Entrepreneurship

• Entrepreneurial Process of Creating New Venture

  1. Recognition of a potential market

  2. Entrepreneurial Ideas

  3. Identification of entrepreneurial opportunities

  4. Opening of entrepreneurial venture
• Source: 'These are the basic foundation that the entrepreneur must have in seeking opportunities'
• Entrepreneurial mind frame


  • Allows the entrepreneur to see things in a very positive and optimistic way in the midst of difficult situations
  • Being a risk-taker, an entrepreneur can find solutions when problems arise
• Entrepreneurial heart flame


  • Entrepreneurs are driven by passion; they are attracted to discover satisfaction in the act and process of discovery
  • Passion is the great desire of an entrepreneur to achieve his/her goals
• Entrepreneurial gut game


  • Refers to the ability of the entrepreneur of being intuitive
  • Also known as intuition
  • Confidence in oneself and the firm belief that everything you aspire can be reached
• Sources of Opportunities


  • Changes in the environment
  • Technological discovery and advancement
• Physical environment


  • Climate - the weather conditions
  • Natural resources - minerals, forests, water, and fertile land
  • Wildlife - mammals, birds, reptiles, fish, etc.
• Societal environment


  • Political forces - laws, rules, regulations, permits, approvals, licenses
  • Economic forces - income level, employment rate
  • Sociocultural forces - customs, lifestyles, values
  • Technological environment - new inventions, technology innovations
• Industry environment


  • Competitors
  • Customers
  • Creditors
  • Employees
  • Government
  • Suppliers
• Changes in the physical environment

  Entrepreneurial ideas arise when changes happen in the external environment
• For example, one factor in the physical environment that can easily change is the climate. The temperature is very high during summer but very low during the rainy season. An individual with entrepreneurial drive can be extremely imaginative and inventive in identifying opportunities. He/she can venture on a business that responds to the needs of the people during summer and rainy season
• Technological discovery and advancement

  A person with entrepreneurial interest sees the possibility of business opportunities in any new discovery or because of the use of the latest technology
• Needs of the people during summer and rainy season


  • Summer needs
  • Rainy season needs
• Technological discovery and advancement

  Entrepreneurial interest sees possibility of business opportunities in new discoveries or latest technology
• Entrepreneurial idea from repair and installation knowledge

  • Discovering engine parts that reduce fuel consumption
• Government’s thrust, programs, and policies

  Government priorities, projects, programs, and policies as sources of ideas
• Entrepreneurial idea from government policy

  • Prohibition of firecrackers leads to business opportunity for new product
• People’s interest as a source of entrepreneurial ideas

  • Interest, hobbies, and preferences leading to entrepreneurial opportunities
• Entrepreneurial idea from past experiences

  • Accountant starting own firm after gaining skills in prominent accounting firm
• Forces of Competition Model

  • Industry environment is competitive with five forces: Buyers, Potential new entrants, Rivalry among existing firms, Substitute products, Supplier
• Competition is the act or process of trying to get or win something
• Competition among stores


  Results in lower prices
• Buyers


  Buyers pay cash in exchange for goods and services
• Potential New Entrants


  • New entrants have the ability to penetrate or enter a particular industry
• Rivalry among Existing Firms


  • Business organizations compete with each other in a particular market
• Rivalry among existing firms

  1. Diversity of rivals

  2. Number of competing firms

  3. Characteristics of the products or services

  4. Increased capacity

  5. Amount of fixed costs

  6. Rate of industry growth
• Substitute Products


  1. Switching cost is low

  2. Preferences and tastes of the customers easily change

  3. Product differentiation is highly noticeable

  4. The quality of substitute products dramatically improves

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


  1. The supplier has the ability for forward integration

  2. Suppliers in the industry are few, but the sales volume is high

  3. Substitute products are not readily available in the market

  4. The switching cost is very high

  5. The product or service is unique
• Value Proposition (VP)


  • Business or marketing statement summarizing why a consumer should buy a company's product or use its service
  • Used to convince a customer to purchase a particular product or service to add value to their lives
  • Elements considered: Target Customer, Needs/opportunity, Name of the product, Name of the enterprise/company
• Creating Value Proposition


  Entrepreneurs consider basic elements: Target Customer, Needs/opportunity, Name of the product, Name of the enterprise/company
• Value Proposition must be truthful and establish credibility to the consumers
• Example of Value Proposition


  • Potential value proposition is most common in small businesses of your locality
  • Example: Aling Charing Sari-Sari Store, open 24/7
• Unique Selling Proposition (USP) refers to how you sell your product or services to your customer by addressing their wants and desires
• Tips for creating an effective Unique Selling Proposition


  1. Identify and rank the uniqueness of the product or services character

  2. Be very specific

  3. Keep it Short and Simple (KISS)
• Identifying the Unique Selling Proposition requires marketing research
• Readers often confuse Value Proposition and Unique Selling Proposition, both used to differentiate products from competitors
• Example of Unique Selling Proposition


  • Jollibee is known for its Filipino taste burger with the unique selling point "Langhap Sarap"
• Unique Selling Proposition and Value Proposition are valuable tools for entrepreneurs to explain why customers buy each product and service
• Understanding the target market, customer requirements, and market size is crucial in building a business model
• Market Targeting aims to determine buyers with common needs and characteristics