Entrepreneurship Theory and Practice: Opportunities and Strategies

This report delves into the core concepts of entrepreneurship, focusing on the critical debate between opportunity creation and discovery. It examines how entrepreneurs identify and exploit opportunities, differentiating between the Schumpeterian and Kirznerian perspectives. The analysis includes case studies of Suzlon and ARM, illustrating the practical application of these theories. The report further explores firm-level strategies such as market orientation and alliance formation, crucial for capitalizing on entrepreneurial opportunities. The second part of the report discusses the student's entrepreneurial orientation, highlighting personal attitudes and behaviors related to innovativeness, risk-taking, and proactiveness, providing a comprehensive overview of entrepreneurial theory and practice.

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Entrepreneurship Theory and Practice
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Table of Contents
Part A.........................................................................................................................3
Introduction...............................................................................................................3
Evaluating the Discovery and Creation of Entrepreneurial Opportunities................3
Case Examples..........................................................................................................5
Firm-level Strategies.................................................................................................7
Conclusion.................................................................................................................8
Part B......................................................................................................................................................9
Bibliography........................................................................................................................................11

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Part A
Introduction
An entrepreneurial activity refers to the process of introducing new goods and services,
as well as raw materials, markets, including organizing methods by forming new means and ends
relationships. Despite that the concept of opportunity is crucial to entrepreneurial and economic
theories, the primary source of an opportunity is still an ongoing discussion. One stream of
search debate indicates that the existence of an opportunity is as a result of market equilibrium,
thus resulting in “discovery” by individuals that are alert to opportunities, the other stream
argues that an entrepreneur’s initiative is essential to the emergence of an opportunity. As a
result, the second stream asserts that entrepreneurs “create” the opportunities. Alvarez and
Barney (2013) summarize the fundamental difference that exists between the two streams by
inferring to differing practical implications for each. An entrepreneur’s perceived context, may it
be discovery or creation, determines the efficiency of the actions an entrepreneur takes. The
paper revisits earlier entrepreneurial theories, taking into account the effectuation theory to
evaluate the creation as well as the discovery contexts of entrepreneurial opportunities. Inferring
to cases of disruptive innovation (DI), the paper shows that entrepreneurs act in a manner that
involves discovery as well as the creation of opportunities.
Evaluating the Discovery and Creation of Entrepreneurial Opportunities
The debate as to whether the entrepreneurial opportunity is created or discovered was as a
result of differing between Schumpeter (1934) and Kirzner (1979). According to Schumpeter,
exogenous shocks that comprise of demographic, social, along with technological changes result

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in market disruption, resulting in entrepreneurs using their early access to this information to
create new services, processes, as well as products. However, Kirzner believed that market
equilibrium exists due to incomplete and idiosyncratic information that is held by people,
particularly, those keen on market disequilibrium can come up with a new profitable service or
product, thus ensuring that the prices are at market equilibrium (Garud and Giuliani, 2013,
pp.159). Based on the two theories, the streams of entrepreneurial creation and discovery
emerged.
Scholars pursuing the opportunity discovery model are concerned with the search
process, aimed at improving market inefficiency that results from knowledge and information
asymmetry to individual factors that include prior experience, cognition, personality traits, and
motivation (González, Husted and Aigner, 2017, pp.214). However, scholars pursuing the
opportunity creation model aim at determining how entrepreneurs enact opportunities as a
response to changes in technology, regulations, and politics, along with demographic and social
changes. In their argument, Barney and Alvarez show that the creation and the discovery creation
streams are different based on their basic assumption and they result in different outcomes in the
identification and exploitation process of an opportunity (Alvarez and Barney, 2013, pp.156). In
the two streams, there are three mean areas of difference and they comprise of the nature of
opportunities, the nature of the context in the process of decision making, along with the nature
of the entrepreneurs. The two scholars literate by stating that the discovery of entrepreneurial
opportunities assumes that opportunities exist independently of the entrepreneur, who advance
differ in certain essential ways from a non-entrepreneur. Besides, unlike uncertainty, the context
of the decision-making process is risky and can be calculated (Foss and Klein, 2017, pp.735).
The decision-makers can thus access information in anticipation of likely outcomes, including

