Study material on Entrepreneurship Skills

4th Semester – Mandatory course – CVMU

Chapter 1: Entrepreneur and Entrepreneurship:

 Entrepreneur is a person who creates a business enterprise.
 Entrepreneurship is the process of creating a business enterprise.
The process of designing, launching and running a new business, which is often initially a small
business, or as the "capacity and willingness to develop, organize and manage a business venture
along with any of its risks to make a profit."
Entrepreneurship is the creation or extraction of value. It is a key to economic development,
industrial development, regional growth, employment etc.
Entrepreneurship is an act of being an entrepreneur. The owner or manager of a business enterprise
who, by risk and initiative, attempts to make profits. Entrepreneurs act as managers and oversee the
launch and growth of an enterprise.
Entrepreneurship typically focus on the launching and running of businesses, due to the high risks
involved in launching a start-up, a significant proportion of start-up businesses have to close due to
"lack of funding, bad business decisions, government policies, an economic crisis, lack of market
demand, or a combination of all of these."
Entrepreneurship is also viewed as change, which may include other values than simply economic
ones. Entrepreneurship is a key to economic development.
Various perspectives:
 An individual who bears the risk of operating a business in the face of uncertainty about future
conditions. - Britanica Encyclopedia
 Entrepreneur is the one who innovates, and introduces something new in the economy. –
Joseph A. Schuumpeter
 Entrepreneur searches for change, responds to it and exploits opportunities. Innovation is the
specific tool of entrepreneur. – Peter F Drucker
 Entrepreneur shifts economic resources out of an area of lower and into an area of higher
productivity and greater yield. – J B Say
 Entrepreneurship is not only about starting of businesses, but it is an attitude to life. – Matt
Hancock
 Everyone can tell you the risk, entrepreneur can see the reward. – Robert Kiyosaki
 True entrepreneur is a doer, not a dreamer. – Nolan Bushnell
An entrepreneur has the ability to find and act upon opportunities to translate inventions or
technologies into products and services:
The entrepreneur is able to recognize the commercial potential of the invention and organize the
capital, talent, and other resources that turn an invention into a commercially viable innovation.

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

Manager and Entrepreneur

Manager Entrepreneur
Salaried employee Own Boss
Executes decisions given by management Take own decisions
He is an Employee Hires employees
Fixed reward Uncertain reward
Loss of talent as an employee, due to limited Put ideas in practice with Innovation
working freedom

Process / Stages of Entrepreneurship: There are five steps of Entrepreneurship development.

1. Perceiving, identifying and evaluating an opportunity
2. Drawing up a business plan
3. Marshalling (organizing) resources
4. Creating an enterprise
5. Consolidation and management
Importance of Entrepreneurship
Creation of Employment-
Entrepreneurship generates employment. It provides an entry-level job, which is required for gaining
experience and training for unskilled workers.
Innovation-
It is the hub of innovation that provides new product ventures, market, technology and quality of
goods, etc., and increase the standard of living of people.
Impact on Society and Community Development- A society becomes greater if the employment base
is large and diversified.
It brings about changes in society and promotes facilities like higher expenditure on education, better
sanitation, fewer slums, a higher level of homeownership. Therefore, entrepreneurship assists the
organization towards a more stable and high quality of community life.
Increase Standard of Living- Entrepreneurship helps to improve the standard of living of a person by
increasing the income. The standard of living means, increase in the consumption of various goods
and services by a household for a particular period.
Supports research and development- New products and services need to be researched and tested
before launching in the market.
Therefore, an entrepreneur also dispenses finance for research and development with research
institutions and universities. This promotes research, general construction, and development in the
economy.

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

B S Venkata Rao has developed 5 stages for Entrepreneurship development.

