Entrepreneurship Reviewer PDF

**Entreprenurship Reviewer** **Relevance of Entrepreneurship in the Society** **ENTREPRENEURSHIP**- Process of creating a business venture to generate profit. **INNOVATION** - Introducing new ideas, devices, or methods. **ENTREPRENEUR** - An individual who has the natural capacity and phenomenal...

**Entreprenurship Reviewer** **Relevance of Entrepreneurship in the Society** **ENTREPRENEURSHIP**- Process of creating a business venture to generate profit. **INNOVATION** - Introducing new ideas, devices, or methods. **ENTREPRENEUR** - An individual who has the natural capacity and phenomenal devotion to set up and deal with a business **ECONOMY** - It is the creation, appropriation, and exchange, just as utilization of products and services by various agents. **SOCIETY** - It refers to the total of individuals living respectively in a pretty much arranged network. **Concept of Entrepreneurship** The word "**entrepreneur**" (pronounced as aan·truh·pruh·noor) was derived from the **French verb enterprendre**, which means "**to undertake**." This is pinpointing to those who "undertake" the risk of enterprise. The enterprise is created by an entrepreneur and the process is called "Entrepreneurship." \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **ENVIRONMENTAL FACTORS AND SOURCES OF OPPORTUNITIES** **PHYSICAL ENVIRONMENT**- Physical or the natural environment is composed of the natural elements. **1. Climate** -- the climatic condition in a specific area where the business will be set up must be assessed. **2. Physical resources** - the availability or lack of raw materials will determine the cost of the products. The availability of raw materials to be utilized for the business is sufficient for long-term operation. **3. Wildlife**- Entrepreneurs must add to the conservation of the biological framework and set up corporate social responsibility. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **Social Environment** Social forces which significantly impact the business venture: 1\. **Sociocultural Environment**- it includes the demographic and cultural dimensions such as values, traditions, family structure, social status, religions, customs, education, and dynamics of the population at large. 2\. **Political Environment**- political forces such as political parties, political systems, and other related political groups generously impact the political soundness of a nation. Political forces include trade regulations, taxation, government stability, unemployment, worker's benefits, and election practices. 3\. **Economic Environment** -- it is driven by supply and demand forces. Basically, it brought about by changes in the Philippine economy wherein it is a similar factor that drives remote foreign exchange rates to fluctuate with other market forces. 4\. **Ecological Environment** -- It includes resources and the ecosystem that defines the habitat of a man, animals, plants, and minerals. 5\. **Technological Environment** - It refers to the trends and development in information technology, scientific discoveries, and technological advancement. It includes the use of the internet, social media, and E- commerce. 6\. **Legal environment-**- According to Aduana (2016, 93) emphasized that legitimate powers are components associated with enactment and understanding of laws and ordinances influencing the business. **Environmental scanning** - is a process of gathering data, basic assessment of events, exercises and activities, utilization of pertinent information related to different environmental forces. **PESTEL analysis** -- This is a tabular framework commonly utilized in environmental scanning tools. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **INDUSTRY ENVIRONMENT** **Industry** - is a group of companies that are related based on their primary business activities. In modern economies, there are dozens of industry classifications. Industry classifications are typically grouped into larger categories called **sectors**. **Six industry forces** 1\. **Government** -- it alludes to the entire framework that handles the undertaking of the nation and has the ward over the significant exercises within the territory. Example: Build, Build, Build Program 2\. **Suppliers** -- Morato (2016, 16) emphasized that it incorporates providers of contribution for instance gas, power, and crude materials.Providers of machinery and equipment, suppliers of manpower and expertise, and supplies of merchandise assume a vital job in the creation of merchandise and enterprises. 3\. **Customers** -- it incorporates the purchasers of goods and administrations gave by the business. Benefits are earned from each exchange with the customers. 4\. **Competitors**- According to Zarate (2017, 63) competitors are rival firms that offer similar goods and services as the organization. Competitors are classified either direct or indirectly. a\. **Direct competitors** - produce and sell comparative items. Example: The direct competitor of the iPhone is Samsung since they have a place with the same products and ventures. b\. **Indirect competitors** on the other hand offer substitute products and services. Example: Coca Cola offers soft drink so their direct competitor is Pepsi Cola, on the other hand, their indirect competitors are businesses offer other goods such as natural product juices, filtered water, milkshakes, caffeinated drink, and sports drink. 5\. **Employees**- Are the genuine work power of the business who are liable for the creation of merchandise or conveyance of administrations to the clients. They guarantee the quality and amount of items or administrations to the clients. They are viewed as the backbone of the business. 