Dick Smith: Entrepreneur and Businessman

This assignment delves into the life and business journey of Dick Smith, a prominent Australian figure known for his entrepreneurial spirit. It analyzes his various ventures, drawing upon biographical information and insights from academic sources. The focus is on understanding the strategies and factors that contributed to his success as an entrepreneur.

Entrepreneurship 1
ENTREPRENEURSHIP
Author
Course
Professor
University
City, State
Date

Entrepreneurship 2
Table of Contents
Entrepreneurship..............................................................................................................................3
Background of the entrepreneur..................................................................................................3
Entrepreneurial traits...................................................................................................................4
Opportunity recognition and development of ideas.....................................................................5
Competitive advantage................................................................................................................5
Recommendations........................................................................................................................6
References....................................................................................................................................8

Entrepreneurship 3
Entrepreneurship
Entrepreneurs are often confused with business owners. While a business owner may be
an entrepreneur, not every person who operates a business entity qualifies as one. At the core of
this concept is the mindset of the entrepreneur which is centered on innovation that seeks to
create value and solve problems. Confidence and passion are some of the hallmarks of the typical
entrepreneur who is also motivated. The current theories on the concept include the sociological
and psychological approaches. Innovation and motivation theories are also postulated by scholars
such as McClelland and Joseph Schumpeter. Dick Smith is an Australian entrepreneur who
exhibits the traits of an entrepreneur, saw the opportunities and developed business ideas and
competes successfully against his competitors.
Background of the entrepreneur
Some of the enterprises started by Smith include the Dick Smith Electronics in the 1960’s under
the erstwhile name of Dick Smith Car Radios. This venture was engaged in the sale of the
Citizens Band brand of radios and personal computers. He sold the business in 1982 to
Woolworths which continued to operate the business under his name (Feneley 2015). He also
successfully established the Australian Geographic which was based on the famous world
renowned National Geographic. Dick Smith Foods was founded in 1999 to sell food that is
exclusively produced in Australia and owned by Australian companies. This company competes
with companies with foreign ownership such as Campbell Soup Company which is actively
engaged in the foods market in Australia.
Smith was born in 1944 and his father was a salesman while the mother was a housewife.
His father tried unsuccessfully to start a business which failed (Griffins 2017).He did not
perform well in his education and at one time dropped out to start an apprenticeship. He
managed to obtain a radio license at seventeen years of age and was repairing taxi car radios by
the age of 20. This shows that he had a passion and propensity to engage in entrepreneurship that
was hinged on problem solving. The relevant theory that is applicable in this case study is the
psychological approach (Gorgievski, & Stephan 2016). While performing poorly in his
academics, he may have developed the passion to achieve highly in business that was based on a
focused vision. He showed the ability to face opposition by briefly dropping out of school to start
an apprenticeship.

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The characteristics that contributed to his success as an entrepreneur may have been
influenced by his father who unsuccessfully tried to start a business. The need to start in the
future a business that would be successful in comparison to his father may have been a motivator
for the young entrepreneur. It is also probable that the father had low dominance on Smith in
allowing him to briefly take leave of his studies in his formative years. Hägg & Kurczewska
(2016) state that self reliance is another trait that he exhibited by attaining the license to repair
car radios at a young age. The psychological theory also posits that the society should have a
sufficient number of people with the necessary psychological characteristics (Ikemefuna 2016).
This could have been provided to the young entrepreneur by his parents as well as his
grandmother who was a photographer.
Entrepreneurial traits
The three traits of an entrepreneur as stated by Joseph Schumpeter are innovation,
creativity and foresight (Jasanta 2015). Smith showed innovation when he opened a new market
under his Dick Smith Foods which competed against foreign owned entities. The new market
catered for Australian owned companies and dealt with food exclusively produced in Australia.
He also introduced a new product, Australian Geographic which became successful. His
foresight is seen when he foresaw the opportunity for the car radio and personal computers and
pioneered in capturing the market at its infancy stage. He later sold out when the market was
beginning to mature and made a good profit from the disposal of the electronics business. Some
of the colorful names given to his food labels show his creativity. This is in the effort to compete
with the closest market leaders.
In addition to the above traits, Smith showed the character of being able to make
decisions under uncertainty as well as to make things in a better and totally new way. This is
according to the theory set out by McClelland in the theory of high achievement (Jasanta
2015).The need to succeed may have started from his early years after seeing the failure of the
business started by his father. The need to succeed that is not influenced by money is a trait that
can be seen in Smith. The theory of high achievement is underpinned by the acquired needs
theory. This theory states that a person has three needs at any given time: need for power,
affiliation and achievement. The third consideration is applicable in the case of Smith who
showed the desire to achieve or get success through his efforts. The above traits collectively are
common in most successful entrepreneurs.

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Opportunity recognition and development of ideas
The recognition of opportunity and development of ideas is within the perspectives of
process and activity (Kuratko, Morris & Schindehutte 2015).Using this perspective, Smith was
able to extract profits from the car and radio electronics business when the environment was
ambiguous and uncertain. Smith capitalized on the value of information that he had received
while undertaking his radio repair license and recognized the opportunity in its infancy. The need
for customers to install car radios in their cars was an opportunity he leveraged with his training
as an emerging entrepreneurial opportunity. Schmidt (2007), states that he also recognized the
opportunity and potential growth of the Citizens Band radio for short-distance communication
which enabled individuals and businesses to communicate.
The development of the ideas started in Australia in the electronics but which later spread
to other markets. In the years 1978-1982, he spread outside of the boundaries of Australia into
Asia and the US (Schmidt 2007). In the foods business segment, the process of development of
ideas was simply to instill pride in Australian ownership and products. This required knowledge
of the food market, the objective to undertake sector marketing and identifying the consumer
problems and issues. His proposition that was part of the activity process in idea development
was the objective to change the market. He located the opportunity, accumulated resources, built
an organization and marketed his products creatively. His entrepreneurial ability was in the
ability to make connections with the “dots” in a market and establish a business idea out of them.
Dick Smith’s (media releases, 2017), states that the process of development of the idea
frequently courted legal actions by his competitors to which he responded to proactively.
Competitive advantage
The competitive advantage in his foods business is the differential advantage he
propositioned of being a domestic brand. The mission statement states that sells food produced in
Australia by domestically owned companies. The value proposition is that the profits made will
stay within Australia, will provide employment for Australians and will help in the development
of the Australian economy (Dick Smith 2017).This appeal to the patriotic sensibilities of
consumers is what gives Dick Smith the competitive advantage over its competitors. Another
proposition and marketing strategy is that all profits are donated to charity (Heene & Sanchez
2010). This approach gives it the differential advantage of being seen as being more of a
charitable enterprise that is not driven by private gain when compared to its competitors. This

