RESOURCE-BASED PERSPECTIVE: ENVIRONMENT AND ENTREPRENEURSHIP

The resource ventures should follow the technological developments characterizing the environment. Ongoing updates and a profound familiarity with innovations in the professional area of the business's main product(s) are essential. Consumers keep up and move along with the times, and they expect the businesses they are dealing with to not onlv move ahead but also to enlighten them, and to guide them as to which of the updated products should be purchased.

Entrepreneurs must follow R&D progress in order to forecast their products' long-term feasibility and profitability. However, businesses should not consider only the technological environment; clients' demands for technological improvements in the goods or services they are buying are important factors in their interactions with suppliers. Taking the previous example of social spa-ing, even a spa that offers the best massage treatments but lacks the most technologically up-to-date equipment such as sophisticated rain showers, steam rooms, and advanced comple­mentary facilities will be less attractive to important potential clients, who will opt for the newest, most innovative and most 'in' products in the technological context (Naman and Slevin 1993; Shane and Ulrich 2004).
The ecological environment. Nature, the climate and environmental factors have become focal points in the entrepreneurial realm. Ecological considerations regarding where and when to launch a venture (Carroll and Khessina 2005), and global preservation approaches are emerging almost everywhere. Al Gore's documentary on global warming, An Inconvenient Truth (2006), is but one illustration of the 'taking action' or 'proactive' atmosphere in which everyone, but especially businesses, need to calculate their specific impact on global ecology. Entrepreneurial businesses should acknowledge these trends: they should support and preserve clean environments by applying processes that sustain natural ecosystems and that conser ve and protect natural resources, and, in general, implement practices that reduce the footprint of development (Carroll and Khessina 2005; Kariv and Kirschenbaum 2007a, bi.
The operational environment. Familiarity with one's direct and indirect competitors prior to launching a new business is extremely important as it allows the entrepreneur to deal most effectively with the competition, either by finding a different niche than that of tile competitors or by competing on such factors as price, quality of service and range of expertise.
The direct competitors are individuals or companies that offer similar or identical products and/or services which answer the same customer needs and demands. For example, when examining where to locate a private dental clinic, the entrepreneur should know how many dental clinics are already active in the given area, and what specific expertise they offer (e.g., emergency treatment, preventive, restorative or cosmetic treatments, treatments for adults, seniors or children, etc.). The entrepreneur should also find out how successful the competitors are in terms of size, client diversity, reputation, marketing and advertising.
Indirect competitors are companies or businesses that offer parallel or similar products or services that respond to similar client needs or demands. For example, establishing a new bakery in an area where restaurants and coffee shops abound will undoubtedly lead to tough competition since the clients have an array of alternative possible sources of baked goods (D'Souza and McDougall 1989; Waldersee, Griffiths and Lai 2003).
The entrepreneur should thus analyze the following aspects of the proposed operational environment:
Existence of active direct and indirect local competitors. Number of competitors.
Types of products and services provided bv the competitors. Prices of products and services provided by the competitors. Present and potential clientele.

Communication
P'anned ius'ress
Distribution and localization
Production
Prices                         Sa.es =
Figure 1,1  The main topics in market research

The topics that are associated with the information gathered from the '4-W technique are presented in Figure 1.1. Information to answer the above-listed questions can be gathered in one of two ways: an independent research survev. or encasement ot a specialist to carry out such a survey. The first option allows for more control ot the search process by the entrepreneur, as well as ongoing adaptations to his or her specific needs. Such hands-on management of the search for information also promotes a more intensive and in-depth study of the strengths, constraints and limitations of the market. This is the least expensive option, but it is usually time-consuming.

The internet can and should be exploited in order to access facts and general knowledge on entrepreneurship, and there are several sites that provide suet information.3 Other sources may also be utilized: economics journals, academic journals Dr. economics, trade or professional publications, which have a more practical perspective and periodicals dealing with ongoing market matters, statistical data published by the particular country'; bureau of statistics, university libraries, and centers for entrepreneurs. It is also important to communicate with active entrepreneurs, to interact with potential clients (asking questions, analyzing their replies), and to experience similar products and services provided bv future competitors.
Engaging a specialist or company that provides data and market analyses can facilitate the information-gathering process and provide evidence-based support for decision-making. Not only are such specialists usually more experienced in such procedures. thev are also very well networked and have access to otherwise less accessible databases i Chrisman. Chua and Steier 2002)

