Entrepreneurship Week 2

LESSON 2 RECOGNIZE A POTENTIAL MARKET
ENTREPRENEURSHIP
IN THIS MODULE, YOU WILL KNOW THE FOLLOWING:
 Associate the market problem to be solved or the market need to be met;

 Look for solution/s in terms of product/s and service/s that will meet the need using techniques on seeking,
screening, and seizing opportunities:
 Break down the market needs;
 Detect the possible product/s or service/s that will meet the need of your locality.
 Screen the proposed solution/s based on viability, profitability, and customer need in developing a Business Plan.
 Choose the best product or service that will meet the market needs.
AFTER COMPLETING THIS MODULE, YOU NEED TO:
 Learn and understand the sources of opportunities for business.

 Determine the essentials in the entrepreneur’s opportunity seeking
 Identify market problems and propose potential products or services that will meet the market needs.
 Know the problem in which a business opportunity arises from.
 Identify, screen and proposed solution to meet the problem
 Select the best product or service that will meet the market’s need with a consideration of generating
profit.
ENTREPRENEURIAL IDEAS
The creation of an entrepreneurial ideas leads to

the identification of entrepreneurial opportunities, which
in turn results in the opening of an entrepreneurial venture.
The entrepreneurial process of creating a new venture
is presented in the diagram below. (Aduana, 2017)
Figure 1. The Entrepreneurial Process of Creating
New Venture
ESSENTIALS IN ENTREPRENEUR’S OPPORTUNITY SEEKING
 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
 I. Changes
The physical environment in
includes the environment
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.
I. Changesincludes
 The Societal environment in the the
environment
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. Changes in the environment

 The industry environment of the business includes:
a. Competitors
b. Customers
c. Creditors:
d. Employees
e. Government
f. Suppliers
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.
THESE ARE THE FIVE FORCES COMPETING WITHIN THE
INDUSTRY:
 Buyers/Customers
 There are several suppliers available in the market.
 The buyer has the potential for backward
The buyers are the one that pays cash in integration.
exchange to your goods and services. For  The cost of switching the supplier cost is minimal.
example, the influenced of the price or in
 The product represents a high percentage of the
the bargaining strategy. The buyer has a
buyer’s cost.
strong and magnified bargaining power.
 The buyer purchases large portions of the seller’s
The threat of its bargaining power will be
product or services.
less if the following factors notice:
INDUSTRY:
This can be notice if there is the presence of the

 Suppliers following factors:
The supplier has the ability for forward integration.
The Suppliers are the one that provide Suppliers in the industry are few, but the sales volume
something that is needed or wanted. is high.
For example if the supply and services Substitute products are not readily available in the
being offered is unstable or keep. The market.
intensity of the threat is strong in this The switching cost is very high.
kind of the competitive force in the
The product or service is unique.
industry.
INDUSTRY:
 Substantial capital requirement.

 Potential New Entrants
A new entrant is defined as the one  Strict government policy.
who enters something. For example,
 Difficulty in accessing distribution
the level of capital requirements, if
the business requires huge capital, channels.
new entrants should decline to join  Economies of scale.
the business. This gives a threat to the  High cost of product differentiation
business. This can be notice if there is
the presence of the following factors:
 High switching cost
INDUSTRY:
A substitute product can give a big threat in the industry

 Substitute Products environment if the following factors are notice:
Substitute means anything that Switching cost is low.
takes the place or function of Preferences and tastes of the customers easily change.
another. For example the consumers Product differentiation is highly noticeable
decide to use margarine as a substitute The quality of substitute products dramatically
for butter. In case the price of butter improves.
increases, preferably the consumer The price of substitute product is substantially lower.
will gradually switch to margarine.
INDUSTRY:
 Rivalry among Existing Firms/Competitors
Rivalry is a state or situation in

The intensity of rivalry among existing firms is
which people or groups are characterized to the following factors:
competing with each other. For a. Diversity of rivals. b. Number of competing firms.
example it depends on the c. Characteristics of the products or services. d. Increased capacity.
e. Amount of fixed costs. f. Rate of industry growth.

Marketing strategy of your
competitor, like giving freebies
and special offers.
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LESSON 2 RECOGNIZE A POTENTIAL MARKET

 Associate the market problem to be solved or the market need to be met;

 Learn and understand the sources of opportunities for business.

The creation of an entrepreneurial ideas leads to

 Entrepreneurial mind frame. This allows the entrepreneur to see

 Entrepreneurial heart flame. Entrepreneur's driven passion, they

 Entrepreneurial gut game. This refers to the ability of the

1. Changes in the environment

2. Technological discovery and advancement

3. Government’s thrust, programs, and policies

This can be notice if there is the presence of the

 Substantial capital requirement.

A substitute product can give a big threat in the industry

 Rivalry among Existing Firms/Competitors

Rivalry is a state or situation in

example it depends on the c. Characteristics of the products or services. d. Increased capacity.

e. Amount of fixed costs. f. Rate of industry growth.

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