Lesson 1:

Historical Development of Entrepreneurship

Evolution of Entrepreneurship

• The word Entrepreneur is derived from the French entreprendre, meaning “to undertake.”

• It was a term coined by Richard Cantillon, a French economist.

• The entrepreneur is one who undertakes to organize, manage, and assume the risks of a business.

R.A. NO. 10679- YOUTH ENTREPRENEURSHIP ACT IN 2015

The Beginnings of Entrepreneurship and Trade

• The first entrepreneurs can be traced back to nearly 20,000 years ago.

• The first known trading between humans took place in New Guinea around 17,000 BCE.

• Locals would exchange obsidian (a volcanic glass prized for its use in hunting tools) for other needed goods – like tools, skins, and
food.

• This early type of entrepreneurship continued for millennia.

• Hunter-gatherer tribes would trade goods from different parts of their respective regions to provide an overall benefit for their tribe.

Entrepreneurship and the Agricultural Revolution

• Humans started to domesticate plants and animals. Instead of having to roam, forage, and hunt for their food in different regions
throughout the year, human populations could remain stationary in one location and farm the land.

• People didn’t need to spend all day hunting and gathering for their own sustenance – it was more efficient to let a smaller number of
farmers handle food production while the rest of the population focused on other tasks.

• Some common areas of specialization included:

∙ Hunting and gathering

∙ Fishing

∙ Cooking

∙ Tool-making

∙ Shelter-building

∙ Clothes-making

• Farmers could grow more food than they needed to support their own families.

• They could rely on the specialized services within a community to provide for them.

• Over time, these specialists became better and better at their unique areas of specialization.

• The pace of innovation sped up.

• As specialists became better and better at their unique roles, they brought increased benefits for the entire community.

• As time went on, new areas of specialization began to emerge. Early entrepreneurs would work in areas like:

∙ Pottery

∙ Carpentry

∙ Wool-making

∙ Masonry

The Expansion of Trade Routes from 2000 BCE Onward

• Between the Agricultural Revolution and 2000 BCE, cities started to appear around the world.

• Early areas of civilization were concentrated around rivers, particularly the Nile, the Tigris and Euphrates, the Indus, and the Yellow
and Yangtze.

• As cities sprang up around the world, entrepreneurship took an important turn. Entrepreneurs were still specializing in all of the areas
listed above (pottery, carpentry, tool-making, etc.).

• They began to realize that profits could be made by trading between cities and cultures.

The right international trade route could make an entrepreneur very wealthy.

• Entrepreneurs that were able to trade military goods that created empires were justifiably rewarded for their work.

• Thus, some of the most successful early entrepreneurs traded the means of warfare around the world.

• Of course, trade routes were about more than just raw resources and goods.

• They were also about ideas and technologies. In this way, entrepreneurs were responsible for spreading ideas around the world.
(France on providing free education by the government for children)

Entrepreneurship and the Invention of Money

• Prior to the invention of money, all entrepreneurship and trade took place through the barter system. If John wanted 5 bars of iron,
then he might have to sell 1 horse to get those bars. Of course, he would also need to find an iron merchant who needed a horse.

• Some of the earliest forms of currency were found in ancient Iraq in the forms of silver rings and silver bars.

• Starting in 2000 BCE, early forms of money have been discovered.

 • These forms of money were called specie and changed widely throughout the world: some cultures used seashells, for example, while
others used tobacco leaves, beads, or large round rocks.

• Over time, paper money and coinage would be developed. Currency gave entrepreneurs several important things:

1. It facilitated long-distance trade

2. It acted as a medium of exchange

3. It provided a way for entrepreneurs to store value

4. Obviously, currency changed the fate of entrepreneurship forever.

Entrepreneurship and the Beginnings of the Marketplace in the Medieval Period

• Starting in the medieval period, markets became more and more popular.

• Larger populations required larger marketplaces where they could purchase food, clothing, services, and other important things.

• The population spurt starting around 1470 solidified the market’s connection with entrepreneurship.

• Some of the important developments that took place in entrepreneurship during this period:

• Banking grew to new heights and complexities as small business owners had greater financing needs.

• The guild system expanded, giving skilled craftsmen and other entrepreneurs a way to organize their business together,
regulate the quality of the goods produced, and develop reputations for certain goods in towns across medieval Europe.

• Entrepreneurs were able to purchase goods from abroad, turn those goods into finished products, and then sell those goods
for a profit at a wider scale than ever before.

The Unexpected Stifling of Innovation

• It wasn’t all good news for entrepreneurs during this period. Many entrepreneurs had their inventions and innovations stifled.

• Prior to the advance of merchants and explorers, many people frowned upon the accumulation of capital. Innovation was often –
perplexingly – blocked around the world.

• There are even examples were visionary entrepreneurs had their inventions stifled because they weren’t seen as beneficial for
society.

