RECOGNIZING THE

POTENTIAL MARKET

HELEN GRACE M. SALDEVIA

Teacher II
 Learning Competencies
O Identify the market problem to be solved or the market to be
met;
O Propose solutions in terms of products and services that will
meet the need using techniques on seeking, screening, and
seizing opportunities.
O Analyze the market need
O Determine the possible products/services that will meet the
need;
O Screen the proposed solutions based on viability, profitability,
and customer reuirements;
O Select the best product or service that will meet the market
need
 The Entrepreneurial Process

Opportunity Developing Determining

Running the
Spotting & a Business the Capital
Business
Assessment Plan Needed
O This is the beginning of the process and is
considered the most difficult.
O Entrepreneurs take note of interesting trends in the
environment.
O Consumers are reliable sources of opportunity
information because market needs originate from
them.
O Glaring problems in the environment
O Problems encountered by co-entrepreneurs
O New trends, Processes and Development in the
environment
O Feedback from distribution or business partners
such as retailers, wholesalers, manufacturers, and
technical people that the entrepreneur is working
with
O The entrepreneur’s toughest job is to carefully
assess the opportunity through estimation of
opportunity length, capitalization, required threats,
profitability, and calculation of real and perceived
value.
O Entrepreneurs should also assess if the opportunity
is aligned with their personal goals & attributes.
O Entrepreneurs should think in advance how they
will position the product/service in the market and
showcase its unique selling proposition.
1. Evaluate the identified opportunity
2. Conceptualize and measure the opportunity
3. Identify the perceived value of the
opportunity to the company and customers
O Entrepreneurs formulate a business plan when they
have already spotted and assessed the
opportunities for market.
 is a comprehensive
paper that details the marketing, operational,
human resource, financial, strategic, and tactics of
the business.
The business plan will be the core guide and
direction of the entrepreneur in calculating
resources needed, assessing how to obtain these
resources efficiently, and running the business
sustainably.
1. Come up with a business description and analysis
2. Perform industry analysis
3. Come up with the marketing plan
4. Prepare the operations plan including the organizational
plan
5. Come up with the financial plan
6. Identify strategies & tactics
7. Perform monitoring and control
O It is mandatory for entrepreneur to calculate the
resources needed to establish the business and
compare this against his/her resources. Caution must be
applied in computing the complete set of resources
needed and include only those items that are
considered as the real needs in venture creation.
Allowance must be considered as well because there
will be times that resources will be
inadequate/unsuitable.
1. Calculate the intrinsic and extrinsic capital needed
2. Calculate the existing capital
3. Calculate the difference between the needed
capital and the existing capital. Choose the most
cost-efficient suppliers or service providers
4. Develop contact and relationship with suppliers
and service providers
O This is the part where the entrepreneur should use the
resources allocated for new venture. The business plan
prepared should already have been implemented. All
aspects of the business plan should be critically
observed from operations, marketing and sales, human
resources, finance, and strategy implementation. The
entrepreneur should have a control and monitoring
system to serve as a check and balance of the
formulated plans.
1. Practice leadership as a way of life
2. Recognize critical success factors
3. Identify existing and foreseeable problems and
issues
4. Employ risk-mitigating controls and monitoring
systems
5. Devise an expansion/sustainability strategy
- is the starting point of any new venture that involves
understanding and knowing the intricacies of the
macroenvironment, microenvironment, and internal
environment
- An entrepreneur recognize various opportunities at
the same time understand thoroughly the arena
where the future business will operate
The 3S opportunity spotting and assessment is the framework
that most of the promising entrepreneurs use to finally come
up with the ultimate product or service for a specific
opportunity. An opportunity is an entrepreneur’s business idea
that can potentially become a commercial product or service
in the future. The entrepreneur serves as the catalyst of
creating a value for the customers through the new or
innovated product/service. As a reward, the entrepreneur
earns profits when the customers are satisfied and delighted.
 It involves the development of new ideas from various sources as
follows:
MACROENVIRONMEN- MICROMARKET
TAL SOURCES
• STEEPLED • Consumer preferences, interests, &
• Industry perception
• Competitors
• New discovery or
• Unexpected opportunities from
knowledge customers
• Futuristic • Talents, hobbies, skills, & expertise
Opportunities • Irritants in the marketplace (deterrents,
problems, complaints, delays)
• Location
 This is a mnemonic for Sociocultural, Technological,
Economic, Environmental, Political, Legal, Ethical, and
Demographic factors. This represent the general
environment where the entrepreneur can identify business
opportunities from and where the future business is about
to operate. Any external factor or a combination of external
factors from these 8 environmental forces can have a direct
effect in opportunity generation and business sustainability.
 The result of the STEEPLED scan will aid the
entrepreneur in deciding what product or service to set
up and whether this new venture will succeed or not.
The focus of this scan is only the macroenvironment.
Again, not all factors can have an effect on the new
venture. The important thing is for the entrepreneur to
fully scan these factors so he/she can decide if there is
a compelling business opportunity or an impending
threat.
 SOCIO-CULTURAL
-represent the general view of a locality’s
traditions, customs, beliefs, norms, and
perceptions which affect how a person of the
locality behaves or reacts to marketing and selling
activities
• Health consciousness, Education level, Attitudes
toward imported goods and services, Attitudes toward
the person’s lifestyle, Attitudes toward product quality
and customer service, Attitudes toward saving and
investing, Emphasis on safety, Buying habits, Religion
and beliefs
 TECHNOLOGICAL
-composed of innovations of an existing technology or an intervention
of a new one mostly on applied science ad engineering research
areas. These are catalysts in improving a product/service or
replacing them entirely