6\. **Creditors**- It refers to financial institutions, banks financial intermediaries engaged in lending money to the borrower usually for a fee in a form of interest. Creditors broaden their help by stretching out credit to the business. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **5 Barriers to forces competing within the business** 1\. **Potential new entrants**- An organization that is willing and ready to enter a market given the correct condition. The threat of new entrants alludes to the danger of new contenders\' posture to existing rivals in the industry. 2\. **Buyers** -- They have solid and amplified dealing power in the business. 3\. **Suppliers**- The severity of the threat of the suppliers is solid if the following variables remain valid: ◉If the product or service is exclusive and special. ◉The cost of changing brands, suppliers, or products is very continuously high. ◉Substitutes' items are not promptly accessible in the market. ◉Few suppliers but sales volume are generally high 4\. **Rivalry** among existing firms in the industry is ascribed to the accompanying: ◉Diversity of competing industry ◉A great number of competing organizations ◉Characteristics of product offerings ◉Management styles and leadership 5\. **Substitute products** present incredible dangers in the business condition if the accompanying variables are noticeable. ◉Lower cost of a substitute product ◉Changing customers buying behavior. ◉The innovation of substitute products. ◉Switching cost is generally low ◉Product value creation is hardly observable \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **INTERNAL ENVIRONMENT** What does **S W O T** stand for? S - Strengths W -- Weaknesses O -- Opportunities T - Threats SWOT Analysis Definition-This is a tool to dissect environmental factors. **SWOT Analysis** - is a method of summing up the present status of an organization and assisting with conceiving an arrangement for what\'s to come, one that utilizes the current qualities, reviews existing shortcomings, misuses openings, and guards against dangers. 1\. **Strength** - refers to the strong attributes or capabilities of the business that provide an advantage in exploiting the business opportunity. Examples: good reputation,good management and leadership,qualified and competent labor force, complete and new facilities, availability of the resources, strong demand for the products, low capital requirement. 2\. **Weaknesses** - refers to attributes that need to be improved or enhanced. Examples: inaccessibility of required technology, limited access to the channel of distribution, poor transportation system, poor leadership, incompetent labor force, lack of capital, inefficient business process and operations. 3\. **Opportunities** - are business circumstances as products or services that must be maximized given their potential as far as benefit and development. Examples: good governance, Good infrastructure, technological advancement, product innovation, process innovation 4\. **Threats** -are considered conditions in the environment that will have an adverse effect on the business activities. Examples: increase inflation rate, entry of new competitors, stiff government regulations, terrorism, War, pandemic situations, a shift of customers' preferences \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **OPPORTUNITY SCREENING** **Goods** - refer to tangible products that consumers can observe with their senses. (Ilano 2016,140). These are material things needed and wanted by consumers. Examples: Foods, Clothing, Cleaning materials, Transportations etc. **Services** - refer to intangible offerings that are abstract and cannot be observed with our senses. (Ilano 2016, 140). A key characteristic of services is that the "act of delivery" itself is the product and provide services rather than make goods. Examples: Laundry Shops, tutorial services, hotel accommodations, repair shops, travel agencies, beauty parlors etc. \_\_\_\_\_\_\_\_\_\_\_\_ **12 Rs of OPPORTUNITY SCREENING** 1.**Relevance to Vision, Mission and Objectives of the Entrepreneur**. - Opportunity must be aligned with the vision, mission and objectives of an entrepreneur to attain the long-term goal of the business. 2\. **Resonance to Values**- It is essential that the opportunities you choose to pursue matches with your values and desired virtues. 3\. **Reinforcement of Entrepreneurial Interests-** As a potential entrepreneur, it is best to select an opportunity close to your interests to develop your skills. 4\. **Revenues**- Revenues depend not only on the quality of the opportunity, but on the future enterprise's ability to strategize and develop a saleable product or service. 5\. **Responsiveness to Customer Needs and Wants-** If your choice fits well with unfulfilled customer wishes, then you have a better chance to succeed. 6\. **Reach-** Opportunities that can be expanded by adding similar products or services, branches or franchise outlets have good visions for attaining rapid development. 7\. **Range-** The broader the variety of potential product or service offerings, the more attractive is the opportunity. 8\. **Revolutionary Impact-** The next big thing in the market is likely to be the opportunity. It can be a game changer that revolutionizes industries and makes old products and services obsolete. 9\. **Returns-** Opportunities with low production or servicing costs but higher prices would most likely yield higher returns on sales and return on investment. 10\. **Relative Ease of Implementation-** The best opportunities are those that are easy for you to implement, but very difficult for others. 11\. **Required Resources -** Opportunities requiring fewer resources from an entrepreneur may be more profitable than those requiring more resources. 