In the previous lesson, you already know about the difference between businessman and

entrepreneur. Knowing all the entrepreneurial concepts will not assure a person of becoming a
successful entrepreneur and not all business people are entrepreneurs. Some says being an
entrepreneur is a calling; a lot of qualities must be possessed to be considered successful and
sustainable. So, if you are given a great opportunity to venture into the field of entrepreneurship, it
may be a long process to undertake and the willingness to take a risk. Also, you’re not only the one
who’s in progress but at the same time, you’re helping for the development growth of our economy.

Entrepreneurial Ideas

The creation of an entrepreneurial ideas leads to the identification of entrepreneurial opportunities,

which in turn results in the opening of an entrepreneurial venture. The entrepreneurial process of
creating a new venture is presented in the diagram below. (Aduana, 2017)

Creation of Identification of Opening of

entrepreneurial entrepreneurial entrepreneurial
Ideas Opportunities Venture

Figure 1. The Entrepreneurial Process of Creating New Venture

Essentials in Entrepreneur’s Opportunity Seeking

These are the basic foundation that the entrepreneur must have in seeking opportunities:

Entrepreneurial mind frame.

This allows the entrepreneur to see things in a very positive and optimistic way in the midst of
difficult situation. Being a risk - taker, an entrepreneur can find solution when problems arise.

Entrepreneurial heart flame.

Entrepreneur's driven 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.

This refers to the ability of the entrepreneur of being intuitive. This also known as intuition. The gut
game also means confidence in one’s self and the firm believes that everything you aspire can be
reached.

Sources of Opportunities
There are many ways to discover opportunities. Looking at the big picture some have noticed the
emerging trends and patterns for business opportunities. While others are trying to find out their target
market. Some are the following sources of opportunities:

1. Changes in the environment

Entrepreneurial ideas arise when changes happen in the external environment. A person with an
entrepreneurial drive views these changes positively. External environment refers to the physical
environment, societal environment, and industry environment where the business operates.
1.1 The physical environment includes:
a.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.

1.2The Societal environment includes the various forces like

a.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.

1.3The industry environment of the business includes:

a.Competitors
b.Customers
c.Creditors
d.Employees
e.Government
f.Suppliers

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 a business that responds to the needs of the people during summer and rainy season.

2. 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.
For example, an individual with knowledge in repair and installation of a machine engine discovers
that additional engine parts that considerably reduce fuel consumption.

3. Government’s thrust, programs, and policies

The priorities, projects, programs, and policies of the government are also good sources of ideas.
For example, the use of firecrackers to celebrate New Year’s Eve is strictly prohibited. People without
entrepreneurial interest will view the ordinance as a plain restriction. However, for an entrepreneur, it
is a business opportunity to come up with a new product that will serve as a substitute for firecrackers.

4. People’s interest
The interest, hobbies, and preferences of people are rich source of entrepreneurial ideas. Like the
increasing number of Internet Café at present could be lead to the strong attachment of young people
to computers.

5. Past experiences
The expertise and skills developed by a person who has worked in a particular field may lead to the
opening of 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.

Competition – it is the act or process of trying to get or win something.

For example, the prices are lower when there is a competition among the stores.

These are the five forces competing within the industry:

•Buyers
•Potential new entrants
•Rivalry among existing firms
•Substitute products
•Supplier

1. Buyers
The buyers are the one that pays cash in exchange to your goods and services. For example, 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:
a.There are several suppliers available in the market.
b.The buyer has the potential for backward integration.
c.The cost of switching the supplier cost is minimal.
d.The product represents a high percentage of the buyer’s cost.
The buyer purchases large portions of the seller’s product or services.

2. Potential New Entrants

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 notice if there is the presence of the following factors:
a. Substantial capital requirement.
b. Strict government policy.
c. Difficulty in accessing distribution channels.
d. Economies of scale.
e. High cost of product differentiation
f. High switching cost

3. 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:
a. Diversity of rivals.
b. Number of competing firms.
c. Characteristics of the products or services.
d. Increased capacity.
e. Amount of fixed costs.
f. Rate of industry growth.

4. Substitute Products
Substitute means anything that takes the place or function of another. For example the consumers
decide to use margarine as a substitute for butter. In case the price of butter increases, preferably the
consumer will gradually switch to margarine.
A substitute product can give a big threat in the industry environment if the following factors are
notice:
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.

5. Suppliers
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:
a. 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.

