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The different types of entrepreneurs and their fit

with firms and markets

By Marc van der Meulen

Marc van der Meulen

S1710443

University of Groningen

Prof. dr. P.S. Zwart

dr. C.H.M. Lutz

Masterthesis

August 2013

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1.1 Introduction

Entrepreneurship is a very interesting subject for researchers these days. According to

Stevenson (2006), the number of entrepreneurial ventures in the United States (US) doubled

the last 10 years. He also states that there is a huge growth in the amount of capital that is

flowing to young and new firms. For larger firms intrepreneurship is getting more interesting.

Because of these facts it is important and interesting to find out what the important aspects of

an entrepreneurial firm are. For example, research shows that business plans should be

followed to get better results (Karlsson & Honig, 2009), entrepreneurs can create or discover

opportunities (Alvarez & Barney, 2007) and that entrepreneurs can make use of causation or

effectuation (Sarasvathy, 2001). Another subject in the research about entrepreneurship is the

personality of an entrepreneur. There are several reasons why it is important to know more

about this phenomenon. First, it could benefit in finding potential entrepreneurs, that could be

successful to start their own business. Second, it can help potential stakeholders to get clear

whether they want to do business with an entrepreneur or not. Finally, it can reduce risk for

banks and financial capitalists. That is why the focus of this research will be on the

personality of the entrepreneur.

1.2 Research goal

As stated before, entrepreneurship can be very broad and different. According to Miner

(1997) every entrepreneur is different and has his own characteristics. However, not only

entrepreneurs differ from one another. According to Miller (1983; 1987) firms and markets

can also differ. He states that the potential of every type of entrepreneur is different. The

potential of every type correlates with criteria like venture creation, economic growth and

occupational success. There has to be a fit between the things an entrepreneur is capable of

and the circumstances. He also concludes that successful entrepreneurship is not only growth

or profit, but can also be the job itself and life satisfaction. This interesting fit, Miner talks

about, is the focus of this research. Therefore, the main goal of this research is:

'Which types of entrepreneurs fit with which types of firms and types of markets?'

For example, which type of entrepreneur fits in a non-routine firm (Perrow, 1967) within a

dynamic market (Miller, 1987)? It is also interesting to find out if there are more options for a

good fit. Is there just one fit or are there more options? Is there just one type of entrepreneur

that fits within a non-routine firm and a dynamic market situation? It is interesting for

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potential entrepreneurs to know which type of entrepreneurs fits in which situation. With the

right information they can search for the right firm and market and create a good fit with their

personality. It can also help existing entrepreneurs to get information about their pitfalls and

which characteristics they need in their firms and markets. In this research we will use several

theories to define three types of variables: type of entrepreneur, type of firm and type of

market. Littunen (2000) writes that typical characteristics of successful entrepreneurs are the

ability to take risks, innovativeness, knowledge and skills, and the ability to co-operate.

However, this is a fairly broad definition of an entrepreneurial type. Therefore, this research

will define several types of entrepreneurs and describe their differences. Each of these types

has their own characteristics. The same thing will be done for types of firms and types of

markets. To define these types we will make use of several theories of researchers in the past

and present.

1.3 Research methodology

This research will be done in a qualitative way. According to Shiny (2013) this is a good way

to describe the variables, to connect them with each other, and interpret them. This way we

can explore the relations between types of entrepreneurs, firms and markets. The research

question of this paper is open and broad. The qualitative way will give us more insight into

the research goal. For a quantitative method we need more existing information about this

subject. The fit we are investigating in this research is fairly new and therefore a quantitative

method is hard to use. We will create a discussion where we will compare theory with

practical information.

Through interviews with entrepreneurs we collect information about the type of firms and

markets. With help of entrepreneurial scans we collect information about the type of

entrepreneurs. The collected information will give an insight into which relations there are

between the three variables. The results from the interviews and scans will be compared with

our own insights from the literature. The entrepreneurial scan we use is the scan defined by

Driessen and Zwart (2006). The interview is conducted by ourselves.

The paper is structured as follows. First we define the types of entrepreneurs, types of firms

and types of markets. Second, the methodology and validation of the research will be

described. Finally, findings and conclusions will be presented and limitations will be given.

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2. Theory

2.1 Types of entrepreneurs

In the following paragraph six theories will be used to explore the variable 'type of

entrepreneur'. The authors are Smith (1967), Donkels and Frohlich (1991), Miner (1997),

Muller and Gappisch (2005), Driessen and Zwart (2006) and Jung (1921).

Joseph Schumpeter (1934) was one of the first economists who investigated entrepreneurs,

and looked to their characteristics. Although he did not distinguish different types of

entrepreneurs, he already had the idea that entrepreneurs where different. Entrepreneurs are

leaders and are driven by autonomy and have success, according to Schumpeter. After years,

other economists like McCelland (1961) and Brockhaus (1982) started to investigate the

entrepreneur and found out that entrepreneurs are willing to take risks, have a high need of

achievement, locus of control and take responsibility for success or failure. Stevenson (2006)

states that searching for one psychological profile is bound to fail. Building on this statement

of Stevenson, several types of entrepreneurs will be described in this section. Each of these

types will have their own characteristics. At the end, four types will be selected carefully

which will be used for the variable 'type of entrepreneur'. The choice of four types is based on

the fact that most of the theories describe four types and the more types you distinguish the

harder it is to place entrepreneurs under the right type.

Smith

One of the first researchers that distinguished types of entrepreneurs was Smith in 1967. In

the research of Smith we find 2 types of entrepreneurs. Through empirical analysis Smith

conducted two ideal types: the craftsman entrepreneur and the opportunistic entrepreneur. The

craftsman entrepreneur is more focussed on the present and past, is not really confident and

hardly flexible. The opportunistic entrepreneur has more confidence and is really flexible. He

also looks at the future and has social skills.

Donkels and Fröhlich

Another interesting theory is that from Donkels and Fröhlich (1991). In this research Donkels

and Fröhlich make use of 2 dimensions which lead to four types of entrepreneurs. The two

dimensions are 'dynamic-creative' and 'administrative-executive'. Types of entrepreneurs can

be weak or strong in these dimensions. Donkels and Fröhlich distinguish the all-round type,

pioneer type, routineer type and the organizer type. According to Donkels and Fröhlich the

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all-round type acts like a designer, accountant, salesman and foreman by himself. He is

versatile, can do a lot of things by himself. The pioneer is the most creative of the four types.

Innovation is important for this type of entrepreneurs. The routineer is the most careful

entrepreneur of these types. He does not like risk and is therefore cautious. The organizer is

mostly rational, organized and analytical. He can be seen as an administrative type. Figure 1

gives a complete overview:

Miner

Important research has also been done by Miner (1997). He did research to types of

entrepreneurs and found some interesting things. Miner states that every entrepreneur is

different and an individual that follows his own path. Someone who wants to start as an

entrepreneur has to ask the question: do I have what it takes to become a successful

entrepreneur. However, as Miner states, there is not just one kind of person who has the

potential to succeed as an entrepreneur. Rather there are four types with all their own

characteristics. The four types of Miner are the personal achiever, the real manager, the expert

idea generator, and the emphatic salesperson. Miner and Muller et al. (2005) define the

personal achiever as an entrepreneur with an high achievement motivation and they like to

face the challenges their tasks bring along. They have a lot of self-confidence. Real managers

have a high power motivation, are strongly committed to managerial tasks and try to do

everything to achieve a high position. Their main interest is to find out how they can use their

abilities to influence and lead other people. They like to be in charge. The most creative and

imaginative entrepreneur would be the expert idea generator. They like to innovate and

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improve products, following their intuition. The emphatic salesperson is interested in building

relationships and creating commitment. They are communicatively strong and they know how

to convince people. Most of the time these types of entrepreneurs are extravert. Figure 2 gives

an overview.

Muller and Gappisch

A more recent research about types of entrepreneurs is the research of Muller and Gappisch

(2005). They make use of the Myers-Briggs Type Indicator (Gartner and Martinko, 1996;

Reynierse, 1997) and identify four entrepreneurial personalities: The extraverted, the intuitive,

the tough-minded and the maladapted type. Extraverted types value interpersonal relations in

the business environment, according to Muller and Gappisch. Employees, subordinates and

customers are really important for those types. The intuitive type stands for innovation and

creativity. They try to look for new techniques and products. Tough-minded types

communicate on an impersonal way, are analytical and objective. The last type is

complicated. The maladapted type does not like authority and rules. Freedom of doing what

they want is important. A summery is shown in figure 3.

