“Too many people are

thinking of security
instead of opportunity.
They seem more afraid
of life than death.”
-James F. Byrnes
Recognize a Potential
Market
FIX ME:
PSIERUPL

01
Suppliers – are the ones who provide
something that is needed or wanted.
FIX ME:
NISSUBES

02
Business – The activity of making,
buying, or selling goods or providing
services in exchange of money.
FIX ME:
KERTAM

03
Market – a regular gathering of people
for the purchase and sale of provisions,
livestock, and other commodities
FIX ME:
EDICRRSTO

03 Creditors – or lender is a party that has

a claim on the services of a second
party. It is a person or institution to whom
money is owed.
FIX ME:
SUTEMOSRC

03 Costumers – a person or organization

that buys goods or services from a store
or business
FIX ME:
UTSBETIUST

03 Substitute– anything that takes the

place or function of another.
FIX ME:
CTROPDUS

03 Products– is something that is made or

grown to be sold or use, or something
that is result of a process.
Entrepreneurial Ideas
The creation of an
entrepreneurial idea leads
to the identification of
entrepreneurial
opportunities, which in
turn results in the
opening of an
entrepreneurial venture.
 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 Entrepreneurial
seeking opportunities:
mind frame.
Entrepreneurial
heart flame.
Entrepreneurial
gut game.
Sources of Opportunities
“Looking at the big
picture, some have
noticed the emerging
trends and patterns for
business opportunities.
While others are trying
to find out their target
market.”
 1.Changes in the Environment
1.1 The Physical en- 1.2 The Societal envi- 1.3 The Industry envi-
vironment ronment ronment

a. Climate – the weather a. Political forces –

conditions. includes all the laws, a. Competitors
b. Natural resources – rules, and regulations
such as minerals, forests, b. Economic forces –
b. Customers
water, and fertile land that such as income level and c. Creditors
occur in nature and can be employment rate.
used for economic gain. c. Sociocultural forces –
d. Employees
c. Wildlife – includes all customs, lifestyles e. Government
mammals, birds, reptiles, d. Technological
fish, etc., that live in the environment – new
f. Suppliers
wild. inventions and innovations.
2. Technological discovery and advancement
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 additional
engine parts that considerably reduce
fuel consumption.
3. Government’s thrust, programs, and
policies

The priorities, projects,

programs, and policies of the
government are also good
sources of ideas.
4. People’s interest

The interest, hobbies, and

preferences of people are rich
sources of entrepreneurial ideas,
like the increasing number of
Internet Cafés at present could
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 a related
business enterprise.
WORD HUNT
 Forces of
Competition Model
Forces of Competition Level
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.
Five Forces of Competition
The buyers are the ones
1. BUYERS that pay cash in exchange for
your goods and services.
One example is the influence
of the price or in the
bargaining strategy. The
buyer has a strong and
magnified bargaining power.
BUYER
The threat of its bargaining power will be less if
the following factors are noticed:

a. There are several

suppliers available in
the market.
BUYER
The threat of its bargaining power will be less if
the following factors are noticed:

b. The buyer has the

potential for
backward integration.
BUYER
The threat of its bargaining power will be less if
the following factors are noticed:

c. The cost of
switching the supplier
cost is minimal.
BUYER
The threat of its bargaining power will be less if
the following factors are noticed:

d. The product
represents a high
percentage of the
buyer’s cost.
BUYER
The threat of its bargaining power will be less if
the following factors are noticed:

e. The buyer
purchases large
portions of the seller’s
product or services.
Five Forces of Competition
is defined as companies or
2. Potential businesses that have the ability
to penetrate or enter into a
New Entrants
particular industry. For example,
in the level of capital
requirements, if the business
requires huge capital, new
entrants should decline to join
the business.
POTENTIAL NEW ENTRANTS
This gives a threat to the business. This can be
noticed if there is the presence of the following
factors:
a. Substantial capital
requirement
b. Strict government
policy
POTENTIAL NEW ENTRANTS
This gives a threat to the business. This can be
noticed if there is the presence of the following
factors:
c. Difficulty in
accessing distribution
channels
d. Economies of scale
POTENTIAL NEW ENTRANTS
This gives a threat to the business. This can be
noticed if there is the presence of the following
factors:
e. High cost of
product differentiation
f. High switching cost
Five Forces of Competition
Rivalry is a state or situation
wherein business organizations
3. Rivalry among
are competing with each other
Existing Firms
in a particular market. For
example, it depends on the
marketing strategy of your
competitor, like giving freebies
and special offers.
RIVALRY AMONG EXISTING FIRMS
The intensity of rivalry among existing firms is
characterized to the following factors:

a. Diversity of rivals
b. Number of
competing firms
RIVALRY AMONG EXISTING FIRMS
The intensity of rivalry among existing firms is
characterized to the following factors:

c. Characteristics of
the products or
services
d. Increased capacity
RIVALRY AMONG EXISTING FIRMS
The intensity of rivalry among existing firms is
characterized to the following factors:

e. Amount of fixed
costs
f. Rate of industry
growth
Five Forces of Competition
Substitute is one that serves the
same purpose as another
4. Substitute
product in the market. For
Products
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.
SUBSTITUTES PRODUCTS
A substitute product can give a big threat in the
industry environment if the following factors are
noticed:
a. Switching cost is low
b. Preferences and
tastes of the customers
easily change
SUBSTITUTES PRODUCTS
A substitute product can give a big threat in the
industry environment if the following factors are
noticed:
c. Product differentiation
is highly noticeable
d. The quality of
substitute products
dramatically improves
SUBSTITUTES PRODUCTS
A substitute product can give a big threat in the
industry environment if the following factors are
noticed:
e. The price of
substitute product is
substantially lower
Five Forces of Competition

5. Suppliers The Suppliers are the one

that provide something that
is needed in business
operations such as office
supplies and equipment.
SUPPLIERS
The intensity of the threat is strong in this kind of
the competitive force in the industry. This can be
noticed if there is the presence of the following
factors:
a. The supplier has the
ability for forward
integration
SUPPLIERS
The intensity of the threat is strong in this kind of
the competitive force in the industry. This can be
noticed if there is the presence of the following
factors:
b. Suppliers in the
industry are few, but
the sales volume is
high
SUPPLIERS
The intensity of the threat is strong in this kind of
the competitive force in the industry. This can be
noticed if there is the presence of the following
factors:
c. Substitute products
are not readily
available in the market
SUPPLIERS
The intensity of the threat is strong in this kind of
the competitive force in the industry. This can be
noticed if there is the presence of the following
factors:
d. The switching cost is
very high
e. The product or
service is unique