitions views entrepreneurs from a slightly different perspective, they all contain similar notions, such as newness, organizing, creating, wealth, and risk taking Yet each definition is somewhat restrictive, since entrepreneurs are found in all professions education, medicine, research, law, architecture, engineering, social work, distribution and government

2 Challenges faced by entrepreneurs

Entrepreneurs have to face numerous challenges on the road to success, in particular with regard to access to finance All entrepreneurs will at some point feel submerged with the many responsibilities that fall on their shoulders The common challenges faced by entrepreneurs are Overestimating Success, Misplaced Purpose, Negative Mindset, Poor Organization, Jack of All Trades, Employee Motivation, Lack of Support

Difficulties of Start-up companies are weak knowledge and technology transfer, limited skills, absence of special government program in support of entrepreneurship and innovation among key factors that constrain their growth and development

2.1 Developing the vision and business idea

Finding the right business opportunity or creatively developing an idea is the first true task

of an entrepreneur An entrepreneur must possess the ability to see what others cannot see While others see problems, an entrepreneur must see opportunities

2.2 Raising Capital

The next challenge that the entrepreneurs are going to face when starting a business from scratch is that of raising capital An entrepreneur is the only one that knows business idea to the core Trying to convince investors about something that does not exist is definitely a challenge

In the game of raising capital, an entrepreneur must have a good story to tell; backed by a strong business plan and good persuasion skills

2.3 Choosing right Business Location

Finding a good business location at the right place is definitely not easy An efficient location has a rapidly growing population, good road network and other amenities at a good

place If you're preparing to open a food or retail business with a storefront, putting your business in the proper location might be the single most important thing you do at startup 3.4 Finding Good Employees

Employees are the representatives to business customers and the outside world They are a reflection of the business culture and ethics If an employee is bad or rude to customers, it is going to portray a bad image for the company

2.4 Others

Competition is the next challenge an entrepreneur will face when starting a business Most individuals see competition as a plague but competition may be a good challenge It is up to company’s creativity, the main engine that stimulates innovation and production of quality products at great prices

Change in trends is a challenge an entrepreneur must be prepared for when starting a small business Trends have made and broken lot of businesses Profitable businesses have been wiped out by slight industrial changes and trends A typical example is the Dot com trend, where many established industrial based businesses were wiped out by new web based dot com companies Seasoned entrepreneurs know that trend is a friend and are always willing to swiftly adjust their business to the current trend

One of the biggest mistakes entrepreneurs make in their early days is trying to be all things to all people They attempt to sell their product or service to too wide of a market Entrepreneurs also face another challenge in this area They focus on the wrong things

Originated from successes of researches and clinical applications of Ho Chi Minh City Nutrition Center, Dong Tam Nutrition Food Joint Stock Company (Nutifood), was established on March 29th, 2000 and has operations and growth from 2000 to 2007 In 2007, the CEO was replaced Nutifood cooperated with Kinh Do Corporation (Vietnam’s largest confectionary company), extended investment in finance and real estate but investment failure Nutifood lost nearly 150 billion The new CEO resigned Former CEO was invited back to the company to conduct and reorganization He focused on company’s core business area - nutrition products and specialized products for the elderly, people with diabetes, obesity or anorexia in children The result is revenue and profit grew again, Nutifood trademarks got better identified

http://www.baomoi.com/Hoa-hong-va-gai-sau-nhung-cai-bat-tay-de-doi-cua-Nutifood/45/14150193.epi

4 Innovation, good organizational management and sustainability in entrepreneurship

4.1 Innovation

Innovation is the specific tool of entrepreneurs, the means by which they exploit change as

an opportunity for a different business or a different service It is capable of being presented as a discipline, capable of being learned, capable of being practiced Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation And they need to know and to apply the principles of successful innovation

An innovation is the way of doing something differently and better All goods (products or services) are regarded as being made up of three factors: nature raw material, physical and mental labor, and capital An innovation is a new combination of those three factors Entrepreneurs are the people who create these new combination and then present to the market

The name Hewlett-Packard (HP) has been popular with high-tech innovation From its early days in 1939 right up to the present, HP's growth has been fueled by one technological breakthrough after another But what really sets HP apart isn't technology, but the visionary management style created by HP founders William Hewlett and David Packard Their policy of showing sensitivity to their employees' needs and giving their workers the chance to be creative

in solving technical and business problems has made HP one of the most successful and admired companies in the history of American industry

The interested in starting an entrepreneurial venture-either within an established company

or as independent small business-should monitor seven sources of innovative opportunity: The Unexpected; Incongruity; Innovation Based on Process Need; Changes in Industry or Market Structure; Demographics; Changes in Perception, Mood, and Meaning; and New Knowledge The first four exist within the industry itself, and the last three in the social environment

Innovation is the development process It is the translation of an idea in to an application

It requires persistence in analytically working out the details of product design or service, to develop marketing, obtain finances, and plan operations If the entrepreneur is going to manufacture a product, the process includes obtaining materials and technical manufacturing capabilities, staffing operations, and establishing an organization

