James Packer
Discuss about the Entrepreneurial Business Planning.
The entrepreneurial venture is a plan of activities developed by an individual aiming at starting and running a business without sufficient resources (Mishra & Zachary, 2015). An entrepreneurial venture is different from other forms of conducting business as it relates to innovation, service or product. Entrepreneurs like James Packer possess certain principles that play a critical role in the success of their businesses. Such principles include flexibility in their thinking, they are highly motivated, persistent, and can thrive in the harsh working environment (Elliott & Boshoff, 2008). James Packer is a successful entrepreneur as a result of his ability to take initiatives by overcoming challenges to ensure that the objective set is achieved as expected.
James Packer began his entrepreneurial venture after taking control of his parent’s company. Over the years James realized that the ball game was changing and media companies were going to lose advertising shares because of the growth of online advertising. As a result, James Packer decided to sell stakes in media companies that he acquired through inheritance. After selling all the shares, he began investing in casinos and resorts that earned him a name in the gambling as well as the tourism industry. James owns Crown Resorts situated in Australia, London and Philippines. His resorts have villas for essential personnel, gaming sections, swimming pools, luxury spas among other entertainment activities.
Packer’s resorts are said to attract more than 25 million people in a year mainly of Asian descent. Although James has been successful in his entrepreneurial venture, he has equally encountered losses in his quest to make the gambling empire a reality. James invested a quarter a billion in a casino in the United States that failed as well as the similar amount that was lost when he wanted to acquire a stake in Station Casinos. James Packer began appearing in entrepreneurial wealth list after 2006, a year after his father’s death. Packer is reported to have lost a significant portion of his money as a result of struggling profits as well as poor investment skills. In 2009 Packer’s wealth had substantially reduced significantly and he sold some of his major assets including a yacht. Additionally, Packer’s wealth reduced further after dividing the inheritance with his sister.
As of 2016, Packer’s net worth was reported to be fewer than 3.5 billion dollars. He has since dropped to 6th place among the richest people in Australia. Whether his investments in entertainment and gambling are going to pay off is a matter of time.
Opportunity Evaluation
There are several tools available for evaluating a business opportunity and vary based on the nature of the business. To begin with, Timmons Model of the Entrepreneurial Process is an opportunity evaluation tool that focuses on three broad categories which include the workers, resources and the nature surrounding the opportunity (Matthews, Schenkel, Ford & Human, 2009). Applying this method, it can then be said that James Packer used the resources and team available to him to study the characteristics of media venture which his companies managed. It is at this point that he realized that advertising revenue would soon be consumed by online advertisement. It is here that Packer managed to acquire stakes in online businesses, SEEK and Carsales.
After six years, Packer sold his stake for 440 million dollars after an initial purchase of 33 million dollars. Besides the three elements, Timmons provides other measures for evaluating a potential business opportunity (Matthews, Schenkel, Ford & Human, 2009). These measures include the industry, market, economic and personal factors. After the fall of One Tel, Packer used the funds he had to advance his push for venturing into a completely different industry and also decided to venture into other markets such as London, Macau, Philippines, Australia and the United States. Here, we see that he had a personal criterion that encouraged him to leave his family business and venture into a completely different market which could be attributed to high potential opportunity since his earlier businesses were vulnerable to online businesses.
Other tools available for entrepreneurs for evaluating opportunity include the New Venture Decision-Making Model and the Opportunity Search Model. In all the frameworks for evaluating the opportunity, the entrepreneur such as James Packer takes center stage. According to the New Venture Decision Making Model, generating the business idea and evaluation of the concept is usually the main important stages. On the other hand, the Opportunity Search Model suggests that entrepreneurs are guided by three factors which include: personal characteristics, environmental factors as well as strategic factors (Harris & Gibson, 2008). Additionally, other serial entrepreneurs perform a SWOT analysis which is an investigation into the strengths, weakness, opportunity and threat surrounding a particular business.
