Entrepreneurship, a concept believed varies from person to person, and it is hard to say which one is right. But I must say I believe this perspective: the introduction of new economic activity can make the market change (cf, Herbert Simon in Sarasvathy, 2000, pp. 2,11) from the deep of my heart. It means a good entrepreneurship needs not only good innovations, but also a right way to use them in the market. And I figure “Firm and market newness of economic activities” mentioned in <What is entrepreneurship?> written by Davidsson, P. (2004) impressed me a lot.
The true entrepreneurship, according to the writer, is making some kind of differences in marketplace. “New offer” is definitely an important part of entrepreneurship, and it does not need any further explanation. And what I want to say is the concept: geographical market expansion (Davidsson, P. 2004). Do something new to the market is the soul of true entrepreneurship, even the action is not an innovation in the industry. As we all know, Mark Zuckerberg, the genius founder of the most famous and successful social network Facebook, he not only establish his own network empire but also a totally new industry. Mark got a great idea, saw a wonderful opportunity, knew what he should do, took his time and got the job done. Obviously the work Mark did is an excellent model of entrepreneurship, but let us see what the other guys did just after Mark. One year after Mark’s Facebook, Wang Xing, a student from Tsinghua University, built his third website Xiaonei.com.
When Wang studied as an international in abroad, he found a lot of his classmates keep contact with each other using the Facebook. So after he finished his study, Wang returned to China and started his owner business with a few friends. They copied Mark’s social network, but made it a Chinese edition, added some element easy for Chinese people to use and accept.
Wang’s Xiaonei.com became so popular and even beyond his exception. It is easy for us to tell that, to the social network industry, Wang did nothing can be called “new”; but to the china domestic market, Wang is a “new offer”. On the base of geographical market expansion, innovation aims at certain geographical market is very important. As what I have mentioned above, the target customer of Xiaonei.com is university student. It offers a lot of specialized service, for example, a very complete and powerful university list of all over world. With the help of the list, the user can find old classmates efficiently. And, of course, true name and head portrait system. At the same time, another social network, kaixin001.com, was launched quietly. The founder, Cheng Binghao, worked as a white collar. He defined his mainly user as company man, and offered them a huge number of online games to help them kill time. So we can make a short conclusion here that the key to entrepreneurship is innovation, but the innovation should turn its direction to market.
The sentence Entrepreneur are not just opportunistic; they are also creative and innovation written by Haward H.Stevenson & David E.Gumpert(1985) in <The heart of entrepreneurship> inspired me a lot. This is a much higher level which compared with mere geographical market expansion. Let’s talk about Steve Jobs and his iPhone. Steve launched only one product but changed the whole mobile communication industry and even people’s life style. The famous sentence “We want to reinvent the phone” not only means the birth of a totally new product but also a new demand, a new opportunity.
Before iPhone, nobody realized that they have so many demands for a mobile phone. High quality camera; voicemail; internet surfing; navigation, millions of apps; a phone can be almost omnipotence. That can be called innovation and entrepreneurship. The writer also mentioned some very interesting differences between administrator & entrepreneur.
That makes me think of my money-making exercise. Making 900 kronas in 6 hours should be considered as a kind of success. But it is time for me to look back and find out what can I learn from it. When my group got the 50 kronas, the first thing came in my mind was not the paper with a woman’s head on it; but the other resource I need and the way to acquire them. Finally I figured my identity, a university student, should be a kind of advantage to use in my business. I can borrow the resource from university, and the next day’s 5 minutes’ presentation was the best resource I could use. Then we decided to turn the presentation into a commercial time, and get money from it. And that is called “entrepreneur learn to use other people’s resources well” by Haward H.Stevenson & David E.Gumpert.
And I think that is why we made a good business. After discussed about entrepreneurship, it is extremely necessary for us to make a deep study about the people who carry out the entrepreneurship actions, the entrepreneur.
James W. Carland believed that entrepreneur is different from small business owner; also entrepreneurial venture is different from small business venture. And the key to distinguish these two concept is innovative strategic. But actually I think the attempt to make a clear distinction between small business venture and entrepreneurship venture is meaningless. Firstly since the market is always changing, small business venture must meet some crisis during some hard period.
