Quiz 3 Flashcards
Being coined as the “_______” in the business industry, entrepreneurs are equipped with a spirit of inquiry that will help them decide which products or services are most likely needed in the marketplace.
Entrepreneurial Opportunity Seeking
innovative opportunity seekers
The creation of an _______ leads to the identification of entrepreneurial opportunities, which in turn results in the opening of an entrepreneurial venture.
Entrepreneurial Ideas
entrepreneurial process of creating a new venture :
Creation of entrepreneurial Ideas
Identification of entrepreneurial Opportunities
Opening of entrepreneurial venture
These are the basic foundation that the entrepreneur must have in seeking opportunities
Essentials in entrepreneur’s opportunity-seeking
Entrepreneurial mind frame
Entrepreneurial heart flame
Entrepreneurial gut game
3 Essentials in entrepreneur’s opportunity-seeking
- Entrepreneurial mind frame
- Entrepreneurial heart flame
- Entrepreneurial gut game
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.
- Entrepreneurial mind frame
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.
- Entrepreneurial heart flame
This refers to the ability of the entrepreneur of being intuitive. This is 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.
- Entrepreneurial gut game
5 SOURCES OF OPPORTUNITIES
- Changes in the environment
- Technological discovery and advancement
- Government’s thrust, programs, and policies
- Consumer preferences and interest
5.
Past experiences
3 types of changes in the environment
Physical environmental sources
Societal or macroenvironmental sources
Industry or microenvironment sources
Entrepreneurial ideas arise when changes happen in the external environment. A person with an entrepreneurial drive views these changes positively.
Changes in the environment
refers to the physical environment, societal environment, and industry environment where the business operates. :
The Physical Environment
The Societal Environment
The Industry Environment
External environment
Consist of natural and man made components and are tangible, or material, objects and conditions that affects the business. These includes:
Climate
Natural Resources
Wildlife
Physical environmental sources
Physical environmental sources
Includes the 3
Climate
Natural Resources
Wildlife
the weather conditions
Climate
such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain
Natural resources
includes all mammals, birds, reptiles, fish, etc., that live in the wild.
Wildlife
Any enterprise, company, or organization is not alone in its business environment. It is always surrounded by an array of factors and forces that help in shaping opportunities but also pose present threats to the company.
Societal or macroenvironmental sources
Societal or macroenvironmental sources
It can includes 6 various forces like
Demographic
Economic
Socio-cultural
Technological
Ecological
Political and Legal
describe the characteristics of a population that can be used to influence the success of a business or commercial venture.
DEMOGRAPHIC
The most 4 important demographic factors for businesses include
age,
sex,
education level, and
occupation.
factors such as monetary and fiscal policies, interest rate, employment and inflation rate
ECONOMIC
consider the various social factors such asthe customs, lifestyles, religion, family, wealth and values that characterized a society which can change over a course of time
SOCIO-CULTURAL
SOCIO-CULTURAL consider the 6 various social factors such asthe
customs,
lifestyles,
religion,
family,
wealth and
values
it includes new inventions and technology innovations under production techniques, information and communication resources, production, logistics, marketing, and e-commerce technologies
TECHNOLOGICAL
connected to actions and processes necessary to protect naturalenvironmentand in the same time maintain or increaseefficiencyof the business
ECOLOGICAL
includes all the laws, rules, and regulations that govern business practices as well as the permits, approvals, and licenses necessary to operate the business.
POLITICAL and LEGAL
These are internal sources that pertain to those factors that can be controlled by the management. It includes factors of resources available that affect individuals and businesses.
Industry or microenvironment sources
6 Industry or microenvironment sources
It includes the following:
Customers
Suppliers
Resellers
Competitors
General Public
Creditors
A person with entrepreneurial interest sees possibility of business opportunities in any new discovery or because of the use of latest or advance 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 sources of entrepreneurial ideas. When products eventually become outdated, consumers’ changes in perception can subsequently kill sales
- Consumer preferences and interest
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.
- Past experiences
It is also known as the “five forces of competition” or “porter’s five forces”.
FORCES OF COMPETITION MODEL
First described by ______ in his __________ which tells that an industry environment is a competitive environment and regardless of what product or services you have, competition is always present.
FORCES OF COMPETITION MODEL
Michael Porter
classic 1979Harvard Business Reviewarticle
A Five Forces analysis can help companies assess industry attractiveness, how trends will affect industry competition, which industries a company should compete in—and how companies can position themselves for success
FORCES OF COMPETITION MODEL
it is an act or process of trying to get or win something
Competition
Five forces competing within the industry:
Buyers
Potential new entrants
Rivalry among existing firms
Substitute products
Suppliers
Threat of new entrants
Bargaining power of buyers
(Rivalry among existing competitors)
Threat of substitute products or services
Bargaining power of suppliers
PORTER’S FIVE FORCES
they are the ones that pay cash in exchange for your goods and services
buyers
they are the companies or businesses that have the ability to penetrate or enter into a particular industry
New Entrant
the one that serves the same purpose as another product in the market
substitute
is the state or situation wherein business organizations are competing with each other in a particular market.
rivalry
The one that provide something that is needed in business operations such as office supplies, raw materials and equipment.
suppliers
8 THREAT OF NEW ENTRANTS:
Barriers to entry
Economies of scale
Brand loyalty
Capital requirements
Cumulative experience
Government policies
Access to distribution channels.
Switching costs
7 BARGAINING POWER OF BUYERS:
Number of customers
Size of each customer order
Differences between competitors
Price sensitivity
Buyer’s ability to substitute
Buyer’s information availability.
Switching costs
8 RIVALRY AMONG EXISTING COMPETITORS:
Number of competitors
Diversity of competitors
Industry concentration
Industry growth
Quality differences
Brand loyalty
Barriers to exit
Switching costs
5 THREAT OF SUBSTITUTE PRODUCTS:
Number of substitute products available
Buyer propensity to substitute
Relative price performance of substitute
Perceived level of product differentiation
Switching costs
3 BARGAINING POWER OF SUPPLIERS:
Number and size of suppliers
Uniqueness of each supplier’s product
Focal company’s ability to substitute
If barriers to entry are low, new companies can easily enter the market, increasing competition and reducing profitability. If barriers are high, existing firms can enjoy a more secure position.
Threats of new entrants
If suppliers have high bargaining power, they can increase prices or reduce quality, squeezing the profitability of firms in the industry.
Bargaining power of suppliers
High bargaining power of buyers can force companies to lower prices, improve quality, or offer better services, which can decrease profitability for businesses in the market.
Bargaining power of buyers
High bargaining power of buyers can force companies to lower prices, improve quality, or offer better services, which can decrease profitability for businesses in the market.
Bargaining power of buyers
If substitutes are available and attractive to customers, businesses will face downward pressure on prices and reduced market share, affecting profitability.
Threats of substitute products
High rivalry leads to price wars, advertising battles, and innovation, which can erode profits and create instability in the industry.
Rivalry among existing competitors
