Recognizing a Potential Market

• The entrepreneurial process of creating a new venture:

  CREATION OF ENTREPRENEURIAL IDEAS

  IDENTIFICTION OF ENTREPRENEURIAL OPPORTUNITIES

  OPENING OF ENTREPRENEURIAL VENTURE
• CREATION OF ENTREPRENEURIAL IDEAS -Create an idea for the business or identify for market gap. Asking your friends or doing research from random consumers and business owners to create an idea.
• IDENTIFICTION OF ENTREPRENEURIAL OPPORTUNITIES - Look or explore market and look for opportunities such as things that can help the business and apply changes.
• OPENING OF ENTREPRENEURIAL VENTURE - be innovative. Take risks to create a business.

  Example : find a profitable business idea, develop a product, secure          fundings, and launching the business.
• Essentials in Entrepreneur’s Opportunity Seeking:

  1.Entrepreneurial mind frame.

  2.Entrepreneurial heart flame.

  3.Entrepreneurial gut game.
• ENTREPRENEURIAL MIND FRAME - Be optimistic and be positive specially in the midst of crisis or difficult situations. Don't be discouraged, instead make the problem your inspiration to cope up and seek possible reasons of the problem so you can solve it right away.
• ENTREPRENEURIAL GUT GAME - The ability of being intuitive. It means as an entrepreneur, you are confident of yourself, your decisions, and all the things you do to the business
• ENTREPRENEURIAL HEART FLAME - Have passion on what you do. It is important because if you don't have any interest with your work then there will be no drive to push yourself further. Passion also helps you overcome challenges and obstacles along the way.
• CHANGES IN THE ENVIRONMENT:

  The physical environment

  The Societal environment

  The industry environment of the business
• The physical environment includes

  Climate- the weather conditions.

  b. Natural resources- such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

  c. Wildlife- includes all mammals, birds, reptiles, fish, etc., that live in the wild.
• 2. The Societal environment includes the various forces like

  1. Political forces- includes all the laws, rules, and regulations that govern business practices as well as the permits, approvals, and licenses necessary to operate the business.

  b. Economic forces- such as income level and employment rate.

  c. Sociocultural forces- customs, lifestyles and values that characterize a society.

  d. Technological environment- New inventions and technology innovations.
• 3 The industry environment of the business includes:

  a.Competitors

  b. Customers

  c. Creditors

  d. Employees

  e. Government

  f. Suppliers
• Sources of Opportunities:

  1.Changes in the Environment

  2.Technological discovery and advancement

  3. Government’s thrust, programs, and policies

  4. People’s interest

  5. Past experiences
• Technological discovery and advancement

  • A person with entrepreneurial interest sees possibility of business opportunities in any new discovery or because of the use of latest technology.
  • Discovering how your machineries and technologies work.
• GOVERNMENT'S THRUST, PROGRAMS, AND POLICIES

  • The programs and agenda of the Philippine government intuitively address the needs of the Filipino people. Whenever there are changes in the policies and programs of the government, new entrepreneurial ideas are likely born
  • The priorities, projects, programs, and policies of the government are also good sources of ideas.
• • PEOPLE'S INTERESTS:The interests, hobbies, and preferences of people are a rich source of entrepreneurial ideas.
• PAST EXPERIENCE

  • The expertise and skills developed by a person who has worked in a particular field may lead to the opening of a related business enterprise.
  • For example an accountant who has learned the appropriate accounting and management skills and techniques in a prominent accounting firm can start his/her business venture by opening his/her own accounting firm.
• Forces of Competition Model:

  • It is also known as the “five forces of competition,” An industry environment is a competitive environment. Regardless of what product or services you have, competition is always present.
• Forces of Competition Model Components:

  Buyers

  Potential New Entrants Or Potential of new products and ideas.

  Rivalry among Existing Firms 

  Substitute Products

  Suppliers 
• Buyers who have power to influence their forces to help your business sell more products. 
• The influenced of the price or in the bargaining strategy. The buyer has a strong and magnified bargaining power. The threat of its bargaining power will be less if the following factors notice: 

  • There are several suppliers available in the market. 
  • The buyer has the potential for backward integration. 
  • The cost of switching the supplier cost is minimal. 
  • The product represents a high percentage of the buyer’s cost. 
  • The buyer purchases large portions of the seller’s product or services.
• Potential New Entrants Or Potential of new products and ideas 

  • Your competitors might lowered their prices of the same product as yours so their products have more buyers.
• A new entrant is defined as the one who enters something. For example, the level of capital requirements, if the business requires huge capital, new entrants should decline to join the business. This gives a threat to the business.

  This can be noticed if there is the presence of the following factors: 

  • Substantial capital requirement. 
  • Strict government policy. 
  • Difficulty in accessing distribution channels. 
  • Economies of scale. 
  • High cost of product differentiation. 
  • High switching cost 
• Rivalry among Existing Firms 

  • your rivals have lowered their product's prices while still maintaining the same ingredients or materials used in their products.
• Rivalry among Existing Firms Rivalry is a state or situation in which people or groups are competing with each other. For example it depends on the Marketing strategy of your competitor, like giving freebies and special offers.

  The intensity of rivalry among existing firms is characterized to the following factors:

  • Diversity of rivals. 
  • Number of competing firms. 
  • Characteristics of the products or services. 
  • Increased capacity. 
  • Amount of fixed costs. 
  • Rate of industry growth. 
• Substitute Products

  • Your rivals have a substitute of your products that have a lower price but still has the same effects of the products the buyers usually buys.
• Factors that can make a substitute product a big threat in the industry environment:

  a. Switching cost is low.

  b. Preferences and tastes of the customers easily change.

  c. Product differentiation is highly noticeable

  d. The quality of substitute products dramatically improves.

  e. The price of substitute product is substantially lower.
• Suppliers

  • Your suppliers sold your products with high price which prevents the buyers because of its price.
• The Suppliers are the one that provide something that is needed or wanted. For example if the supply and services being offered is unstable or keep. The intensity of the threat is strong in this kind of the competitive force in the industry.

  This can be notice if there is the presence of the following factors: 

  1. The supplier has the ability for forward integration. b. Suppliers in the industry are few, but the sales volume is high. c. Substitute products are not readily available in the market d. The switching cost is very high. e. The product or service is unique. 
• Opportunity seeking - Process of considering, evaluating, and pursuing market-based activities that are accepted to be beneficial for the business. 
• •Entrepreneurial process - can be defined as the steps taken in order to begin a new enterprise. It is a step-by-step method one has to follow to set up a business. 
• •Entrepreneurial ideas - an innovative concept that can be used for financial gain that is usually centered on a product or service that can be offered for money.
• •Essentials of entrepreneur’s opportunity seeking - These are the basic foundation that the entrepreneur must have in seeking opportunities, such as entrepreneurial mind frame, heart flame and gut game. 
• Sources of opportunity - can be attain by assessing and looking at changes in the environment; technological discovery and advancement; government’s thrust, programs, and policies; people’s interest, and past experiences.
• External environment - refers to the physical environment, societal environment, and industry where the business operates. 
• 2.Government - refers to the local government (municipality, city, or provincial) or the national government and its branches. 
• 3.Competition – it is the act or process of trying to get or win something. 
• 4.Substitute – anything that takes the place or function of another. 
• 5.New entrants – the one who enters something. 
• 6.Suppliers – are the one that provide something that is needed or wanted.