• Nevertheless, this period still gave rise to some of the world’s most influential technologies, including the windmill, paper mill,
mechanical clock, the map, and the printing press, among many others.

• It paved the way for future entrepreneurs to use innovation to capitalize on growing trends.

Mercantilism, Explorers, and the New World from 1550 to 1800

• Followers of this philosophy believed that there was only a finite amount of wealth in the world.

• A country’s wealth and value was solely based on how much treasure and gold it could obtain, and how many more exports it could
sell compared to imports.

• During this period, entrepreneurs were known more as merchants and explorers than as entrepreneurs.

• These individuals would raise capital, take risks, and stimulate economic growth (much like the entrepreneurs of today). Many see
this period as the beginnings of capitalism.

• Another key advance in entrepreneurship during this period were Luca Pacioli’s accounting advances. Pacioli created standardized
principles for keeping track of a firm’s accounts.

• These principles would later be used by the era’s explorers and merchants.

Entrepreneurship in the 1800s Onward: Machines and Markets

• Many people see the last 200 years of entrepreneurship as being fueled by “machines and markets”.

• Capitalism became more entrenched in societies around the world. The theories of capitalism were solidified in Adam Smith’s 1776
work An Inquiry into the Nature and Causes of the Wealth of Nations, where he destroyed the idea of mercantilism. Instead, he
argued that self-interested was the driving force in societies around the world.

• Thus, entrepreneurs of this period were able to act in self-interest while still improving society as a whole. Robert L. Heilbroner
explains this theory in The Worldly Philosophers:

• “A man who permits his self-interest to run away with him will find that competitors have slipped in to take his trade away; if he
charges too much for his wares or if he refuses to pay as much as everybody else for his workers, he will find himself without buyers in
the one case and without employees in the other.”

• Thus, the competition of the marketplace regulates self-interest and leads to a type of entrepreneurship that fuels innovation,
improves the standard of living, and increases the wealth of nations.

The Industrial Age and Entrepreneurship

• The Industrial Revolution marked yet another profound shift in the history of entrepreneurship. Starting in the 18th century,
entrepreneurship moved from small-scale production in small towns to large-scale production in big cities.

• Two things fueled this fundamental change in entrepreneurship, including:

• Availability of Energy Production: Businesses were no longer restricted by small-scale energy powered by wind (which was weather-
dependent) or falling water (which was location-dependent). Instead, they could rely on technologies like electricity, steam, the
internal combustion engine, the locomotive, the automobile, and oil. This gave them the means to make large-scale factories.

• Availability of Labor: Huge populations began moving to Industrial Revolution cities starting in the 1700s. This gave entrepreneurs a
large pool of cheap labor with which to work.

• Eventually, these powerful market forces would give rise to some of the world’s greatest entrepreneurs and innovators. America
played a particularly prominent role during this period, giving rise to entrepreneurs like Andrew Carnegie, J. Morgan, John D.
Rockefeller, Frank Kenan and Henry Ford.
Post-World War II Entrepreneurship

• After World War II, entrepreneurship began to change for a few different reasons.

• First and most importantly, the economy was increasingly global and becoming more global every decade. Better means of shipping
and communication made it easy for entrepreneurs to sell products and services to a global audience. Massive economies like
America could no longer afford to concentrate solely on selling products to American marketplaces.

• There were also microeconomic factors like the number of people owning cars. Especially in America, car ownership made it more
important to have highways between major cities. As highways became more important, restaurants were needed where people
could eat while traveling.

• This is the environment where entrepreneurs like Ray Kroc made their millions. Kroc created a standardized restaurant that cut down
on costs by serving a limited number of men items. Then, he replicated that model.

Modern Entrepreneurship

• Today, entrepreneurs are the lifeblood of economies all over the world.

• The global economy – combined with modern infrastructure and communications – has introduced a new age of competition to the
world of entrepreneurship.

• No longer are you competing with entrepreneurs in your tribe, town, village, or city: you’re competing with entrepreneurs all over
the world.

• Many of these entrepreneurs can access cheaper means of production than you.

• They may have better access to raw resources of cheap labor, for example.

• This has made modern entrepreneurship more challenging – and arguably more rewarding – than ever before.

Lesson 2:
The Evolution of Entrepreneurship

Entrepreneurship is a mindset.

• -It is not only about the creation of a business, but rather it involves seeking opportunities, taking risks beyond security and
having the tenacity to push an idea through to reality.

Essential components of entrepreneurship include the following:

• The willingness to take calculated risks—in terms of time, equity, or career.

• The ability to formulate an effective venture team; the creative skill to marshal needed resources.

• The fundamental skills of building a solid business plan.

• The vision to recognize opportunity where others see chaos, contradiction, and confusion.

