Entrepreneurship

1st Quarterly Exam Reviewer Padayon!

Need for Achievement

Different Definitions
Howard H. Stevenson
-process of creating or seizing an opportunity
Marife Agustin-Acierto
-science of converting processed ideas into a
remarkable business venture.
Fajardo
-a capacity for innovation, investment and
expansion into new markets and techniques.
-should feel the need to succeed and take
responsibility for the outcomes of their actions.
Ambition
-stay motivated, persistent, and persevere even
in the face of a difficult challenge.
Willingness to Learn
-pursue opportunities to acquire new skills and
competencies.

Key Concepts, Skills, and Competencies
Competency
-capability, capacity, and ability of the learner in
handling situations in various areas in business
operations.
Strong Initiative
-always driven to work hard. Can work
independently to achieve the task.
Adaptability & Flexibility
-able to develop novel solutions to complicated
problems.

Willingness to Take Risks

Entrepreneurial Competencies
Locus of Control
-knowledge in determining the state to which a
person agreed that their actions can directly
affect a situation/they can control a result.
INTERNAL-can influence events&outcomes
EXTERNAL-blames the outside forces
Specific Goal Setting
-motivation to set goals, specifically business
growth objectives.
Specific Goal Setting
-belief in one's own ability. Self-confidence.
-can accept consequences but they can also
identify, calculate, and manage risk and can take
into account legal actions.
Integrity
-should have a positive sense of values and
personal beliefs.
Conceptual Thinking
-willing to use new approaches and ideas that
may enhance work.
Networking/Collaboration
-understand the ability of networks. They can
negotiate with other people.

Layers of Competency Strategic Thinking

-some skills and competencies are applicable to -know that thinking using strategies can help
all entrep. While some skills and competencies achieve goals in the organization.
are only applicable to some.

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Entrepreneurship
1st Quarterly Exam Reviewer
Commercial Aptitude
-keep themselves updated with their
surroundings.
Decisiveness
-able to resolve issues as they arise in an
unavoidable situation and are able to respond
flexibility to changes.
Optimism
-perform in the hope of success, rather than the
fear of failure.
Customer Relation Service
-able to develop and build trust and long term
relationships with their customers.
People Centered
-can create commonality among stakeholders
and are able to be inclusive in decision making.
Entrepreneurial Skills
Creative/Critical Thinking
-learners who engage in creative thinking are
able to both generate innovative solutions and
use relevant information to understand the
greater picture.
Organizing
-can plan and prioritize work to ensure that time
is managed effectively.
Planning
-must be specific about the direction for their
venture and their strategy.
Business Principles
-must be well versed in market knowledge,
economic principles, and ethical practices.
Padayon!
Computer Competencies
-must be competent in the use of basic
computer hardware and software.
Workplace CCompetencies
-able to apply their skills, knowledge, and values
ro job tasks and work related experiences.
High-Growth to High-Value Entrepreneurship
-typically offer incentive compensation, manage
business operations, build a strong entrep
culture around determination….
Marketing
-competent in both executing strategies that
promote their products and establish
client/customer relationships.
Interpersonal Skills
-can work well with people regardless of their
backgrounds. Insightful on the behavior of
people.
Career Opportunities in Entrepreneurship
Reasons Peeople Pursue Entrepreneurship
Eureka- you have a brilliant idea and want to
give it a try!
You’re not the boss of me
Ka-ching, I want to be rich
I hate my job- you’re no longer inspired, you’re
at a dead end.
It’s glamorous and exciting.
Satisfaction, professional growth, and increased
responsibility.
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Entrepreneurship
1st Quarterly Exam Reviewer Padayon!

OPPORTUNITIES MIND-SER AND SKILLS NEEDED FOR

ENTREPRENEURIAL SUCCESS

Business Principles
(4 SKILLS) -are you a self-starter?
Engineering - the skill to invent and develop -are you a positive thinker?
new products (or services). -are you disciplined?
Manufacturing - the skill to deliver them, -can you be objective?
consistently
Selling - the skill to sell them TRAITS:
Business - the skill to make a profit doing the -gain respect of their peers
other three. -believe and trust in themselves
-follow a plan
-think creatively
TRENDS, RISKS, AND DISDVANTAGES
-explore their exceptional skills
-envision their success
Risks and Disadvantages -NEVER GIVE UP
-losing stable income - lack of family support
-long hours - no health benefits TRENDS::
-all expenses are yours - it’s all your fault! -internet businesses
-you don’t work, you -didn’t research don’t eat -service businesses
-start up costs - thinking, I’m my own boss. -home-based business
-socially responsible nonprofit businesses
RISKS AND DISADVANTAGES -focus on technology
-outsourcing - contracting with other companies
-no regular salary
for service
-work schedule
-strategic alliances - forming a partnership with
-administration
another company
REASONS FOR FAILURE -corporate ventures - new venture started inside
a large corporation
-high debt ratio - you’re heavy in debt or others
-convenience products/services
owe you.
-high levels of mismanagement - lack of
Professional Development Opportunities
professionalism
-meetup
-unexpected staff resignations
-minority business network
-inadequate inventory
-facebook’-asian women in business
-selling products below cost
-universities SBA
-dwindling working capital, consistent negative
-linkedin
cash flow and inability to secure operational
-workshops
capital.
-conventions
-declining profit
-loss of market share

