MISCONCEPTIONS OF ENTREPRENEURSHIP

Entrepreneurship has a fair share of misconceptions…..

The basic is which is equating it with the activities of ordinary small businesses.

SOME COMMON MISCONCEPTIONS OF ENTREPRENEURSHIP

ENTREPRENEURSHIP:

1. Applies only to manufacturing business.

2. Applies only to small business

3. Applies mostly to persons with good educational background in business courses.

4. Applies only to a good economy.

5. Simply opening a small business.

ENTREPRENEURSHIP APPLIES ONLY TO MANUFACTURING BUSINESS:

❌ Misconception, that an entrepreneurship is only applicable to manufacturing but not to

merchandising and services.

However………

❑ Creativity and innovation appears limited in merchandising because there is in

transformation in the appearance and content of the product.

❑ No change of appearance from the time it is bought from the manufacturers until it is
finally sold to the consumers.

ENTREPRENEUR APPLIES ONLY TO SMALL BUSINESS:

❌ Entrepreneurial concepts and principles do not make any distinction as to the size of the
business venture.

❌ The amount of the business capital does not serve as a reckoning ground for classifying
whether to venture is operating with the concept of entrepreneurship or ordinary small
business.

❌ Government support to small business have led to the belief that entrepreneurship is
about small business only.
CORPORATE ENTREPRENEURSHIP: is the process that goes inside an existing business venture.

❑ When the business venture big, expand it operations, or opens other branches locally, or
abroad.

❑ When the owner usually employs a qualified manager to run the day to day operations of
the branches.

❑ When the manager certain functions includes decision making, and marketing.

ENTREPRENEURSHIP APPLIES MOSTLY TO PERSONS WITH GOOD EDUCATIONAL BACKGROUND

IN BUSINESS COURSES:

❌ Nobody is born entrepreneur………..

To become a successful entrepreneur

❑ Must know the basic concepts and principles of entrepreneurship and apply them to the
chosen business.

❑ The environment in which the business operates also contribute to its success.

❑ Business course may help, but does not provide an assurance that you will become a
dynamic entrepreneur.

ENTREPRENEURSHIP APPLIES MOSTLY TO PERSONS WITH GOOD EDUCATIONAL BACKGROUND

IN BUSINESS COURSES…..CONT…

SEVERAL FORCE THAT INFLUENCES THE SUCCESS OF THE BUSINESS VENTURE, (CONSIDERED
THREATS).

❑ New entrants

❑ Bargaining power of the supplier and buyer

❑ Threat of substitute products and services.

MISCONCEPTION:

❌ Does not require any entrance examination in business course.

❌ Successful entrepreneurs come from all walks of life.

❌ Have different educational background from different colleges and universities.

❌ Studying from prominent colleges and universities does not guarantee of becoming a
successful entrepreneurs.
ENTREPRENEURSHIP APPLIES ONLY TO A GOOD ECONOMY:

❑ Finds business opportunities in both flourishing and distressed economies.

❑ While big businesses decrease their production output during financial crackdown, small
businesses increase their output.

❑ In financial crackdown, new ideas can be created and new business opportunities can
identified.

❑ Bad economy does not completely serve as a constraint to the continuation of

entrepreneurial venture and even the creation of new ones.

ENTREPRENEURSHIP IS SIMPLY OPENING SMALL BUSINESS:

❌ Entrepreneurship does not only mean opening a small business.

❌ Does not start and end with opening a small business it is a long, continuing process.

❑ The business must have already passed through the preliminary stages of scanning the
environment and preparation of feasibility study and business plan.

DEVELOPING INNOVATION MINDSET

CHANGE IS THE ONLY CONSTANT

• Ancient Greek philosopher Heraclitus observed that the natural world was in a constant
state of movement.

• People age, develop habits and move environments. You can't step into the same river
twice — even rocks were subject to changes by the elements over time.

