Introduction+to+Entrepreneurship 12.pptx

Entrepreneurship 12 SHS

1. Introduction to Entrepreneurship

2. Why Study Entrepreneurship? There are many different definitions as to what “entrepreneur” means, and despite this, there is no single profile that can represent every entrepreneur. What is clear, though, is its origin: The term “entrepreneur” is derived from the French word, entreprendre , which means “to undertake” or “to take in one’s own hands.” Thus, an entrepreneur is someone who undertakes the creation of business—including its inherent risks and rewards. Entrepreneurs are the ones who seek, screen, and select business opportunities in hopes of satisfying the needs and wants of the market while, at the same time, earning a profit. Businesses are one of the key drivers of economy and society in any country. Entrepreneurs constantly seek opportunities in order to create more value for consumers and even other businesses. Entrepreneurship, therefore, keeps us sustainable.

3. Why Study Entrepreneurship? Here are some specific reasons to illustrate the importance of entrepreneurship: Entrepreneurs create employment opportunities through their business. Micro, small, and medium enterprises (MSMEs) comprise 99.5% of the listed establishments in the Philippines, according to the Philippines Statistics Authority data reported on Department of Trade and Industry (DTI) in 2020. The micro and the small enterprises outnumber the medium and the large enterprises by a significant margin. For every business start-up, new employment opportunities become available, and these businesses hire a lot more people compared to large enterprises combined. On average, a micro business hires at least two workers while a small business start-up typically employs at least five workers in its first year of operations—not to mention that an entrepreneur makes one less job seeker as he/she creates a job for himself/herself.

4. Why Study Entrepreneurship? Entrepreneurs help in developing new markets. What separates a conventional businessperson from an entrepreneur is their ability to create demand for an existing product to a new market that is, a group of people with defined characteristics that entrepreneurs can entice to buy their products and services. Entrepreneurs are creative: They do not just think outside the box; they often create their own boxes. For instance, video games are often associated with children and adolescents, and the market is predominantly male. While Nintendo has been extremely successful in creating video game consoles for decades now, its launch of the Nintendo Wii in 2006 revolutionized gaming. Wii Sports sold more than 82 million copies around the globe, making it the most popular game of the console. However, what’s more notable here is the development of new markets for gaming industry—women and the elderly—making the Nintendo Wii less as a child’s device and more as a family device.

5. Why Study Entrepreneurship? Entrepreneurs introduce innovation. Exceptional entrepreneurs make us realize that we need something we never thought we needed or wanted before. The television was declared to be a fad that will not last long according to radio broadcasters. They claimed that radio is sufficient because of the sheer number of listeners they had on a daily basis; they thought that radio was all they need for entertainment and news. Lo and behold, TV is the primary source of entertainment in many households. The digital age brought about significant innovations we may not have thought of as possible before. Innovations stem from new ideas or processes, or existing ideas and processes approached in new ways; either way, they make way for new products and services. Who would have thought that we can shop online and have our items delivered right to our front door? Who would have thought that we can sell our old stuff through eBay and recover some money for it? It was common to have garage sales to get rid of things we no longer use: Set up a makeshift stall in your garage to display old clothes, toys, appliances, and electronic devices, among many others in hopes that passersby notice something useful or interesting and buy it from you. Your reach, though, cannot be that far as you are restricted by your immediate location. Your market, really, is just the ones who are passing by. While garage sales are still a thing, online marketplaces like eBay and Facebook allow for a wider reach for you to sell off items you no longer need.

6. Why Study Entrepreneurship? Entrepreneurs help in generating new sources of materials. In line with the innovation, the entrepreneurs are always on the look out for better ways of doing things in order to strengthen their business, make it bigger, more efficient and effective, and in turn, more successful. Copper, for example, is widely used as electric conductor in many electronic devices. You can see copper used as electric conductors on your computer or laptops and on your smartphones. Graphene, meanwhile, is shaping to be a better material—albeit extremely more expensive than copper due to difficulties making graphene. But as with many innovations prior, new sources of materials tend to get cheaper as they become mainstream.

7. Key Concepts and Competencies in Entrepreneurship There are five important factors that are generally identified in order for entrepreneurship to formally take place: the entrepreneur (or the individual); an opportunity (or market demand); adequate resources (physical, financial, intellectual, and human); an organization; and a suitable entrepreneurial environment. All five factors must be present to an extent, and they can manifest in many different ways. At the core, the entrepreneur (a highly motivated individual who is willing to undertake the risks and rewards of creating a business) should be able to bring the other four factors together in order to create value (through a product, a service, or both) for the market (customers). The entrepreneur needs to possess the following: entrepreneurial alertness, prior knowledge, willingness to actively search for the opportunities, and social networks (Nikraftar and Hosseini 2016, 6–17).

8. Key Concepts and Competencies in Entrepreneurship Entrepreneurs take on their journey differently. They realize a considerable number of problems along the way, but there are common traits among entrepreneurs. They are known to be: Calculated risk-takers. Starting a business is no easy task, and there is no guarantee of success. Even though the possibility of failure can never be taken away, they are comfortable with some level of uncertainty. Entrepreneurs carefully analyze situations to ensure that the risk they are taking is worthwhile. Persistent . Entrepreneurs often fail. In fact, many immensely successful entrepreneurs have a long list of failed ventures. They understand that failure is part of the process, and they decide to keep on going. Active seekers of opportunities . Entrepreneurs always challenge the norm, and from it, they begin to see what normal people cannot. There is always a better way to do things, and there are products and services that can bring more value to customers. Highly motivated and committed to a cause . Running a business entails a lot of personal sacrifices, and entrepreneurs are willing to make those sacrifices. Many entrepreneurs work longer hours and even during weekends in order to keep the business afloat.

