entrep

Salary-Substitute Firms

• Definition: Firms that provide owners a comparable level of income to what they would earn in conventional jobs.

Lifestyle Firms

• Definition: Firms that offer owners the chance to pursue specific lifestyles while earning a living.

• Characteristics: Not innovative or quickly growing.

Entrepreneurial Firms

• Definition: Firms that introduce new products and services to the market by creating and seizing opportunities, regardless of available resources.

• Essence of Entrepreneurship: Creating value and disseminating it to customers.

Changing Demographics of Entrepreneurs

• Women Entrepreneurs

• Minority Entrepreneurs

• Senior Entrepreneurs

• Young Entrepreneurs

Women Entrepreneurs

• Definition: Women who initiate, organize, operate, and manage a business that involves risks and uncertainties.

• Contributions: Bring economic growth, innovation, creativity, and productivity, playing a critical role in entrepreneurship.

Minority Entrepreneurs

• Definition: Business owners who belong to minority groups (religious, ethnic, racial, cultural, gender, or sexuality).

• Support: Growth facilitated by organizations that promote and assist minority entrepreneurs.

Senior Entrepreneurs

• Definition: Individuals aged 50 or older who plan to start, are starting, or have recently started a business.

Young Entrepreneurs

• Definition: Children or young adults who take risks to start and operate a business or improve existing business models.

• Education: Teaching entrepreneurship in high schools and universities is becoming commonplace.

Why Entrepreneurship is Important?

• Joseph Schumpeter (1934) stated the importance of entrepreneurship to the economy in his book The Theory of Economic Development.

  • Concept: Entrepreneurs create new products and technologies that render existing products obsolete, termed "creative destruction."

Creative Destruction Process

• Initiated by startups improving on existing products.

• Not limited to new products; includes new pricing strategies, distribution channels, or retail formats.

Economic Impact of Entrepreneurial Firms

• Two key reasons:

  1. Innovation: Central to the entrepreneurial process; involves creating something new.

  2. Job Creation: Small businesses create most new jobs and employ over half of private sector employees in the Philippines and other countries.

Entrepreneurial Firms’ Impact on Society

• Innovations lead to new products and services that enhance quality of life and productivity.

• Innovations also present moral and ethical challenges that societies must address.

Entrepreneurial Firms’ Impact on Larger Firms

• Entrepreneurial firms contribute positively to larger firms' effectiveness.

  • Example: Original equipment manufacturers supplying parts to larger firms.

Partnerships with Larger Firms

• Evidence shows many entrepreneurial firms build their business models around products/services that enhance larger firms' efficiency.

• Collaborations accelerate growth through accessing partners' resources and talent.

The Entrepreneurial Process

• Four Steps:

  1. Deciding to become an entrepreneur.

  2. Developing successful business ideas.

  3. Transitioning from an idea to an entrepreneurial firm.

  4. Managing and growing the entrepreneurial firm.

Identifying and Recognizing Opportunities

• Opportunity: A favorable set of circumstances for a new product, service, or business.

• Opportunity Gap: Identifying products/services that are needed but not yet available in the market.

Attractive and Durable Opportunities

• Features:

  1. Timely

  2. Anchored in a product, service, or business that adds value.

Importance of Window of Opportunity

• Definition: The period during which a firm can realistically enter a new market.

Three Ways to Identify Opportunities

1. Observing Trends

2. Solving Problems

3. Finding Market Gaps

Observing Trends

• Essential to monitor economic, social, technological, and regulatory trends for entrepreneurial opportunities.

Distinguishing Trends vs. Fads

• Important to focus on sustainable trends instead of fads that lack long-term viability.

Economic Forces Impacting Opportunities

• Key factors:

  • Economic state

  • Disposable income levels

  • Consumer spending patterns

Social Forces Impacting Opportunities

• Understanding societal trends is vital for product and service development.

• Reasons for a product's existence often relate to social needs.

Current Social Trends

• Aging baby boomers

• Workforce diversity

• Growing interest in social networks (e.g., Facebook, Twitter)

• Health and wellness awareness

• Clean energy emphasis (wind, solar, etc.)

• Educational retraining trends

• Interest in healthy and green products.

Technological Advances

• Frequently linked with economic and social changes to yield new opportunities.