1. Stimulation: This stage includes the creation of an industrial atmosphere, policy statement
emphasizing the role of small industry, wide publicity of indusrial development programmes,
and formation of special schemes and creation of support institutions.
2. Identification: This stage is necessary to identify prospective entrepreneurs. The prospective
entrepreneurial force can be identified in rural artisans, factory workers, persons with formal
training in engineering and technology, and graduates in business administration and
management.
3. Development: This stage would include organisation of motivation and managerial training
programmes along with advice on technology, formulation of bankable project, location, and
so on.
4. Promotion: This stage would include government policy initiatives tor promoting small
entrepreneurship.
5. Follow up: This stage includes reviewing the policies and programmes or n government and
seeking follow up with a view to making them more effective.
Entrepreneurship Cycle: M. P. Akhori suggested the cycle entrepreneurial develop consisting of the
following components for the promotion and development of entrepreneurship.

Entrepreneurial Devlopment Cycle

1. Stimulatory activities: These activities ensure the emergence of entrepreneur in the society. They
prepare the background for the entrepreneurship people to start to sprout a looking for
entrepreneurial pursuits. They generate initial motivation and offer opportunity to acquire skill.
 Entrepreneurial education
 Planned publicity for entrepreneurial opportunities
 Identification of potential entrepreneurs through scientific methods
 Motivational training to new entrepreneurs
 Help and guidance in selecting products and preparing project reports
 Evolving locally suitable new products and processes

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

 Availability of local agencies with trained personnel for entrepreneurial counselling and
promotions
 Creating entrepreneurial forums Recognition of entrepreneurs
2. Support activities: These activities help a person to develop into an entrepreneur. They nurture
and help entrepreneurship to grow.
 Registration of unit Arranging finance
 Providing land, shed, power, water, and so on.
 Guidance for selecting and obtaining machinery
 Supply of scarce raw materials
 Getting licences/import licences
 Providing common facilities
 Granting tax relief or other subsidy
 Offering management consultancy services
 Help marketing the product
 Providing information
3. Sustaining activities: These activities are all those that help in the continuous and efficient
functioning of entrepreneurship.
 Help modernization
 Help diversification/expansion/substitute production
 Additional financing for full capacity utilization
 Deferring repayment/interest
 Diagnostic industrial extension/consultancy services
 Production units legislation/policy change
Characteristics of Entrepreneurship:
1. Ability to take a risk- Starting any new venture involves a considerable amount of failure risk.
Therefore, an entrepreneur needs to be courageous and able to evaluate and take risks, which
is an essential part of being an entrepreneur.
2. Innovation- It should be highly innovative to generate new ideas, start a company and earn
profits out of it. Change can be the launching of a new product that is new to the market or a
process that does the same thing but in a more efficient and economical way.
3. Visionary and Leadership quality- To be successful, the entrepreneur should have a clear
vision of his new venture. However, to turn the idea into reality, a lot of resources and
employees are required. Here, leadership quality is paramount because leaders impart and
guide their employees towards the right path of success.
4. Open-Minded- In a business, every circumstance can be an opportunity and used for the
benefit of a company.
For example, Paytm recognized the gravity of demonetization and acknowledged the need
for online transactions would be more, so it utilized the situation and expanded massively
during this time.

