Entrepreneurship: Business Entry Wedges
If we all have the keys to success, the locks must be changed. Marc Dollinger-an author of undisputed fame observed. I present briefly the means of new business start ups that have been found to be applicable and appropriate.
A business entry wedge is a means of trying to set foot on a new venture. There are three major wedges. A person who comes up with a new product or service is exploiting the new product or Service wedge. This entails coming up with a product or service that is not offered by a competitor. Safaricom Kenya Limited is a good example. Being the first company to offer Mobile telephony services, they have a huge customer base and the profits they are raking in are substantial. Moreover, being a leader in an untapped market gives you magnificent competitive advantage. By implication, you also develop isolation mechanisms cushioned by the First mover advantage. Isolation mechanisms are methods of shielding the effect of competitors. Celtel have born the brunt of this. They have found out that acquiring market share and loyalty is not easy in the market. Their strategies are laudable though!
An entrepreneur who enters an already existing market is said to be exploiting the parallel competition wedge. Such a person is well versed in the prevailing market but is determined to input innovation and creativity in his/her modus operandi. Most businesses are started in this manner. It is not difficult to think about a business venture that has been started this way. To succeed in this manner, you must have a very calculated approach to desist from the ‘norm’. You must do things differently much to the satisfaction of the customers.
Then there is Franchising. A franchise is a business venture started as a duplicate of another which has been tested and found to be lucrative. The buyer of a franchise (franchisee) benefits from the repute of the franchisor. Entry costs are kept at a minimum. This is the best way to start a business. Usually, a license fee is paid to the franchisor. Nandos is a good example of a Franchise. The parent company is in South Africa.
There are of course other minor wedges that you might want to get accustomed to. Exploiting underutilized resources is a way that can give you a foot in the market. There are also government regulations that can raise an opportunity for business. We all know how companies dealing with speed governors made money when the government made it mandatory for PSV’s to install the gadgets. You can also exploit partial momentum by making a witty Geographical relocation of an idea. Customers can also make you think about start a business venture. You can listen to people and learn what they want and it is not available in the market. Or better still, it is available but it is not satisfying them. Another minor wedge is a spin-off which is a business venture started by a person vacating employment to go start up a business venture in the same field. The individual here is actually using the business knowledge got from the parent company. This wedge is also regarded as parent company sponsorship. It is up to you to smell the environment and establish viable entrepreneurial ventures.
Next release: Why entrepreneurs fail in their quest for success!
Joseph K. Kanyua The writer is a Software Developer at Ascribe Plc.