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their probability. In contrast, the opportunity creation stream is of the assumption that an
opportunity is as a result of an entrepreneur’s perception. The context of making decisions is
uncertain and as a result, there is the unavailability of information in anticipation of likely
outcomes and their probability.
Case Examples
Suzlon is the main wind power provider in India, the fifth largest wind turbine
manufacturer globally. The company’s founder, Tulsi Tanti, took chances to enter the wind
power business. Tanti was unhappy with increasing energy costs as well as the erratic power
supplies at his textile mill located in Gujarat. As a result, he decided to try wind energy as a
source of power in the 1990s when there existed no other wind energy entrepreneur in India. The
entrepreneurial nature, as well as the nature of the opportunity and the context of decision-
making in the case of Suzlon, aligns with the discovery category of entrepreneurial opportunities
(Ramoglou and Tsang, 2018, pp.817). During those times in India, there existed a market failure
due to the inadequate provision of conventional energy. By deciding to take chances in the wind
energy business, Tanti recognized that the intermittency considered a shortcoming to wind
energy could not be compared to power failure. The company’s vision was to supply as well as
bring down India’s cost of power, which was Tanti’s entrepreneurial project since its conception,
thus denoting an entrepreneurial orientation. The decision to shift from the textile business to the
wind turbine business was risky. By deciding to enter this business, Tanti had conducted
extensive research and calculated the risks which helped understand the level of skill set,
including hiring specialists from Europe, which is another trait of discovery (Ojala, 2016,
pp.411). This case fits the opportunity discovery attributes that include the nature of the
opportunity, entrepreneur, and decision-making context, leadership, strategy, HR practices, and

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finance (Suddaby, Bruton and Si, 2015, pp.5). Suzlon was different due to rapid installation,
reduced prices, including cheap and reliable maintenance, Tanti’s leadership was partly
charismatic and was based on experience and expertise. Suzlon did not only depend on Germany
specialists but also pre-existing engineers that worked at the textile factories. However, despite
that Suzlon shows most traits of discovery, it also has attributes of opportunity creation.
A case that shows strong opportunity creation is the case of ARM that features most of
the opportunity creation attributes identified by Barney and Alvarez (Martin and Wilson, 2016,
pp.270). In the case of ARM, the recognition of opportunities due to special prowess in RISC
chips which was a technology that was necessary for emerging mobile devices markets. As a
result, ARM’s case features information asymmetry. The stream of opportunity discovery in the
case is evident due to ARM’s knowledge that the low power RISC chip was value for embedded
devices in the emerging market. Despite this, in some instances, there is evidence of opportunity
creation. Since the company’s founders were originally R&D engineers, as they proceeded, they
became increasingly entrepreneurial (Ramoglou and Zyglidopoulos, 2015, pp.76). ARM’s CEO,
a member of the founding team was from Motorola and possessed the necessary market insights.
As a result, the company’s entrepreneurial team was comprised of a blend of both entrepreneurs.
The creation of opportunities was as a result of strategical shift as well as the development of an
IP model that offered customer support along with design services (Alvarez and Barney, 2014,
pp.172). The leadership was charismatic and the context of decision-making was incalculable
and uncertain. The company adopted an economical business model aimed at reducing the
dependence on venture capital. In brief, irrespective that ARM shows more evidence of
entrepreneurial creation, it as well features opportunity discovery.

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Firm-level Strategies
Based on the above research, in the wake of disruptive innovation, market orientation is
among the firm-level strategies that are applied when exploiting entrepreneurial opportunities.
Market orientation refers to a business philosophy that identifies the needs of the customer and
meeting them. Adopting the market orientation approach aims at designing and selling services
as well as products that meet the needs of the customer, aimed at obtaining profits through the
company’s marketing mix (Ozkaya, Droge, Hult, Calantone and Ozkaya, 2015, pp.315). The
case of ARM applies here because the founders were aware that emerging mobile devices
markets needed the RISC chips. The other firm-level strategy used by entrepreneurs to exploit
entrepreneurial opportunities is alliance formation. Aimed at exploiting an entrepreneurial
opportunity, an entrepreneur may consider collaborating with other established companies with
the main focus being sharing resources (Bozeman, Fay and Slade, 2013, pp.30). Such alliances
provide access to the skills, knowledge, as well as the resources of the partner firm while
retaining control, along with limiting the loss of flexibility. Besides, aimed at exploiting an
entrepreneurial opportunity, an entrepreneur may use a technological strategy. Through the use
of this strategy, an entrepreneur can run a more competitive business. Another technological area
that an entrepreneur can tap into is the use of the internet to market a business. The technological
strategy encompasses incorporating technological issues in a company’s strategic decision
making (Yu, Hao, Ahlstrom, Si and Liang, 2014, pp.692). Besides, it includes the systems of
planning along with production through which an organization’s abstract ability is translated into
services and products which determine a company’s success.