4.2 Organizational management

Managing a company requires knowledge, dedication, organizational skills and ingenuity

To effectively manage a company, get informed about hiring and managing employees, budgeting, marketing, and tax and employment laws Here are a few strategies for the successful organizational management

4.2.1 Outline the vision for the company

Think about the ultimate goal of your product or service The overall vision for the company may be to address a need, provide a service or create something new Generating revenue is a given goal for companies, so the vision statement should be broader than a statement about profits

Apple said on their website: “We strive to create products that are the best they can be in every day Products are beautiful, easy to use, and powerful And the same passion for innovation goes in to how we think about environmental responsibility It’s why we work tirelessly to reduce our impact on climate change, find ways to use greener materials, and conserve the resources we all need to thrive And while we’re proud of the progress we’ve made,

we know we can still do better It won’t all happen overnight But we can work to get better every day.”

4.2.2 Analyze the company budget

Assess your financial status The development of new products and services requires staff and resources Determine how much money you can devote to these expenses Factor in overhead costs for rent, utilities, marketing and other business-related expenses Create a contingency fund to set aside in the event of emergency needs Hire a finance person, if necessary, to handle these tasks

4.2.3 Make decisions about marketing efforts

Marketing activities in larger companies are generally handled by a department or a team

of people In a small business, you may be responsible for overseeing marketing efforts Determine how you will market your products or services Delegate marketing tasks to employees and monitor their progress

4.2.4 Hire and manage employees

Choose from a variety of methods for hiring new employees, specific about your hiring needs and requirements, interview prospective employees Study the requirements in your jurisdiction and industry for laws Decide on your management style Empower employees by

explaining tasks and allowing them to manage their duties, checking in with you for clarification

as needed Address employee needs and conflicts Create an environment of open communication for employees to approach you regarding professional conflicts Address conflicts by listening, asking questions, showing objectivity and taking a solution-oriented approach to resolving problems

4.2.5 Assess company progress

Decide on a regular time frame for evaluating your company's progress towards its goals You might engage in this assessment on a weekly, monthly or quarterly basis Take this time to evaluate your marketing efforts, product sales, financial health, employee issues and all other business-related matters

4.3 Strategy of Sustainability

One definition of sustainability is that it is a business approach that creates long-term shareholder value by embracing opportunities and managing risks derived from economic, environmental, and social developments

Sustainability from an organizational perspective also includes an increase in productivity

or reduction of consumed resources without compromising product or service quality, competitiveness or profitability

In order to have the ability to think about building a sustainable business we need to start changing our attitude about how we handle and protect environmental resources, so there is something to build on 25 years from now We need to meet the needs of the present without compromising the ability of future generations to meet their own needs

There are some key components to create a financially sustainable and environmentally sound organization.There needs to be a strategic commitment and clear vision communicated by senior leadership of the organization Employees need to understand and believe in the vision in order to develop the attitudes and behaviors necessary to implement the new strategy, and all of the organization's processes that move horizontally through the organization need to be aligned with the outcomes of the overall strategy

5 Entrepreneurial risk management

5.1 Types of risks

http://www.nagpurentrepreneurs.com/blog/different-types-of-risks-in-business

Starting a business is risky, but it’s worth taking such a risk As an entrepreneur or a founder, you must know these different types of risk that Chris Dixon has explained so well Financing risk: You cannot raise money at various stages because you have not hit accretive milestones or your space is not appealing to investors

Product risk: You cannot translate your concept into a working and compelling product Technology risk: You cannot build a good enough or, if necessary, breakthrough technology

Business development risk: You cannot get deals with other companies that you depend

on to build or distribute your product

Market risk: Customers or users will not want your product

Timing risk: You are too early or too late to the market

Margin risk: You build something people want but that you cannot defend, and therefore competitors will squeeze your margins

At the early stage, the main way to mitigate these risks is to recruit great people as co-founders or early employees You should not recruit people that will give you a high likelihood

of reducing these risks You should recruit people that give you an unfair advantage You should try to win the game before it starts Startups are hard, and risky But if you lump all the risks together, you are playing the lottery Talented entrepreneurs identify specific risks and do everything they can to overcome them

Sweden’s Comvik, South Korea’s SK Telecom and most recently Russia’s VimpelCom all abandoned Vietnam’s telco market In Vietnam, despite operating over four years as a joint venture model, Beeline had yet to be given suitable waveband for providing 3G services To achieve the best coverage for voice services, Beeline would need at least 20,000 base transceiver stations (BTSs) since it was only given 1,800MHz waveband, meanwhile other local operators having the right to use 800- 900MHz waveband and only needed half of the BTS which entailed a far lower investment ratio for each BTS against higher coverage efficiency GTel’s general director Nguyen Van Du pointed out four reasons behind the Russian partner’s disengagement First, Vietnam’s current policy did not allow foreign partners to hold a ruling share in a telco joint venture company The Russian partner had poured a half of billion dollars into GTel Mobile, but it lacked the management position to drive through its strategy Second, the financial downturn swept Europe in 2011, triggering a nosedive in the foreign partner’s parent company

share value VimpelCom then faced difficulties in raising capital.Third, the parent company strategy was to focus on markets with high revenues and profitability, while Vietnam’s telecom market was structured around cut-throat price competition.Fourth, GTel Mobile was given limited frequency resources putting it at a disadvantage when competing with other rivals

