ENTREPRENEURSHIP 1 Essay Example

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    Business
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    Undergraduate
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Entrepreneurship

Part A: Introduction to the Entrepreneur

Entrepreneurship has been defined by many economist and businessmen as a way of reasoning, thinking and acting on the certain opportunity which generates profit and the end run. This is a process which involves the creation of new value in a commodity to be traded at a higher price to generate income to the stakeholders and participants in an organization or a business entity. This dynamic process is normally aimed at increasing the wealth of an individual or an organization. In this essay, we will be focusing on a case example of an entrepreneur who had some successful entrepreneurship skills. According to Nelson, (2012) An entrepreneur is someone who can unite all factors of production and to be able to find the value of the products that are re-established of the entire capital the employees and the value of their wages. The interest and wages incurred from the value of the products are paid and profits are enjoyed by the entrepreneur. An entrepreneur develops various skills from an early age and continues to pursue his/her dreams of being an entrepreneur. Many entrepreneurs while young develop skills like repairing and reusing materials rather than buying others.

In this essay, we will discuss extensively the life of Henry Ford as an entrepreneur and a businessman. Fords father was an Irish farmer, and he was born on July 30, 1863, and brought up to their farm in Greenfield Township, Michigan. He gained a reputation of repairing watches and farm tools for his neighbors. Although he did not invent the automobile or the production line he revolutionized the way production of the automobile was perceived. He changed the fact people thought that automobiles were not affordable to poor people but only the rich. When he was aged 15, he left their farm to work in Detroit as a mechanical engineer after a couple of years he returned to work in their family farm and was later hired by Westinghouse to service steam engines. He had experienced his trigger was with hindsight that his life’s work was then dedicated to the production of a motorized replacement for the ubiquitous horse and cart, and a tractor to do the work of the horses on the farm. His experimenting continues after he left the family farm and started working in a steam engine workshop at the age of sixteen to work for Thomas Edison. Ford became manager of one of Edison power generating plants. Edison was aware that Ford was using and refining the gasoline driven internal combustion engine invented by Daimler and Benz in Germany to produce early motor cars, and he encourage him in this endeavor. The two men never lost touch, and Edison’s laboratory has been reconstructed for Fords world famous Greenfield village museum (Curcio, 2013).

Part B: Entrepreneur background analysis

Henry Ford is long remembered by many Americans and other people who never believed to one day be able to afford to buy an automobile. The automobiles which were produced by Ford were relatively cheap, and moderate people in the society were able to buy them unlike those from other manufacturers who produced expensive cars. With the affordability of the automobiles produced by Ford, people became civilized and transformed into a society with great freedom of when and where they live and worked. This has enabled the development of modern lifestyles like the existence of malls and drive-through restaurants. Ford had a greater imagination that people will one time be able to move freely from one point to another for a cheaper cost. The production line techniques that he applied in his company showed that he possessed strong ego and an entrepreneur with a conscience. He was able to compensate his workers with a higher rate compared to what was prevailing in the market hence enhanced the efficiency of his employees. He was able to provide his employees with a good working condition with a five-day working plan at eight hours a day which was far better that the existing working environments in many industries at that time (Barreto, 2013). 

Henry Ford founded Ford Motor Co. in 1903, which went on to become a world leading manufacturer of Model T automobile. As an entrepreneur, he became successful due to the higher efficiency of the input in the company. The employees were very efficient due to the compensation they received from the company hence producing many automobiles which lowered the general cost of manufacture and, in turn, lowered the cost of the automobile hence increasing demand. The result of this efficiency created. He was able to combine several ideas from various machines and industries in trying to ensure that the manufacture of model T was efficient as much as possible. He later turned to aviation when the demand of war planes was increasing, and the government ordered for the production of B-24 Liberator bomber planes. This venture did not work out for the company and hence failed due to the inefficiency in producing the planes (Manne, 2014).

However, the successful entrepreneurship practiced by Ford he faced a lot of competition from other automobile companies. Chevrolet was its major competitor in the market; it surpassed Ford regarding sales due to resistance to changing the model of the automobile produced by Ford. Ford failed to realize that people wanted different thing an any given time; the persistent production of Model T lead to the drop in sales. The failure to recognize that color was a major factor in the selling of the model T also led to the drop in is sales. Ford preferred to use black color due its speed of drying up. This minimized the choice and preference of the consumers. The competitors took advantage of this hence overtaking Ford company sales. The evolution took place again when Ford decided to produce Model A, which was a six stroke engine and soon gained its market share (Cirillo, et al., 2012).

