BUSINESS

PLAN
 A documented statement that provides clear
and specific description of the goals or
objectives of the business and how these
goals will be achieved.
What is Business Plan for?
Entrepreneur who plan to enter any business
endeavour must have a business plan on hand to
guide them throughout the process. Different
business plans are prepared for different purpose.
There are business plans written prior to setting up
an enterprise, which are similar to a prefeasibility
study and feasibility study.
 Many new enterprise need to convince
prospective business investors about the
soundness and potential of their business. They
need to convey the capabilities and
competencies of their owners and managers.
They must also be able to sell the proponent
and the business proposition to this audience.
These are situations when a good business plan
is needed.
 There are business plans that are written
during the first few years of the enterprise in
order to guide the entrepreneur on which
strategies would be most beneficial for the
enterprise to take . And there are business plans
that are focused on bringing the enterprise to a
higher level of growth, a period where the
enterprise has already reached its peak and
would want to enter into another endeavour by
recreating and re-establishing itself.
Business Plan serves many master.
 First, it serves the entrepreneur who must set
a navigational course.
 Second, it serves investors and cautious

financiers.
 Third, it serves the managers and staff of the

organization so that they will know the

strategies and programs of the enterprise.
The business plan must have a specific
audience in mind and what important questions
do this audience want answered. In order to aid
the entrepreneur in getting his or her business
plan organized, the following format may be
good start:
OUTLINE OF A BUSINESS PLAN
I. Cover Sheet
II. Introduction
III. Table of Contents
IV. Executive Summary
V. Target Customers and Main Value Proposition
VI. Organizational Plan
VII. Marketing Plan
VIII. Enterprise Strategy And Enterprise Delivery
System
IX. Financial Plan
I. COVER SHEET
 This should include the following:
 Company Name
 Company Address
 Company Phone Number
 Website Address (url)
 Company Logo
 Name and Contact Information of the owner or
officers
 Issue Date of Business Plan
 Preparer Name
I. INTRODUCTION
A. Business Concepts and Business Model
B. Business Goals
 Vision
 Mission
 Objectives
 Performance Targets
C. Business offering and Justification
II. Executive Summary
III. The Business Proponents:
 Organizers with their capabilities and

Contributions.
IV. The target customers and the Main Value
Proposition to the customer
V. The Market, Market Justification based on the
Industry dynamics and the Macro Environmental
Factors Affecting Opportunities and Threats in the
Market, the Size, potential and realistic share of the
Market.
VI. The Product and service offerings
VII. The Enterprise strategy and Enterprise
Delivery Systems: Business competitiveness
VIII. The financial forecasts and Expected
Returns, Risks, and Contingencies
IX. Environmental and Regulatory Compliance
X. The capital structure and financial offering:
Returns and benefits to Investors, Financiers,
and Business Partners.
Contents of a Business Plan
Business Concepts
 Contains the essence of enterprise in a concise but
powerful manner.
 It stresses the value of the product offering to the

target consumers who would most likely to buy it

Business MODEL
 It
is a formula on how the enterprise
exactly plans to make money out of
the business.
 The product concept must be translated into
a business model. A business model is a
formula on how the enterprise exactly plans
to make money out of the business.
There are four areas of money making which
the business model must address:
1. How will the business raise revenues? What critical
factors will cause the revenues to materialize?
2. What will be the costs of the enterprise products and
other costs be managed to ensure comfortable
profits? What critical factors will drive the costs? How
can these factors be controlled?
3. What will be the major investments of the enterprise a
competitive edge?
4. How will the enterprise finance the investments? How
will the enterprise fund its growth?
Business goals
It shows the future and long-term prospects of the
enterprise. It is composed of the mission, vision,
objectives, key result areas and performance indicators
of the enterprise.
VISION
“To establish a commanding presence and market
leadership as food chain servicing major bus terminals
in Central Luzon within the
next five years. ”
MISSION
“ To provide quality food and passenger convenience
services that would generate sufficient profits for the
stockholders and improve
the lives of its employees. ”
OBJECTIVES
 Vision and mission must be translated into
measurable end results, called objectives.
 It must be more specific than the vision and mission
statements.
 They should be SMART.
Case Example: Double Happiness
 Vision:
“ to establish a commanding presence and market
leadership as a food chain servicing major bus
terminals in Central Luzon within the next five years.”

