EFFECTS OF ENTREPRENEURIAL SKILL ON PRODUCT PORTFOLIO DEVELOPMENT
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EFFECTS OF ENTREPRENEURIAL SKILL ON PRODUCT PORTFOLIO DEVELOPMENT
Chapter one
INTRODUCTION
1.1 Background of the Study:
The success or failure of any organization’s product offering(s), whether goods or services, is heavily dependent on the strategies and technology utilised to produce, maintain, and sustain such items or services in the target market.
The extent to which these responsibilities/duties/tasks are successfully carried out is due to the unusual skills, experience, and ability possessed by the owner (entrepreneur) of the said business organisation; to effectively coordinate the human and material resources in that organisation in order to achieve the stated organisational objectives, whether to make a profit or to provide community service.
Edward P. Lazear’s definition emphasises the responsibilities of the ‘entrepreneur’. According to him, a ‘entrepreneur’ is a generalist who brings together people, resources, and capital. To do so effectively, they must have a broad range of skills.
Although an individual may be gifted with a set of skills, that endowment can be enhanced via investment in human capital. As a result, a single business owner cannot successfully assemble, coordinate, and manage these resources, whether it is a small organisation or a major firm.
These skills, possessed by a ‘entrepreneur’, enable them to provide products (in the form of goods or services) of great additives, which are second to none in the market of industry; this is referred to as the quality that an individual must possess in order to be a successful entrepreneur, and it is known as ‘entrepreneurial skills’.
The term ‘entrepreneurial’ is an adjective concept that describes the degree of entrepreneurial trait that an individual possesses or exhibits, as well as the pattern of entrepreneurial behaviour evident in an individual’s actions.
As a result, it is possible to define a person as ‘entrepreneurial’ if they exhibit certain characteristics or practices typical of an entrepreneur.
Entrepreneurial skills may be incorporated in networks with customers, suppliers, and other market participants, which improves entrepreneurs’ outcomes.
It’s also probable that it’s a better ability to identify markets, formulate strategies, and correctly assess various business difficulties, which allows organisations to expand their product line.
To improve the outputs of an entrepreneur, a sequential process or procedures must be followed. This is known as ‘entrepreneurship’.
Kuratko and Hodgetts (2001) define entrepreneurship as a dynamic process of building incremental wealth. This wealth will be created by individuals who take significant risks in terms of equity, time, and career commitment to providing value information about some products or services, which may not be new or unique, but the entrepreneur must place value by securing and allocating the necessary skills and resources.
The focus of this study is on abilities, which will include the capacity to successfully deploy resources (both human and material) to attain the goal.
A skill can be defined as an organised and coordinated pattern of mental and/or physical activity in regard to an item or other display of information that typically involves both the receptor and the impact or process. It entails having sufficient ability, knowledge, and experience to perform a task effectively.
As a result, in order to be considered an entrepreneur, a person must possess some unique and personal attributes, behaviour, values, and skills or characteristics that enable them to successfully develop, set up, grow, render
and maintain a highly addictive product that consumers in the industry regard as second to none. They are referred to as agents of effective economic change, enterprising individuals, job creators, goal-getters, and so on.
Linus Osuagwu (2006) divided the diverse skills of entrepreneurs into three categories. They include ‘technological talents’, ‘business management skills’, and ‘personal entrepreneurial abilities’. Writing, listening, oral presentation and communication, environmental monitoring, organisational capacity, and so on are all considered technical talents.
Management skills, on the other hand, encompass the areas involved in starting, developing, and managing any enterprise, such as decision making, marketing, general management/administration, financing, accounting, production, controlling, and negotiating, all of which are required when launching and growing a new business venture.
Personal skills that distinguish an entrepreneur from a manager include inner control/discipline, risk-taking, innovation, change-orientation, persistence, visionary leadership, and so on.
All of these entrepreneurial skills are unquestionably required in every aspect of an organization’s product development or product life cycle (development, growth, maturity, and decline stages), to ensure the sustainability of various products to a state of economic stability and growth in order to maximise profit.
For a setup to be classified as an organisation, it must have a product offering, i.e. items or services that it will provide to customers in exchange for a profit.
An organization’s product(s) offering refers to the specific items or services provided by the organisation to meet the needs and desires of its target market in order to achieve its declared goals and objectives.
And if the product offering is well coordinated, it will result in high demand and the product’s continued existence, necessitating the need for the organisation to expand its scope or area of production, either by diversifying, integrating, or using other options available to the organisation. As a result, the necessity to create or design a product portfolio emerges.
A portfolio refers to a collection of investments. In other words, an organization’s product portfolio can be defined as a collection or list of its product offerings (their investment).
When an entrepreneur owns only one business, he is known as a novice owner/entrepreneur. Habitual-serial owners/entrepreneurs create multiple businesses in a row, whereas habitual-portfolio owners/entrepreneurs start multiple businesses at the same time. According to existing literature on small business ownership (Carter, 1999).
‘Portfolio entrepreneurship’ refers to a single entrepreneur owning many firms as a strategy of decreasing or distributing business risk.
The need for entrepreneurial skills for product portfolio development arose as a result of the significant gaps or lack of qualification frequently encountered by small and medium-sized enterprise (SMEs) owners, which leads to setbacks such as liquidation, low profit, product offering declining within a short period of time, and so on.
Furthermore, there are some similarities between small and medium-sized businesses and entrepreneurship that allow ‘entrepreneurs’ to enter and thrive in medium-sized businesses. It has been a widespread practice or custom to discuss entrepreneurship in terms of small and medium-sized firms.
For example, SMEs require low capital startup, which encourages ‘entrepreneurs’ who have what it takes but lack the capital to start a firm; they can be sole proprietorships or partnerships (joint ventures, mergers, etc.).
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