Importance of Entrepreneurship

Creation of job opportunities

 Entrepreneurs start new firms, which may mean more job prospects for individuals.
 Entrepreneurs can both earn cash for themselves and employ others in their business activities.
 As a result, entrepreneurship usually creates new jobs at every level.

Creation of new businesses

 Entrepreneurship is essentially the ownership of a business by a single person.

 All big industrial organizations usually begin as small business initiatives.
 In every economy, entrepreneurship typically offers a diverse range of initiatives that lead to the creation of new businesses.

Innovation

 It creates new product lines and improves product quality, ideas, technologies and markets and usually makes life easier for both the
entrepreneurs and the consumers.

Leads to better standards of living

 They can meet even the most specific needs.

 Since entrepreneurship usually creates new jobs and generates income for a family, entrepreneurship can help improve your
standard of living.

Supports research and development

 An entrepreneur works with research organizations and institutions and provides funding for research and development.
 This often helps boost research and development, which may make discoveries possible.

Promotes community development

 Entrepreneurs can help bring unity and build goodwill among individuals who have common goals and interests.
 This usually brings positive changes like fewer slums, better sanitation, a skilled workforce and better infrastructure.
 Entrepreneurship generally promotes community stability and improves the quality of life.

Leads to increased productivity

 Entrepreneurs can make current businesses more competitive by offering lower pricing and a wider range of products.
 Existing firms may rethink their strategies, increase the quality of their products, lower expenses and become more efficient.

Creation of national wealth

 Entrepreneurship usually plays a key part in contributing to the country's national economy by generating wealth and paying taxes,
which generally adds to a country's gross domestic product (GDP).
 This increase in revenue can significantly improve the national income of a country.
Contributes to social welfare

 Entrepreneurship also brings about social integration and reforms by connecting and helping people.
 It helps provide income to poor and marginalized sections of the society and allows them to fulfil their basic needs.
 By being inclusive of all people regardless of their differences, entrepreneurship can often create a sense of connectedness.

ENTREPRENEURIAL SCHOOLS OF THOUGHT

MACRO VIEW

 The macro view of entrepreneurship includes external factors that are beyond the control of the entrepreneur but could affect
him/her.

THE ENVIRONMENTAL SCHOOL OF THOUGHT

 Considers the external factors that influence a potential entrepreneur’s lifestyle.

 These could be positive or negative factors that mold the entrepreneur’s entrepreneurial desires. Example, the pandemic situation
may influence one to be an entrepreneur.

THE FINANCIAL SCHOOL OF THOUGHT

 Based on the capital-seeking process — the search for seed and growth capital.
 Availability of funds needed for potential business venture may influence one to be an entrepreneur.

MACRO VIEW

THE DISPLACEMENT SCHOOL OF THOUGHT

 Alienation drives entrepreneurial pursuits.

 Displacement focuses on the negative factors.
 Frustrations will drive you to your entrepreneurial pursuits.

Political displacement

 Examples are governmental regulations or policies that limit certain industries, causing job displacement and turning toward
entrepreneurship.

Cultural displacement

 Examples are ethical background, religion, race and sex factors that drive people away from standard professions and toward
entrepreneurial ventures.

Economic displacement

 Economic variations of recession and depression can create the foundation for entrepreneurial interest.
 Example is the loss of their job during this pandemic, which prompted some to be entrepreneurial.

MICRO VIEW

 The micro view of entrepreneurship examines the factors that are specific to entrepreneurship.

THE ENTREPRENEURIAL TRAIT SCHOOL OF THOUGHT

 Focuses on identifying traits common to successful entrepreneurs.

 Believing that entrepreneurs have traits common to them and that if you have these traits, you could be a successful entrepreneur
might prompt you to be an entrepreneur.

THE VENTURE OPPORTUNITY SCHOOL OF THOUGHT

 Focuses on the opportunity aspect of venture development.

 The more idea sources and resources that are available for the development of business concepts and their implementation to take
advantage of venture opportunities, the more people are motivated to be entrepreneurs.

THE STRATEGIC FORMULATION SCHOOL OF THOUGHT

 Emphasizes the planning process in successful venture management and development.

 Involves establishing a business venture with all its internal factors aligned with each other and with the external forces as the
entrepreneur pursues the venture’s vision and mission, its dream and purpose.

CATEGORIES OF ENTREPRENEURSHIP

CORPORATE ENTREPRENEURSHIP

 It is also referred to as intrapreneurship.

 This is entrepreneurship WITHIN existing organizations or companies.
 It is observed when the company organizes its structure to instigate innovation within the company.
 The corporate entrepreneurs are managers or employees who lead the company to NEW directions.
 Companies that encourage intrapreneurial environment motivate their employees to take initiative, commitment and risk taking.
 This is an option for learners who have set their minds to work in existing companies, not just employees, but as entrepreneurial
employees and managers.

