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Entrepreneurial ventures

  1. 1. Lecture two By: Ryan
  2. 2. Entrepreneurial ventures This is the second lecture which will contain different types of entrepreneurial ventures, explanation on why different types of entrepreneurial ventures relate to the typology of entrepreneurship, the similarities and differences between different types of entrepreneurial ventures and the critical examination on the scope, development and growth of the entrepreneurial ventures.
  3. 3. Private companies A limited company will have its profit, losses, assets and liabilities belonging to the company, this means that it will be owned by the members, shareholders and will be run by the managing directors. This will create a limited liability which means that if the company fails personal assets will be safe (Campbell and Craig, 2005). There are two limited companies which is public and private limited companies.
  4. 4. Private limited companies Private companies will not give their shares publicly, these shares are held by private individuals which will most likely work for the company. For individuals which want to get shares they need to ask for the shares to the shareholders directly (Campbell and Craig, 2005). The objectives of a private limited company is Profit Maximization. For a private company profits will be restricted to the companies core set of owners which may include a small group of stakeholders. Another objective is picking the right organizational structure. This is because picking the right type of organizational structure will provide different benefits for the company and stakeholders (Bradley, n.d.).
  5. 5. Example of private limited company An example of private limited company is PT Tirta Alam Semesta which produces products such as Air Murni Rivero. They made Rivero due to the concern for public health regarding the importance of pure water. They started producing this purified water in the year 2007 by PT Tirta Universe. They are a private limited business due to them not showing up in the stock market plus not having TBK in the name which means Terbuka.
  6. 6. Public limited companies The public limited companies will have shares that can be bought by anyone unlike the private limited company. The shares may be freely bought and sold through stock exchange. Becoming a public limited company will overall increase investments (Campbell and Craig, 2005). The public limited companies will have objectives such as gaining more market share. They are able to do this by getting media attention by being in the stock exchange. Another objective of a public limited company is expansion of the business, this is because public limited companies will be able to get the money needed to expand from selling shares.
  7. 7. Example of public limited company An example for the public limited company is PT Acset Indonusa TBK. which is a construction company. They focus on the development of commercial, residential and industrial buildings. It was first established in the year 1995 by Ronnie Tan and Hilarius Arwndhi. The reason that PT Acset Indonusa TBK is private limited is that they have foreign direct investors which means that they are in the stock exchange (Indonesia investments, n.d.).
  8. 8. Social enterprise A social enterprise is a business which will focus on creating social value rather than making value, there is also a hybrid social enterprises which will make profit and social value. Some people see social entrepreneurship as an innovation which will have a social impact towards the society. There are also some people which see social entrepreneurship as tools for social transformation (Rostiani, Paramita, Audita, Virgosita, Budiarto and Purnomo, 2014). The objective of the company law to fulfill the role of public services such as improving health care, environmental protection, alleviate poverty and many more (Legalvision, 2016).
  9. 9. Example of social enterprise An example of a social enterprise in Indonesia is Smart Farmer Kids In Action & AgroEdu Jampang which was established by Heni Sri Sundan, which is concerned about the education of agriculture in Indonesia. They sell products to benefit migrant workers, farmers and widows and manage Bogor Agroedu Tourism agro-tourism, and EmpowerIN Academy agribusiness tour in Jampang. They stated that they are not non profit oriented but benefit oriented (Youngster.id, 2016).
  10. 10. Size Size will be divided into four which is micro, small, medium and large.
  11. 11. Micro The micro business can be described as a business which has only one owner with a total of up to five employees. There are lots of people which are starting their own micro business, this is due to the upward mobility and flexibility that they provide. Micro businesses are changing the dynamics of income, wealth creation and quality of life in America. The objectives of a micro business is to encourage the dispersal of industries to smaller towns, villages or economically lagging regions. The objectives of a micro business is to allow the backward areas to join in the national development (Sinha, n.d.).
  12. 12. Example of micro The example for a micro business is Bakso Moro Abadi. They sell different products such as bakso besar, bakso seporsi and pangsit, their main dish is bakso (UMKM kota Jogja, 2018).
