Lesson 2

Question 1

Entrepreneurial Ideas

Answer 1

The creation of an entrepreneurial idea leads to the identification of
entrepreneurial opportunities, which in turn results in the opening of an entrepreneurial
venture.

Question 2

The entrepreneurial process of creating a new venture is presented in the
diagram below. (Nick L. Aduana, Etrepreneurship in Philippine Setting for Senior High School, 2017, C&E publishing page 46, Aduana, 2017).

Answer 2

Creation of entrepreneurial Ideas > Identification of entrepreneurial
Opportunities > Opening of
entrepreneurial
Venture

Question 3

Essentials in Entrepreneur’s Opportunity – Seeking

Answer 3

1. Entrepreneurial mind frame
2. Entrepreneurial heart flame.
3. Entrepreneurial gut game

Question 4

Entrepreneurial mind frame

Answer 4

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 solutions when problems arise.

Question 5

Entrepreneurial heart flame

Answer 5

Entrepreneurs are driven by 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.

Question 6

Entrepreneurial gut game

Answer 6

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 belief that everything you aspire can be reached.

Question 7

Sources of opportunities

Answer 7

1. Changes in environment
2. Technological discovery and advancement
3. Government’s thrust, programs, and policies
4. People’s interest
5. Past experiences

Question 8

Changes in environment

Answer 8

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.

Question 9

Changes in environment

(The Physical environment includes)

Answer 9

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.

Question 10

Changes in environment

(1.2 The Societal environment includes the various forces like)

Answer 10

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.

Question 11

Changes in the environment

(1.3 The Industry environment of the business includes:)

Answer 11

a. Competitors
b. Customers
c. Creditors
d. Employees
e. Government
f. Suppliers

Question 12

2. Technological discovery and advancement

Answer 12

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 additional engine parts that considerably reduce fuel consumption.

Question 13

3. Government’s thrust, programs, and policies

Answer 13

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

Question 14

People’s Interests

Answer 14

The interest, hobbies, and preferences of people are rich sources of
entrepreneurial ideas, like the increasing number of Internet Cafés at present could lead to the strong attachment of young people to computers.

Question 15

Past experiences

Answer 15

The expertise and skills developed by a person who has worked in a particular
field may lead to the opening of a 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.

Question 16

Forces of Competition Model

Answer 16

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.

Question 17

Competition

Answer 17

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.

Question 18

These are the five forces competing within the industry

Answer 18

 Buyers
 Potential new entrants
 Rivalry among existing firms
 Substitute products
 Supplier

Question 19

Buyers

Answer 19

The buyers are the ones that pay cash in exchange for your goods and services.
One example is the influence 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 are noticed:

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.

Question 20

Potential new entrants

Answer 20

A new entrant is defined as companies or businesses that have the ability to
penetrate or enter into a particular industry. For example, in 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 noticed 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

Question 21

Rivalry among existing firms

Answer 21

Rivalry is a state or situation wherein business organizations are competing
with each other in a particular market.

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

Question 22

Substitute Products

Answer 22

Substitute is one that serves the same purpose as another product in the
market.

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 factors are noticed:
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

Question 23

Suppliers

Answer 23

The Suppliers are the one that provide something that is needed in business
operations such as office supplies and equipment.

In an example where supplies and services being offered is unstable the intensity of the threat is strong in this kind of the competitive force in the industry.

This can be noticed if there is the presence of the following factors:
a. The supplier has the ability for forward integration
b. Suppliers in the industry are few, but the sales volume is high
c. Substitute products are not readily available in the market
d. The switching cost is very high
e. The product or service is unique