International Entrepreneurship: Case Study of Amancio Ortega

This report is a case study of Amancio Ortega, a Spanish billionaire and his journey in international entrepreneurship. It covers topics such as motivation, trait theories, effectuation theories, and lessons from his entrepreneurial career. The report also discusses the growth and development of international SMEs and the role of entrepreneurship in economic development.

International
Entrepreneurship

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
The motivation to set up the ventures/businesses supported by theories such as: familial
influences, education etc.............................................................................................................1
Apply trait theories here: Are Entrepreneurs born or made?......................................................2
Use effectuation theories by SAVARASTHY............................................................................2
What lessons can we draw from this International Entrepreneur? .............................................3
PART B ...........................................................................................................................................3
International Entrepreneurship theme.........................................................................................3
Course work 2-Literature Review ...................................................................................................5
Growth & development in the international SME......................................................................5
Theoretical frame work to study the growth path of enterprises................................................7
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
International Entrepreneurship is a form of businesses that includes the operations of
multinational companies. Entrepreneurship is the process of calculating risk, innovating ideas,
investing time and money in a vision. With enough success in the home country the next step in
this process is to start operations in a foreign country as well, and hence comes the term
international entrepreneurship (Belitski, 2019). In this report is the case study of Amancio
Ortega, who is a Spanish billionaire with a current net worth of USD 77.8 Billion. He is currently
the second richest man in Europe earning his fortune through his Inditex Group; a multinational
clothing company. In this report an analysis is done on the life events and entrepreneurial carrier
of Amancio Ortega through a secondary review. Included in the report are the motivational
factor, vision, a classification on the basis of effectuation theories and respective lesson from the
story of Amancio Ortega.
MAIN BODY
The motivation to set up the ventures/businesses supported by theories such as: familial
influences, education etc.
Motivation is the process that helps each and every individual enthusiastic about achieving
the goals and objective. It is the motivation that pushes a person to overcome the changes
faced in the path of achieving goals. Every successful entrepreneur in the world has a
remarkable story about the life struggle and business success and Amancio Ortega is no
different. Born in 1936 in a small town of Spain; Busdongo de Arbas in family of a
railway worker, his father. He has to leave the school in a young age of 13 years due to the
uncertainties associated with the job of his father. Due to this unstable early education and
not very fortunate family background, Amancio started working in as a helper in a small
shirt maker shop by the name Gala (Criado-Gomis, Iniesta-Bonillo and Cervera-Taulet,
2018). From here started the entrepreneurship of a business tycoon. In the following years
he worked at several position in the garment and clothing industry and this is where his
fashion sense developed and his entrepreneurship grew. In 1963 he partnered with his
cousins and future wife Rosalia Mera and started a company of his own by the name
Confessuiones Goa, which primarily produces woman's bathrobes. Over the years
Amancio has kept his life private and insisted on only be recognixed by his friends family
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and the people he worked with. In 1975 he opened the first store if Zara in his home-town
La Coruna.
Apply trait theories here: Are Entrepreneurs born or made?
In order to understand the nature of an entrepreneur each and every life-event of that
person is required to answer the question whether entrepreneurs are born with their abilities or
develop in through the life events. In case of Amancio Ortega, officially only 3 interviews were
given by 2012 which makes the analysis unlikely for precision. Amancio's father was a worker
railways and had to constantly make changes in the lifestyle due to the demands of the job. This
uncertainty in the lifestyle of his father routine and lack of the feeling of settlement both forced
and motivated Amancio to start working of his own by a shirt shop (Jafari-Sadeghi, Mahdiraji,
and Dana, 2021). While there are always many characteristics and skills that are learnt in the
process of being an entrepreneur some of the skills are present by birth. Following are some
examples of natural behaviours of Amancio. It is primarily though the genetic and cultural
influence a person is more likely to start a business. Once influenced by the business world a
person can identify opportunities. It is experiences of life which developed a tendency to be self
employed, derived by the will of successful for oneself, friends and family. Amancio Ortega is
very much a made entrepreneur with himself starting a company among is cousins and continued
to make an impact in the market. The top Spanish billionaire kept himself indulged in continuous
expansion and acquiring of other companies under the Inditex group which made him a fortune.
