Recognize a Potential Market

Background

• Entrepreneurial Idea: Leads to identification of opportunities, creation of new products/services.
• Entrepreneurial Venture: Creation of new businesses and concepts.

Essentials in Entrepreneur's Opportunity Seeking

Basic Foundations for Entrepreneurs

1. Entrepreneurial Mind Frame: Positive and optimistic outlook, risk-taker, solutions-oriented.
2. Entrepreneurial Heart Flame: Driven by passion, motivated to achieve goals, satisfaction in discovery.
3. Entrepreneurial Gut Game: Intuition-based decision making, confidence in one's aspirations.

Sources of Opportunities

Changes in the Environment

• External Environment: Technology, consumer behavior, e-commerce rise.
• Physical Environment: Climate, natural resources, wildlife.
• Societal Environment: Political (laws, regulations), Economic (income levels, employment), Socio-cultural (customs, lifestyles), Technological (new innovations).

Industry Environment

• Competitors: Direct (Jollibee vs. McDo), Indirect (Jollibee vs. Pizza Hut).
• Customers: Key stakeholders.
• Creditors: Banks, suppliers on account.
• Employees: Crucial internal stakeholders.
• Government: Regulatory influence.
• Suppliers: Provide essential raw materials.

Factors Influencing Opportunity Recognition

• Climate: Seasonal business adaptations (e.g., ice cream in summer, coffee in rainy season).
• Technological Discovery: New inventions leading to business ideas.
• Government Programs: Policies creating new business opportunities.
• People's Interest: Hobbies and preferences influencing market demand.
• Past Experiences: Leveraging skills and expertise from previous work.

Forces of Competition Model (Five Sources of Competition)

1. Buyers
   • Bargaining power, price influence.
   • Factors reducing threat: Several suppliers, potential for backward integration, minimal switching costs, high buyer's cost percentage, bulk purchasing.
2. Potential New Entrants
   • Barriers to entry: Capital requirements, strict government policies, distribution channel access, economies of scale, high product differentiation costs, high switching costs.
3. Rivalry Among Existing Firms
   • Factors: Diversity of rivals, number of competing firms, product/service characteristics, increased capacity, fixed costs, industry growth rate.
4. Substitute Products
   • Threat factors: Low switching costs, changing customer preferences, noticeable product differentiation, improved substitute quality, lower substitute prices.
5. Suppliers
   • Factors: Ability for forward integration, few suppliers with high sales volume, lack of substitute products, high switching costs, unique products.

Conclusion

• Lecture summary and thanks.