Entrepreneurship and Innovation in SME

Keywords: Macro-environment analysis, Micro-environment analysis, evaluation of entrepreneurship and innovation capabilities, E-entrepreneurship, Reflective report, Entrepreneurship assignment writing services

Introduction

Cropley and Cropley (2014) stated that the role of the entrepreneur in today’s competitive and dynamic business environment is value creation. An entrepreneur needs to tackle two challenging factors, which are knowledge-based economies and complex business environment to generate business profitability and manage growth. The intellectual capital ensures the survival in the competitive business environment to seize opportunities and devise innovative business strategies that deliver competitive advantage. Market innovation delivers unique competitive advantage and value creation strategy (Sahut and Peris-Ortiz, 2014).

The purpose of this report is to conduct environment analysis for Entrepreneurship and Innovation capabilities of ABC partnership. In addition, it enclosed critical analysis of ABC capabilities and propose recommendation for ABC in light of entrepreneurship and innovation theories.

Business Profile and objectives – The ABC Partnership

An independent management consultancy firm, ABC partnership LLP was formed in 1990. The company offers a number of services from developing strategies, implementing technologies, managing project and programme to achieve operational efficiency and deliver best results for organisation stakeholder. The company was formed with five people and one client but it has grown to 80 people and 100 clients over the years. ABC used organic growth method to retain culture and value rather mergers and acquisition to deliver high-quality work.

Company has received Top 25 ‘best small companies’ and retain the highest accreditation 3* rating from ‘The Sunday Times’. The mission statement of ABC is ‘Do the right things’ and aim to make right decision and give the right advice to its customers. Company focus on ethos, set high standards so members act with integrity, decisions are transparent and focus on client success.

Analysis of the environment

Macro-environment analysis – ABC Partnership

A macro environment involves the condition present in the economy as a whole. The macro-environment factors are political, economic, social and technology. Political factors enclosed regulation and legal implication, which effect on the formal and informal procedures for the firms. According to North (2015) entrepreneur, need an awareness of formal and informal institutions and these reflect different economic scenario, interpret the future as well as the objective of the company.

The implication for ABC understands of legal procedures such as tax changes and contracts law with the client, which presents legal challenges for the company. Economic factors defined the factors such as gross domestic product (GDP), employment, inflation, exchange and interest rates. According to Venkataraman (2016), the economic entrepreneur is one exploring economic opportunities and exploitation this situation such as new goods and organising method to manage profitability.

For ABC, manage the workforce, identifying new clients as well as manage the exchange and interest rate to ensure profitability of the company.

Shane (2012) added that entrepreneur exploit profitable business opportunities through creativity and combining resources and innovation might be radical or incremental. Economic entrepreneur and innovation combine economic and political factors for resource allocation, institution development and commercialisation. Socio-cultural factors highlight the attitude, education, employment patterns as well as belief and lifestyle of the population.

ABC partnership focuses on the ethos and doing the right things. The understanding of the socio-culture environment is important for ABC to ensure its policies and practices re according to society. According to Edvinsson and Sullivan (2015) customer relations, agreements, preferences from innovation have the central role in entrepreneurship.

ABC is service firm and social environment helps better of community and practices ethos for the right of society and stakeholders. Technological factors enclosed new technologies, knowledge management, competitors’ products and infrastructure changes. ABC is consultancy management firm and technological development is highly important to manage process and communication. For ABC, technology and innovation allow to protect intellectual capital and ensure utilisation intangibles to tackle business challenges and explore opportunities (Morato, 2013).

Micro-environment analysis — ABC Partnership

Microenvironment factors are close to business and have the direct impact on business success and operations. Moller, Rajala and Svahn (2015) elaborated strategic capabilities of entrepreneurs and added that it involves relationship management, efficient operations, process excellence, vertical integration and radical innovation. The six-microenvironment factors, which are directly linked, are employees, suppliers, media, competitors and customer. Employees effect operations, service quality and profitability of business.

For ABC, employee is important for high service standard and process excellence. Suppliers are a provider of product or service, which add value to company offerings. For ABC, the quality and timing of service are critical and failure of supplier means quality suffers. Media involves online, printed and televised sources that firestorm problem or source of accreditation for company. For ABC, opportunities exist in media is creating positive influence and it has managed to maintain positive image (Strydon, 2008).

Competitors affect business through taking away business and affect profitability. Guan and Ma (2015) describe competitive advantage as valuable asset and innovation capacity is non-modifiable correlated to internal experiences and develop the competitive advantage.

