Marketing and Entrepreneurship - Essay Example

? Marketing and Entrepreneurship al affiliation: Marketing and Entrepreneurship The growth and development in entrepreneurship is determined by a number of factors. The factors are categorized under economic, social, psychological and political conditions. These conditions may have different implications on entrepreneurship both negatively and positively. The positive factors provide a conducive and facilitative environment for entrepreneurship. The negative factors threaten the growth of entrepreneurship according to Ernst (2010, 139). Economic Factors Marketing management This is an important factor that constitutes to business success. An existence of an enterprise implies that there must be market for its products. Despite the competition from other producers an entrepreneur ensures efficient marketing skills to make profits. Effectiveness in product marketing is an important factor hat has to be put in consideration in any business enterprise. To enhance business success in marketing management, small scale business link up with both large and medium business enterprise. This linkage facilitates their supply of products hence it becomes easier to market the products. Production management For every enterprise to succeed, their must be a proper management in the production sector. The enterprise should have a well established source of raw materials. The cost of raw materials together with the cost of production should not exceed the cost of sales. A successful enterprise is one that always reaps profit from its sales. The department of production in any business must connect with the marketing department so as to ensure every item that is produced has direct or indirect market. Financial management Financial gain is always the driving force in any entrepreneurial investment. Therefore management of finances is a very important factor in any business enterprise. The success of the enterprise is dependent on the profits made by the particular enterprise. This means that the main objective is to balance all factors with the aim of attaining this objective. Financial management is also a sensitive part of every enterprise as it ensures the right operation of other departments of the enterprise. For instance it provides auditing services to the enterprise which helps it determine its success. Therefore it can be argued that it is the financial capability of every entrepreneurial activity that measures its strength against the other as suggested by Ernst (2005, 165) Personnel management The department of the personnel is another factor that determines the success of any business enterprise whether small or large. Personnel management coordinates all activities related to workers in an organization. Its contribution to the business success is through how it handles the welfare of the employees. Offering the best to the employee in terms of salary, enough time limit of work and other incentives increases their motivation to work. The more motivated the employees are the more they increase production hence large sales. The increasing in sales indicates increase in profits and the business enterprise is said to be successful. Another factor relating to entrepreneurial success is the personnel skills and knowledge. Employees who have the necessary skill are capable of leading the business to success. Political Factors Any business entrepreneurship occurs within a particular framework or political governance. Some of the political factors that affect business enterprise include: Political environment The political environment surrounding a business enterprise determines its operation and success. The current economic structure of the country may adversely affect the success of the business. For instance incase of an inflation the entrepreneurship is not likely to succeed. Favorable government incentives like loans to starting entrepreneurs, motivates them and they are likely to succeed. The economic strategies passed by the government such specialization on the area of production also lead to business success as it reduces completion. Government stability The stability of the government dictates the progress of the business enterprise in different ways. For instance incidences of civil wars affect the success of the business in that entrepreneurs operate in fear because of incidences of theft. The economic stability of the government is another factor in determining the success of the business. The economically developed countries have been able to support the entrepreneurial activities thus achieving a global success. Government laws and policies The applicability of government policies in business enterprises determines the function as well as their success. The government policies in terms of operation of the business enterprise may affect its success either negatively or positively. The Social and Psychological Factors Age Age has been a vital condition associated with the success of an enterprise. The entrepreneur’s age at the start of the enterprise dictates a lot towards the success of the enterprise. Research on the factor indicates that the largest percentage of successful entrepreneurs started the enterprise at the age range of 25 to 30years and less than 25.The argument is that at this age one is a lot of energy and potential. Individuals at this age are said to be adventurous hence risk taking. They are curious in achieving success in life and they are capable of investing their time in business. This age group is also vital for starting an enterprise as one has fewer responsibilities. Migration Migration is another social factor that constitutes the success of entrepreneurship. An entrepreneurship can migrate to a place which favors the type of business he/she wants establish. Entrepreneurs migrate for different