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

5. Flexible- An entrepreneur should be flexible and open to change according to the situation.
To be on the top, a businessperson should be equipped to embrace change in a product and
service, as and when needed.
6. Know your Product-A company owner should know the product offerings and also be aware
of the latest trend in the market. It is essential to know if the available product or service
meets the demands of the current market, or whether it is time to tweak it a little. Being able
to be accountable and then alter as needed is a vital part of entrepreneurship.
Knowledge and Skills requirement for an Entrepreneur:
 Idea generation & scanning of the best suitable idea
 Determination of the business objective
 Product analysis and market research
 Determination of form of ownership
 Completion of promotional formalities
 Raising necessary funds
 Procuring machine & material
 Recruitment of men power
 Undertaking the business operations
Characteristics of a successful Entrepreneur
These characteristics are required to become a successful entrepreneur. Creativity, Innovation,
Dynamism, Leadership, Team building, Motivation, Problem solving, Goal orientation, Risk taking and
decision making ability, Commitment
1. Creativity
 Creativity is the ability to bring something new into existence.
 Innovation is the process of doing new things, but creativity is a prerequisite to innovation.
 The creativity process for an idea involves 5 stages.
o Germination: seeding process, invest in R & D
o Preparation: focus on idea, creative people embark, solving problem
o Incubation: stage of thinking it over, nurture the idea
o Illumination: idea resurfaces as a realistic creation, opportune incident (fitting event)
o Verification: stage of development that refines knowledge into application.
2. Innovation:
 It is an act that endows (provides) resources with a new capacity to create wealth. Innovation
indeed creates a resource.
 A small scale enterprise today need not remain small forever. There are chances for the unit
to grow from small to large. Entrepreneur should be futuristic and innovative.
3. Dynamism:
 Innovation with dynamism constitutes a potential prosperity. Dynamism revises the targets
of the enterprise upwards time and again.

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

 The enterprise may open up with new vistas (views), better product mix, charismatic product
image stimulating steady growth. A sole entrepreneur should promote a second line of
decision-making mechanism to prevent a void being created in his absence.
 A dynamic entrepreneur believes in action rather than depending on paper correspondence.
An engineer at heart, should update his knowledge of various functions. An efficient
entrepreneur must be good at managing change.
4. Leadership
 Leadership is a basic quality of an entrepreneur. This spirit keeps him paces forward in any
field.
 A great leader possess a clear vision, is courageous, has integrity, honesty, humility and clear
focus. Great leaders help people reach their goals, are not afraid to hire people that might be
better than them and take pride in the accomplishments of those they help along the way.”
 Four types of leadership: Direct, Coach, Support, and Delegate.
5. Team building
 An entrepreneur should have ability to build a team. A team of group of individuals with a
common purpose, that is focused and aligned to achieve a specific task or set of outcomes.
 The purpose of team building activities is to motivate the people to work together, to develop
their strengths, and to address any weaknesses. So, any team building exercise should
encourage collaboration rather than competition. Be sure to incorporate team building into
the workplace routines and practices.
6. Motivation:
 Motivation is the process that initiates, guides, and maintains goal-oriented behaviors.
Motivation involves the biological, emotional, social, and cognitive forces that activate
behavior.
 Entrepreneurs have a higher goals and targets. They make plan and attempts for certain
achievements. They must be guide by their inner self (self-motivated). They believe in slow
and steady wins the race. They keep pace for modern requirements
 They are professional in their thinking and approach. They believe in continued education.
They are patient listeners. They take initiative and prepared to give credit to others.
7. Problem Solving
 It is important that an entrepreneur should be able to solve problems and not avoid them.
 A formal problem – solving model
o Define the problem
o Gather information
o Identify different alternative solutions
o Evaluate alternatives and select the best option
o Take action
o Evaluate action plan

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

 Brainstorming is a creative group problem-solving technique that involves generating large

