Untitled Flashcards Set

Chapter 1: Entrepreneurship

WHAT IS AN ENTREPRENEUR?

• Entrepreneur: Individuals who have initiated the establishment of a business enterprise. The term comes from the French word entreprendre, which means "to undertake."

• Megaentrepreneurs: Entrepreneurs who generate substantial value and profits from innovations in a very short period of time, often using enormous amounts of capital and absorbing huge risks.

• Microentrepreneurs: Entrepreneurs in developing countries who initiate business enterprises with limited 'value-added' and profits, often due to limited funds and skills. They engage in micro and small businesses as an alternative to formal employment.

ENTREPRENEURIAL PROCESS

• Entrepreneurial Process: The systematic approach entrepreneurs follow to achieve their goals, involving several stages from the awareness of an opportunity to the realization of a business idea.

  • Discovery: The recognition of a business idea or the detection of opportunities that could make money for the entrepreneur.

  • Development of Concept: Transforming the business idea into a detailed business concept, including the preparation of a business plan.

  • Organizing Resources: Identifying, sourcing, and financing human, nonhuman, and other resources needed for the conduct of business.

  • Implementation: Carrying out the business plan, including managing resources and responding to external challenges.

  • Reaping the Returns: Strategies related to the expansion of the business firm and addressing conditions in the business environment.

CHARACTERISTICS OF AN ENTREPRENEUR

• Entrepreneurial Traits and Creation of Value-added: The characteristics of an entrepreneur vary depending on their level of education, employment status, wealth, and risk appetite.

  • Level of Education: Megaentrepreneurs often have formal education to understand technological developments, while microentrepreneurs may have limited educational qualifications.

  • Employment Status: Megaentrepreneurs are usually former employees of companies in the formal sector, while microentrepreneurs are often drawn from the pool of the unemployed or underemployed.

  • Entrepreneur’s Wealth: Megaentrepreneurs often source funds from their own wealth or family, while microentrepreneurs have limited funds.

  • Risk Appetite: Megaentrepreneurs are more willing to take risks due to their education, experience, and wealth, while microentrepreneurs take risks by default but have limited risk appetite.

• Entrepreneurial Traits and Entrepreneurial Intentions: The formation of entrepreneurial intentions is influenced by internal and external factors.

  • Internal Factors: Demographics, personal traits, psychological characteristics, individual skills, prior knowledge, and social ties.

  • External Factors: Environmental support (government, financial institutions, training institutions) and environmental influence (regulatory structure, patents, protection of property rights, competitive environment).

CHARACTERISTICS OF FILIPINO ENTREPRENEURS

• Filipino Entrepreneurs: Many Filipinos engage in entrepreneurship for income creation and employment. Early-stage entrepreneurial activities are more common among females, while mature-stage activities see a more even gender distribution. Young individuals are more attracted to entrepreneurship due to youth unemployment.

ENTREPRENEURIAL DECISION-MAKING

• Critical Thinking: The systematic and rational way of providing an answer to a question, useful in explaining how a firm can survive and remain stable.

  • SWOT Analysis: A tool used in business analysis to show how businesses can use their strengths to take advantage of opportunities, improve on their weaknesses, and guard themselves against threats.

  • Porter’s Five Forces of Competition: A framework used to determine the impacts of various forms of competition, including the bargaining power of buyers, suppliers, existing competitors, potential rivals, and new products.

  • Environmental Scanning: A systematic analysis of the effects of various environments on the viability of a firm.

• Creative Thinking: Thought processes that bring about the discovery of new ideas, useful in developing new products and systems in business operations.

• Strategic Thinking: Thought processes that assess a current situation and formulate plans for the future, useful in enhancing the growth of an enterprise.

RISKS, COGNITIVE ADAPTABILITY, AND ENTREPRENEURIAL DECISIONS

• Risks: Uncertain situations and developments that can increase the probability of loss or business failure, categorized into internal and external risks.

• Cognitive Adaptability: The ability of individuals to produce several ways of decision-making based on the identification and management of changes in their environment, requiring flexibility, dynamism, and self-control.

Chapter 2: Generating Ideas: Harnessing Logic and Creativity

SOURCES OF IDEAS FOR ENTREPRENEURIAL VENTURES

• From the Product: Entrepreneurs can source business ideas from existing products or services by differentiating them.

• From the Process: Business ideas can arise from the process of production and distribution.

• From the Person: Business ideas can come from an individual's interests, hobbies, skills, dreams, and travels.

• From Relationships: Business ideas can be sourced from families, relatives, friends, and neighbors.

METHODS FOR GENERATING OR TESTING NEW IDEAS

• Logical Thinking: The systematic and rational way of providing an answer to a question, used in methods like statistical analysis, market analysis, SWOT analysis, and Delphi technique.

  • SWOT Analysis: A tool used to describe the state of competition within an industry and provide business ideas that an entrepreneur can pursue.

  • Porter’s Five Forces of Competition: A framework used to analyze the competitive environment and generate business ideas based on the bargaining powers of competitors and suppliers, major shifts in government involvement, sociodemographic changes, and technological developments.

  • Delphi Technique: A systematic way of generating ideas from a select group of individuals using various rounds of consultations or sessions.

• Creative Thinking: Thought processes that do not follow systematic or analytical procedures, used in methods like brainstorming, problem inventory analysis, free association method, and checklist method.

  • Brainstorming: An unstructured discussion of a group to elicit ideas, where all ideas are entertained, even those that are illogical.