Use effectuation theories by SAVARASTHY
In order to completely understand the mind-set of an entrepreneur and analyse the
business methods and approach Saras Savarthy present a theory. This theory informs describe the
business strategy and decision making skills of an entrepreneur based on the history of decisions
and steps taken in the business world. It includes following categories and types of effectuation
principles to classify and deduce the logical approach of entrepreneurs (Landström and Harirchi,
2018).
Bird in hand: This category of people are derived by making an impact with the
resources available with them.
Lemonade principle: This principle revolves around finding opportunity in every mistake
made.
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Crazy Quilt: Making the most of the business my merging and acquiring with other
companies.
Affordable loss: People derived from this principle are derived by the logic of only
risking the money they could afford to lose.
In case of Spanish billionaire Amancio Ortega had different approaches in different
stages of his entrepreneurial career. Amancio initial approach was Bird in hand i.e. when he had
enough experience and wanted to start a company he started, he chose his cousins and friends In
the later stages when he got success with the initial years Crazy Quilt became the way of
growing in the market (Lin and Si, 2019). Amancio always had a calculated approach which
gave him positive results through out his career. His success credit not only goes to his Inditex
revenue but also to the real estate business as he own property majorly in Madrid Barcelona,
New York etc.
What lessons can we draw from this International Entrepreneur?
Amancio Ortega has always kept a low profile; always kept himself away from the fame
that comes with the money that he had earned. There are many learning that Amancio has for the
world, from his way of looking at the business world to making most of the present situation and
resources available. The business legend didn't restrict himself to the Inditex but also is a
successfully in real estate world. Being clear about the mission and vision of the company and
focused on the opportunity; targetting the right market is one of the best learnings through the
entrepreneurial career of Amancio Ortega.
PART B
International Entrepreneurship theme
Entrepreneurship theme classifies as the type of entrepreneur on the basis of the sectors
they serve in. There are various theme of entrepreneurship in the world as there are any types of
businesses (Xu, Drennan and Mathews, 2019). Every entrepreneur can be given a theme based
on their core thinking and idea around which their business revolves. Major themes of
entrepreneurship are as follows.
Social Entrepreneurship: This theme of entrepreneurship involves the venture and
businesses that work for the social development and well being particularly with the partnership
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with government and non profit organisation. The driving force of this entrepreneurship is social
progress and increment in brand image value.
Technological Entrepreneur: When entrepreneur are indulged in the technological
sector of business then they are said to be working in the theme of technological entrepreneur.
Continues innovation and search for the better technology and covering all the fields of
technological gadgets.
Innovation Entrepreneur: Entrepreneur are indulged in all kind of activities that can
start a venture and serve the market through the product or the services. The entrepreneurs who
are indulged in the innovational activities that is in the process of solving a problem or
improving the solution through innovation are called as innovation entrepreneurs. Elon Musk is
the best example of this theme of entrepreneurs.
Finance Entrepreneur: These Entrepreneur are derived by the will of making their
money work for them (Porfírio, Mendes and Felício, 2018). Through successfully investing and
expanding their core businesses with merger and acquisitions, such make use of their market
understanding and trend prediction. While targeting the market with their main and primary
brand such entrepreneur do not restrict themselves to a single source of permanent earning but
engage in many horizontals and verticals of the business market.
Amancio Ortega operates under finance theme of entrepreneurship through Inditex
corporation stock market exchange and real estate business. Amancio is a perfect example of
financial entrepreneurship. Although majority of his earning comes from the Inditex corporation
which owns many s company and operates in many nations. In 1985 the formation of Inditex and
ultimatelyt holding the zara brand under it. He invested his fortune in the company and made the
product for fast fashion which is affordable to all the people. Through constant approach of
expansion and mergers and acquisition in the end of 90s the corporation acquired brands like
Massimo Dutti and Pull&Bear. In 2000s Inditex open up to the public in the stock market and
raised USD 2.1 Billion. Soon after which the company never had to look back because of the
multiple resources of earnings Amancio had which were ultimately helpful in balancing any
situation that the corporation faced. Amancio owns a property of around USD 17.2 Billion all
around the world of which the majority is shared by the cities like Madrid Barcelona Paris and
New York through his company Pontegadea. Apart from this Amancio also holds 10% of shares
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in telecom companies like TelefonicaSA's unit Telxius along with owning 5 % of shares in the
Spanish energy company Engages in 2019.
