Entrepreneurship in the Global Environment - Essay Example

Entrepreneurship in the Global Environment the Entrepreneur I Most Admire. Introduction An entrepreneur is an individual who takes an initiative to start an enterprise and eventually progresses towards its growth. The individual posses certain entrepreneurial qualities such as innovative thinking, risk taking abilities and learn from their mistakes. These factors ensure the success of his venture and lead to sustainability of his business operations (Stokes, Wilson and Mador, 2010). This paper is based on the topic of entrepreneurship in global environment with focus on the entrepreneurship of John Mackey, the co-founder of Whole foods. This paper also encompasses the entrepreneurial strategies utilized by him and how they can be justified by the theoretical approach. It also covers a critical evaluation of the learning module outcomes. Profile Brief This section is based on the brief overview of the profile of John Mackey and his business activities. John Mackey is the co-founder of Whole Foods Markets, which is an organic grocery retail chain based in Austin, Texas. The company holds a valuation of $14 billion and holds its position among the Fortune 500 companies. In 1978, John Mackey founded a health food store called SaferWay. After two years, it merged with Clarksville Natural Grocery to form the parent company Whole Foods market. Mackey started his business with only 19 employees and it has grown significantly since then. Currently, the company operates with 410 stores in the UK, US and Canada, with 88,000 employees (WholeFoods, 2015a). John Mackey and his business brings my attention to his entrepreneurial qualities because he has been able to increase his business operations from a single store to a large retail chain of stores that operates in overseas location as well. One can certainly learn for his strategies and know what it needs to be an entrepreneur. Apart from focusing on business activities, Mackey also engages in socially responsible activities. He is also the co-founder of the Conscious Capitalism Movement, which discusses about ethical consciousness and how a business operation should be grounded on this concept (WholeFoods, 2015c). These characteristics have made John Mackey the person of interest for the entrepreneurial studies. Choice of Entrepreneur This section will justify that John Mackey can be categorised as an entrepreneur, by discussing his activities based on theoretical background. The theoretical background of entrepreneurship stated that an entrepreneur must have certain character which allows him to thrive towards his objectives of making his business grow. It has been mentioned that an entrepreneur must be creative and should be able to take risks. However, being an entrepreneur is not that simple, he needs to fulfil a series of actions in order to ensure a success in business venture. Drucker (2014) have mentioned that the individual must do what he enjoys doing. This is particularly important from the motivational point of view. It allows him to yield a personal satisfaction from his venture. The success of the venture is mostly dependent on the level of dedication that the individual has put to achieve his objectives. It has been stated that if one is not passionate about what he is doing then he is most likely to fail in his venture. Thus for an entrepreneur, it is important to make the right decision regarding his choice of venture. John Mackey continued with his venture of healthy grocery business, which he was most passionate about. This allowed him to use his expertise in proposed line of business. It also motivated him to face all the odd situations that challenged his business. Kuratko (2013) have also mentioned that in order to succeed in ones business venture, he must be able to take his business seriously and keep pushing towards his objective despite of all the hassles and distractions. It has been evident that several new start ups have failed to grow mostly because they got easily sidetracked and became a victim of others’ scepticism. An entrepreneur must be able to keep his focus on what he believes. In several cases, they are distracted by the pessimism and scepticism of their peers. They must believe that their business operation will only be successful if they are positive about its success. Almost all the big firms that rule the industry have started to from a garage or a small store. This theory fits perfectly for John Mackey. John and his girlfriend Renee started their business in a small store by borrowing $45,000 from family and friends. They faced several challenges as they were asked to move from their apartment for storing food products as a result they decided to live in the store. These challenges would otherwise de-motivate any individual, but John and his partner believed that they would eventually succeed in the near future (WholeFoods, 2015b). Stokes, Wilson and Mador (2010) further mentioned that every entrepreneur must develop a risk taking ability. Taking risks is a major part of the venture of an entrepreneur. Almost every entrepreneur has taken certain risky decisions which could have brought the business down. However, risk taking is also essential for the growth of the business. With every probability of failure, there comes a bigger chance of success. Thus, taking risks is vital for ensuring growth of the company. John has also taken several risky decisions which eventually pushed the business to its success. The entire business was standing on a huge loan amount of $45,000, which they had to pay back. The company has also faced certain unforeseen incidents such as the 1981 flood had severely damaged the food stocks and the store itself. Despite of the setback, the entrepreneur still managed to get the back in its previous form within 28 days (WholeFoods, 2015b). According to (Drucker, 2014), every entrepreneurial business venture goes through a series of stages of development throughout its life. These stages can be defined as introduction, Growth, Maturity and Decline. This is a typical form of lifecycle of a business venture, however, every entrepreneur tries to seek out new ways to stay as long as possible in the growth stage and make the life of the business venture longer. During the introduction phase, the venture is usually small with limited cash flow. At this stage, the company tries to cope up with the initial market entry strategies and tries to reach the breakeven point. This stage is followed by the growth stage, where the company employs several marketing