Competitors management is important for ABC to retain customer and profitability by delivering products and service which add more value than competitors through employee and supplier network for competitive advantage. The customer is least controllable factor of the company microenvironment and affects business sales. For ABC, attracting new customers through quality service is important to fulfil their needs (Nandan, 2013).

Critical evaluation of entrepreneurship and innovation

According to Dobni (2016), innovation is important criteria for entrepreneurs and innovation must be sustained. Innovation environment is centre to management to support innovation, behaviours related employees and these are market orientated behaviour create competitive advantage. The innovative capabilities of entrepreneurs include manufacturing, R&D, resource exploitation and adaptability to the competitive environment.

Menguc, Auh and Shih (2007) proposed that transformational leadership delivers advantage in the marketplace through strategies such as market differentiation, innovation differentiation, lower cost and efficiency as well as the contribution to efficiency. This section evaluates business model and growth strategies of ABC in light of entrepreneurship and innovation literature (Cropley and Cropley, 2014).

Business model and ABC partnership

Zott, Amit and Massa (2014) explains the role of business model to link the business with external stakeholders (customers and suppliers) and engagement for economic exchange to create value. In addition, it added that business model enclosed content, the structure as well as governance designed to create value through managing challenges and exploiting opportunities  (Jelonek, 2013).

For ABC, the value proposition is service quality to meet the need of its customers using the resources people, technology, suppliers and facilities. The organisational structure enables the organisation to respond to customer needs and processes to turn organisation assumption into value is part of the culture of the organisation.

ABC focuses on ethos and delivers right action for the company. Entrenuership capabilities have helped the ABC through the summation of core business decision. The company has adapted organic growth strategies and build it reputation through delivering quality service (George and Bock, 2016).

Barney (2016) defines that implicit and explicit competencies for competitive advantage and resource based view is consistent to view as the bundle of resources of capabilities. ABC management has managed to executive activities in an efficient manner and generates value for value chain. The employee of the company are the intellectual asset and company have a strong culture and rigorous training processes to ensure employees compliance ethos and deliver quality service. Internal capabilities of ABC involve operating systems for resource efficiency and effectiveness (Foss et al., 2015).

The company has the policy to hire employees through a selective policy which fits ethos and focus on the frontline employee to ensure satisfaction of customers. Knowledge transfer is the basis for innovation in relation to competitive advantage and market orientation. The company has grown from 5 to 80 employees and communicate culture with an employee for right practices. ABC competitive strategy ensures operational excellences through image building with differentiation, quality service, technical knowledge and technology (Alvarez and Busenitz, 2015).

Microenvironment factors enclosed internal fit to reinforce consistency and sustainability. The Economic model of the company has managed to achieve profits and fixed sales through significant customer relationship. ABC economic model is based on premium pricing and high margins because customers are relative price inelastic and competitive position is based on differentiation and organic growth. The company has strong reputation through media as well as it suppliers has the long-term relationship (Khan and Riyaz, 2014).

On the other hand, macro-environment fit ensure company alignment with the external environment. Economic changes have captured with growth in the client portfolio. The technological and political changes have been closely observed by the company with the implementation of the new system as well as manage the legal contracts. Business model and entrepreneurship have allowed ABC to adapt changes in external environment through strong internal capabilities (Valdez and Richardson, 2013).

E-entrepreneurship

Kollmann (2010) stated that e-entrepreneurship is based on using the internet in strategic and competitive manner to achieve goals and objectives of business. This involves conducting transactions with customer and supplier over the internet for resource efficiency and effectiveness. The concept of e-entrepreneurship is not limited to e-business but does include infrastructure of information technologies, which enable the organisation to create and manage knowledge, respond to uncertainty and encompass unique knowledge for niche markets (Kollmann, 2010).

According to Dobni (2006), technology and knowledge are critical for value creation and entrepreneur combining technological resources create the dynamic landscape. E-entrepreneurship improves internal capabilities of business and link business with the external environment using technology and knowledge. Entrepreneur achieves competitive advantage through technological development and opportunities present in macro-environment and achieve knowledge as well as information superiority (information leadership). ABC partnership has 18 partners and 35 consultants working through 9 offices (The ABC Partnership, 2016).

According to social network theory, entrepreneurship is situated in the social network and these relationships facilitate the relationship resources, opportunities and entrepreneur. Jelonek (2015) E-entrepreneurship involves the development of ICT networks using technology and economic idea which allowed delivering product and service through e-value creation.

