ENTREPRENEURIAL STRATEGIES FOR ENHANCING THE COMPETITIVE ADVANTAGE OF MEDICINAL HERBS IN KANO STATE
CHAPTER ONE
INTRODUCTION
BACKGROUND OF STUDY
The traditional concept of entrepreneurship, as in the Schumpeterian view, suggests the most innovative individuals can bring sustainable change and creative destruction to specific markets, acting alone or within large firms (Elia et al. 2016; Schumpeter 1961). Thus, the initiative of individuals is a core competence of firms to transform promising business ideas into successful new ventures.
However, many entrepreneurs in the high-tech industry often ignore managerial aspect of organizations and fail to capitalize on connections in and outside the industry necessary to sustain market competitiveness (Zahra and Nambisan 2012).
The global business environment demands that established firms adopt entrepreneurial strategies to revitalize existing organizations and create innovation (Ireland et al. 2009; McGrath and MacMillan 2000; Morris et al. 2010). Individual-level interpretations of business opportunities should be institutionalized as organizational-level strategies, linking individual-level cognition and organizational-level outcomes (Ireland et al. 2009). For this reason, entrepreneurship has become accepted as a firm-level phenomenon deserving scholarly attention (Brown et al. 2001).
Strategic entrepreneurship (SE), belonging to the realm of corporate entrepreneurship, can place corporate entrepreneurship within a broader field of strategic management, more than merely within the start of a new business (Kuratko and Audretsch 2013; Stevenson and Jarillo 2007).
SE is concerned with a potential source of sustainable competitive advantage of medicinal herbs as a result of entrepreneurial and managerial activities (Ireland et al. 2009; Zucchella and Magnani 2016).
SE integrates the concept of entrepreneurship and strategic management, focusing on entrepreneurial action with a strategic perspective (Hitt et al. 2001; Ireland et al. 2009). The field of entrepreneurship and strategic management are mutually supportive and thereby enhance the value of outcomes by creating synergy (Ireland et al. 2001).
Entrepreneurship embraces identifying and exploiting external opportunities to create new economic activities, while strategic management embraces a set of actions to produce competitive advantage and maintain what has been created (Hitt et al. 2001; Sexton and Smilor 1997; Venkataraman and Sarasvathy 2001).
Previous studies have suggested entrepreneurship and strategic management research can be synthesized to better understand how entrepreneurship functions for firms (Dhliwayo 2014; Hitt et al. 2001; Kor et al. 2007).
Nowadays, entrepreneurship plays a key role in economic development and it is considered as a source of jobs, innovation and competition in any market (Simpson et al., 2011). More importantly, it has beenproved that, according to marketing concepts, techniques, and principles it ensures small and medium-sized businesses’ success (Carson, 2005).
Now the environmental circumstances have changed in such a way that it leadssmall businesses to achieve entrepreneurial success strategies (Grath & MacMilan, 2000). Adopting entrepreneurial strategies in an enterprise leads to the release of strategic capabilities and its follow-up causes the firms to realize entrepreneurial opportunities frequently and systematically (Kuratko et al., 2005).
Nigerian’s economy dependence on oil revenues and earnings’ being affected by political and economic issues has caused the economic vulnerability of the country. One way to deal with this challenge is to develop products that increase non-oil exports while improving the domestic economy.
More than 80% of well-known medicinal plants in the world grow in products and it provides premature returns. Consequently, it can be concluded that investment on medicinal plants could have huge benefits for the country (Kashfi Bonab, 2010).
At present, 80 percent of the populations in developing countries rely heavily on plant-based drugs for their health care needs, and the World Health Organization (WHO) has estimated that in coming decades, a similar percentage of the world population may well rely on plant-based medicines.
Thirty percent of the drugs sold worldwide contain compounds derived from plant material (Hishe et al., 2016). The present medicinal plants value chain is characterized by the informal nature of its upstream base (producers, gatherers and collectors) and its better organized and more formally structured actors downstream (processors and wholesalers/retailers).
Overall, the value chain operates with little vertical integration and almost no horizontal collaboration. Yet actors are aware that there are local and export market opportunities for products without their necessarily being able to identify consumer trends or to react quickly to them at their level of operation (Iqbal, 1993).
Medicinal value, market demand, and processing are the important indicators for economic assessment of medicinal plants. According to the Food and Agricultural Organization, the trade value of medicinal plants is currently about a hundred billion dollars and is expected to amount to five trillion dollars by 2050 (Kashfi Bonab, 2010).
Nigeria with climatic conditions and plant diversity better than those of the Europe only has a share of 60 to 90 million US dollars of world trade in medicinal plants. Fortunately, with the developed countries of the world turning to herbal products and increasing consumption in the world, a golden opportunity has been given to Iran to increase its presence at international markets more than ever before.
According to the performed estimations in recent years, the value of world markets of medicinal plants (including medicinal plants and their products) has been increasing in recent years and in the meantime, Ilam Province has a high potential in terms of growth and trade in the agricultural sector, and this sector can be recognized as the leading economy in the province and as a profitable economy; accordingly, it is necessary to take a specific look at this sector.
Medicinal plant industry as a part of the agricultural industry, given the province’s potentials and advantages, could generate enormous revenues for the province; hence, cultivation and commercialization of these plants should be considered.
