Entrepreneurship Review - BLA2024 PDF

**ENTREPRENEURSHIP** **BLA2024** **INTRODUCTION TO ENTREPRENEURSHIP** - was derived from French verb "entreprendre" means "to undertake" - **maximization** of **available resources** in the community and transform these into either product/service. Maximization - Talks about **effici...

**ENTREPRENEURSHIP** **BLA2024** **INTRODUCTION TO ENTREPRENEURSHIP** - was derived from French verb "entreprendre" means "to undertake" - **maximization** of **available resources** in the community and transform these into either product/service. Maximization - Talks about **efficiency** (do make a product as possible as the resources that you have. - Use of resources in the optimum level Resources - **Things available to your area** - Natural Resources: LAND( Agriculture) LABOR( Man Power) CAPITAL (Money/Machines) ENTREPRENEUR - Are innovators(they take risk and generate new unique ideas) - Rule is to assemble this resources - To help our community INNOVATION - Things that **have been created** uniquely from/based on other businesses **have been created** - Introduction of **new method, procedure, customs, device, among others.** Invention - New existing product **Benefits of Entrepreneur to SHS Students** - Assess Feasibility of Ideas - Manage risk - Apply basic marketing skills - Apply economic principles - Apply basic accounting principles - Apply principle of human relations management - Identify Legitimate source of capital - Evaluate ownership structures - Translate problems into opportunities - Speak "business"&"entrepreneurship" - Demonstrate financial management - Creation of entrepreneurial thinkers who also have the skills and tools to start their own businesses - Write a business plan - Determine individual entrepreneurial interest - Use Strategies for idea generator Four types of Ownership 1. Sole Proprietorship 2. Partnership 3. Corporation 4. Cooperative **Relevance of entrepreneurship to an organization** - Developing managerial capabilities - Creation of Organizations - Improving standards of living - Means of economic development Importance of Entrepreneurship - Entrepreneurship is a key driver of our economy. - Wealth and a high majority of jobs are created by entrepreneurially minded individuals, many of whom go on to create big businesses - Business consultant - Sales manager - Research and development - Teacher - Recruiter - Business reporter 1. **ACHIVEMENT CLUSTER** 2**.) PLANNING CLUSTER** -**supports the character traits in the achievement cluster.** The plan serves as the **blueprint** of the actions to be undertaken by the entrepreneur. The entrepreneur who belongs to the planning cluster is: **1. A goal-setter** **2. An information-seeker** **3. Systematic in planning and monitoring** **3.)** **POWER CLUSTER** **relationship and image of the entrepreneur in the community.** **The entrepreneur who belongs to the power cluster is:** **1. A persuasive and positive networker** **2. Self-confident** **CORE COMPETENCIES IN ENTREPRENEURSHIP** 2. Innovation 3. Profit potential 4. Risk Bearing ENTREPRENEURIAL SKILLS \- set of **cognitive, technical, and interpersonal skills** required in the practice of entrepreneurship. **COGNITIVE SKILLS** -**Mental ability** of the entrepreneur to learn new things, generate new ideas, and express knowledge in both oral and written forms. The **cognitive skills of an entrepreneur** include the following: 1\. Ability to **understand written materials** 2\. Ability to **learn and apply new information** 3\. Ability to **solve problems systematically** 4\. Ability to **create new ideas** 5\. Ability to **innovate new products and procedures or methods** **TECHNICAL SKILLS** -relate to their knowledge and **proficiency** in a specialized field. Technical skills of an entrepreneur include proficiency and ability, in the following areas: **1. Information Technology** **2.Feasibility study and business plan preparation** **3. Technical writing skills** **4. Marketing** **5. Management and Finance** **INTERPERSONAL SKILLS** **-(to socialized)** relationship and **interaction** of the entrepreneur with the workers, suppliers, creditors, prospective customers, and other members of the business community. Interpersonal Skills include the following: 1\. Skills in **verbal** communication 2\. Skills in **non-verbal** communication 3\. Skills in **listening** 4\. Skills in **leading** 5\. Skills in **negotiating** **TYPES OF ENTREPRENEURS** 1. Innovative Entrepreneurs \- to think **newer, better and more economical ideas** of business organization and management. They are business leaders and contributors to the economic development of a country. **Example** Technology companies triggering a paradigm shift by impacting industries **A. Apple** -- changed music and consumer electronics **B. Uber** -- changing the taxi business **C. Airbnb** -- changing the accommodation industry **D. Amazon** -- changing retailing 2. **Fabian Entrepreneurs** \- skeptical about the changes to be made in the organization. They do not initiate any inventions but **follow only after they are satisfied** with its success rate. Example **Kodak** Company- **too late to introduce digital cameras as other** brands used this opportunity. These entrepreneurs have the following **characteristics:** ** Accept and stick to traditional methods.