Entrepreneurship

Relevance of Entrepreneurship to an Organization

1. Development of Managerial Capabilities- this means that one of the benefits an

entrepreneur gets is to develop his managerial skills.
2. Creation of Organizations- which means that because of entrepreneurship many
organizations will exist.
3. Improving standard of living- this means that entrepreneurship can lift up the economic
status of an individual.
4. Means of economic development- this means that not only the life of the entrepreneur is
improved but also the society where the business is located.

Concept of Entrepreneurship

 The word entrepreneurship was derived from the French verb entreprendre which means
“to undertake”.
 This is pinpointing to those who “undertake the risk of enterprise”.
 The enterprise is created by an entrepreneur and the process is called entrepreneurship.
 Entrepreneurship are innovators, willing to take risk and generate new idea to make it
unique and profitable solutions to the present-day problems.

Factors Affecting Entrepreneurship

1. Personality Factors which include:

a. Initiative – which means doing things even before being told.
b. Proactive - which means he can classify opportunities and seize it.
c. Problem Solver – which means he can retain good relations with other people.
d. Perseverance – meaning he will pursue things to get done regardless challenges.
e. Persuasion – means that he can make entice people to buy even if they don’t want.
f. A Planner – meaning he makes plan before doing things and do not fake monitor it.
g. Risk taker – which means that he is willing to gamble but he will calculate it first.

2. Environmental Factors which include:

a. Political
b. Climate
c. Legal System Economic
d. Social Conditions
e. Market Situation

Common Competencies in Entrepreneurship

1. Decisive – an entrepreneur must be firm in making decisions

2. Communicator – an entrepreneur must have a convincing power
3. Leader – an entrepreneur must have the charisma to obeyed by his employees
4. Opportunity seeker – an entrepreneur must have the ability to be the first to see business
chances.
5. Proactive – controlling a situation by making things to happen or by preparing for possible
future problems.
6. Risk Taker – they have the courage to pursue what is their business ideas.

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7. Innovative – the entrepreneurs have big business ideas; they do not stop improving and
thinking of new worthwhile ideas for their business.

Core Competencies in Entrepreneurship

1. Economic and Dynamic Activity – entrepreneurship is an economic activity because it

involves the creation and operation of an enterprise with a view to creating value or wealth
by ensuring optimum utilization of limited resources.
2. Innovative – entrepreneurs constantly look for new ideas, thus he needs to be creative.
3. Profit Potential – meaning the entrepreneur can be compensated by his profit coming from
the operation.
4. Risk bearing – meaning the entrepreneur needs to gamble but wise enough to offset the
risk.

Types of Entrepreneurs

1. Innovative Entrepreneur – they are those who always make new things by thinking of new
ideas.
2. Imitating Entrepreneur – they are those who don’t create new things but only follow the
ideas of other entrepreneurs.
3. Fabian Entrepreneurs – they are those skeptical. They don’t initiate but follow only after
they are satisfied.
4. Drone Entrepreneur – they are those who lives on the labor of others. They are die-hard
conservative even ready to suffer the loss of business.
5. Social Entrepreneur – they are those who initiate changes in the various fields such as;
education, health, human rights, environment and enterprise development.

Career Opportunities of Entrepreneurship

1. Business Consultant – with the expertise of the entrepreneur he can be a very good source
of advices to other entrepreneurs and would be business man.
2. Teacher – a graduate of an entrepreneurship can be using his knowledge in teaching.
3. Researcher – the entrepreneur can be employed as researcher by an enterprise.
4. Sales – the entrepreneurship graduate can apply as salesman.
5. Business Reporter – the entrepreneur being expert in the field, he can be employed as a
business reporter.

