SLA No.

3: Opportunity Seeking, Screening, And Seizing

Subject Code/Number: APLD06
Subject Title: Entrepreneurship
Teachers:

I. Introduction

Good day students! In connection with the business you were planning to venture, what are
opportunities you need to consider in order for it to become more successful?

(These learning competencies are extracted from the DepEd curriculum guide)

A. Learning Competencies

1. Recognize a potential market

2. Select the best product or service that will meet the market need.

B. Learning Outcomes

1. The learner demonstrates understanding of concepts, underlying principles, and processes

of developing a business plan.

II. Learning Content

OPPORTUNITY SEEKING

Entrepreneurs are innovative opportunity seekers. They have endless curiosity to discover new or different
ideas and see whether these ideas will work in the marketplace. This is what separates entrepreneurs from
the ordinary businessman whose main objective is simply to earn profits from producing, buying, and
selling goods.

Entrepreneurs create value by introducing new products or services or finding better ways of making
them. These may include innovation in terms of products design or addition of new product features to
existing one. They may also tinker on improving their operational capability of employing new technologies
that will bring them greater efficiency, better economies and even enable them to reach unparalleled
superiority. They may also consider expanding their reach by creating their markets or maximizing existing
market list. At the highest level, entrepreneurs may totally change the prevailing business paradigm by
rendering it by obsolete through the introduction of disruptive technologies, processes, and systems

.
Entrepreneurial Mind Frame, Heart Flame and Gut Game

Essential to an entrepreneur’s opportunity seeking are the entrepreneurial mind frame, heart flame and gut
game.

Entrepreneurial Mind Frame allows the entrepreneur to see things in a very positive and optimistic light in
the midst of crisis or difficult situations. The word crisis is composed of two characters. The first means
danger and the second means opportunity.

Entrepreneurial Heart flame (surging passion) allows the entrepreneur to draw or find fulfillment in the act
and process of discovery.

•Passion – great desire to attain a vision or fulfill a mission

•Heart Flame is also about emotional intelligence or EQ which is often manifested in the entrepreneur’s
efforts to nurture relationships with customers, employees and suppliers.

Entrepreneurial Gut Game– refers to the ability of the entrepreneur to sense without using five senses. Also
known as intuition. It also connotes courage or in the local dialect “lakas ng loob” (strong intestinal
fortitude).

Sources of Opportunities:

Macro Environmental Sources of Opportunities

Refers to the big or macro forces that affect the area, the industry, and the market , which the enterprise
belongs to.They influence how business should be conducted, how consumers will behave, how supply and
demand will move, how different competitors would position themselves, and how the cost of doing
business will proceed.

Socio-cultural environment
Includes the demographics and cultural dimensions that govern the relevant entrepreneurial endeavor.
Taking this consideration helps the entrepreneur assess the trends and dynamics of the bigger consumer
population, their beliefs, tastes, customs, and traditions. It looks at social structure and shifts in social
status and behavior

Political environment
Defines the governance system of the country or the local area of business. It includes all the laws, rules,
and regulations, that govern business practices as well as the permits, approvals, and licenses necessary
to operate the business. Specifically, it regulates the use of natural resources; the disposal of wastes; the
taxation of income; the importation of goods and services; the accounting and reporting of business
financial statements; public and private education; health programs, use of public funds and other such
concerns
-includes the establishment of vital infrastructures, logistical access, and interventions that affect the cost of
doing business.
-these factors are important influencers in evaluating the attractiveness of any political domain where the
entrepreneur intends to locate and do business in.

Economic environment

Supply and demand forces mainly drive macro economic environment. They are the same factors that drive
the interest and foreign exchange rates that fluctuate with the movement of the market forces.
-income levels and the purchasing power of its people as well as the competitiveness (or
uncompetitiveness) of its industries and enterprises are sources of opportunities
-the entrepreneur must be able to think critically through each and every single economic event that
impacts his or her enterprise.

Ecological environment
Includes all natural resources and the ecosystem, habitat of men, animals, plants, and minerals.
-there is a growing awareness in the world today that will make this factor more and more important for
countries, industries, and businesses
-opportunities abound for greener, cleaner, and healthier products, whose objectives are to save the planet
and prolong lives

Technological environment

New scientific and technological discoveries, which often lead to the launch and commercialization of new
products with superior or to rendering the old ones obsolete , are the entrepreneurs nightmares
-technology does not only come in the form of advanced machinery or equipment, but it can also be in the
form of new systems, new processes, or new products.
 Industry Sources of Opportunities

After the macro environment, the next biggest sources of opportunities are the industry and the market.
One of the most difficult aspects about industry analysis is defining what constitutes an industry in the first
place. The proper classification of what industry and enterprise is competing in is important if the
entrepreneur’s intentions is to define who are the relevant customers, who are the direct and indirect
competitors and what are the critical characteristics of the market as to the quality of products or services to
be delivered.

