International Relations and the Measurements of Power

Get Complete Project Material File(s) Now! »

Literature review

In this chapter, we will introduce to the reader the literature which is used to answer the pur-pose. Our goal is to carry out the understanding of the main steps of business creation pro-cess, followed by a presentation of “Recognizing opportunities and generating ideas”, “Feas-ibility analysis”, “Industry, market and competitor analysis”, and “Developing an effective business model” which are the main parts of the business creation process. Finally, we will present how these processes assist to the Wine Essence company.

Explanation of business creation process and entrepreneurship

The literature suggests about entrepreneurship that there are significant differences between entrepreneurs and non entrepreneurs and between new firms and already established firms. “A framework for describing new venture creation integrates four major perspectives in entrepreneurship: characteristics of the individuals who start the venture, the organization which they create, the environment surrounding the new venture, and the process by which the new venture is started” (Gartner, 1985).
“The creation of a new venture is a multidimensional phenomenon; each variable describes only a single dimension of the phenomenon and cannot be taken alone. There is a growing awareness that the process of starting a business is not a single well-worn route marched along again and again by identical entrepreneur” (Hartman, 1983). New business creation is a complex phenomenon: entrepreneurs and their firms differentiate; also the actions they take and the environments they operate in are diverse – and all these features form complex and unique combinations in the creation of each new venture. Therefore, there is no « average » entrepreneur and « typical » venture creation. New venture creation is “the organizing of new organizations. To organize is to assemble ongoing interdependent actions into sensible sequences that generate sensible outcomes » (Weick, 1979).
Figure 6 below presents a framework for describing the creation of a new venture across four dimensions: (a) individual(s) – the person(s) involved in starting a new organization; (b) organization which is the kind of firm that is started; (c) environment which is the situation surrounding and influencing the new organization; and (d) new venture process which is the actions undertaken by the individual(s) to start the venture (Gartner, 1985). Gartner (1985) outlined a framework of four dimensions that should be accounted for when studying new ventures: the individuals involved in the creation of the new venture, the activities undertaken by those individuals during the new venture creation process, the organizational structure and strategy of the new venture, and the environmental context of the new venture.
However, as the literature says there is no particular configuration for new venture creation. The framework above is the first to combine the four dimensions of venture creation, though other researchers have sought to combine two or more of the dimensions. “The four dimensional conceptual framework can be seen as a kaleidoscope, as an instrument through which to view the enormously varying patterns of new venture creation” (Gartner, 1985). In analyzing results of one of the four dimensions, Collins and Moore (1970) suggest that individuals who start firms are social misfits who do not fit into most organizations, while Cooper (1970) suggest that individuals who start successful firms are good team players. “The framework for describing new venture creation provides the possibility of describing subsets within the unwieldy set of all entrepreneurs and all new ventures. Newly created ventures that display meaningful similarities across the four dimensions could be described and classified together” (Gartner, 1982).
To conclude our introductory part to literature review we must notice that the kinds of activities and the number of activities that entrepreneurs undertake, and the sequence of these activities have a significant influence on their ability to successfully create new ventures. We will explain more precisely the most important steps of business creation in the proceeding parts of our analysis, which are: Recognizing opportunities and generating ideas, Feasibility analysis, Industry and competitor analysis and Developing an effective business model.
In the following parts we will explain the principal steps of a business creation process in order to understand the main four stages of the development of a business idea.

