Wesleyan University-Philippines

College of Business and Accountancy

ENTREP 1-ENTREPRENEURIAL MANAGEMENT

(PRELIM REVIEWER)

For 4SBAT1

Introduction

ENTREPRENEURSHIP

What is Entrepreneurship?

The capacity and willingness to develop, organize and manage a business venture along with any of its risk in order to
make profit.

What is an ‘Entrepreneur’?

-Is a person who starts a new business venture.

-An Individual who, rather than working as an employee, founds and runs a small business, assuming all the risks and
rewards of the venture.

-He is an individual or a person who owns and manages his own business, and is engaged in selling

-He is one who takes risks and makes innovations on the factors of production, an adventurer, undertaker, and
projector.

BUSINESSMAN VS ENTREPRENEUR

Businessman and Entrepreneur -A businessman is a person who runs the business, undertaking an unoriginal business
idea. On the contrary, an entrepreneur is someone who first initiates a product or business idea and thus the leader
of that in the market.

DIFFERENCES BETWEEN BUSINESSMAN AND ENTREPRENEUR

The following are the differences between businessman and entrepreneur:

1. A person who brings his unique idea to run a start-up company is known as an entrepreneur. A businessman is a
person who starts a business on an old concept or idea.
2. A businessman makes his place in the market with his efforts and dedication, whereas an entrepreneur creates
the market for his own business.
3. The businessman is a market player while Entrepreneur is a market leader because he is the first to start such a
kind of enterprise.
4. As the businessman follows the footsteps of other businessmen, the possibility of failure is very less which is just
opposite in the case of the entrepreneur.
5. A businessman uses traditional methods to run the business. Conversely, an entrepreneur applies unconventional
methods for the same.
6. A businessman is oriented towards profit, however, an entrepreneur is a people focused in essence, he gives more
importance to its employees, customers, and the public.
7. The businessman faces extreme competition because it is very difficult to gain a competitive position in an already
existing market, which is not in the case of an entrepreneur.
 Chapter 1

ATTRIBUTES, QUALITIES, AND CHARACTERISTICS OF AN ENTREPRENEUR

Self-awareness
He knows who he is, what he is good at, and what he likes to do. He starts a business that is based on his expertise
in a specific field, and focuses on his involvement in an area he thoroughly enjoys.

Self-motivated
Self-motivation is one of the most important personality traits of successful entrepreneurs. This is the
characteristics that gets him going and keeps him moving when he is in business. It is what helps him keep on turning out
those craft items, upgrading his technical skills, or developing new improved promotional techniques when business is
slow.

Courage
Courage, or the willingness to take risks is a valuable trait when striving for success. A successful person might
say something like “I do not know how I did it; I just made a phone call and asked for the money I needed.” It was more
than luck that made it possible for this person to raise the needed capital to get a business off the ground; it was the
willingness to take a chance and hope for the positive response to the request.

Positive thinkers
Entrepreneurs are positive thinkers. They think of success and bright sides. Such success consciousness leads
entrepreneurs to success.

Patience
When one owns his business, there will be times when he feels like the roof is craving in, especially when the
suppliers seem to be taking their own sweet time in fulfilling an important order.

Experience
A primary reason some businesses fall within a few years of start-up is lack of business experience. Whether or
not one’s experience is directly related to business he is planning to start, it is a key component for growth.

Knowledge
Experience in one’s field is invaluable, but it is not enough. One has a better chance of succeeding by knowing, as
much as possible, about factors such as business basics, the product or service that he want to sell, the industry he is
entering his competition, and the local, regional, state, and/or national.

Information-Seeking
To assure accomplishment of his entrepreneurial goals, the entrepreneur continuously seeks for relevant
information regarding the market, clients, suppliers, and competitors, and consult experts’ advice on business and other
technical matters.

Drive
One must believe in his goal and be determined to succeed. The successful businessperson does not view obstacles
or stumbling blocks as problems, but rather as challenges. To make his business a success, he needs to be totally
committed and willing to work long hours, especially in the beginning.