SUMMARY
Prior to launching a venture, entrepreneurs should conduct research on both the market and the environment in which they are planning to operate. Thev must have a thorough grasp of their potential clients' behaviors regarding similar products and/or services and be aware of the major trends in terms of the active clients' profiles and their motivation for purchasing the product to be offered. Thorough familiarity with the market is a valuable advantage at the pre-launch stage in either preparing a marketing plan that will attract clients already engaged with existing businesses (e.g., one that will attract people having dental treatments in one clinic to a new clinic that is planned for launch in the same area), or to adjust the products or services of the planned business so that it will attract a different target clientele or answer different needs than those provided by the existing businesses (e.g., the new dental clinic can offer a twenty-four-hour emergency switchboard or employ experts in dental treatments not available in the specific area).

CASE STUDY 1.1    Baby-Dalozo, Hungary
The book provides a relatively unique service in Hungary: it offers a catalogue, a magazine and a website for baby products, equipment and services to both retail stores and individuals,
Aggie Molnar, a thirty-three-year-old entrepreneur, launched Baby-Dalozo three years ago .-.hen her first daughter, Mara, was born and she found it difficult to locate a place where she could buy both the equipment and the varied products needed for the new infant. Aggie Molnar and her husband were even more frustrated when they realized that the shops they found were either very expensive or did not carry some of the products they asked for: xln one shop there .vere beds and baby carriages, but no toys or baby clothes for newborns. So we went to a different shop where they told us that they had baby clothes but did not have any guidance books for new carents. We were going from one shop to another, and in each one there was always something acking,' says Molnar.
The manager of one of the baby stores told Molnar and her husband that he buys most of the store's merchandise according to market demand as he is never sure if merchandise that is not 'n demand will be sold and does not want to keep unsold stock in the store. He also remarked that although he had been in the business for about thirty years, he himself had no idea who the oest manufacturers for baby products were. Molnar did not pay attention to the man's remark at the time, but when Mara was about eight months old, she decided to quit her job, and the store owner's words came back to her: she decided to launch a business. Her idea was to gather information about baby products and equipment and put them all into a catalogue that would be distributed to a broad range of suppliers and consumers; she envisioned a database, updated •nonthly, that would include a list of suppliers and buyers of products and equipment for infants, v/ith prices and sales, recommendations, and many other details that might ease the entire process. Using personal savings, she started working from home.
Molnar expected that it would be relatively easy to penetrate the market, since it was necessary only to present the new idea to suppliers, free of charge (at first), in order to produce the first catalogue. To her surprise, not a single business owner was willing to include the name of his or her business in the catalogue. She was aware that marketing and advertising were at a very early stage in Hungary at that time, and that most baby supplies were acquired in neighborhood stores 3r by finding other sources, usually by chance. She was convinced this was neither the most economical nor the most satisfying way of outfitting the new baby. Although she was disappointed 'n her failure to produce the catalogue, Molnar launched a company - with great concern but much support from her husband. Founding a catalogue for businesses producing and selling baby aroducts and equipment was an innovative concept, but she felt that, although it would entail a :ertain amount of consumer education, the Hungarian market was ripe for such a new idea. Molnar says that most of the people with whom she and her husband discussed her idea suggested that she consider going into a different business.
Molnar began by conducting a market survey, by telephoning companies in order to find those that might suit the catalogue. Most were very suspicious about her proposed service, particularly about the vfree-of-charge' advertising and distribution of the catalogue. After three months, supplier response was still very limited, and she decided on a different strategy. At her husband's suggestion, she posted the catalogue on the internet. She arranged it both by types of products;     and equipment and by suppliers, in alphabetical order. Going on to the internet obliged Aggie ; Molnar to be more creative and dynamic; she hired a young graphics student to design the catalogue, making it both user-friendly and attractive.