Types of Entrepreneur

1. Innovative Entrepreneurs – have the ability to think newer, better and more economical
ideas.
2. Imitating – these are people who follow the path show by innovative entrepreneurs.
3. Fabian Entrepreneurs – are skeptical about changes to be made in the organization.
4. Drone Entrepreneurs – are person who lives on the labor of other.
5. Social Entrepreneurs – are people who drive social innovation and transformation in various
fields, including education, health, human right, and may others.

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 Recognize a Potential Market

Entrepreneurial Ideas
 The creation of an entrepreneurial ideas leads to the identification of entrepreneurial
opportunities, which in turn results in the opening of an entrepreneurial ventures.
 Aduana 2017

Creation of Identification of Opening of

Entrepreneurial Entrepreneurial Entrepreneurial
Ideas Opportunities Venture

Essentials in Entrepreneur’s Opportunity Seeking

These are the basic foundation that the entrepreneur must have in seeking opportunities:

Entrepreneurial mind frame

 this allows the entrepreneurs 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 problem 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 again
c. Wildlife – include all mammals, birds, reptiles, fish, etc. that live in the wild
For example, one factor in the physical environment that can easily change is climate.
The temperature is very high during summer but very low during the rainy season. An
individual with entrepreneurial drive can be extremely imaginative and inventive in

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 identifying opportunities. He/she can venture a business that responds to the needs of
the people during summer and rainy season.
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. Sociocultural forces – customs, lifestyles, and values that characterize a society
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 fire crackers to celebrate New Year 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 new product that will serve as
a substitute for fire crackers.
4. People’s interest
 the interest, hobbies, and preferences of people are rich source of entrepreneurial ideas.
5. Past Experiences
 The enterprise and skills developed by a person who has worked in a particular field may
lead to the opening of related business enterprise.

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 services of trying to get or win something.
 For example, the prices are lower when there is a competition among those stores.
a. Buyers
b. Potential New Entrants
c. Rivalry Among Existing Firms
d. Substitute Product
e. Supplier
1. Buyers – are the one that pays cash in exchange to your goods or services.
2. Potential New Entrants – is defined as the one who enters something.
This can be notice if there is the presence of the ff. factors:
a. substantial capital requirement
b. strict government policy

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 c. difficulty in accessing distribution channels.
d. Economies of scale
e. High cost of product differentiation
f. High switching cost
3. Rivalry among Existing Firms – is a state or situation in which people or groups
are competing with each other.
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
4. Substitute Products – means anything that takes the place or function of
another.
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 – are the one that provides something that is needed or wanted.
This can be notice if there is the presence of the ff. factors:
a. The supplier has the ability for forward integration
b. Supplies in the industry are few, but the sales volume is high
c. Substitute products are not readily available in the market
d. The switching sort is very high
e. The product or service is unique

Recognize and Understand the Market

Value Proposition (VP) – is a business or marketing statement that summarizes why a consumer
should buy a company’s product or use its services. This statement is often used to convince a
customer to purchase a particular product or service to add a form of value to their lives.
In creating Value Proposition, entrepreneurs will consider the basic elements:
a. Target customers
b. Needs/opportunity
c. Name of the product
d. Name of the enterprise/company
Unique Selling Proposition (USP) – refers to how you sell your product or services to your customer.
You will address the wants and desires of your customers.
Target Market – market targeting is a sage in market identification process that aims to determine
the buyer’s with common needs and characteristics.
Commonly used methods for segmenting the market are follows:
1. Geographic segmentation – the total market is divided according to geographical location.
 Variable to consider
a. Climate
b. Dominate ethnic group
c. Culture
d. Density (either rural or urban)
2.Demographic Segmentation – divided based customers.
 Variable to consider

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 a. Gender
b. Age
c. Income
d. Occupation
e. Education
f. Religion
g. Ethnic group
h. Family size
1.Psychological Segmentation – divided in terms for customers think and believe.
 Variable to consider
a. Needs and wants
b. Attitudes
c. Social class
d. Personally traits
e. Knowledge and awareness
f. Brand concept
2.Behavioral Segmentation – divided according to customer’s behavior pattern as they interact with
a company.
 Variable to consider
a. Perception
b. Knowledge
c. Reaction
d. Benefits
e. Loyalty
f. Responses
Customer Requirements – are the specific characteristics that the customers need from a product or
a service.
There can be two types of customer requirements:
1. Service Requirement
2. Output Requirement

