Page 1: Introduction
An entrepreneur is someone who is prepared to take a risk by setting up and organising a new business or enterprise, without the certainty that a profit will result. Setting up and running a business is not something that everyone with a good idea should take on. It requires hard work, focus, the ability to enjoy challenges and not be put off by failure.
This case study focuses on the entrepreneur Peter Cruddas, who set up his own business CMC Markets in the early 1990s with just £10,000 of capital. The case study shows how Peter was able to spot a gap in the financial services market by using the latest technology at that time the internet. Peter took the risk, got in first and quickly took the lead. Business people refer to this as 'First Mover Advantage'. Another good example of this was James Dyson with his bagless vacuum cleaner. If a business gets in first with a product or service, rivals can only play 'catch up'.
Peter launched CMC's online trading platform in 1996. This new online platform was an innovation. His business can now deal in foreign exchange and trade over 3,000 different types of financial transactions for clients, using just one account in real time through the internet. Before developing this software, dealers in financial markets needed several different accounts, all with different types of software. This was inefficient and productivity suffered. This has given CMC a unique selling point (USP) in this industry. Through CMC's online service, traders are able to buy and sell financial products in almost every country.
CMC is competitive because:
- it is cheaper to deal with (fees are low because activity is carried out online)
- it is easy to make transactions. Transactions are carried out immediately (in real time). Traders can even buy and sell using their mobile phones.
CMC Markets is now a global company and Peter Cruddas is the wealthiest businessman in the city of London. CMC has 18 offices around the world, employs 1,250 people and has around 250,000 clients. The business continues to grow rapidly. In 2008 CMC carried out 21 million trades (buying and selling). 98% of these trades were online.