  13. 13. Small Small businesses will be independently owned and operated. They are not the best in their field and usually do not have any new or innovative practices. Owners of a small-medium business might prefer a stable and less aggressive approach when running their business, this means that the owners have an expected amount of sales, profit and growth (Kuratko, 2016). Small business objectives is to maintain profitability which is to make sure the revenue will stay ahead of the costs. This is done by focusing on controlling the costs of production and operation while maintaining the profit margin on the sold products. Another objective is to grow which can be done by carefully using of company resource such as finances and
  14. 14. Example of small An example of a small business in Indonesia is Nasi goreng Bu Sumi (UMKM kota Jogja, 2018). Nasi goreng Bu Sumi is a small business which produces different types of products which includes fried rice and noodles. There are five different types of fried rice which are nasi goreng babat, nasi goreng biasa, nasi goreng istimewa, nasi goreng uritan and nasi rames ampela. For the noodles they have two different type which is bakmi godok istimewa and bakmi goreng uritan.
  15. 15. Medium Medium sized businesses will have up to 250 employees, they may be family owned and managed businesses however, they may also be complex entities in which the ownership is separated from management. These businesses will be well established and has an observable track record (ACCA, n.d.). An objective of a medium sized company is to promote customer loyalty. This is done by listening to the customer and making it easy for customers to contact the business. Another objective is to acquire new customers to the business, this can be done by engaging with the customers and finding what type of social platform they prefer such as whatsapp or instagram (SAP, n.d.)
  16. 16. Example of medium An example of a medium sized company in Indonesia is Furniture Bp. Widadi which produces and sells furniture. Some examples of their products are wardrobes, tables and beds.
  17. 17. Large A large business will be businesses which have a combined turnover of of greater than $250 million. This includes public, private and foreign owned companies, partnership, trusts and super funds (Australian government, n.d.). The objectives of large companies will be to gain large profit from the sales. Another objective is to increase the demand, this is due to large companies wanting to increase sales (Accountlearning.com, n.d.)
  18. 18. Example of large An example of a large company is Gudang Garam, which is a well known cigarette company in Indonesia. It was first established in the year 1958 in the town of Kediri, East Java. Gudang Garam is known both internationally and nationally as a producer of high quality Kretek clove cigarettes. They have Rp 66,759,930 for their total assets in the year 2017 as stated in their annual report (Gudang Garam, n.d.).
  19. 19. Public corporate Most of the public limited companies which provide the essential goods and services to other businesses or directly to customers. These will include electricity, water, gas and many more. This means that without the public enterprise there will be no essential goods and services which might lead to the economy collapsing. These public enterprises will have shared responsibilities with the governments (Bos D, 1986). An objective of the public enterprise is to create sustainable enterprises. Since the government owned enterprise will be in the forefront of sustainable enterprise they must act in and exemplary way in the area. The other objective is economic growth, if a government owned company will have the same economic demand on operations as other organisations, there will be an increase in the competitiveness, value development and capital efficiency. This will also reduce risk of distorted competition (Government offices of Sweden, n.d.).
  20. 20. Example of public corporate An example of a public corporate in Indonesia is bank Mandiri. It was first established in the year 1998 as part of the bank restructuring program for the Government in Indonesia . In 1999 it was able to merge four other state owned banks. These four banks had a history of over 140 years and the four together contributed in the beginning of the Indonesian banking sector (Bank Mandiri, n.d.).
  21. 21. Typology This part will discuss about three different types of entrepreneurship which is corporate, technical and social
  22. 22. Corporate entrepreneurship Corporate entrepreneurship is a process used for developing new businesses, products, services or processes in an existing company to create value and generate new revenue growth by using entrepreneurial thought and action . Corporate entrepreneurship will set the context for innovation and growth. Corporate entrepreneurship provides a system view of resources, processes and environment which are needed for support, motivate and engage the organizations entrepreneurial thinking and action (corporate entrepreneurship, n.d.).
  23. 23. Examples of corporate entrepreneurship Adobe is a good example for a corporate entrepreneurship. Since they provide a kickbox which is an innovation workshop in a box which contains helpful guidelines and resources for the employees so that that can develop and refine their innovative ideas. The box has a purpose of inspiring the creativity in the individual employees and also to assist them when developing their creativity into an innovative project (Niekerk, n.d.).
