ENTREPRENEURSHI P:

Recognizing Potential Market

 OBJECTIVE
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.
 MARKET – IT IS A PLACE WHERE BUYERS AND SELLERS
INTERACT.
It can be described as the exchange of goods and
services between businesses.
POTENTIAL MARKET – refers to a group of consumers or businesses
that have a need or desire for a product and service but may not
currently be part of the existing customer base. Could make eco
friendly pet cleaning products a successful niche
Example: eco friendly cleaning products- pet owners as their
potential market;
while the company focuses on general household
cleaning product,
the awareness of growing pet related allergies
sensitivity Could
make eco friendly pet cleaning products a successful
position.
 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

Creation of Identification of Opening of

Entrepreneurial entrepreneurial entrepreneurial
Ideas Opportunities Venture
 Essentials in Entrepreneur’s Opportunity Seeking
These are the basic foundation that the entrepreneur must have in
seeking opportunities:

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.
 Essentials in Entrepreneur’s Opportunity Seeking

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
 OPPORTUNITY
Is an entrepreneur's business idea that
can potentially become a commercial
product or services in the future
Sources of Opportunities

Government’s
Changes in Technologic thrust, People’s Past
the al interest experience
environme discovery
programs, and
s
nt and policies
advanceme
nt
 Changes in the environment

Changes in the “It is not the strongest of the

Environment species that survives, nor
the most intelligent that
Entrepreneurial ideas survives. It is the one that is
arise when changes
happen in the external
most adaptable to change.”
environment. A person
with an entrepreneurial - Charles Darwin

drive views these

changes positively.
2. Technological discovery and advancement

You can’t wait for inspiration. You have to go

after it with a club.
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 considerable
reduce fuel consumption
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 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.
1.2 The Societal Environment
1.2 The Societal environment includes the 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
External environment refers to the physical environment,
societal environment, and industry environment where
the business operates.
1.3 The industry environment of the business includes:
a. Competitors
b. Customers
c. Creditors
d. Employees
e. Government
f. Suppliers
 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.
 Forces of
Competition Model
It is also known as the “five forces of competition,” An industry environment
is a competitive environment. Regardless of what product or services you
have, competition is always present.

Competition – it is the act or process of trying to get or win

something. For example, the prices are lower when there is a
competition among the stores.
These are the five forces competing within
the industry:
• Buyers
• Potential new entrants
• Rivalry among existing firms
• Substitute products
• Supplier
. Buyers

The buyers are the one that pays cash in exchange to your goods
and services.
For example, the influenced of the price or in the bargaining
strategy. The buyer has a strong and magnified bargaining power.
The threat of its bargaining power will be less if the following factors
notice:
a. There are several suppliers available in the market.
b. The buyer has the potential for backward integration.
c. The cost of switching the supplier cost is minimal.
d. The product represents a high percentage of the buyer’s
cost.
e. The buyer purchases large portions of the seller’s product or
services.
. Potential New Entrants
A new entrant is defined as the one who enters something.
For example, the level of capital requirements, if the
business requires huge capital, new entrants should
decline to join the business. This gives a threat to the
business. This can be notice if there is the presence of the
following factors:
a. Substantial capital requirement.
b. Strict government policy.
c. Difficulty in accessing distribution channels.
d. Economies of scale.
e. High cost of product differentiation.
f. High switching cost
3. Rivalry among Existing Firms
Rivalry is a state or situation in which people or groups are
competing with each other. For example it depends on the
Marketing strategy of your competitor, like giving freebies
and special offers. The intensity of rivalry among existing
firms is characterized to the following factors:

a. Diversity of rivals.
b. Number of competing firms.
c. Characteristics of the products or services.
d. Increased capacity.
e. Amount of fixed costs.
f. Rate of industry growth.
4. Substitute Products

Substitute means anything that takes the place or

function of another.
For example the consumers decide to use
margarine as a substitute for butter. In case
the price of butter increases, preferably the
consumer will gradually switch to
margarine.

A substitute product can give a big threat in the

industry environment if the following
factors are notice:
A substitute product can give a big threat in the
industry environment if the following
factors are notice:
a. Switching cost is low.
b. Preferences and tastes of the customers
easily change.
c. Product differentiation is highly noticeable
d. The quality of substitute products
dramatically improves.
e. The price of substitute product is
substantially lower.
5. Suppliers

The Suppliers are the one that provide something

that is needed or wanted.

For example if the supply and services being

offered is unstable or keep. The intensity of
the threat is strong in this kind of the competitive
force in the industry.
This can be
notice if there is the presence of the following
factors:
a. The supplier has the ability for forward
integration.
b. Suppliers in the industry are few, but the sales
volume is high.
c. Substitute products are not readily available in
the market
d. The switching cost is very high.
e. The product or service is unique.
This can be
notice if there is the presence of the following
factors:
a. The supplier has the ability for forward
integration.
b. Suppliers in the industry are few, but the sales
volume is high.
c. Substitute products are not readily available in
the market
d. The switching cost is very high.
e. The product or service is unique.
Group Activity:
List 4 examples of a primary product and
substitute products with brand name. Then
describe and differentiate its characteristics and
uses.
Margarine(star margarine)
Example Butter -
Ballpen Pencil (Mongol)
Group Activity:
primary product and mention a substitute
products with brand name. Then describe and
differentiate its characteristics and uses.
[Link]
[Link]
4. TOOTHPASTE
[Link] BAR SOAP
[Link]
[Link] POWDER SOAP
8. POWDER MILK
9. CAR TOYOTA
10 PASTE
THA NK YOU!