E-entrepreneurship involves productive subculture and maximise the effectiveness of business. This defines the role of communication and information need for the company to the market (macroenvironment) and customer (microenvironment) to achieve the objectives of the organisation. The social network and technology facilitate communication, accessibility of network and communication medium groups. ABC partnership social network involves a number of stakeholders including employee, suppliers and clients but lacks reliable communication network (Hurmelinna, Kylaheiko and Jauhiainen, 2017).

According to Kollmann (2006), knowledge is a competitive factor and strong data network ensure that organisation is at relevant trade level to understand future business trends. Technology facilitates rapid innovation and microenvironment is important in the knowledge economy, which improves organisational learning and efficient utilisation of asset.

Santarelli and Vivarelli (2007) stated that strategic management is concerned with performance and behaviour of companies for competitive advantage whereas entrepreneurship promotes the competitive advantage through innovation, product development and processes improvement.

Hurmelinna, Kylaheiko and Jauhiainen (2007) stated that innovation allows filling the gap for the need of online entrepreneurs by managing personal relationship maintained the online relationship. ABC internal capabilities are based on the support of consultant and partners but they are less supported by technology development. Entrepreneur skills and knowledge base is important for the support system of organisation. The success of knowledge-based economy helps the entrepreneurship to implement the strategies and exploit opportunities for life-long learning  (Jelonek, 2013).

Recommendation

ABC partnership has a robust business model, which has delivered sustainable growth for the company. The focus of the company is what it does rather how it is done. The consultant and partners value the high-quality services offering in internally consistent manner. The traditional business model involves employee skills and knowledge as core competencies and unique value proposition.

In terms of recommendation, ABC business model is expected to evolve towards innovation and collaboration from the foundation. The innovation and technological development would increase efficiency and further increase the competitive advantage of the company.

For ABC, the value proposition is service quality to meet the need of its customers using the resources people, technology, suppliers and facilities.  An implicit model restricts flexibility because of basic decision at foundation level. Firm partners develop the rule of thumb, which support basic models such as client selection and employee hiring. However, technology and globalisation have evolved the business practices. Partners need to add periodic components and incremental changes to evolve the existing elements.

A rapid innovation approach can transform the ABC through the formal, innovative and comprehensive approach to exploit the economic opportunities. The new potent model would provide direction and attract new stakeholder and resources for high organic growth, which fits with the objective of ABC. The evolution of model enclosed cycles of the specification, adaptation and refinement. The new components or model remains informal, which allows the company to test and trial new direction and decisions and how firm evolve with such decisions. These new components and specification at some stage will become formal for the ABC. The adjustment made to new business model is based reinforcement, arguments and deletion.

The external fit is achieved through model evolution and specification ensures strategic alignment. Performing activities that are different to competitors offer the competitive advantage and operational effectiveness. The differentiation perspective creates value for the firm while operational efficiency delivers profitability for the firm. Therefore, model evolution incorporates both strategy and operational effectiveness.

Model represent framework with both operational and strategic concept for value creation. The business model provides guideline and motivates the entrepreneur to evaluate the strategic choices to exploit economic, social and technology changes.

The new business for ABC would allow the analysing alternative relationship with stakeholder through unique combinations. Moreover, it provides logical framework to ensure elements of strategy, economics and growth through making the explicit choices. Environment factors define economic and stakeholders’ perspective through education, employment patterns as well as economic opportunities and technology developments. ABC partnership focuses on the ethos and doing the right things.

Strategic capabilities of entrepreneurs and added that it involves relationship management, efficient operations, process excellence, vertical integration and radical innovation. Organisational activities are source to map the organisational evolution along its development path and distinctive through interaction and core element. The experience of the firm details the vision of entrepreneur in the growth of the venture.

At foundation level, the model would allow organising the decisions and integrate innovation into business process and activities. This would allow to ABC to achieve strategic fit between internal and external environment and assessing the consistencies as well as recognising the decision trade-off for the partners to sustain competitive advantage.

ABC philosophy aims to offer personalised service to stakeholders through consultant and maintain communication through tradition medium. E-entrepreneurship enables the organisation to communicate and integrate using electronic service and involve introducing the range of online tools. The identification of technological opportunities, which add economic value for the business, is based taking action and control of the processes. An entrepreneur needs to tackle two challenging factors, which are knowledge-based economies and complex business environment to generate business profitability and manage growth. The tangible aspect is associated with technology where innovation spurs.