Participants in an industry include:

The entrepreneur may discover weak links in the chain that need strengthening or gaps in the whole chain
that need filling. Sometimes, the opportunity lies not in finding gaps and weaknesses but in assailing the
strongest links where there may be a concentration of bargaining power. In this case, the entrepreneur
should determine which players produce the most volume of goods, which ones control the flow of those
goods, which ones make the most profits and which ones push the most volume through the market
channels all the way to the final customers. These processes may uncover strategic opportunities for
industry intervention.

The entrepreneur should always be alert in detecting windows of opportunities emanating from shifts in the
industry power equation or changes in the industry rules of the game.

Market Sources of Opportunities

The entrepreneur must also be able to measure the actual demand and supply as well as the potential
demand and supply of the industry that the enterprise belongs to. Equally important is the monitoring of the
prevalence of product substitutes and their market impact on the existing players in the industry. Market
trend analysis is also conducted by determining the critical variables, which would most likely affect the
future directions of the industry. Lastly, market traits, characteristics and behavior are identified in order to
match these customer traits with the product offerings of the enterprise.

Market sources of opportunities can be discovered from increased or decreased demand as well as higher
or lower supply. An example of this is the battle of the value/combo meals otherwise known as “more-for-
less” strategy in the fast food restaurant industry. The demand for more affordable but filling meal is
continuously growing particularly for the working population. This, in turn, creates an increased demand in
the items that come with the value/combo meal such as rice, chicken, pasta, sidings (e.g, mashed potato,
buttered corn, French fries, etc.) and beverage drink. Although smaller in portions, the volume served is
more particularly during peak hours (lunch and dinner). It also opens up the opportunity of offering
breakfast items and strengthening this time of the day segment. More and more consumers are resorting to
having their breakfast near their workplaces or along the way to work in order to avoid getting stuck in the
rush hour traffic. However, the threat of price war remains strong such that the industry players are
compelled to strengthen their supply chain for better leverage.

Micromarket

Micro-market refers to the specific target market segment of a particular enterprise. These are the target
customers that represent the immediate customers of an enterprise, meaning those who are currently
buying the goods or services offered by the enterprise and its direct competitors. It likewise pertains to a
clearly defined location or specific customer group that an enterprise wishes to serve.

The need for segmentation would be crucial in micro-market analysis because the definition of value for
money differs from group to group. If they do not differ, then the entrepreneur is better off by aggrupating
rather than segmenting. For example, the Makati office crowd has several choices where to eat. Observing
the behavior of customers during lunch would indicate what groups of customers prefer fast food
establishments, what group brings their own pack lunches, and what group goes for casual dining. Several
opportunities can be spotted by the entrepreneur, such as opening up a new food outlet or offering food
delivery services to a particular office crowd.

Consumer Preferences, Piques and Perceptions

Consumer preferences, piques and perceptions can be sources of opportunities

Consumer preferences - refer to the tastes of particular groups of people. Some examples are the clothes
people people wear, the food they eat, the music they listen to and the movies they watch. The consumers’
age, culture and status affect their preferences. In contrast, consumer dislikes refer to the things that irritate
customers. Either way, the entrepreneur can explore opportunities brought about by consumer preferences
or dislikes.

For example, if consumer trends show a rising preference for “fast casual” dining then this would be an
opportunity worth exploring. If customers show great annoyance at standing in long queues in fast food
outlets, then sit-down “fast casual” dining could be a great opportunity.

There are times when the product is not changed by the enterprise but what changes is the way consumers
perceive the product. A classic example is Listerine mouthwash. It was first offered as a surgical antiseptic
and later, a cure for athlete’s foot during the war.

Because of the many choices that customers have to struggle with every day, a product or service must be
able to win the battle for the customers’ mind. First, awareness of the new product or service,must be
generated. This is followed by arousing the customers’ interest to buy, going to the evaluation of the
product, and finally, the decision to purchase the product. After a customer purchased the product, there is
a need to build brand loyalty and retain the customer for a long time to get a bigger share of his or her
wallet, not just his or her mind.

Other Sources of Opportunities

As an opportunity seeker, the entrepreneur will surely discover other sources of opportunities. Unexpected
successes (or failures) can lead to good opportunities.

Another potential source of opportunity is the entrepreneurs’ own set of skills or expertise or hobby. New
knowledge as well as new technology can be the source of highly innovative opportunities.
1.Customer preferences change over time.

2. People’s tastes in clothes,music,shoes,entertainment,dance,sports,hobbies and even careers have

evolved over the years.

3. What piques customer is a great source of opportunities.

4. Before the customer is won over, there is first a battle for the mind. Next, there is a battle for the heart.
Finally, there is a battle for the wallet.