TECHNOPRENEURSHIP

 This involves doing business with the use of technology in transforming ideas into products; use of new technology in the
enhancement of the existing operations.
 It is said that the first use of term technopreneur was in 1987.
 A technopreneur is a new age entrepreneur who makes use of technology to come out with something new to make innovation.
 Example:
 Software development, Mobile app development, Online marketplace, Web design and development
SOCIAL ENTREPRENEURSHIP

 This is a new form of entrepreneurship, which focuses on solving social problems through innovation and risk taking; venturing into
business in pursuit of a social mission.
 This is different from the concept of corporate social responsibility.

EXAMPLE:

 educational programs
 providing banking services in underserved areas
 helping children orphaned by epidemic disease.

Lesson 3:Economic Development and Entrepreneurship

ECONOMIC DEVELOPMENT -(growth of the economy)

 Refers to the improvement in the economic aspects of a country or region, often measured by indicators such as GDP growth, income
levels, employment rates, and industrialization

SOCIO-ECONOMIC DEVELOPMENT (total well-being of the people)

• Encompasses economic development but also includes social and cultural factors.
• It focuses on enhancing the quality of life, reducing poverty, improving education, healthcare, and infrastructure.

INDICATORS IN ECONOMIC & SOCIO-ECONOMIC DEVELOPMENT

ECONOMIC DEVELOPMENT:

• § Metrics like Gross Domestic Product (GDP), Gross National Income (GNI), trade balances, and employment rates are commonly used
to economic development.

SOCIO-ECONOMIC DEVELOPMENT:

• § In addition to economic indicators, it considers social metrics such as literacy rates, life expectancy, access to education and
healthcare, gender equality, and overall human development indices like the Human Development Index (HDI).

EXAMPLES OF ECONOMIC & SOCIO-ECONOMIC DEVELOPMENT

Economic Development:

• A country achieving a high GDP growth rate or successfully industrializing its economy is an example of economic development.
• China's rapid economic growth and development in the last few decades are often cited as a notable example.

Socio-economic Development:

• Improvements in education, healthcare, and poverty reduc on represent socio economic development.
• For instance, Nordic countries like Norway and Sweden are often praised for their comprehensive socio-economic development,

• Economic development primarily concerns the growth and expansion of the economy
• Socio-economic development takes a more holistic approach by considering the well-being of individuals in society along with
economic factors.
• Both concepts are interconnected and contribute to the overall progress and prosperity of a nation.
• It's important to note that these definitions and examples are generalizations
• Individual countries may have unique contexts and priorities in their development trajectories.

ENTREPRENEURSHIP AND SOCIO-ECONOMIC DEVELOPMENT

1. Poverty Alleviation:

• Example: Microfinance institutions, such as Grameen Bank in Bangladesh, have empowered entrepreneurs at the grassroots level,
enabling them to start and grow small businesses, ultimately contributing to poverty reduction.

2. Community Development:

• Example: Social entrepreneurship initiatives, like TOMS Shoes, which donates a pair of shoes for every pair sold, contribute to
community development by addressing social and environmental issues.

3. Diversity and Inclusivity:

• Example: Entrepreneurship provides opportunities for individuals from diverse backgrounds to participate in economic activities.
Programs that support women entrepreneurs, such as Women's Entrepreneurship Day, contribute to gender inclusivity.

ENTREPRENEURSHIP AND SOCIO-ECONOMIC DEVELOPMENT

1. Job Creation:

• Example: Small and medium-sized enterprises (SMEs) often serve as significant job creators. For instance, the growth of technology
startups in Silicon Valley has led to the creation of numerous high-skilled jobs.

2. Innovation and Technology Advancement:

• Example: Companies like Apple, founded by Steve Jobs and Steve Wozniak, have transformed industries through innovative products
like the iPhone, contributing to technological advancements and economic growth.

3. Economic Growth and Competitiveness:

 • Example: Entrepreneurial activities stimulate economic growth by introducing new products, services, and business models. The rise
of e-commerce platforms like Amazon has significantly impacted global trade and economic competitiveness.

ROLE OF GOVERNMENT IN ENTREPRENEURSHIP GROWTH

Financial Assistance

- Government through government agencies provide financial assistance through grants and loans.

Marketing assistance

- Provision of assistance in the form of promotion, product clinic and development, pricing, and distribution.

Production and productivity assistance

- Assistance through trainings and workshop on productivity enhancement.

PHILIPPINE GOVERNMENT SUPPORT IN ENTREPRENEURSHIP GROWTH

THE GO NEGOSYO LAW (REPUBLIC ACT NO. 10644)

• The Negosyo Center Program is responsible for promoting ease of doing business and facilitating access to services for Micro, Small, and
Medium Enterprises (MSMEs) and it seeks to strengthen MSMEs to create more job opportunities in the country.