Recognizing opportunities and generating idea

According to academic research we will define the entrepreneurial opportunity: “the market is an allocative process; a discovery process; and a creative process” (Buchanan & Vanberg, 1991). Every entrepreneur when starting a new venture has to be able to recognize, discover and create entrepreneurial opportunities. The Oxford English Dictionary defines opportunity as: “A time, juncture, or condition of things favorable to an end or purpose, or admitting of something being done or effected”. Therefore, an entrepreneurial opportunity consists of set of ideas, beliefs and actions that enable the creation of future goods and services in the ab-sence of current markets for them” (Venkataraman, 1997).
Hence, entrepreneurial opportunity consists of new ideas or inventions that may or may not lead to the achievement of economic ends, beliefs about achievement of economic ends and actions that implement those ends through specific goods such as products and services. An entrepreneur should always look for the opportunity to discover, create and exploit new mar-kets. But there is always high risk of venture failure.
Venkataraman, Dew and Velamuri (2002) defined three views of entrepreneurial opportun-ity, as follows:
– Opportunity Recognition: If both sources of supply and demand exist rather obvi-ously, the opportunity for bringing them together has to be « recognized » and then the match-up between supply and demand has to be implemented either through as exist-ing firm or a new firm.
– Opportunity Discovery: If only one side exists, for instance demand exists, but sup-ply does not and vice versa then, the nonexistent side has to be « discovered » before the match-up can be implemented.
– Opportunity Creation: If neither supply nor demands exist in an obvious manner, one or both have to be created and several economic inventions in marketing, financing etc. have to be made, for the opportunity to come into existence.
To conclude this part, every invention develops opportunities for the creation of several pos-sible economic effects. An effective entrepreneur needs not only the ability and alertness to recognize, and the perception and perseverance to discover opportunities for the achieve-ment of pre-determined goals; such as increasing profits and larger market shares, but also he/she needs to be able to take decisions and actions based often only on human imagination and human aspirations, generate their ideas that may or may not in time lead to new products, firms and markets. Wine Essence entrepreneurs have created the company once they had recognized the opportunity, but they did not go through a PEST analysis (Political, Economical, Social and Technological factors research) because they saw the opportunity through a customer demand.

Case study. Recognizing opportunities and generating idea

The intention to create a firm and the propensity to act (Krueger, 1993) are considered as the main forces that make the creation of a firm possible. Ardichvili, Cardozo, & Ray (2003) have recognized the identification of opportunities as one of the most important compet-ences of successful entrepreneurs, and it is also become an important aspect in the scholarly study of entrepreneurship. Many studies have been done on the subject about why and how some people are better to identify opportunity than the others (Shane & Venkataraman, 2000). Long & McMullan (1984) observed that the knowledge derived from education or work has a bigger influence when creating a business than the degree of innovation of the opportunity, and we agree on this point. In the Wine Essence case we have noticed that the level of education of each entrepreneur gives them the abilities to see an opportunity but also to react positively to it. The knowledge and the experience developed and acquired during the formation years are paramount factors in the business creation process. We agree with the literature which defines the entrepreneurs as special persons to recognize opportunity and to transform it to a successful business idea., even if most of time the founders attribute their initial idea for a business creation to odds. For Wine Essence, the business creation was made after that the entrepreneurs realized that they had an opportunity to answer to the de-mand. One of their contacts was interested in a wide range of different wines (French, American, German, etc) and was wondering who could be able to regroup all these wines. The three entrepreneurs thought about the opportunity and decided to accept the challenge. Wine Essence was created on internal stimulation; they have identified a gap in the market with a specific segment of customers and they have decided to fill it.
Through this explanation we can realized that the work experience is also present in the identification of the idea, because the entrepreneur needs to be aware of his environment and what she/he is going to face with the business creation.
For Wine Essence, this phase of the business creation process was very fast – no more than two weeks to pass from opportunity identification phase to the business creation launching steps. The entrepreneurs decided to create the company to fill the gap there was in the mar-ket with a particular segment of customers. They have realized that this segment of custom-ers will give them the possibility to penetrate the market easily and quickly, without any competitors on this precise market, also called a niche.