By going on the Web, Molnar's concept gradually penetrated the market, and the catalogue's range of advertisers expanded. She believes that the internet made her services more visible; the products and services were categorized and we I! organized, the photographs of the equipment and products were attractively displayed, and it was easy to contact the companies that advertised on the website. Both manufacturers and store owners benefited from the catalogue; their sales increased, and requests to advertise in Baby-Daidzo increased as well. Molnar's marketing concept was based on a one-month, commitment-free tria: \r aavert'sing; businesses wishing to continue advertising once the month was up had to pay. Recasts :c advertise in the Baby-Dalozd catalogue also increased, and some links she had been t.-v'-g to establish several months earlier, tomanufacturers outside Hungary, began to become ac:'.e: Pc-iaman, Moldavian, Italian, Polish and French manufacturers of baby products ar.d e3-'c™;er: started to advertise in the Baby-
:     Daldzd internet catalogue.
;          'The problem of penetrating the market witr a far'.'a.-, expected product or service versus
i     an innovative concept is always there; I could have .',a:~.~3 -":." a while and started this business
:     after someone else had introduced the concept. It r.'3^: -a.s been easier; my husband and I
!     spent a lot of money at the beginning of my business /,':- -: 'euros. The competitors we face
;     now had a smoother path. However, I am glad :hat '. .'.as :re founder of such an idea in
i     Hungary. If you research your environment very caye~i. _.   ,;.,: a'ways find some open-minded
;     people who are prepared for a different concept. T~:s 's -;,•, _, ;j create your own niche,' says
;     Molnar.
;          'At first, sales were fairly poor, as I had expected; s:". ': ;,as disappointing and somehow
;     frightening. I couldn't guarantee that things wou.d ge: ce::ei- £ t-cugh I had a strong intuitive
;     feeling that they would. In order to target my pctert'a   : 'e-is, I used many techniques simultaneously; besides the market research, which re cec —.s segment my potential clients and
;     sort their products and services, I was constantly ;ookr'g -':<• c:-"oaries that were active in the
•     market. I mainly used the internet for this, but I a.'sc Lsea —y ccntacts to find such companies; :     finding the companies was relatively easy, but getrir; :-5- :; ccoperate was very difficult. I I     personally contacted each one of them and presented -;. se - a-a' rr.y new concept. I was trying i     to emphasize the win-win aspect of the situation, of cccc~"=:vg together on such a project, as ;     well as to show them the potential avenues of our ccocerat'cr. Some of those companies that I I     contacted acknowledged the potential of such a p':.:ect and agreed to advertise through our ;     catalogue; but I couldn't be sure how much they trustee that :t would enhance their sales. I was ;     persistent in looking for different companies thai \vere active in the market, and that suited the ;     catalogue and could benefit from it. It was a lot of ;, or<, and sometimes frustrating; there were i     many refusals, but there was also corresponding y positive feedback from those that had been >     advertising in Baby-Dalozd.'
.'          After a while, the range and number of companies advertising in Baby-Dalozd expanded. Baby-
;     Dalozo continues to grow in terms of sales, number of companies advertising in the catalogue,
;     product innovation, product diversity, number of employees, and more. But Aggie Molnar says
J     that her satisfaction comes mostly from product innovation: 'I've had very positive feedback from
?     relatives and friends on the use they make of the catalogue as individuals, so I launched a different

THE ENVIRONMENT AND ENTREPRENEURSHIP
magazine - one that targets parents and pregnant women. It provides lists of stores and manu--'acturers, but has many other sections, such as an interactive blog where parents can communicate •.vith each other, a recommendation-of-the-day section; a "beautiful baby of the month" contest, and much more.'
QUESTIONS FOR DISCUSSION
I      Identify the different environments that Aggie Molnar worked in, from pre-launch to the present. C      What are the main relationships between the sociocultural and technological sub-environments
that Baby-Dalozo is active in? J      What was Aggie Molnar's main focus while launching her company? Can you analyze the
motives that led her to focus especially on this particular aspect? -     With Hungary now rapidly entering the internet era, how would you suggest that Aggie Molnar
proceed with her services?
NOTES
At www.oecd.org/. At www.gemconsortium.org/.
The sites, in alphabetical order, are: ADI, the African Development Institute, dedicated to fostering and promoting the human and material development of Africa, www.africainstitute.com/about.html; ASES, an international entrepreneurship network, focused around the Asia-Pacific region, that nelps foster a new generation of entrepreneurs ready to innovate in the ever-changing global markets, www.asesinternational.org/mission.htm; CIE, the Center for Innovation and Enterprise ;n Africa, www.ifc.org; CORDIS, Community Research and Development Information Service on European Research and Innovation activities, http://cordis.europa.eu/en/home.html; EBAN, a European angel network promoting the exchange of experiences and good practice and the role of ousiness angels and their networks near public authorities, http://www.eban.org/; Eureka, a network -"or market-oriented R&D, www.eureka.be/home.do; GEM, Global Entrepreneurship Monitor, ;,ww.gemconsortium.org/; for each country, government websites for entrepreneurship or SMEs; IFC, Private Enterprise Partnership for Africa, to stimulate private-sector growth, promote sustainable private-sector investment in developing countries, helping to reduce poverty and improve reople's lives, www.ifc.org/about; International Council for Small Business, www.icsb.org/; IRC network, supporting innovation and transnational technological cooperation in Europe, ,\ ,vw.innovationrelay.net; local authority for SMEs, microbusinesses; local Ministry of Trade, Industry, Employment, per country, per region.

