ENTREPRENEURS AND THEIR ROLE IN THE ECONOMY An entrepreneur is a managed risk- taker who sees opportunities and allocates resources to implement ideas for the benefit of self and/or others Intrapreneur is an enterprising person but who works for others

Three basic questions asked: What resources are to be used? What/How resources is to be produced/processed? For Whom? THE ENTREPRENEUR BELIEVES HE/SHE KNOWS WHAT THE CONSUMER WANTS OR NEEDS.

ENTREPRENEURIAL ACTIVITY MAY RESULT IN INEFFICIENT USE OF A COUNTRY’S RESOURCES!

As a result… Up to 80% of Start-up businesses fail within the first five years Entrepreneurial activity results in a wide variety of similar goods and services (Toasters, chocolate bars, cars, cereal, insurance, etc) Useless products are produced

Entrepreneurs are: Sensitive to the wants and needs of the consumer Will respond quickly to these wants and needs

Benefits from Entrepreneurship Increased competition Job provider (large organizations downsizing, it is the smaller businesses that continue to hire) Are a major source of new innovations (small businesses do not invent, they innovate modify/change something that already exists)

Opportunities Vs. Ideas An opportunity is an area of general interest to an entrepreneur (Usually someone else’s problem or concern) eg. Household safety for children Idea is a specific means of addressing the opportunity area eg. Gates at the top of stairs, plastic plugs for sockets

International Competitiveness, Productivity, and Quality Chapter 3

Establishing a Global Presence What kinds of economic and social factors would attract international business to Canada? How can an unprofitable international business improve its chances of becoming profitable?

Global Presence and Canada Global/International presence plan should answer these questions  Which product will lead the way as the company launches or “rolls out” an international business initiative?  Which markets should be entered first?  What is the best way to enter these markets?  How rapidly should the company expand internationally?

Global Presence and Canada Globalization of world’s economy It is recognized internationally for its reliability, its fairness and integrity standards May have a negative connotation (non- democratic, unsafe working conditions, lack of environmental protection, political upheaval) May have a negative connotation (non- democratic, unsafe working conditions, lack of environmental protection, political upheaval)

Global Presence and Canada Canada’s global presence gives us access to capital and markets World Wide Capital: the money or other assets that are available for investment purposes If expanding internationally a company needs to develop a strong global presence

Global Presence and Canada International = a few countries Global = many countries Going global can either make or break an organization

Global Presence and Canada International = a few countries Global = many countries Going global can either make or break an organization

Global Presence and Canada Need to establish: distribution offices, manufacturing facilities, hiring local staff, toll-free telephone number, website, e-commerce, marketing over the Internet To minimize risks and maximize profits, develop a plan that answers: 1) Which product lead way? 2) Which market to lead way? 3) What is the best way to enter the market? 4) How fast to expand internationally?

Global Presence and Canada Pursue opportunities and meet challenges adapt to local markets

Competitive Advantage Is achieved when companies and countries outperform their competitors around the world by improved/superior products, better pricing, higher quality, better service, uniqueness, and profit Access to markets and distribution channels is important

Competitive Advantage Can be measured by market share and performance with suppliers, customer demand and loyalty, distribution, service, resources, and financial indices Canada ranks ___

Gross Domestic Product GDP – The total value of all goods and services produced in a country during a specific period. GDP per capita – Total GDP divided by the number of people n the country. Means Canada is not as productive, not as internationally competitive; reasons due to manufacturing, R&D, technology Competitiveness is often linked to R&D spending

Achieving competitive advantage? How do we achieve competitive advantage? Through greater economic utility, or usefulness Economic utility: is a producer’s ability to satisfy the needs and wants of the customer; form and place utility

Factors affecting Canada’s competitiveness Quality and quantity of natural resources Strength of the country’s currency and it’s exchange rate Infrastructure in the country Research and Development Workforce Characteristics Societal Characteristics Entrepreneurship Government Involvement

Competitive Advantage Opportunity Cost – The forgone alternative Calculates in financial terms, the benefits of the next best opportunity that was forgone or not taken. When one country has a lower cost in producing at a lower opportunity cost than another country, it is said to have COMPARATIVE ADVANTAGE. ABSOLUTE ADVANTAGE – If a country can produce the good at a lower cost or with a higher rate of productivity

Assignment In a group of four choose a product/service that you can invent or innovate and sell it to the class. You can do it in a form of a skit, commercial, poster. After your presentation I will be asking you the following questions: How are you gaining competitive advantage over your competitors? Which resources will you be using? How will create presence in Canada? How will you create global presence?