ENTREPRENEURSHIP

ENVIRONMENTAL SCANNING:
RECOGNIZING THE
POTENTIAL MARKET
Ma. Kiara S. Avendaño
Steps in the Entrepreneurial Process

1.OPPORTUNITY SPOTTING AND ASSESSMENT

(DISCOVERY)
This step generate ideas, recognizes opportunities and
studies the market. This is the beginning of the process
and is considered the most difficult. Entrepreneurs at
this point take note of interesting trends in their
environment. The entrepreneur’s toughest job is to
carefully assess the opportunity through estimation of
opportunity length, capitalization required, threats,
profitability, and calculation of real and perceived value .

2.Developing a Business Plan
(Concept Development)
This step provides a detailed proposal describing the
business idea. The entrepreneur should formulate a
business plan when they have already spotted and
assessed the opportunities for a market. A business
plan is a comprehensive paper that details the
marketing, operational, human resource, financial,
strategic direction, and tactics of the business.
The business plan will be the core guide and direction
of the entrepreneur in calculating the resources
needed, assessing how to obtain the resources
efficiently, and running the business sustainably.
3.Determining the The step in which the entrepreneur
identifies and acquires the financial,
Capital Needed human and capital resources for the
(Resourcing) venture startup.

A big idea can never be translated into

reality if the entrepreneur’s resources
are limited.

Therefore, it is mandatory in the

entrepreneurial process to calculate the
resources needed to establish the
business and compare this to
entrepreneur’s current resources.
4. Running the The step in which the entrepreneur operates
Business the business and utilizes resources to achieve
its goals/ objectives. The business plan
(Actualization) prepared should already have been
implemented.

5. Harvesting The step in which the

entrepreneur decides venture’s future
growth development or demise.
Scanning the Marketing Environment

The 3S of opportunity spotting and

assessment is the framework that
most of the promising entrepreneurs
use to finally come up with the
ultimate product or service suited for
a specific opportunity.
Opportunity - entrepreneur’s business idea that can potentially become a commercial
product or service in the future

S1: OPPORTUNITY SEEKING

Involves the development of new ideas from various sources as follows:

1.MACROENVIRONMENTAL SOURCES
a.PESTEL analysis studies the key external factors (Political, Economic, Sociological, Technological, Legal and
Environmental) that influence an organisation.

b.Industry – source of current trend on what is happening in the industry where the future business belongs to

c.New discovery or knowledge – new trends that can be the core business model of a new venture

d.Futuristic opportunities – projected new opportunities that can possibly affect the new business while it is running
2. MICROENVIRONMENT

a.Consumer preferences, interests, perception – current needs and wants of potential customers that should be discovered
right away by a budding entrepreneur

Need – recognized when a customer believes that there is a difference between his current situation versus his desired condition
Want – recognized when customers believes that there is a specific product or service that can perfectly suit the need

b.Competitors – recognizing and understanding potential competitors will aid the entrepreneur develop a product or service that
is unique and will surely stand out from the competition. The 4Ps of marketing (product, place, price, and promotion) will be
competitively positioned if the entrepreneur is familiar with his competitors.

c.Unexpected opportunities from customers – unlikely situations, places, people and other existing problems could be
the sources of unexpected opportunities

d.­Talents, hobbies, skills, expertise – business opportunities do not just come from outside forces, but also from within the
entrepreneur

e.Irritants in the marketplace such as deterrents, problems, complaints, and delays – entrepreneurs see
opportunities in situations where there is a recurring problem or sometimes when there is no hope in solving the problem

f.Location – entrepreneurs just have to look at their ecosystem and they will be able to spot a business opportunity right away
 Methods of Generating Ideas

1.FOCUSED GROUP DISCUSSION 2.BRAINSTORMING

3.BRAINWRITING OR INTERNET
4.PROBLEM INVENTORY ANALYSIS
BRAINSTORMING
PESTEL Analysis 1.SOCIO-CULTURAL FACTORS
-represent a general view of a locality’s traditions, customs, beliefs, norms, and
perceptions
The result of this analysis will aid the entrepreneur in
deciding what product or service to set up and whether this
new venture will succeed or not. The important thing of these 2.TECHNOLOGICAL FACTORS
analysis is that entrepreneur can fully scan these factors to
-composed of innovations of an existing technology or an invention of a new one
decide if there is a compelling business opportunity or an
mostly on applied science and engineering research areas
impending threat.

3.ECONOMIC FACTORS
Plays a vital role in the scanning of marketing environment because it directly
affects any business venture. These includes income, expenses, and resources the
cost of doing business and generating income.