INNOVATION LEADERS HAVE TO CHANGE THEIR MINDSET

TO OPERATE AS SOLUTION SEEKERS RATHER THAN A PROBLEM SOLVERS

Solution seekers are people who are concerned about the effect they are having on the environment
and are seeking ways to minimize and/or neutralize that impact.
FOUR CHANGES IN THE ENVIRONMENT OF CEOS/LEADER THAT DRIVEN THE INCREASE IN
UNCERTAINTY

1. GLOBALIZATION
• Globalization offers a number of benefits for entrepreneurship, including access to funding
and resources. With the improving interconnectedness of the global marketplace,
entrepreneurs have access to a wider pool of investors, customers, and resources,
providing new opportunities for growth and expansion.

2. DIGITILIZATION
• Digital technologies have generated new business opportunities for entrepreneurs.
• Digital entrepreneurship allows different entrepreneurs to connect via a platform,
facilitating access to global markets with growth potential.

3. COMMUNITIZATION
• One can never be a market leader unless in the first place, your customers knows your
brand – who you are, what value you offer, loves your value offer and share this with their
community.
• Significant benefits for a strong brand, these include – brand awareness; brand loyalty;
perceived quality; brand associations and other proprietary brand assets.

4. POLITICIZATION
• Why do political factors affect businesses?
• The political environment mainly affects the business environment by affecting its ability
to make a profit and maintain its customer base.
• Factors, such as employment laws, impact employer-employee relations, and when they are
unfavorable, the business may lose its most important resource

THE THREE CRITICAL ELEMENTS

• THESE THREE CRITICAL ELEMENTS THAT NEED TO BE ADDRESSED BY MANAGEMENT

AND MANAGEMENT EDUCATION WHEN CONSIDERING INNOVATION IN THIS CHANGING
ENVIRONMENT.

1. CONNECTING
• As innovation is changing from a game of problem solvng to a game of solution seeking,
managers need to become more resourceful in connecting with other people that can
provide (partial) solutions to the problem at hand.

2. EXPERIMENTING
• As there is no ‘one-size-fits-all’ and solutions might be elusives, managers will need to
be more comfortable experimenting in order to come up with solutions for their problems.
• One can learn from failure. Setting up experiments that yield useful knowledge regardless
of success or failure will be important.
 3. ORGANIZING
• As opportunities for innovation can arise at any point in the eco-system, managers will need
to increase their agility in organizing for innovation.
• Project teams will be assembled and disassembled as the need occurs.
• Probably, this will become the most critical skill in the process of innovating.

CONCLUSION:

• Given the changing environment where innovation is taking place, business schools and
companies need to rethink how they develop programs to reflect these changes in the
environment.

• In this lesson, we have argued that management programs need to reflect these changes as
well in order to expose all levels of management of an organization to the need to change
their mindset and engage in new ways of connecting, experimenting and organizing to create
and capture value from innovation.

MARKETING FOR ENTREPRENEURS

 Knowledge of marketing dynamic is the heart of entrepreneurship.

 Marketing is the indispensable tool that can effectively bring a new product to consumers
and thus generate the needed financial rewards for the survival and growth of the new
business.

 The entrepreneur, therefore, must know how to translate his intended objective into a
blueprint or action plan to prepare and guide into effectively delivering the product to the
market.

 This takes the form of a comprehensive marketing strategy, which can be subdivided into
three parts:

1. Market Strategy- Knowing and analyzing what the best target market is
2. Product Strategy- Knowing what product best meets the needs of the target
market.
3. A competitive strategy- Knowing what approaches can be employed to give the
product or the business an effective competitive edge.

MARKETING STRATEGY

In order to develop and implement a market strategy, one needs to be able to identify that part of
the total market which will direct the coordinated marketing effort.

 In order to develop this marketing strategy, an entrepreneur needs facts called Marketing
Research.
These includes:

 Picking a suitable location.

 Selecting the right products.

 Determine the size and characteristics of a target market.

 Establish the best ways to promote sales.

 Market segmentation- is the process of dividing the total market into smaller groups.

 The objective is to identify what particular types of goods or services are most likely to be
purchased by particular groups of customers.

MARKET SEGMENTATION

 Market segments can be classified in a number of ways such as age group, income levels,
or special interests.

 In order to segment a market, the characteristic of the segments need to be measurable

and the information about them must be available.

THE MARKET CAN BE SEGMENTED INTO GROUPS:

 Age  Ethnic identity  Income

 Geographic location  Family size  Brand loyalty

 Sex  Lifestyle  Home ownership

 Religious affiliation  Occupation  Special interests

 Marital status  Leisure activities

 The process of segmenting a market consists of finding the answer to the following four
questions:

 What is the total market for the product?