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approach appeals to consumers, who would wish to participate in charitable activities and are
able to do so indirectly by purchasing products from this company.
In the electronics business, Dick Smith Electronics had a comparative advantage over its
competition. Apart from selling and installing car radios, the business also sold components to
hobbyists who enjoyed working with electronics. The current market at that time was dominated
by large whole sellers. Their mode of operation was run on customers making queues and being
served at the counter. Smith introduced a new model that was based on self service as well as a
mail order service. This advantage in improved service when compared to the counter-sales of
his competitors resulted in an exponential growth of his company. The Australian Geographic
publication enjoyed the differential advantage of being seen as a superior brand that is affiliated
with the world renowned National Geographic. This brand was protected by patent and had
immediacy in brand recognition.
Recommendations
The future recommendation to Dick Smith is with regards to the two business entities he
currently runs: Australian Geographic and Dick Smith Foods. He should consider diversifying
into other publications that are related to his current business. He should also ensure generational
transition in the leadership of his business entities by mentoring his children to take over when
he passes on (Daspit 2017). A magazine that is informative that targets farm producers in
Australia would be in tandem with his foods business. For the Dick Smith Foods, the
consideration of branching out into new markets and replicating the model is worth considering.
An example would be to venture into New Zealand and establishing a similar venture and
appealing to the sensibilities and patriotism of New Zealand consumers. He would use the
Australian entity as his reference point in gaining consumer confidence.
Entrepreneurs are differentiated from business owners by several traits such as being self
driven, motivated and innovative. Dick Smith in Australia developed his entrepreneurial ability
early on in life, influenced by the experiences of his father. The need to succeed and achieve as
stated by McClelland influenced the decisions he made in his formative years. Being a socially
marginal man, he was not constrained by social restrictions in his quest for success. He
recognized opportunities, developed the ideas into business organizations and grew the entities
formed. His companies prospered on competitive advantages of the value proposition he
postulated that were based on differential advantages. The recommendation for Dick Smith is to

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diversify his investments and consider replicating his models in new markets such as New
Zealand.

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References
Daspit, JJ, Chrisman, JJ, Sharma, P, Pearson, AW, & Long, RG, 2017, 'A Strategic Management
Perspective of the Family Firm: Past Trends, New Insights, and Future Directions', Journal of
Managerial Issues, vol. 29, no. 1, pp. 6-29.
Dick Smith’s, 2003, Media releases, viewed 15 September, <
https://www.dicksmithfoods.com.au/?d=media>
Dick Smith’s, 2017, About us, viewed 15 September, < https://www.dicksmithfoods.com.au/?
d=main&p=sitemap>
Feneley, R, 2015, Queen’s Birthday honours: Dick Smith, a ‘dumb’ kid who was almost never
famous, viewed 15 September, < http://www.smh.com.au/national/queens-birthday-honours-
dick-smith-a-dumb-kid-who-was-almost-never-famous-20150605-ghhxjc.html>
Gorgievski, MJ, & Stephan, U 2016, 'Advancing the Psychology of Entrepreneurship: A Review
of the Psychological Literature and an Introduction', Applied Psychology: An International
Review, vol. 65, no. 3, pp. 437-468. Available from: 10.1111/apps.12073. [15 September 2017].
Griffins, G, 2017, Dick Smith: Australian aviator and businessman, viewed 15 September,
<https://www.britannica.com/biography/Dick-Smith-Australian-aviator-and-businessman>
Hägg, G, & Kurczewska, A, 2016, 'Connecting the Dots: A Discussion on Key Concepts in
Contemporary Entrepreneurship Education', Education & Training, vol. 58, no. 7-8, pp. 700-714.
Heene, A, & Sanchez, R, 2010, Enhancing Competences for Competitive Advantage, 1st ed,
Emerald Group Publishing Limited, Bingley, UK.
Ikemefuna, A, 2016, 'International Entrepreneurship Theory: Past, Present and Way Forward',
Entrepreneurial Business and Economics Review, Vol 4, Iss 4, Pp 93-103 (2016), no. 4, p. 93.
Jasanta, P, 2015, 'A Conceptual Mapping Resource Advantage Theory, Competitive Advantage
Theory, and Transient Competitive Advantage', Expert Journal of Business and Management,
Vol 3, Iss 2, Pp 140-149 (2015), no. 2, p. 140.
Kuratko, D, Morris, M, & Schindehutte, M, 2015, 'Understanding the dynamics of
entrepreneurship through framework approaches', Small Business Economics, vol. 45, no. 1, pp.
1-13. Available from: 10.1007/s11187-015-9627-3, viewed 15 September 2017.
Schmidt, L, 2007, Profile: Dick Smith, viewed 15 September, < http://www.smh.com.au/small-
business/profile-dick-smith-20090619-coo6.html>