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Entrepreneurship
1st Quarterly Exam Reviewer
Pathways to Entrepreneurship
The Entrepreneurial Mindset
Entreprendre - french word - to undertake
-a reference to individuals who have initiated the
establishment of business enterprises.
Theory of Economic Development
Two Types of Entrepreneur
-Mega Entrepreneur
-Micro Entrepreneur
Mega Entreprenuers
-generated substantial value and profits from
innovations in a very short period of time.
-willing to absorb huge risks
-rapid economic progress
-huge amount of value-added
-attracts number of competitors and imitators
-crucial in rapid economic prosperity
Micro Entrepreneurs
-initiate business enterprise, value-added and
profits they make are limited.
-value-added and profits are limited.
-contributions are minimal
Padayon!
-attracts a few competitors and imitates
-short in funds and inadequate in skills.
-cannot undertake huge capital, sophisticated
technology and extensive risks.
-engage in micro and small business as an
alternative to formal employment.
Entrepreneurial Process
-a system entrepreneurs follow to achieve their
goals.
-a strategic process that includes an articulation
of a plan and how this is going to be
implemented.
-an entrepreneurial discipline which involves
several stages.
DISCOVERY
-recognition of a business idea
-detection of opportunities that could make for
the entrepreneur’
DEVELOPMENT OF BUSINESS CONCEPT
-gives more details on how the general business
can be realized.
-Suggest a business plan
BUSINESS PLAN: to be organized, to be
managed, to be financed.
ORGANIZING RESOURCES
-process of identifying, sourcing, and financing
human, non human and other resources needed.
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Entrepreneurship
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IMPLEMENTATION -Risk appetite

-process of carrying out the business plan.
-management of human, physical, technological,
and financial resources.
-confronting actual and potential rivals
-responding to various opportunities, challenges
and developments.

REAPING THE RETURNS

-strategies related to the expansion of the Entrepreneurial Traits and Entrepreneurial
business firm. Intentions

Characteristics of an Entrepreneur INTERNAL FACTORS

DEMOGRAPHICS - Gender, age, marital status,

Entrepreneurial Traits and Creation of
and employment status of individuals who are
Value-Added
likely to form entrepreneurial intentions.
-Level of Education

PERSONAL TRAITS - Theoretical bases for the

contributions of self-confidence, determination,
and enthusiasm and other positive human
qualities.

PSYCHOLOGICAL TRAITS - include a host of

qualities including need for achievement, risk
-Employment status
appetite, acceptance for vagueness,
self-efficacy and goal setting.

INDIVIDUAL SKILLS & PRIOR KNOWLEDGE -

Vocational Know-how, supervisory and
managerial skills acquired from work
experience.

-Entrepreneurs wealth SOCIAL TIES - important in building networks

that can complement the productivity of human
and nonhuman resources of business.