 What are the segments of the total market?

 What basis is used for defining each market segment?

 What products or services are most appropriate for each market segment?

 EXAMPLE: suppose you want to open a jean shop. The total market is anyone who wants
to wear jeans. You might want to decide to segment your particular market along the
following lines:
JEAN SHOP:

MARKET SEGMENT SEGMENT BASIS SEGMENT PRODUCT

LINES
CONSTRUCTION WORKERS OCCUPATION WORKING OVERALLS
CHILDREN AGE PLAY CLOTHES
TRENDIES LIFESTYLE DESIGNER JEANS

PRODUCT STRATEGY

 In order to develop an effective product strategy, a starting entrepreneur needs to be able

to clearly define the particular market to which he wishes to appeal.

 He needs to know the customers to whom he wants to sell and he needs to know how his
product or service appeals to their particular needs.

 Needless to say, the easiest and most profitable products or services to sell are the ones
that your intended customers want to buy.

 However, for each of the product line that you decide to carry, it is important you weigh a
number of factors such as the following:

 Availability and terms of supply  Specific products or services within the line.
A. Is the product a staple, impulse or luxury
 Expected sales volume
item?
 Cost of initial inventory B. What range of models, brands, colors or
sizes are best?
 Projected profitability C. What quality range or price range is best?
 Number and types of customers  The experience you already do or do not
 Number and types of competitors have in carrying similar goods or services.


PRODUCT LINE

 A product line is a group of products that have similar characteristic and uses.

 Product mix- is the consistency with which it conforms to the target market segments.

 Product breadth- the number of product lines offered by a business.

 Decisions about product lines, product mix, product breadth and product depth, constitute
your product strategy.
COMPETITVE STRATEGY

 After an entrepreneur has identified his market and product strategies, he still needs to
consider the way in which he is going to compete in the market place.

 To market any product or service effectively, you need to know your competition and the
advantages that they offer.

 When you choose an image, be sure that it accurately reflects the needs and wants of your
target market segments.

THERE ARE A NUMBER OF BUSINESS CHARACTERISTIC USED BY CUSTOMERS IN FORMING

IMAGES. AMONG THEM ARE:

1. Price 5. Convenience 9. Atmosphere

6. Advertising 10. Fashion
2. Location
7. Assortment 11. Service
3. Display
8. Parking 12. Sales personnel
4. Quality

 The overall image of your business depends on the values placed on each individual factor by
your factors. Since each characters can be controlled or modified, you can emphasize those
which your customers value most so that your image represents exactly what they want from
your business.

THE PHILIPPINE ECONOMY: HOW DOES AN ECONOMY GROW

GDP AND ECONOMY

■ Gross domestic product (GDP) is the total monetary or market value of all the finished goods
and services produced within a country's borders in a specific time period.

■ An Economy is an area of the production, distribution and trade, as well as consumption of

goods and services.

■ The Philippines economy grew at a pace of 7.6% in 2022, the fastest rate of economic growth
recorded by the Philippines since 1976. With strong growth forecast over the medium-term
outlook, the size of Philippines GDP measured in US Dollar nominal terms is set to reach USD
one trillion by 2033.

■ This will make the Philippines one of the largest emerging markets in the Asia-Pacific as well
as a leading emerging market globally. Average annual GDP per person has also risen
 dramatically over the past two decades, from below USD 1,000 per person in 2000 to USD
3,500 by 2022 and is projected to rise above USD 6,000 per person by 2030.

PHILIPPINES: ONE OF WORLD'S FASTEST GROWING EMERGING MARKETS

■ The strong rebound from the COVID-19 pandemic during 2022 helped to drive the pace of
growth of the Philippines economy to the fastest rate since 1976. The Philippines GDP growth
rate of 7.6% was comparable to some of the world's fastest growing large emerging markets
in 2022, including the Gulf Co-operation Council oil exporting nations of Saudi Arabia and
United Arab Emirates, as well as other rapidly growing Asian emerging economies such as
Malaysia, Vietnam and India.