 Service Requirement – intangible things or products that is not able to be touched but
costumer can feel the fulfillment.
 Output Requirement – tangible things that can be seen.
Market Size – is like a size of arena where the entrepreneurs, will play their business. It is the
approximate number of sellers and buyers in a particular market.
In determining the market size, entrepreneur will conduct a strategic marketing research from
reliable sources using the ff. method:
First Step: To estimate the potential market, approximate number of customers that will buy the
product or avail your services.
Second Step: To estimate the customers who probably dislike to buy your product or avail the
services.
Third Step: Is for the entrepreneurs to estimate the market share, that means plotting and
calculating of the competitor’s market share to determine the portion of the new venture.

Market Research

Data Collection - It is the process of gathering and measuring information on targeted variables in an
established system, which then enables one to answer relevant questions and evaluate outcomes.

Different Data Gathering Techniques

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Surveys - are the most common way to gather primary research with the use of questionnaires or
interview schedule.
Two Types of Survey:
 Online Survey
 Paper Survey

Interview - is one of the most reliable and credible ways of getting relevant information from target
customers.

Two Types of Interview:

 Personal interviews are the traditional method of conducting an interview. It allows the
researcher to establish relationship with potential participants and therefore gain their
cooperation.
 Telephone interviews are less expensive and less time consuming, but the disadvantages
are that the response rate is not as high as the face-to- face interview, but considerably
higher than the mailed questionnaire.

Focus Group Discussion - is an excellent method for generating and screening ideas and concepts.
Two Types of FGD:
 Mini
 Online
Concept of Marketing Mix

Marketing Mix – is the set of marketing tools that a company utilizes to achieve its marketing goals
in the target market environment.
- Marketing Mix is a set of controllable a connected variable that a company gather
to satisfy a customer better than its competitor.
- It is also known as the “P’s” in marketing.
- Originally, there were only 4Ps but later on the model has been continually
modified until it became 7P’s.

Edmund Jerome McCarthy (Feb. 20,1828 – Dec. 3, 2015) – was an American Marketing professor
and author. He proposed the concept of the 4P’s Marketing in his book “Basic Marketing: A
Managerial Approach” which has been one of the top textbooks in university marketing courses
since its publication.

Importance of Marketing Mix

 It helps to understand what your product or service can offer to your customers. It also helps
to plan a successful product offering.
 It also helps with planning, developing, and executing effective marketing strategies.
 It is also essential in helping businesses make a use of their strengths and avoid unnecessary
costs.

The 4Ps’ stands for;

 Product - refers to any goods or services that are produced to meet the consumers’ wants,
tastes and preferences.
 Place - represents the location where the buyer and seller exchange goods or services. It is
also called as the distribution channel.
-This movement could be through a combination of intermediaries such as distributors
or wholesalers and retailers.

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Types of Distribution Channels:
 Direct
 Indirect
 Dual Distribution
 Reverse Channels

There are four main types of intermediaries:

 Agents
 Wholesalers
 Distributors
 Retailers

 Price - is the value of money in exchange for a product or services. Generally speaking, the
price is the amount or value that a customer gives up to enjoy the benefits of having or using
a product or service.

Pricing Strategy - The pricing Strategy should reflect on product’s positioning in the market and the
resulting price should cover the cost per item and the profit margin.

Types of Pricing Strategies:

o Penetration Pricing
o Skimming Pricing
o Competition Pricing
o Product Line Pricing
o Bundle Pricing
o Psychological Pricing
o Premium Pricing
o Optional Pricing
o Cost-Based Pricing

 Promotion - refers to the complete set of activities, which communicate the product, brand
or service to the user.
-The idea is to attract people to buy your product over others. Advertising, Sales
Promotion, Direct Marketing, Personal Selling, and Public Relations are example of
promotion.