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Driessen and Zwart

Another recent research about types of entrepreneurs and their characteristics has been done

by Driessen and Zwart (2006). They developed the so-called entrepreneurial scan (E-scan).

According to Driessen and Zwart the entrepreneurial scan is a validated and automated

instrument , offering insight into characteristics and capabilities for entrepreneurship as

objective as possible. The scan offers entrepreneurs an insight into their entrepreneurial

strengths and weaknesses. It is interesting to find out what these characteristics are in general.

The E-scan distinguishes 10 categories in which entrepreneurs can score points. A random

test could look like figure 4.

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Building on this E-scan, Driessen and Zwart distinguish four types of entrepreneurs: the

pioneer, the salesman, the manager and the expert. Every type has its own characteristics. The

following figure shows which characteristics belong to which type of entrepreneur:

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Jung

From another perspective we introduce the color theory of Jung (1921) described by Cambell

(2004). He is the founder of the analytical psychology. He created theories which divided

people into four categories. His studies were not specifically on entrepreneurs but more on

personalities of people. But the types he describes are interesting and useful for this research,

because it has similarities with entrepreneurial types and it can help us to get a better view of

a type of entrepreneur. Jung divides people into four categories: red, yellow, green, and blue.

Each category has its own traits and pitfalls. The red type is full of energy, extravert, a fast

thinker, rational, and competitive. Red people don't like to get their time wasted, they have no

patience. They want to be in control. Yellow people are more enthusiastic and social.

Relationships are important and they are very good at imagining things. Pitfalls of a yellow

person are conversations that are impersonal and people that inhibit their creativity. Green

personalities like informal things and are very relaxed. A good working climate is important.

They can feel when something is wrong. Green personalities don't like to be in the spotlights,

or being pushed. Last but not least, we have the blue people. Blue people are analytical and

think before they make a decision. They take their time and think about everything. Blue

people do not like it when people are late, or unorganized. It is also hard to deal with

emotions for a blue person. An overview is shown in Figure 6.

Red people can be interpreted on business level like people that can handle change, lead the

company and make decisions really fast. Yellow people have creative ideas and solutions and

like to work in a business with a good climate and culture. Green people like to work in the

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background, but can form a good team with other employees in the business. Blue people

work very precise and careful, and can take responsibility within a firm.

2.2 Creating type of entrepreneur variable

As stated above, there has been a lot of research to define types of entrepreneurs. In most of

the theories the author distinguishes four types of entrepreneurs. There are a lot of similarities

in the theories discussed above. According to Muller and Gappisch (2005), their four types

can be compared to the four types of Miner. If we compare these types we see similarities

between the types of both theories. The extraverted type of Gappisch and Muller has

similarities with the empathic salesperson of Miner. Both are social, and build interpersonal

relations. The intuitive type can be compared to the expert idea generator. They are creative,

innovative and follow their intuition. The tough-minded type has characteristics from both the

real manager and the personal achiever. All three, they are formal in their communication.

The maladapted type is hard to compare, according to Muller and Gappisch.

Next, we add the model of Driessen and Zwart, to compare the pioneer, the salesman, the

manager and the expert with the types we already discussed. The pioneer can been seen as the

intuitive, expert idea generator type. 'Creative' and 'intuitive' are keywords for these three type

that look like each other. The salesman looks like the extraverted, empathic salesperson.

Keywords for this type are 'social' and 'building relations'. The expert has similarities with the

tough-minded, personal achiever type. They are analytic, realistic and have self-confidence.

The manager can be compared to the real manager. They like to organize things and are

formal. We keep the maladapted type out of this comparison because it is hard to define and it

cannot be placed right.

Donkels and Fröhlich (1991) have two types that fit perfectly into the types we already

analysed. The pioneer can be placed at the same spot as the pioneer from Driessen and Zwart

(2006). They are creative and innovative. The organizer can be compared to the expert, tough-

minded, personal achiever type. They are all analytic and organized.

Last but not least, the color theory of Jung. Starting with the blue part, we can conclude that

the organizer, expert, tough-minded, personal achiever type can be seen as a blue personality.

They work precise and are really analytical. The pioneer, intuitive expert idea generator has a

lot of similarities with the yellow personality of Jung. The salesman, extraverted empathetic

salesperson could be seen as red but also has aspects of a yellow personality. The (real)

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manager is all-round, which means he has a few aspects of all the colors. Green aspects like

'encouragement' and red aspects like 'determination' and 'strong will' are common.

According to all these theories we can now make a clear picture of four types that could be

seen as the variable 'type of entrepreneur'. First we have the creative pioneer. This type has

characteristics like creativity, intuition, innovativeness and experimental. The second type is

the analyzer. This type is analytical, rational, thinks before he decides and is realistic. Then

we have the salesperson: a social type which likes to build relations. The fourth type is the all-

round manager. This type is organized, all-round and formal. With these types we are going to

do our research. The decision to make use of these types is based on the fact that we use de

entrepreneurial scan to acquire information about the type of an entrepreneur. This way the

acquired information fits with the types we have distinguished. Also we believe these four

types are clear and really different from each other, so an entrepreneur can be easily placed in

one of the categories. This does not mean an entrepreneur has characteristics of only one type.

A personality is complicated and for example it is possible that a salesperson type also has

characteristics of a creative pioneer. The methodology describes what to do when these kind

of situations appear. In figure 7 we give a complete overview to show which types we use and

what their characteristics are:

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2.3 Types of Firms

The following variable we describe is 'type of firm'. We make use of six theories, out of the

research of Perrow (1967), Miles and Snow (1978),Mintzberg (1980), Miller (1983), Porter

(1998) and Parnell (2006). The types of firms are distinguished based on several things. For

example technology (Perrow), strategy (Miles and Snow) and structure (Mintzberg). In this

paragraph these options will be discussed. Important to say is the fact that some

characteristics that are found in this paragraph can also be seen as characteristics of markets.

A clear example is Parnell, which make use of market characteristics. We are aware of this

fact and take it into account when we find results and draw conclusions.

Perrow

Perrow (1967) distinguished firms based on their technology. To do this, he stated there are

two dimensions. The first dimension is the amount of exceptions that a firm has to deal with

in their work. Some firms have to deal with a lot of exceptions while other firms always have

to deal with the same things. When you always have to deal with the same things your

structure, strategy and technology is completely different from firms that have to deal with a

lot of exceptions. The second dimension is the amount of analysability of problems a firm

faces. This is also different in every firm. Perrow created the following figure:

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Perrow distinguishes 4 types: Routine, non- routine, craft and engineering. All types have

their own characteristics. You can find routine tasks in a stable environment where

technology is highly mechanized. On the other hand we have non routine tasks. These are

changing all the time, uncertain and complex and the technology is not mechanized. Craft

tasks are not very analysable but there are not many exceptions. It is hard to find the solutions

for these few problems. Engineering tasks are variable but easily analysable. A good structure

and standardisation helps to find the solution.

Miles and Snow

Miles and Snow (1978) classified firms in a different way. They looked at the strategy of the

firms, looked which decisions they make. They designed a theoretical framework that deals

with ways organizations define their product-market domains and the structure of the firm to

use their strategy. The framework distinguishes 4 types of firms: defenders, prospectors,

analysers and reactors.

• Defenders: Stability is the keyword for defenders. They stick to their plan, focussing

on a narrow segment of the total market. They produce only a limited set of products.

They act aggressive against competitors. With high quality products and competitive

pricing they try to keep competitors out of their market segment. Innovation,

development and trends are not interesting for defenders when they are out of their

segment. They keep focussing on their own segment.

• Prospectors: The prospector is in a lot of ways totally different from the defender.

Instead of focussing on a few products and keep stable, the prospector tries to

innovate, find and explore new products and opportunities. Keeping their reputation as

a good innovator is sometimes more important than profitability.

• Analysers: The analyser can be seen as a combination of the prospector and defender

and an alternative for those two types. The analyser wants to minimize his risk while

he is maximizing his profit. He tries to find balance between both types, copying the

best things of both.

• Reactors: This type is inconsistent and unstable. This is not really a type you choose

for, but it the result of bad decisions, performing poorly and respond wrong on

changes. According to Perrow, defenders, prospectors and analysers can all be pro-

active with respect to their environment, each in their own way. A reactor lacks

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response mechanism so it is not pro-active with respect to their environment. Their

respond is inappropriately.

