CO_Q1_Entrepreneurship SHS

Module 1
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 “entrepreneur” was derived from the French verb enterprendre, 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.”
Entrepreneurs are innovators. They are willing to take the risks and generate unique ideas that can provide
profitable solutions to the needs of the market and the society.
Factors Affecting Entrepreneurship
1. Personality Factors which include:
a. Initiative - 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 of challenges.

e. Persuasion - means that he can entice people to buy even if they don’t want to.

f. A Planner - he makes plans before doing things and does not fail to monitor it.

g. Risk-taker - which means that he is willing to gamble but he will calculate it first.
2. Environmental Factors which include political, climate, legal system, economic and social conditions and
market situations.

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 be obeyed by his employees.
4. Opportunity seeker - an entrepreneur must have the ability to be the first to see business chances.
5. Proactive – an entrepreneur can control a situation by making things happen or by preparing for possible
future problems.
6. Risk Taker – an entrepreneur has the courage to pursue business ideas.
7. Innovative - the entrepreneur has big business ideas and he does not stop improving and thinking of new
worthwhile ideas for his 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 – The entrepreneur constantly looks for new ideas, thus he needs to be creative.
3. Profit Potential - The entrepreneur can be compensated by his profit coming from the operation.
4. Risk bearing – The entrepreneur needs to gamble but wise enough to offset the risk.

Types of Entrepreneurs
1. Innovative Entrepreneurs - They are those who always make new things by thinking of new ideas. They
have the ability to think newer, better and more economical ideas.
2. Imitating Entrepreneurs - They are those who don’t create new things but only

follow the ideas of other entrepreneurs.

3. Fabian Entrepreneurs - They are skeptical about changes to be made in the organization. They don’t
initiate but follow only after they are satisfied.
4. Drone Entrepreneurs - They are those who live on the labor of others. They are die-hard conservatives
even ready to suffer the loss of business.
5. Social Entrepreneurs - They are those who initiate changes and drive social innovation and
transformation 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 in the field of entrepreneurship, he can be a very good
source of advices to other entrepreneurs and would be business men.
2. Teacher - a graduate of an entrepreneurship can use his knowledge in teaching.
3. Researcher - the entrepreneur can be employed as a researcher by an enterprise.
4. Sales - the entrepreneurship graduate can apply as a salesman.
5. Business Reporter - the entrepreneur being expert in the field, can be employed as a business reporter.

Entrepreneurial Ideas

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 entrepreneur 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 problems 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 gain.
c. Wildlife- includes all mammals, birds, reptiles, fish, etc., that live in
the wild.
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
For example, one factor in the physical environment that can easily change is the 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 identifying opportunities. He/she can
venture a business that responds to the needs of the people during summer and rainy season.
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 firecrackers to celebrate New Year’s Eve 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 a new product that will serve as a substitute for firecrackers.
4. People’s interest
The interest, hobbies, and preferences of people are rich source of entrepreneurial ideas. Like the
increasing number of Internet Café at present could be lead to the strong attachment of young people to
computers.
5. Past experiences
The expertise and skills developed by a person who has worked in a particular field may lead to the
opening of related business enterprise.
For example an accountant who has learned the appropriate accounting and management skills and
techniques in a prominent accounting firm can start his/her business venture by opening his/her own
accounting firm.
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 process of trying to get or win something.
For example, the prices are lower when there is a competition among the
stores.
These are the five forces competing within the industry:
• Buyers
• Potential new entrants
• Rivalry among existing firms
• Substitute products
• Supplier
1. Buyers
The buyers are the one that pays cash in exchange to your goods and
services. For example, the influenced of the price or in the bargaining strategy. The
buyer has a strong and magnified bargaining power. The threat of its bargaining
power will be less if the following factors notice:
a. There are several suppliers available in the market.
b. The buyer has the potential for backward integration.
c. The cost of switching the supplier cost is minimal.
d. The product represents a high percentage of the buyer’s cost.
e. The buyer purchases large portions of the seller’s product or services.
2. Potential New Entrants
A new entrant is defined as the one who enters something. For example, the level of capital
requirements, if the business requires huge capital, new entrants should decline to join the business.
This gives a threat to the business. This can be notice if there is the presence of the following factors:
a. Substantial capital requirement.
b. Strict government policy.
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
Rivalry is a state or situation in which people or groups are competing with each other. For example it
depends on the Marketing strategy of your competitor, like giving freebies and special offers. The
intensity of rivalry among existing firms is characterized to the following factors:
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 growth.
4. Substitute Products
Substitute means anything that takes the place or function of another. For
example the consumers decide to use margarine as a substitute for butter. In case
the price of butter increases, preferably the consumer will gradually switch to
margarine.
A substitute product can give a big threat in the industry environment if the following