TOPIC 1

OVERVIEW OF
ENTREPRENEURSHIP

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Learning Outcomes

At the end of this chapter, students are

given the following competencies:

Understand how the economic environment

influence the selection of new business
ventures.
Use of relevance information to help
screening potential new business venture.
Able to use basic SWOT Analysis technique
to review options of new business venture.

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Contents

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Environmental Screening
Analysis of Business Opportunities
Selection of Business Opportunities
Development of new Business
Concept
Initial Plan for New Business Ventures

Definition
Entrepreneurship:

is the process of creating

something new with value by
devoting the necessary time
and effort, assuming the
accompanying financial,
psychic, and social risks, and
receiving the resulting
rewards of monetary and
personal satisfaction and
independence.

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WHO ARE THE ENTREPRENEURS?

Paradigm shifters, innovators and opportunists

Key change catalysts and agents

Wealth and employment creators

Economic engine drivers

Key actors of the Malaysian Economy

Entrepreneurs are made and not born

You can be the entrepreneur - if you have what it

takes

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People who like to be their own boss

People who has experienced a social disruption?

WHY BECOME ENTREPRENEURS?

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Definition of an entrepreneur French word

entreprende meaning go between or enter to
undertake. A person who undertakes to organize,
manage and assume risks of business

How people become entrepreneur ? by design and

default.

Entrepreneurs are created in good and bad economic

times - Creative Destruction.

Challenges and rewards for an entrepreneur.

Many begins but few make it big.

Screening the environment

Country Economic
Scenario (Malaysia)

Historical ( 5 years trend)

Current economic scenario
GDP growth
Industrial Growth
Manufacturing /
Services

Other Policy / Priority

Economic Policy

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Five Years Plan RMK -9

Promoted Industry
Biotechnology
ICT
Food Halal Food
SMEs

Promoting Human
Capital
Knowledge based
Industry
Agriculture as a viable
business

Improve delivery
services
Improve maintenance
of Assets
R&D and innovation

MALAYSIA: A MOST ENTERPRISING CULTURE

AND NATION
KnowledgeAgriculture-based
led by Government

Export of
rubber, tin,
palm oil &
timber

Manufacture
of import
substitution
goods

Export
textile &
electronic
goods

Knowledge Era

Labour
Driven

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1970s

Labour
Driven

Knowledge
Driven

1990s
1980s

1960s

2000s

Technology Era
Industrial Era

Agriculture Era

based
goods &
services

Export high
value added
electrical &
electronic
goods

Investment
Driven

Productivity
Driven
Knowledge-based led by
Private Enterprises

Screening Environment
OPPORTUNITIES

THREATS

Regional Economic/
Business trend

Government Policy /
Initiatives

ENTREPRENEUR
Strength
Global Economic/
Business trend

Weakness
Private Sectors
Initiatives

Other Issues ( Education, Health, Social, Political, Culture)

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Steps to select new ventures

Step 4 Select one which is suitable to the
entrepreneur and develop business concept .

Step 3 Analyze specific opportunities which are

feasible to venture.
Step 2 Screening environment, evaluating self,
community & society, value and
culture of the potential target group.

Step1

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Identify Customers needs and wants

Step 1 : Identifying customer needs & wants

Needs & Wants
Products
Something physical
which can satisfied
customer needs and
wants.

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Needs : something
basic which people
must have. Example:
clothing, house, food,
health, basic education,
protection etcs.
Wants: desire to have
more than basic needs.
Wants will be fulfill
after the basic needs
were being fulfilled.
Examples: cars, bigger
house, traveling, golf
club, latest fashions,
jewelry etcs.

Services
Non-physical but able
to fulfill customer
needs and wants

Step 2 : Screening environment, evaluating self, community

& society, value and culture of the potential target group.

Analyze
Environment
Population structure, Income, taste,
preferences
Country export & imports
Local resources and new technology
Industry linkages
Government and Private
development projects
Global and Regional development
Currents issues, social, rules &
regulations.
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Self

Community

Experience
Knowledge &
skills
Financial standing
Interest
Networking

Norm

Step 3: Analyzing the feasibility of

Opportunities
Legal perspective
Market Competition
level
Funding
Technology availability

Analyze

Feasibility

Raw material supply

Expertise & manpower
Logistic
Sustainability

Risks Level
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Step 4: Select New Ventures

Market Competition
level / Marketing Plan
Operational Plan
( Technology, Supply
Chain)

Analyze

Viability

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Organizational &
Admin. Plan ( Expertise
& manpower )
Funding ( working
capital, fixed assets)
Profitability ( ROI,
ROE, Pay back, Cash
Flow, Risks Level

Step 4 ( cont: )
New venture selected.
Prepare Details Business
Plan.
Execute Plan
Monitor and
Improvement.

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Example business opportunities

AGRICULTURE

Forestry

Veneer Plywood
Logging
Furniture
Sawn timber

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Fishery

Fishing Equipment
Deep-sea fishing
Fish Processing
Wholesales/
distributions

Plantation

Clearing plantation
Planting
Processing
Wholesale/
distribution
Nursery

Poultry

Poultry farming
Processing
Wholesales/
Supplies

Industrial Linkages
FORWARD

BACKWARD

OIL INDUSTRY

Explorations engineering
Steel Fabrications
Oil Rigs construction
Engineering Servicing
Equipment components

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Petroleum Refinery
Petroleum Trading
Engine Oil products
Hydrocarbon raw material
Plastic / resin products

Business Opportunities
High Risks

Business Risk
Risk could be transfer
insurance (fire, loss etc)
Controlled risk but not
100% - market forecast
quality products,
Uncontrolled risk : economy
recession, currency value,
disaster
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Financial Risk
Liquidity level
Loan
Credit
Currency exchange

Business and Level of Risks

Alternatives

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Entry

Easy

Medium

Difficult

Level of
Risk

Low

Medium

High

Expect Examples
ed
returns
Low

Medium

High

Food Stall
Tailor
Gen. Trading
Mini Market
Auto Services
Public
Transport
Constructions
Heavy
Industry

Conclusion

SWOT ANALYSIS.
S

= Strength
W = Weakness
O = Opportunity
T = Threat

SWOT is use to evaluate new

business opportunities.
Entrepreneur will choose one which
is fit to his /her objective / vision.

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SWOT Analysis

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