Mintzberg

An important research in the area of organizations has been done by Henry Mintzberg in

1980. His focus is more on the structure of an organization. He started with five basic parts of

an organization. These parts are: the operating core, the strategic apex, the middle line, the

technostructure, and the support staff. With these parts a basic structure of an organization can

be created. This is illustrated in figure 9:

Building on these basic parts Mintzberg defined 5 types of firms. In every type, one basic part

has the most influence which leads to a type of firm:

• Simple structure type: The influence of the strategic apex in strong, which leads to

centralization. The strategic apex has control over decision making.

• Machine bureaucracy: In this type the technostructure is leading. Limited

decentralization and a lot of standardization.

• Professional bureaucracy: The operating core is in front, try to minimize influence of

administrators, managers and analysers over their work. They like horizontal and

vertical decentralization.

• Divisionalized form: Middle line managers seek for autonomy. They seek for power

from different levels and divisions.

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• Adhocracy: The support staff has the most influence in this type, not when it is

autonomous but when its collaboration is called for decision making, owing to its

expertise.

Miller

Miller did some research in 1983 to define organizations. He came with three types of firms:

the simple firm, the planning firm and the organic firm. A simple firm is a small firm owned

by an owner-manager. The power is centralized at the top of the firm. The firms is dealing

with a homogeneous environment. These firms make strategy based on intuitive rather than

analytical basis. Time is short, there is not much planning. The planning firm is totally

different. Planning is important and leads to efficiency. Stability is important and one tries to

ban uncertainty. In the organic firm 'environment' and 'structure' are key words for an

entrepreneur. The environment is dynamic, the market is a heterogeneous market and

innovation is needed. To deal with this, the firm needs an organic structure. This is really

important.

Porter

A more recent research is the research done by Porter (1998). Just like Miles and Snow he

distinguished firms based on their strategy. He found three strategies which an organization

can use. These three strategies are cost leadership, differentiation and focus. The cost

leadership type asks the lowest price in the market, which is possible for the quality of the

product. They can ask such a low price because they keep their costs very low. The

differentiation type has a totally different strategy. This type tries to differentiate their

products. The product is not price-sensitive. The firm has unique resources and capabilities

that are hard to copy. The focus type is not a complete different strategy, it only shows

whether a firm focuses on a complete market or just a niche. Thus, Porter actually describes

two types (Cost leadership and differentiation) and the focus part tells on which market the

focus is.

Parnell

Parnell (2006) reconceptualises the findings of Porter. He created a model with the

dimensions market value and market control. In his figure firms can find themselves. A firm

can face any level of market control and value. Therefore Parnell creates a figure were firms

can be placed in, where their emphasis is. Figure 10 gives a good view:

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According to Parnell (2006), firms with their emphasis on market control are able to restrict

entry of new competitors and/or they can prevent customers from switching to other

competitors. These firms are vulnerable when barriers drop or switching costs are minimized.

The firms that have their emphasis on value deal with more competition, but try to offer more

value than their competitors. Most of the time their size is not really large. The market is

dynamic and competitive. The firms that have moderate market control and value are looking

for a balance between these two options. This is common for stable organizations. Firms that

deal with high market control and value are dominant. They even have control over their

suppliers. The last category are firms that have a lack of emphasis on market value and

control. Most of the time these firms perform poorly. They can only survive when the market

is growing fast, so the firms cannot meet the demand.

2.4 Creating type of firm variable

To create the variable type of firm, we need to compare these theories. Let's start with

comparing the types of Perrow with the types of Miles and Snow. The routine type of Perrow

has similarities with the defender type of Miles and Snow. Both can be described as stable,

not innovative and their focus is on their own segment. The non-routine type is more like the

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prospectors type: No mechanized work, innovation is important and it is flexible. The

engineering type looks like the analyser type because both make use of a good structure and

try to minimize risks. The craft type has similarities with the prospector type because they

need flexibility and innovation to find solutions. But they have to deal with less exceptions so

they can use things like stability and some mechanized work from the defender type. The

reactor type of Miles and Snow is hard to compare with something, because it is performing

poorly and it has no typical characteristics.

The differentiation and the cost leadership types of firms could be compared with the findings

above. The routine, defender type and the engineering, analyser type can be seen as a cost

leadership type. Standardisation is key for these types of firms. The focus for routine types is

more on a niche and for the engineering type more on a complete market. The craft en non-

routine type are more part of the differentiation type of Porter. Innovation and finding new

solutions are important here. The focus for craft is on a niche and for non-routine on the

complete market.

Let us add the structure types of Mintzberg. The routine, defender, cost leadership type needs

a simple structure. Simple, stable and low complexity. The engineering, analyser, cost leader

type needs more a structure of machine bureaucracy. They try to minimize risks through

stability and structure to get to efficiency. The craft, differentiation type looks like the

divisionalized form of Mintzberg. They need different divisions: some with stability, others

with flexibility. The non-routine, prospector, differentiation type is dynamic, heterogeneous

and innovation is needed. This is why the adhocracy is the best option to get to these things.

If we take a look at the types Miller distinguishes we see that the routine, defender type with a

simple structure has similarities with the simple firm of Miller. Both have low complexity,

and centralization. The engineering, analyser type with the structure of a machine bureaucracy

looks like a planning firm: stability and efficiency is key here. The craft type looks a bit like

an organic firm, but not as much as the non-routine, prospector type with an adhocracy

structure. Both are complex and deal with uncertainty and innovation.

Finally, we take a look at the theory of Parnell. Firms with emphasis on market control try to

keep out competitors and protect themselves. This is a similarity of the routine, defender, cost

leadership type, with a simple and stable structure. Firms that have their emphasis on market

value deal with a competitive and dynamic market. Comparison can been seen with the non-

routine, prospector, differentiation type. The moderate type of Parnell looks for a balance of

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the two described above. The engineering, analyzer and the craft type can be found in this

area.

As we can see, all these theories add something in the search to the variable 'type of firm'.

Structure, focus, technology, and strategy are all discussed and have their own characteristics.

However, they all have similar characteristics and therefore we now have defined four types

of firms which we will use as variable for further research. The most important authors we

used are Perrow, Miles and Snow and Miller. This way we use technology, strategy and

structure, three key conceptions to define a type of firms. To avoid problems with similarities

between the types we choose to define four types with clear characteristics. The first type is

the simple defender: simple, stable and low risks. The second type is the planned analyser:

structure and standardisation and minimize risk. The third type is the craft differentiator:

divisionalized, more risky, needs innovation and flexibility at some level. The fourth and last

type is the complex prospector: Needs flexibility and creativeness, dynamic and complex, non

routine. A complete overview is given in figure 11:

Simple Defender

Stable

Simple

Low risk level

Craft Differentiator

Divisionalized

Innovation

Flexibility

Planned Analyzer

Structure

Standardization

Minimize risk

Adaptive

Complex Prospector

Non-routine

Organic

Dynamic

Risky

These types are clear and different from each other. Their characteristics are clear so a firm

can be placed easily into the right category when the required data has been collected.

2.5 Types of markets

In this paragraph we will use the following authors to create the variable type of market: Dill

(1958), Duncan (1972), Sheth (1985), Miller (1987), Laughlin and Taylor (1991) and Blank

(2005),

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Dill

The research of Dill (1958) distinguishes no clear types of markets, but is still interesting to

look at. Dill distinguishes three factors that can be characteristics of a market. These factors

are diversity, change and uncertainty. Diversity can be seen as how complex the market is,

and whether the market is heterogeneous or homogeneous. Change covers the degree of terms

like turbulence, volatility and dynamism. The factor uncertainty shows whether the market is

clear and predictable or not.

Duncan

Duncan (1972) also did a lot of research on market and environment. He makes a distinction

between a simple-complex environment and a static-dynamic environment. The simple-

complex one is characterized by high analysability and high diversity. Decisions are simple

but there is a high number of decisions to make. In the static-dynamic type things are more

changing.

Sheth

A research of Sheth (1985) described two ways to define markets. The first one is based on

level of competition in a market and the level of suppliers in the market. This leads to figure

12:

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Although this is a good way to classify markets, Sheth stated that this is rather an obsolete

way to define markets. That is why he came with a new model. His new model is based on

market and product differentiation and distinguished four types of markets with all their own

characteristics: commodity markets, segmented markets, differentiated markets, and

fragmented markets. Figure 13 gives a schematic overview:

In commodity markets cost efficiency and economies of scale are really important. Entry

barriers are low so everybody can enter. In this market a firm tries to get a good market share.