reasons. For instance establish a new business, better opportunities and family influence. Migration of entrepreneurs can be both interstate and intrastate. Previous job experience Previous job experience is said to be one of the significant conditions for entrepreneurial success. Individuals who move from other employment opportunities to entrepreneurship tend to be more innovative. They are aware of risks that can interfere with an enterprise and thus they stand a better position for good management. The major goal of starting an individual enterprise is to get self employed and live an independent life. One of the most important factors in enterprise success is the managerial ant experiential abilities. Being familiar with business activities such as management ensures business success. Education Different researches have shown that most of the successful entrepreneurs are highly educated. Those with high-level of education, end up being successful in business enterprises. For instance university graduates have most of the prominent and successful enterprises n most countries. This is because university education equips them important knowledge and the prevailing managerial skills in the market. The two factors give them the ability to be conscious of business facts and avoid failure. Adaptive and creative innovative behavior These two behavioral mechanisms are deemed to be effective in determining success of an enterprise. Systematic or habitual innovation is important for an entrepreneur aimed at achieving success. Creativity precedes innovation since creativity is coming up with an idea while innovation is putting the idea into action. Personality traits Experts in the filed of entrepreneurship have argued that personality traits play a vital role for an entrepreneurial success. These traits include: Self control: a successful entrepreneur is able to control his/her emotions and coordinates activities well. Self confident: for a business enterprise to succeed, the entrepreneur should trust his/her abilities. This demands one to be a positive thinker in all business perspectives. Hard-working: it goes that hard work is the key to success. Therefore working hard is part and parcel of entrepreneurship succeed. The entrepreneur needs to be committed in the business. Autonomous: behind business success is diversity whereby an entrepreneur needs to think broadly and keep the business growing. Flexibility in friendship: socialization is road to business success. This because the more an entrepreneur meets with new people the more he/she gains new ideas in as far as business is concerned. Risk taking: this is a very important factor that has to be put in place in any business plan. Engaging in any business activities starts with risk taking as one never knows the future. The business growth also involves taking risks since entrepreneur is not always aware of what exists behold his/her limits. Sarasvathy's work on effectuation In as far as personal traits on entrepreneurial success are concerned; Sarasvathy argues that effectuation supposes over-trust. However he claims that trust may not be of importance to an effectual entrepreneur. In his contribution to personal traits Sarasvathy comes up with three issues relevant in different ways to connection between over-trust and effectual logic. First, in the assumption concerning effectual process, he concludes that in effectual reasoning there is no need for over-trust. A successful entrepreneur has real manager personality because a real manager achieves success when he/she starts and leads a new business on their own. The second issue is about the irrelevance of psychological characteristics of entrepreneurs when observed from an effectual lens. Finally he comes up with a number of behavioral assumptions needed in entrepreneurial research when developing a theory. Some of the limitations of the assumptions raised by Saravathy in his view of effectual reasoning may include the following. First, Sarasvathy argues that it is not relevant to develop entrepreneurial theories by basing them on psychological traits of entrepreneurship. However his critics argue that it is vital to study the entrepreneur’s psychological traits that contribute to their decisions. This is due to the fact that personal psychological traits keep on changing. According to Sarasvathy (2008, 8), trust is not necessary to the entrepreneurs and what they need is effectual logic. This is criticized on the fact that all human actions need trust. Secondly, Sarasvathy’s argument against trust in effectual entrepreneurship is said to be based on certain assumption. He assumes that trust is exclusive of predictions. He also assumes that effectual reasoning demands that the different parties involved apply strategies which are non predictive. Finally he claims that effectuates engage in intelligent altruism. In examining the limitations to the above assumptions, decision to maintain trust or over trust is not predictive issue. Sarasvathy claims that since effectual reasoning is not naturally predictive trust is not in necessary to it. However he claims that decision to trust is predictable. Sarasvathy, also objects the agreement on “placing a bet” against opportunities as claimed by Goel and Karri. The argument is that effectuates put their bets that are over trust but the bets have recognizable issues that do not go behold the available loss criterion. Finally, the decision to trust by effectuates is not necessarily tied to a constant effect they try to predict. Instead trust or over trust is capable of forming resources that could not be formed under usual circumstances. In the view of Sarasvathy, “placing bets” can be viewed as entrepreneurial effort to provide options on effectual decision making. In conclusion most of the time entrepreneurs trust or over