the role of entrepreneurship in creating and starting up a business

Enterprise – The Role of Entrepreneurs and Intrapreneurs

Learning Objective

Explain how entrepreneurship creates and starts new businesses, how intrapreneurship sustains the ongoing success of existing firms, and evaluate the qualities, risks, barriers and scale of activity required by both roles in line with Cambridge AS‑Level 9609 (1.1.1 & 1.1.2).

1. Business‑Activity Overview (Syllabus 1.1.1)

• Purpose of business – to generate profit, add value for customers and meet societal needs.
• Four factors of production
  • Land – natural resources.
  • Labour – human effort and skills.
  • Capital – physical (machinery, buildings) and financial assets.
  • Entrepreneurship – the ability to combine the other three factors, take risk and innovate.
• Adding value – converting inputs into outputs that are more useful or desirable to the consumer (e.g., raw coffee beans → roasted, packaged coffee).
• Opportunity cost – the benefit foregone when a business chooses one activity over another (e.g., using capital to develop a new product instead of expanding existing production).
• Dynamic environment – businesses operate in a constantly changing context shaped by technology, economics, social trends, legal regulations and competition.
• Key reasons for success or failure
  • Internal factors: market fit, finance, management capability, operational efficiency.
  • External factors: competition, regulatory changes, economic cycles, consumer preferences.
• Scale of business activity
  • Local – e.g., a neighbourhood bakery.
  • National – e.g., a regional chain of gyms.
  • International – e.g., a fashion label selling in several countries.
  • Multinational – e.g., a technology corporation with production, R&D and sales in multiple continents.

2. Key Definitions

• Entrepreneur: an individual who identifies a market opportunity, mobilises resources and assumes personal risk to start a new business.
• Intrapreneur: an employee who behaves like an entrepreneur inside an existing organisation, using the firm’s resources to develop new products, services or processes.
• Enterprise: the act of creating, organising and managing a new business venture.

3. Why Entrepreneurship Matters

1. Drives economic growth through job creation and competition.
2. Introduces innovation that raises productivity and expands consumer choice.
3. Provides solutions to unmet needs, stimulating market development.
4. Fosters a culture of risk‑taking and continuous improvement.

4. Role of Entrepreneurship in Creating and Starting Up a Business

Entrepreneurship moves a business from a simple idea to a functioning, growing enterprise. It underpins every stage of the start‑up process – from spotting an opportunity to scaling the operation.

5. Stages of the Entrepreneurial Process

1. Opportunity Identification – recognise a gap in the market or a problem that needs solving.
2. Idea Development – refine the concept, test feasibility and craft a clear value proposition.
3. Planning – produce a business plan covering market analysis, marketing, operations, finance and risk assessment.
4. Resource Mobilisation – obtain capital (own funds, loans, investors), recruit staff and acquire assets.
5. Implementation – launch the product/service, set up sales channels and commence operations.
6. Growth & Scaling – monitor performance, reinvest profits and expand market reach.

6. Qualities Required for Success (Syllabus Requirement)

Entrepreneur

• Visionary thinking – anticipates future market trends.
• Risk tolerance – comfortable with uncertainty and personal financial exposure.
• Resilience – persists despite setbacks and learns from failure.
• Opportunity recognition – spots unmet needs or market gaps.
• Resourcefulness – makes the most of limited resources.
• Leadership – inspires, motivates and mobilises a team.

Intrapreneur

• Proactiveness – initiates change without being prompted.
• Collaborative mindset – works effectively across departments.
• Strategic alignment – ensures ideas fit the organisation’s overall goals.
• Political savvy – navigates corporate structures and resistance.
• Strong communication – sells ideas internally and secures support.

7. Business Risk & Uncertainty (1.1.2)

• Financial risk – cash‑flow volatility, profit margins and loan repayment.
• Market risk – demand fluctuations, competitive response, price sensitivity.
• Operational risk – production bottlenecks, supply‑chain reliability, technology failures.

8. Barriers to Entrepreneurship (1.1.2)

• Financial constraints – limited access to start‑up capital or credit.
• Regulatory & legal obstacles – licensing, taxation, health & safety requirements.
• Lack of skills or knowledge – insufficient expertise in finance, marketing or operations.
• Cultural attitudes to risk – societies that discourage failure or view entrepreneurship negatively.
• Market entry barriers – strong incumbents, high switching costs or economies of scale favouring existing firms.

9. Role of Intrapreneurship in Ongoing Success (1.1.2)

• Generates new product or service ideas that refresh the company’s portfolio.
• Improves processes, reduces costs and increases efficiency.
• Creates additional revenue streams that sustain long‑term profitability.
• Helps the firm adapt to market changes, preserving competitive advantage.

10. Entrepreneur vs. Intrapreneur – Comparative Overview

11. Advantages & Challenges

• Entrepreneurship – Advantages: high potential rewards, creative freedom, direct impact on business direction.
• Entrepreneurship – Challenges: personal financial risk, market uncertainty, heavy workload.
• Intrapreneurship – Advantages: access to established resources, lower personal financial risk, support structures.
• Intrapreneurship – Challenges: bureaucracy, limited autonomy, possible resistance from existing staff.

12. Illustrative Case Studies (Brief)

Entrepreneur Example: Sarah founded “EcoBrew”, a sustainable coffee brand, after noticing a lack of eco‑friendly packaging. She raised seed capital, developed a biodegradable cup, launched via an online store and created 15 jobs in the first year.

Intrapreneur Example: James, a product manager at a large beverage corporation, proposed a line of plant‑based drinks. Using the firm’s R&D facilities and distribution network, the product generated £2 million in its first six months and expanded the company’s market share.

13. Summary

Entrepreneurship is a catalyst for economic development, driving the creation of new businesses and innovative solutions. Entrepreneurs bear full risk and reap the rewards of their ventures, while intrapreneurs leverage organisational resources to innovate from within, sustaining long‑term competitiveness. Mastery of the required qualities, awareness of risks and barriers, and the ability to operate at different scales equips future business leaders to either launch their own enterprises or champion innovation inside existing firms.