REFERENCES
Carr:    3.R. and Khessina, O.M. (2005) The ecology of entrepreneurship', in S.A. Alvarez, R. Agarwal = "3  C.   Sorenson  (eds)   Handbook of Entrepreneurship Research:  Disciplinary Perspectives - ":f"?ar/ona/ Handbook Series on Entrepreneurship), New York: Springer.
Chrisman, J.J., Chua, J.H. and Steier, L.P. (2002) 'The influence of national culture and family
involvement on entrepreneurial perceptions and performance at the state level', Entrepreneurship
Theory and Practice, 26: 113-31. Doh, J.P. and Pearce, J.A. (2004) 'Corporate entrepreneurship and real options in transitional policy
environments: theory development', Journal of Management Studies, 41: 645-64. D'Souza, D.E. and McDougall, P.P. (1989) 'Third World Joint Venturing: a strategic option for the
smaller firm', Entrepreneurship Theory and Practice, 13: 19-35. Dubini, P. (1989) 'The influence of motivations and environment on business start-ups: some hints for
public policies', Journal of Business Venturing, 4: 11-27. Gartner, W.B. (1985) 'A conceptual framework for describing the phenomenon of new venture creation',
Academy of Management Review, 10: 696-706. Gustavsen, B., Finne, H. and Oscarsson, B. (2001) Creating Connectedness- The Role of Social Research
in Innovation Policy, Amsterdam: John Benjamins Publisher. Hanssens, D. (1980) 'Market response, competitive behavior, and time series analysis', Journal of
Marketing Research, 17: 470-86. Kariv, D. and Kirschenbaum, A. (2007a) 'Collective spatial perceptions of men and women commuters;
linking space, jobs and activity', Journal of Human Ecology, 22: 71-82. Kariv, D. and Kirschenbaum, A. (2007b) 'Linking space and labor markets: towards an alternative
conceptualization of labor market behavior', Journal of Social Science, 15: 187-95. Lumpkin, G.T. and Dess, G. (1996) 'Clarifying the entrepreneurial orientation construct and linking it
to performance', Academy of Management Review, 21: 135-72. Naman, J. and Slevin, D. (1993) 'Entrepreneurship and the concept of fit: a model and empirical tests',
Strategic Management Journal, 14: 137-53. Rodie, A.R. and Martin, C.L. (2001) 'Competing in the service sector: the entrepreneurial challenge',
International Journal of Entrepreneurial Behaviour and Research, 7: 5-21. Schwienbacher, A. (2007) 'A theoretical analysis of optimal financing strategies for different types of
capital-constrained entrepreneurs', Journal of Business Venturing, 22: 753-81. Shane,   S.A.   and   Ulrich,   K.   (2004)   'Technological   innovation,   product   development,   and
entrepreneurship in management science', Management Science, 50: 133-44. Spencer, J.W., Murtha, T.P. and Lenway, S. (2005) 'How governments matter to new industry creation',
Academy of Management Review, 30: 321-37. Waldersee, R., Griffiths, A. and Lai, J. (2003) 'Predicting organizational change success: matching
organization type, change type and capabilities', Journal of Applied Management and Entrepreneurship,

8: 66-81.
Share on Google Plus

Declaimer - MARTINS LIBRARY

NB: Join our Social Media Network on Google Plus | Facebook | Twitter | Linkedin