Goals:
are communicated by articulating the basic purpose
of setting up the enterprise in a mission statement.
Needless to say, all business enterprises are establish
for the purpose of making money for its investors.
Mission
 “ to provide quality food and passenger
convenience services that would generate
sufficient profits for the stock holders and
improve the lives of its employees.”
Sample Objectives
 To establish a strong market presence in Central
Luzon;
 To earn good financial returns for its owners;
 To delight customers with high quality food and
services; and
 To make the organization a happy and rewarding
place to work in.
KEY RESULT AREA
 Objectives must be translated into key result area or
KRA.
 KRAs are the qualitative manifestations that the
objectives are being achieved.
PERFORMANCE INDICATOR
 The Key Result Area must be rendered into qualified
measurements, otherwise called performance
indicator.
 It serves as the aspirational scorecard of the
enterprise managers and the motivational results of
the investors.
EXECUTIVE SUMMARY
 Summarizes the who, what, where, why, when, and
how.
 Who are the officer and managers?
 What is the business name, assets and
liabilities?
 Where is the business located?
 Why is a loan needed?
 When was the business established?
 How much funding is needed?
EXECUTIVE SUMMARY
 It contains everything that is relevant and important
to the business audience.
 It is a synthesis of an entire plan.
 It must contain the major argumentations of the
business proponents on why the business will work
and succeed.
EXECUTIVE SUMMARY
 It should then render all the major institutional,
market, operations, and organizational strategies
previously cited into financial strategies and
forecasts.
 Investment requirements should be presented along
with the summaries of the projected income
statements, balance sheets, cash flows, and funds
flow and their analysis and conclusions.
EXECUTIVE SUMMARY
 It should also contain a section on the
environmental and regulatory compliance of the
proposed business, as well as more proactive
programs to become a more responsible corporate
citizens.
 It should also present the capital structure of the
proposed business and show how this structure will
respond to the investment programs and financial
forecast of the enterprise.
 It can only be written last in order to capture the
findings and insights of the other parts, but for
presentation purposes, it is placed in the first part of
the business plan.
The Business Proponents
Four types of stake holders
1. Resource mobilizers and Financial backers
2. Technology providers and applicators
3. Governance and top management
4. Operating and support team
 If the Business plan readers are the
resource providers, then they will want to
know who else are on board to share the
burden of raising money to see the whole
thing through.
 If the business readers are the governance

and top management team, then they will

want to know what strategies and
performance indicators are being proposed.
 If the business plan readers are the
technology providers, they will want to know
if there will be sufficient funds to pay for the
technology.
 If the business plan readers are the

implementing, operating and support teams,

they will want to know what programs,
activities, tasks, and resources would be in
place.
TARGET CUSTOMERS & MAIN VALUE
PROPOSITION
 The business proponent must be very precise
about the target audience or target customer.
 Target Customers
- must be sufficient size sufficient paying capacity,
and have sufficient interest to purchase the products
being offered by the enterprise.
 Main Value Proposition
- the unique selling proposition of the enterprise.
TARGET CUSTOMERS & MAIN VALUE
PROPOSITION
Knowing where the target customers are
exactly concentrated, the business plan should
then pinpoint what the customers buy, when
they buy, where they buy, and what convinces
them to buy. These information should then be
used to justify the exact locations and
marketing channels to be employed by the
enterprise.
TARGET CUSTOMERS & MAIN VALUE
PROPOSITION
 Unique Selling Proposition
 the reason that one product or service is different from and
better than that of the competition.
 This is especially important when your product or service is
similar to your competitors.
 USP requires careful analysis of other businesses' ads and
marketing messages. If you analyze what they say or what
they sell, not just their product or service characteristics, you
can learn a great deal about how companies distinguish
themselves from competitors.
ORGANIZATIONAL PLAN
 This section describes the legal form of
business selected and why.
 Sole Proprietor
 Partnership
 Corporation
 ORGANIZATIONAL PLAN
A. Management and Personnel
B. Personnel
C. Accounting and Legal Accounting
D. Insurance
E. Security
F. Business Proponents
ORGANIZATIONAL PLAN
A. Management and Personnel

Why should your management be entrusted with our

money?
Who is in charge of product, marketing,
administration and finance?
ORGANIZATIONAL PLAN
B. Personnel

How many employees are required to operate

company?
When will you hire employee?
How will you hire employee?
What are the salaries and benefits?
ORGANIZATIONAL PLAN
C. Accounting and Legal Accounting
What accounting system will be used?
Why was it chosen?
What portion of accounting will be done internally?
Who is responsible for this record?
ORGANIZATIONAL PLAN
D. Insurance
Is your business insured?