** ** Work for a family-owned business.** ** Careful.** ** Display risk-aversion.** ** A clear, strict, and basic strategy** 3. **Drone Entrepreneurs** **- die-hard conservatives** even ready to suffer the loss of business **4. Social Entrepreneurs** -drive social innovation and transformation in various fields including **education, health, human rights, workers' rights, environment and enterprise development** **ENTREPRENEURIAL IDEAS** -**foundation (starting point)** of business opportunities The Entrepreneurial process of **CREATING A NEW VENTURE** 1. Creation of Entrepreneurial Idea 2. Identification of entrepreneurial Opportunities 3. Opening of Entrepreneurial Venture **Entrepreneurial Ideas** - Is a feasible, financially sound, technically possible and socially acceptable idea of a project or product that may have utility for prospective customers. Feasible - Can use easily, easy to realized Financially Sound - Good capital - Should give you a profit Technically possible - Process of doing the product - Aspects of machine, efficiency, equipment, people - Production Socially Acceptable - legally, acceptable - Think people who will be affected Utility-purpose/use -Satisfaction In entrepreneurship, **idea** refers to a **concept or a thought that has the potential to solve a problem or meet a need.** They can come from various **sources** such as **personal experiences, market trends, or customers feedback.** **THREE IDENTIFACATION OF ENTREPRENEURIAL OPPORTUNITIES** 1. **OPPORTUNITY SEEKING** **Looking for some options to create products** that customers will satisfy **Ongoing process** of considering, evaluating, and pursuing market-based activities that are believed to be advantageous for the firm. **TO CONSIDER** - Need , Problem to be solved - Preference , Resources - Cost **TO EVALUATE** - Consider to evaluate all the things you consider **MARKET-BASED** - Customer centered **THREE ESSENTIALS IN OPPORTUNITY SEEKING** **Entrepreneurial Mind Frame** - Allow the entrepreneur to see things in a very **positive and optimistic way** in the midst of difficult situation. **Entrepreneurial Heart Flame** - Are driven by **passion**; are attracted to discover satisfaction in the act and process of discovery - **Passion**-great **desire** of an entrepreneur to achieve his/her goals. **Entrepreneurial Gut Game** - **Being initiative** - Also known **Being initiative** - as Intuition, means confidence in oneself and the firm belief that everything you aspire can be reach. SOUCRE OF BUSINESS OPPORTUNITIES SOURCE OF OPPORTUNITIES - Change in the Environment - Technological Discovery and Advancement - Government Thrust, Programs, and Policies - Peoples Interest - Past experience **SOURCE OF BUSINESS (Business Environment)** **PHYSICAL ENVIRONMENT** - **Climate** **Climatic/weather** condition in a particular region where the business will be established. **Ex. Ice Cream(Summer time)** - **Natural/ Physical Resources** **Minerals, forests, water and fertile land** that occur in nature and can be used for economic gain. **Ex. Jewelry(minerals)** - **Wildlife** **All mammals, birds, reptiles, fish etc.** that live in wild. **Ex. Zoo, leather Jacket(reptiles)** MACRO ENVIRONMENTAL SOURCES OF OPPORTUNITIES THE SOCIETAL ENVIRONMENT - **Socio -- Cultural Environment** **traditions, customs, lifestyles** and values that characterize a society. **Ex.Bahag(baguio)** - **Political Environment** **government system** of the country or the local area of the 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. **Ex. Vest(ilocos Sur)** - **Economic Environment** inflation rates, consumer purchasing power, income level and employment rate. - **Ecological Environment.** Opportunities abound for greener, cleaner, and healthier products, whose objectives are to **save the planet and prolong lives.** - **Technological Environment** **new inventions and technology innovations.