Opportunities and Functions: Enterprise
Enterprise in Business
Enterprise in business refers to the ability and willingness to take on new and potentially risky projects to make profit. It lies at the foundation of entrepreneurship and business management. Here we examine the key components and implications of enterprise.
Characteristics of Enterprise
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Innovativeness: Entrepreneurs constantly seek new ideas and methods to improve existing goods and services, or to create new ones. This involves a high level of creativity.
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Risk-taking: Enterprise involves acceptance of the risks that come with starting and running a business. Entrepreneurs may risk financial loss, but without risk, no progress is achieved.
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Proactivity: Entrepreneurs are proactive, taking initiative rather than just reacting to events. They identify opportunities and take action before others do.
Role of Enterprise
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Job Creation: When entrepreneurs set up new businesses, they create jobs. This not only benefits individuals, but also stimulates economic growth.
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Wealth Creation: Successful enterprises generate profit, contributing to wealth creation in the economy.
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Innovation: Through developing new products, services and ways of doing things, entrepreneurs contribute to innovation in society and in their respective sectors.
The Enterprise Function
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Identifying Opportunities: The enterprise function involves identifying and assessing potential business opportunities. This involves market research, competitor analysis, identification of consumer needs and wants etc.
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Decision Making: The entrepreneur will make decisions about which opportunities to pursue based on their assessment and other factors such as resources and skills available.
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Risk Management: Once a prospective business idea is identified, entrepreneurs need to manage the associated risks and uncertainties. This involves strategic planning, financial management and possibly obtaining insurance.
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Resource Allocation: The entrepreneur must efficiently allocate resources (including finances, people, equipment) to implement the business plan.
Evaluating Opportunities
Three major factors usually considered when evaluating business opportunities are market attractiveness, competitive positioning, and the ability to deliver.
Market Attractiveness
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Market Size and Growth: The larger and faster-growing the market, the more attractive it is as a business opportunity.
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Market Profitability: The degree of profitability in the market is another essential consideration.
Competitive Positioning
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Creating Unique Value: Opportunities where the company can create unique value—through superior products, better customer service, lower prices etc—are more attractive.
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Barriers to Entry: If there are high barriers to entry, it can prevent competitors from entering the market, making a business opportunity more attractive.
Ability to Deliver
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Available Resources: Whether a business opportunity can be pursued depends on whether the company has the necessary resources—financial, human, technological, etc—to deliver on the opportunity.
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Existing Capabilities: The company's skills and capabilities can enable it to exploit certain business opportunities and make a significant difference in the end result.