9. Key Concepts and Competencies in Entrepreneurship An opportunity often refers to a situation wherein a product, service, or process can be marketed and sold for profit . Opportunities are typically derived from a careful assessment of the needs and wants of the market. While customers can effectively identify what they need or want from a product or service, many customers cannot articulate these needs and wants, and in some cases, they are unaware of such needs and wants. When entrepreneurs are able to create or introduce a product or service that makes customers realize that they need (or want) it all along, it brings about a lucrative business. Once entrepreneurs are able to recognize and ultimately select the right opportunity to exploit, they gather adequate resources . Resources can be classified into four basic categories: financial , human , physical , and intellectual .

10. Key Concepts and Competencies in Entrepreneurship Financial resources can also be referred to as the working capital of the business. Money is one of the most essential components in starting a business as it is necessary to purchase or secure other resources. You will need it to hire human resources, to buy physical resources, and to secure intellectual resources. One of the deterrents for individuals to start a business is lack of financial resources, which often stems from the misconception that you need a lot of money to begin. This belief is far from the truth, however, because entrepreneurs have several sources of finance: Personal savings Investors Financial institutions, such as banks that offer business loans

11. Key Concepts and Competencies in Entrepreneurship An entrepreneur can determine the right mix of these sources to fund the entrepreneurial venture. Human resources are responsible for transforming or modifying raw materials and operating the machineries to produce finished goods. For service-oriented business, human resources are the ones rendering the actual service. The entrepreneur has to put a premium on skills , expertise , and discipline when selecting employees for the business. Physical resources can be categorized into two types: materials and machineries . Materials (or raw input) are gathered, modified based on a set of specifications, and processed to produce the finished goods. A bakeshop needs flour , eggs , sugar , dairy products , among many others to produce bread pastries. Service-oriented business also need materials to perform the actual service. A hair salon, for instance, requires shampoo and conditioner to be available for use. Machineries , meanwhile, are what you can use to modify your materials. Some machineries are required for you to create your product while other types of equipment may be introduced into your business to improve operational efficiency . For example, you may be able to sew your product by hand, but it is much more efficient to use a sewing machine. It allows you to make more products or allows you to deliver them in less time.

12. Key Concepts and Competencies in Entrepreneurship Finally, intellectual resources refer to the intangible resources of the business. They can be your brand (logos, trademarks, copyrights, and patents). They can take time to develop as they grow alongside the business; that is why it is important to secure your intellectual resources and protect them from “copycats.” Intellectual resource may also refer to your business methodologies—the workflow, technical parameters, and execution of key parts of the production process. The formula of Coca-Cola is considered to be a “trade secret,” and it is one example of an intellectual resource. After gathering adequate resources, the entrepreneur decides to build an organization to formalize the business. There are several types of organizational structures that the entrepreneur can form: joint ventures, acquisitions, and franchises are viable options—depending on the opportunity. A joint venture (JV) occurs when two or more businesses agree to set up a new legal entity, and they share the risks, rewards, costs, and control of that new entity (Hoang 2015, 85). A good example of this JV is the shared ownership of Coca-Cola bottling company between San Miguel Corporation (SMC) and Coca-Cola Company in 2001.

13. Key Concepts and Competencies in Entrepreneurship Meanwhile, an acquisition (or a takeover) occurs when one fi rm purchases a controlling interest (or the majority stake) in another fi rm. In 2007, SMC agreed to sell its 65% stake of the Coca-Cola Beverages Philippines, Inc. (CCBPI) to the Coca-Cola Corporation (TCCC)— making TCCC the full owner of the CCBPI and, thus, dissolving the joint venture between SMC and TCCC. Finally, franchising is a form of business ownership wherein a person or a company (the franchisee) purchases a license (typically called a franchising fee or simply franchise fee) to do business using another firm’s (the franchisor) brand name along with its associated trademarks. The franchisee also gives a percentage of sales revenue to the franchisor in a form of royalty fee—in exchange for the benefit of using the franchisor’s brand. For example, Rustan Coffee Corporation (under Rustan Group of Companies) is the sole franchise holder of StarbucksCoffee International here in the Philippines while Potato Corner has several franchising packages available for aspiring entrepreneurs.

14. Key Concepts and Competencies in Entrepreneurship Entrepreneurship also takes place in diverse business environments, so it is up to the entrepreneur to select the best for the situation (fit)—by assessing the opportunity available, understanding the resources needed (focus), and matching with the right organization (configuration). Figure 1 shows the dynamic interactions between the elements of entrepreneurship, again, with the entrepreneur at the core. For instance, not all entrepreneurs need to go the “start-up route” and build the business from the ground up. There are opportunities wherein an existing business can be a very good alternative; thus, acquiring that business and introducing innovation from within can make the most logical entrepreneurial sense.

15. Key Concepts and Competencies in Entrepreneurship Key Elements of Entrepreneurship (Fueglistaller, Müller, Müller, and Volery, 2012).

16. ACTIVITY BUNGA Directions: Choose T if the statement is true or F if the statement is false. 1. Equipment, raw materials, ingredients, and other machineries make up physical resources. 2. An opportunity can be any business idea that can address the needs and wants of the market. 3. The entrepreneur’s personal savings is the best and only source of finance. 4. Service-oriented businesses can also benefit from securing intellectual resources in case other entities copy them. 5. Entrepreneurs are risk-takers; meaning, they actively seek out business ideas without adequate thought.

17. ANSWER KEY BUNGA 1. T 2. T 3. F 4. T 5. F