However, there are numerous tools that entrepreneurs use to evaluate a business opportunity but all of them are aimed at identification of opportunities that are likely to succeed, these tools also aim to ensure that complex ideas are simplified by experts and the need to have a team for conducting an analysis. Besides, the evaluation process acts as a checklist for an entrepreneur to pitch an idea to investors, stakeholders and financiers of a particular business. Other goals of an assessment process are improving the efficiency of operations and implementing new strategies to improve upon an existing idea such as James Packer did by investing in a different industry. James opportunity evaluation determined that future for telecommunication industry was in jeopardy and he had to salvage whatever he could to ensure that he ventured into a new form of business that was sustainable.
Pathways entrepreneurs take
To discuss pathways of entrepreneurship ventures, we need to look at some of the questions that entrepreneurs ask themselves when evaluating an opportunity. These pathways are based on key questions that entrepreneurs need to ask themselves because the answers are pertinent towards drawing a business plan that will achieve the objective of the business venture (Jones & Jones, 2011). The first issue revolves around the question whether the entrepreneur can identify the market and channel all the marketing efforts to specifically target those that have needs to be satisfied. In this case, traditional media forms such as magazine and television were to soon lose market share regarding advertising revenue. For this reason, James understood that online advertising is going to lucrative since it targets specific users thereby allowing market efforts to target potential customers with precision.
The second aspect is whether the idea solves real problems that people have. Gambling and casino industry has been on the rise over the past decades (Mitchelmore & Rowley, 2010). As many people look for these spots to entertain themselves and gamble, James as an entrepreneur identified the need and as a result decided to venture into the industry for purposes of providing such services. It is through solving a problem that entrepreneurs can come up with a solution that then becomes business ventures.
Another significant factor that determines that pathways entrepreneurs take in their venture is scalability (Liao, Welsch & Pistrui, 2009). The media industry could not be scaled any further as compared to gambling and entertainment industry. James had the potential to scale his business by opening operations in various regions of the world to tap into different markets for the purpose of maximizing returns from different groups of people.
Lastly, personal objective plays a significant factor and entrepreneurs take different pathways simply because the venture plays into a larger motive to achieve something (Srivastava, Yoo, Frankwick, & Voss, 2013). Since entrepreneurs are risk takers, James is believed to have taken a calculated risk to advance into his new business venture. He sold his stake in companies to raise funds to start an international gaming and tourism business.
The role of design thinking, lean-startup and business model canvas in entrepreneurship is to ensure that traditional ways of doing business are disregarded by adopting a new process that is aimed at achieving the optimum performance (Armstrong, 2014). To achieve the objective of design thinking, a fresh perspective and approach are necessary. The goal of design thinking is to analyze existing customers and optimizing the process to achieve better results that will satisfy the customers. The role of design thing is to evaluate the whole process and develop a new framework for conducting business (Liao & Gartner, 2008). This can be attested by James Packer decision to analyze the gaming industry and ensuring that he made it work for his company.
During opportunity evaluation for a particular form of business, it should ensure that it has addressed several key ideas such as long-term planning, strategic analysis by focusing on market segmentation, life cycle and SWOT analysis (Liao & Gartner, 2006). Also, it requires one to carefully ascertain the quality of product or services to be introduced to the market. Other activities that an entrepreneur should consider are portfolio theory, scenario planning, resource allocation models, corporate culture, leadership craft and focus on metrics that matter (O’Neill, Saunders & Hoffman, 1987).
Conclusion
This topic has elaborated the entrepreneurship business planning by focusing on James Packer and how he decided to venture into the gaming industry. It analyzes the opportunity evaluation through describing the pathways that entrepreneurs take as well as the role of design thinking, lean startup and business model canvas that play a significant role in explaining the relationship between innovation and creativity for purposes of sustainability.
References
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Srivastava, P., (Jay) Yoo, J., Frankwick, G. L., & Voss, K. E. (2013). Evaluating the Relationship of Firm Strategic Orientations and New Product Development Program Performance. Journal of Marketing Theory and Practice, 21(4), 429-440.
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