number of fresh ideas.
 Ideas are not analysed or criticised at brain storming session, rather the purpose is to share
creative ideas.
 Entrepreneur should facilitate brain-storming amongst employees, when new opportunity is
there.
8. Goal Orientation:
 Goal setting is the achievement of targets and objectives for successful performance of an
entrepreneur. It helps to measure how every individual and groups are meeting the
performance standards.
 Human behaviour is goal directed. Therefore, goal setting is necessary part of all activities.
Everyone needs to feel that they have a worthwhile goal that can be reached with the
resources and leadership available.
Aspects of goal setting are Clarity of goals, Reformulation of goals, Restating goals, Plan of action,
Recognising risks and obstacles, Goal reaffirmation, Goal attainment
9. Risk taking and decision making ability
 Entrepreneurs are persons who take decisions under conditions of uncertainty
 Hence, they are willing to take risk, but never gamble with results.
 Few examples are: Exploring alternative lines of production, New product mix, New
combination of input, etc.
 Risk bearing and decision making calls for absolute clarity in thinking and coordinated action.
 An uncertainty is faced not just by a single enterprise, but by all, like the market.
10. Commitment
 One of the subtle qualities of an entrepreneur is his willpower.
 Strong determination with sound thinking fortifies willpower.
Role of Entrepreneurship in Economic Development
Entrepreneurs initiate and sustain the process of economic development in the following ways:
1. Capital Formation:
Entrepreneurs mobilize the idle savings of the public through the issues of industrial securities.
Investment of public savings in industry results in productive utilization of national resources. Rate
of capital formation increases which is essential for rapid economic growth. Thus, an entrepreneur is
the creator of wealth.
2. Improvement in Per Capita Income:
Entrepreneurs locate and exploit opportunities. They convert the latent and idle resources like land,
labour and capital into national income and wealth in the form of goods and services. They help to
increase net national product and per capita income in the country, which are important yardsticks
for measuring economic growth.
Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar
 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

3. Generation of Employment:
Entrepreneurs generate employment both directly and indirectly. Directly, self-employment as an
entrepreneur offers the best way for independent and honorable life. Indirectly, by setting up large
and small scale business units they offer jobs to millions. Thus, entrepreneurship helps to reduce the
unemployment problem in the country.
4. Balanced Regional Development:
Entrepreneurs in the public and private sectors help to remove regional disparities in economic
development. They set up industries in backward areas to avail various concessions and subsidies
offered by the central and state governments. Public sector steel plants and private sector industries
by Modis, Tatas, Birlas and others have put the hitherto unknown places on the international map.
6. Economic Independence:
Entrepreneurship is essential for national self-reliance. Industrialists help to manufacture indigenous
substitutes of hitherto imported products thereby reducing dependence on foreign countries.
Businessmen also export goods and services on a large scale and thereby earn the scarce foreign
exchange for the country.
7. Backward and Forward Linkages:
An entrepreneur initiates change which has a chain reaction. Setting up of an enterprise has several
backward and forward linkages. For example- the establishment of a steel plant generates several
ancillary units and expands the demand for iron ore, coal, etc.
Factors impacting Emergence of Entrepreneurship
Economic Factors Social Factors Psychological Factors Political Factors
 Capital  Family background  Need  Government
 Labour  Education  Achievement Policies
 Raw material  Attitude of society  Withdrawal of status  Banking support
 Market  Culture value  Motives, Patience,  Local government
 Infrastructure  Caste factor tolerance, willingness, body support
Self-confidence etc.
Managerial v/s Entrepreneurial Approach
Entrepreneurial Approach Managerial Approach
Entrepreneur is visionary and bears all Manager works for salary and do not bear
financial risk. any risk.
The entrepreneur’s orientation depends on Manager’s orientation is administrative domain
his/her own perception. is operant.
Focuses on starting and expanding of business. Focuses on smooth functioning of business.
Reward of all efforts is profit. Remuneration is the salary draws from the
company.
Approach of entrepreneur is informal and Approach of manager is very formal.
casual.
Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar
 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

Successful Entrepreneurs and their companies

There are many successful entrepreneurs, who have developed a business with creative ideas and
take-up the company to national level.