trust consciously, making a risk of trusting what is irrelevant. Burn’s model of start-up influences According to Burn’s model, at the start-up stage, the business struggles to survive. Then it goes to incubation where the business is in the process of developing until it starts making profits. Once the business starts making profits it begins to grow and soon it matures. According to this model, it finally comes to decline and then fail. Burn’s model on entrepreneurship is based on the assumption that: The entrepreneur always aims at a continuous growth. Business keeps on growing until they reach at the stage of maturity. At a certain stage the business inevitably declines Finally, there is no way a business can jump a particular stage or go back to the previous stage. The business is not also capable of experiencing characteristics of more than one stage at same period of time. However this model fails to acknowledge the issue of motivation of entrepreneur or the business manager as suggested by Butler (2006, 255). Apart from government policies there are factors like providing business support agencies, encourage the survival of small firms. The success of the enterprise is always depended on the owners desire to achieve success. To completely appreciate the success of the business, the entrepreneurs and motivators should be put into consideration. When that is done, the outcome model is a standing decision rather than a linear process. In conclusion creating new venture will be successful on following conditions: If the enterprise is capable of supporting a new venture, in that it as a strong position of intellectual property. It should also possess a variety of products in several markets. Availability of staff time when preparing to create new venture. There should a proper management of conflicts based on interest. The ability to create a good business opportunity by identifying a strong a knowledgeable management. Identifying the most efficient and the most effective entrance to the market for a particular product. It can liaise with a particular enterprise or create a new venture. Considering the effect of the venture to the local economy development. For instance its effect to employment, access and use of local business as well as taxes. The availability of technological opportunities that can be associated with the business venture. The increasing development has drawn a lot of attention to entrepreneurship and networking activities as the main aspect in the competitive business environment. The current market has become used to change and change is viewed as normal in all business aspects. Today a company with few products in the market is just but risking its survival. There has been incorporation of new information and communication technology in business enterprise. This has widely enhanced networking between both small-scale and medium business enterprises globally. It has led to the loss of importance of regional based networking. When planning for a new venture, it is necessary for the potential entrepreneur to provide set of physical resource. These include the appropriate equipments and material with labor included. It is advisable for the entrepreneur to have an applicable maintenance policy. For instance, in maintenance one should plan on how and when to replace goods. A good strategy on making use of productive machinery should be devised when creating a venture. The entrepreneur should consider which resources are affordable at the beginning of the venture and which to be acquired later. Before making this decision it is advisable to consider how the resources contribute to the success of the venture. For a successful venture the expenses required in the future should be incorporated into the business plan. A capable entrepreneur also comes up with a stock evaluation strategy that links with the financial accounts. There can never be successful venture without a good stock management plan. Therefore it is advisable for a capable entrepreneur to come up with proper stock management strategy. For capable entrepreneur it is good to put into consideration problems likely to occur within the business. The mostly predictable problems should be calculated in terms of their costs to the business. A capable entrepreneur puts into consideration the market environment before engaging in any business venture. The business environment includes customers, competitors among other factors. Which type of customers does your enterprise target in relation to the product your enterprise offers? The capable entrepreneur considers locating the business where there is a favorable market for their product. The entrepreneur comes up with a good strategy for retaining customers. The secret behind retaining customers lies in knowing their expectations and perception. Knowing customers’ changes in perception and expectations allows the entrepreneur to know how to cope with the change. On the factor of business environment the entrepreneur also considers what already exits in the market. There is a need to determine the rate of competition on a particular product. The loyalty of the customers to the current venture is another consideration. This provides a better chance for knowing how to handle customers. Before creating new venture it is advisable to survey the customers’ reaction to new suppliers in the market. These allow the entrepreneur to calculate for start-up and incubation period of business. The capable entrepreneur should define the market where he/she operates. Some markets like the international market may appear to be uneasy to enter. The rate of consumption of the ventures products in that particular market is an important knowledge to the entrepreneur. For instance the culture of the targeted customers determines what to be produced and what not to