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Entrepreneurship and Acquiring a Business

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Introduction to Entrepreneurship and Acquiring a Business

The word entrepreneurship is defined as a process of designing or running a new business. The persons who offer new services and products are called entrepreneurs. To become an entrepreneur it is not necessary to develop a new idea or build a new company. A new business can be started through outright purchase or by buying franchises of a business. This report will analyse to acquisition of an existing business by buying the franchise of TESCO plc in Brazil. TESCO is a UK-based retail company which offers different types of products and services in the UK and Europe but Brazil is still not aware of this brand. It also analyses different concepts related to entrepreneurship and gives recommendations based on evaluation.

Acquiring an existing business by buying a franchise

TESCO PLC is the UK's renowned retail store brand. It has various branches in Europe and Asia but Brazil is still not aware of the company's products and services. Brazilian markets are emerging with plenty of opportunities for both existing businesses and entrepreneurs. When a person like an entrepreneur wishes to buy licensed privileges for doing business in some foreign markets then, it is known as franchising. It is a form of business expansion which involves greater marketing and merchandising of a brand. Growing demands have led to individuals becoming more interested in bringing foreign brands to their country. This not only helps in developing relations directly with multinational giants but also helps in running self-sufficient businesses without many investments.

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The benefits to buy franchises of TESCO are that it is a well-established business that serves a number of services or products to its customers in the UK. A company's trademarks save the cost of the business owner of creating advertising. Products sold by organizations are already in demand in the market and millions of consumers are using goods sold by entity. For the company's owners supervision and consulting is always available. The retail company offers uniform packaging everywhere. It also reduces the risk of business and provides profits for every business operation. For an individual, it is a great opportunity to become an entrepreneur through buying franchises. However, it is not for everyone to open a business through franchises. The owner does not have any control over the business and individuals have to make a binding contract with the company. If the market for franchisors is not responsive then it will also affect the business of an individual. So franchised business contains high risk factors for firms.

Concept of entrepreneurship

Businesses are owned by either one single person or a group of individuals. When a person decides to follow his instincts and works all by himself to transform his idea into a business then, he/she is said to be an entrepreneur. Basically, it is a concept of starting a business on your own rather than working for someone else. Entrepreneurship involves risk and effort with no compromise in hard work. Vision is significant in the working of every business. If a person proceeds to work without any interest or vision then, the success rate will be less. In fact, business ventures may even fail as a result of an aimless path.

Some special qualities that characterise a person as a legitimate entrepreneur are vision, skills, interest levels and most importantly confidence. Markets are full of competition. It requires courage and confidence to implement a completely new strategy and idea for earning profits. Chances of functioning totally depend on the delegation skills of the entrepreneur. Being a highly risk-oriented work, resources that majorly fall for the success of these ventures are time and money. Risk and money are directly proportional. When more money is invested then more risk is involved. Franchise method can bea dopted and existing business activities can be expanded in new market area. The only things that are required for setting up a franchise are money and human resources. Capitals are required for purchasing licenses, land, rights and other physical requirements.

Franchise entrepreneurship is easy and smart because it is an investment in already successful business plans. Risks are the least involved in this sort of business. People are willing to purchase new products and explore new companies only when cost-effectiveness is achieved. Consumers go crazy for innovative and modified approaches to marketing and product manufacturing. Innovation is the key strength of entrepreneurship. Every prospective entrepreneur must be analytical and innovative in his strategies.

Description of industry and entering market

Over the past few years, the retail industry of Brazil has grown very fast. The economic conditions of the country are favourable for the retail industry. Consumer's purchasing power has increased due to stable macroeconomic factors. The country's cosmetics and personal care industry is growing and it is giving impressive performance. Proper distribution channels can be developed and it will support selling goods to a large number of consumers. Further, the retail industry is becoming the world's largest grocery retailer.

The major competitor of TESCO in the Brazilian market is WAL-MART. After entering Wal-Mart in the Brazilian market, many other supermarkets had to shut their business. The company offered the best product to their customers according to their preferences. Wal-Mart uses an aggressive price policy and offers low-cost products to their customers which also affects the business of other firms. Buying behaviour shown by consumers also has an impact on the overall operational activities that are performed in the entity.

There are many other companies which are doing business in Brazil but there is no retail company which is UK based. The rise in globalization also affects Brazil and its business. It is a great opportunity to open a business from the franchises of TESCO as there is no British food retail company in the new market area. The general merchandise and fashion sector is also growing in the country along with its economy. There are also some hurdles available in the market such as the high tax rate charged by the government and lack of infrastructure investment in the country had slowed down the growth of business. There is also a lack of awareness about the TESCO in Brazil and high competition from other brands also affects its business. They also need to focus on the present economic conditions of the country which is favourable for retail businesses.

