Entrepreneurship Q1 Reviewer PDF

**Entrepreneurship** -- the process of creating new product/services by individual using a new technology to generate incremental wealth. - "entrepreneurs are innovators." **Characteristics** - Innovative - A planner - Problem Solver - Persuasion - Create new product - Guts -...

**Entrepreneurship** -- the process of creating new product/services by individual using a new technology to generate incremental wealth. - "entrepreneurs are innovators." **Characteristics** - Innovative - A planner - Problem Solver - Persuasion - Create new product - Guts - Risk-Taker **Relevance of Entrepreneurship to an Organization** 1. **Development of Managerial Capabilities** -- To develop his/her managerial skills. 2. **Creation of Organization** -- Because of Entrepreneurship many organization will exist. 3. **Improving of Standard Livings** -- that Entrepreneurship can lift up the economic status of an individual. 4. **Means of Economic Development** -- Not only the life of entrepreneur is improved but also the society. **Types of Entrepreneurs** 1. **Innovative** -- who always make new things by thinking of new ideas. 2. **Imitating** -- only follows the ideas of others. 3. **Fabian** -- they don't imitate but follow only after they are satisfied. 4. **Drone** -- they are those who live on the labors of others. 5. **Social** -- they are those who initiate changes and drive social innovation and transformation. **Benefits of Entrepreneurship** 1. It helps the economy to grow. 2. It encourages technology growth 3. It aids in human development. 4. It promotes inclusive growth. 5. It begets entrepreneurship **Career Opportunities** - Business Consultant - Teacher - Researcher - Sales - Business Reporter **Recognizing Potential Market** - **Business** -- providing services in exchange of money - **Product** -- something that is result of a process - **Services** -- are those intangible products **Entrepreneural Process:** **Creation of Entrepreneural idea ---› Identification of Entrepreneural opportunities ---› Opening of Entrepreneural venture** **Basic Foundation** 1. **Entrepreneural Mind Frame** -- optimistic, risk taker, always find solution 2. **Entrepreneural Heart Flame** -- passion driven, love to discover new things 3. **Entrepreneural Gut Game** -- being intuitive/intuition **Source of Opportunities** 1. **Changes in the Environment** -- physical, societal, and industry environment 2. **Technological Discovery and Advancement** 3. **Government's Thrust, Programs, and Policies** 4. **People's Interest** 5. **Past Experience** **Competition** -- process of trying to win something **Industry** -- group of manufacturers that produce a particular kind of goods **5 Forces Competing within the Industry:** - **Buyers** -- the one that pays cash in exchange for your goods. - **Potential New Entrants** -- business that have the ability to penetrate into a particular industry. - **Rivalry** -- a state wherein business organizations are competing with each other. - **Substitute Product** -- one that serves the same purpose as another product - **Suppliers** -- the one that provide something that is needed in business operations **Product & Services** - **Look within you** - **Look at other people's innate abilities and knowledge** - **Look at the market** - **Look for help** - **Look for problems** - **Look for tried and tested IDEAS** **Screening Business Opportunities** - **Your personal preference** -- to actually like the business you would want to enter into - **Customer requirements** -- it is of equal importance to study and abide by the customer requirements - **Viability** -- it is easy to get carried away by our own and our customers ideals to the point of impossibility - **Profitability** -- Sales -- Expenses = Profits - **Innovation or differentiation** -- it could be your Unique selling and Value Proposition that sets you apart from other products or service providers. - **SWOT Analysis** -- a framework for identifying and analyzing the internal and external factors. It stands for: **Strengths** (Internal) -- resources that support a successful outcome **Weaknesses** (Internal) -- resources that work against a successful outcome **Opportunities** (External) -- the project can capitalize on or use to its advantage **Threats** (External) -- that could jeopardize the project **Value Proposition (VP)** -- a business statement that summarizes why a consumer should buy a company's product or use its service. **Basic Elements of a Good Values Proposition** - **Target Customer** - **Needs/Opportunity** - **Name of the product** - **Name of the enterprise/company** **Unique Selling Proposition (USP)** -- refers to how you sell your product or services to your customer. **Three factors to determine your customer:** 1. **Target market** -- is a sage in market identification process that aims to determine the buyers with common needs and characteristics - **Geographic segmentation** -- the total market is divided according to geographical location. - **Demographic segmentation** -- divided based on consumer: Gender, Age, Income, Occupation, Education, Religion, Ethnic group, Family size - **Psychological segmentation** -- divided into terms of customers think and believe. - **Behavioral segmentation** -- divided according to customers behavior pattern as they interact with a company. 