12\. **Risks-** Some opportunities are riskier than others because they are untested or have a very small market base. Sales might be seasonal or cyclical. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **Market segmentation-** is an entrepreneurial marketing strategy designed primarily to divide the market into small segments with distinct needs, characteristics, or behavior \- It is the process of dividing the market into homogenous part or groups. (So & Torres, p. 55) \_\_\_\_\_\_\_\_\_\_\_\_\_\_ **Types of Market Segmentation** 1\. **Geographic Segmentation** = Total markets are into cities, regions, rural and urban areas based on location. -The physical location of a market includes the general characteristics of the location, factors such as climate, traffic conditions, cultural characteristics that are inherited in a geographic area, livelihood opportunities and population density. Example \#1: Baguio city offers a cooler overall climate. Example \#2: Jazz Cola, began by focusing primarily in Visayas, building up popularity there among teenagers in 1990's. They were effectively competing with Coca Cola through low price and a localized strategy ( at least until Coca Cola bought it.) 2\. **Demographic Segmentation** = Market is divided according to personal traits of their consumers like Age, Gender, Income, Religion, Nationality. It is the easiest and most common used in market segmentation. -Refers to quantifiable and factual statistics of the population such as age, sex, income, occupation and any information gathered by National Statistics Office (NSO) Example\#1: In Gender Segmentation, Ana focuses only on shoes for women. Example \#2: Lamoiyan Corporation Hapee Toothpaste began by appealing to kids using bright toothpaste with fruity flavors. 3\. **Psychographic Segmentation** = market is divided based on mental and emotional characteristics of what the customers think and believe in. Their needs, wants, lifestyles, attitudes, personalities, social classes and other variables should be considered. \- how consumers see and feel about themselves, hence, psycho or "of the mind". It includes elements such as social class, lifestyle and personality. -If you are segmenting the market by whether or not they are adventurous, idealistic, or how they feel about a particular issue or who they aspire to be, then these are all factors that reside primarily in people's minds. Example \#1: Manufacturing companies of Levis jeans only serve the customers who have the interest to buy their products and those who are brand conscious. Example \#2: Nike has used psychographics in designing its communication, appealing primarily to people with competitive self identities. 4\. **Behavioral Segmentation** = Market is divided on the way customers used and acted toward the products. It is based on the customers' knowledge, responses, perceptions, reactions, benefits and loyalty. -refers to how we behave when buying a product, whether these actions maybe conscious or unconscious in nature. This includes issues such as: when do we typically buy a product what we look for in buying the product how loyal we tend to be towards a brand how often and how much do we buy what price point we can be comfortable with how ready we are to buy the product in the first place for whom we typically buy the product. Example \#1: Fruit juice company may decide to concentrate the segment of their products to teenagers from the middle class income and not to segment by education. Example \#2: Jollibee originally differentiated its burger by proclaiming them to be "Langhap Sarap" appealing to a typical Filipino behavior of smelling food to fully appreciate it before eating it. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **Overview and Significance of Marketing Mix** **Marketing** - defines as an organizational function and a set of process for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **Overview of Marketing Mix** In 1948, the 7P's of marketing article has been published by Harvard University professor **James Culliton** in which he describes as "**mixers of ingredients**." Later on, his colleague **Neil Borden** (1960) reinvent the term "**marketing mix**" which composed of **12 elements** such as; product planning, pricing, branding, channels of distribution, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact-finding analysis. In 1960, Northwestern University professor **Edmund Jerome McCarthy** proposed the conceptualization of **4P's that focused into 4 elements**, namely: Product, Price, Place, and Promotion that only caters to "product industries". To enable the "service industries" adopt the said elements**, three additional P's are formed**---People, Physical evidence, and Process (Booms and Bitner 1993). \_\_\_\_\_\_\_\_\_\_\_\_\_ **These are the elements of 7P's:** 1\. **Product**. It could be tangible or intangible in nature that can be offered for the satisfaction of consumers. 2\. **Price**. It determines the value of goods or service to the buyers and sellers. It also includes the production cost. 3\. **Place**. The location wherein the product is being processed and where can the consumers buy. 4\. **Promotion**. A marketing strategy in which it is used to inform and persuade your target consumers about your product. 5\. **People**. They are the ones who provide information about the product that provides consumer satisfaction. 6\. **Process**. A set of activities that results in the delivery of product benefits in a standard procedure. 7\. **Physical evidence (environment)**. Includes product packaging, delivery receipts, signage, or the layout of a physical store. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **BRANDING** **Brand** -is a mark of differentiation that can be sensed usually in the form of names or terms and signs or symbols. Well-managed brands give the product a good evaluation and mark to the customers. **Branding** -- means "the use of a name, term, symbol, or design-or a combination of these- as a marketing tool to identify a product." A **brand name** - It is aword, letter, or a group of words or letter. Example: Subject Names **Elements of a Brand** 1\. **Trademark** - is a legal term. It includes only those words, symbols, or marks that are legally registered for use by a single company. **Rights Granted**: Right to use the mark and prevent others from using similar mark in a way that would cause a likelihood of confusion about the origin of the goods or services. 2\. **Logo** - is the visual symbol or image that identifies the product. Examples: the stylized script letters of Coca-Cola. 3\. **Taglines** - are optional catch-phrases, such as BDO's "We find ways." 4**. Generic category** - is a classification in which the brand would fall under. For Medicines: \*PARACETAMOL -- BIOGESIC \*Phenylephrine Chlorphenamine -- NEOZEP OR BIOFLU \*Cetirizin -- Benadryl one, sa baby: Alnix and allerkid 5\. **Visual cues** - are the distinctive visual identifiers, such as colors and shapes. Example: the green and red line of Seven --Eleven. 6\. **Sounds** - as advertising jingles such as M. Lhuillier "Ang tulay ng Pilipino, maaasahan at sigurado." 7\. **Scent and Taste-** -signature fragrance and special recipes or secret ingredients. Example is the sweet Filipino style of Jolly Spaghetti and the aromatic Chicken Joy of Jollibee and burger \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **INTRODUCTION TO BUSINESS PLAN PREPARATION** Vocabulary List **Business** - refers to the organized efforts and activities of individuals to produce and sell goods and services for profit. **Business Plan** - is a detailed and integrated written document that describes the various activities involved in opening and operating a new entrepreneurial venture. **Entrepreneur** -- refers to a person who strongly advocates and correctly practices the concepts and principles of entrepreneurship in operating and managing the self-owned entrepreneurial venture. **Entrepreneurship** -- is the art of observing correct practices in managing and operating a self-owned, wealth-creating business enterprise by providing goods and services that are valuable to the customers. **Feasibility** -- the possibility that can be made, done, or achieved, or is reasonable. **Feasibility Study** - This is another document that must be prepared aside from the Business Plan. \- F.S. will serve as the forerunner of the business plan. \- Feasibility study is an assessment of the practicality of a proposed plan. **Corporation** - is a legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. \_\_\_\_\_\_\_\_\_\_\_ **What is a Business Plan?** 1\. It is a road map that provides directions so a business can plan its future and helps it avoid bumps in the road. 2\. It is the only single written document that must be prepared before opening a new business or expanding an existing business. 3\. It provides a clear direction to any uncertain business endeavor. 4\. It is a detailed and integrated written document that describes the various activities involved in opening and operating a new entrepreneurial venture. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **MAJOR PARTS OF THE BUSINESS PLAN** **Introduction**-The introduction presents the general perspective of the business. It may consist of one to two pages. **Different sections in Introduction:** 1\. **Proposed Name of the Business** The proposed business name must: 1\. Reflect the business identity and image, 2\. Promote the philosophical values and culture that the business values the most, 3\. Profess the brand identity of the product, and 4\. Attract or influence the target costumers \_\_\_\_\_\_\_\_\_\_\_ 2\. **Address of the Business**-It is important that the address of the Business is correctly written because all business correspondence is mailed to the business address. Raw materials and other manufacturing supplies are also shipped by the seller to the designated business address. \*\*\*e-mail address is necessarry to facilitate electronic communication between the business and significant parties. \_\_\_\_\_\_\_\_\_\_\_ 3\. **Name of the Owner or Owners** The name of the owner must be properly stated. **Sole Proprietorship**- there is only one owner. **Partnership** - the names of the partners **Corporation** - the names, nationalities, and addresses of the incorporators must be given. Incorporators are persons who originally formed the corporation. \_\_\_\_\_\_\_\_\_\_\_ 4\. **Description of the Business** -A brief description of the business must include information about the type of product or service that the business intends to produce or provide. It must include a brief information about: Mission Vision Goals Objectives The other products or services that the business plans to produce or provide must also be mentioned in the description of the business. \_\_\_\_\_\_\_\_\_\_\_ 5\. **Location of the Business**- indicates the reason/s for the selection of the location. The following factors should be considered when deciding on the location of the proposed business: 1\. Proximity to the target customers 2\. Distance from the sources of raw materials, labor, and utilities 3\. Availability and cost of transportation 4\. Peace and order situation 5\. Presence of direct competitors 6\. The geographic and climatic conditions \_\_\_\_\_\_\_\_\_\_\_ 6\. **Funding Requirement and Source** - The estimated total initial cost of the business venture must be clearly indicated. This section also presents the source or sources of funds. The initial cost of the investment may be provided solely by the owner or owners or partly by the owner and creditors.