1.1 Introduction
Product portfolio development refers to the strategic process of managing and expanding a company's range of products to align with market needs and organizational goals. It involves decisions regarding the introduction, diversification, or discontinuation of products, as well as the management of a balanced mix of offerings that appeal to various customer segments (Kotler & Keller, 2016). Effective product portfolio development helps businesses maintain competitiveness and profitability by responding to market changes and consumer preferences. Entrepreneurship is widely recognized as a key driver of economic growth and innovation, with entrepreneurial skills playing a critical role in the success of new ventures. The ability of entrepreneurs to identify opportunities, develop strategies, and adapt to changing market conditions significantly influences the development of products and services (Kuratko, 2017).
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of terms.
1.2 Background of Study
In recent years, the rise of small and medium enterprises (SMEs) and the increasing importance of entrepreneurship in developing countries has spurred more research into the specific effects of entrepreneurial skills on product portfolio development in these contexts. As SMEs often face resource constraints and intense competition, the ability to innovate and manage product portfolios effectively has become even more crucial for their survival and growth (Baker & Nelson, 2005). Despite the growing body of literature on entrepreneurship and product development, gaps remain in understanding the direct link between entrepreneurial skills and the success of product portfolios, particularly in emerging markets where entrepreneurial activity plays a significant role in economic development (Kuratko, 2017).
Entrepreneurship is a driving force behind economic development, particularly in fostering innovation and creating new opportunities in both established and emerging markets. Entrepreneurial skills, such as creativity, risk management, problem-solving, and strategic thinking, are integral to the success of any business venture (Kuratko, 2017). The development and management of a product portfolio is an array of products or services offered by a company serve as a fundamental component of an entrepreneur's strategy for ensuring long-term business sustainability and competitive advantage (Kotler & Keller, 2016).
In today's dynamic and competitive business environment, entrepreneurs are expected to continuously innovate and diversify their product offerings to meet changing customer needs and preferences. Effective product portfolio development allows businesses to cater to diverse market segments, reduce risks associated with market fluctuations, and increase their market share (Meyer & Rowan, 2019). However, achieving a balanced and successful product portfolio requires entrepreneurs to possess a range of skills, including the ability to identify market trends, manage resources, and adapt to new challenges (Hisrich, Peters, & Shepherd, 2017).
In many small and medium enterprises (SMEs), entrepreneurial skills are often seen as the key differentiator between success and failure in product portfolio development. Entrepreneurs who are skilled in market analysis, innovation, and strategic planning can build a portfolio that meets consumer demand while also positioning the business for growth (Baker & Nelson, 2005). Despite the recognized importance of these skills, there is limited empirical research on the specific ways in which entrepreneurial competencies influence the development of product portfolios, particularly in the context of SMEs in developing countries. According to Kuratko (2017), entrepreneurial skills refer to the competencies and abilities required by entrepreneurs to successfully identify opportunities, innovate, and manage business operations. These skills include strategic decision-making, risk management, creativity, leadership, and resource allocation (Kuratko, 2017). Entrepreneurial skills enable entrepreneurs to effectively navigate challenges and seize opportunities, making them a critical factor in the success of businesses, particularly in product development and portfolio management. Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the effects of entrepreneurial skill on product portfolio development.
1.3 Statement of Problems
Investigation revealed that many entrepreneurs face challenges in aligning their product offerings with changing consumer preferences and market trends. These challenges are exacerbated in SMEs where limited resources, financial constraints, and competitive pressures hinder effective product portfolio development. Inadequate entrepreneurial skills, such as strategic decision-making, market analysis, and innovation, often result in a lack of effective product differentiation, leading to a poorly managed portfolio that does not cater to the needs of the target audience (Kotler & Keller, 2016).
Furthermore, entrepreneurs in these contexts are required to make critical decisions about product introductions, expansions, or discontinuations based on their skills in market forecasting, creativity, and innovation. Despite the increasing recognition of these skills as key drivers of entrepreneurial success, there is insufficient research examining how entrepreneurial capabilities directly affect the development of product portfolios in SMEs (Baker & Nelson, 2005). Therefore, this study is aimed at exploring the impact of entrepreneurial skills on the development of product portfolios, with a focus on how these skills influence strategic decisions in product diversification, innovation, and market positioning in SMEs.
