Entrep Term Test

**OPPORTUNITY SEEKING**

discover new or different ideas; innovation part of the business; create value

Entrepreneurial Mind Frame

* see things in a very positive and optimistic light in the midst of crisis
* problems = opportunity = inspiration = challenge = not smth that will bring you down

Entrepreneurial Heart Flame

driven by passion (they feel fulfilled); emotional intelligence (relationship with suppliers, customers and employees)

Entrepreneurial Gut Game

sense without using the 5 senses (intuition); they know smth will work or not; courage

Macro Environment

* how consumers will behave, how supply and demand will move
* FACTORS (things you can take advantage of; can not be controlled = need to adapt)

**Political Forces**

* government type and policy, funding, grants, and initiatives
* government actions that influence the economy
* EX. policies and laws on taxation, rules, and regulations in business practices, permits, approvals, licenses, trade, and labor
* follow the requirements, they make change = be active
* imports & exports,

**Economic Forces**

* inflation and interest rates, labor and energy costs; supply and demand
* determinants of an economy
* market boom, a recession (a period of temporary economic decline) or a growing inflation
* EX. inflation rate, interest rate, monetary policies, and foreign exchange rates,

**Social Forces**

aspects of culture and society, demographics, lifestyle, values, social trends, and other similar changes

DEMOGRAPHICS

age, race, ethnicity, gender, marital status, income, education, and employment

CULTURAL DIMENSION

beliefs, tastes, customs and traditions

__FADS__

trends that are **short-lived** (months)

__TRENDS__

particular behavior of a certain group of individuals which lasts for a **certain period** (years)

__MEGATRENDS__

trends that persist over a **long period**

**Technology**

advancements in technology

* This prompts companies to analyze trends and developments in technology and determine how these can be used for their benefit
* EX. emerging technologies, web; information & communication

**Legal and Regulatory Forces**

* laws, regulations, and government policies; standards and employment law
* include health and safety standards, advertising policies, equal opportunity regulations, copyright laws, consumer rights, and policies on product labeling.
* similar to political
* These forces regulate the activities of the business organization, and marketers need to be aware of __rules__ and __guidelines__ in order to undertake **effective** and **proper** strategies. 
* These forces also ensure healthy competition within the market and uphold consumer rights.

**Environmental/ Ecological Forces**

* weather, green, & ethical issues; pollution, waste, recycle; ecology, climate, and climate change
* Business devises plans and other means to address the threats it possesses.

Industry

* product types/function of the product or service
* (e.g. computer industry, beer industry, fast food industry, cola industry, etc.)

**PRODUCT CHAIN**

* focuses on the __volume produced__ and the use of the product to the consumers; all parts of the raw material can be used

**VALUE-ADDED CHAIN**

*  focuses on the __value__ or __cost__ **added** in each stage of making the product; chain of mark-ups

**Market**

* actual and potential demand and supply of a product
* Ex. value/combo meals or more-for-less strategy

**Micromarket**

* **specific target market segment**
* are those who are currently buying the goods or services.

**Consumer Preferences**

* the tastes of particular groups of people; taste → culture, age)

**Consumer Piques**

 things that irritate customers

**Consumer Perceptions**

customer's impression, awareness or consciousness about a company or its offerings

Other Sources of Opportunities

* Entrepreneur's own set of skills, expertise or hobby
* New knowledge on new technology

**OPPORTUNITY SCREENING**

Which one is the most effective opportunity?

Personal Screening

* entrepreneurs have to consider his/her preferences and capabilities through these questions.
* Do I have the drive to pursue this business opportunity to the end?
* Am I willing to spend my time, effort and money to make the business opportunity work?
* Am I willing to sacrifice my existing lifestyle, endure emotional hardship, and forego my usual comforts to succeed in this business opportunity?

__WEIGHT__

COMPONENT IN RISK/RETURN GRID

* is how important is that r to the opportunity of the business

__RATING__

COMPONENT IN RISK/RETURN GRID

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can you do it?

**Relevance**

The opportunity must be __aligned__ with your business' vision, mission and objectives.

**Resonance**

The opportunity must match the values and desired __virtues__ that you wish to impart.

**Reinforcement**

* The entrepreneurs should reflect on their __personal interests, talents and skills__ as well as their hobbies and previous experiences.

**Revenue**

* Determine the __sales potential__ of the products/services you want to offer. 
* Is there a big enough market to grab and nurture for growth?

**Responsiveness**

* The entrepreneurs should try to __research__ what his/her target customers are looking for.