Conclusion
Amancio Ortega has made his venture perform well enough to be recognized and respected
all around the world. The entrepreneur posses critical market understanding and triggering
the opportunities of the market. With all this allocation of his money in various sectors of
business Amancio Ortega has been on of the most successful financial entrepreneur in the
world.
Course work 2-Literature Review
Abstract
The following report consist of the understanding about the small medium enterprises and
importance of the role played by these scales of ventures in the economy of the nation. The
following report has been formed on the basis of a secondary research of a well known writer
who project light on the important entrepreneurial issues. Consisting in the report are all the
relevance issue, opportunities and ways in which small and medium enterprise can help the
economic development
Growth & development in the international SME.
As per the view point of Samapti Guha., 2021. the study on the literature on small and
medium enterprises suggests that SME go through the different stages of the growth and
development. Enterprises has to start business and than they face challenges in the process of
development in the country. There are various factors that contributes in the growth of
enterprise's success, these factors enhance the effectiveness of the business in the market and
increase the level of proficiency (5 success tips from a multibillionaire who went from rags to
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riches, 2021). Geography and various factors influence the growth of enterprises by provide
valuable resources and development plan to the business. There are two set of assumption in the
process of growth first is the growth path followed by the enterprise is prevailing and linear and
other suggest that growth of the enterprise is fairly based on the opportunities that enterprise get
and these opportunities are unpredictable by the individual. However the concept of the growth
depends upon the different entrepreneurs. Growth of the SME can be define as the revenue
generation, value addition, and expansion in the term of volumes of the business.
As per according to the viewpoint of Priya Gupta, 2021, Growth of SME can be measure
as a market position of enterprise, quality of product and services, goodwill to the customers.
Growth of SME depend upon the quality of product they offer to the customers in the domestic
market. It also analyse the value proportion in the wider market and growth in the business
business framework of the business in the competitive market. Use of different frameworks helps
businesses in effective generation of product and services and customer satisfaction. Critical
study of how enterprise manage growth and proficiency in the market that helps in international
growth of the business. Determine the successive growth phases of growth in the market all the
resources needs to be study in most effective manner so that SME enterprise can be developed
and increase its growth in the market.
Entrepreneurship and enterprise growth:
Entrepreneurship is all about analysing the opportunity and creation of new business in
order to gain effective growth and development in the market. Creation of new opportunity and
innovation of new venture helps the SME sectors to grow and increase the level of effectiveness
in the business and market. Entrepreneurial ventures increase the level of innovativeness in the
business that helps them to attract more customers and increase customer base. Effective strategy
of entrepreneurial venture helps SME sectors to increase their growth in the international market
and gain more profitability. They discover opportunities in the international market and expand
their business in the market for the better growth and effective level of growth in the market.
They aggressively focus on the innovativeness so that new customer base can be attracted in the
business and it can increase the level of proficiency. It helps the business of SME to gain
effective profitability and growth in the market. It highlighted the part of human capital in the
business that support its growth and level of profit in the market. Growth of entrepreneur
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depends in the level of profit they are earning from the various product and services they are
providing in the market.
SMEs, innovation and economic development:
SME consider as a back born of the economy, this sector of the country recognize
worldwide due to its significant contribution in the socio economic development. Also this sector
contributes in the higher growth of economic development and growth in the market also in
promotion of exports, forecasting entrepreneurship, and the various outputs they provide to the
economy. Many countries has focused on the significant development of SME sector in order to
increase the level of economic growth in the business and various activities they perform. Market
condition has changed for the SME after the economic reforms; organisation face constant
pressure of well perform in the business and their growth in the market. They also face
challenges in the various competition in the market and attracting the customers by providing
them effective quality of product and services and growth in the market. It has become necessary
for the businesses to differentiate their product and services from the other competitors. They
need to complete different aspect in order to compete with the competitors in the market such
design of the product and development process. Further, the turnover of the business analyse its
size in the market. Also some organisations use fixed investment for the employee growth within
the business.