5. The longer the customer wants to use the product, the greater the chances of creating lasting loyalty.

6.Opportunities abound in shaping consumer perceptions or occupying spaces in their minds or places in
their hearts that have not yet been filled.

7. New inventions, new systems and work processes, new insights about human psyche, new applications
for old knowledge, new revelations about how the physical world works, new interpretations, new
combinations based on the convergence of previous technologies, new outlooks about how life should be
led, and a host of other new things are tremendous sources of opportunities.

8. Determining personal preferences and competencies lay the foundation for a new business venture.

9. Unexpected occurrences in both the external and internal environment of the enterprise indicate that
significant changes are happening and opportunities are sprouting.

Opportunity Screening

After opportunity seeking comes the rigorous process of Opportunity Screening. Because of the many
opportunities possible for the entrepreneur, it is important to come up with a short list of a few very
promising opportunities, which could be scrutinized in detail.

The Personal Screen

In screening opportunities, the entrepreneur first has to consider his or her preferences and capabilities by
asking three basic questions:

1. Do I have the drive to pursue this business opportunity to the end?

2. Will I spend all my time, effort and money to make the business opportunity work?

3. Will I sacrifice my existing lifestyle, endure emotional hardship and forego my usual comforts to
succeed in this business opportunity?

If “YES” is your answer to all of the above, then you can begin your earnest pursuit of that opportunity. At
the simplest level, the entrepreneur may want to make a risk-return grid shown as follows:
 Risk
Return
Low Risk Medium Risk High Risk

High Return Best Good Fair

Medium Return Good Fair Bad

Low Return Fair Bad Worst

A more complex screening grid uses twelve criteria for screening opportunities.

The 12 Rs of Opportunity Screening

1. Relevance - To vision mission and objectives of the entrepreneur. The opportunity must be aligned
with what you have as your personal vision, mission, and objectives for the enterprise you want to set up.

2. Resonance - To values. Other than vision, mission and objectives the opportunity must match the
values and desired virtues that you have or wish to impart.

3. Reinforcement of Entrepreneurial Interests - How does the opportunity resonate with the
entrepreneur’s personal interests, talents and skills?

4. Revenues - In any entrepreneurial endeavor, it is important to determine the sales potential of the
products or services you want to offer. Is there a big enough market out there to grab and nurture for
growth?

5. Responsiveness - To customers needs and wants. If the opportunity that you want to pursue
addresses the unfulfilled of underserved needs and wants of customers, then you have a better chance of
succeeding.

6. Reach - Opportunities that have good chances of expanding through branches, distributorships,
dealerships or franchise outlets in order to attain rapid growth are better opportunities.

7. Range - The opportunity can potentially lead to a wide range of possible product or service
offerings, thus tapping many market segments of the industry.

8. Revolutionary Impact - If you think that the opportunity will most likely be the “next big thing” or
even a game changer that will revolutionize the industry, then there is a big potential for the chosen
opportunity.
 9. Returns - It is a fact that products with low costs of production and operations but are sold at higher
prices will definitely yield the highest returns on investments. Returns can also be intangible; meaning they
come in the form of high profile recognition or image projection

10. Relative Ease of Implementation - Will the opportunity be relatively easy to implement for the
entrepreneur or will there be a lot of obstacles and competency gaps to overcome

11. Resources Required - Opportunities requiring fewer resources may be more favored than those
requiring more resources.

12. Risks- In an entrepreneurial endeavor, there will always be risks. However, some opportunities
carry more risks than others, such as those with high technological, market, financial and people risks.

III. Self-learning Activity

Activity 1. (Group Activity)

Instruction: Write your answer on a whole sheet of paper.

From what we have discussed in this chapter, what do you think are the opportunities and
threats that you see from the macro environment, industry, market, micro market, and consumer
perspective of the business you intend to pursue or already pursuing?

IV. Evaluation (Quiz)

Identification.
Directions: Identify what is being described in each statement below. Write your answers in the
exam booklet.

1. What do you call to the great desire to attain a vision or fulfill a mission?
2. A macro environmental factor that includes all natural resources and the ecosystem, habitat of
men, animals, plants and minerals.
3. It is the entire process of converting input into output and these output into outcomes.
4. A macro environmental factor in which the new scientific and technological discoveries often
lead to the launch and commercialization of new products.
5. It is the transformation process where inputs are converted to output.
6. A macro environmental factor that defines the demographics and cultural dimensions that
govern relevant entrepreneurial endeavor.
7. A macro environmental factor that is mainly driven by supply and demand forces.
8. This refers to the ability of the entrepreneur to sense without using the five senses.
9. A macro environmental factor that defines the governance system of the country or local area
of business.
10. A macro environmental factor that defines all natural resources and the ecosystem, habitat of
men, animals, plants, and minerals?
Reference:
Entrepreneurship 2016 Edition by Eduardo A. Morato, Jr., Rex Publishing