MARFRANCISCO, PINAMALAYAN,

BASIC EDUCATION DEPARTMENT ORIENTAL MINDORO

Senior High School 043-284-7504

Abada College Basic Education Department

ABADA COLLEGE

Entrep
Entrepreneurship

NAME: ______________________________GRADE AND SECTION: ____________

TEACHER: __________________________TIME FRAME: (JANUARY 17-29, 2022)

A W A R E N E S S. C O M M I T M E N T. E X C E L L E N C E. SERVICE
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DEVELOPING A

Content The learner demonstrates understanding of concepts, underlying

Standard principles, and processes of developing a business plan.

PERFORMANCE The learner independently or with his/her classmates presents an

Standard acceptable detailed business plan.

How to learn
(Most Essential Learning Competencies)
from this module?
To achieve the desired objectives, you
1.1 Identify the market problem should do the following:
to be solved or the market need
to be met; and 1. READ and ANALYSE the given
1.2 Propose solution/s in terms of lessons as possible.
product/s and service/s that will 2. TAKE YOUR TIME to go thru each
meet the need using techniques lesson.
on seeking, screening, and 3. Answer the given activities
seizing opportunities: HONESTLY.
4. If you have your hard time
1.2.1 Analyze the market need; understanding the lessons and
1.2.2 Determine the possible
activities, please do TAKE A
product/s or service/s that will
BREAK. Having breaks between
meet the need;
1.2.3 Screen the proposed
lessons and activities will give you
solution/s based on viability, some space where you can
profitability, and customer absorb the lesson well.
requirements; and 5. AVOID PROCASTINATION. Don’t
1.2.4 Select the best product or be distracted while working. Set
service that will meet the market priorities and submit your work as
need. early as possible.
6. You can USE THE INTERNET if you
need more information about
CONTENT the lesson.
A.The Entrepreneurial Process 7. BE POSIVITE every time. Don’t
B. Scanning the Marketing forget to smile.
Environment 8. Write your answers on the
provided ANSWER SHEET.

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Lesson
2 RECOGNIZING THE POTENTIAL MARKET
EXPECTED SKILLS:
At the end of the lesson, you are expected to:
 determine the step-by-step entrepreneurial process;
 differentiate product from service;
 recognize and describe the potential market;
 analyse the 3s of opportunity spotting and assessment;
 conduct an opportunity spotting and assessment activity in your own barangay or
locality; and
 demonstrate confidence and persistence in executing the assigned task.

As the saying goes, the most difficult

part of every task is where and how you
start. The same is true with
entrepreneurship. You may have all the
resources needed to operate a new
venture, but it will never be easy to start
one. This module will discuss the proper
and efficient ways of starting a business.
You will be introduced to the
entrepreneurial process, which starts with
identifying and evaluating the
opportunity. The heart of this module is the
scanning of the marketing environment
where you can formulate a product or
service solution applying the techniques of
seeking, screening, and seizing
opportunities. As a result, you will deal with
analyzing the need of the market, think of
the potential set of products or services
that will meet the need, assess the
feasibility of the solution, and select the
best product or service that will address
the need.

EXPLORe Activity 1: SITUATION ANALYSIS

DIRECTIONS: Analyze the pictures below and list down at least three (3) potential
markets that entrepreneurs should consider during this COVID -19 pandemic and
indicate their needs. Write your answer on the answer sheet provided.

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Firm up
The entrepreneurial process
The entrepreneurial process is a step-by-step procedure in establishing any kind of business
that an entrepreneur has to undergo. It is composed of four aspects.

1. Opportunity spotting and assessment

 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.
 Consumers are reliable sources of
opportunity information because market
needs originate from them.
 Other major sources of opportunity are
the glaring problems in the environment,
problems encountered by co-
entrepreneurs, new trends, processes, and
developments in the environment.
 Other minor sources are feedback from
distribution or business partners such as
retailers, wholesalers, manufacturers, and
technical people that the entrepreneur is
working with.
 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.