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Reasons for becoming an entrepreneur

There are several reasons for becoming an entrepreneur. Some of them are discussed below...

Opportunity

Working as an entrepreneur gives one more chance to capture business opportunities. Individuals are not bound to only specific areas of business. They can grab more opportunities to develop their creativity in their own ways. Working in a corporation sometimes becomes frustrating for the employees. In corporations, there are many barriers that stop the development of the individual.

Freedom

For being an entrepreneur, individuals get enough freedom to balance their lives. It also gives flexibility to an individual towards its working hours. They are not bound to work only a few hours. Freedom gives an opportunity to employees to work on their innovations. They can think about new technology as well as ideas.

Freedom

For being an entrepreneur individuals get enough freedom to balance their life. It also gives flexibility to an individual towards its working hours. They are not bound to work only a few hours. Freedom gives an opportunity to employees to work on their innovations. They can think about new technology and ideas.

Offer advance learning

To work in a corporate culture can stop learning opportunities for employees. The main advantage of entrepreneur is never stop learning and their knowledge always increases. The learning opportunities of an individual are not limited to their organization. Entrepreneurship provides opportunities to learn more new things over time.

Unlimited Earnings

The biggest advantage of entrepreneurship is earning is not limited. The earnings of individuals grow as businesses grow. Entrepreneurship is self-motivated and builds profits for business. The potential of earnings is totally dependent on the capabilities of individuals. In a job earning potential is always limited and depends on job promotions.

Change world

Entrepreneur not only changes their lives but also change other worlds too. Entrepreneur gives the opportunity to think differently and their innovations can change other lives too. By innovations, they try to overcome deficiencies that affect the lives of humans.

Positioning of product and resourcing options

There are a number of ways of positioning of brand based on different approaches. The major categories of positioning of products are as follows...

By product attribute

A product attribute defines the benefits of products. This positioning is focused on the benefits of products and their relative competitive offerings.

By user

This positioning focuses on user problems. By highlighting the problems of user they suggest which product is best to use as per their requirements. This type of approach also contributes person self identity.

By product class

This posting strategy highlights leadership positions in the market. This strategy defies only for this product which is best in their fields.

Against competitions

In this approach, a firm competes directly with its competitors on the basis of its products.

By applications

With these approaches' the product is positing according to consumers. This approach defines the best solution for particular tasks or uses.

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Quality or value

Some business firm positions their products on the basis of their quality and their significant value. For opening a business in Brazil it can use combinations of the above strategies. The owner of the company can adopt more than two positioning approaches for their business expansions. They can apply user positioning approaches against the competition approach. By using these approaches company attracts more customers in their business and also gives competition to their competitors. These approaches have capabilities to target the market in Brazil and also give cost-effective benefits. This positioning approach helps to organization for better target segments. The positioning and targeting business approaches help to company to capture markets in Brazil and also allow to company to increase its sales.

Recommendations

Acquiring business through franchises may be a good idea. In Brazil, there are only a few supermarkets available. Taking a franchise of TESCO can benefit an individual. In franchises, business decisions are taken by members of the network. Acquiring business from franchises can be beneficial for owners. To gain more success in business through franchises they should balance local customization as well Since TESCO is a UK-based retail company most of the products consist preferences of UK customers. To run operations successfully in Brazil they need to maintain local preferences as well. Companies need to focus on combinations as well. There should be no communication gap between the company and local people. The owner of the company has clear core concepts about the market and the product which they are offering to people. To gain market and take competitive advantages location is very important for every business.

Before opening a franchise business company needs to look over the market and its recent trends, consumers' habits can also affect business. They also focus on locations of business. Locations of business also affect its performance. Without a great location for business, they cannot overlook its benefits. From the above report, it can be recommended that the company focus more on innovations of company and take advantage of technology in their business so they can acquire the market in a better way.

Conclusion

From the above report, it can be concluded that franchises are good options to acquire to become an entrepreneur. TESCO offers good products and services to their customers on standard systems. Entrepreneur can benefit from franchises as their advertising and training costs are low. It also benefits entrepreneurs because it the retail company is a well-established brand in the UK and other countries but in Brazil, it is still not aware of the company. However, there are some other supermarkets such as Wal -Mart which are main competitors of business. The economic conditions of the country are favourable for retail business.

References

  • Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
  • Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago Press.
  • Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
  • Baum, J.R., Frese, M. and Baron, R.A., 2014. The psychology of entrepreneurship. Psychology Press.
  • Carraher, S.M. and Paridon, T.J., 2015. Entrepreneurship journal rankings across the discipline. Journal of Small Business Strategy.
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