Significance of growth in SME:
SME consider as a main source of employment generation in the national and
international market. The business of SME plays vital role in the job generation and development
of employee growth in the market. It is consider as the effective source of employment creation
and development of the economic growth of the country. SME sector organisation select multiple
strategy transformation to gain effective outcome in the business and gain profit and growth. The
entrepreneur of SME sector has high level of education that helps them in better planning of the
resource generation and effectiveness in the market. Government also introduce various polices
that helps the business of SME sector to increase their growth in the international market and
increase the level of efficiency. Small scale companies also get support from the large scale
companies that helps them to expand their business in international market. It also helps them to
gain competitive advantages in the business in order to gain effective business growth and
proficiencies in the market. However there are various challenges and barriers for the business of
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SME that impact the level of growth and proficiencies in the market. They face challenge of lack
of resources and financial resources that impact their position in the market. Financial barriers
involve lack of support from the higher businesses that impact the creation and innovation of the
business in the market. Small businesses are depend on the owner's insight, training, managerial
skills, education, and the background of the company. This could impact the growth in the future
and decrease level of effectiveness.
Small and medium enterprises are the major source of employment in the current
generation. With many people leaving the primary sector activities like farming and fishing and
moving towards the secondary sector of employment which is jobs in such enterprises. Studies
all around the world suggest that the business sectors create maximum number of jobs for the
people of any country. Hence the growth of this sector of enterprises plays a major role. Another
factor which makes the success and development of these class of enterprises significant is that
with its success comes the success of numerous people associated with it. Ultimately helping in
the entire growth of the region these businesses served. With the international success of these
businesses not only the life of the directly involved people will become better but also those who
are indirectly involved will reap the benefit of international success in the market (The
management style of Amancio Ortega, 2021). As there are may benefits of international market,
for example the culture gets promoted, people of the home nation get the direct opportunity to
learn from the trends and organisation of the foreign market as well. For this reason the
Government should make appropriate efforts to make the small and medium enterprises a
success in the intervention market.
Theoretical frame work to study the growth path of enterprises
As the SMEs are operating on the limited resources the investment and capital becomes
on of the major limiting cause for the success of this sector of businesses. As many scholars
suggest that capital and investment can be replaced with an effective theoretical and strategical
approach with respect to the relative market and business sector. Churchill and Lewis (1983)
have given a theory on the development of enterprise which can proves out to be a lot helpful in
the success of SMEs particularly in the international market (Guercini and Ceccarelli, 2020).
This theory is primarily concerned on the working ways of the enterprise and points out on
carrying out the operation in effective way which keeps the international market in a close
observation while bettering own self of an enterprise. The key factors of this theory are
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existence, survival, success, take off , resource maturity. In order to better understand and apply
the theory this key points are described in brief.
Existence: This is the stage of en enterprise when it struggles for an identity and mere
existence as the name suggest. Bringing in customers and creating service and product awareness
is a challenge in this stage of an enterprise. Hence in order to continue the progress and
transcends into further stages the basic duties towards the enterprise should be completed.
Survival: In this stage of growth of the the enterprise begins to draw customers towards
it and the income and expenses of the enterprise stabilise. With this stabilisation, although the
owner gets nothing out of the business but at least there is nothing that is to put in into the capital
for its sustainability and hence the enterprise can be termed as surviving if its own
Success: At this stage of growth the enterprise starts to bear the fruits of the effort of
owner and finally the earning of the owner can be calculated as the enterprise is earning more
than its expenditure, Churchill and Lewis describe this stage of business growth as the most
Crucial on because with the arrival of this stage most of the business owners start to become
satisfied and stop putting additional efforts. With which opportunity seeking and strategy
formation for growth also stops for the majority. For the people who want to continue making
the progress the next stage has challenges worth overcoming.