The differentiated market is a market where needs can be satisfied in different ways.

Innovation is important, efficiency and economies of scale are less important. The segmented

market is characterized by versatility. This versatility can be found in technology and

marketing. Segmentation and customization are key in this market. The last market is the

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fragmented market. Specialization and niching are important. Focus and expertise can help to

achieve this. Decentralization is also needed.

Miller

Miller (1987) investigates how structure and strategy correlate with the environmental market.

In this research he made use of three types of markets. The first type of market was a dynamic

one. This type of market can be described as a changing market with a lot of uncertainties.

Innovation is needed, and a firm should react fast when opportunities appear. The

heterogeneity market asks for more diversity from a firm, to get more and different customers

in different market segments. The hostility type is a market with a lot of competition. This can

also be in different segments or dimensions.

Laughlin and Taylor

An interesting research has been done by Laughlin and Taylor (1991). They created a new

model to identify industrial market segments. In their model, they make use of two

dimensions: the degree of market concentration and the degree of product customization.

Market concentration refers to the number of customers. Product customization refers to the

degree to which the product must be customized or tailored to the needs of the end user. This

can be very different for every industrial product. The model Laughlin and Taylor created is

shown in figure 14:

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Teamwork can be operationalized on individual customer level. Close interaction and good

salesmen are important in this market. Customers are willing to pay a higher price for the

products that are delivered in this market. Hawking deals with more general products for few

customers. Entry barriers are hard to create. Focus more on relationships and loyalty. For

adapting markets flexibility is important, to offer specialized products to a broad group of

customers. Flexibility is the key and price and advertising are important here. They want to

keep the costs low. Hyping deals with products that need hyping to get from the ground.

Advertising is important to differentiate and hype the products, just as keeping the costs low

to offer a low price.

Blank

According to Steven Blank (2005) a market is a set of companies with common attributes.

Blank divides markets by making distinction in the way a firm started in the market. So some

firms start in a complete new market, where there is no information about customers or

anything. A firm should do their own research. This is different in a existing market where

everything is already running. Third you have the resegmented market. In this market you

enter when you see a niche, a market share that has not fulfilled by other firms.

2.6 Creating type of market variable

To get the variable 'type of market' we now compare these theories described above. Two

theories that can be compared very easily are the theories of Steth and Laughlin & Taylor.

The dimensions they use look like each other. If we take a look at the adapting type, it has

similarities with the fragmented type of Steth. Both deal with differentiated products and a

heterogeneous market. Specialization, innovation and decentralization is important. The

hawking type is more like the commodity type of Steth. A homogeneous product, for a

homogeneous market. Entry barriers are low so efficiency is key to compete with other

competitors. The hyping type looks like the segmented type because of their homogeneous

products, but heterogeneous market. Versatility is the keyword for these two types. To

achieve this, segmentation is really important. The last comparison is about the teamwork

type and the differentiated type. Innovation is important to achieve quality. Customers are

willing to pay more for a good product.

Next, we add the three types of Miller. The dynamic type looks like the adapting, fragmented

type. Innovation is needed, uncertainty and things change over time. The heterogeneity

market looks like the hyping, segmented market. The market is diverse and needs versatility.

23

The hostile type can be seen as a hawking, commodity type: Homogeneous characteristics and

a lot of competition. Entry barriers are really low.

The factors of Dill (diversity, change and uncertainty) can be added to these types. Very clear

is that the dynamic, adapting fragmented type deals with high diversity, change and

uncertainty. The opposite of these type is the hostile, hawking commodity type which deals

with low diversity, change and uncertainty. The heterogeneity, hyping, segmented type deals

with high diversity but change and uncertainty is not that high. The teamwork, differentiated

type deals more with change and uncertainty but not as high as the dynamic, adapting,

fragmented types.

When we combine all these theories we distinguish four types which we will use for further

research. The four types are: the fragmented adapting type, the commodity hawking type, the

segmented hyping type and the differentiated teamwork type. As you can see, the chosen

types are combinations of the theory of Steth and Laughlin and Taylor. Their characteristics

have similarities that fit with each other. The other theories are used to add some

characteristics. This way the type of market can be easily found when you know more about

the product differentiation and the differentiation of the market and customers. The chosen

types and their characteristics are shown in figure 15 to give a complete overview:

24

2.7 Conclusions

Now that we have defined the three variables, we can conduct a matrix. With this matrix we

can do research on good and bad fits for types of entrepreneurs. On the vertical part of the

matrix we will put the types of firms. The horizontal part will show the types of markets. This

way we create sixteen cells which all refer to some kind of market and firm. Next, we will

look which type of entrepreneur fits within these cells. The created matrix can be found in

figure 16.

In this matrix we will choose 9 cells which we will further investigate. We choose nine cells,

because this should be representative for the matrix and to avoid that cells are too similar to

each other. The cells are marked in the matrix in figure 16. The cells 1, 4, 6 and 9 are chosen,

because on the first hand we believe the combinations of firms and markets in these cells have

a good connection with each other based on their characteristics. For example Cell 1, where

we deal with a simple defender (stable and simple) and commodity hawking (stable and

simple). Cell 2 and 8 are chosen because these look like a complex and interesting situation

with a strange fit. Cell 3, 5 and 7 are chosen because we needed these cells to compare with

the practical information.

Cell 1

The first situation we describe is that from a simple defender firm within a commodity

hawking market. This market is a good match for the simple defender firm, because it has a

lot of similarities and the market offers opportunities for the simple defender to achieve his

goals. The simple defender can predict the market easily, because the market is stable and

homogeneous. This way there is low risk and the simple defender can try to compete with

other competitors to get a good production process with the lowest price. Knowing this, we

state that this situation needs an entrepreneur that can lead the process to reduce production

costs and can make the right decisions to improve this. The entrepreneur should be risk

averse, because the market is stable and predictable and does not ask for risky moves. A good

possibility for an entrepreneur to fit within this situation is the analyser type. With his

analytical skills and his rational and realistic view he can make the right decisions to lead this

firm. Based on his calculations and statements he improves the process of the firm. A good

alternative is the all-round manager. He is organized which can help to improve the

production process.

Conclusion: 1. Analyzer 2. All-round manager

25

Cell 2

The second situation is more complicated. Is this situation we find a simple defender firm

within a fragmented adapting market. This is complicated because the firm is characterized as

a stable and simple firm, that tries to keep the risk level low. However, the market it has to

deal with is dynamic, there is change and uncertainty and specialization, innovation and

niching is important. To achieve this, focus and expertise can help. An entrepreneur that can

possibly lead this firm in this hard situation should at least be creative to find solutions for

this situation. The analyser is not an option because he is not creative and risk averse. The all-

rounder is probably not creative enough to deal with this situation. Innovation is not his cup of

tea. Because of that reason the salesperson is a good option. With his social skills he can form

a right team to handle this situation. He is also creative enough to deal with the innovation

that is asked in this market. The creative pioneer is also creative, can absolutely deal with the

market, but his personality is hard for the stable defender type. He takes to many risks and

trusts on his intuition instead of thinking about other options and opinions.

Conclusion: 1. Salesperson

Cell 3

In this cell we deal with a craft differentiator within a commodity hawking market. On the

first hand this does not look like a really good fit. The craft differentiator need innovation and

flexibility. The commodity hawking type is really stable and simple, with a homogenous

product and market. Innovation and flexibility is not needed, efficiency and low risk is more

important. To deal with the market an analyzer is really good. But the innovation and

flexibility of the firm is unnatural for this type. The creative pioneer can easily deal with the

innovation and flexibility part, but the market asks for stability and efficiency and the pioneer

cannot offer this. Leaves us with the salesperson and the all-round manager. The choice for

one of these types depends on what is more important in this cell. When the firm is most

important, so flexibility and innovation is needed, the salesperson is the right type. If the

market is more important the all-round manager is better, to provide structure and efficiency.

Conclusion: 1. All-round manager 2. Salesperson

Cell 4

The fourth situation looks like a good fit. Inside a segmented hyping market we see a craft

differentiator. The craft differentiator firm is divisionalized and needs innovation and

flexibility. The segmented hyping market is characterized by diversity and versatility. Change

26

and uncertainty is not that high. As the firm is divisionalized and flexible, it can easily deal

with the circumstances within the market. The entrepreneur that fits within this situation has

to deal with a flexible firm, and multiple divisions. Innovation is needed in some way and so a

creative person is desired. A salesperson should be perfect for this situation. He can build

bridges between the divisions, with his social skills. He is also creative enough to deal with

the innovation part. The analyser will have problems with that, and the creative pioneer is a

bit too much in this situation. The all-round manager is also a good option because of his

diverse skills.