Feasibility analysis

It is important that most techniques for entrepreneurship behavior and salience in the pre-start up phase of a business creation are systematic in approach. This part of our paper ex-plores the utility of a feasibility analysis. We have chosen to analyze this step of business creation for a more inclusive assessment of entrepreneur’s behavior in the context of sustain-able development. Before contributing to the final steps of a business creation process, we want to support our analysis with some theory about importance of carrying out feasibility analysis. While application of the theory suggests that it is beneficial and useful to complete feasibility analysis before starting a business.
Feasibility analysis helps to figure out a potential framework for planning and assessing a foreseen development. Feasibility analysis is a pre-start up and strategic planning tool, conducted in the pre-business plan phase of a development. It involves a process of ”collecting and analyzing data prior to the new business start up, and then using knowledge thus gained to formulate the business plan itself” (Castrogiovanni, 1996). “Implementing a detailed feas-ibility analysis during the project planning process demonstrates how the development will operate under a specific set of assumptions considering all economic and non-economic factors” (Matson, 2004).
Feasibility analysis occurs before considerable investment is made. Feasibility analysis is considered as an important business tool; during this process an entrepreneur contemplates usefulness and benefits of the potential business success. Strategic planning is one of the useful activities of feasibility analysis. It can produce many creative solutions. Therefore, pre-start up planning has concrete advantages depending on the context in which our venture take place. Such contexts include a number of environmental conditions, such as “uncer-tainty, munificence, and industry maturity, and founder conditions, such as knowledge and capital” (Castrogiovanni, 1996). These various contexts have positive or negative influence on the effectiveness of strategic planning efforts. Castrogiovanni (1996) debates also that, with all the consideration of contexts, pre-start up planning has no applied influence on fin-ancial performance, survival or other outcomes. However, planning benefits from that it gives the ability to achieve its goals and objectives to a firm in an easier way. Some of the benefits are following: learning through planning, legitimization of the business, improving communication with external stakeholders, increased efficiency and cooperation through im-proved communication within the organization, and streamlining certain procedures before starting up the business. Lyles, Baird, Orris, and Kuratko (1993) spoke about formal plan-ning that offers firms a comprehensive strategic decision making process including a wide variety of alternative strategies and this in turn leads to higher levels of performance and profitability.
We agree on the usefulness of strategic planning, literature emphasizes assessment of the re-lationship of pre-start up planning to business performance because “formal strategic plan-ning usually results in performance success” (Pearce, Freeman and Robinson 1987; Powell 1992; Schwenk and Shrader 1993). Thus, strategic planning tool like feasibility analysis is beneficial and can increase performance and success rate of a company. ‘‘Positive planning-performance relationships outnumbered negative ones’’ (Powell, 1992). Schwenk and Shrader (1993) noted that, ‘‘the overall relationship between formal planning and perform-ance across studies is positive and significant’’. After examining planning-performance we think that, strategic planning has the biggest impact on financial performance of a firm and on the business survival which is a defining success factor in a business creation.
However, we should realize that measuring the success of a business must involve an evalu-ation which goes beyond the survival or financials. Judge and Douglas (1998) articulates the changing attitudes that ‘‘strategic planning can and should have an impact beyond the finan-cial performance of the firm’’. Then, success refers to much more than financial profitabil-ity.
Effective planning always occurs between all levels of planning from the international level down to the site itself. The members of a company need to have common goals and vision to make the plan work. Feasibility analysis also works as an intersectional link, connecting policies made at higher levels of planning to their implementation at the site level. “A fur-ther advantage to having a strategic planning tool at the site level is that it focuses on local particulars and specifics while still adhering to wider policies built on sustainable principles, thus linking the strategic and the normative” (Costa, 2001).
“Also, systematic stakeholder analysis can and should fit within the domain of feasibility analysis. Nevertheless, the literature on feasibility analysis and pre-start up planning does not offer a framework for determining stakeholder status” (Yuksel et al, 1999). But there is no template for identifying these stakeholders during pre-start up planning.
Therefore, it is important to approach a systematic stakeholder analysis framework and then explores its utility for feasibility analysis. Freeman (1984) describes a stakeholder as ‘‘any group or individual who can affect or is affected by the achievement of the organizations ob-jectives’’. Freeman also approached that the possible number of stakeholders is unlimited and could include competitors and media, but about this we will mention more broadly in the next part of “Market Analysis”. As stakeholders are identified, planners in collaboration with numerous stakeholders could conduct feasibility analysis. Therefore, entrepreneurs should be collaborative, use a common framework to collectively plan, set goals and object-ives, and evaluate a proposed development. An important aspect of feasibility analysis is the question of perspective.
Finally, feasibility analysis embodies the elements of strategic planning, such as an emphas-is on goal and target specification, identification and evaluation of alternative policy actions, quantitative analysis and prediction of environment, and an evaluation of means against ends.