Take off: This is the stage when the company after its success stage continues looking
for the opportunities and constant efforts were put into being able to make the service and
product better each day (Jin, Jung and Jeong, 2018). When an enterprise is in the stage of success
and still keeps solving the problems faced with a eye on expansion comes the stage of take off in
which rapid success comes to enterprise because of the popularity of the business along with
better services and product delivery.
Resource maturity: This is the stage of an enterprise where it is not considered as a small
or medium enterprise any more. In this stage the business exceeds and grows enough to be
considered as a large and successful enterprise. But just like every other businesses whether it is
a multinational brand or local enterprise the challenges keeps on coming, So is the case for the
enterprise at this stage. Here the enterprise is much focused on maintaining a quality control
along with the financial control and creating an image of its own in the market. As the company
is big enough, at this stage the company has enough resources to solve the problems that keeps
on coming.
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CONCLUSION
Through the understanding of literary review it is concluded that small and medium
entrepreneur requires a clear vision and mission of the company and for oneself as well. With the
growth of the enterprise not only the wealth and image of the brand grows but also increases the
responsibility of the entrepreneur, Entering the local market is not the success but maintaining
the operations in the market along. Just as an international entrepreneur's is not restricted to a
company owned by the individual but also the effective use of the resources for further growth
similar is the case with small and medium scale entrepreneurs.
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REFERENCES
Books and Journals
Belitski, M., 2019. Innovation in Schumpeterian-type firms: Knowledge collaboration or
knowledge spillover?. Foundations and Trends® in Entrepreneurship. 15(3-4). pp.368-
390.
Civera, A. and et. al., 2019. Fostering the creation of academic spinoffs: does the international
mobility of the academic leader matter?. International Entrepreneurship and
Management Journal, pp.1-27.
Criado-Gomis, A., Iniesta-Bonillo, M.Á. and Cervera-Taulet, A., 2018. Sustainable
entrepreneurial orientation within an intrapreneurial context: effects on business
performance. International Entrepreneurship and Management Journal. 14(2). pp.295-
308.
Guercini, S. and Ceccarelli, D., 2020. Passion driving entrepreneurship and lifestyle migration:
insights from the lutherie of Cremona. Journal of International Entrepreneurship, pp.1-
20.
Jafari-Sadeghi, V., Mahdiraji, H.A. and Dana, L.P., 2021. Empirical International
Entrepreneurship: A Handbook of Methods, Approaches, and Applications.
Jin, B., Jung, S. and Jeong, S.W., 2018. Dimensional effects of Korean SME’s entrepreneurial
orientation on internationalization and performance: the mediating role of marketing
capability. International Entrepreneurship and Management Journal. 14(1). pp.195-215.
Landström, H. and Harirchi, G., 2018. The social structure of entrepreneurship as a scientific
field. Research Policy. 47(3). pp.650-662.
Lee, B. and Kelly, L., 2019. Cultural leadership ideals and social entrepreneurship: an
international study. Journal of Social Entrepreneurship. 10(1). pp.108-128.
Lin, S. and Si, S., 2019. The influence of exploration and exploitation on born globals’ speed of
internationalization. Management Decision.
Porfírio, J.A., Mendes, T.C. and Felício, J.A., 2018. From entrepreneurship potential in culture
and creative industries to economic development: the situation of UK and southern
European countries. International Entrepreneurship and Management Journal. 14(2).
pp.329-343.
Ratten, V. and Usmanij, P., 2020. Entrepreneurship education: Time for a change in research
direction?. The International Journal of Management Education, p.100367.
Xu, K., Drennan, J. and Mathews, S., 2019. Immigrant entrepreneurs and their cross-cultural
capabilities: A study of Chinese immigrant entrepreneurs in Australia. Journal of
International Entrepreneurship. 17(4). pp.520-557.
ONLINE
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billionaire-amancio-ortega.html>.
Gupta. P., 2021. Firm growth and its determinants. [Online] Available through:
<https://innovation-entrepreneurship.springeropen.com/articles/10.1186/2192-5372-2-
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The management style of Amancio Ortega, 2021, [Online] Available through:
<https://www.economist.com/business/2016/12/17/the-management-style-of-amancio-
ortega>.
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