E. Security

How will you protect your information, inventory

and products from being stolen?
ORGANIZATIONAL PLAN
F. Business Proponents
Information about stakeholders

Four Types of Stakeholders:

1. Resource mobilizers and Financial backers
2. Technology providers and applicators
3. Governance and top management
4. Operating and support team
Market Demand and Supply, Industry Dynamics,
and Macro Environmental Factors
 What is the Market?
A market is any place where makers, distributors
or retailers sell, and consumers buy. It is to the
whole group of buyers for a good or service.
Businesses that operate in markets are competitors
of other businesses as well. The other companies or
rivals offer similar goods or services.
 Markets are composed of the following:
  Buyers
  Sellers
  Institutions and infrastructure
  Others: importers, processors, storage

owners, wholesalers, credit suppliers,

government officials and policies
Why market is important?

 Markets are a part of everyone’s lives

  People rely on markets for food, essential
goods and services
  It provides access to paid work and
mechanisms for selling commodities and services
  It is a source of livelihood
  Impairing markets can have negative impacts,
particularly on the poor
  Important to understand markets, so we know
if our programs are strengthening or harming
markets
The fifth section of the business plan is the
market demand and supply, the industry
dynamics, and the macro environmental forces
affecting the business of the enterprise.
It is normal for enterprises to actually expand
their product offerings to include to other
segments of a bigger market. The business
proponent should examine all the opportunities
in this bigger market in order to determine what
exactly influences this bigger market.
The business plan should estimate the total market
supply and demand for the product offerings of the
enterprise. The business plan should then determine the
major critical factors that influence this market demand
and supply.
Once these critical factors or variables are determined,
the business plan should then forecast the future
demand and supply. If these physical factors are
expected to remain the same, the most likely, the future
forecast will follow the past trends. If not, the future
demand and supply should be revised according to the
new variables influencing the demand and supply.
 The market analysis and forecasting
exercise should lead to a quantification of the
current and prospective size of the market.
Both the current potential consumptions
should then be dissected.
The business plan should discuss the relevant
industry dynamics:
 
 
Who are the competing enterprises in the industry and what
are their comparative advantages and disadvantages? What
business models and strategies are they employing?
Who are the suppliers in the industry and what are their
capabilities and bargaining power?

What are the channels of distribution being used by the

industry? How effective are these channels?
 Both the industry players and the market are
affected by the macro environment, which
includes the social, political, economic,
ecological, and technological (SPEET) forces.
The business plan should discuss the major
trends and changing patterns in the macro-
environment, which would have significant
impacts on the relevant industry and the
behavior of consumers.
 Social environment includes the demographics and cultural
dimensions that govern the relevant entrepreneurial behavior.
The structure, social status, and dynamics of the population at
large, as well as the people's beliefs, tastes, mores, customs,
and traditions dictate the major parameters of market behavior.

Political
environment defines the governance system of the
country or the local area of business. It includes all the laws, rules,
and regulations on allowable and disallowable business practices.
 Economic Environment
is mainly driven by supply and demand forces. It is the
same factor that drives the interest and foreign exchange rates
to fluctuate with the movement of the market forces.
 
 Ecological environment includes all-natural resources and the
ecosystem that defines the habitat of man, animals, plants, and
minerals.

 Technological environment makes or breaks competing

participants in any industry. New scientific and technological
discoveries often lead to the launch and commercialization of new
products with superior attributes or to rendering the old ones
obsolete.
  
Product/Service Offering: Description,
Evolution, and Justification
The sixth section of the business plan is the product/service
offerings that should contain a description, evolution, and
justification of the product/service offerings.
The products/services must be described by highlighting the
features and attributes that would most appeal to the target
customers. The business plan should also prove that the
products/services would be accepted and carried by the
distribution channels.
 ENTERPRISE STRATEGY AND
ENTERPRISE DELIVERY SYSTEM
The business plan should expound on the
Enterprise Strategy (ES) by mapping the
competitive landscape and by situating the
enterprise and its competitors as to their
strategies and chosen positionings.
ENTERPRISE STRATEGY AND
ENTERPRISE DELIVERY SYSTEM
ENTERPRISE STRATEGY
- builds and develops the game plan for attaining
competitiveness.

