Challenges of Entering the Business Market: The Pre-Entry Knowledge and Experience

Abstract

Abstract. In any national economy entrepreneurial entry serves to transform and revitalize markets and industries, thereby enhancing their competitiveness. Existing empirical research suggests that the pre-entry knowledge of the market and the entrepreneur's prior practical and managerial experience will influence the new venture's chances of survival and its future growth. The current paper emphasizes the key role that the entrepreneur has on the market entry as this entry influences business survival, growth or exit. In the paper we seek to better understand the relationship between the pre-entry knowledge and experience and the new venture's success, by performing an in-depth analysis of the specialized literature. We argue that the pre-entry knowledge should be assessed against three key perspectives: (1) personal characteristics of the entrepreneur, (2) knowledge about the business activity, the market and the industry, and (3) resources at entrepreneur disposal. Also, the pre-entry experience can contribute to development of three categories of skills in an entrepreneur, such as: (1) functional skills - ability to perform various managerial functions, (2) relational skills - ability to work with external actors, and (3) resource management skills - ability to effectively identify and allocate scarce resources.Keywords: business entry, entrepreneurial company, pre-entryplanning, pre-entry knowledge, preentry experience.1. IntroductionThe current business environment goes through turbulent and dynamic changes, with companies entering and exiting various industries at an alarming rate. Now with the global economic crisis, it has been more than obvious that it is important to invest in the entrepreneurial culture of a country that leads to creation of new businesses with the potential to transform and rejuvenate the national economies. Therefore, entrepreneurship is viewed as the engine for economic growth and vitality of the large society as a whole. One important particularity of this subject comes from the fact that there is no universal entrepreneurship recipe. When studying the various cases of successful we can find many similarities, but also many differences from one person to another. There are many variables included in this equation that different experts still continue to argue over (e.g., Mitton, 1989; Chell et al., 1991; Kamineni, 2002). These aspects have been proven to influence the behavior and the decisions of entrepreneurs. Certainly, there are both success and failure stories in every situation.One of the most important factors of growth and development of all industries and economies around the world was the process of companies entering and leaving the business market. The biggest effect that this factor had on market performance has focused on productivity and market structure. There is a lot of knowledge in terms of entrepreneurship input and output activities, their variability in time and connection to various industries and their influence on the processes of change in the economy (Carree and Thurik, 2002; Aghion et al., 2004; Thurik et al., 2011; Tantau and Mateesescu, 2012). Even if the entering and exiting processes are influenced by various factors, the most important part of them is the person behind these processes - the entrepreneur. There is little information in the literature about the main player of great caliber.Looking at both the Romanian and the international business environment, we observe some very strong examples of unique companies that started doing business in a different way, which proved to be a very successful one. The creative behind those businesses turn problems into opportunities, bringing added value to market and making an impact through innovation. Like Drucker (1993, p. 45) stated, entrepreneurs always search for a change, respond to it and exploit it as an opportunity. Innovation became a competitive tool of entrepreneurs, a mean by which they exploit problems and change as opportunities. …

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