Case study. Feasibility analysis

We cannot really speak about feasibility analysis concerning the creation of Wine Esssence. As we have seen in the previous part, “Recognizing opportunities and generating ideas” the three entrepreneurs have recognized the opportunity and have transformed it into a business idea. Intention is related with the attitudes, more concretely concerning the perceived de-sirability and feasibility (Gatewood, Shaver, & Gartner, 1995). The personal choice to start a new venture depends on three elements: (a) the perception of the desirability, (b) the propensity to act, and (c) the perception of feasibility (Shapero, 1982). This was the first model, “Entrepreneurial Event model”, it considers the business creation as an event that can be explained with the interaction between initiatives, abilities, management, relative autonomy and risk (Guerrero, Rialp & Urbano, 2006).
But since the model has involved and many studies have been made on the subject, the Dav-idsson’s model (1995) is the last considered. According to this model, intention to go into a business can be influenced by two elements: (a) the conviction defined by general attitudes (willingness to change, competitiveness, money orientation, achievement, and autonomy) and domain attitudes (payoff, social contribution and know-how), and (b) the current situ-ation (Davidsson, 1995). We agree with this last model from Davidsson, because we have experienced it during the business creation of Wine Essence. We want to underline an aspect of the intention of going into a new business which does appear in small portion in both Davidsson and Sheparo model through the “know-how” and the “perception of feasibility”; the idea of professionalism.
We have seen through Wines Essence business creation that the entrepreneurs did not make any feasibility analysis but were able through their knowledge of the industry and the abilit-ies they posses in entrepreneurship to take a decision about a new venture thanks to their pri-or experiences. The know-how should be take a bigger part in the feasibility analysis, be-cause an entrepreneur who is an expert of her/his industry, is able to take a decision and to act efficiently than any other entrepreneur and without following the steps we have seen previously in the literature. And the ability to take the decision make the entrepreneur even more efficient on his/her activity.
For the case of Wine Essence, the entrepreneurs have identified the opportunity of selling wine to a specific type of customers and to offer them a new type of service. They are on a niche market, delivering complete wine list to palaces in adequation with their customers. The feasibility analysis depends on their abilities to answer positively to the demand, thanks the right range of products. We can add to the professionalism that the social network in this case plays a very important role, in order to be in contact with the right person, when they need specific products. The three entrepreneurs did not need a proper feasibility analysis as we have seen in the previous part, but they needed to know their industry to be able to un-derstand the need of the customers and to be able as entrepreneurs to take the right decision and to take on the risk.

