Entrepreneurial competencies, By Dr. Parul Chotalia

MEANING: COMPETENCY

Competency: forms of

business-related expertise

Basic business competency:

understanding the organizational and

business processes of a firm

MEANING: COMPETENCY Competency is a bundle of skills andtechnologies that enables a company toprovide a particular benefit to stakeholders

For example,

At Sony – benefit is pocketability

core competence is miniaturization

At Times of India – benefit is on time delivery

core competence is logistics management

At Motorola–benefit is un tethered(rope) communication

core competence is wireless communication.

MEANING: COMPETENCYDetermination competencies: skill identified with

the energy and focus needed to bring a business

into existence

Opportunity competencies: skills necessary to

identify and exploit elements of the business

environment that can lead to a profitable and

sustainable business

Resource competencies: the ability or skill of the

entrepreneur at finding expendable components

necessary to the operation of the business

Time

Information

Location

Financing

Raw materials

Expertise

MEANING: COMPETENCY

MEANING: ENTREPRENEURIAL COMPETENCY

Entrepreneurial competency means the area of expertise, skills, ability, efficiency, updated technology regarding organizational and business processes of a firm.

PERSPECTIVES OF COMPETENCY

Identifying existing competency

Establishing competence acquisition agenda

Building competency

Deploying competency

Protecting and defending competenceleadership

ENTREPRENEURIAL COMPETENCIES

INITIATIVESNATCHES OPPORTUNITYPERSISTENCE, ASSERTIVE, PERSUASIVE, SELF CONFIDENCE, INFLUENCEINFORMATION SEEKINGCONCERN FOR HIGH QUALITYCOMMITMENTEFFICIENCY ORIENTATION, MONITORINGSYSTEMATIC PLANNINGPROBLEM SOLVINGCONCERN FOR WORK AND EMPLOYEESCUSTOMER ORIENTATION

TO BE CONSIDERED COMPETENCE A SKILL MUST MEET THREE TESTS

1. Customer Value: Competencies are the skills that enablea firm to deliver a fundamental customer benefit.

2. Competitor Differentiation: A capability must also becompetitively unique

power trains is a competence at Honda which has never been so at Ford.

Honda’s ability to produce some of the world’s best engines andpower trains does provide customers with highly valued benefitsof superior fuel economy, zippy acceleration, less noise andvibration.

TO BE CONSIDERED COMPETENCE A SKILL MUST MEET THREE TESTS

3. Extendibility: A competitive is truly corewhen it focus the basis for entry

into new product markets.

SKF, the world’s leading manufacturer of roller bearing hascompetencies in antification, precision engineering and makingperfectly spherical devices. In order to achieve extendibility, SKF mustbe capable of manufacturing the round, high precision recording headsthat go inside a VCR, most of which are now manufactured by Japanesefirms.

RISKS OF IGNORING COMPETENCIES

Opportunities for growth will be turned down.

Ignorance of competencies may weaken the enterprise

The lack of competence perspective can make a companydependent on outside suppliers for core products.

A company focused only on end products may fail to investadequately in new competency that may constrain growth inthe future.

The new entrants in the area /competitors may lag the growthof the company.

AWARENESS

Identification of business opportunity.

INDENTIFICATION OF OPPORTUNITY

Tools

1. Environment Scanning

2. SWOT Analysis

FACTORS IN IDENTIFICATION OF OPPORTUNITIES1. Self Experience or Exp. of Pretense / family

members.

2. Ready demand in local market

3. Imports banned or controlled

4. Competition of Medium & large enterprises

5. High profitability

6. Reservation

7. Incentive by Govt.

8. Marketing by Govt.

CAREER ALTERNATIVES IN SELF EMPLOYMENT

Industry – ManufacturingTradeCommercial Services

Banking InsuranceWarehousing, Logistics

Professional Service CA ArchitectsDoctors

ConsultancyEtc

SALES ASSESSMENT

PROCESSES OBJECTIVES

FIRM PRODUCT

1.PRICING

2.SELLING

3.ADVERTISING

1. SALES

2. PROFITS

MARKETING ASSESSMENT PROCESSES OBJECTIVES

FIRM PRODUCT

1.Product Quality

2.Pricing

3.Barnding

4.Advertising

5.Selling

6.Channels

1.Customer

Satisfaction

2.Sales

3.Short term &

Long Term Profits

4.Brand Image &

Goodwill

5.Diversification

Environment

MARKET DEMAND ASSESSMENT

1. Product – Specifications2. Total Volume- Physical Volume / Monetary3. Bought – volume booked / dispatched / paid for /

received / consumed.4. Customer Group.5. Geographical Area.6. Time period –season , plane period.7. Marketing Environment – economic conditions , Govt.

policy , Practical , Consumer Behavior.8. Marketing Program –Pricing , Advertising , Sale

promotion, personal selling , channels, dealers.