**Reach**

Opportunities that have good chances of __expanding__ through branches, distributorships, dealerships or franchise outlets in order to attain rapid growth are better opportunities.

**Range**

* Does this business opportunity have the potential for creating a __wide array__/display of **products/services**?
*  Is it easy to increase the number of product/service offerings?

**Revolutionary Impact**

* If you think the opportunity will be the __next big thing__ or game changer, then there's a big potential for the chosen opportunity.

**Returns**

* Does the business opportunity promise to generate __good profits__? 
* Products with low costs of production and operations but are sold at higher prices will definitely yield the highest returns on investments.

**Relative Ease of Implementation**

Will the opportunity be __easy__ to implement by the entrepreneur or will there be a lot of problems to overcome?

**Resources Required**

* Requiring fewer resources from the entrepreneur may be more favored than those requiring more resources. 
* Does the opportunity need a lot of capital?

**Risk**

Does the opportunity present a lot of market, technology, people and financial __risks__?

Pre-feasibility Study

* ascertain the __viability__ of the opportunity; is it possible?
* focuses on the few ideas that could make or break your business concept
* a preliminary study undertaken to determine, analyze, and select the best business scenarios.

**Market Potential and Prospects**

* estimated **possible** customers who might avail your product or service
* factors that customers consider in making final choice in buying

**Market Segmentation**

division of customers in different sets (e.g. demographics)

**Assessment of Competition**

* determine how saturated the market is in a given area
* more suppliers and competitors = greater level of saturation
* this is about how heavy the market is in a given area. 
* Some entrepreneurs would like to keep out of a market where there's a tight competition but others prefer to enter the biggest and richest competitive markets for them to have growth potential.

**Estimation of Market Shares and Sales**

* define the market coverage (active outlets)
* determine the broad market segments within the area (demographics)
* evaluate the relative strengths of suppliers and competitors

MARKET SHARES

* stronger the business and longer = higher market share
* Each company within an industry has sold to a percentage of the market.

MARKET COVERAGE

number of active retail and wholesale outlets

Technology Assessment and Operations Viability

determine whether the product/service will meet customer demand/not

**Quantities Demand**

one of the four target customer expectations affecting the scale and complexity of an enterprise's operations

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* It's about the needed capacity/volume of the operations.

**Quality Specifications Demanded**

one of the four target customer expectations affecting the scale and complexity of an enterprise's operations

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* Quality of input/raw materials, Quality assurance process in transforming input to output, Quality output that meets the operations, standards set, and Quality outcomes for the customers who will be looking for specific results.

**Delivery Expectations**

one of the four target customer expectations affecting the scale and complexity of an enterprise's operations

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How much, how frequent, and when to deliver to customers.

**Price expectations**

one of the four target customer expectations affecting the scale and complexity of an enterprise's operations

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Selling price would be evaluated by the customers according to the value that they would receive (in terms of quality, delivery, and quantity) and it should be matched against competitors

Investment Requirements

* determine how much money is needed to start the business opportunity considering the technologies and operating levels

**Pre-Operating Costs**

one of the three investments that need to be funded

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Costs related to the preparation for the launch of the business (pre-feasibility study, in-depth feasibility study, market research, product development, organizational development, and initial promotional costs)

**Production/Service Facilities Investment**

one of the three investments that need to be funded

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The long-term investment for the actual business establishment (investment in land, buildings, machinery, equipment, computers, software, furniture, vehicles, etc.) If the business will rent, it would also be included.

**Working Capital Investment**

one of the three investments that need to be funded

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The investment needed to operationalize the business (__cash__ - to cover the inventories to be purchase; __accounts receivable__ - to accommodate customers and operating expenses to be incurred such as employees’ salaries, wages and benefits, rent expense, utilities, transportation, fees and licenses, commissions, office supplies; inventories)

**Financial Forecasts and Determination of Financial Feasibility**

* indicate the feasibility of the enterprise
* **complete projection of the financial statements**
* the monetary transactions that the business is expected to engage in

Income Statement

* revenue/sales forecasts (marketing strategy and action program)
* forecasts of cost of goods produced (operations strategy and production/service delivery program); raw materials
* forecasts of operating and non-operating expenses (rest of the enterprise delivery system)

Balance Sheet

shows the investments in form of assets and their corresponding financing in form of liabilities (resources mobilized)

Cash and Funds Flow Statement

* flow of resources
* inflow - income; outcome - expenses


* Net Income or Net Loss
* earn? lose?