THE BARANGAY MICRO BUSINESS ENTERPRISE LAW (RA. 9178 ACT OF 2002 )

• declared it the policy of the state to hasten the country's economic development by encouraging the formation and growth of barangay
micro business enterprises (BMBEs) which effectively serve as seedbeds of Filipino entrepreneurial talents.

THE MAGNA CARTA FOR SMALL AND MEDIUM ENTERPRISES (REPUBLIC ACT 6977)

• passed by the Philippine Congress in 1991. The law's purpose is to promote, develop, and assist small and medium-sized enterprises
(SMEs). It also aims to create a conducive business environment for SMEs and provide them with easier access to finance.

THE INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES (R.A.8293)

• Intellectual Property law deals with laws to protect and enforce rights of the creators and owners of inventions, writing, music, designs and
other works, known as the "intellectual property."

INNOVATIVE START UP ACT (REPUBLIC ACT 11337)

• The law creates the Philippine Startup Development Program, which provides benefits and incentives for startups and startup enablers. The
DOST, DICT, and DTI are mandated to assess, monitor, develop, and expand the program.

THE 10 PERSONALS ENTREPRENEURIAL COMPETENCIES

ACHIEVEMENT CLUSTER

Opportunity-seeking.

• Entrepreneurs seek opportunities and take the initiative to transform them into business situations.

Persistence.

• When most people tend to abandon an activity, successful entrepreneurs stick with it.

Commitment to work contract.

• Entrepreneurs keep their promises, no matter how great the personal sacrifice.

Demand for efficiency and quality.

• Entrepreneurs try to do something better, faster or cheaper.

Taking calculated risks.

• Taking calculated risks is one of the primary concepts in entrepreneurship

PLANNING CLUSTER

Goal setting.

• This is the most important competency because none of the rest will function without it. Entrepreneurs set goals and objectives which are
meaningful and challenging.

Information seeking.

• Entrepreneurs gather information about their clients, suppliers, technology and opportunities.

Systematic planning and monitoring.

• Systematic behavior means acting in a logical way.

• Planning is deciding what to do.

• Monitoring means checking.

POWER CLUSTER

Persuasion and networking.

• Entrepreneurs influence other people to follow them or do something for them.

• Self-confidence.

• Entrepreneurs have a quiet self-assurance in their capability or potential to do something.

Lesson 4: Journey to Entrepreneurial Development

WHAT IS MINDSET?

It is a mental attitude or inclination (Merriam Webster)

• The sum of your knowledge-beliefs and thoughts about the world and yourself. (Thum, 2012)

• It can be shaped by an intentional awareness but are also driven by our experiences.

• A habit that requires practice (Bosman & Fernhaber, 2018)

WHAT IS ENTREPRENEURIAL?

• Undertaker (Richard Cantillon)

• Creates value (Jean Baptiste Say)

• Change agent (Joseph Schumpeter)

• Resourceful (Howard Stevenson)

WHAT IS ENTREPRENEURIAL MINDSET?

-The inclination to discover, evaluate and exploit opportunities. (Bosman, Lisa; Fernhaber, Stephanie).

-Entrepreneurial mindset refers to a specific state of mind which orientates human conduct towards entrepreneurial activities and outcomes.

-Individuals with entrepreneurial mindsets are often drawn to opportunities, innovation and new value creation.

-The entrepreneurial mindset is about a certain way of thinking

-It is what you need to propel yourself forward.

-If you want to cultivate an entrepreneurial mindset, you must embrace challenges. You must seek them out.

THE IMPORTANCE OF ENTREPRENEURIAL MINDSET

To build an entrepreneurial society

• Developing the right mindset at a very early age

• Inculcation process needs to be implemented thru various programs and activities
• Entrepreneurs as agents of change at every level of the society
• Entrepreneurship as a way of life

ENTREPRENEURIAL MIND ATTRIBUTES

Entrepreneurial attributes encompass a range of qualities, skills, and characteristics that contribute to the success of entrepreneurs and their
ventures.

1. Visionary Leadership

2. Risk-Taking

3. Resilience

4. Innovativeness

5. Adaptability

6. Customer-Centric Focus

7. Effective Communication

8. Networking Skills

9. Financial Literacy

10. Proactive Problem-Solving

11. Time Management

12. Ethical Decision-Making

13. Openness to Learning

14. Team Building

• Being an entrepreneur is not just about having a great business idea or being good at making money.

• It's about having a certain set of traits and characteristics that set you apart from the rest.

• Identifying these traits in yourself and working to develop them, you can set yourself up for success as an entrepreneur.

• Remember to stay focused on your goals, stay adaptable, and never be afraid to take risk.