** **MICRO ENVIRONMENTAL SOURCES OF OPPORTUNITIES** **INDUSTRY ENVIRONMENT** - **Government** system or institution that handles the affairs of a particular country. - **Suppliers** Individual persons or companies that provide the required materials, parts, or services to the business. - **Customers** buyers of goods or services produced or rendered by the business. - **Competitors** Forces that produce, sell, or render products or services similar to those of the business. - **Employees** Workers of the business who are highly responsible for the production of goods or delivery of services - **Creditors** to banks, financial institutions, and financial intermediaries engaged in the lending of money **2. OPPORTUNITY SCREENING** process of evaluating which market offers the greatest opportunity. **12 Rs OF OPPORTUNITY SCREENING** 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. **3. OPPORTUNITY SEIZING** **PROCESS OF OPPORTUNITY SEIZING** 1. **Crafting a positioning statement** the entrepreneur is advised to **look at other competitors** in the market place. customer profiling will come into picture. **Positioning-** something to do what you want to perceive to your customers about your product/services 2. **Conceptualizing the product or service offering.** **idealized abstraction** of the product or service to be offered to the preferred market of the entrepreneur. 3. **Designing, prototyping, and testing the product** **Designing**-ur product looks like **Prototyping**-onetime process, abstract design **Testing**-to test the product The entrepreneur must render the concept and translate it into its very physical and very real dimensions. Be ready for the actual testing by potential customers through FGD, surveys, product demo sessions, etc. Assess how much resources available. 4. **Implementing, organizing and financing** ** ** Choose correct technology Choose the right people Design the operating work flow Specify the systems and procedures Design the organizational structure 1. **Service Requirement** 2. **Output Requirement** - on-time delivery - service with a smile - easy-payment etc. 1. Product/Service Development 2. Competitive Advantage 3. Increased Sales and Revenue 4. Customer Satisfaction 5. Improved Quality 6. Innovation 7. Brand Loyalty **MARKETING MIX** \- It includes multiple areas of focus as part of a comprehensive marketing plan. \- It was created by Jerome McCarthy in 1960, the 4Ps encourages a focus on Product, Place, Price and Promotion. \- The model has been continuously modified until there are 7Ps of Marketing Mix. Three elements have been added, namely, people, packaging, and positioning **PRODUCT** The tangible good or intangible service offered by the business to the target consumers **BASIC ENTREPRENEURIAL TENETS RELATIVE TO** **PRODUCT ARE AS FOLLOWS:** 1\. The product is only produced once there is an existing need or want. 2\. The product must satisfy the need or want better than the competing products What solution does the customer want and need? **-FEATURES** is a product\'s traits or attributes that deliver value to end-users and differentiate a product in the market. **-DESIGN** The visual and aesthetic aspects of the product. It includes the product\'s appearance, layout, packaging, and overall visual appeal. **-USER EXPERIENCES** the feeling users experience when using a product, application, system, or service. It involves aspects such as ease of use, accessibility, and the overall satisfaction users derive from using the product. **-NAMING** involves creating memorable, unique names for your products. The product\'s name should be clear, relevant, and align with the brand\'s message and image. **-QUALITY** It refers to how well a product satisfies customer needs, serves its purpose and meets industry standards. It encompasses factors like durability, reliability, performance, and the absence of defects. **-DIFFERENTATION** A marketing strategy designed to distinguish a company's products or services from the competition. **PRODUCT MIX** It is also known as product assortment or product portfolio, refers to the complete set of products and/or services offered by a firm. A product mix consists of product lines, which are associated items that consumers tend to use together or think of as similar products or services. **DIMENSIONS OF A PRODUCT MIX** **WIDTH**. The number of product lines offered by a company **LENGTH**. The total number of products in a firm's product mix **DEPTH**. The number of variations within a product line **CONSISTENCY**. How closely the product lines are to each other **PLACE** The place where the target consumers are expected and willing to buy the product. -Place represents the location where the buyer and seller exchange goods or services. It is also called as the distribution channel. It can include any physical store as well as virtual stores or online shops on the Internet. **How does the customer act or buy?