ENTERPRISE DELIVERY SYSTEM

- the entire process of converting input (resources)
into output and these output into outcomes.
ENTERPRISE STRATEGY AND
ENTERPRISE DELIVERY SYSTEM

The business plan should then show how the

Enterprise Delivery System (EDS) would enable
the business to implement the Enterprise
Strategy.
 The Enterprise Delivery System starts from the
Input (resources mobilized), proceeds to the.
Throughput (the transformation process where input
are converted to output), and produces the Output
(the products/services). The Output are then marketed
to the customers (in the case of goods) or experienced
by the customers (in the case of services). Customer
satisfaction level, profits generated, and the
performance of people from the transaction are the
Outcomes of the EDS.
 Input Throughput Output Marketing Desired
Outcomes

• Harnessing • Conversion of • Goods • Positioning • Customer

of human, input into produced • Product satisfied
money and output and the or • Packaging • Sales
physical transformation services • Place volume
resources process within delivered • People attained
the factory or • Promotion • Profits
• Resources service shop • Price generated
mobilized • People
-Money performance
-Men
-Machines
-Materials
-Methods
-Managemenr
 
The EDS involves the harnessing of human, money,
and physical resources well-selected sources.
These resources become the input (money, men, machines,
materials, and management) which the Operations unit within
the EDS (i.e., the manufacturing service delivery personnel) will
convert or transform into output.
The output will then be delivered to the customers through
the Marketing unit EDS. The products/services of the enterprise
are positioned to meet the requirements the selected market
segment by choosing the right packaging, pricing promotions,
people for selling and distribution, and places or locations
where the targeted customers can best be found.
 
 

The Operations and Marketing units are supported

by the Finance, Administration and Human Resource
Management units, which oversee the flow of money,
the procurement and maintenance of machinery and
materials, and ensure the proper deployment and
development of people.
 The EDS serves as the enabler of the Enterprise
Strategy. The business plan must demonstrate how the
EDS and the ES tandem lead to the attainment of the
desired enterprise outcomes.
These business outcomes should reasonably include:

 high customer satisfaction levels;

 high sales volume, market share, and market
reach;
 high financial returns; and
 high people performance, productivity, and
morale levels.
Financial Forecasts: Expected Returns,
Risks, and Contingences
 The eighth section of the business plan is the
financial forecast including the financial returns, the
financial risks, and the financial contingencies.
 
The business plan must translate everything that we
have discussed so far into financial forecasts and
outcomes.
 From the financial forecasts, the business plan should then calculate
the expected the business. The important return calculations are the
following:

(1) expected return on sates;

(2) expected return on assets or investments;
and
(3) expected return on stockholders' equity.
 The business plan should also calculate the long-
term returns, using the time value of money. This
means estimating the internal rate of return and the
expected net present value.
The business plan should then evaluate both the
business risks and the financial risks involved.
 Environmental and Regulatory Compliance
The ninth part of the business plan is composed of the
environmental and regulatory compliance.

The business plan must articulate the laws, rules, and regulations
governing the business, and the industry that the enterprise is in. It
should ascertain that all the necessary permits, licenses, and authority
to use proprietary intellectual capital had either been secured or would
definitely be secured.
 
 The business plan should also assure the reader that
all the necessary local government ordinances and
barangay ethics would be followed by the enterprise.
 Since you would spend considerable time
and money launching and operating your
business, you have to protect its name. Before
you order your business cards, create social
network accounts, print stationery and
brochures, you first need to register your
business with:
DTI( Department of Trade and
Industry)
Many people start their own business by
operating it under their own name( and
sometimes underground), but this make the
enterprise look small and unprofessional.
Before you start any business, you should
first decide on a trade business name and
register it with the DTI.
For newly set up companies
 Securities and exchange Commission (SEC)
registration ( to have its legal personality)
 Bureau of Internal Revenue (BIR) registration

( For taxation purposes)

 Sss, Philhealth, Pag ibig
 Mayors permit
 Barangay clearance
 Occupancy permit ( Building and unit)
 Sanitary permit
 Location clearance
 Fire clearance
Other Government agencies
 DOH ( Department of Health)
 DENR ( Department of Environment and