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 Entrepreneurs should also assess if the opportunity is aligned with their personal
goals and attributes.
 Last, entrepreneurs should already think in advance how they will position the
product or service in the market and showcase is unique selling proposition.

2. Developing a business plan

 Entrepreneurs should formulate a business plan when they have already spotted
and assessed the opportunities for a market.
BUSINESS PLAN
 It is a comprehensive paper that details the marketing, operational, human
resource, financial, strategic direction, and tactics of the business.
 This will be the core guide and direction of the entrepreneur in calculating the
resources needed, assessing how to obtain these resources efficiently, and running
the business sustainably.

3.Determining the needed capital

 A big idea can never be translated into reality if the entrepreneur's resources are limited.
 It is mandatory in the entrepreneurial process to calculate the resources needed to
establish the business and compare this against the entrepreneur's current resources.
 Caution must be applied in computing the complete set of resources needed and
include only those items that are considered as the real needs in venture creation.
 Allowance must be considered as well because there will be times that resources will be
inadequate or unsuitable.

4.Running the business

 This is the part where the entrepreneur should use the resources allocated for the
new venture.
 The business plan prepared should already have been implemented.
 All aspects of the business plan should be critically observed from operations,
marketing and sales, human resources, finance, and strategy implementation.
 The entrepreneur should have a control and monitoring system to serve as a check
and balance of the formulated plans.

COMPONENTS AND STEPS IN THE ENTREPRENEURIAL PROCESS

Opportunity Spotting Developing a Business Determining the

Running the Business
and Assessment Plan Needed Capital
Evaluate the Come up with a Calculate the intrinsic Practice leadership as
identified opportunity. business description and extrinsic capital a way of life.
and analysis. needed.
Conceptualize and Perform industry Calculate the existing Recognize critical
measure the analysis. capital. success factors.
opportunity.

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Identify the perceived Come up with the Calculate the Identify existing and
value of the marketing plan. difference between foreseeable problems
opportunity to the the needed capital and issues.
company and and the existing
customers. capital. Choose the
most cost-efficient
suppliers or service
providers.
Do cost-benefit Prepare the Develop contact and Employ risk-mitigating
analysis of the operations plan relationship with controls and
opportunity including including the suppliers and service monitoring systems.
risk analysis organization plan. providers.
Match the opportunity Come up with the Devise an
with the entrepreneur’s financial plan. expansion/sustainability
skills and objectives. strategy.
Scan the strength and Identify strategies
weaknesses of and tactics.
competitors.
Perform monitoring
and control.

Scanning the marketing environment

 Potential market is the part of the total population that has shown some level
of interest in buying a particular product or service. Potential market is also
called Total addressable market (TAM) (MBA Skool Team, 2018).
 A potential market is the part of the market you can capture in the future. It
includes the demographic groups that are not currently your customers but
could become customers in the future (Lake, L, 2019).
 Market potential is the total demand for a product in a given business
environment (Bhasin, H., 2018).

The Importance of Potential Markets (Lake, L., 2019)

 Potential markets are an important part of a business's future growth.
 Ensure the future of your business by identifying new customers.
 Think proactively about ways for your business to grow and change.
 Show the potential of your business to investors or collaborators.
 Increase your revenue.
 Create a plan B that will weather changes in the economy or market.

 Scanning the marketing environment is

the starting point of any new venture that
involves understanding and knowing the
intricacies of the macro environment,
microenvironment, and internal
environment.

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 With this process of scanning the general environment, an entrepreneur can

recognize various opportunities and at the same time understand thoroughly the
arena where the future business will operate.
 The process of seeking, screening, and seizing is adapted to create the most
suited product or service for an opportunity.

TAKE NOTE!
Find the opportunity first before coming up with a new product or service.

