Good morning!

^_^
What are the factors that
affect ENTREPRENEURSHIP ?

What are career

opportunities of
Entrepreneurship ?
Let’s check first what you already know.
True or False. On the space provided before the number, write T if the statement is
true and F if the statement is false.
_____ 1. An entrepreneur enters a business because of its profitability.
_____ 2. New business ideas provide business opportunities.
_____ 3. The entrepreneurial process starts with identification of entrepreneurial
opportunities.
_____ 4. Not all changes in the external environment provides business
opportunities.
_____ 5. Discovery and advancement in the use of technology are additional good
sources of business opportunities.
_____ 6. Interest and hobbies of the people are possible good sources of
entrepreneurial ideas.
_____ 7. The industry environment of the business is under technological discovery
and advancement sources of opportunities.
_____ 8. The variables in the physical environment include the economic forces.
____9. Entrepreneurial heart flame refers to the ability of the
entrepreneur to sense without using the five senses.
____ 10. Entrepreneurial mind frame permits the entrepreneur to see
things in a very positive and optimistic light.
_____11. The business operates in the industry environment.
____ 12. Opening a Halo – halo business during summer season is
ideal.
____ 13. Environmental scanning is conducted only when a new
business is opened.
____ 14. When the barriers to the competitive forces are high, the effect
to the growth of the business is likewise high.
_____15. Entrepreneurs need not observe and evaluate the priorities of
the government.
Recognize a Potential
Market
OBJECTIVES
 Detect the possible product/s or service/s that
will meet the need of your locality.
 Screen the proposed solution/s based on
viability, profitability, and customer need in
developing a Business Plan.
 Choose the best product or service that will
meet the market need.
Entrepreneurial Ideas (1)
 The creation of an entrepreneurial
idea 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. (Nick
L. Aduana, Etrepreneurship in Philippine Setting
for Senior High School, 2017, C&E publishing
page 46, Aduana, 2017).

Creation of Identification of Opening of

entrepreneurial entrepreneurial entrepreneurial
Ideas Opportunities Venture

Figure 1. The Entrepreneurial Process of Creating New Venture

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 (2)
 refers to the physical environment, societal
environment, and industry environment where
the business operates.
1.1 The Physical environment includes
(3,4 -5)
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.
 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
1.2 The Societal environment includes the various forces
like (6,7 and 8)
a. Political forces (6) – 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 (7) – such as income level and
employment rate.
c. Sociocultural forces (8)– customs, lifestyles and values
that characterize a society.
d. Technological environment – new inventions and
technology innovations.
1.3 The Industry environment of the
business includes: (9 and 10)
a. Competitors
b. Customers
c. Creditors
d. Employees
e. Government
f. Suppliers
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 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
 5. Past experiences
4. People’s interest The expertise and skills developed by
The interest, hobbies, a person who has worked in a
and preferences of particular field may lead to the
people are rich sources of opening of a related business
entrepreneurial ideas, like enterprise.
For example, an accountant who has
the increasing number of
learned the appropriate accounting
Internet Cafés at present and management skills and
could lead to the strong techniques in a prominent accounting
attachment of young firm can start his/her business
people to computers. 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 *For example, the
competitive environment. prices are lower
Regardless of what product
or services you have, when there is a
competition is always competition among
present.
Competition – it is the act
the stores.
or process of trying to get or
win something.
Five forces competing within the
industry:
Buyers
Potential new entrants
Rivalry among existing firms
Substitute products
Supplier
1. Buyers (11) The threat of its bargaining
The buyers are the power will be less if the
ones that pay cash in following factors are
noticed:
exchange for your
goods and services. a. There are several suppliers available
in the market.
One example is the b. The buyer has the potential for
influence of the price backward integration.
or in the bargaining c. The cost of switching the supplier cost
is minimal.
strategy. The buyer d. The product represents a high
has a strong and percentage of the buyer’s cost.
magnified bargaining e. The buyer purchases large portions of
the seller’s product or services
power.
2. Potential New Entrants
What is a new entrant? (12)
defined as companies or This gives a threat to the business.
businesses that have the
This can be noticed if the following
ability to penetrate or enter factors are present:
into a particular industry. a. Substantial capital requirement
b. Strict government policy
For example, in the level of c. Difficulty in accessing distribution
capital requirements, if the channels
d. Economies of scale
business requires huge capital,
e. High cost of product differentiation
new entrants should decline to f. High switching cost
join the business.
3. Rivalry among Existing Firms
What is Rivalry? (13)
is a state or situation For example,
wherein business  giving
organizations are freebies
competing with each and
other in a particular special
market. 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
Example
What is Substitute? (14)
the consumers decide
is one that serves to use margarine as a
the same purpose substitute for butter.
as another product In case the price of butter
in the market. increases, preferably the
consumer will gradually
switch to margarine.
Does switching to margarine instead of butter a
threat in the industry environment? Why?
A substitute product can give a big threat in
the industry environment if the following
factors are noticed:
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 (15)
This can be noticed if there
are the one that provide
is the presence of the
something that is needed
following factors:
in business operations
such as office supplies a. The supplier has the ability for
and equipment. (In an forward integration
example where supplies b. Suppliers in the industry are
and services being few, but the sales volume is high
offered is unstable the c. Substitute products are not
intensity of the threat is readily available in the market
strong in this kind of the d. The switching cost is very high
competitive force in the e. The product or service is
industry.) unique
What I have Learned
Buyers – are the ones who pay cash in exchange for your goods and services.
Competition – it is the act or process of trying to get or win something.
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.
External environment - refers to the physical environment, societal environment, and
industry where the business operates.

Government - refers to the local government (municipality, city, or provincial) or the national
government and its branches.

New entrants – the one who enters something.

Opportunity – seeking – the process of considering, evaluating, and pursuing market-based

activities that are accepted to be beneficial for the business.

Rivalry – is a state or situation in which people or groups are competing with each other.

Sources of opportunity - can be attained 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.
Substitute – anything that takes the place or function of another.
Suppliers – are the ones who provide something that is needed or wanted.
QUIZ