Conclusion: 1. Salesperson 2. All round manager

Cell 5

In this cell the planned analyzer deals with a segmented hyping market. The planned analyzer

asks for structure, standardization and minimal risk. The segmented hyping market is diverse,

but change and uncertainty are not that high. This asks for an entrepreneur that can offer

structure, but can also deal with the diversity of the market. The all-round manager seems

perfect for this situation: he can offer structure and can ban risk, but can also deal with the

diversity of the market because he is all-round. The salesperson can be a alternative according

to the diversity, but he is not that good in keeping structure and minimizing risks.

Conclusion: 1. All-round manager 2. Salesperson

Cell 6

The fourth situation is a planned analyser firm within a differentiated teamwork market. The

planned analyser needs structure, standardisation and wants to minimize risks. The

differentiated teamwork market can be seen as a market that asks for innovation, quality and

change. To offer their customers the right quality it is important that the innovation in this

situation is on the right level and the firms should be flexible to deal with change. This is hard

for a planned analyser firm, because this firm is aiming for structure and standardisation. An

analyser type of entrepreneur cannot offer this, because he is risk averse and he is not creative

enough. The all-round manager is an option, because he can lead the firm to structure and

standardisation, but with his diverse skills he can offer the quality that is needed. The

salesperson can offer innovation, quality and change, but it is questionable whether he can

offer structure and standardisation. This same question we can be asked for the creative

pioneer. So the all-round manager is the best option in this situation, to create a good fit

between firm and market. The salesperson could be an alternative.

27

Conclusion: 1. All-round manager 2. Salesperson

Cell 7

This is a very complex situation. A really dynamic, risky and organic firm (complex

prospector) is situated in a very stable, simple and risk averse market (commodity hawking

market). To deal with this situation an entrepreneur must be creative, but also take into

account that the market is not asking for lots of creativity. The analyzer is not creative

enough, he cannot deal with the firm and the situation. Probably the all-round manager faces

the same problems. The salesperson and pioneer seem like better options. They have the

creativity to deal with this situation. Although they should have some affection with structure

and efficiency. Therefore the salesperson is the best option, he can use his social skills to

gather people to take care of this part of the situation. A creative pioneer is an alternative, but

this pioneer needs to have some affection with efficiency and structure to deal with the

market. Most of the time a pioneer does not have these skills, so the pioneer is not a really

serious option.

Conclusion: 1. Salesperson

Cell 8

If we change the firm type to a complex prospector firm and the market as a differentiated

teamwork one, things will change. In this situation the complex prospector is dynamic and

organic, and a risk is normal in this type of firm. In this firm an analyser and all-round

manager will not fit. They need structure, and are not creative enough to deal with this

situation. The creative pioneer and salesperson are creative enough to deal with this situation.

They are creative and can deal with the market and firm. The choice depends on the amount

of risk, uncertainty and dynamics. When these things increase, the option to choose for a

creative pioneer will increase.

Conclusion: 1. Creative pioneer 2. Salesperson

Cell 9

In this situation we have an extreme situation with a complex prospector firm within a

fragmented adapting market. Both types are changing and dynamic and uncertainty is very

high. To deal with all this, innovation is needed. The entrepreneur has to take risks, because

otherwise he will fail, so a risk averse type is unimaginable. The analyser and all-round

manager are no option. The salesperson is probably not creative enough. The only option here

28

is the creative pioneer. He is a specialist in innovation, creation and dealing with risk and

uncertainty. He seems perfect for this situation.

Conclusion: 1. Creative pioneer

These situations are all based on theory that is described in the theoretical framework. In

further research we will take a look on how entrepreneurs find their way in the real world. We

will compare the results above with practical findings. Figure 16 shows the conducted matrix,

figure 17 shows a complete overview of the results.

29

Simple Defender 1 2

Craft Differentiator 3 4

Planned Analyzer

5 6

Complex Prospector 7 8 9

Commodity hawking Segmented hyping Differentiated teamwork Fragmented adapting

30

Cell Type of firm Type of Market Type of entrepreneur Alternative entrepreneur

1 Simple defender Commodity hawking Analyzer All-round manager

2 Simple defender Fragmented adapting Salesperson -

3 Craft differentiator Commodity hawking All-round manager Salesperson

4 Craft differentiator Segmented hyping Salesperson All-round manager

5 Planned analyzer Segmented hyping All-round manager Salesperson

6 Planned analyzer Differentiated teamwork All-round manager Salesperson

7 Complex prospector Commodity hawking Salesperson -

8 Complex prospector Differentiated teamwork Creative pioneer Salesperson

9 Complex prospector Fragmented adapting Creative pioneer -

31

3. Methodology

3.1 Sample

To gather information, we approached 29 randomly selected small and medium firms. We

define small and medium firms as firms that have less than 100 employees. The reason why

we choose small and medium entrepreneurs (SMEs) is that in this kind of firms the

entrepreneur, most of the time, has more influence on the whole business than within large

firms. As we are looking for a good fit between entrepreneur, firm and market it is important

that the entrepreneur really has influence. The sectors of the firms are randomly chosen so we

find different situations and therefore different fits.

3.2 Data gathering

In order to find the necessary information, we have conducted a questionnaire and we made

use of the entrepreneurial scan of Driessen and Zwart (2006). The E-scan consists around 100

questions about the personality of the entrepreneur. The questionnaire consists 14 questions

about the type of firm and market. Based on conceptions like flexibility, innovation, risk,

stability, heterogeneity and uniqueness conclusions can be drawn, where to place the firms

and in which market. The questionnaire can be found in appendix A.

The output of the E-scan is described in a clear report. The report consists a clear profile of

the entrepreneur, with strong and weak points of the entrepreneur. Next figure is an example

of how an entrepreneur is divided into four characterized types:

32

As you can see, the E-scan does not assign one type to an entrepreneur. The results show

percentages of how much each type correlates with the personality of the entrepreneur. In this

research we will mainly use the highest percentage of the type of entrepreneur in combination

with strong and weak points of the entrepreneur, which provide us with extra information to

assign the entrepreneur. That way there are scans which provide results where no type really

sticks out. In this case we will discuss the type briefly and use the strong and weak points to

assign the entrepreneur.

The results of the questionnaire are summarized into a schedule. This way results can be

easily shown and can be analysed. Each questionnaire has been screened individually after

which the type of firm and market is assigned. The assignment of the types is based on

characteristics that arise from the answered questions. By means of the answers we can see

which characteristics are important for the firm and market. If it is not clear which type

belongs to the firm or market, other information will be used. This information can be

achieved from websites. The results of the questionnaire can be found in the paragraph with

results.

3.3 Data analysing

The results of the E-scan and questionnaire shall be brought to the matrix we have conducted

in the theoretical framework. In this matrix we have selected cells that we have practical

information for. These cells will be compared with theoretical findings. We will analyse the

theoretical information and the practical information and when this is done, conclusions will

be drawn.

3.4 Validity and reliability

The validity of this research is pretty high. The E-scan is a proven attribute to measure the

type of entrepreneur according to "www.ondernemerstest.nl". This is the hardest variable to

define because only with the help of an entrepreneur you can distinguish the type of

entrepreneur. Define the type of firm and market is more easy, because a lot of information

about sectors and the firm itself can be found on internet. The questionnaire adds specific

information which helps us to define the types. The reliability could be better. The amount of

scans and questionnaires is not that high and more depth interviews could also help to

improve the reliability. The response rate is also not high enough. With more interviews and a

higher response rate the reliability could be higher.

33

4. Results

The responses have been obtained by email. The questions were explained broadly so

entrepreneurs did not have any questions. The response rate can be divided into two

categories. The questionnaire is answered by 7 people out of 29. This is a response rate of

24,7 %. The E-scan has been done by 10 people which leads to a response rate of 34,5%. As

we can only use complete responses (questionnaire + E-scan) we can only use the people who

filled in both. This were 7 people out of 29 which leads to a response rate of 24,7%. First we

will show the results of the questionnaire. Then we will place the entrepreneurs into the right

cells within the matrix. After that the results of the E-scan will be shown.