  24. 24. Technology entrepreneurship Technology entrepreneurship is a driving force which facilitates prosperity in individuals, firms, regions and nations. Thus the study of technology entrepreneurship will serve as an important function beyond satisfying the intellectual curiosity. Technology entrepreneurship is an investment to a project which assembles and deploys specialized individuals and diverse assets which will be intricately connected to the advances in scientific technological knowledge with the purpose of creating and capturing value for a firm (Bailleti, 2012).
  25. 25. Example of technological A good example for a technology entrepreneurship is tinder. A good example of technology entrepreneurship is tinder. Tinder is an app which uses lots of new technology to improve their product. A recent example is when Tinder is trying new features for their product in India, which lets the women enter the first message when there is a match. Unlike in the past where either of the two can send the first message. This is done because Tinder wanted to make the women feel safe and comfortable when using the app (BBC news, 2018).
  26. 26. Social entrepreneurship The most basic definition for social entrepreneurship is doing a business for a social cause. Social entrepreneurs will combine commerce and social issues in a way that will benefit the people which are connected to the cause. Success is not measured in terms of profit alone but also the way they have improved the world. (Shopify, n.d.).
  27. 27. Example of social Safepoint trust is a good example for social entrepreneurship. They are a good example because Safepoint trust redesigned medical tools to make them cheaper and reusable. One example is the reusable syringe they made, they have been able to deliver four billion safe injections in 40 countries with their auto-disable syringes (Orlic, 2016).
  28. 28. Relationship between entrepreneurial ventures and typology
  29. 29. Similarities and differences This part will talk about similarities and differences of the entrepreneurial ventures.
  30. 30. Similarities and Differences between Public limited, private limited and social enterprise The similarities of the three is that all of them will aim for profit from their business. The main goal of public and private limited is for profit and even though social uses the profit to improve their social impact they still need to get profit to do it. A difference between the three is the amount of shares they have, public limited will be able to obtain lots of shares while private limited will have shares only from friends and families and social enterprise will only have little or no shares.
  31. 31. Similarities and Differences based on Sizes of Entrepreneurship One similarity for size is that all of them have the similar goal of trying to grow as a company. This is because no matter the size a company will want to keep on growing. A difference is that all the different sizes have different target markets. For example, a micro business will target a small group of people while a large business will try to target a larger group. Another difference is the amount of assets they will have, a large business will have a lot of assets unlike a small or micro which will most likely have a little. This is due to micro businesses having smaller market rather than a large business which will have lots.
  32. 32. Critical evaluation This part will contain the growth of MSME and large businesses over the past years and discuss about it.
  33. 33. 2012-2014 Indicator 2012 2013 2014 Amount Shares Amount Shares Amount Shares MSME 55.206.444 99,99 56.534.592 99,99 57.895.721 99,99 Micro 54.559.969 98,82 55.856.176 98,79 57.189.393 98,77 Small 602.195 1,09 629.418 1,11 654.222 1,13 Medium 44.280 0,08 48.997 0,09 52.106 0,09 Large 4.952 0,01 4.968 0,01 5.066 0,01 Table 2 MSME and Large business growth (Depkop, n.d.)
  34. 34. 2015-2017 Table 2 MSME and Large business growth (Depkop, n.d.) Indicator 2015 2016 2017 Amount Shares Amount Shares Amount Shares MSME 59.262.772 99,99 61.651.17 99,99 62.922.617 99,99 Micro 58.521.987 98,74 60.863.578 98,71 62.106.900 98,70 Small 681.522 1,15 731.047 1,19 757.090 1,20 Medium 59.263 0,10 56.551 0,09 58.627 0,09 Large 4.987 0,01 5.370 0,01 5.460 0,01
  35. 35. Critical evaluation The table shows the growth of MSMEs and Large businesses over five years. The MSME growth from 2012-2017 was a large amount. There was a total increase of 7.716.172 of MSME growth from 2012-2017. However, the large businesses did not increase as much, they only increased by 508. The micro businesses had the most increase in the five years, however the small businesses have been gaining more shares which may lead to further increase in the market share to the future.
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