Entrepreneurship 2ND SEM (Part II) Flashcards
refers to the physical environment, societal environment, and industry environment where the business operates.
External Environment
The physical environment includes : 3
Climate
Natural Resources
Wildlife
The Societal environment includes the various forces like : 4
Political Forces
Economic Forces
Sociocultural Forces
Technological Forces
The industry environment of the business includes: 6
Competitors
Customers
Creditors
Employees
Government
Suppliers
A person with entrepreneurial interest sees possibility of business opportunities in any new discovery or because of the use of latest technology.
Technological discovery and advancement
The priorities, projects, programs, and policies of the government are also good sources of ideas.
Government’s thrust, programs, and policies
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.
People’s interest
The expertise and skills developed by a person who has worked in a particular field may lead to the opening of related business enterprise.
Past experiences
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.
Forces of Competition Model
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.
Competition
These are the five forces competing within the industry:
Buyers
Potential New Entrants
Rivalry among existing firms
Substitute Products
Supplier
The _________ 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.
Buyers
A ____________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.
Potential New entrant
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.
Rivalry among existing firms
___________ 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.
Substitute Products
The _________ are the one that provide something that is needed or wanted. For example if the supply and services being offered is unstable or keep. The intensity of the threat is strong in this kind of the competitive force in the industry
Suppliers
Process of considering, evaluating, and pursuing market based activities that are accepted to be beneficial for the business.
Opportunity seeking
can be defined as the steps taken in order to begin a new enterprise. It is a step-by-step method, one has to follow to set up a business.
. Entrepreneurial process
an innovative concept that can be used for financial gain that is usually centered on a product or service that can be offered for money.
Entrepreneurial ideas
These are the basic foundation that the entrepreneur must have in seeking opportunities, such as entrepreneurial mind frame, heart flame and gut game.
Essentials of entrepreneur’s opportunity seeking
can be attain by assessing and looking at changes in the environment; technological discovery and advancement; government’s thrust, programs, and policies; people’s interest, and past experiences.
Sources of opportunity
refers to the physical environment, societal environment, and industry where the business operates.
External environment
refers to the local government (municipality, city, or provincial) or the national government and its branches.
Government
it is the act or process of trying to get or win something
Competition
anything that takes the place or function of another.
Substitute
– the one who enters something.
New Entrants
are the one that provide something that is needed or wanted.
Suppliers
are the one that pays cash in exchange to your goods and services.
Buyers
is a state or situation in which people or groups are competing with each other.
Rivalry
____________ is a business or marketing statement that summarizes why a consumer should buy a company’s product or use its service. 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.
Value Proposition (VP)
refers to how you sell your product or services to your customer. You will address the wants and desires of your customers.
Unique Selling Proposition (USP)
effective unique selling proposition to the target customers: 3
- Identify and rank the uniqueness of the product or services character
- Very Specific
- Keep it short and simple (KISS)
_________________is a sage in market identification process that aims to determine the buyers with common needs and characteristics. Prospect customers are market segment that entrepreneurial venture intends to serve.
Target Market
Commonly used methods for segmenting the market are follows. (Target Market) 4 Items
Geographic Segmentation
Demographic Segmentation
Psychological Segmentation
Behavioral Segmentation
the total market is divided according to geographical location.
Geographic Segmentation
Geographic Segmentation (4 variables)
Climate
Dominant Ethnic Group
Culture
Density (either rural or urban)
divided based consumers.
Demographic Segmentation
Demographic Segmentation (8 variables)
Gender
Age
Income
Occupation
Education
Religion
Ethnic Group
Family size
divided in terms for customers think and believe.
Psychological Segmentation
Psychological Segmentation (7 variables)
Needs and Wants
Attitudes
Social Class
Personality Traits
Knowledge and Awareness
Brand Concept
Lifestyle
divided according to customers behavior pattern as they interact with a company.
Behavioral Segmentation
Behavioral Segmentation (6 variables)
Perceptions
Knowledge
Reaction
Benefits
Loyalty
Responses
are the specific characteristics that the customers need from a product or a service.
Customer Requirements
There can be two types of customer requirements:
- Service Requirement
- Output Requirement
Intangible thing or product that is not able to be touched but customer can feel the fulfillment.
Service Requirement
Tangible thing or things that can be seen.
Output Requirements
Entrepreneur’s most critical task is to calculate the market size, and the potential value that market has for their startup business. Market research will determine entrepreneur possible customers in one locality.
Market Size