The entrepreneurs that responded had an age range from 27 to 58 years old. The amount of

employees variated from 5 to 24. The average number of employees was 13. The sectors of

the responding firms are driving school, art, manufacturing, construction, decoration, lease

and the retail sector. Results of the questionnaire can be found in figure 20. Remarkable was

the fact that some questions get the same answer from every entrepreneur. For example,

almost every entrepreneur thinks innovation and flexibility is important for his firm. Although

other concepts points at the fact that the firm is a price fighter with stability and structure,

where innovation and flexibility is less important, they still think they need flexibility and

innovation. Also the structure is simple at all firms. This could be because the amount of

employees is not enough to get a divisionalized structure or complex structure. Finally, the

level of competition: all responders answer that they deal with at least pretty much

competition. At least, this is how they feel.

Questionnaire

Let us take a closer look at the results. First, we will place the entrepreneurs in the right cell of

the matrix, based on the information we collected from the questionnaire. This information is

shown in figure 20, where you can see how entrepreneurs answered the questions about

concepts of firms and markets. According to this concepts the firms and markets will be

assigned.

Entrepreneur1

If we take a look at entrepreneur 1 we see that the type of firm of this entrepreneur is

characterized by innovation and flexibility. Task variability is low and analysability is normal.

Also quality is more important than price. According to this characteristics we assign this firm

to the craft differentiator type, where innovation and flexibility is important and task

34

variability is low. If we take a look at the type of market we see that the market is

homogeneous, there is a lot of competition and identical products. This points at a commodity

hawking type. But the fact that there is pretty much change and stability is not that high, could

also point at differentiated teamwork type. Further information shows us that we deal with a

driving school. This market looks pretty stable and therefore we decide to assign this to the

commodity hawking market.

Entrepreneur 2

This entrepreneur is really different. As the results show, flexibility and innovation is

important. Furthermore it is a risky business, dynamic and based on quality. Tasks are really

non routine. According to this characteristics we deal with a complex prospector type of firm.

The market is dynamic with a lot of change and uncertainty. This is clearly a fragmented

adapting type, with heterogeneous products and innovation and flexibility is important.

Entrepreneur 3

The following type is pretty easy to assign. Entrepreneur 3 has a simple defender type of firm:

Stable, really simple structure, risk not that high and trying to be a cost leader. All these

characteristics correspond to the simple defender type. The market is Commodity hawking:

High competition, stable and predictable. Some characteristics can also be seen in the

differentiated teamwork type.

Entrepreneur 4

For the fourth entrepreneur it is difficult to assign the firm. Based on the fact that most

products are different but easy to produce, a simple structure, we could place this firm into the

planned analyzer type, but is also has some things of the craft differentiator. If we take a look

at information about this firm we see we deal with a company that buys, sells and rents art to

privates and businesses. This is not a risky business and standardization is possible.

According to this extra information we assign this firm to the planned analyzer type. The type

of market is most likely the segmented hyping type: change and uncertainty are not that high

and the market is heterogeneous.

Entrepreneur 5

The fifth entrepreneur looks exactly like the fourth entrepreneur. All questions were answered

the same about the type of firm. So we assign this firm to the planned analyzer type. The type

of market is different. This is more pointing at the differentiated teamwork type because

quality is important and change and uncertainty are higher than with the previous example.

35

Entrepreneur 6

The following entrepreneur is difficult to assign. The type of firm looks like a craft

differentiator: Innovation and flexibility is needed, variability of the tasks is low and

analysability is also not that high. The market is almost the same as entrepreneur 4:

segmented hyping. Change and uncertainty are not that high, and this entrepreneur deals with

a heterogeneous market.

Entrepreneur 7

The seventh and last entrepreneur can be placed in the complex prospector type. This firm

needs innovation and flexibility really badly and risk level is really high. In combination with

the dynamic firm, this points at the complex prospector. The market is pretty clear. The fact

that the market and product are homogeneous, with a lot of competition points to a

commodity hawking type. Only the change level does not correspond with the commodity

hawking market. Still we assign this firm into the commodity hawking market.

E-scan

Now that we know the type of firm and type of market we can place the type of entrepreneur

into the conducted matrix. This matrix is shown in figure 21. We can now take a look at the

results of the E-scan (figure 22) and see which fit we find within the cells. A complete

overview shows immediately that every entrepreneur is different. There are clear differences

between the entrepreneurs and a nice result is that we find at least one of every type of

entrepreneur.

Entrepreneur 1

This entrepreneur is clearly an all-round manager type: organized and formal. A result of 65%

is really high. A remarkable result is that this manager is willing to take risks and is flexible.

These are characteristics that are not really common for a manager.

Entrepreneur 2

The next entrepreneur is a difficult case to assign. According to the percentages this is an

entrepreneur that has characteristics of all the types. Pioneer has the lowest percentage, but

still 20% is a share that we cannot ignore compared with the other percentages. The E-scan

points out that strong points of this entrepreneur are creativity and social orientation. Based on

the creativity and social orientation we assign this entrepreneur to the salesperson type, with

also influences of the other types.

36

Entrepreneur 3

For entrepreneur 3 we can exclude two types; the pioneer and the salesman. These two types

have really low percentages. The other two types, analyzer and manager are both represented

with 40%. So both types could be the type of this entrepreneur. To assign the entrepreneur we

take a look at the strong points and weak points of this entrepreneur. This entrepreneur does

not want to dominate other people, his social orientation is low, and his effectiveness could be

higher. These characteristics points at a analyzer type which we assign him to.

Entrepreneur 4

The next entrepreneur is an interesting type. When we take a look at the type of entrepreneur

we see that it is a mix of an analyzer and a pioneer. A not very common mix, as these types

have really different characteristics, but maybe the type of firm and market could clarify

more. This type works in the art sector, where creativity and risk is needed. Though to sell art,

characteristics of an analyzer could be useful. Strong points of this entrepreneur are creativity

and willingness to take risk. This is why we assign this entrepreneur to the creative pioneer

type.

Entrepreneur 5

The fifth entrepreneur is also a combination of two types: the manager and salesperson type.

Strong points are creativity and social orientation which leads us a little bit more to the

salesperson type: building relationships and social skills. Although this entrepreneur has also

manager-characteristics we assign him to the salesperson type based on the fact that creativity

and social orientation are strong points of this entrepreneur.

Entrepreneur 6

This entrepreneur has a creative personality. The salesperson and the pioneer type have the

biggest share. Social orientation and creativity are also for this entrepreneur strong points.

Remarkable is that although this entrepreneur looks like a salesperson and pioneer, he is a bit

risk averse. This is not very common for these types. Based on the fact that this entrepreneur

does not like risk, a pioneer is maybe a bit too much for this personality. Therefore we assign

this entrepreneur to the salesperson type.

Entrepreneur 7

The seventh entrepreneur is pretty clear. According to the percentage, willingness to take

risks, creativity and flexibility we can conclude that this is a clear pioneer. Remarkable is that

37

this entrepreneur scores high on most characteristics of an entrepreneur and does not have

much weak points.

Now that we have assigned all entrepreneurs, their firm and the market in which they operate

we give a complete overview in figure 19.

Entrepreneur Type of firm Type of market Type of entrepreneur

1 Craft differentiator Commodity hawking All-round manager

2 Complex prospector Fragmented adapting Salesperson

3 Simple defender Commodity hawking Analyzer

4 Planned analyzer Segmented hyping Creative pioneer

5 Planned analyzer Differentiated

teamwork Salesperson

6 Craft differentiator Segmented hyping Salesperson

7 Complex prospector Commodity hawking Creative pioneer

38

Concept Entrepreneur 1 Entrepreneur 2 Entrepreneur 3 Entrepreneur 4 Entrepreneur 5 Entrepreneur 6 Entrepreneur 7

Flexibility Important Important Important Important Important Important Really important

Innovation Important Important Important Important Important Important Really important

Risk level Normal A lot of risk Normal Normal Normal Pretty much risk A lot of risk

Structure Simple Simple Really simple Simple Simple Simple Simple

Stability of firm Neutral Pretty dynamic Stable Pretty dynamic Pretty dynamic Stable Pretty dynamic

Focus Quality Mostly on quality Mostly on price Mostly on quality Mostly on quality Neutral Neutral

Product uniqueness Most is the same Every product is

different Neutral Most is different Most is different Most is the same

Every product is

different

Production process Neutral Extremely

complicated Neutral Neutral Neutral Neutral Pretty complicated

Market variability Pretty homogenous Heterogeneous Heterogeneous Pretty

heterogeneous Neutral

Pretty

heterogeneous Homogeneous

Product compared to

competition Pretty identical Identical Identical Pretty identical Neutral Pretty identical Identical