And if the small business owner want to save his company, it is definitely necessary for him to try some new strategies to get through the hard time. For example, some small restaurants use discount coupon just like KFC and McDonald to attract consumers in off season. Compared with traditional business model, it is a kind of new strategies, but cannot change the fact that they are still small business ventures. Secondly, some small business ventures also use innovative strategy to gain more profits. The most interesting story I knew is a farmer who lived in a village and since the price of apple was really high in the market, all the villager decided to plant apple next year.
This man thought if the supply of apple become high, the price must go down. So he did not just follow the others to plant apple. And to most people’s surprise, he felled a lot of bamboo from forest and made a lot big basket. Year passed, the apple got a good harvest, but since there were too many apple in market, the price become very low. At same time, since all the apples had to be transported, the needs of basket become very high. So the famer got huge amounts of money. But after that, the man stills a farmer. We can easily tell that the farmer as a small business owner did use some innovative strategies to get the profits, exactly like an entrepreneur.
However, even the best entrepreneur in the whole world needs to take the entrepreneurial opportunities to create new processes, new products, new markets, and new ways of organizing. At this moment, recognizing an opportunity and seize it become extremely important. But in some circumstance, even the best company in the world cannot take the opportunity and gradually decline. For instance, the former giant in film industry Kodak beaten by the digital revolution and filed for bankruptcy in January this year. After release the news, the whole business world was shocked. People asked what went wrong in this 128-years-old company and what reasons behind them.
Some said that Kodak failed because it was not innovative enough, stood still and refused to make progress. But actually, Kodak became the first company to make a digital camera in1975, long before the digital age. It was really a fantastic machine at that time.
And the failure of Kodak is definitely not because lack of innovation. In my opinion, Kodak failed to recognize the potential market opportunity of digital camera lead to it final bankruptcy. They let their genius invention died in the lab rather than had a try in the market. The management layer said they did that because the fear of killing its all-important film business. An innovation cannot turn into profit if it not be putted into the market, no matter how great it is. But what kind of innovation should and could be accepted by the customers is the top question of every entrepreneur. Kodak believed that people still need to print out their photos and put them in their photo frame as a permanent memory.
But with the rapid development of Internet especially social network, more and more people take photos just for share them with their friends. Photos generally became a kind of carrier of individual identity and tool for communication. People want take photos with low cost and with easy transmission form, they no longer need to print their photos out and it killed the core business of Kodak. We can see from Kodak’s failure that innovation is very important to a company but it is not everything. How to bring it into market and maximize the profit is the core work of all the entrepreneurs. Some scholars ask “Dose entrepreneurial experience influence opportunity identification?” ( Deniz Ucbasaran et al.,) I believe the answer definitely is “Yes”. Think about Nokia, whose performance declined obviously these years in smart phone market.
Most people believe that Nokia started decline just after the appearance of iPhone. iPhone become succeed because it provides users an Internet mobile terminal rather than a phone. What’s more, the launch of AppStore and sharing the commission with all developers make the users of iPhone can choose tens of thousands of high quality Apps. Faced with this revolution in mobile communication industry, the first company involved in is Google and Andriod mobile phone system, an open-source operating system. But at the same time, Nokia still want to make a good and tough phone use its own system Symbian—with fewer programs to choose.
Nokia felt iPhone would failure in a short time because it was easy to break, much different with their former experience about customers. When Nokia figured out what happened in the market that was too late. The entrepreneurs of Nokia thought they knew their customers’ needs based on their old experience, and made some decisions. Unfortunately, these wrong decisions cause the company to fail. What Amar Bhide mentioned in <The question every entrepreneur must answer> aroused my interest.
Although competing in the same industry, companies did not evolve in the same way. Different companies use different strategies to compete with their competitors. As we all know, the competitions in cosmetic industry is very fierce and if a company want to survive in this combat, its entrepreneur must use some unique strategies.
For example, The Body Shop, which used a very especial competitive strategies called “all natural ingredients”. This differentiation strategy helped the company get huge amounts of loyal customers, and higher rate of profit. During the same time Procter & Gambler Co., and L’oreal Group established multi-brand strategy. Use this strategy, these big business groups can get good quality and low cost at the same time. This strategy can help them to get most part of the market share.
All of these three companies were very successful in cosmetic industry, but we can see the entrepreneurs of them use innovation in different ways to win the market. Although the definition of entrepreneurship is really hard to provide, in my present opinion: Innovation is the key for entrepreneurs to success in fierce competition, and the key to entrepreneurship is use the innovation in a right way.
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