4.ENVIRONMENTAL OR ECOLOGICAL FACTORS

-factor that should be given much importance in conducting a business especially
when the world has already suffered severely from human-induced calamities
5. POLITICAL
FACTORS
-induced by government
policies and administrations,
which can have a strong effect
the entrepreneur’s business
NOTE: TO FURTHER UNDERSTAND THE PESTEL ANALYSIS, PLEASE READ PAGES 91-98 OF
6. LEGAL FACTORS 7.ETHICAL 8.DEMOGRAPHIC
-government laws and FACTORS FACTORS
regulations that can restrict or
-serves as an --characteristics of the
allow business activities
entrepreneur’s guide on people in the target
how to be ethical in market
running the business
YOUR BOOK.
 S2: SCREENING THE OPPORTUNITY

Opportunity Selection of the best opportunity depends on

these factors:
screening
1.Internal Intent -main objective that the
-Process of cautiously selecting
business will accomplish in the
the best opportunity
entrepreneur’s life
2.External Intent- ­will address the
compelling needs of the target market
3.Risk Appetite- refers to the
entrepreneur’s tolerance of business
risks

The Opportunity Attractiveness Test

- (Youngleson, 2009) aims to assist entrepreneurs in ensuring that the opportunity that they will venture
into is an attractive and feasible prospect
S3: Seizing the Opportunity
Opportunity seizing- “pushing through” with the chosen opportunity
Innovation- process of positively improving an existing product or service

Three types of innovations according to the degree of distinctiveness:

3.ORDINARY
1.BREAKTHROUG
2.TECHNOLOGICA INNOVATIONS
H INNOVATION
L INNOVATION - commonly originating
– includes inventions that
- occur more frequently from market analysis and
occur infrequently as these
than breakthrough technology pull instead of
establish the platform on
innovations a technology push
which future innovations
in an area are developed
 Product or Service Planning and Development
Process

1.IDEA STAGE 2. CONCEPT STAGE

– stage where the entrepreneur determines what are the feasible – once the acceptable product or service has already been identified,
product and/ or services that will perfectly suit the opportunity it will go through the concept stage, the developed idea will undergo
a consumer acceptance test

3. PRODUCT DEVELOPMENT STAGE 4. TEST MARKETING STAGE

– entrepreneur leverages on the information generated form the
– stage wherein it validates the work done from the first three stages
prospective customers via the concept stage, actual product samples
to measure success in the commercialization of the product or service
or actual service samples will be given or rendered to the panel of
potential customers
Business plan

·Operating guide for a business to refer to

·Self-checking tool that lets the business know if they
still on track with their business aims and objectives
·Roadmap that guides a business in which direction they
working towards
 1. EXECUTIVE SUMMARY
This part covers the foundation of the business, which
Components of a Business is:
·The target markets
Plan ·The business structures
·The objectives of the business
·Advantages the organization has over the companies

2. PRODUCTS AND SERVICES

This section describes the company’s products
and services, as well as how they are positioned
to serve current and future market segments.

3. MARKET ANALYSIS
Here the plan should identify the reasons why
customers will buy from the company, and the
value proposition that underpins the company’s
This Photo by Unknown Author is licensed under CC BY-NC-ND
success.
4. STRATEGY IMPLEMENTATION
This section should describe the – company’s high-level strategies and anticipated results. Strategic
priorities should fit into one of the following categories: – financial, – customer, – products and
services, – people, or internal capabilities.

5. MANAGEMENT TEAM
The group of individuals that operate at the higher levels of an organization and have day-to-day
responsibility for managing other individuals and maintaining responsibility for key business functions.

6. MARKETING PLAN
Provides the details what you propose to accomplish, and is critical in obtaining funding to
pursue new initiatives.
- Explains (from an internal perspective) the impacts and results of past marketing
decisions.
-Explains the external market in which the business is competing.
-Sets goals to direct future marketing efforts.
-Sets clear, realistic, and measurable targets.
-Includes deadlines for meeting those targets.
-Provides a budget for all marketing activities.
-Specifies accountability and measures for all activities.
7. FINANCIAL PLAN
This translates your company's goals into specific financial targets.
The Financial Plan section:
– Clearly defines what a successful outcome entail. The plan isn't merely a prediction; it implies a commitment to
making the targeted results happen and establishes milestones for gauging progress.
– Provides you with a vital feedback-and-control tool. Variances from projections provide early warnings of problems.
When variances occur, the plan can provide a framework for determining the financial impact and the effects of various
corrective actions.
– Anticipate problems. If rapid growth creates a cash shortage due to investment in receivables and inventory, the
forecast should show this. If next year's projections depend on certain milestones this year, the assumptions should spell this
out.
ENTREPRENEURSHIP

THANK YOU!
REFERENCES:
Book
Ronaldo “Ron” S. Batisan, (2016) ENTREPRENEURSHIP DIWA Senior High School Series, DIWA LEARNING SYSTEMS, Makati City, Philippines

Nick L. Aduana, (2020) ENTREPRENEURSHIP in Philippine Setting for Senior High School, Revised Edition, C & E Publishing, Inc. Quezon City Philippines

Digital Source

https://www.slideshare.net/DrRRavikumar1/entrepreneurial-process-53513612

https://www.slideshare.net/ssuserb4c5a5/components-of-business-plan