Entrepreneurship & Intrapreneurship (CIE A Level Business)

• An entrepreneur is a person who is willing and able to create a new business idea or invention and takes risks in pursuing success
  
  • Successful entrepreneurs can identify and pursue opportunities, create value for customers and build thriving businesses
     
• These individuals bring a unique entrepreneurial spirit into the business, which helps drive it forward and expand
  • Howard Schultz was hired by Starbucks in 1982 as Director of Retail Operations and Marketing. He later left to start his own coffee company, but returned to Starbucks in 1987 as CEO. Under his leadership, Starbucks expanded globally and became one of the most recognised brands in the world
  • Marissa Mayer was brought in to lead Yahoo! in 2012 as CEO. She implemented several initiatives to revitalise the struggling company, including acquisitions, product improvements, and a renewed focus on mobile
    

• Entrepreneurs fulfil important roles in business
  • Organising resources, including finance, facilities, people and equipment
  • Making decisions, both at the start and throughout the life of a business
  • Taking risks to maximise returns and maintain a competitive advantage
     

What do Entrepreneurs do?

• An intrapreneur is an individual tasked with creating or improving innovative products or processes within an already-established business
  • Intrapreneurship involves empowering employees to think and act like entrepreneurs
  • The business encourages them to take risks, innovate, and develop new ideas and projects that may benefit the business
    
    • Businesses can tap into the creative potential of their employees and generate new products/services or processes that can drive growth and competitive advantage
    • This helps to create a culture that generates a sense of ownership and engagement among employees, which increases motivation and helps to retain top talent
    • To promote intrapreneurship, businesses may provide resources to employees or offer incentives/rewards for successful projects
       

Examples of Intrapreneurship in Business

• Intrapreneurs fulfil important roles in business that compliment those of the entrepreneur:
  • Innovation, including using resources in the most effective way, developing new ideas and processes and identifying new techniques
  • Organising operations by making day-to-day decisions that drive a business forward
  • Persuade business owners to take calculated risks and follow new paths
    
    

What do Intrapreneurs do?

• Entrepreneurs and Intrapreneurs require a unique set of characteristics and skills
  

Diagram: The Skills and Characteristics of Entrepreneurs & Intrapreneurs

The skills and characteristics required by entrepreneurs and intrapreneurs

• Successful entrepreneurs and intrapreneurs tend to be very persuasive in their communication and decisive in their decision-making
  • Convincing lenders, investors and customers to support their business is central to achieving financial success
    
    
• Developing new solutions to solve existing or emerging problems is a key intrapreneurial role that helps a business stand out from rivals and achieve success
  • During the 2020 COVID-19 pandemic, many businesses used their creativity to switch production techniques to cater for what the market wanted
  • E.g Harrogate Gin switched from producing gin to hand sanitiser
    
    
• Starting a business is often the sole responsibility of a single entrepreneur, who will need to be able to solve problems with limited support
  • E.g. The owner of Gymshark, Ben Francis, started off the company by buying a sewing machine and making gym clothes in his parents garage with a few school friends
    • This led to the growth of a multi million pound company employing hundreds of people

• Making the decision to set up and run a business is rarely easy
• Entrepreneurs face a series of barriers that they must overcome if they are to make a success of an enterprise
   

Barriers to Entrepreneurship

• Business uncertainty is when a business cannot predict what is going to happen or directly influence it
  • Uncertainty cannot be prepared for because it is unknown and cannot be measured
  • Factors which typically cause uncertainty to include:
    • Environmental factors such as the Japanese Tsunami in March 2011
    • Economic changes such as Covid lockdowns, Brexit or collapses in the banking system
    • The entry of new competitors
    • Changes in local and national legislation (laws)
    • Changes in the political party governing the country
      
      
• Risk can be measured, allowing business owners to make informed decisions before taking action
  • Research, market insight and creating a business plan can help to reduce risk
  • E.g. Awareness of increased demand for music on vinyl, extensive market research and a strong business plan convinced entrepreneurs Joel Magill and Will Greenham to set up Smugglers Records in the small seaside town of Deal

Diagram: Risk versus Uncertainty 

The difference between risk and uncertainty

• Entrepreneurs have varying levels of risk they are willing to accept
  • Risk-averse entrepreneurs may prefer to start small and achieve slow growth
  • Some entrepreneurs may prefer to share risks with others in a partnership or protect their personal assets by forming a private limited company
    
    
• Successful entrepreneurs can manage risk and quickly respond to uncertainty in the business environment
  
  

An Example of Entrepreneurial Response to Uncertainty

• Government policy often includes support to entrepreneurs to encourage them to set up new businesses or take steps to grow their business
  • The Philippine government recognises the contribution that small businesses make to its economy and offers a range of incentives to entrepreneurs, including
    • Training programmes to equip business owners with the skills they need to operate an enterprise
    • A streamlined application process for low cost government-supported loans
    • Mentor initiatives where entrepreneurs are partnered with an expert who can provide advice on training and business development services
    • The Go Loka! project, which provides product development training, access to a marketing platform and promotional events
    • Exemptions from income tax and minimum wage law for a limited period
       

How Small Businesses Contribute to a Country's Economic Development