ENGINEERING ECONOMICS & ENTREPRENEURSHIP.ppt
Transcript of ENGINEERING ECONOMICS & ENTREPRENEURSHIP.ppt
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ENGINEERING ECONOMICS & ENTREPRENEURSHIP
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BPK 3013
Engineering
Economics
Entrepreneurship
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Financial
Statement
Introduction
Business
Plan
Analyze
Opportunities
&
Business
Strategy
Business
Entities
&
Support
Services
Creativity
&
Innovation
Introduction
Entrepreneurship
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Assessment of
Capital
Investment
Principles of
Money-Time
Relationships
Economic
Equivalence
& Interest
Rates
Cost Concepts
Introduction
Engineering
Economics
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Chapter 1
Introduction to Entrepreneurship -
Learning Outcomes
Understand the concept of entrepreneurship and entrepreneurRealize the importance of entrepreneurshipDifferentiate the characteristics of an entrepreneur to small business owners -
Definition of Entrepreneurship
It is the practice of starting new organizations, particularly with new project in response to identified opportunities (Barringer and Ireland, 2008)The process of organizing, managing, and assuming the risk of business (Kuratko and Hodgetts)Involves an opportunity, an individual, an organizational context, risk and resources (Lambing and Kuehl) -
Comprehensive Definition
A field of business, seeks to understand how opportunities to create something new arise and are discovered or created by specific individual, who then use various means to exploit or develop them, thus producing a wide range of effects.(Baron and Shane)
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Types of Business
Wholesaling
Retailing
Manufacturing
Services
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Manufacturing
Process of converting raw materials, components, or parts into finished goods that meet a customers expectations or specifications.Employ a man-machine set up and equipmentsNeed division of laborEg. Food industries, furniture, electrical and electronic -
Wholesaling
Sale of goods or merchandise to retailers, industrial, commercial institutional and others.Wholesaler buys large quantity of goods from various producers or vendors -> warehouse them -> resell to retailers. Eg.??? -
Retailing
Sale of goods or commodities in small quantities directly to consumersConsumers maybe individuals or businessesThey are called shops or storesRetailers are at the end of supply chain -
Services
Defined as intangible goodsEg. Insurance, government, tourism, banking, retail, educationThe output of this sector is information, service, attention, advice, experiences etc. -
Difference Between Entrepreneurs and Employees
Entrepreneurs
Founder & OwnerTake calculated riskAll to gain & all to loseEntrepreneurial Accountability for final outcomeVision drivenEmployees
Worker & EmployeeDont take much riskGains through salary incrementManagerialAccountability for all defined operationsTime basedProfession driven -
Characteristics of Entrepreneur
Passion/commitment for the business
Drive to achieve and grow
Opportunity and goal orientation
Taking initiative and personal responsibility
Persistent problem solving
Seeking and using feedback
Internal locus of control
Calculated risk taking
Tolerance for ambiguity
Integrity and reliability
Tolerance for failure
High energy level
Creativity and innovativeness
Vision
Self confidence and optimism
Independence
Team building
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Top Ten Characteristics of Successful Entrepreneur
Recognize and take advantage of opportunitiesResourcefulCreativeVisionaryIndependent ThinkerHard workerOptimisticInnovatorRisk TakerLeader -
ENTREPRENEURSHIP STATISTICS Did You Know?
Malaysian Situation
211 775 companies registered in Malaysia (Until Dec 2002).76 847 companies have terminated their businesses (Year 2002). 75.7% failed the first year of start-up.8% to 22% last through the next 5 years.4 in 100 000 with a high tech business idea eventually becomes a successful company that goes public. Bankruptcies occur for 84% of the high tech companies that succeed in getting venture capital. 1:24 start-up entrepreneurs success rate.(Source : Malaysia Statistics (MVD Agencies Sdn Bhd)
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Entrepreneurs Contributions
Develop new marketsDiscover new sources of materialsMobilize capital resourcesIntroduce new technologies, new industries and new productsCreate employment -
Advantages of Entrepreneurship
ExcitementSalary PotentialFlexibilityIndependence -
Other Advantages
Enormous personal financial gainOffer more job satisfaction and flexibilityEmployment for othersDevelopment of more industriesIncome generation and increase economic growthHealthy competition and encourage higher quality productsMore goods and services available -
Other Advantages
Promotion of the use of modern technologyEncouragement of more researchersDevelopment of entrepreneurial qualitiesFreedomThe ability to have great accomplishmentsReduction of the informal economyEmigration of talent may be stopped by a better domestic entrepreneurship climate -
Disadvantages
No regular salaryWork scheduleAdministrationPersonal sacrificesBurden of responsibilityLittle margin for error -
Entrepreneur vs. Small Business Owner
Small Business OwnerEntrepreneurDefinitionDoing business for the sake to support familyDevelop the business for himself and publicRiskLowerMedium and higherManagement StyleLowerLatestSourcesUsed for business continuityUsed to expand the businessOpprtunityLower Identification of possible opportunitiesAlways looking for new opportunitiesInnovation and creativityLowerPosses higher creativity and innovation -
Thank you