Level of competition A lot of

competition

A lot of

competition

A lot of

competition

Pretty much

competition

Pretty much

competition

A lot of

competition

A lot of

competition

Stability of market Neutral Dynamic Pretty stable Pretty stable Pretty dynamic Pretty stable Pretty stable

Change within market Pretty much A lot of change Not much change Neutral Neutral Neutral Pretty much

Type of Firm Craft differentiator Complex

prospector Simple defender Planned analyzer Planned analyzer Craft differentiator

Complex

differentiator

Type of Market Commodity

Hawking

Fragmented

adapting

Commodity

hawking Segmented hyping

Differentiated

teamwork Segmented hyping

Commodity

hawking

39

Simple defender Entrepreneur 3

Craft differentiator

Entrepreneur 1 Entrepreneur 6

Planned analyzer Entrepreneur 4 Entrepreneur 5

Complex prospector Entrepreneur 7 Entrepreneur 2

Commodity hawking Segmented hyping Differentiated teamwork Fragmented adapting

40

41

5. Conclusion and discussion

5.1 Conclusions

Now let us compare our theoretical findings with the practical findings. To do this, we first

take a look at the cells we found practical information for. For example, if we take a look at

the cell where Entrepreneur 1 is in, this cell is similar to Cell 3 of the theoretical findings. So

both cells deal with a craft differentiator within a commodity hawking market. We look if the

entrepreneurial type is the same or different after which we draw some conclusions.

Entrepreneur 1 - Cell 3

In this cell we deal with a craft differentiator within a commodity hawking market. According

to the theory the all-round manager or the salesperson are the best options. In theory we

conclude that when the firm is most important, the salesperson is the best choice. When the

market is most important to deal with, the all-round manager is a better choice. Practical

information shows that the entrepreneur that operates in this cell is clearly an all-round

manager (65%). His strengths are willingness to take risk and flexibility. This is interesting

because this is exactly what he needs in combination with his all-round manager skills.

Knowing this, we can conclude that theoretical and practical information both show that the

all-round manager, who is flexible and wants to take risks, is a good fit for this situation.

Entrepreneur 2 - Cell 9

A complex prospector within a fragmented adapting market was easy to assign in theory. This

has to be a creative pioneer: creative, flexible, take risks, innovative. But our practical

information is different. This entrepreneur was hard to assign: the percentages of the types

were almost equal. His strengths (creativity and social orientation) made us assign him to the

salesperson type. If we compare the theoretical and practical information we clearly see a

difference. According to the theory the creative pioneer is the only option. The practical

information shows that this entrepreneur is definitely not a creative pioneer. He lacks the

willingness to take risks, and does not like uncertainty. So we can conclude that in this

situation there is a difference between the theoretical fit and the practical fit.

Entrepreneur 3 - Cell 1

In theory we told that a simple defender within a commodity hawking market looks like a

good fit. The most compatible type of entrepreneur in this situation should be the analyzer,

with as alternative the all-round manager. If we look at the practical information we find an

42

entrepreneur that exactly looks like the described entrepreneur in theory. Entrepreneur 3 is a

mix of an analyzer and an all-round manager where the analyzer type is a bit stronger. So

theoretical and practical information meet each other perfectly in this situation.

Entrepreneur 4 - Cell 5

A planned analyzer within a segmented hyping market asks for an all-round manager

according to the theory. He can offer structure and diversity, what is needed in this situation.

The alternative is the salesperson, which is good for diversity, but offering structure is harder

for this type. Is we look at the practical information we see that entrepreneur 4 is a creative

pioneer. The two types he is definitely not, are: all-round manager and salesperson. That is

interesting, because according to the theory these type are needed to deal with this situation.

We can conclude that we do not find a match in this situation between practical and

theoretical information.

Entrepreneur 5 - Cell 6

In this cell the planned analyzer deals with a differentiated teamwork market. As the planned

analyzer wants to minimize risks and asks for structure, and the market asks for innovation

and quality, the all-round manager is in theory the best option here, but the salesperson is a

good alternative. Looking at the practical information we see that this entrepreneur is a

combination of an all-round manager and the salesperson. He is assigned as a salesperson, but

also his manager skills are mentioned. So practical and theoretical information meet each

other in this situation.

Entrepreneur 6 - Cell 4

Theoretical information tells us that when a craft differentiator is dealing with a segmented

hyping market, the demand for innovation and flexibility is high. To deal with change and

uncertainty the entrepreneur needs creativity. The best option in this case would be the

salesperson. If we take a look at the practical information we see that entrepreneur 6 is

assigned as a salesperson, and therefore has similarities with the theoretical information.

Though the alternative (all-round manager) is not really a good match with the practical

findings. Still, on the first hand, in this situation theoretical and practical findings meet each

other.

Entrepreneur 7 - Cell 7

In this complex situation where a complex prospector meets a commodity hawking market the

theoretical information asks for a salesperson. He is creative enough to deal with the firm, that

43

is changing, dynamic and innovative, but also can deal with the market that asks for more

stability. The practical information about Entrepreneur 7 is really clear: this is a creative

pioneer. Though theory concludes that the pioneer is not really an optio,n because he lacks

skills to be effective and stable. There is no match between theory and practice in this

situation.

Looking at these conclusions we see that in some cells there is a good match between theory

and practice, but in three cells there also is a complete miss match. In figure 23 we conducted

a complete overview.

44

Entrepreneur Theoretical Cell Situation (Firm -

Market)

Theoretical type of

Entrepreneur

Practical type of

Entrepreneur Match

1 3 Craft differentiator -

Commodity hawking

All-round manager /

Salesperson All-round manager

2 9 Complex prospector -

Fragmented adapting Creative pioneer Salesperson

3 1 Simple defender -

Commodity hawking

Analyzer / All-round

manager Analyzer

4 5 Planned analyzer -

Segmented hyping

All-round manager /

Salesperson Creative pioneer

5 6 Planned analyzer -

Differentiated teamwork

All-round manager /

Salesperson Salesperson

6 4 Craft differentiator -

Segmented hyping

Salesperson / All-round

manager Salesperson

7 7 Complex prospector -

Commodity hawking Salesperson Creative pioneer

45

According to the overview we can conclude that theory and practice do not always match

with each other. There are theoretical situations which are really different in practice.

Interesting is that we did not find a match for any situation with a complex prospector. The

complex prospector firm is the firm with most non-routine tasks, and it is dynamic and

organic. This could be why situations with a complex prospector are hard to predict, based on

theoretical findings. Every situation could be really different and ask for a different

entrepreneur. Situations with a simple defender of a craft differentiator are more stable and

predictable and we found more matches for these types. The more things get uncertain,

changing and dynamic, the more mismatches we found.

We can also conclude that you cannot say that for every situation there is only one type of

entrepreneur, only one fit. In the theoretical framework we already gave alternatives, for the

best fit, so there were more options. The practical information confirmed this statement with

findings that show there are more fits. In some situations we found three fits out of the

possible four options. For example, the situation of Entrepreneur 4: a planned analyzer within

segmented hyping market. This theoretical information gave two possible types of

entrepreneurs; the all-round manager and the salesperson. The practical information added the

creative pioneer to the list of options. Therefore, we can conclude that every situation is

different and there are more fits possible for every situation.

5.2 Discussion and limitations

Let us take a look at the whole research and the main goal of this research: 'Which types of

entrepreneurs fit with which types of firms and types of markets?'. To find answers for

this goal we created three variables ('type of entrepreneur', 'type of firm' and 'type of market')

with all four types. In the theoretical part we created situations which we discussed and we

assigned types of entrepreneurs to this situations, based on similar characteristics. After this

we collected practical information, so we could compare the theoretical information with the

practical information. As the results and conclusions showed, we cannot say that a specific

type belongs to a specific situation. We can clearly see that for most situations we

investigated there are multiple options. In some situations we found three out of four types of

entrepreneurs. So the right conclusion should be that there is not one specific fit for the three

variables type of entrepreneur, firm and market. There are multiple fits possible for an

entrepreneur.

46

We did not expect to find matches between the theoretical findings and the practical findings

only and this expectation was a good one. In some situations there was a total mismatch, but

there were also situations where theory and practice totally found each other. This was

remarkable and unexpected. This could be coincidence, because of the low sample size, but it

can also be plausible, because the characteristics of the types fit and this is the best fit.

