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The Environment for

Entrepreneurship

The central task facing an organization which has entrepreneurial aspirations is to take advantage of

the opportunities from change that appear in its environment.

—Sharon Oster

OUTLINE

LEARNING OBJECTIVES

After reading this chapter, you will understand

• the components of the business environment.


• the process of business environment analysis.


• the six segments of the macroenvironment, and the issues presented by each of them.


• what changes in the macroenvironment can become sources of opportunity for the entrepre-
  neur.


• the five elements of the industry environment, and the components that affect each of these
  segments.

CHAPTER

3

Schematic of the New Venture’s Environment
Processes of Business Environment Analysis
Scanning
Monitoring
Forecasting
Assessing

Political and Governmental Analysis
Global and International Issues
National Issues
State, Regional, and Local Issues
Stakeholder Analysis
Seven Dimensions
Kauffman Foundation
Macroeconomic Analysis
Structural Change
Cyclical Change
Technological Analysis
Pure Invention
Process Innovation

Sociodemographic Analysis

Demographics

Social Trends and Values

Ecological Analysis

Competitive Analysis

Industry Analysis

Buyer Power

Supplier Power

The Threat of Substitutes

Entry Barriers

Rivalry between Firms

Competitor Analysis

Identifying the Competition

Ranking Competitors

Summary