** \- location of purchase \- ease of transaction \- access to distribution channels \- sales force \- competitor approaches **STAGES OF DISTRIBUTION CHANNEL** **Channel 1** contains two stages between producer and consumer - a wholesaler and a retailer. A wholesaler typically buys and store large quantities of several producer's good and the breaks into bulk deliveries to supply retailers with smaller quantities. **Channel 2** contains one intermediary. In consumer markets, this is typically a retailer. A retailer is a company that buys products from a manufacturer or wholesaler and sells them to end users or customers. In a sense, a retailer is an intermediary or middleman that customers use to get products from the manufacturers. **Channel 3** is called a \"direct-marketing\" channel, since it has no intermediary levels. In this case the manufacturer sells directly to customers. tip The entrepreneur must establish his/her business or product in the most strategic place or location. The basic entrepreneurial concept relative to place in the marketing mix is very simple and straightforward, that is, put your business where your consumers are willing to buy the product. Marketers should carefully choose the location for selling their products because it will directly impact sales. The best way to determine a strategic location for the business is by conducting market research to understand consumer behavior and patterns. Consumers prefer convenience. As such, products must be conveniently available to the consumer when they walk into a retail store or search online. Where accessibility and product availability are compromised, the customer will likely favor alternative options. Place strategy is also referred to as distribution strategy because it brings the products or services to consumers. This includes online, physical, and several other distribution methods. **PRICE** The value we pay in exchange for the product and services offered by a company **What is the cost to the customer?** \- value to buyer \- price sensitivity \- existing price points \- discounts \- competitor pricing **VARIABLES THAT HIGHLY INFLUENCE THE SETTING OF PRICES** **01 AVAILABILITY OF THE COMPETEING PRODUCTS** When the supply of the competing product is high, the price of the product is usually low. As an entrepreneur you must know then the level of supply and demand for the product **02 COST OF MAKING THE PRODUCT** The term cost refers to the amount spent by the manufacturer in view of the expected future benefits. The manufacturing cost includes the direct materials, direct labor, and factory overhead. ** Direct Labor --** refers to the wages paid to the workers who are directly involved in manufacturing the products. ** Factory overhead --** includes indirect materials and labor and other expenses like the cost of light, water, fuel, or machinery maintenance. ** Direct materials --** pertain to the materials that form part of the finished product. **03 TYPE OF PRODUCT** **▪ Industrial Products -** are used as raw materials of other manufacturing entities. These products usually have higher prices compared to consumer products. **▪ Consumer Products --** are used and consumed by individuals consumers. **04 PRESENCE OF SUBSTITUTE PRODUCTS** The presence of substitute products is a threat to the primary product. Substitute products basically set the limit to the selling price of the primary product. **05 STAGES OF THE PRODUCT IN THE MARKET** The product stages: Introductory Stage Growth Stage Maturity Stage Decline Stage **PRICING STRATEGIES** The pricing model that may be adopted during the introductory stage is price skimming approach. The new product is highly priced when introduced in the market , but is gradually reduced as competitors increase. The pricing model that may be adopted during the introductory stage is price skimming approach and price penetration. ** Price skimming approach** means the new product is highly priced when introduced in the market, but is gradually reduced as competitors increase. ** Price penetration approach,** the product is introduced with low price The pricing model that may be adopted in the growth and maturity stage is cost-based model, in which price is simply equal to the cost plus desired profit margin. **▪ Competition Pricing -** A pricing method in which a seller uses prices of competing products as a benchmark instead of considering own costs or the customer demand. **▪ Product Line Pricing -** The practice of reviewing and setting prices for multiple products that a company offers in coordination with one another. **▪ Bundle Pricing -** The act of placing several products or services together in a single package and selling for a lower price than would be charged if the items were sold separately. **▪ Premium Pricing -** Setting the price of a product higher than similar products. The goal is to create the perception that the products must have a higher value than competing products because the prices are higher. **▪ Psychological Pricing -** is the practice of setting prices slightly lower than rounded numbers, in the belief that customers do not round up these prices, and so will treat them as lower prices than they really are. **▪ Optional Pricing -** The company earns more through cross-selling products along with a basic core product **DEMOGRAPHIC PROFILE OF THE TARGET CONSUMERS** Consumers demographic profile highly influences the process of setting the most appropriate