**The Feasibility Study**

* required for bigger projects that entail millions of pesos worth of investment
* more __comprehensive__ and __detailed__; more rigorous/meticulous approach

prepared to __convince__ bankers and investors to put money into the business

**OPPORTUNITY SEIZING**

determine the critical success factor and be vigilant about the factors the lead to failure

CRITICAL SUCCESS FACTOR

* ay change depending on what market segment the enterprise is addressing.
*  If the market segment wants high quality and can tolerate high prices, it's different from those who are very price conscious but at the same time not too demanding on the quality.
* Will I be able to manage these factors?

POSITIONING STATEMENT

* an expression of how a given product, service or brand fills a particular consumer need in a way that its competitors don't.
* branding of the product
* For you to craft a positioning statement, know your competitors' major buyers and features of their products should give you an idea.
*  Then, customer profiling should be done.

VALUE PROPOSITION

* a statement that answers the __'why'__ someone should do business with you.
*  It should __convince__ a potential customer why your service or product will be of more value to them than similar offerings from your competition.

__MARKET NICHE__

* small segments of the market where discriminating customers are searching for special product/service features and attributes to satisfy the specific market needs.

**Designing, Prototyping, and Testing the Product**

* render the concept and translate it into reality
* assess how much resources are available and what kind of setup is needed
* provide the concept and translate it into its very physical and very real dimensions. 
* Then, assess how much resources are available in order to seize the opportunity and what kind of organizational setup will work best for this kind of opportunity.
* END RESULT: highly satisfied customers, huge sales realized, large profits generated, etc.

**WHY**

ONE OF THE QUESTIONS THAT SHOULD BE ASK IN MARKET RESEARCH

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Purpose and objective for conducting the market research

**WHAT**

ONE OF THE QUESTIONS THAT SHOULD BE ASK IN MARKET RESEARCH

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Determine the scope and limitation of the market research to be conducted

**WHICH**

ONE OF THE QUESTIONS THAT SHOULD BE ASK IN MARKET RESEARCH

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Determine the market segment to be studied

**WHO**

ONE OF THE QUESTIONS THAT SHOULD BE ASK IN MARKET RESEARCH

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Identify the members of the selected segment who will participate for the research

**WHEN**

ONE OF THE QUESTIONS THAT SHOULD BE ASK IN MARKET RESEARCH

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Determine the time and timing of the research

**WHERE**

ONE OF THE QUESTIONS THAT SHOULD BE ASK IN MARKET RESEARCH

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Pinpoint the relevant location of the market research

**HOW**

ONE OF THE QUESTIONS THAT SHOULD BE ASK IN MARKET RESEARCH

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Determine the methodology to be used.

Sales Data Mining

* observing and recording
* includes all numbers for the data; frequencies

Focus Group Discussion

* is one of the most common qualitative research tools. 
* It is effective in extracting consumer and non-consumer experiences regarding products, places, or programs. 
* This method can also be used for generating initial insights.
* extracting consumer and non-customer experience about the product, place or program
* timer, transcriber; 1. 5 to 3 hours only
* qualitative, interview

Observation Technique

* one of the best ways of gathering data about customers in their __natural__ setting without having to interact or talk to them. 
* One has to simply observe people as they go about their usual activity such as buying and using products and services and assess how they __behave__.
* However, the researcher must be __discreet__ so as not to attract the attention of the one being observed.

HUMAN OBSERVATION

humans observe the events as they happen

MECHANICAL OBSERVATION

mechanical devices are used to record events for later analysis

Survey Research

* most preferred instrument for in-depth quantitative research
* The respondents are asked a variety of questions which are often about their personal __information__, __motivations__, and __behavior__.
* not only paper and pen, also be conducted via telephone, personal, and mail interview

Usage, Attitude, and Image Survey

*  the most popular type of survey
* is intended to **derive** market __awareness__, market __size__ and __share__, product __usage__ and __preference__, customer __interest__, and customer __image__.

**Probability sampling**

*  randomly selected

**Non Probability sampling**

done when it's difficult to estimate population because they move from one place to another or not permanent in a given location; respondents are not constant

**Data variability of a proportion**

* how spread out a set of data is from a central point

**Confidence level**

*  tells you how sure you can be (90%, 95%, 99%)

**Error in the result**

remaining of the confidence level

 **Legal Visibility**

the ability to accurately and completely view the processes, transactions and other activities operating within an enterprise

**People and Physical Resources**

these are the sales volume targeted (determine the quantities of materials, supplies, power, space, people, operating expenses, and other requirements), technology to be utilized, and the capabilities needed by the employees (calibrate the salaries and wages, benefits and allowance, travel and transportation, and other people-related expenses).

**Peso/Money Resources**

other financial requirements in establishing and nurturing the business.