Sr. No. Entrepreneur Name of Company / start-up

1 Vineeta Singh Sugar Cosmetics
2 Namita Thapar, Emcure Pharmaceuticals
3 Anupam Mittal Shaadi.com, Makaan.com, Mauj Mobile
4 Peyush Bansal Lenskart
5 Aman Gupta boAt
6 Ashneer Grover Fintech Company - BharatPe
7 Amit Jain CarDekho
8 Zomato Deepinder Goyal
9 Ola cabs, Ola Electric Bhavish Aggarwal,
10 Praveen Maurya Squadrans Security Services.
11 Shammi Akhtar Phonics Readership
12 Alakh Pandey EdTech unicorn platform - Physics Wallah
13 Vimal Patel Mobilewala Vadodara
14 Dhruvik Patel Softsove Private Limited (Digital marketing)
15 1. Ritesh Agarwal OYO Rooms
16 2. Trishneet Arora TAC Security Solutions (Ethical hacker)
17 Akhilendra Sahu ASTNT Technologies Pvt. Ltd.
18 Farrhad Acidwalla Rockstah Media and CYBERNETIV DIGITAL
19 Sreelakshmi Suresh eDesign, TinyLogo
20 Tilak Mehta App-based courier service in Mumbai known as ‘Papers n
Parcels’
All students should read their success story.

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

Chapter 2. Starting the venture

Generating business ideas
This is the first step in starting a new venture - To generate right type of business idea. The new
venture is based on experience or knowledge. Hence, some experience is required or study /
knowledge is required. Most common idea generation methods are Brain storming, Market analysis,
Think tank, and Looking in to the future.
Brain storming:
 This is a group creativity technique designed by Alex Osborn.
 It generates large number of ideas for the solution of a problem or product development.
 Business ideas should be uncensored. No idea is dumb and impossible.
Market Analysis:
 With using SWOT analysis – adequate business strategy of an entrepreneur will be defined
which lead to product development.
 Also known as documented investigation of market –
 Product planning activities, inventory, purchase, work force management, facility
expansion, capital equipment, promotional activities, etc.
Think tank:
• The entrepreneur should form own core group from known people.
• This group will involve in decision making of the company.
Looking into the future:
• Observe changing customer needs and societal trends.
• Forecast for the new product development and demand.
Sources of new ideas: Wide variety of sources should be tapped to identify new ideas.
1. Analyse the performance of existing industries
2. Review imports and exports
3. Study plan outlays and government guidelines.
4. Study the suggestions of financial institutions
5. Investigate local resources and skills
6. Analyse economic and social trends
7. Study new technological development
8. Explore possibility of reviving sick units.
9. Attend trade fairs
10. Stimulate creativity for generating new product ideas

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

Creative Problem Solving

• Creative problem solving (CPS) is a way of solving problems or identifying opportunities when
conventional thinking has failed. It is a key idea generation technique. Currently, though better
service quality is important, it is not enough on its own.
• CPS suggests to separate divergent and convergent thinking.
• Divergent thinking involves generating lots of potential solutions and possibilities.
• Convergent thinking involves evaluating these options and choosing the most promising one.
Models of Creative Problem Solving
1. Synectics
Synectics is usually classified as a Creative Problem-Solving (CPS) Technique along with
brainstorming and Lateral Thinking. This problem solving methodology inspires thought processes
that the subject might not be aware of.
The term “Synectics” has its origins from the Greek language and means the combining of different
and supposedly irrelevant elements. Direct analogy, Personal analogy, Symbolic analogy, Fantacy
analogy, Game with words, etc.
In Gordon’s opinion, it is a way of mentally taking things apart and putting them together to furnish
new insights for all problems.
Synectics research has to do with three key assumptions:
1. It is possible to describe and teach the creative process;
2. Invention processes in science and arts are analogous and propelled by the same
“psychic” processes;
3. Creativity at the level of individual and group is analogous.
2. TRIZ methodology
TRIZ (or TIPS – Theory of Inventive Problem Solving) was created by Genrich Altshuller and his
coworkers. It is a Russian method of problem solving. This strategy is meant to cultivate the creation
of patentable inventions. However, the technique is also helpful for developing non-product
solutions.
In the beginning, following the invention of bulletproof glass, a trade off happened. Though the glass
would prevent the bullet from entering, the former would crack to such an extent that the vision of
the pilot or driver behind the glass would be obscured.