strategies to improve its business activities, thereby increasing its product portfolio, customer base and revenue generation. The next stage is the maturity stage where growth curve eventually slows down to a flat line. In this stage, the business venture has reached the peak of its potential and cannot expect any further growth with its current marketing mix and strategies. Most of the firms try to seek out for new ways to change its existing product or services strategies to get back to the growth stage. The next and the final stage is the decline stage which marks the financial downfall of the company characterizing the end of the lifecycle of the firm. Every successful entrepreneur has been able to extend its growth stage by adapting to the changing market environment (Stokes, Wilson and Mador, 2010). John is no exception to this trend. He has managed to keep the company growing by constantly employing new marketing strategies, thereby expanding its business. Just after four years of the inception of the business, it has expanded its business outside of Austin into Houston, Dallas and New Orleans. From the above discussion, it can be clearly stated that John posses all the characteristics of a successful entrepreneur and he has proved this through his successful venture of The Whole Foods (WholeFoods, 2015a). Evaluation of Entrepreneurial Strategy This section will discuss the entrepreneurial strategies taken by John Mackey to develop his business over the years. John realized that the key to sustainability is to keep the business growing. In order to achieve that, he decided to implement several merger and acquisition strategies. The expansion started by a series of geographic diversification into locations like Dallas, New Orleans, Palo Alto, California. While the company was increasing its number of stores all across the nation, it also simultaneously underwent acquisition of several smaller natural foods retail chains (WholeFoods, 2015b). These strategies allowed the company to not only increase its customer base and increase its revenue generation but it also allowed it to increase its brand preference. The Whole Foods Market started to develop new subsidiary companies under its parent name. The Whole Food Company is the grocery subsidiary opened by the parent company. The company has decided to expand into several cities of the USA. The company has also opened a whole division called Texas Health Distributors. In 1991, the parent company made business collaboration with Wellspring Grocery. Wellspring Grocery is a grocery store which offers high quality food products which were particularly “vegetarian” in nature. Eventually, the company also started to stock non-vegetarian food items. Acquiring this company allowed the Whole Foods to enter into the North Carolina market (WholeFoods, 2015b). Whole Foods then decided to expand its business in the north east segment of the nation. This was achieved by the acquisition of the largest natural food company in the region called Bread and Circus. This expansion strategy also allowed the company to expand its product portfolio, as Bread and Circus offered grocery products as well as bakery products and toys. The strong brand preference of Bread and Circus allowed the parent company to win over a large customer base (WholeFoods, 2015b). In 1993, Whole Foods acquired Mrs. Gooch’s. By this acquisition, the company managed to enter into the organic and high standard of natural food products. This is mostly because Mrs. Gooch’s is best known for its high standard food products. It sells food items without any artificial colours or flavours, white flours, alcohol or refined sugar. These food items are targeted at highly health conscious customers who are greatly concerned regarding what they are consuming. This as a result allowed the company to enter into specialty organic health food segment and at the same time it also allowed the company to cater to a new customer segment. Whole Foods then entered into the Chicago market by taking over Fresh Fields. This company is best known for its large number of stores and high annual sales. This business collaboration allows the parent company to further increase its revenue generations. Whole Foods continued to expand its business operations by acquiring several other grocery and healthy foods companies like Amrion, Merchant of Vino, Allegro Coffee and many more. The company eventually expanded its business to several overseas location in the UK and Canada (WholeFoods, 2015b). From the point of view of the strategic decisions that leads to success for an entrepreneur, it can be stated that different firms employ different strategies to ensure its growth and sustainability. The strategic decision is somehow dependent on the industry the firm is operating in. Therefore, it appears to me that the entrepreneurial strategies employed by John Mackey are specific to that of the grocery and health foods industry (Stokes, Wilson and Mador, 2010). The products offered by Whole Foods are quite standardized and all the rival companies also offer identical products. Since there is very less room for product differentiation, thus, John figured out an alternate way to increase its competitive advantage in the industry. The grocery industry is characterized by high saturation and high level of competition and it has been quite clear that the competition cannot be faced by creating a product differentiation due to highly standardized products. However, John figured out that if the competition cannot be faced, may be they can be nullified by taking over them (WholeFoods, 2015a). The long portfolio of mergers and acquisition allowed the company to reduce the competitiveness from the local player and at the same time it also gave the company the financial prowess to keep up with the global retail giants like Tesco or Walmart. Apart from the expansion strategies, the company has also decided to implement certain marketing strategies which helped it to attract new customers and maintain its sustainable cash flow. Whole Foods have successfully leveraged the growing popularity of social media and used it in its favour. The strategy is based on the utility of social media is particularly centred around its website and other third party social media sites such as Twitter, Facebook, Flickr, Pinterest and Foursquare. The Twitter is mostly used by the company as a customer service platform where individual queries or requests are answered. The company holds several accounts to address these issues and try to improve customer relationships. The