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EXTERNAL FACTORS
ENVIRONMENTAL SUPPORT - Positive effects
of government, financial institutions and training
institutions in setting up a business.
ENVIRONMENTAL INFLUENCE - Includes
regulatory structure, patents, protection of
property rights, and competitive environment.
Entrepreneurial Decision-Making
Critical Thinking
-the systematic and rational way of providing
an answer to a question.
-Explains what is going on in a business and how
a firm can survive and remain stable.
-SWOT Analysis
Creative Thinking
-refers to thought processes that bring about
discovery of new ideas.
-from a dream, an insight or from mere
observation.
Strategic Thinking
-involves thought process that assess current
situation that can be useful in formulation of
plans for the future.
Porter’s Five Forces of Competition
-Michael Porter, to analyze an industry’s
attractiveness and likely profitability.
-Rivalry among existing competitors.
Competitive Rivalry
-This looks at the number and strength of your
competitors. How many rivals do you have? Who
are they?
Padayon!
Supplier Power
-How Powerful are the companies that supply
me? Can they Easily Drive up prices?
Buyer Power
-How powerful are my consumers? Can they
easily choose other businesses and force me to
change my price?
Threat of Substitution
-Are there other similar products and services,
which my customers might switch to?
Threat of New Entry
-How easy is it for new businesses to enter my
market and take my customers?
RISKS, COGNITIVE ADAPTABILITY, AND
ENTREPRENEURIAL DECISIONS
Risks
-uncertain situations and developments that can
increase the probability of loss or business
failure
INTERNAL - danger coming from the
management of resources of a business
enterprise.
EXTERNAL - threats coming from various
environment outside the business firm.
Risk Management
-process of identifying, assessing, and
responding to risks.
IDENTIFY-ASSESS&ANALYZE-PLAN-
IMPLEMENT-MEASURE,CONTROL&MONITOR
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Entrepreneurship
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Cognitive Adaptability
-ability of individuals to be involved in the
process of producing several decision-making
based on the identification and management of
changes in their environment.
REQUIRES: Flexibility, Dynamism, Self-control
Generating Ideas: Logic and Creativity
Sources of Ideas for Entrepreneurial Ventures
From the product
-More than changing the product, successful
entrepreneurs introduce new products because
of their dissatisfaction with those available in the
market.
From the process
-Fried siopao from the traditional steamed
siopao.
From the person
-Interests, hobbies, skills, dreams, and even
his/her travels.
From relationships
-From families and relatives.
Methods for Generating or Testing New Ideas
Logical Thinking
-Systematic and rational way of providing an
answer to a question.
STATISTICAL ANALYSIS - systematic analysis of
data generated from surveys of individuals.
MARKET ANALYSIS - undertaken to know the
various factors that affect the demand for a
particular product or service.
Padayon!
SWOT ANALYSIS - describe the state of
competition within an industry.
DELPHI TECHNIQUE - systematic way of
generating ideas from a select group or
individuals using various rounds of consultations
or sessions.
Creative Thinking
-Looks at things from different perspectives
BRAINSTORMING - unstructured discussion of a
group to elicit ideas.
PROBLEM INVENTORY ANALYSIS - uses the
group discussion method to elicit ideas to
identify all possible problems encountered with
a specific product or service.
FREE ASSOCIATION METHOD - to elicit the
unconscious thoughts of individuals by
expressing their thoughts associated with words
and ideas given by the therapist;
CHECKLIST METHOD - listing all possibilities
that ideas can be connected to, reprocessed and
associated with
Alex Osborn
-developed a method known as SCAMPER
(Substitute, Combine, Adapt, Magnify, Put to
other use, Eliminate, and Rearrange)
Factors that influence CREATIVITY
Problem Solving
-provide an answer to a problem.
Motivational
-stimulate desire and energy in people.
Situational
-they are confronted with concrete situations.
Organizational
-thrives in an environment that is nurturing and
not threatening.
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Entrepreneurship
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DIVERGENT THINKER - thinks of all possible

ways to reach a solution.
CONVERGENT THINKER - thinks for a final
solution.
Osborn-Parnes Model
DR, SYDNEY PARNES - ALEX OSBORN
1.) Mess Finding
2.) Fact Finding
3.) Problem Finding
4.) Idea Finding
5.) Solution Finding
6.) Acceptance Finding
Stages of Opportunity Recognition
According to Hills, Shrader, & Lumpkin
PRECONDITION - Preparatory Stage
CONCEPTION - Gestation Phase
VISIONING - Hunch; logic of connections
ASSESSMENT - Evaluation of Ideas
REALIZATION - Production of prototype
Factors in Opportunity Recognition
Elements in Opportunity Assessment
Product or Service
-What is the unique feature of the product or
service?
Market Opportunity
-Refers to the appraisal of the characteristics of
the market.
Costing and Pricing
-depend on the cost of raw materials and other
factors of production.
Profitability
-A non-profitable business enterprise, however
creative the business idea, is not worth pursuing.
Resource Requirements
Intermediate inputs – raw materials that need
further processing.
Factor inputs – the processing inputs which
include labor, capital, and technology,
Risks
-If the potential business venture will just face
normal business risks, the business venture can
be pursued.
Entrepreneurial Commitment
-the seriousness of the individual to proceed
with the introduction of the product or service

Market Awareness Opportunity Pathways

-(prior knowledge of the market), refers to
personal exposure to the market and its RATIONAL APPROACH
components. -mega entrepreneurs
Entrepreneurial Readiness -traditional approach
-(entrepreneurial alertness), refers to a -uses entrepreneurial process
variety of features of an individual to start a INTUITIVE APPROACH
business venture; -micro entrepreneurs
Connections -proceeds directly to the grabbing of the
-(networks), families and friends as well as opportunity after sensing that it can be done.
business associates

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Entrepreneurship
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ENTREPRENEUR
-allows to anticipate potential business risks
-a road map for managing the business
-identifies the resources needed
-more crucial if he invests to fixed assets

LENDER
-able to meet debt and interest payment
-collateral or tangible assets
-4 c’s of credit