1. Segmentation: Transfers a complex task into several simplest tasks

2. Taking out: Eliminate non-essential activities with no added values
Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar
 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

3. Local quality: Focus a single object and try to improve

4. Asymmetry: Asymmetric solutions provides better functionality (rather than symmetric)
5. Merging: Bringing together things which happen at the same time / same place
6. Universality: An object can be eliminated by having another object perform the same function
7. Nesting: Putting one thing inside another
8. Anti-weight: Identify a force that cause a negative shift then apply a comppensating force
3. Brainstorming
Brainstorming is an individual or group activity by which attempts are made to determine a
conclusion for a particular problem by collecting a list of ideas that its members spontaneously
contributed.
4. Mind mapping
This creativity technique both reframes the situation and cultivates creativity. A mind map is a
representation of concepts and ideas in a graphical manner. This visual thinking tool assists with
structuring information, assisting with better analysis, synthesis, comprehension, recall and
engendering of new ideas. The power of the mind map is traceable to its simplicity.
5. Reversal of problem
This approach is about coming up with ideas to solve problems by way of a different/opposite
perspective (turning it around: upside-down, inside-out or back to front).
6. Look beyond something’s common function
Split an object into all its individual parts. If you have a description suggesting a function (just like the
function of a prong is transporting electricity), describe it in a more generic manner by way of shape,
size and the make-up of the material (such as rectangular, flat, small piece of metal). If you call an
item an electric plug’s prong, the description may conceal the fact that the item could also turn into
a screwdriver if required.
7. Lateral thinking
Lateral thinking is a manner of thinking that looks for a solution to an obstinate issue through
unorthodox elements or methods that would usually be disregarded by logical thinking. To be more
precise, “lateral thinking” may be defined as a way to solve problems by a creative or indirect
approach, utilizing reasoning that may not be obvious straight away or incorporating ideas that
cannot be gathered by utilizing only conventional step-by-step logic
8. SCAMPER
The basis for SCAMPER is the belief that everything new is a variation of something already in
existence. SCAMPER is an acronym, and each letter indicates a different method by which the person
can toy around with the features of whatsoever it is that is challenging him to come out with new
ideas. The letters and their full forms are as follows:
S = Substitute, C = Combine, A = Adapt, M = Magnify, P = Put to Other Uses, E = Eliminate
(alternative is Minify), R = Rearrange (alternative is Reverse)

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

Opportunity Window
New firms can realistically enter in to the market at any time. For example, Google is not the first in
the search business and Facebook is not first in social media platform.
Window of opportunity:
Opportunity Recognition
• Entrepreneurs discover opportunities when they search for them in existing markets. This
means they observe technological, economic or social trends.
• Recognizing opportunities is a cognitive process. It relies on the ability of people to recognize
patterns and connect the dots.

• There are two ways to recognize opportunities: Discovering or Creating.

• It is up to you as an entrepreneur which way is most suitable for you and which actions to
take to enable opportunity recognition.
• Entrepreneurs discover opportunities when they search for them in existing markets. This
means they observe technological, economic or social trends. Recognizing opportunities is a
cognitive process. It relies on the ability of people to recognize patterns and connect the dots.
• Entrepreneurs create opportunities when they engage with others in bouncing ideas back and
forth, and each time it becomes more specific what the user needs are and how they are
going to be solved. Creating opportunities is a social process. It relies on the ability of
entrepreneurs to interact.
Model of Opportunity recognition
• Opportunity recognition means proactively brainstorming a new business venture or
expansion idea. A small-business owner typically engages in opportunity recognition at the
point where he realizes he has an idea, strength or capability that matches well with a
particular target market.

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

Environmental Scanning
• In any business organization, there is an internal and external environment. They
comprise all the factors that can affect the business of a company in any way. It is the
analyses of all factors that may affect the future of the organization.
• There are opportunities for the business to grow and threats that may harm the business.
So these environments need constant monitoring.
• The purpose of environmental scanning is to provide the entrepreneur with a roadmap to
the changes likely to happen in the future. So this way they can adapt the business to
overcome the threats and capitalize on the opportunities coming their way.
• Kubr has suggested three approaches, which could be adopted for sorting out information
for environmental scanning. Systematic Approach, Ad Hoc Approach, and Processed –
Form Approach.