ACTIVITY 1
WORD HUNT
Think of words or terms related to the topic and find the words in the grid horizontally, vertically, or

V E N T U R E A B C D E F A B C D E F S
A B N P O H W Q G S D L O S J E T U E Q
B C T R P R O D U C T S R L R E H R B E
C V R E P G O Y T R E P T G S T V A C N
V H E N O V R F D A B C U D E I O G V T
H K B E R C T K R F G E N H C J R K H R
K I C I T H U L V D E O C E U A T U K E
I D V D U K N S J Y I R Z O Q E U Y I P
D G H G N O U A O F G T U X N X N D R
G L K L I P W L R E P U R E P O J O G E
L H Z H T S P K L I O N H L I O M E L N
H A X Q I M I L G C V R I V A L R Y H E
A D S J E T U R E A B B S T I T U H A U
S S U B S T I T U T E S J E T U R F J R
V T U R E A B Q R S J E T U T U R E A B

diagonally. Write the words or terms on the space provided below.

 ACTIVITY 2
COMPLETE ME
Complete the table below by supplying it with products that you consider similar. Write the product
and not the brand in their respective columns. Then describe and differentiate its characteristics and
uses.
Primary Product Substitute Product
No.
(Product name ) (Product name )
Butter - expensive price used Margarine – lesser price also used as
Example
as bread spread. bread spread
1.

2.

3.

4.

5.

ACTIVITY 3

Direction: Encircle the letter of your choice.

1.It is the process of considering, evaluating, and pursuing market-based activities that are believed to
be advantageous for the firm.
A.Opportunity seeking C. Opportunity screening
B.Opportunity seizing D. Sources of opportunity

2.This is essential to opportunity seeking which allows the entrepreneur to see things in a positive and
optimistic light in the midst of crisis or difficult situations.
A.Entrepreneurial mind frame C. Entrepreneurial heart flame
B. Entrepreneurial gut game D. Entrepreneurial heart frame

3.It is the ability of entrepreneur that can sense without using the five senses, also known as intuition.
A.Entrepreneurial mind frame C. Entrepreneurial heart flame
B.Entrepreneurial gut game D. Entrepreneurial heart frame

4.One of the essentials of entrepreneur’s opportunity seeking that refers to the driven passion of an
individual.
A.Entrepreneurial mind frame C. Entrepreneurial heart flame
B. Entrepreneurial gut game D. Entrepreneurial heart frame
5.What variable of societal environment includes income level and employment rate?
A.Economic forces C. Political forces
B.Sociocultural forces D. Technological forces

For questions 6 and 7 refer to the following statements:

A.Preferences and tastes of the customers easily C.The cost of switching the supplier cost is
change. minimal.
B.The buyer has the potential for backward D.Product differentiation is highly noticeable.
integration.
6.Which are the factors of the substitute product that pose a great threat in the industry environment?
A.A, B, C, D C. A and D
B.A and C D. B and C

7.Which are the factors that influenced the buyer to have a less threats because of the bargaining
power?
A.A only C. A and D
B.A and C D. B and C

8.They are the one that pays cash in exchange to your goods and services.
A.Buyers C. Sellers
B.Competitors D. Suppliers

9.The intensity of rivalry among existing firms is characterized to the following factors except one:
A.Diversity of rivals. D.The product represents a high percentage of
B.Number of competing firms. the buyer’s cost.
C.Characteristics of the products or services.

10.The following are the forces competing within the industry except one:
A.Potential new entrants and Substitute Products C.Rivalry among existing firms
B.Buyers and Suppliers D.Needs and Wants

11.Which of the following good sources of entrepreneurial ideas determine the interest, hobbies and
preferences of people.
A.Changes in the environment C. People’s interest
B. Technological discovery D. Past experiences

12.Societal environment includes the following, except:

A.Economic forces C. Political forces
B.Sociocultural forces D. Natural resources

13.Which among the following is the result of identifying entrepreneurial opportunities?

A.Creation of entrepreneurial ideas C. Sources of opportunity
B.Opening of entrepreneurial venture D. Entrepreneurial process

14.What entrepreneurial idea will you recognized, if you consider the new discovery and advancement
of technology as source of opportunity?
A.Changes in the environment C.Government’s thrust, programs, and policies
B.Technological discovery and advancement D.People’s interest

15.Source of entrepreneurial idea where expertise and skills developed by a person from its previous
work can lead to the opening of a related business enterprise.
A.Government’s thrust, programs, and policies C. People’s interests
B.Past experiences D. Technological discovery and advancement