Promotional Mix - through the Promotional Mix, a company aims to fulfill two basic objectives. One
is to make the customer “aware” that the product and brand exist. The other is to “persuade” them
to actually pick this product over all others and continue to buy it.

Elements of Promotional Mix:

 Advertising - this mode of promotion is usually paid, with little or no personal message.
Mass media such as television, radio or newspaper and magazine is most often the carrier of
these messages.
 Sales Promotion - is a marketing strategy where a business will use short-term campaigns to
spark interest and create demand for a product, service or other offers.
 Direct Marketing - this channel targets specific influential potential users through
telemarketing, customized letters, emails and text messages.

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  Personal Selling - Opposite of the one directional promotional method, direct selling
connects company representatives with the consumer. These interactions can be in person,
over the phone and over email or chat.
 Public Relations & Sponsorship - Publicity tries to increase positive mention of the product
or brand in the influential media outlets. These could include newspapers, magazines, talk
shows and new media such as social networks and blogs.

The Additional 3Ps’ of Marketing

 Packaging - packaging is a silent hero in the marketing world. Packaging refers to the outside
appearance of a product and how it is presented to the customers.

Types of Packaging:
a. Primary - is the packaging in direct contact with the product itself and is sometimes
referred to as consumer or retail packaging. The main purpose of primary packaging is to
protect and/or preserve, contain and inform the consumer.
b. Secondary - is the second layer of packaging applied to your product after the primary
packaging layer. For example, consider the paperboard box holding the plastic bottle that
your over-the-counter sleep aids or pain killers come in.
c. Tertiary - facilitates the protection, handling and transportation of a series of sales units
or secondary packaging in order to group everything into unit loads during transit. This type
of packaging is rarely seen by the consumer.

 People - are the ultimate marketing strategy. They sell and push the product. People are one
of the most important elements of the marketing mix today. This is because of the
remarkable rise of the services industry.

 Positioning - refers to a process used by marketers to create an image in the minds of a

target market.

Developing a Brand Name

Brand Name - is a name, symbol, or other feature that distinguishes a seller's goods or services in
the marketplace.
- is an identity which puts a product apart from the other.
Characteristics of Good Brand Name:
o Distinctive

o Simple

o Meaningful

o Universal Valid

o Have Short Name

o Compatible with product

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Brand strategy - is a long-term design for the development of a popular brand in order to achieve
the goals and objectives.
Branding - is a powerful and sustainable high-level marketing strategy used to create or influence a
brand.

Commonly Used Branding Strategy:

1. Purpose;
a. Functional - This way focuses on the assessments of success in terms of fast and profitable
reasons. For example, the purpose of the business is to make money.

b. Intentional - This way focuses on fulfillment as it relates to the capability to generate money
and do well in the world.
2.Concistency - the significant of consistency is to avoid things that don’t relate to or improve your
brand. Consistency aids to brand recognition, which fuels customer loyalty.
3. Emotion - there should be an emotional voice, whispering "Buy me". This means you allow the
customers have chance to feel that they are part of your brand.
4.Flexibility - marketers should remain flexible to in this rapidly changing world. Consistency targets
at setting the standard for your brand, flexibility allows you to adjust and differentiate your approach
from your competition.
5.Employee Involvement - it is equally important for your employees to be well versed in how they
communicate with customers and represent the brand of your product.
6. Loyalty - is an important part of brand strategy. At the end of the day, the emphasis on a positive
relationship between you and your existing customers sets the tone for what potential customers
can expect from doing business with you.
7.Competitive Awareness - do not be frightened of competition. Take it as a challenge to improve
your branding strategy and craft a better value in your brand.

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