Part C: Future Entrepreneurial Suggestions

Entrepreneurs can develop various businesses due to the existence of many opportunities in the current market. The development of businesses by entrepreneurs is normally explained effectively by the following entrepreneurial process below.

  1. Acquiring motivation

This is factors that trigger an entrepreneur to venture into a certain business. The culture of an entrepreneur may force him or her to develop certain ideas and may eventually venture into that business opportunity. When an entrepreneur is experiencing various hardship like Henry Ford, who was not comfortable seeing farm animals used to pull carts, and there were existences of locomotives which used steam engines which could be used to pull and perform many farm activities. Also the existences of background knowledge about various techniques like Ford, who used to repair watches.

  1. Evaluating opportunity

After an opportunity is identified by an entrepreneur, he or she is required to conduct sufficient evaluation of the opportunities available. If the opportunity can be viable for further development into realization, then the entrepreneur evaluates the return on investment, capital requirement, competition and profit margin.

  1. Developing business plan

When a business opportunity is identified then, a plan will be needed to execute the business idea. There should be an appropriate strategy set to propel the business operations, analysis of the market, SWOT analysis and ways to cope up with the competition and entry to the market.

The entrepreneur should invest different sectors currently the fashion industry is evolving much, and new investments are created every time. This is a genuine sector to invest in since fashion is trending worldwide every time. The hospitality sector is also another industry to invest since modern lifestyle is changing and many people are resorting and yearning for luxurious living. Many people are engaging in businesses hence holding conferences and business meetings. The availability of these hotels and restaurants that offer sufficient services to support these activities. The sector is employing a lot of people and hence, should be an investment destination for many entrepreneurs to determine the opportunities available and create a viable business out of it. The development of automobiles which use renewable sources of energy should also be an opportunity for an entrepreneur. The development of automobiles which uses electricity and solar power is a priority to many entrepreneurs

An entrepreneur should be able to identify various business opportunities in different fields. There are several industries that entrepreneur can venture into, like the clean energy sector whereby current economies are headed to investing due to the depletion of fossil fuels in most countries which initially produced a lot. Investing in space exploration which is seen as the future key economic activities. The development of satellites and cloud computing is also one of the growing sectors which will be demanded shortly. The development of nuclear energy should be a priority since the future will depend on such kind of energy. Many machines that are in the process of development need a lot of energy.

In conclusion, an entrepreneur is a person who mobilizes all factors of production to develop a viable business which generates profits and creates employment, and useful products are produced. An entrepreneur should be a person with the following characteristics

  1. Hardworking

  2. Risk taker

  3. Self-motivated

  4. Persistent and innovative

These are some of the characters that enabled Henry Ford to be successful in his venture into business. He was an innovative character who identified his skills when he repaired watches at the age of 10. He was a focused individual who was determined to merge all factors of production to generate profit. He paid high wages to enhance the efficiency of his employees. However, he failed to understand the fact competition advantage was gained by just choosing different colors for the automobile produced by Ford. Chevrolet took the advantage of the lack of changes in colors of automobiles produced by Ford. He later adjusted to the market demands to offset the competition.

References

Abu-Saifan, S. (2012). Social entrepreneurship: definition and boundaries.Technology Innovation Management Review2(2).

Barreto, H. (2013). The Entrepreneur in Microeconomic Theory: Disappearance and Explanaition. Routledge.

Cirillo, A., Jensen, K., Reader, S., & Geier, M. (2012). The Growth of Labor Relations during World War II: A Comparison of Henry Kaiser and Henry Ford.

Curcio, V. (2013). Henry Ford. Oxford University Press.

Manne, H. G. (2014). Resurrecting the ghostly entrepreneur. The Review of Austrian Economics27(3), 249-258.

Nelson, B. (2012). The Real Definition Of Entrepreneur And Why It Matters.undefined. Retrieved September17.

O’Reilly, G., Dziurman, B., Sprague, J., & Witt, M. D. (2013). Winning the Baldrige Award: How the Henry Ford Health System Undertook a Five‐Year Improvement Process.

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