produce. According to Block and MacMillan (2003, 23), the target market is also dictated by the capacity of production of the business enterprise. The entrepreneur considers the part of market they intent to control depending on their potential. On the same note it is advisable to consider the effect that your product is likely to cause in the market. This enables the capable entrepreneur to be in a position to handle reaction from the competitors. When creating a venture the entrepreneur, comes up with written policies which govern the business operation. There method of monitoring and evaluating these policies should also be devised. Another important factor is the method of expanding the market of one’s business products. The entrepreneur decides on the right medium of advertisement and promotion that fits to their business. Before deciding on the medium it is good to consider the medium used by your competitors. The consideration of current economic growth is necessary to determine how your business is likely to affect it. The economic cycle keeps on changing to periods of recession and vice versa. The entrepreneur considers the economic influences likely to overcome their plan of business expansion according to Fayolle (2010, 220) A capable entrepreneur will focus on social trends and other demographic factors. These may include age population, ethnic influence, feminism and single parenthood. For instance, the aging of the population affects the pension system of those enterprises with pension schemes. The other factors such as feminism, family set up and ethnicity are likely to market of the products. Technological advancement is another factor that a capable entrepreneur considers. This is because it is always on the change thus engaging in a new technology is considered as taking risk. Analysis of an Entrepreneur (Donald Trump) Donald Trump is an Entrepreneur that that is known internationally for his net worth. Globally, Trump features among the top ten richest people in the world. The New York based business man focuses on real estate but also ventures in other businesses. Trump owns some of the finest buildings in the city of which is the Trump Tower. Trump was mentored by his father who was a successful real estate business person. In his younger days, The Younger Trump learnt how to make business sense of his endeavors. Trump’s determination in business has made him own a number of exclusive properties in New York. Some of his best known properties include the Trump Marina Hotel and Casino, Trump Casino, Trump Taj Mahal Casino Resort, and the Trump International Hotel. Trump is a self confident man going by the steps he takes when engaging in business. He does not restrict himself to one line of business and is always looking for opportunities to expand. He likes to take reasonable risks and calculates how to make his way to success. He is also very hardworking and will sacrifice what he can to ensure that he succeeds. He always seeks knowledge in books and he himself writes books that give insight into the nature of business and how best to succeed in entrepreneurship. Conclusion (Personal Evaluation) From the GET and other tests, I have realized that I have a high chance of succeeding as an entrepreneur. This is because I am self confident and always therefore believe in myself and the decisions that I make. I am also persistent and determined, qualities that are very necessary especially if the business has to withstand turbulent times and during start-up. In pursuing my goals, I am always more optimistic than pessimistic. I always trust that whatever I do will always succeed some how in spite of the challenges that come my way. I am always looking for opportunities to accomplish my goals, my mind focused more on results and the tasks at hand. In general, I realize that I have a high need to be an achiever. My need for independence started long when I was in my teenage. I prefer to make my own decisions based on my evaluations. I have the tendency to like working my way round problems individually therefore having not to take orders from other people. Furthermore, I always tend to avoid being swept by peer pressures or agreeing to everything that people say when discussing or dealing with various subjects, trying to study how things work and how businesses operate. To me, life would be so boring if it lacked challenges. I have always been imaginative and like to study how people have made brilliant choices to come up with great innovations. My curiosity almost never ends as I try to come up with ideas on alternative methods to overcome problems. In as much as I like to take risks, I prefer to consider the costs of the risks that I take. Almost every so often, I come up with periodical plans that I constantly strive to achieve. Given that I believe less in luck, I realize that I need to put a lot of effort in whatever I do so as to succeed. In order to become a better entrepreneur, I need to do a lot in developing my self confidence. Sometimes I get rigid when it comes to solving problems. I need to learn to be flexible depending on the situation at hand. References Block, Z. & MacMillan, I.(2003). Corporate Venturing: Creating New Businesses Within the Firm. New York, NY: Beard Books. Butler, D (2006). Enterprise planning and development: small business start-up, survival and development. San Francisco, CA: Butterworth-Heinemann. . Ernst,H. (2005). Success factors of fast growing companies: selected case studies. Thousand Oaks, CA: Gabler Verlag. Fayolle, A. (2010) Handbook of Research in Entrepreneurship Education.UK: Edward Elgar Publishing Kumar, S. (2010). Entrepreneurial Success in Small and Medium Eterprises. New Delhi: Mittal Publications. Sarasvathy, S. (2008). Effectuation: elements of entrepreneurial expertise.UK: Edward Elgar Publishing Read More