1.4 Aim and Objectives of Study
The aim of the study is to investigate the effects of entrepreneurial skill on product portfolio development. The specific objectives of the study are:
- To explore the challenges faced by entrepreneurs in applying their skills to product portfolio development, particularly in emerging markets like Nigeria.
- To evaluate how strategic decision-making skills contribute to the successful development and management of product portfolios in SMEs.
- To assess the role of entrepreneurial skills in identifying market trends and opportunities for product innovation and diversification.
- To investigate the impact of resource management and allocation skills on the effectiveness of product portfolio development.
- To analyze the relationship between creativity and risk-taking in the process of expanding or adjusting product portfolios.
- To provide recommendations for entrepreneurs on improving their product portfolio strategies through the development and application of relevant entrepreneurial skills.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Is there challenges entrepreneurs face in applying their skills to product portfolio development, especially in emerging markets like Nigeria?
- How do entrepreneurial skills influence the identification of market trends and opportunities for product innovation and diversification in SMEs?
- In what ways do strategic decision-making skills contribute to the development and management of product portfolios in small and medium enterprises?
- What is the role of creativity and risk-taking in the process of expanding or adjusting product portfolios in entrepreneurial ventures?
- How do resource management and allocation skills affect the success of product portfolio development in SMEs?
- How can entrepreneurs improve their product portfolio strategies through the development and application of entrepreneurial skills?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
- H01: There is no significant relationship between entrepreneurial skills and the development and management of product portfolios in small and medium enterprises (SMEs).
- H02: Entrepreneurial skills, including strategic decision-making, creativity, and risk-taking, significantly influence the development and management of product portfolios in small and medium enterprises (SMEs).
1.7 Significance of Study
The study will provide practical recommendations for entrepreneurs on how to enhance their skills to improve the management of their product portfolios. This will be particularly beneficial for entrepreneurs in emerging markets, such as Nigeria, where SMEs face unique challenges related to limited resources, financial constraints, and market uncertainty. In addition, the research will add to the academic literature on entrepreneurship and strategic management by filling the existing gap on the direct link between entrepreneurial skills and product portfolio management.
The research findings will be useful for policymakers, business educators, and consultants who aim to support the development of entrepreneurial competencies in the context of SME growth and sustainability.
1.8 Scope of Study
The scope of the research is focused on the effects of entrepreneurial skill on product portfolio development. The study is limited or shall be restricted to one hundred (100) small-medium scale enterprises in Lagos state, specifically in Ojo and Lagos island local government area. Also problems such as funds, sources for appropriate materials and time were encountered.
1.9 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
1.10 Definition of Terms
Entrepreneurial Skills: Entrepreneurial skills refer to the competencies and abilities required by entrepreneurs to successfully identify opportunities, innovate, and manage business operations. These skills include strategic decision-making, risk management, creativity, leadership, and resource allocation (Kuratko, 2017).
Product Portfolio Development: Product portfolio development refers to the strategic process of managing and expanding a company's range of products to align with market needs and organizational goals. It involves decisions regarding the introduction, diversification, or discontinuation of products, as well as the management of a balanced mix of offerings that appeal to various customer segments (Kotler & Keller, 2016).
Small and Medium Enterprises (SMEs): Small and Medium Enterprises (SMEs) are businesses that maintain a relatively small scale in terms of revenue, number of employees, and market share. These enterprises play a significant role in the economy by contributing to job creation and innovation, but they often face challenges such as limited resources, financial constraints, and market competition (OECD, 2017).
Strategic Decision-Making: Strategic decision-making refers to the process of selecting the best course of action from various alternatives to achieve long-term business objectives. In the context of product portfolio development, strategic decision-making involves analyzing market trends, customer needs, competition, and internal capabilities to determine the direction of product offerings (Mintzberg et al., 2009).
…