INVESTOR
Major Sections of the Business Plan
-to gauge whether projected returns are
acceptable
-character of the entrepreneur and capability of 1.) Introductory Page
the management team -Provides a brief summary of the
business plan’s content.
2.) Executive Summary
BUSINESS PLAN
-prepared after the total plan has been
written
-Describes the various external and internal 3.) Environmental and Industry Analysis
elements involved in starting a business
-a guide for short-term and medium-term
decision-making and managerial action

Information Need for Major Sections of the

Business Plan

Market Information Need

-Determine the size of the market
Operation Information Needs 4.) Description of the Business
-Depends largely on the cost of sourcing and -Products and/or services
manufacturing the product or of providing the -Size of the business
service. -Mission statement and core values
Financial Information Needs -Location of the business and its major
-Require the entrepreneur to include a list of all physical assets
sources of revenue and a list of all possible -Background of the business
expenditures owners/entrepreneurs

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5.) Production Plan Direct Materials

–Manufacturing process -Cost of raw materials
-Physical plant
-Machinery and equipment
-Suppliers of raw materials
-Future capital equipment
needs
6.) Operation Plan
-Description of the company’s
operations (manufacturing, service, Direct Labor
retail or online business) -Wages of the workers responsible for making
7.) Marketing Plan the product.
-Pricing
-Distribution
-Promotion
-Sales forecasts
8.) Organizational Plan
-Provides a documentation of the
venture’s form of ownership
9.) Financial Plan
-Cash flow projections Direct Overhead
-Sources and uses of funds -Amount that was spent in the manufacturing
10.) Assessment of Risk overhead (e.g. power, water, other utility costs)
-Response to risks should they occur for every unit produced.
11.) Timetable/Milestones -Total manufacturing overhead divided by units
-When major activities happen and produced
when milestones will be reached serves
a useful purpose.
12.) Appendices
-Market research data

PRICING

Product Cost Estimation

-Cost of the product must be computed before a Fixed Costs
company sets a price. -Expenses that are unrelated to the manufacture
of the product.
Unit Variable Cost -Executive/Staff Salaries, Office Rental,
-How much it would cost to manufacture one Advertising, etc.
unit of the product.
-Direct materials, labor, overhead

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Entrepreneurship
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MARKETING PLAN

-a document containing the marketing

objectives, marketing strategies and the
activities that will undertaken to execute these
strategies;
COMPETITOR ANALYSIS
7P’s of Marketing
Break-even Point Positioning
-the company would make no profit but will also Product
incur no loss. Packaging
Mark-up Pricing Strategy Place
-allows the seller a fixed mark-up every time the People
product is sold. Promotion
Price
MADI Questions of Dr. Ned Roberto
-provides a useful way of identifying unmet or
unsatisfied customer needs and expectations.
M-Whats is Missing
A-What is Annoying
D-What is Disappointing
I-What is Irritating

7P’s of Marketing

POSITIONING
3 Overlapping Objectives:
-enterprise perspective
-competitive perspective
-customer’s perspective

Market Dimensions
Latitude Market
-important to the different customer segments
from their differing points of view.
Longitude Market
-the product features and attributes of
competitors in the marketplace.

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Entrepreneurship
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4 General Types of Products that are PROMOTION

marketed by entreprises: -explicit communication strategy adopted by an
-Breakthrough products enterprise to elicit the patronage, loyalty, and
-Differentiated products support not only from its customers but also
-Copycat products from its other significant stakeholders.
-Niche products -advertising, public relation campaigns,
promotional tours, product offerings,
Breakthrough Products point-of-sale displays, websites, flyers, emails,
-offers completely new performance benefits letters, telemarketing, and others.

Differentiated Products PRICE

-Tries to claim a new space in the mind of the -Pricing depends on the business objectives set
customer different from the spaces occupied by by the enterprise.
existing products. 1.) Profit Maximization
2.) Revenue Maximization
Copycat Products 3.) Market Share Maximization
-Offering more physical space in the shelves, 4.) Attainment of the desired prestige/
lower prices, easier access, and promotional quality leadership
freebies. 5.) Penetration, survival, or liquidation
6.) Scarcity pricing or market skimming
Niche Products 7.) Cost Recovery
-They are content to play minor roles in specific 8.) Subsidy Pricing
and smaller market segments. 9.) Marginal Pricing

PACKAGING
-It provides easy brand identification for the
consumers.
-differentiates the product from its competitors
and even from its other brand offerings. .

PLACE
Image and Location Conditions
Exact fIt to Target Customers
Clustering of Competitor Establishments
Future Area Development
Fiscal and Regulatory Requirements

PEOPLE
-the ultimate marketing strategy.
-Availability, Accessible, Adequate, Acceptable,
Affordable

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