Recognize a Potential Market 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 belief that
In this module, you will know the following: everything you aspire can be reached.
 Associate the market problem to be solved or the market need to be met.
 Look for solution/s in terms of product/s and service/s that will meet the need using Sources of Opportunities
techniques on seeking, screening, and seizing opportunities. There are many ways to discover opportunities. Looking at the big picture, some
 Break down the market need. have noticed the emerging trends and patterns for business opportunities. While others
 Detect the possible product/s or service/s that will meet the need of your locality. are trying to find out their target market. The following are some sources of opportunities:
 Screen the proposed solution/s based on viability, profitability, and customer need in
developing a Business Plan. 1. Changes in the environment
 Choose the best product or service that will meet the market need. Entrepreneurial ideas arise when changes happen in the external
environment. A person with an entrepreneurial drive views these changes
After completing this module, you need to: positively. External environment refers to the physical environment, societal
 Learn and understand the sources of opportunities for business. environment, and industry environment where the business operates.
 Determine the essentials in the entrepreneur’s opportunity seeking. 1.1 The Physical environment includes
 Identify market problems and propose potential products or services that will a. Climate – the weather conditions.
meet the market needs. b. Natural resources – such as minerals, forests, water, and
 Know the problem in which a business opportunity arises from. fertile land that occur in nature and
 Identify, screen and propose solutions to meet the problem. can be used for economic gain.
 Select the best product or service that will meet the market’s need with a c. Wildlife – includes all mammals, birds, reptiles, fish, etc., that live in
consideration of generating profit. the wild.
1.2 The Societal environment includes the various forces like
Entrepreneurial Ideas a. Political forces – includes all the laws, rules, and regulations that
The creation of an entrepreneurial idea leads to the identification of entrepreneurial govern business practices as well as the permits, approvals,
opportunities, which in turn results in the opening of an entrepreneurial venture. and licenses necessary to
The entrepreneurial process of creating a new venture is presented in the diagram below. operate the business.
(Nick L. Aduana, Entrepreneurship in Philippine Setting for Senior High School, 2017, C&E b. Economic forces – such as income level and employment rate.
publishing page 46, Aduana, 2017). c. Sociocultural forces – customs, lifestyles and values that characterize
a society.
Figure 1. The Entrepreneurial Process of Creating New Venture d. Technological environment – new inventions and technology
innovations.
1.3 The Industry environment of the business includes:
a. Competitors
b. Customers
Creation of Identification of Opening of c. Creditors
entrepreneurial entrepreneurial entrepreneurial d. Employees
Ideas Opportunities Venture
e. Government
f. Suppliers

Essentials in Entrepreneur’s Opportunity – 2. Technological discovery and advancement

Seeking These are the basic foundation that the entrepreneur must have in seeking A person with entrepreneurial interest sees possibility of business
opportunities: opportunities in any new discovery or because of the use of latest technology.

Entrepreneurial mind frame. 3. Government’s thrust, programs, and policies

This allows the entrepreneur to see things in a very positive and optimistic way in The priorities, projects, programs, and policies of the government are also good
the midst of difficult situation. Being a risk - taker, an entrepreneur can find solutions when sources of ideas.
problems arise.
Entrepreneurial heart flame. 4. People’s interest
Entrepreneurs are driven by passion; they are attracted to discover satisfaction The interest, hobbies, and preferences of people are rich sources of
in the act and process of discovery. Passion is the great desire of an entrepreneur to entrepreneurial ideas, like the increasing number of Internet Cafés at present
achieve his/her goals. could lead to the strong attachment of young people to computers.
 b. Preferences and tastes of the customers easily change
5. Past experiences c. Product differentiation is highly noticeable
The expertise and skills developed by a person who has worked in a particular d. The quality of substitute products dramatically improves
field may lead to the opening of a related business enterprise. e. The price of substitute product is substantially lower
5. Suppliers
Forces of Competition Model The Suppliers are the one that provide something that is needed in business
It is also known as the “five forces of competition”. An industry environment is a operations such as office supplies and equipment.
competitive environment. Regardless of what product or services you have, competition is This can be noticed if there is the presence of the following factors:
always present. a. The supplier has the ability for forward integration
Competition – it is the act or process of trying to get or win something. b. Suppliers in the industry are few, but the sales volume is high
For example, the prices are lower when there is a competition among the stores. c. Substitute products are not readily available in the market
These are the five forces competing within the industry: d. The switching cost is very high
 Buyers e. The product or service is unique
 Potential new entrants
 Rivalry among existing firms
 Substitute products
 Supplier
Prepared by:
1. Buyers
The buyers are the ones that pay cash in exchange for your goods and ANNIE ROSE C. MARABULAS
services. The threat of its bargaining power will be less if the following factors are Teacher I
noticed:
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.
e. The buyer purchases large portions of the seller’s product or services.
2. Potential New Entrants
A new entrant is defined as companies or businesses that have the
ability to penetrate or enter into a particular industry. This can be noticed 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 wherein business organizations are
competing with each other in a particular market.
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 is one that serves the same purpose as another product in the market.
A substitute product can give a big threat in the industry environment if the following
factors are noticed:
a. Switching cost is low