THE ENTREPRENEURIAL ORIENTATION

• Entrepreneurial Orientation (EO)

• a key concept when executives are crafting strategies in the hopes of doing something new and exploiting opportunities that other
organizations cannot exploit.

• It refers to the processes, practices, and decision-making styles of organizations that act entrepreneurially.
ANY ORGANIZATION’S LEVEL OF EO CAN BE UNDERSTOOD IN FIVE DIMENSIONS:

1. autonomy

2. competitive aggressiveness

3. innovativeness

4. proactiveness

5. risk taking

• These dimensions are also relevant to individuals.

AUTONOMY

• Refers to the ability of entrepreneurs to make independent decisions and have control over their business operations without external
interference.

• This is crucial for entrepreneurs as it allows them to shape their vision, strategy, and day-to-day activities according to their own judgment
and preferences.

• This independence fosters creativity, innovation, and the ability to take calculated risks.

EXAMPLE:

• Decision-Making:

Entrepreneurs have the freedom to make critical decisions related to their business, such as product development, marketing strategies,
hiring, and financial management.

• Flexibility:

Entrepreneurs can adapt quickly to market changes, adjust business models, and pivot if needed, without the constraints of bureaucratic
processes.

• Innovation:

Autonomy allows entrepreneurs to explore new ideas, experiment with innovative solutions, and pursue unconventional approaches to
problem-solving

• Competitive Aggressiveness

It refers to a firm's strategic orientation and actions aimed at gaining a competitive advantage over rivals.

• It involves a proactive and assertive approach to competition, often characterized by innovation, rapid market entry, and a willingness to
take risks.

EXAMPLE:

1. Innovation and Product Development:

• Apple Inc.'s consistent focus on developing cutting-edge products, such as the iPhone and iPad, has allowed them to maintain a competitive
edge in the technology market.

2. Speed to Market:

• Amazon's aggressive approach to launching new services and entering new markets quickly, such as its rapid expansion into the grocery
industry with the acquisition of Whole Foods.

3. Market Expansion:

• Uber's aggressive global expansion strategy, rapidly entering and disrupting transportation markets in various countries around the world

• INNOVATIVENESS

• It refers to the ability of entrepreneurs to introduce new ideas, products, services, or processes that create value and address unmet needs
in the market.

• It involves a proactive approach to identifying opportunities, solving problems, and staying ahead of the competition.

• Innovative entrepreneurs are characterized by their creativity, adaptability, and willingness to take risks.

• EXAMPLE:

1. Product Innovation:

• Apple Inc.: Apple is known for its continuous product innovations, such as the iPhone, iPad, and MacBook. Their ability to redefine and
improve existing technologies has been a key factor in their success.

2. Service Innovation:

• Uber: Uber revolutionized the transportation industry by introducing a platform that connects riders with drivers using a mobile app. This
service innovation disrupted traditional taxi services and created a new market.

3. Business Model Innovation:

• Netflix: Netflix started as a DVD rental-by-mail service but innovated its business model by transitioning to a streaming service. This shift in
approach transformed the entertainment industry

PROACTIVENESS

• It refers to the ability and willingness of individuals or organizations to take initiative, anticipate future challenges and opportunities, and
act in advance to create positive outcomes.

• Proactive entrepreneurs don't just react to current circumstances; they actively seek to shape their business environment and capitalize on
emerging trends.

EXAMPLE:
1. Market Research and Trend Analysis:

• Conducting thorough market research to identify emerging trends and customer preferences.
• Anticipating shifts in the market and adapting business strategies accordingly.

2. Innovation and Product Development:

• Proactively investing in research and development to create innovative products or services.

• Staying ahead of competitors by continuously improving offerings.

3. Networking and Partnerships:

• Actively seeking and creating strategic partnerships before the need arises
• Building a strong network of industry connections to stay informed about potential collaborations or opportunities.

• RISK-TAKING

• It refers to the willingness and ability of entrepreneurs to undertake uncertainties and challenges in pursuit of opportunities.

• Entrepreneurial ventures inherently involve uncertainty, and successful entrepreneurs often embrace and manage risks strategically.

• EXAMPLE:

• Financial Risk:

Example: Investing personal savings or taking loans to fund a startup.

• Reputation Risk:

Example: Taking a controversial stance or making bold decisions that may impact the company's public image.

• Innovation Risk:

Example: Developing and launching innovative products or services with unproven technologies

BUILDING AN ENTREPRENEURIAL ORIENTATION

Building entrepreneurial orientation involves developing a mindset and organizational culture that embraces innovation, proactiveness, risk-
taking, and a proactive approach to market opportunities.

1.Encourage Innovation:

• Foster a culture that values creativity and encourages employees to generate and implement new ideas.

• Provide resources and incentives for research and development.

• Example: Google's "20% time" policy, allowing employees to spend 20% of their workweek on projects of their choosing, has led to
innovative products such as Gmail.