■ Philippine economic growth is expected to moderate this year due to inflation and global
headwinds before picking up in 2024 as price pressures ease, according to a report released
by the Asian Development Bank (ADB)

■ ADB’s Asian Development Outlook (ADO) September 2023 forecasts the Philippine economy to
grow by 5.7% this year compared to the 6.0% projection in the April report. The 2024 gross
domestic product (GDP) forecast is maintained at 6.2%, with household consumption and
public spending on infrastructure and social services seen contributing to the economy’s
expansion.

■ The government met its target spending on infrastructure of 5.3% of GDP in the first half of
the year and is expected to maintain this level of investment with several big-ticket projects
underway.

■ Forecasts for inflation are maintained at an average of 6.2% in 2023 and 4.0% in 2024, the
report said. However, possible severe weather disturbances including the El Niño dry
weather phenomenon, pressures from elevated global commodity prices, and second round
effects from higher transport fares and minimum wage hikes could slow the pace of inflation
easing.

ECONOMIC GROWTH AND CAPITAL ACCUMULATION

■ Economic growth is an increase in the production of goods and services in an economy.

Increases in capital goods, labor force, technology, and human capital can all contribute to
economic growth.

■ When economies grow, states can tax that revenue and gain the capacity and resources
needed to provide the public goods and services that their citizens need, like healthcare,
education, social protection and basic public services.

■ Capital accumulation refers to an increase in assets from investments or profits and is one of
the building blocks of a capitalist economy. The goal is to increase the value of an initial
investment as a return on investment, whether that be through appreciation, rent, capital
gains, or interest.
THE CONCEPT OF ECONOMIC GROWTH AND DEVELOPMENT

■ Economic growth include changes in material production and during a relative short period
of time, usually one year.

■ In economic theory, under the concept of economic growth implies an annual increase of
material production expressed in value, the rate of growth of GDP or national income.

■ Economic development of an economy consists of a series of structural changes. The

economic development of the country will be achieved through greater participation of the
processing capacity of industrial production (secondary sector), and at higher levels is
increasingly dominated by service sector (tertiary sector).

ECONOMIC SECTORS IN THE THREE-SECTOR MODEL.

■ The three-sector model in economics divides economies into three sectors of

activity: extraction of raw materials (primary), manufacturing (secondary), and service
industries which exist to facilitate the transport, distribution and sale of goods produced in
the secondary sector (tertiary).

PRIMARY SECTOR

■ The primary sector is the economic sector that revolves around the extraction of raw
materials/natural resources.

■ Examples of primary sector activities include agriculture, logging, fishing, and mining.

SECONDARY SECTOR

■ The secondary sector is the sector of the economy that revolves around manufacturing.

■ The secondary sector consists of processing, manufacturing, and construction companies.

The secondary sector produces goods from the natural products within the primary sector.

TERTIARY SECTOR OR THE SERVICE SECTOR

■ The tertiary sector covers a wide range of activities from commerce to administration,
transport, financial and real estate activities, business and personal services, education,
health and social work.

■ The services sector of the economy is comprised of transportation, communication and

storage, trade finance, real estate, private services and government services sectors.

SOURCES OF ECONOMIC GROWTH

■ There are two main sources of economic growth: growth in the size of the workforce and
growth in the productivity (output per hour worked) of that workforce. Either can increase
the overall size of the economy but only strong productivity growth can increase per capita
GDP and income.
 ■ Productivity growth allows people to achieve a higher material standard of living without
having to work more hours or to enjoy the same material standard of living while spending
fewer hours in the paid labor force.

TECHNOLOGICAL CHANGE

■ Based on the historical genesis of the development is easy to see that the technological
changes caused economic improvement of manufacturing capabilities in Europe, North
America and Japan.

■ The most significant technological developments in the modern world took place in
electronics, computers, telecommunications, aviation industry and so on.

INVESTMENTS AND ECONOMIC DEVELOPMENT

■ Through investment, businesses can build up their stock of physical capital, which increases
their capacity to produce goods and services. For example, when a restaurant purchases an
additional grill, it increases its capacity to prepare food over any given time period.

■ By investing, companies can reap the benefits of economic growth and development while
promoting sustainability for all. These investments provide access to new markets,
resources, technologies and capabilities that drive economic growth, create jobs and build
local infrastructure.