company has successfully leveraged Facebook to promote their brand and advertise their product information, health issues and how the company is solving them along with educating the customer regarding healthy foods. This has allowed the company to increase the brand preference among the customers by improving the customer relationships (Schoultz, 2012). The entrepreneurial actions evaluated above clearly suggest that John Mackey have adopted the strategies successfully to ensure that his business venture bears a positive growth curve and it is sustainable against the fiercely growing competition. Critical Evaluation This section is based on the earning outcomes of the module and how it has been achieved. The learning outcome from this module can be broken down based on different entrepreneurial characters which are required for an individual to successfully run his venture. Drucker (2014) have mentioned that in order to be a successful entrepreneur, the individual needs to have an innovative nature. Innovation is usually defined by developing a completely new product or services or a new marketing strategy. Innovation allows the company to add higher value for the customers. Moreover, it also allows the company to gain a first mover advantage over its rivals. This statement can be justified by the fact that in the increasingly competitive global business environment, it is imperative for any new entrant to develop innovative product and market strategies to gain the highest possible market share. The demand of the customers is also constantly changing. They are always looking forward for new value propositions, thus, the company with the most attractive value proposition gains the highest consumer preference. In this regard, it can be stated that in order to be a successful entrepreneur, one must have creative mind and a drive to try out something new that no one has tried before. (Stokes, Wilson and Mador, 2010) also mentioned that an entrepreneur must learn to face failure and learn from them to further develop its business ventures. In most cases, the shutting down of a new firm is mostly because the entrepreneur has decided to give up on initial setbacks. However, every successful entrepreneur would agree that success lies beyond failure. Bringing the example of Steve jobs, I can state that he faced severe setbacks in the early years of his business venture and he was even booted out of his own company. Even after such a downturn, he failed to give up and pulled Apple Inc. to great heights (Stokes, Wilson and Mador, 2010). This suggests that every entrepreneur must learn to overcome failure to achieve what he desires for his business venture. Kuratko (2013) stated that trying out something new always comes with some degree of failure. The market environment is dynamic in nature and the demand and preferences of the customers are always changing. Thus, there are no definite algorithms that can tell us which product will work or which marketing strategy will fetch more customers. Even after a thorough market research, there always remains a considerable degree of risk of rejection for the entrepreneur while implementing something innovative. Drucker (2014) further added that taking risk is the key to success for entrepreneurs. Without taking risks, one cannot implement new strategies and cannot ascertain whether it will work or not. Every successful entrepreneur have taken significant risks and introduced new products or strategies in the market, some of them have succeeded while others have failed. Even the major failures did not stop them to take innovative steps in the near future. Thus, it can be mentioned that the risk taking is essential for entrepreneurial success. Kuratko, (2013) have also added that risk taking should be calculative in nature. One must not take risks without calculating the possible outcomes. This will allow the individual to assess the possible risk of loss and its influence on the stakeholders. It appears to me that taking risk blindfoldedly is not really advisable in the current business market scenario. Most of the new entrepreneurial businesses are funded by the banks and the venture capitalists. If the business makes considerable loss and shuts down, then the individual will be under a mountain of debts. Thus, it may be favourable to take calculated risks where the loss making is also taken into consideration while implementing a new strategy in the market. Conclusion The concept of entrepreneurship in the global environment dictates that, in order for an individual to be successful in his new business venture, he must have certain entrepreneurial qualities and must employ innovative strategies to push his business among the highly competitive business environment. The global business environment is getting increasingly competitive and is most likely to get more intense in the near future, thereby, making it more difficult for the entrepreneurs to sustain their business for long. This as a result makes it imperative for them to constantly think of innovative strategies to expand the business constantly. This can be achieved through several strategic actions such as mergers and acquisitions, geographic diversification, innovative products development, etc. The business venture of John Mackey poses a great example of entrepreneurial strategies. It clearly indicates that John has all the required skills and abilities to prove himself as a successful entrepreneur and he has ensured that the company has grown over the years and is likely to sustain in the long term period in the future. The entrepreneurial strategies employed by John were mostly on the grounds of expansion through mergers and acquisition. This allowed the company to increase its customer base and increase its product portfolio, which as a result have increased the revenue generation of the company thereby increasing the competitive advantage of the firm. Reference List Stokes, D., Wilson, N. and Mador, M., 2010. Entrepreneurship. Hampshire: Cengage Learning. Drucker, P., 2014. Innovation and entrepreneurship. London: Routledge. Kuratko, D., 2013. Entrepreneurship: Theory, process, and practice. Hampshire: Cengage Learning. WholeFoods, 2015a. Company Info. [Online] Available at: [Accessed on 8 April 2015] WholeFoods, 2015b. History and Timeline. [Online] Available at: [Accessed on 8 April 2015] WholeFoods, 2015c. John Mackey. [Online] Available at: [Accessed on 8 April 2015] Schoultz, M., 2012. Whole Foods Marketing Uses Social Media to Advantage. [Online] Available at: [Accessed on 8 April 2015] Read More