prices of the goods or services. The pricing strategies most often used by retail businesses include psychological pricing and discount pricing. **PSYCHOLOGICAL PRICING** Promotional Pricing -- where products are sold at a lower price in a limited temporary period like midnight sale, Christmas sale, or anniversary sale. Odd or even pricing -- where products sold at the prices that end in odd number such as 99.99 or 78.25, use an odd pricing strategy, whereas prices ending in an even number, such as 200.00 or 18.50, use an even strategy. Prestige pricing -- where products are purposely sold at a higher price in the order to create a high or superior image **PROMOTION** The mode of conveying information about the product to the target consumers **What is the dialogue between customer and company?** \- message \- method of delivering message \- timing of delivery \- communications by customers and influencer \- competitors promotions **PROMOTIONAL MIX** **ADVERTISING** The most common medium of promoting a product or a service is through advertising in the following forms: 1\. Television or radio commercials 2\. Print advertisements 3\. Online advertising 4\. Packaging ads **PUBLICITY** Members of media are usually informed through a formal statement or press release about a particular event where the product or service will be presented or endorsed of a well-known personalities. **PERSONAL SELLING** It involves a salesperson who has personal or direct contact with the prospective consumers and is in a competitive position to influence the consumers to but the product. **SALES PROMOTION** This strategy involves giving incentives to consumers so they will acquire the product or service. The most popular tools adopted in sales promotion category are discounts, coupons, cash rewards, and gift certificates. **DIRECT MARKETING** It is undertaken through the internet. The entrepreneur starts by building a consumer database, performs one-on-one approach in building consumer relationship, and sells the product online. **PEOPLE** Individual employees or workers who are directly involved in the production, marketing, and sale of the product or service **PRIDE PROCESS** P - PROVIDE A PLEASANT WORKING ENVIRONMENT R - RECOGNIZE, REWARD AND REINFORCE THE GOOD BEHAVIOR I - INVOLVE AND PARTICIPATE IN THE ACTIVITIES AND PROGRAMS D - DEVELOP SKILLS AND ATTITUDE E - EVALUATE AND MEASURE PERFORMANCE **PACKAGING** The process of putting the product in a package or container **FIVE BASIC FUNCTIONS OF PACKAGING** 1\. Protection 2\. Containment 3\. Information 4\. Utility of Use 5\. Promotion **CRITERIA FOR CHOOSING PACKAGING MATERIALS** **PROTECTION -** Can the package give ample protection to the product? **COST -** Will it be cost-efficient? **DISPLAY VALUE -** Can it attract consumer? **CONVENIENCE -** Is it easy to carry? Will the package be too heavy? **SIZE -** What is the industry practice? Any weight limit? **POSITIONING** The place occupied by the product in the minds of the consumers **STEPS IN POSITIONING PROCESS** STEP 1 -- Confirm Your Understanding of Market Dynamics STEP 2 -- Identify Your Competitive Advantages STEP 3 -- Choose Competitive Advantages that Define Your Niche STEP 4 -- Define Your Positioning Strategy STEP 5 -- Communicate and Deliver on the Positioning Strategy **BRANDING** **BRAND** The use or combination of a name, term, symbol, or design to identify a product. A brand combines dimensions that differentiate the offering in some way from other offering designs to meet similar need. Brand name has a narrower meaning. A brand name is a word, letter, or a group of words or letter. ** Branding** is providing products and services with the power of brand. Branding is all about making differences. To brand a product, it is essential to teach consumer "who" the product is---by giving it a name and using other brand elements to help identify it---as well as "what" the product does and "why" consumers should care. **BRAND STRATEGY** It is a long-term design for the development of a popular brand in order to achieve the goals and objectives. A welldefined brand strategy shakes all parts of a business and is directly linked to customer needs, wants, emotions, and competitive surroundings. **COMMONLY USED BRANDING STRATEGY** 1\. Purpose (Functional or Intentional) 2\. Consistency 3\. Emotion 4\. Flexibility 5\. Employee Involvement 6\. Loyalty 7\. Competitive Awareness **GOOD BRAND NAME CHARACTERISCTICS** 1\. Short and simple 2\. Easy to spell and read 3\. Easy to recognize and remember 4\. Easy to pronounce 5\. Can be pronounced in only one way 6\. Can be pronounced in all languages (for international markets) 7\. Suggestive products benefits 8\. Adaptable to packaging/labelling needs 9\. No undesirable imagery 10\. Always timely (does not go-out of date) 11\. Adaptable to any advertising medium 12\. Legally available for use (not in use by another firm)