A STUDY OF THE CHARACTERISTICS AND BUSINESS STRATEGIES OF DIFFERENT ENTREPRENEURIAL TYPES

Abstract

Entrepreneurs are not a homogeneous group. Based Oil the literature on reasons for starting a business and goal satisfaction, this study develops a model of four entrepreneurial types. Through the use of personal interviews, these entrepreneurial types are further described by the previous experience, age. education and role models of the entrepreneurs. The financial performance of each entrepreneurial type is also examined. Successful performance is associated with entrepreneurs who had prior owner experience. In this sample. having experience in operating a small business is more important than having prior industry experience. Furthermore, these successful entrepreneurs value extrinsic goals more than intrinsic goals. They aspire to create organisations that would become large corporations. Achieving monetary rewards is their primary goal. Business strategies of the entrepreneurial types are also studied. The results show limited variation in strategies across the four types. A significant difference among the entrepreneurial types is the attitude towards growth of the business; only two entrepreneurial types view growth as necessary for their small firms. Obstacles to growth include the lack of financial and human resources. With regards to entrepreneurial performance. a major influencing factor is the industry growth rates which set the context within which the entrepreneurial firm operates. In addition, a dominant competitive strategy is the use of price-quality relationship. A strategy of "higher price-higher quality" or "lower price-higher quality" proves to be a winning formula for success.