Implicit and explicit competencies for competitive advantage and resource-based view are consistent to view as the bundle of resources of capabilities. E-entrepreneurship allows deploying and improving infrastructure, which allows timely communication, and facilitating innovation, which achieves the objectives of organisation. The new business model of ABC would base on the combination of innovation and e-entrepreneurship through proposing the one-portal solution. For instance, the development portal and website offers multi-dimensional perspective.

Knowledge management through communication technologies has evolved the business and business slow to adopt the technologies excluded from the up-to-date information about customer, suppliers and market knowledge. E-entrepreneur enables the business marginalisation of business process through information which increases efficiency and client satisfactions. The growth and success of the business are based on entrepreneurship through developing relationship and relationship with the range of stakeholders.

The opportunities exist in an economic environment through technology development allows innovating new processes and increased efficiency of business processes. Competitive advantage as valuable asset and innovation capacity is non-modifiable correlated to internal experiences. Technological capabilities improve internal capabilities through the evolution of business model and deploying systematic structure and procedure to monitor and evaluate consequences of actions.

E-entrepreneurship involves productive subculture and maximise the effectiveness of business. The communication helps the organisation to succeed through partnership with stakeholders. The social network and technology facilitate communication, accessibility of network and communication medium groups. The improved customer experience and offers flexibility responsiveness in relation to company services and program offering. The innovative capabilities and knowledge management reinforce the business model through customer focus, achieve customer satisfaction and market knowledge to offers mutual benefits for stakeholders and emphasis on ethos. ABC sustains competitive advantage through technological development and opportunities present in macro-environment and achieve knowledge as well as information superiority.

Conclusions

An entrepreneur needs an awareness of formal and informal institutions and these reflect different economic scenario, interpret the future as well as the objective of the company. Business model acts as focal point for entrepreneurs and organisation to define the set of guidelines to analyse and implement the decision. The model set direction and clearer sense of the value proposition of firm and elaborate action to generate value.

ABC can manage strategic fit between internal and external environment and assess the consistencies as well as recognise the decision trade-off for the partners to sustain competitive advantage. E-entrepreneurship allows deploying and improving infrastructure, which allows timely communication, and facilitating innovation, which achieves the objectives of an organisation.

The new business model of ABC would base on the combination of innovation and e-entrepreneurship through proposing the one-portal solution. The entrepreneurship and innovation capabilities enable the exploitation of opportunities and tackle the challenges through business model to sustain competitive advantage.

Reflective report

This is second attempt for this module assignment and I have decided to rewrite the task. The objective was to analyse the environment of ABC partnership in the light entrepreneurship and innovation theories to prepare a management consultancy report. However, my first attempt had a number of shortcomings in each section of the report as point out in the feedback. For example, introduction lack details, analysis were missing evidence, evaluation lacked relevance and recommendations were generals.

The feedback provided had allowed me to understand my weakness and shorting in the preparation of the report. Therefore, in the light of feedback, I decided to take the second attempt for the task. I remained slicked to original task and organisation to overcome the gap left in the first attempt of the report. The reason for the approach was that I believe repeating task would allow the better understanding of situation through overcoming problems.

The first task I did before the rewriting the task was the identification of problem and evaluation of skills required completing the task according to feedback. I believe the first attempt lacked the connection between the theories and commercial business activities. There I decided to connect the entrepreneurship and innovation to the practical situation to overcome the weakness and fill the identified gaps. The first step was rewriting of introduction section to provide an overview of tasks and ABC.

I analysed the mission, resources and activities of companies in details through exploring the secondary data available. This has provided me completing of organisation activities, processes and resources. The next stage involved exploring the literature on entrepreneurship and innovation to develop understanding and relationship of theories with real world business. This provided me foundation to connect the business with theories and evaluate the ABC system dynamic.

The second stage was conducting detail business analysis and I explored the literature in detail to examine how environment factors impact and interact with an organisation. The literature on entrepreneurship and environment analysis has allowed conducting business analysis with evidence. The in-depth understanding of ABC system dynamic and exploring literature has allowed presenting the rigorous evaluation of the company.

The final stage was presenting recommendation, which improves business of ABC. The identification of environment factors and evaluation of business has enabled to present the recommendation, which is cohesive, and allowed to overcome challenges and exploited opportunities for ABC.

 

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