ASSESSMENT OF COMPETITION

1. Competitions

2. Market Share of competitors

3. Strength and weakness of consumer, Image of competitor products-price features.

4. Consumers’ Image towards competitors’ products / services.

5. Trade practices of competitors-Discount to dealer.

6. Major customers of each brand.

ASSESSMENT OF SITEFactory

Personal Factors

Economics

Competition

Geography

Local Law’s

ProcedureCriteria

Factors

Location Alternatives

Evaluate

Select

SITE-SELECTION

FACTOR WEIGHT SCORE WEIGHT SCORE WEIGHT SCORE

1.Production

Cost

2. Raw

Material

Supply

3. Labour

Availability

4. Cost of

living

5. Enviro

nment

6. Market

WEIGHT

SITE-A SITE-B SITE-C

Total

score

LOCATIONAL & BREAK-EVEN ANALYSIS

Site A

Site B

Site C

Rs. 1 Lakh

Rs. 1.5 Lakh

Rs. 2 Lakh

Rs.100

Rs.50

Rs.25

POTENTIAL

LOCATION

FIXED COST

PER YEAR

VARIABLE COST

PER UNIT

MAKE OR BUY

1. Facilities. 2. Plant Capability – Equipment , Quality ,

Quantity , Personnel.3. Economic Advantage.4. Trade relations. 5. Supplier Reliability6. Trade Union Views.7. Alternative Resource Uses.8. Legal Restrictions (Patents).

ASSESSMENT OF PRODUCTION PROCESS

1. Product / Service requirement 2. Technological Feasibility3. Financial Considerations4. Labors & skill5. Output & capacity needs6. Compatibility win existing facility7. Flexibility8. Raw materials9. Size & other limits a plant/ building 10. Spare parts inventory

PRELIMINARY PRODUCT DESIGN

PILOT PROJECT

DETAILED PRODUCT DESIGN

PRE PRODUCTION RUN

MANUFACTURE

DESINGNING PRODUCT / SERVICE INTERNAL

ENVIRONMENTIDEACOLLECTION EXTERNAL

ENVIRONMENT

MARKET

APPRAISAL

1. Demand

2. Supply

3. Competition

4. Physical Appearance:

Colour, Style, Fashion

5. Diversification

6. Packaging

7. Cost

8. Import & Export

9. Consumer Behavior

10. Distribution Channels

TECHNICAL

APPRAISAL

1. Inputs

2. Quality of

Materials

3. Production

Technology

4. Productivity

5. Equipment Choice

6. Location & Site

7. Lay-out

8. Work-Schedule

9. Value Analysis

10. Standardization

FINANCIAL

APPRAISAL

1. Investment

2. Financial

3. Cost

4. Profitability

5. Breakeven

6. Cash flow

7. Investment

Worthiness

ECONOMIC

APPRAISAL

1. Cost & Benefit

2. Impact on

Society

3. Employment

NEW PRODUCT DEVELOPMENT

Feasibility Study

10 COMPETENCIES FOR ENTREPRENEURIAL SUCCESS:

Major competencies that contribute towards top performance to entrepreneur

Integrity - the entrepreneur has a clear sense of values and beliefs that underpin the creative and business decisions that they make; and that influence the actions they take, particularly when in difficult or challenging circumstances


2. Conceptual Thinking - the entrepreneur is prepared to use fresh approaches; comes up with crazy ideas that may just work, leading to radical change or significant improvements; and takes time to listen to new ideas without pre-judgement


3. Risk taking - the entrepreneur understands that risk taking means trying something new, and possibly better, in the sense of stretching beyond what has been done in the past; and that the constant challenge is to learn how to assess choices responsibly, weighing the possible outcomes against his/her values and responsibilities


4. Networking - the entrepreneur understands that networking is a key business activity which can provide access to information, expertise, collaboration and sales; and that careful planning and preparation helps achieve desired results


5. Strategic Thinking - the entrepreneur understands and values the planning process, thinking and planning over a significant timescale; recognizes external trends and opportunities; and is able to think through any complex implications for the business 6. Commercial Aptitude - the entrepreneur keeps up to date with developments in the sector; seeks out best practice; and identifies and seizes opportunities that are not obvious to others


7. Decisiveness - the entrepreneur resolves issues as they arise; does not get bogged down in analysis during decision making; and responds flexibly to deal with changing priorities

8. Optimism - the entrepreneur persists in pursuing goals despite obstacles and setbacks; operates from hope of success rather than from fear of failure; and sees setbacks as due to manageable circumstance rather than a personal flaw


9. Customer Sensitivity - the entrepreneur builds trust and long term relationships with customers; generates an expectation of high level of customer service; and regularly exceeds customer expectation

10. People Focus - the entrepreneur creates common purpose with colleagues through shared vision and values; walks the talk; sees and values the best in others; builds the total capability of the immediate and wider team; and always considers the principles of inclusiveness in planning and dealing with others

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Education

Entrepreneurial competencies, By Dr. Parul Chotalia