3S: seeking, screening and seizing

 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.
 An opportunity is an entrepreneur’s business idea that can potentially become a
commercial product or service in the future.
 The entrepreneur serves as the catalyst of creating value for the customers through
the new or innovated product or service. As a reward, the entrepreneur earns
profits when the customers are satisfied and delighted.

S1: seeking the opportunity

 Opportunity seeking is the first step and is the most difficult process of all due to the
number of options that the entrepreneur will have to choose from. It involves the
development of new ideas from various sources as follows:

1. MACROENVIRONMENTAL SOURCES
A. STEEPLED
 This is a mnemonic for socio-cultural, technological, economic, environmental, political,
legal, ethical and demographic factors.
 This represents the general environment where the entrepreneur can identify business
opportunities from and where the future business is about to operate.
 Any external factor or a combination of external factors from these eight environmental
forces can have a direct effect in opportunity generation and business sustainability.

a. SOCIO-CULTURAL FACTORS – These factors represent a general view of locality’s

traditions, customs, beliefs, norms, and perceptions. These factors affect how a person
of the locality behaves and reacts to marketing and selling activities.
EXAMPLES:
1. Health consciousness
2. Education level
3. Attitudes towards imported goods and services

b. TECHNOLOGICAL FACTORS – These are composed of innovations of an existing

technology or an invention of a new one mostly on applied science and engineering
research areas. Entrepreneurs should always be up-to-date with the technological

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changes as these are catalysts in improving a product or service or replacing them entirely.
EXAMPLES:
1. Access to newest technology
2. Internet infrastructure and penetration
3. Communication infrastructure

c. ECONOMIC FACTORS - These economic factors play a directly vital role in the scanning
of marketing environment because economic factors directly affect any business
venture. These factors include income, expenses, and resources that can influence
the cost of doing business and generating income.
EXAMPLES:
1. Inflation rates
2. Unemployment trends
3. Labor costs

d. ENVIRONMENTAL OR ECOLOGICAL FACTORS - These factors should be given much

importance in conducting a business especially when the world has already suffered
severely from human-induced calamities. The scan of these factors will help the
entrepreneur determine if the business he or she is entering into will comply with the
environmental standards or will just be a hazard to people, animals, and nature.
Moreover, the entrepreneur will know if the business venture will be suited with the
weather conditions in his or her locality.
EXAMPLES:
1. Weather
2. Climate Change
3. Waste Management

e. POLITICAL FACTORS – These factors are mostly induced by government policies and
administrations, which can have a strong effect in the entrepreneur's business.
EXAMPLES:
1. Government stability and likely changes
2. Corruption level
3. Tax policies

f. LEGAL FACTORS – Related with political factors, legal factors are government laws and
regulations that can restrict or allow business activities.
EXAMPLES:
1. Discrimination law
2. Health and safety law
3. Copyright, patents/intellectual property rights

g. ETHICAL FACTORS - . These are the factors that will serve as an entrepreneur's guide on
how to be ethical in running the business.
EXAMPLES:
1. Ethical advertising and sales practices
2. Attitude toward development and well-being of employees
3. Accepted accounting, management and marketing standards.

h. DEMOGRAPHIC FACTORS - These are the characteristics of the people in the target
market.

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B. INDUSTRY
 This is the source of the current trend on what is happening in the industry where the
future business will belong to.

C. NEW DISCOVERY OR KNOWLEDGE

 These are new trends that can be the core business model of a new venture. For
example, the influx of mobile applications necessitates businesses to have this platform
as one of their transaction channels.

D. FUTURISTIC OPPORTUNITIES
 These are projected new opportunities that can possibly affect the new business while
it is running. For example, sari-sari stores in the future will be able to incorporate financial
transactions such as accepting bills payment and process remittances.

2. MICROMARKET
A. CONSUMER PREFERENCES, INTERESTS, AND PERCEPTION.
 These are the current needs and wants of potential customers that should be
discovered right away by a budding entrepreneur.
 This way, he or she will be able to take a chance of the opportunity. A need is
recognized when a customer believes that there is a difference between his or her
current situation versus his or her desired condition. A want, on the other hand, is
recognized when a customer 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 to
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 or her competitors.

