Entrepreneurship Lesson 2 PDF

Entrepreneurship – Lesson 2 Identification of The Entrepreneurial Process of Creating New Venture Entrepreneurship drives the growth and diversification of the economy and contributes to the creation of wealth. Before we get into...

Entrepreneurship – Lesson 2 Identification of The Entrepreneurial Process of Creating New Venture Entrepreneurship drives the growth and diversification of the economy and contributes to the creation of wealth. Before we get into the specifics of the role of entrepreneurship in economic development, let’s briefly encapsulate its significance. Entrepreneurship’s importance lies in the following: Drives economic growth and creates new job. Encourages innovation by bringing new ideas, products, and services to the market. Contributes to social change by developing products or services that reduce people’s dependence on outdated technologies. Addresses social and economic problems by creating solutions that meet the needs of society. Enables competition which improves business efficiency and lowers prices for consumers. Essentials in Entrepreneur’s Opportunity Seeking Entrepreneurial mind frame. This allows the entrepreneur to see things optimistically during difficult situations. Being a risk-taker, an entrepreneur can find solutions when problems arise. Remember: Challenges are opportunities Everything requires effort. Big things are made from small components. Mistakes are healthy. There’s no magic or short-cut to success. Entrepreneurial heart flame. 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 gut game. This refers to the ability of the entrepreneur to be intuitive. This is also known as intuition. The gut game also means confidence in oneself and believing that everything you aspire to can be reached. Everyone experiences gut feelings. From matters of personal safety to decision making and relationships, the gut speaks to us. These intuitive clues come to us in many forms and will rarely steer you wrong. Gut feelings are a combination of wisdom, experience, and an innate intuition. Wise entrepreneurs listen to their inner voice and others don't even acknowledge it or deny their ability to access intuitive hunches. Perhaps these insights will help. What is intuition? Perhaps a logical explanation of intuition will help to put things into perspective. Your intuition is based on past experiences, perspective, and accumulated knowledge. A robust, intuitive ability does not replace the need for logic and analysis; it complements our ability to make smart decisions. We cannot access the information stored in our brain within a nanosecond; however, our intuition kicks in without thought or intention getting involved. It offers a wealth of information, even if we can't remember where the information comes from Sources of Opportunities 1. External Environment - Refers to the physical environment, societal environment, and industry environment where the business operates. 1.1 The Physical Environment includes a. Climate – the weather conditions. b. Natural Resources – such as minerals, forests, water, and fertile and 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. 1.2 The Societal Environment includes 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. 1.3 The Industry Environment includes a. Competitors b. Customers c. Creditors d. Employees e. Government f. Suppliers 2 Technology 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. 3 Government Thrusts, Programs, and Policies – The priorities, projects, programs, and policies of the government are also good sources of ideas. 4 People’s Interests – 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. 5 Past Experiences – 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.  Forces of Competition Mode It is also known as the “five forces of competition”. An industry environment is a competitive environment. Regardless of what product or service you have, competition is always present. Michael E. Porter’s Five Forces framework is one of the most widely regarded business strategy tools. Born out of his work in 1979, this framework offers organizations a systematic approach to assessing their competitive environment and making strategic decisions that can influence their long-term success. Porter’s Five Forces is a classic model that organizations use to assess their competitive environment and make informed decisions. Competition – it is the act or process of trying to get or win something. The Five Forces competing within the industry: Buyers – The buyers are the ones who pay cash in exchange for your goods and services. Potential New Entrants – A new entrant is defined as companies or business that can penetrate or enter into a particular industry Rivalry Among Existing Firms – Rivalry is a state or situation wherein business organizations are competing with each other in a particular market. Substitute Products – Substitute serves the same purpose as other products in the market. Suppliers – The Suppliers are the ones that provide something that is needed in business operations such as office supplies and equipment.