Industry, market and competitor analysis

This part of the paper indicates techniques that may be useful in the case of using the help of analysts who usually incur excessive expenses for a firm. Market analysis often concerns two basic tasks. The first one is to assess the size of existing markets and the second to forecast the size of future markets. Research of domestic market is much easier than analysis of the international one. What makes the international market more difficult to analyze is that a firm has to go through many diverse markets with unique characteristics; however, in this case it is hard to generalize. Also, the problem is that many foreign markets miss the reliable statistical data, especially the developing economies. There are several factors to consider before finding a potential market for particular products, such as differing customs, tastes and the trade restrictions. We should also think of trade blocks, for instance, in the European Economic Community, European Union countries are usually evaluated as individual countries rather than together as a trade group. Most of these national markets are small compare with the U.S. market. Therefore, the market research is necessary for analyzing the markets which are either superficial or reasonably priced when after we compare the benefits or adequate expenses that a company has to pay (Moyer, 1968).
In additions, it is important for a company to have the ability of competitive advantage, which is connected to successive market analysis capacity. But maybe the clue of this advantage lies in market positioning, as well as be able to look outside the firm. Entrepreneurs should focus on the existing core competences and assets of their firms and think how they can expand them. “Core competences are viewed as catalysts which reduce the time and cost required for a business to expand its asset base in ways which allow it to deliver a more competitive product; they help companies build new assets which can enhance their competitive advantage, enable them to meet the needs of changing markets and diversify into new ones.” (Verdin & Williamson, 1994).
A regular market consists of a group of current and/or potential customers who are willing to buy products, goods or services, to satisfy their particular wants or needs. Thus, markets consist of buyers – people or organizations and their needs, not products. If we speak about what is an industry, it consists of sellers, typically organizations, which offer products that are similar and close substitutes for one another. Therefore, is there a difference between an industry and a market? According to Mullins (2003), “judgments about the attractiveness of the market one proposes to serve may be very different from judgments about the industry in which one would compete.” Mullins says that “this should not be – but often is – surprising, for the questions asked to assess market attractiveness are different from those for industry attractiveness, a point easily obscured when words like “sector and space” are used indis-criminately or carelessly in the opportunity assessment process.”
Also obviously, most entrepreneurs and investors would prefer to serve attractive rather than unattractive markets. But how might such a market assessments be made? According to Mullins (2003), assessments must be made at both the macro- (broad, market-wide) and mi-cro- (particular to a specific segment) levels.
He emphasizes that macro-level market assessment is quite straightforward to conduct. It is easy to measure how large the market is. Market size can be measured in many ways. This include: number of customers in the market, the aggregate money spent by these customers on the relevant goods or services, and the number of units of relevant products or usage oc-casions, bought annually. Also, it is relevant to collect recent historical data to make sure how fast the market has been growing and to forecast about how fast it is likely to grow in the future, whether things are likely to get better or worse. Mullins (2003) highlights that the broad, macro-level market assessment is important to the entrepreneur to avoid the risk of failure. If we speak about micro-level, it is difficult for an entrepreneur to face other compet-ition. In this sense, there is no such thing as a new market in customer terms; we will always find a competition. The entrepreneurs who say that they have no competition are simply na-ive.
Thus, the micro-level market assessment involves asking four key questions relevant to a particular market: is there a target market segment where we might enter the market in which we offer the customer clear and compelling benefits at a price they are willing to pay? Are these benefits, in the customers’ minds, different from and superior in some way – bet-ter, faster, cheaper or whatever – to what’s currently offered by other solutions? How large is this segment, and how fast is it growing? Is it likely that our entry into this segment will provide us entry to other segments we may wish to target in the future?
How all these problem can be solved? By collecting data draw from talking to or surveying potential customers and data which is available on the Internet or in libraries or from other sources, to determine segment size and growth rate. These can deliver the understanding that the entrepreneur needs.
Mullins (2003) also emphasizes that many aspiring entrepreneurs make the mistake of ex-amining only the macro-level.
Another solution for decent market analysis can be the five forces of Michael Porter, that de-termine industry attractiveness through the analysis of the customers, suppliers, new entrants, substitute products and the competitive rivalry on the market. However the Porter’s 5 forces analysis use alone will be just an indicator of the industry for th company and will not realize a complete market study.
In this part, we have tried to describe several techniques for market analysis. There are many conventional devices, useful in marketing research, that may be used equally effectively in domestic marketing research and abroad as well.

Table of Contents
1. Introduction
1.1 Background
1.2 Purpose
1.3 Method & Material
1.4 Limitations
1.5 Disposition
2. Theoretical Approach
2.1 International Relations and the Measurements of Power
2.2 Foreign Policy and International Law
2.3 Realism Point of View
2.4 Civil Society
2.5 Liberal Pluralism
3. The Interaction Between Civil Society and International Relations – The Case of Lebanon
3.1 Birth of a state
3.2 The Arab League
3.3 Right & Left wing
3.4 Civil War 1975-1990
3.5 Taef Agreement and the Aftermath of the Civil War
4. Analysis
4.1 Was the conflict External of Internal?
4.2 The role of Taef Agreement and the Civil War winner
4.3 Efficiency of Confessionalism
5. Conclusion
References
GET THE COMPLETE PROJECT