Components of external scanning that could be considered include:

 Trends: What trends are occurring in the marketplace or industry that could affect the
organization either positively or negatively?
 Competition: What is your competition doing that provides them an advantage? Where can
you exploit your competition's weaknesses?
 Technology: What developments in technology may impact your business in the future? Are
there new technologies that can make your organization more efficient?
 Customers: How is your customer base changing? What is impacting your ability to provide
top-notch customer service?
 Economy: What is happening in the economy that could affect future business?
 Labor supply: What is the labor market like in the geographies where you operate? How can
you ensure ready access to high-demand workers?
 Political/legislative arena: What impact will election outcomes have on your business? Is
there impending legislation that will affect your operations?

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

Competitor and Industry Analysis

Make competitor industry overview and collect some basic data about the sector you plan to operate
in, including such relevant metrics as: annual sales, annual unit or volume sales, trend of prices, plant
capacity and possibly capacity utilization.
Rivalry among firms is the central force determining a business’s competitive position. It is therefore
necessary to analyze competitors in a similar way to how you would your own business.
The elements of a competitor analysis are:
• current strategy or positioning;
• strengths;
• weaknesses;
• opportunities;
• threats;
• possible changes in strategy;
• reaction to changes in your business’s strategy;
• financial strength;
• operational strength.
Industry and competitive analysis (ICA) is a part of any strategy development in firms and other
organizations.
It contains a very practical set of methods to quickly obtain a good grasp of an industry, be it
pharmaceuticals, information and communication technology, aluminum, or even the beer industry.
The purpose of ICA is to understand factors that influence the performance of the industry, and as
well the performance of firms within the industry.

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar

 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

Feasibility Study
Feasibility analysis is the process of determining if a business idea is viable. It is the preliminary
evaluation of a business idea conducted for the purpose of determining whether the business is
worth pursuing.
1. Market feasibility
2. Technical / operational feasibility
3. Financial feasibility

Check feasibility

Product / service feasibility:

Product/service feasibility analysis is an assessment of the overall appeal of the product or service
being proposed. Although there are many important things to consider when launching a new
venture, nothing else matters if the product or service itself doesn’t sell.
Market feasibility
Market feasibility is required to identify the opportunity of the market. If opportunity does not exists
(no market), there is no meaning proceeding further. There are 3 primary issues considered while
analysing the market. Industry attractiveness, Market timeliness, Identification of niche market
Industry attractiveness
o High rate of growth for past few years
o Essential to customers?
o Longer product life cycle
o High Operating margins
o Less competition
Market timeliness
o Scope of Improvement in product & services
o Good time for new entrant
o Customers are buying
Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar
 Study material on Entrepreneurship Skills
4th Semester – Mandatory course – CVMU

o Price rising trend

Identification of Niche Market
o A smaller market within a large market
o New entrant instead of competing in existing product/market
o Specialised market
Technical / operational feasibility: Technical feasibility involves following aspects.
1. Selection of technology
2. Scale of operation
3. Raw material
4. Technical know-how
5. Collaboration agreement
6. Product mix
7. Selection & Procurement of Plant and machinery
8. Plant layout
9. Location of the project
10. Project scheduling and implementation
Financial Feasibility
• A financial feasibility study projects how much start-up capital is needed, sources of capital,
returns on investment, and other financial considerations.
• It looks at how much cash is required, where it will come from, and how it will be spent.
• Financial feasibility consists of major two aspects:
1. Arriving at the cost of the project
2. Arriving at the appropriate means of financing of the project

Study Material on Entrepreneurship Skills - Compiled by: Dr. Hemant R Thakkar