Natural Resources

-depending on the nature of your business

Capital Structure and Financial Offering:
Returns and Benefits to Investors,
Financiers, and Partners
 The tenth section of the business plan contains the
capital structure and financial offerings of the
enterprise including some discussions on who are the
investors, the financiers, and the partners of the
enterprise.
Finally, the business plan must appeal to its target
audience. It must highlight for them the main features
of the business plan that they are looking for.
CHAPTER 2: OPPORTUNITY
SEEKING, SCREENING, AND
SEIZING
2.1 OPPORTUNITY SEEKING

Entrepreneurs are innovative opportunity seekers. They have

endless curiosity to discover new or different ideas and see
whether these ideas will work in the marketplace. This is what
separates entrepreneurs from the ordinary businessman whose
main objective is simply to earn profits from producing, buying,
and selling goods.
 Entrepreneurs create value by introducing new products or
services or finding better ways of making them. These may
include innovation in terms of product design or addition of new
product features to existing ones. They may also tinker on
improving their operational capability by employing new
technologies that will bring them greater efficiency, better
economies, and even enable them to reach unparalleled
superiority.
 They may also consider expanding their reach by
creating new markets or maximizing existing market
reach. At the highest level, entrepreneurs may totally
change the prevailing business paradigm by rendering
it obsolete through the introduction of disruptive
technologies, processes, and systems.
Entrepreneurial Mind Frame, Heart
Flame, and Gut Game
  Essential to an entrepreneur's opportunity seeking are the
entrepreneurial mind frame, heart flame, and gut game.
The entrepreneurial mind frame allows the entrepreneur to
see things in a very positive and optimistic light in the midst of
crisis or difficult situations. Instead of being discouraged, the
entrepreneur is able to use these problematic situations as
inspiration in creating something innovative. In fact, in Chinese
writing, the word crisis is composed of two characters. The first
character means danger while the second character means
opportunity.
 If there is one commonality between an inventor
and an entrepreneur, it is their surging passion or the
entrepreneurial heart flame. Driven by passion, they are
drawn to find fulfillment in the act and process of
discovery.
 Passion is that great desire to attain a vision or
fulfill a mission. It is about wanting something so
much that a person would be willing to totally devote
one's self to the quest. Despite several setbacks or
disappointments, the entrepreneur is not easily
disheartened, but is rather driven to persevere even
more
The heart flame is also about emotional intelligence or EQ,
which is Often manifested in the entrepreneur's efforts to
nurture relationships with customers employees, and
suppliers. The entrepreneur also looks after the interests of
his or her people by motivating and encouraging them to be
the best they can become. This creates a caring culture
within the organization that brings about synergy among the
people working toward a common vision.
The final ingredient is the entrepreneurial gut game. This
refers to the ability of the entrepreneur to sense without
using the five senses. This is also known as intuition.
 Somehow, the entrepreneur just knows
whether something will work or not without
necessitating logical, systematic, and
sequential thinking. The gut game also
connotes courage or, in the local dialect, “
lakas ng loob” ( strong intestinal fortitude). It is
simply confidence in one’s self and the firm
belief that everything is within reach so long as
you aspire for it.
The many sources of Opportunities
There are many ways to uncover or discover
opportunities. Some have to do with looking at the
big picture and noticing emerging trends and
patterns. Others have to do with finding out what
specific customer segments are being targeted in the
market place. Still, others come from new
technologies and new knowledge.
Macro Environmental Sources
Opportunities

The macro environment refers to the “big or

macro forces” that affect the area, the industry,
and the market, which the enterprise belongs
to. They influence how business should be
conducted, how consumers will behave, how
consumers will behave, how supply and
demand will move, how different competitors
would position themselves, and how the cost
of doing business will proceed.
 The macro environment forces can be
divided into five categories composed of
SPEET. The macro environment forces create
their own opportunities for the enterprise to
exploit, and their own threats for the
enterprise to counteract.
SPEET
1. Socio-Cultural Environment

2. Political Environment
 Laws
 Rules
 Regulations
 Permits
 License necessary to operate the business.
 Regulates the use of natural resources
 Disposal of wastes
 Taxation of income
 Importation of goods and services
 Accounting and reporting of business

financial statements;
 Private and public education
 Health programs
 Use of public funds
Other concerns
 Establishment of vital infrastructures, logical
access, and interventions that affect the cost
of doing business.
3. Economic Environment
4. Ecological Environment
 The threats of ecological degradation have
generated countless opportunities such as
smoke and spill detectors, filters and screens,
pollution counters, and energy-saving
devices.
◦
Opportunities abound for greener, cleaner, and
healthier products, whose objectives are to
save the planet and prolong lives.