C. UNEXPECTED OPPORTUNITIES FROM CUSTOMERS

 Oftentimes, the most brilliant ventures come from the most unexpected
opportunities. It may happen in unlikely situations, unlikely places, and with unlikely
people. Existing problems and bottlenecks often give rise to an unexpected
opportunity. What entrepreneurs usually do is be on top of the situation and change
the market's perception of a product or service or build a new market.
 In the Philippines, there are a number of budding social entrepreneurs who turned
unnoticed products into superstar products that carry also the value of social
responsibility.

D. TALENTS, HOBBIES, SKILLS AND EXPERTISE

 The entrepreneur's talents, hobbies, skills, or expertise can be a source of business
opportunity. For example, if the entrepreneur is an artist, why not sell his or her
paintings? If he or she is a musician, why not put up a bar and perform there? If he or
she is an expert in home interior design, why not make it a business?
E. IRRITANTS IN THE MARKETPLACE SUCH AS DETERRENTS, PROBLEMS, COMPLAINTS, AND
DELAYS
Generally, entrepreneurs see opportunities in situations where there is a recurring
problem or sometimes when there is no more hope in solving the problem.
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problem or sometimes when there is no more hope in solving the problem. When customers are
already sick and tired of the same old issue or problem that is when the opportunistic
entrepreneur should come in and make a difference.

F. LOCATION
 Often, entrepreneurs just have to look at their ecosystem and they will be able to
spot a business opportunity right away. For example, if the entrepreneur's location
has many schools, then a restaurant, an eatery, or probably a computer shop might
be a good business to establish. If the entrepreneur is in an island with an awesome
beach front, why not put up a hotel?

S2: screening the opportunity

 This concept has been inculcated to you to see the universe of opportunities an
entrepreneur can derived the macro environmental and micro environmental sources.
The key here is in the effective choosing or careful diligence. Entrepreneurs should start
with the big picture. This is the best way the best potential business to venture into. Once
compelling opportunities are identified, S2 will be the next crucial step.
 Opportunity screening is the process of cautiously selecting the best opportunity. The
selection will depend on the entrepreneur's internal intent, i.e., the main objective that
the business will accomplish in the entrepreneur’s life, and the external intent, which will
address the compelling needs of the target market.
 The entrepreneur should apply due diligence and independent judgment in selecting
the opportunities that have a potential and eliminate those that are not within the scope
of the entrepreneur's risk appetite. Risk appetite refers to the entrepreneur's tolerance of
business risks.

TIME
 It must be considered by the entrepreneur in screening the opportunities at hand, as it is
considered one of the most critical resources of an entrepreneur.
 Time should only be devoted to worthwhile opportunities. Therefore, entrepreneurs must
always be sharp-eyed for real opportunities. They must be able to intelligently say no to
low-compelling opportunities and proceed with sensible ones.
 The crafting of a business plan starts only when entrepreneurs already said no to many
opportunities and said yes to one forceful opportunity, to which they will devote their time
and resources.
Detailed here are the most important elements that are always present in a
compelling opportunity. The entrepreneur should say no to an opportunity if it does
not contain any of these business opportunity elements:
1. Has superior value to customers
2. Solves a compelling problem, issue, a need, or a want
3. Is a potential cash cow
4. Matches with the entrepreneur's skills, resources, and risk appetite

OPPORTUNITY ATTRACTIVENESS TEST (OAT)

 This aims to assist entrepreneurs in ensuring that opportunities that they will venture into
is an attractive and feasible prospect.

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 This will not the “be all” in the road to entrepreneurial success but a framework to
measure how compelling an opportunity is.
 This test is designed to detail each entrepreneurial aspect into small chunks to
come up with a sound entrepreneurial decision.