  • Problem Inventory Analysis: A group discussion method directed at identifying all possible problems encountered with a specific product or service and providing alternative solutions.

  • Free Association Method: A technique used to elicit ideas by expressing thoughts associated with words and ideas given by a facilitator.

  • Checklist Method: A creative way of obtaining business ideas by listing all possible changes that can be made with an existing product or service.

    • SCAMPER: A specific checklist method developed by Alex Osborn, which stands for Substitute, Combine, Adapt, Magnify, Put to other use, Eliminate, and Rearrange. It is used to generate ideas by altering existing products or services.

FACTORS THAT INFLUENCE CREATIVITY

• Problem Solving Factors: The ability to solve problems, influenced by knowledge, experience, and education.

• Motivational Factors: The motivation of an individual to address dissatisfactions and take risks.

• Situational Factors: The ability to implement a plan and manage time under pressure.

• Organizational Factors: Management support, risk-taking incentives, flexible rules, degrees of freedom, and positive evaluation.

CREATIVE PROBLEM SOLVING

• Creative Problem Solving (CPS): A procedure of answering a problem with mechanisms and techniques incorporating creativity, using divergent and convergent thinking processes.

  • Osborn-Parnes Model: A model of creative problem solving developed by Alex Osborn and Sidney Parnes, involving six steps: setting the objective, revisiting the objective, identifying the problem, looking for a solution, selecting a solution, and accepting the solution.

Chapter 3: Recognizing, Assessing, and Exploiting Opportunities

OPPORTUNITY RECOGNITION PROCESS

• Opportunity: A situation or occasion that makes it possible to do something that you want to do, involving a commitment of resources and exposure to risk.

  • Precondition: The preparatory stage where the individual assesses their knowledge of the market.

  • Conception: The gestation phase where entrepreneurial intentions and ideas are generated.

  • Visioning: The stage where ideas become clearer and lead to a new business opportunity.

  • Assessment: The evaluation of whether the idea can be realized.

  • Realization: The production of a prototype or tangible form of the idea.

FACTORS IN OPPORTUNITY RECOGNITION

• Market Awareness: Personal exposure to the market and its components, acquired from formal training and experience.

• Entrepreneurial Readiness: The individual's resources, ability to take risks, and manage uncertainties.

• Connections: The diversity of networks that can bring about business opportunities.

OPPORTUNITY ASSESSMENT

• Product or Service: The unique features and competitive edge of the product or service.

• Market Opportunity: The appraisal of the characteristics of the market, including the competitive environment.

• Costing and Pricing: The cost of production and the unit price of the commodity.

• Profitability: The extent of profitability of a product or service.

• Resource Requirements: The inputs needed in the production process, including raw materials and factor inputs.

• Risks: Uncertain situations that can increase the probability of loss or business failure.

• Entrepreneurial Commitment: The individual's motivation, skills, experience, resources, and time commitment.

OPPORTUNITY PATHWAYS

• Rational Approach: A systematic procedure in proceeding with the implementation of a business opportunity, applicable for business ideas that require substantial initial investments.

• Intuitive Approach: An approach that relies on the intuition of the individual, informed by prior knowledge and experiences, suitable for business ideas that do not require substantial initial investments.

Important Persons Mentioned in the Book

1. Mark Zuckerberg

   • Co-founder of Facebook.

   • Known for using developments in ICT to create a global social network.

2. Travis Kalanick

   • Co-founder of Uber.

   • A prominent example of a megaentrepreneur.

3. Lucio Tan

   • Owner of Philippine Airlines and Asia Brewery.

   • A successful Filipino entrepreneur.

4. Socorro Ramos

   • Owner of National Bookstore.

   • A notable Filipino entrepreneur.

5. Alfredo Yao

   • President of Zest-O Corporation.

   • A successful Filipino entrepreneur.

6. Edgar Sia II

   • Founder of Mang Inasal.

   • A prominent Filipino entrepreneur.

7. Tony Tan Caktiong

   • Founder of Jollibee.

   • A successful Filipino entrepreneur with a college degree.

8. Cecilio Pedro

   • Founder of Lamoiyan Corporation.

   • A successful Filipino entrepreneur.

9. Pacita Juan

   • Co-founder of ECHOstore.

   • A successful Filipino entrepreneur.

10. Joseph Schumpeter

    • Economist and author of The Theory of Economic Development.

    • Emphasized the role of entrepreneurs in economic transformation.

11. Peter Drucker

    • Author of Innovation and Entrepreneurship.

    • Emphasized the discipline in starting and managing a business.

12. Alex Osborn

    • Developer of the SCAMPER method.

    • Co-creator of the Osborn-Parnes Model of creative problem solving.

    • SCAMPER: A checklist method for generating ideas by altering existing products or services (Substitute, Combine, Adapt, Magnify, Put to other use, Eliminate, Rearrange).

13. Sidney Parnes

    • Co-creator of the Osborn-Parnes Model of creative problem solving.

    • Osborn-Parnes Model: A model of creative problem solving involving divergent and convergent thinking processes.

14. W. Chan Kim and Renee Mauborgne

    • Authors of Blue Ocean Strategy.

    • Blue Ocean Strategy: A strategy for creating new market spaces (blue oceans) by differentiating products and reducing costs, rather than competing in existing markets (red oceans).

15. Karl Ulrich

    • Coined the term annoyance-driven innovation.

    • Annoyance-Driven Innovation: A concept where new products or services are created to address annoyances or dissatisfaction with existing ones.