5. Technological Environment
Industry Sources of Opportunities
After the macro environment, the next biggest
sources of opportunities are the industry and the
market. One of the most difficult aspects about
industry analysis is defining what constitutes an
industry in the first place. The proper classification
of what industry the enterprise is competing in is
important if the entrepreneur’s intention is to
define who are the relevant customers, who are the
direct and indirect competitors, and what are the
critical characteristics of the market as to quality of
products or services to be delivered.
Participants is an industry include:
1. Rivals or competitors in a particular type of
business ( Jollibee vs. Mcdonalds, Coca cola
vs. Pepsi, Samsung Galaxy vs. Apple iPhone).
True rivals or competitors are those
competing for the same or similar markets.

2. Suppliers of input ( fuel, electricity, raw

materials) to rivals as well as suppliers of
machinery and equipment, suppliers of man
power and expertise, and suppliers of
merchandise
3. Consumer market segments being served
by rivals or competitors.
4. Substitute products or services, which
customers shift or turn to.
5. All other support and enabling industries
After identifying the participants, it would help the
entrepreneur to determine the logic of the industry. how do
these participants in the industry make or lose money? What
critical factors drive the industry's success? What critical factors
lead to failures?
A thorough analysis of industry structure and dynamics
yields opportunities for the clever entrepreneur. Situating his or
her enterprise within the realm of an industry provides many
profitable opportunities for the entrepreneur.
 There are several ways of defining an industry. The
most common way of defining an industry is according
to product types or according to the functions of the
product or service. Classic examples of these industries
include the computer industry (Microsoft vs. Apple),
beer industry (San Miguel Beer vs. Beer na Beer), fast
food industry (McDonald's vs. Jollibee), and cola
industry (Coca-Cola vs. Pepsi Cola).
 Another way of defining an industry is by tracing
the industry from its most basic raw material down to
its various consumer applications, otherwise known as
product or value-added chain. The difference between
the product and value-added chain is the focus of the
analysis. Product chain focuses on the volume
produced or converted at each link of the chain. On
the other hand, the value-added chain focuses on the
economic rather than the volume aspect of the chain.
 To illustrate the tracing of a product chain, a good
example would be the coconut industry. The coconut
tree, regarded as the 'tree of life,' is useful for different
purposes. Its trunk, shell, meat, husk, and leaves find
their way to all types of products such as oils, soap,
handicraft, oleochemicals, furniture, wallboards, coir,
etc. Looking at this value chain alone presents many
potential opportunities for the entrepreneur.
 However, defining an industry with a narrower
scope presents a threat because of its limiting effect.
For example, to simply classify all those using coconuts
in their production process as being in the coconut
industry per se might not be too useful. The reason is
that most of the coconuts harvested are processed
into coconut oil, which is just one of the many
substitutes in the fats and vegetable oils industry
traded worldwide.
 The value-added chain follows the product chain but
concentrates on the 'value' added from one stage of
the product to the other—a value that is given by the
market price differential between stages of production.
The differential would include the additional costs of
processing the product from one stage to the next and
the profit margins added on each stage by the
processor (or distributor). A good example of the value-
added chain would be a cup of designer coffee.
 At farm gate prices, one would get a few pesos out of a bag
of freshly picked coffee beans. The coffee beans will then get
processed and packaged by the coffee manufacturer. Cost and
profit margins are added before selling the product to
distributors. Once it gets in the hands of the distributors, the
latter will have to market and sell the finished product to coffee
shops for a few more pesos added to cover for the logistical and
transportation costs incurred. The coffee shops will then
proceed to concoct their own versions of designer coffees. The
fancier the coffee gets, the more expensive a cup of designer
coffee becomes. Figure 2.1 shows the relationship between
product and value added chain.
The entrepreneur may discover weak links in the chain that
need strengthening or gaps in the whole chain that need
filling. Sometimes, the opportunity lies not in finding gaps
and weaknesses but in assailing the strongest links where
there may be a concentration of bargaining power. In this
case, the entrepreneur should determine which players
produce the most volume of goods, which ones push the
most volume through the market channels all the way to the
final customers. These processes may uncover strategic
opportunities for industry intervention.
The entrepreneur should always be alert in detecting windows
of opportunities emanating from shifts in the industry power
equation or changes in the industry rules of the game.