S3: seizing the opportunity

 Opportunity seizing is the last step in opportunity spotting and assessment.
 This is the pushing through with the chosen opportunity.
 Entrepreneurs should make the best out of this opportunity, and they should exert effort
and full dedication for the success of the new venture. The entrepreneur’s idea can be
any type of innovations listed here.
 Innovation is the process of positively improving an existing product or service. It is a key
driver for economies growth. Innovation is inevitable as the world constantly changes.
Therefore, products and services must also adapt to these changes.
 There are three types of innovations according to the degree of distinctiveness.
1. Breakthrough innovation.
 These innovations, which may also include inventions, occur infrequently as
these establish the platform on which future innovations in an area are
developed.
 Breakthrough innovations must be protected by a patent, a trade secret, or a
copyright. Examples of breakthrough innovations include the Internet, the
computer, or the airplane.
2. Technological innovation.
 These innovations occur more frequently than breakthrough innovations.
 These innovations are technological advancements of an existing product or
service. These innovations need to be protected, too.
 In relation to the examples given, technological innovations include the wireless
fidelity or Wi-Fi, the laptop, and the jet airplane.
3. Ordinary innovation.
 These innovations occur ordinarily as the name implies.
4.
Product or service planning and development process
CONCEPTS ABOUT PRODUCT AND SERVICE
A product can be defined as anything that we can offer to a market for attention,
acquisition, use or consumption that could satisfy a need or want. However, the definition of
product does not only involve tangible goods such as a car, a fridge or a phone. The
definition is extended to include intangible objects as well, because they can be offered to
a market.
Therefore, the broad definition of product includes services, events, persons, places,
organisations or even ideas (Claessens, M., 2015).
Services are special form of product which consists of activities, benefits or satisfactions
offered for sale that are intangible and do not result in the ownership of anything. A service
can thus include banking, airline travel, communication services, hotel services and so on
(Claessens, M., 2015).
A product is a tangible item that is put on the market for acquisition, attention, or
consumption, while a service is an intangible item, which arises from the output of one or
more individuals (https://corporatefinanceinstitute.com).

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Examples:
1. When a consumer buys a car, the product comes with a lot of other service
responsibilities, such as tune-up and maintenance (https://corporatefinanceinstitute.com).
2. A laptop buyer now buys a bundle of service benefits in addition to the tangible
components of the laptop.

Specific Examples of products and services (https://www.archives.gov)

Products
 new prints of motion picture film elements
 prints for exhibit purposes
 reference copies on DVD/CDs, books, magazines for the reading rooms or other clients
 Cars, tables and chairs, etc.

Services
 consulting with clients on appropriate products for specific purposes
 providing advice on risk assessment and priority setting
 working on standards committees
 conducting training and other educational outreach

In the seeking process, one opportunity stood out from a number of sources. This
opportunity was tested according to its attractiveness and feasibility in the screening
process. The last process, called the seizing process, involves refining and developing this
opportunity. The refining process is called product or service planning and development
process.
As would-be entrepreneurs, there is a need to find the right products or services for
your target market. The product or service should deliver superior customer value
(Claessens, M., 2015).

Five key stages:

1. Idea stage
 In this stage, the entrepreneur determines what are the feasible products and/or
services that will perfectly suit the opportunity.
 Usually, a market evaluation is conducted by the entrepreneur to assess whether the
new product or service ideas will be accepted by the market using values and
benefits to consumers as metrics.
 On the other hand, the value of the new products and/or services should also be
assessed if these will benefit the entrepreneur. Products and services that are
unappealing to the market should be eliminated at this stage.

2. Concept stage
 Once the acceptable product or service has already been identified, it will go through
the concept stage.
 In the concept stage, the developed idea will undergo a consumer acceptance test.
This test includes getting the initial reactions of the primary target market and the
distribution channel.
 Conversational interviews are conducted to understand consumer preference on
physical characteristics and attributes of a product or the physical evidence and
characteristics of a service. Both favourable and unfavourable results will be used to

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devise an acceptable product or service.