2.Promote Proactiveness:

• Encourage employees to actively seek opportunities and address challenges before they become critical.

• Establish a system for monitoring industry trends and emerging opportunities.

• Example: Amazon's proactive entry into the cloud computing market with Amazon Web Services (AWS), recognizing the potential early on.

3. Cultivate a Risk-Taking Culture:

• Create an environment where calculated risks are embraced, and failure is seen as a learning opportunity.

• Recognize and reward employees for taking well-thought-out risks.

• Example: Elon Musk's approach with SpaceX, where the company takes calculated risks in the aerospace industry to drive innovation and
reduce space travel costs

1.Provide Autonomy:

• Empower employees to make decisions and take ownership of projects.

• Encourage a decentralized organizational structure that allows for autonomy at various levels.

• Example: 3M's policy of allowing employees to spend 15% of their work time on projects outside their regular responsibilities has led to
products like Post-it Notes.

2. Cultivate Competitive Aggressiveness:

• Foster a competitive mindset that seeks to outperform rivals in the marketplace.

• Invest in continuous improvement and staying ahead of industry trends.

• Example: Apple's aggressive pursuit of product differentiation and innovation, challenging competitors and shaping entire industries.

3.Embrace Change and Adaptability:

• Create a culture that welcomes change and adapts swiftly to market dynamics.

• Encourage a learning mindset that values continuous improvement.

• Example: Netflix's transition from a DVD rental service to a streaming platform, demonstrating adaptability to changing consumer
preferences
Lesson 5: PROBLEM EXPLORATION

Unit I: Understanding your Environment

*Entrepreneurial mindset influence our critical thinking and problem-based learning.

*Knowing the business environment guides you in your search for problems that can be turned into business opportunities.

*The business opportunities are present in our environment.

*Hence, the need for valuing our environment.

ENVIRONMENTAL SCANNING

*An analysis and evaluation process that businesses use to understand their current environment

*The aim is to identify trends, gaps, events, developments, and issues that will impact the businesses.

BUSINESS ENVIRONMENT

* This consists of the internal and external factors that affect how the company functions including, but not limited to, the customers,
management, supply and demand, and business regulations.

* These are beyond the control of the business, and they affect the functioning of a business enterprise.

MICRO-ENVIRONMENT

*Refers to the environment which is in direct contact with the business organization and can affect the business straight away.

*Is a collection of forces that are close to the firm and these forces are very particular to the firm.

ELEMENTS OF THE MICROENVIRONMENT

Suppliers-Provide to the business such inputs as manpower, money, materials, machines, methods, information and so on.

Competitors-Are the rivals which compete with the firm in the market

Marketing Intermediaries-Wholesalers, distributors and retailers that make a link between the firm and its customers.

Customers-Are the ones who purchase the firm’s goods and services for their own consumption

Firm-Includes shareholders, Investors, employees and board of directors

MACRO-ENVIRONMENT / GENERAL ENVIRONMENT

-It is an important dimension of the business environment as the businessman cannot directly influence or change the components of the
general environment; rather he must change his plans and policies according to the changes taking place in the general environment.

ELEMENTS OF THE GENERAL ENVIRONMENT

Political Environment-

*Centers on the role of the governments in shaping business

*Tax policies, changes in trade restrictions and tariffs

*Stability of the government and immigration policy

Economic Environment

*Centers on economic conditions

*Interest rates, inflation rates, gross domestic products, unemployment rates, levels of disposable income, and the general growth or decline
of the economy

Social Environment

*Consists of the customs and traditions of the society which includes the following:

-Standard of living

-Taste

-Preferences

-Education level of people

Technological Environment

*Changes taking place in the method of production

*New equipment and machineries to improve the quality of product

Physical conditions within which the organization operates.

Which Includes the following factors:

*Natural disasters

*Pollution level

*Weather pattern

Centers on how the law influence the business activity

which includes the following factors;

*Employment laws
*Health and safety regulations

*Discrimination laws

*Anti-trust laws

WHY IS ENVIRONMENTAL SCANNING IMPORTANT TO BUSINESS?

*It helps with the identification of several broad factors and issues that will have a significant impact on businesses and their plans.

*Aids in anticipating changes

*Answers the question, “Where are we now?”

*Provides a starting point for businesses’ planning of goals, objectives, and actions that answer the question, “Where do we want to be?”

ENVIRONMENTAL SCANNING TOOLS

*The SWOT Analysis will be used to assess your macro environment and your internal environment.

-Is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the
Threats you are faced with.

-The SWOT Analysis is sometimes called Internal-External Analysis

-Helps you to craft a strategy that distinguishes you from your competitors

-When carrying out your SWOT Analysis, be realistic and rigorous.

*The Porter’s 5 Forces Model is a tool used to assess your micro or competitive environment.

