GEE 1- THE ENTREPRENEURIAL MIN D

WEEK 3
OBJECTIVES:
1. Discuss entrepreneurial activities in search of business opportunities
2. Describe the concept of ideation, innovation and creativity
3. Discuss the factors to consider in evaluating the business potential of
an idea

CHAPTER 3: SEARCH FOR BUSINESS OPPORTUNITY, IDEATION, INNOVATION AND CREATIVITY

A. SEARCH FOR BUSINESS OPPORTUNITY
o In discovering business opportunities, the following factors on resources
have to be evaluated:
 Markets
-This refers to the number of prospective buyers, competitors, the
price and the quality of goods and services that have to be
analysed.
 Individual interest
- Business interest for individuals should match business
opportunities.
 Capital
- This serves as the fuel that keeps the business operating.
 Skills
-The entrepreneur should have the proper skills in the business he
is going to undertake.
 Suppliers of inputs
-It is important that there are steady suppliers of raw materials
and other inputs to the business
 Manpower
-The success of any business also depends on the efficiency of its
employee
 Technology
- Entrepreneurs should be aware of the presence of technology to
improve their products or services, or introduce new innovations
in the market.

o The best way to evaluate business opportunity is through Market Research,

which is defined as the study of all problems in marketing a product.
- the steps in Market Research are:
1. defining problem
2. making a preliminary investigation
3. planning the research
4. gathering the data
5. analizing the data
6. reaching a conclusion
7. implementation and evaluating decision
o To be able to translate business opportunities into profits, the SWOT
(Strength, Weaknesses, Opportunities, and Threats) Analyis is applied.
o According to Fajardo, products have their own life cycle. It is composed
of four stages:
 -consumer -sales are still rising, -sharp fall in sales volume
-to meet the
awareness and but rate of increase while profit curve
growing demand,
product have declined. becomes almost flat or
product distribution
acceptance is low -a sale reaches its horizontal
is expanded
-product launching peak, while profit -there is also decline in
-sales rapidly as
through the use of begins to fall the number of competitors
product becomes
marketing activities -survivors are those who
popular
-low profit due to specialize in marketing
cost of the product
-once product is no longer
profitable, it is eliminated
from the market

o Category or sector of business

 The service- based business
- Barber shops, repair shops, and beauty parlors
 Trading or product based business
- Buy and sell transaction
- Grocery store, bakery products, general construction materials
 Manufacturing business
- Production based business by creating a product
- Plants, factories (clothes, shoes)
 Licensed business opportunities
-
Franchising is a business format somehow very similar to licensed
business operations
 Distributorship
- Where an independent entrepreneur, company or individual enters
into an agreement or contract to offer, sell, or distribute a
particular product but is not entitled to use the manufacturers
trade name as part of its own trade name
-
Represents foreign companies who can sell products to dealers
strategically located all over the country
 Rack jobber
-
Involves an agent or buyer entering an agreement with a parent
company to market
 Wholesalers
 - Sell the product of manufacturers or producers to retailers and
other distributors who have direct dealings with the end users or
customers
 Subcontracting
- Involves signing up an agreement with a major producer to
complete a set of product components on a pre- agreed price
 Vending machine routes
- Placed in various places or locations
- Coffee vending machine

B. IDEATION- The beginning of business endeavour

o most common ways of developing ideas
 Recognizing the need
- Develop an idea or a product that can satisfy a need, and respond
to the need by establishing a business concern
 Improving an existing product
- The result of consumer dissatisfaction to the existing product
could open the door to introduce innovations or improvements
 Recognize trends
- Should recognize opportunity to develop a product and set trends
that can make leading entrepreneurs
 Be aware of everything
- There is no other way to know about what is happening around you,
but to research and read.
 Questions and assumptions
- Anybody can question the relevance or quality of any product or
services provided that there is an effort to improve the product
 Naming it first, then, developing it
- If you have idea, study it and develop it to something that is
worth a business

o Tips in evaluating ideas

 Do not let your idea follow money, let money follow your ideas
 See yourself as a problem solver
 Use research as weapon against failure
 Make sure your idea has longevity
 Take a risk on your ideas
 Test your idea against the past, present, and future
 Know the idiosyncrasies of your market

o Ways of protecting your ideas

 Confidentiality Agreements
- It specifically provides that a signer will not share the idea to
anyone
- A typical agreement or contract where one should ask advise to a
patents attorney or those with experience and expertise in the
intellectual property rights.
 Patents
- Gives the inventor exclusive legal rights to exclude anyone else
from manufacturing, selling, importing or using an invention
during the life of the patent
 - Three general classifications are:
 Design patents
- a form of legal protection of the unique visual qualities
of a manufactured item
- may be granted if the product has a distinct
configuration, distinct surface ornamentation or both
- provides protection for the ornamental design of something
that has a practical utility
 Utility patents
- a patent that covers the creation of a new or improved—and
useful—product, process, or machine
- also known as a “patent for invention,” prohibits other
individuals or companies from making, using, or selling
the invention without authorization
 Plants patents
- is an intellectual property right that protects a new and
unique plant’s key characteristics from being copied, sold
or used by others
- can help an inventor secure higher profits during the
patent protection period by preventing competitors from
using the plant
 Trademarks
- This is a word, name, symbol, or device used by manufacturers on
merchants to identify their goods and distinguish them from
others sold in the market
- This should be sed in conjunction with a business or a product,
otherwise this will not be granted
 Copyrights
- Protects the creative works of composers, authors/writers,
artists, and others
- This is the easiest form of protection for intellectual property

o Environmental stimulants to creativity

 Freedom
- A sense of control over one’s work ideas
 Good project management
- A manger serves as a good role model
 Sufficient resources
- Access to necessary resources
 Encouragement
- Management enthusiasm for new ideas
 Various organizational characteristics
- A mechanism for considering new ideas
 Recognition
- A general sense that creative work will receive appropriate
feedback, recognition, and reward
 Sufficient time
- Time to think creatively about problem
 Challenge
 - A sense of challenge arising from intriguing nature of the
problem itself
 Pressure
- A sense of urgency that is internally generated from competition
as a personal sense of challenge
 Outside organization
- From a general desire to accomplish something important

o The concepts of innovation- doing something different

 Impacts of innovation
 Effecting a new policy- creating change or orientation or direction
 Finding new opportunities- developing an entirely new product or
opening a new product
 Designing a new structure- changing the formal structure,
reorganizing or introducing a new structure
 Devising a fresh method- introducing a new process, procedure, or
technology for continued use
 Elements of innovation orientation
 Value placed on creativity and innovation in general
 An orientation towards risk
 A sense of pride in the organization and its members and the
enthusiasm about what they are capable of doing
 An offensive strategy of taking the lead towards the future

o DEVELOPMENT GROWTH THEORIES

 Laissez- faire theory- explains that the government should not

interfere in economic activities.
 Keynesian theory- explains that the government should play the key
role in economic development.
 Ricardian theory- this is the theory of David Ricardo focusing on
agriculture playing the major role in economic development
 Harrod- Domar Theory- conceptualized by Sir Harrod of England and
Prof. Domar of the U.S; claims that the application of modern
technology in the production of goods or services has been
responsible for the economic success of the highly developed
countries.
 Kaldor theory- by Nichols Kaldor, maintains that the key factor is
technology. This theory explains that the application of modern
technology in the production of goods and services has been
responsible for the economic success of the highly developed
countries.
 Innovation theory- developed by Joseph Schumpeter, stresses the role
of innovators or entrepreneurs in economic development.