 These will also be used to compare the new idea with the competition with regard to
superiority or inferiority. Once all of the necessary pieces of information are gathered, the
entrepreneur can already proceed with the next stage.
3. Product development stage
 In this stage, the entrepreneur leverages on the information generated from the
prospective customers via the concept stage.
 Actual reactions from prospective customers are determined. The entrepreneur will
conduct a consumer panel where the actual product samples or actual service samples
will be given or rendered to the panel of potential customers.
 The participants’ task is to critique the actual product or service and record the good
qualities and inferior attributes. They are also given samples of competitor’s products or
services for comparative purposes. Consumer preference will largely be based on
methods such as multiple brand comparisons, risk analysis, level of repeat purchases, or
intensity of preference analysis (Hisrich, 2010).
4. TEST MARKETING STAGE
 This stage validates the work done from the first three stages to measure success in the
commercialızation of the product or service.
 Actual sales results will be the foundation of the consumer’s acceptance level and will
be the basis in commercializing the product or service.

deepen Activity 2: Match Me

DIRECTIONS: Match the product from Column A to their corresponding services from
Column B. Write the letter of your answer on the answer sheet provided.

ANSWER COLUMN A - PRODUCTS COLUMN B- SERVICES

1. Car A. Usability and Durability
2. Xerox Machine B. Repairs and Maintenance
3. Smart Phone C. Leasing or pay per copy
4. Credit Card D. Entertainment
5. Organic Products E. Consistent Quality
6. Television F. Bills Payment
7. Accesories G. Healthy Lifestyle
8. Books H. Boost Immune System
9. Vitamins I. Accuracy of information
10. Basic goods J. Fashionable Designs

A. DIRECTIONS: Answer the given question concisely on the answer sheet provided.
1. Activity 3: Reflect!
DIRECTIONS: Reflect on the following questions and answer it concisely.

To succeed as an entrepreneur, you must develop the ability to select and offer the
right products or services to your customers in a competitive market. More than any
other factor, your ability to make this choice will determine your success or failure
(Tracy, B., 2015).

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There are thousands of products and services available to consumers

today. And there are unlimited opportunities for you to enter the
marketplace and compete effectively with a new product or service
that's better in some way than what's already being offered by your
competitors. Remember, your skill at choosing that product or service is
critical to your success (Tracy, B., 2015).
Once you've got a product or service in mind, you need to begin
with a self-analysis (Tracy, B., 2015):

1. What kinds of products do you like, enjoy, consume and benefit

from?
2. Do you like the product or service you're planning to sell? Why?
3. Can you see yourself getting excited about this product or service?
4. Would you buy it and use it yourself?

transfer Activity 4: Bucket List

Conduct an opportunity spotting and assessment activity in your own barangay or
locality. Identify the potential opportunities from the macroenvironmental and
microenvironmental sources. Further details are already discussed in your separate
answer sheet.

(SEE ATTACHMENT)

Mr. Mark Jerwin S. Pelaez Ms. Dina Mycah L. Bautro Mr. Olan Jay D. Pacia

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Reference:

 DIWA Senior High School Series : ENTREPRENEURSHIP,

Ronaldo “Ron S. Batisan pages 19-39.

 Department of Education ,National Capital Region

DIVISION OF CITY SCHOOLS – MANILA
Manila Education Center Arroceros Forest Park

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PREPARED BY:

MARK JERWIN S. PELAEZ OLAN JAY D. PACIA

ABM 12/STEM 12 A&B HUMSS 12A

DINA MYCAH L. BAUTRO

HUMSS 12 B & ICT-HE 12

CHECKED BY: NOTED BY:

VINCENT ROI D. MENDIZABAL CATHERINE L. VENZON

Senior High School Coordinator Academic Coordinator

APPROVED BY:

EMELYN M. NARRA
Basic Education Principal

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