5.2 Mitigate the risks

Entrepreneurs face typical business risks but can reduce these risks and their personal liability through focusing on specific risk-reduction measures Businesses of all sizes face risks regarding development of products, manufacturing them, selling them, earning a profit on these operations and managing growth If the entrepreneur is a sole proprietor, he faces additional personal liability risks and financial risks from guaranteeing business loans Risk management techniques include risk reduction, risk transfer and risk avoidance An entrepreneur can apply these techniques to the business and personal risk he faces

5.2.1 Suitable changing

Select a business structure that limits personal liability Change your business structure from a sole proprietorship in which you are personally liable for business operations to a corporation or limited liability company where you have limited liability

5.2.2 Purchase insurance

Transfer risk to insurance companies by insuring against major risks such as damage to your facilities, product liability, injuries to customers or suppliers and death or incapacity of company principals

5.2.3 Analyze risk

Perform a risk analysis by evaluating the consequences of risky activities, the likelihood

of the consequences occurring and the benefits of the risky activities Avoid risk by not carrying out activities that have severe and likely consequences and low benefits

5.2.4 Organize assurance program

Reduce risk from product failure and warranty claims by implementing a quality assurance program Develop a system of reporting from customer service to identify problems Structure the quality assurance program to document production tasks and product testing Link the problems reported by customer service to specific failures in production or testing procedures and institute corrective action

5.2.5 Reduce financial risk

Reduce financial risk by managing your accounts receivable to minimize outstanding balances and identify poor credit risks Implement credit and payment standards, specifying which credit scores and payment records are acceptable Evaluate customer payments and ask for advance payment from customers who don't meet the standards Keep outstanding loans and financing needs to a minimum Control growth at a rate that the company can finance internally

If the company can't pay off some loans, replace short-term credit with long-term, fixed-rate loans

In April 2012, GTel Mobile, a joint venture between Global Telecommunication Corporation (GTel) and Russia’s leading mobile phone operator VimpelCom, saw GTel buy out the Russian partner’s 49 per cent stake for $45 million GTel Mobile relaunchedGmobile to replace Beeline brand five months later in September 2012 The Beeline brand which was valued

at around $9 billion globally in 2009 officially abandoned the Vietnamese market.VimpelCom chief executive officer Jo Lunder was quoted as saying the disengagement from the Vietnamese market was part of the group’s strategy to focus on added-value services.“We decided on scaling down operations in some regions and territories to focus on key markets,” said VimpelCom’s vice president Pavel Borodin

6 Conclusion

Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence This definition stresses four basic aspects of being an entrepreneur regardless of the field First, entrepreneurship involves the creation process - creating something new of value The creation has to have value to the entrepreneur and value to the audience for which it is developed Second, entrepreneurship requires the devotion of the necessary time and effort Only those going through the entrepreneurial process appreciate the significant amount of time and effort it takes to create something new and make it operational Assuming the necessary risks is the third aspect of entrepreneurship These risks take a variety of forms, depending on the field of effort of the entrepreneur, but usually center around financial, psychological, and social areas The final part of the definition involves the rewards of being an entrepreneur The most important of these

rewards is independence, followed by personal satisfaction For profit entrepreneurs, money becomes the indicator of the degree of success

Entrepreneurs today are differently from those in the past There were entrepreneurs in the past too, but the number has multiplied over the years mainly due to the surge in venture capitalists and angel investors, which makes financing easier for people who wish to start their own business.Nowadays entrepreneurs heavily depend on the banking system than before Banking deregulation and the numerous innovative services offered to promote new businesses are other reasons that encourage entrepreneurship

Today anyone who can bear risks and face challenges can become successful entrepreneurs Business owners are more focused on customer satisfaction than profits They have realized that customer loyalty is essential for long term profits and sustainability They believe that their existence is dependent on the value of their products and therefore try to enhance value as compared to maximizing sales

Various new techniques like data mining that require high end software applications and other cutting edge technology, are used to identify and retain customers Globalization is also advocated and practiced on a large scale by recent entrepreneurs They also feel that they have to give back to the society and do so in a number of ways ranging from producing and marketing greener products to becoming social entrepreneurs or making active participation in community programs and social service programs

Irrespective of how entrepreneurs have changed and evolved over the years, one thing remains the same The desire to make a change is what drives most entrepreneurs, those who chose to take this path out of sheer interest to pursue their own dreams than execute others' plans The rise in the number of such creative minds has boosted the world's economy and speeded the growth of developing countries