We have to take into account that we only have investigate seven entrepreneurs. We cannot

exclude that, if the quantity of investigated entrepreneur grows, we find even more fits. It is

interesting to discuss that in some situations we can maybe exclude some types of

entrepreneurs instead of finding one fit. For example, if we have a simple defender within a

commodity hawking market it is really unlikely to find a creative pioneer in this situation. The

creative pioneer cannot put his creativity into this situation and won't start a business in this

situation. The other way around, an analyzer will not fit into a situation with a complex

prospector and a fragmented adapting market. In this situation the analyzer is not creative

enough to deal with the change and uncertainty this situation deals with. So we state that

some fits are really unlikely to find in extreme situations.

This research could add value to the results of the E-scan of Driessen and Zwart (2006). It

could advise to entrepreneurs that filled in the E-scan, that some fits are bad to explore,

according to their type of entrepreneur. This could help them to choose the right market. Also

it could tell an entrepreneur what in theory could be a good fit, and show some practical

examples.

For further research, it could be interesting to find out whether some types of entrepreneurs

can be excluded in some situations. We found out that there are multiple fits possible for

some situations. But with further research maybe some types of entrepreneurs can be

excluded in some situations. To find out, research should find a significant number of

entrepreneurs in the same situation and then find out if there are types that does not exist in

that specific situation. This can be done for several situations. Also further research could be

done at the success level of fits. Maybe some fits are more successful than others or maybe

risky fits create more revenue than unrisky fits. All interesting subjects for further research.

47

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51

Appendix A:

Beste meneer/mevrouw,

Allereerst hartelijk dank dat u bereidt bent om mij te helpen bij mijn onderzoek. Deze

vragenlijst zal ongeveer 15 minuten duren. Alle vragen worden duidelijk uitgelegd en in de

meeste gevallen hoeft u alleen maar een kruisje te zetten. Uiteraard zullen de resultaten van

de vragenlijst anoniem blijven en zal ik hier zorgvuldig mee omgaan.

Algemene vragen:

Wat is uw naam: ..............................................

Wat is de naam van uw bedrijf: ........................

Wat is uw leeftijd: .....................

In welk jaar is uw bedrijf opgericht: ................................

Hoeveel werknemers heeft het bedrijf: ..............................

Kunt u kort omschrijven wat u bedrijf doet en waar het voor staat:

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

Type bedrijf:

In dit deel van de vragenlijst krijgt u vragen over u bedrijf op zich.

Flexibiliteit is een begrip wat voor bedrijven belangrijk kan zijn. Inspringen op kansen die

voorbij komen, zich aanpassen aan veranderingen en voldoen aan bijzondere vragen van

klanten zijn onderdeel hiervan. Andere bedrijven houden vast aan hun product/dienst,

geloven in de kracht van dit product of dienst, en passen zich minder aan. In welke mate is

flexibiliteit belangrijk voor uw bedrijf?

Totaal niet

belangrijk

Niet belangrijk

Neutraal

Belangrijk

Heel erg

belangrijk

Innovatie wordt gezien als het ontwikkelen van nieuwe producten/diensten of het

verbeteren van bestaande producten/diensten. Ook het verbeteren of vernieuwen van het

productieproces valt onder dit begrip. In welke mate is innovatie belangrijk voor uw bedrijf?

52

Totaal niet

belangrijk

Niet belangrijk

Neutraal

Belangrijk

Heel erg

belangrijk

Elk bedrijf heeft te maken met een bepaald risico, zeker in de huidige situatie waarin onze

economie zich bevindt. Maar niet elk bedrijf heeft te maken met evenveel risico. Door

concurrentie, het type product of dienst, innovatie en dergelijke verschilt dit nogal. In welke

mate heeft uw bedrijf te maken met risico?

Geen risico

Weinig risico

Normaal

Redelijk risico

Veel risico

Elk bedrijf heeft zijn eigen organisatiestructuur. Dit geeft aan wie waar verantwoordelijk

voor is, en waar beslissingen worden genomen. Zo heb je bedrijven die werken met

verschillende divisies en afdelingen, terwijl andere bedrijven een meer centrale structuur

hebben. Op welke manier zou u de structuur van uw bedrijf omschrijven?

Heel Simpel

Simpel

Neutraal

Complex

Heel complex

Stabiliteit geeft aan of een bedrijf veel veranderingen ondergaat. Dit kan zijn op het gebied

van u product, concurrentie en/of afzetmarkt. Waar zou u het bedrijf plaatsen in de

volgende tabel:

Stabiel

Redelijk stabiel

Neutraal

Redelijk

dynamisch

Dynamisch

De prijs van een product/dienst is voor elk bedrijf natuurlijk belangrijk. Een te hoge prijs kost

klanten, een te lage prijs kost omzet. Maar prijs is niet voor elk bedrijf even belangrijk.

Prijsvechters doen er alles aan om de prijs zo laag mogelijk te houden terwijl andere

bedrijven zich meer op het product focussen, om de kwaliteit te garanderen en waar klanten

bereidt zijn meer voor te betalen. Waar ligt de focus bij uw bedrijf?

Volledig op de

prijs

Voornamelijk op

de prijs

Neutraal

Voornamelijk op

de kwaliteit

Volledig op de

kwaliteit

Producten/diensten die geleverd worden door een bedrijf kunnen erg verschillen per klant.

Elk product kan verschillend zijn of juist compleet hetzelfde. Als het product of de dienst

53

altijd hetzelfde is, betekent dit niet automatisch dat het ook makkelijk is om het product of

de dienst te leveren. Een service kan altijd hetzelfde zijn, maar toch ingewikkeld om te

leveren. Hoe zou u het product / de dienst omschrijven die u levert:

Elk product is

hetzelfde

Het meeste is

hetzelfde

Neutraal

Het meeste is

verschillend

Elk product is

verschillend

Het produceren

is erg simpel

Het produceren

is redelijk

simpel

Neutraal

Het produceren

is redelijk

ingewikkeld

Het produceren

is erg

ingewikkeld

Type of Market

In de deel wordt er gekeken naar de markt waarin het bedrijf zich begeeft.

De markt waarin een product/dienst wordt verkocht kan er op verschillende manieren

uitzien. Zo kunnen verschillende bedrijven allemaal veel dezelfde producten aanbieden

(homogeen), maar er kan ook sprake zijn van substitutie producten (producten die

verschillen maar dezelfde behoefte vervullen). Een dergelijke markt definiëren we in dit

onderzoek als heterogeen. Hoe zou u de markt omschrijven waarin u uw product verkoopt:

Homogeen Neutraal Heterogeen

1 2 3 4 5

Een product of dienst kan zich onderscheiden op basis van bijvoorbeeld prijs en kwaliteit.

Ook op basis van de vervulling van een behoefte kan een product/dienst verschillen ten

opzichte van de concurrentie. Het product kan identiek zijn, waarbij de prijs of de kwaliteit

het verschil maakt, of het product is uniek en dus compleet anders. In welke mate

verschillen de producten/services die u aan klanten levert t.o.v. concurrenten?

Identiek Neutraal Uniek

1 2 3 4 5

De meeste bedrijven hebben te maken met concurrentie. Hoe zou u de mate van

concurrentie omschrijven voor uw bedrijf?

54

Geen Weinig Neutraal Redelijk Veel

1 2 3 4 5

Elke markt waarin een bedrijf zich begeeft is anders. De ene markt verandert nooit, het is

goed te voorspellen wat er gaat gebeuren in de markt en hoe de markt reageert op acties

van een bedrijf. Deze markten noemen we stabiel. Daarentegen zijn er ook markten die veel

veranderen, onvoorspelbaar zijn, en goed in de gaten moeten worden gehouden. Deze

markten noemen we dynamisch. Waar zou u de markt waarin u zich begeeft plaatsen?

Stabiel

Redelijk stabiel

Neutraal

Redelijk

dynamisch

Dynamisch

1 2 3 4 5

Hoe zou u de mate van verandering in uw markt omschrijven

Geen

veranderingen

Weinig

veranderingen

Neutraal

Redelijk wat

veranderingen

Veel

veranderingen

1 2 3 4 5

--------------------------------------------------------------------------------------------------------------------------------------

Dit is het einde van de vragenlijst. Ik wil u nogmaals hartelijk danken voor uw medewerking

en als u het leuk vindt om het complete eindresultaat eens in te zien dan is dat natuurlijk

geen enkel probleem. U kunt dit aan geven via marcvdmeulen@hotmail.com en dan zal ik

zorgen dat het eindresultaat bij u terecht komt.

Met vriendelijke groet,

Marc van der Meulen