2. **Customer requirements** -- are the specific characteristics that the customers need from a product or a service. - **Service Requirement** -- an intangible thing or product that cannot be touched but the customer can feel the fulfillment. - **Output Requirements** -- tangible thing or things that consumer expects to be fulfilled in the product. 3. **Market size** -- size of arena the entrepreneurs will play their business. **Strategies for reaching target markets** - **Undifferentiated marketing** -- produces only one product and promotes it to all customers with a single marketing mix. - **Differentiated marketing** -- produces numerous products and promotes them with a different marketing mix. - **Concentrated marketing (niche marketing)** -- commits all of its marketing resources to serve a single market segment. - **Micromarketing** -- involves targeting potential customers at a very basic level such as ZIP code. **Marketing Mix** -- refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market. **7P's** - **Product** -- the product or service offered to your customer **Types of product:** 1. **Breakthrough** -- it offers completely new performance benefits. 2. **Differentiated** -- claim a new space in the mind of the customer different from the spaces occupied by existing products 3. **Copycat** -- will not make much impression on the consumer's mind. 4. **Niche** -- they are products with lower reach, visibility, prices, and top of the mind. - **Price** -- what a customers give up to enjoy the benefits of having or using the product. **Pricing Strategies:** - **Cost plus pricing** -- the mark-up is based on a certain percentage of cost. - **Cost based pricing** -- the basis of mark-up is the cost of sales. - **Optional pricing** -- this refers to adding an extra product or service on top of the original to generate more revenue. - **Premium pricing** -- this refers to setting a very high price to reflect etilism and superiority. - **Psychological pricing** -- this considers the psychology and positioning of price in the market. - **Product line pricing** -- this refers to pricing different products or services within a parallel products array using varying price points. - **Competitive pricing** -- this refers to benchmarking prices with the competitors. - **Skimming** -- this is the opposite of penetration pricing where prices are initially high and then they are lowered to offer the product or service to a wider market. - **Penetration pricing** -- this refers to setting low prices to increase market share. - **Bundling** -- this refers to two or more products or services in one reduced price. - **Positioning** -- is the way the customers perceive the enterprise and its product in their minds. - **Packaging** -- refers to the way your product or service appear from the outside. - **People** -- the most important resource of any organization. - **Promotion** -- complete set of activities which communicate the product or services to the user. (Advertisement) - **Place** -- where your business sells its products or services **Business Plan** -- the blueprint of individuals, organizations or groups who would like to engage in business. **Parts of a Business Plan** - **Executive Summary** -- short brief description - **Introduction** -- presents a clear explanation of the business concept. - **Product or Service Description** -- the details of the proposed idea - **Industry Analysis** -- group of firms producing similar products or offering similar services. - **Market Analysis** -- data that can be used to identify, isolate, describe, and quantify a given market. - **Production or Operational Plan** -- lays down the specifics of operating or running the business. 4 M's: Materials, machines, men (and women), and money. - **Marketing Plan** -- how your product will reach them. Identifies almost all you need to know about your target customers. - **Organizational Plan** -- describes the legal form that the business will take. - **Financial Plan** -- shows the financial or funding requirement of the business - **Appendices** -- intended for miscellaneous items which may not be put in the main part **Brand** -- it is a symbol. Identity of a company. - **Brand Name** -- trademark **Brand Management** - **Tangible elements**: visible product/services - **Intangible elements**: not visible **Branding** -- to give an identity to the product or service (process) *Goals of Branding:* 1. Establishing to target customers that the business is reliable and trustworthy. **Common Practices of Choosing A Brand Name** 1. **Inventive Brand Name** -- pronounceable & catchy made-up word (Pepsi) 2. **Inventive Descriptive** -- choosing a descriptive yet a made-up word (Coca-cola) 3. **Descriptive** -- describing the nature of businesses (Pizza Hut) 4. **Acronym** -- choosing ¾ descriptive words but using acronym (BMW) 5. **Generic** -- words with proper dictionary meaning (apple) 6. **Founder Name** -- Ex. Adidas (Adi Dassier)