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Conclusion
Differentiating the discovery and creation context of entrepreneurial opportunities is both
empirically and conceptually valuable. It is factual that in some instances, the markets, as well as
technologies, are already in existence for the individuals that possess the acumen as well as the
knowledge to recognize and exploit these opportunities. However, in some other instances, an
entrepreneur may be required to create an unavailable opportunity by conducting the role of
“market makers” along with the mobilization of contemporary innovations to facilitate the
realization of the opportunity. The analysis shows that an entrepreneur can escape the radar of
incumbents due to inferior performance features hence the need to come up with new features
that would appeal to new market customers. For instance, initially, Suzlon did not pose any
threat to wind turbine incumbents. Aimed at attracting early customers, the company lowered its
prices and integrated services.

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Part B
Across the world, entrepreneurial ventures account for the development of new business
and growth of the economy. Entrepreneurial orientation provides companies with a foundation
for making decisions by comprehending the organization’s strategy-making process.
Entrepreneurship illustrates new entry into the market while orientation defines the “how” new
entry in a market is likely to be assumed. The five entrepreneurial orientations include autonomy,
innovativeness, proactiveness, competitive aggressiveness, and, risk-taking. This section reflects
how my attitudes and behaviors are consistent with the innovativeness, risk-taking, and
proactiveness orientations (Le Roux and Bengesi, 2014, pp.613).
Innovativeness refers to the tendency of pursuing creativity and experimentations. In
some cases, innovations develop on existing skills with the intention of creating incremental
improvements while other radical innovations necessitate new skills, making exiting skills
obsolete. My attitudes and behaviors are consistent with this orientation in that I like going wide
and pulling in insight as well as inspiration from outside my day-to-day world. Besides, I am
curious and this builds on my innovative ability. As I become more ingrained into my adult life, I
find myself being surrounded by rules as well as assumptions and the manner in which things
should be done. As a great innovator, my behavior and attitude push me to question and
challenge these assumptions. Asking myself questions such as “why”, “what if”, “how”, and
“why not” helps build on my innovative skills.
On the other hand, risk-taking is the tendency of engaging in bold actions. An example of
an organization that made a bold move was Starbucks when it introduced VIA Ready Brew, a
new instant coffee. Based on this orientation, I consider myself a risk-taker. However, before

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taking any risk, my attitude and behavior drive me to first evaluate the pros and cons. After
making such considerations, I keep all the options open and in case the reward justifies the risk, I
definitely take the risk. When taking a risk, I conduct thorough planning as well as working
smart, thus making it possible to minimize the effects of such risks. At any chance that I observe
a reasonable chance of succeeding, I definitely take the opportunity.
Besides, reactiveness is the tendency of anticipating and acting on future needs and not
reacting after events unfold. A proactive person is one that embraces an opportunity-seeking
perspective. Such an individual acts in advance of changing market demand, and in most cases,
they are among the first to enter new markets (Dai, Maksimov, Gilbert and Fernhaber, 2014,
pp.519). To become proactive, I first develop insight to ensure that I am not caught by surprise. I
anticipate events and problems and make use of my imagination, logic, and creativity because I
cannot expressively rely on past events to be correct predictors of what will happen in the future.
Also, as a proactive person, I do not only observe but I am actively involved in finding a
solution. Nonetheless, I take effective and timely action and I am decisive and always willing to
work now, taking account of my performance and holding myself accountable.

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Bibliography
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González, M.F., Husted, B.W. and Aigner, D.J., 2017. Opportunity discovery and creation in
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