Business

enterprise
simulation
 Commit your way to the
lord; trust also in him; and
he shall bring it to pass.
Psalm 37:5
 Business enterprise
simulation
Subject Description: This course integrates all the key
concepts and processes of Accounting, Business, and
Management (ABM) as applied in real-life activities
following the business cycle: business opportunity
search, product/service development, business formation
and organization, business implementation and control,
business wind-up, and relevant management reporting in
the context of ethical standard and social responsibility.
Technologies are used in a business enterprise as
appropriate.
 Why practice a business
simulation?
Business simulations are a hands-on, interactive
learning experience that allows learners to
engage in the actual environment.
 why practice a business
simulation?
Business simulations are a hands-on, interactive
learning experience that allows learners to engage in
the actual environment.
 Imitates reality
 Risk-free environment
 Stimulates co-operation
 Learning by doing
 Engages learners
 What is a business
simulation?

- A business simulation is an
essential tool for
organizational learning and
 Lesson 1

Identification of
Business Opportunities
 Opportunity to Start a Business

 The ability to identify business

opportunities is an essential characteristics
of an entrepreneur

Opportunity – favorable position or range

for advancement
Steps in Arriving at Business Opportunity

 Generating Ideas
 Screening Process
 Formulating the Concept of the
Business
Generating Ideas
Source: Environment
 Scan & Understand the needs & wants of
people
Abraham Maslow – psychologist  people
generally have different kinds of basic needs
such as food, clothing, shelter, safety,
socialization, recognition for self-esteem & self-
fulfillment
Taking macro-perspective or viewing larger
environment where business will be situated
(looking at the social, technological, economic,
environmental & political)
Ways of Scanning the environment
1. Looking closely at the market
- demand & supply gap analysis
- import-export movement
- product substitution
- forward-backward industry linkages

2. Looking at People’s skills

- observe your community
 Ways of Scanning the environment

3. Looking at available business assistance program

- visit DTI office
- government & private institutions
- non-government organizations
Collecting Information
Methods:

 Ad Hoc Scanning  short-term, infrequent &

initiated by crisis
 Regular Scanning  involve studies done on a more
or less regular basis
Continuous Scanning  entails regular collection or
processing of data on a wide range of factors from
business environment
Means of Collecting Information

● Accessing Networks
● Public Meetings, Trade Fairs & For a
● Focused-Group Discussion
● Key People Surveys
● Publications
● In-Depth Interviews
● Usage & Awareness Studies
Screening Process
●Personal-level Screening 
educational & training background,
work experience

●Firm-Level Screening – firm age, firm

size, firm growth and innovation
Screening Process
Personal Level Screening

● Personal Preference (committed)

● Educational & Training Background
● Work experience (degree of expertise &
knowledge)
● Business Network & Contacts (buyers,
suppliers or creditors)
● Family Support Personal-level Screening
Process
Screening Process

Firm Level Screening

● Market
● Technology
● Availability of skills
● Availability of Raw Materials
● Financial/ Capital Requirement
● Profitability
● Government Support Screening Process
Formulating the Concept of the Business

Resource Analysis

● Resources Strengths weakness

● Money
● Materials
● Machines
● Methods
● Manpower
● Management
● Moment (time)
- The resource analysis where strengths and
weaknesses are identified, indicates what the firm
is capable of doing at the start of the business.

- The strengths identify distinctive competencies

of the company which can work to its advantage
Formulating the Concept of the Business

Environmental Analysis

The Environmental Analysis gives an

indication whether the business can survive
or not.
Identifying Opportunities & Threats in the Environment

● Socio-cultural
● Technological & Technical
● Economic
● Natural
● Political
● Peace & Order
● Population Trends
● Government Program
● Global Environment
Formulating the Concept of the Business

Personal Values Analysis

 Represent your philosophy, guiding

principles, outlook and aspirations for your
business (non-monetary values)
 Generating Ideas for your business

1.Examine the existing goods and services

2.Examine the present and future needs
3.Examine how the needs are being satisfied
4.Examine the available resources around you
5.Read magazines, new articles, and other
publications on new products and techniques
or advances in technology
Selecting the Right Business Idea

According to Bautista (2014), once you

have started identifying the business
opportunities within your reach, you can
eventually see that there are various
possibilities available for you. However, it
very unlikely that you will have enough
resources to pursue all of them at once.
Hence, you have to know which one to
choose.
Bautista (2014) stated that in screening your ideas,
examine each one in terms of the following factors:

● How much capital is needed to put up the business?

● How big is the demand for the product/service? Do many people
need this product/service and continue to need it for a long
time?
● How is demand met? Who are processing the products/ services
to meet the need (competition or demand)? How much of the
need is now being met (supply)?
● Do you have the background and experience needed to run this
particular business?
● Will the business be legal, not going against any existing or
foreseeable government regulation?
● Is the business in line with your interest and expertise?
Scanning the Market
Ed Crowley (2007) defined market scanning as the process of
continually and actively monitoring the external environment in
order to identify customer needs, anticipate competitive actions,
and, identify technological changes which will provide new market
opportunities or market disruptions.
The following list from Jobber Academy (n.d.) provides a
non-exhaustive overview of the different factors one must
consider in the Market Scanning. These factors are known
as the PESTLE factors.

Political factors  involve thongs that impact your

business from a government or legal standpoint.
Some Examples:
- Income Tax and other taxes
- Minimum wage laws
- Union influences
- National and local policies
Economic factors  financial fluctuations that are typically
out of your control
Some Examples:
- GDP loss or growth
- inflation rates
- company debt
- Income of potential customers in your area
- Employee salary trends in the service business industry
Technological factors  have a direct impact on the cost of
doing business and efficiency of your business

Other factors to include:

- Automation opportunities
- Technology incentives, like tax credits
- Better equipment coming on the market
- Service business software updates
-Improvements to mobile devices and other communications
Legal factors  will directly influence the
company’s operations of your service
business right now.

Factors Includes:
- Consumer protection laws
- various insurance laws and mandates
Environmental factors  refer to anything that can
impact your business from an ecological or environmental
standpoint.

Other factors includes:

- Environmental impact of service business practices
- Geography
- Access by road, rail, air
- Waste management
- Local attitudes towards pollution
 Activity
Determine and classify the following according to which among
the PESTLE factors it is.

1. GDP growth rate

2. Education
3. Tax Policy
4. Innovation
5. Legal System
6. Climate Change
7. Investment
8. Safety/ Health Law
9. Pollution
10.Robotics