STATEMENT OF THE PROBLEM
No study of entrepreneurship and competitive advantage has focused on medicinal herbs in Nigeria. Previous studies mostly focused on other drivers such as economic factors, consumer pressure, government encouragement, standard, and regulation.
Others focused on supplier participation specifically for SMEs, corporate social responsibility, environmental concerns and profit balancing, and benefits to the company (Fariza, 2015; Lee, 2008; Rezai et al., 2016; Sumin et al., 2016 and Tajasom, Mui Hung, Nikbin, & Hyun, 2015). But no researcher has written on Entrepreneurial strategies of enhancing competitive advantage of medicinal herbs.
The increasingly high rate of failure of entrepreneurship business is caused mostly by the ever-changing and challenging business environment which made adherence to yesterday’s wining formulae a recipe for failure today. The same is true when one business try to apply the success equation of another firm even in the industry.
Small-scale business owners/managers are confronted with the awesome challenge of crafting, evolving and implementing strategies that will ensure the survival and growth of their businesses. Pricing is often used as a strategic weapon for survival.
But making any changes to prices, the strategist need to consider the impact on the triumvirate of customers, the trade, and competitors, which often prove counterproductive not only to the firm initiating the price change but also to all industry player.
Value adding as a strategy to either maintain market share or increase market share or both is not without their costs which sometimes outweigh the benefits. The application of the psychological strategies of complete planning, critical point, opportunistic, reactive and routine/habit can lead to the success and survival of small-scale business as it can also lead to their failure.
Hence, the reason for carrying out this research on entrepreneurial strategies of enhancing competitive advantage of medicinal herbs in Kano State.
AIMS AND OBJECTIVES
The main aim of the study is entrepreneurial strategies of enhancing competitive advantage of medicinal herbs in Kano State. Other specific objectives include:
1. to analyze the cost of entrepreneurial strategies in the process of production and distribution of medicinal plants to enhance the competitive advantage of medicinal herbs in kano State.
2. to analyze customer and market focus strategy to enhance the competitive advantage of medicinal herbs in kano State.
3. to examine the challenges of entrepreneurial strategies towards enhancing competitive advantage of medicinal herbs in Kano State.
4. to examine the effects of Human and Entrepreneurial Capital on Competitive Advantage of medicinal herbs in Kano State.
5. to proffer solutions to the challenges of entrepreneurial strategies towards enhancing competitive advantage of medicinal herbs in Kano State.
RESEARCH QUESTION
1. What is the cost of entrepreneurial strategies in the process of production and distribution of medicinal plants to enhance the competitive advantage of medicinal herbs in kano State?
2. How to analyze customer and market focus strategy to enhance the competitive advantage of medicinal herbs in kano State?
3. What are the challenges of entrepreneurial strategies towards enhancing competitive advantage of medicinal herbs in Kano State?
4. What are the effects of Human and Entrepreneurial Capital on Competitive Advantage of medicinal herbs in Kano State?
5. What are the solutions to the challenges of entrepreneurial strategies towards enhancing competitive advantage of medicinal herbs in Kano State?
STATEMENT OF RESEARCH HYPOTHESIS
1. H0: entrepreneurial strategies have no significant effect on enhancing competitive advantage of medicinal herbs in Kano State.
2. H1: entrepreneurial strategies have significant effect on enhancing competitive advantage of medicinal herbs in Kano State.
SIGNIFICANCE OF STUDY
This study is expected to be beneficial to the selected small-scale businesses under study as well as other small-scale business managers and entrepreneurs both within and outside Kano State. It is believed that this study will be valuable to government and policy makers in the formulation of programmes, policies and strategies aimed at promotion of medicinal herbs.
Practicing marketers, entrepreneurs and academic will also find this research work to be of great value, as it will help them know what strategies are been used in practical term in local setting to help businesses grow, especially small-scale business survive, grow and develop.
Finally, the study will be in the archive of research tool and materials that can be used by other researchers for further study.
SCOPE OF STUDY
The scope of study will cover entrepreneurial strategies of enhancing competitive advantage of medicinal herbs in Kano State.
LIMITATION OF STUDY
1. Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
2. Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
DEFINITION OF TERMS
Entrepreneurial: characterized by the taking of financial risks in the hope of profit; enterprising.
Being entrepreneurial can mean knowing your industry inside out, and being able to exploit that knowledge to create new opportunities. Being entrepreneurial can mean sharing ideas freely, and celebrating so-called failures as learning and growing experiences.
Strategies: a plan of action designed to achieve a long-term or overall aim.
Enhancing: to intensify, increase, or further improve the quality, value, or extent of.
Competitive advantage: In business, a competitive advantage is the attribute that allows an organization to outperform its competitors
Medicinal herbs: A medicinal plant is a plant that has similar properties as conventional pharmaceutical drugs. Humans have used them throughout history to either cure or lessen symptoms from an illness. A pharmaceutical drug is a drug that is produced in a laboratory to cure or help an illness.
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ENTREPRENEURIAL STRATEGIES OF ENHANCING COMPETITIVE ADVANTAGE OF MEDICINAL HERBS IN KANO STATE
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