Module 2

(grade 12-directors and

executives)
 RECOGNIZE A
POTENTIAL MARKET
ENTREPRENEURIAL IDEAS
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
FIGURE 1. THE ENTREPRENEURIAL PROCESS OF CREATING NEW VENTURE
 ESSENTIALS IN ENTREPRENEUR’S
OPPORTUNITY SEEKING
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.
• 1.2 THE 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. c. Sociocultural forces- customs, lifestyles and values that
characterize a society.
d. d. Technological environment- New inventions and technology
innovations.
1.3 THE INDUSTRY ENVIRONMENT OF THE
BUSINESS INCLUDES:
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 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.
e. 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:
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.