• Basic infrastructure level, Rate of technological change

• Spending on research and development, Technology
incentives
• Legislation regarding technology, Communication
infrastructure
• Access to newest technology, Internet infrastructure and
penetration
 ENVIRONMENTAL
-determineif the business he/she is entering into will comply with the
environmental standards or will just be a hazard to people, animals,
and nature; to know if the business venture will be suited with the
weather conditions in his/her locality

• Weather, climate change, laws regulating environmental pollution,

air and water pollution, recycling, waste management, attitudes
toward green or ecological products, endangered species,
attitudes toward and support for renewable energy
 ECONOMIC
-directly
affect any business venture which include income,
expenses, and resources that can influence the cost of
doing business and generating income

• Growth rates, Inflation rates, Interest rates, Exchange rates,

Unemployment rates, Labor costs, Stages of business cycle, Trade
flows and patterns, Level of consumer’s disposable income,
Monetary policies, Fiscal Policies, Price fluctuations, Stock market
trends
 LEGAL

• Anti-trust law, discrimination law, copyright,

patents/intellectual property rights,
consumer protection, employment law,
health and safety law, data protection law
 POLITICAL
-mostlyinduced by government policies and administrations,
which can have a strong effect in the entrepreneur’s
business

• Government stability, bureaucracy, corruption

level, tax policy, freedom of press, rule of law,
government effectiveness, Political rights
 ETHICAL DEMOGRAPHIC
-factorsthat will serve as -the characteristics of the people
entrepreneur’s guide on how in the target market
to be ethical in running the
business
• Ethical advertising and sales • Population growth rate, age
practices, accepted distribution and life expectancy
accounting, management & rates, gender distribution,
marketing standards, attitude social classes, family size and
toward counterfeiting and structure, minorities
breaking patents, attitude
toward development and well-
being of employees
Opportunity Screening – is the
process of cautiously selecting the best
opportunity. The selection will depend on the
entrepreneur’s internal intent, which will
address the compelling needs of the target
market. The entrepreneur should apply due
diligence and independent judgment in
selecting the opportunities that have a potential
and eliminate those that are not within the
scope of the entrepreneur’s risk appetite.