-The Five Forces Model was created by Harvard Business School professor, Michael Porter and was first published in 1979.

-Since then, the model has become one of the most popular business strategy tools that organizations use to understand more about the
main competitive forces at work in their industry.

-Porter's Five Forces include: Competitive Rivalry, Supplier Power, Buyer Power, Threat of Substitution, and Threat of New Entry.

-The model encourages organizations to look beyond direct competitors when assessing strategy and, instead, consider broader
environmental forces.

-By understanding these forces, organizations can make more informed decisions, identify areas for improvement, and redefine their strategy
to enhance and strengthen their competitive position in the market.

Unit 2: Opportunity Identification and Evaluation

-Key factors that will influence your business ideation process are your opportunity seeking competency and opportunity recognizing
mindset. With these competencies and mind, you can easily recognize opportunities around you. Hence, the need to acquire them. In the
future, you can easily recognize employment and project opportunities.

-An opportunity-seeking competency drives you to:

*look for things that you need to be done.

*do things that need to be done before being asked by others.

*like challenges and new opportunities.

*prefer activities that you know well and with which you are comfortable.

*try things that are very new and different from what you have done before.

In addition, the opportunity-recognizing mindset drives you to:

-be curious and inquisitive

-be empathetic and sensitive to the beliefs, feelings, needs, and motivations of other people

-be sensitive to problems and desires to solve them

-be sensitive to available, yet idle, resources

DIFFERENCE BETWEEN A BUSINESS OPPORTUNITY AND A BUSINESS IDEA

*Business Opportunity

-is a favorable set of internal or external circumstances that creates a need for a new business.

-It usually presents itself as a gap to be filled: a need to be satisfied or a problem to be solved.

*Business Idea

-is a thought, impression, or notion of a business venture that could fill the gap; that is, satisfy a perceived need or solve a perceived problem.

OPPORTUNITY IDENTIFICATION

*Internal Environment

-scanning your internal environment to search for business ideas.

-As the enterprise is not yet existing, the internal environment that you will scan will be yourself.

-So, identify ideas from your passion, skills, talents and hobbies.

-Business ideas may sprout within you.

*External Environment

-Identify business ideas through an analysis of the current situation in the external environment.

-This is the primary reason why you internalize the different business environment.

-Approaches to business opportunity identification through study of the external environment are:

1. Observing Trends

-Trends create opportunities for entrepreneurs to pursue.

-The most important trends are:

*Social forces

*Technological advances.

*Economic forces.

*Political action and regulatory change.

-It’s important to be aware of changes and trends in these areas.

2. Solving Problems

-Sometimes, identifying opportunities simply involves noticing a problem and finding a way to solve it.

-These problems can be pinpointed by observing what’s lacking that causes people to suffer or be inconvenienced; sometimes, this could be
done through more simple means, such as intuition, serendipity, or change.

3. Finding Gaps

-A gap in the marketplace often exists when a product or service is needed by a specific group of people that doesn’t represent a large
enough market to be of interest to mainstream manufacturers, retailers or service providers.

-For example, in 2000, Tish Cirovolv realized there were no guitars on the market made specifically for women.

-To fill this gap, she started Daisy Rock Guitars, a company that makes guitars just for women.

-During this Covid 19 crisis, there is a market need for PPEs. One of the companies that fill the gap is Fila.

4. Maximize Use of Idle Resources

-Abundant, available, untapped raw materials

-Search for the idle, untapped, un-utilized raw materials that are abundant in your community and think of how you can utilize them for
productive purposes.

-Example: Bugnay wine- came about as a response to the idleness of bugnay fruits.

-Idle local skills. Capitalize on the local talents, skills, hobbies.

-Example: woodcraft in Ifugao- most of the people in Ifugao are skilled in wood crafting thus, most are into wood carving business

-Most of shoes are made in Marikina where the shoe crafters are.

OPPORTUNITY EVALUATION

-A critical element of opportunity recognition is assessing to what extent an opportunity is viable in the marketplace. For an opportunity to
be viable it must meet four criteria:

*Attractive: There must be market demand for the product or service;

*Achievable: It must be practical and physically possible;

*Durable: It must be attractive long enough for the development and deployment to be successful; and

*Value-creating: It must add value to the market.

SWOT ANALYSIS

-In Unit 1 (module 4), SWOT analysis was discussed as a tool in scanning the environment.

-Swot analysis can also be used to screen business ideas to select the opportunity.

-Once you derive the top 3 or top 5 ideas through the evaluation process, screen them further using the swot analysis.

-Choose the idea that has positive factors (strengths and opportunities) that can be able to eliminate, overcome, minimize its weaknesses and
threats.

-Since the business is not yet existing, then use your strengths and weaknesses related to the idea as the basis of evaluation.