Risk Taking
Entrepreneurs are known for being risk-takers. They prefer tasks, which provides them some challenges. They are
not afraid to take risks.
Entrepreneurs also avoid low-risk situations, because there are no challenges.

Innovative
Entrepreneurs are creative. They do things in new and different ways. For example, they create new products or
services, new methods of production, new markets, and new sources of raw materials. They love to explore the unknown,
and to blaze new paths of progress.

Demand for efficiency and quality

Setting high, but realistic standards of excellence for himself, he finds it difficult to compromise on those
standards. So, in order to meet these standards, the entrepreneur always strives to find ways to do things better, faster,
and at a lower cost.
Systematic planning and monitoring
As a careful planner, the entrepreneur sets what are to be accomplished, and meticulously assesses how today’s
activity can contribute to the accomplishment of his long-term goals.
Furthermore, he keeps on monitoring his progress in order for him to check whether he is in the right direction,
or if modification is needed along the way.

Persuasion and networking

A persuasive person, the entrepreneur easily establishes a network of personal and business contacts around him.
An entrepreneur is aware that power is required to achieve his business objective.

Global Marketing- Involves the creation of a single strategy for a product, service, or company for the entire global market.

GLOBAL MARKETING VS INTERNATIONAL MARKETING

 Service or product offered

In Global marketing, a company provides the exact product or service offerings to the customers in all countries
that it operates.

In International marketing however, each of the individual market is served with specific tailored products
especially suited to the customers in that market only.

 Advertising
In Global marketing, commercials are run all over the world.

In International marketing, favors ad airing in the local market exclusively or in similar markets, at most..

 Marketing Budget
The budget of global marketing team is managed directly from the corporate headquarters.

In International marketing, however, budget issues are negotiated and handled at the local level.

 Marketing Autonomy
In Global marketing, every marketing strategy is devised and implemented from the corporate headquarters.

In International marketing, marketing teams handle things domestically.

 Social Media
Just by reviewing their social media pages, one can contemplate as to what type of marketing policy the company
has adopted.

 Customer’s Engagement
Customers’ engagement is more visible in international marketing. A company can better connect with its
customers by installing in place better communication channels.

 Market Research
Market research are as deep and broad in global marketing as they are in international marketing. Sometimes,
global marketing can produce big flops when market research has not properly conducted.

Chapter 2
SEARCH FOR BUSINESS OPPORTUNITY, IDEATION, INNOVATION, AND CREATIVITY

THE SEARCH FOR BUSINESS OPPORTUNITY

In discovering business opportunities, the following factors on resources have to be evaluated:

Markets
This refers to the number of prospective buyers, competitors, the price, and the quality of goods and services that have
to be analysed. Business opportunities exist in areas where consumer satisfaction is weak or incomplete.

Individual Interests
Business interest of individuals should match business opportunities.
Capital
This serves as the fuel that keeps the business operating. The availability of funds should fit the type of business to
organize.

Skills
The entrepreneur should have the proper skills in the business he is going to undertake.

Supplier of inputs
It is important that there are steady suppliers of raw material and other inputs to the business.

Manpower
The success of any business also depends on the efficiency of its employee.

Technology
Entrepreneurs should be aware of the presence of technology to improve their products or services, or introduce new
innovations in the market.

Other opportunity-seeking processes that can guide a prospective entrepreneur as to what kind of business to establish
are as follows:

1. Look at other successful businesses/entrepreneurs

-Looking up at other entrepreneurs as a role model that could be an inspiration, by doing what they have done or
do it even better.

2. Home-Based Business Option

-These must not be taken for granted, for there are some big businesses that started as a small business at home.

3. Linkage of Resources

-The entrepreneur can produce his own input instead of buying them.

PRODUCT LIFE CYCLE (PLC)

According to Fajardo, products have their own life cycle. It is composed of four stages: Introduction, Growth,
Maturity, and Decline. Some products have long product life cycle, while others have short.

Here are the descriptions of various stages of product life cycle:

 Introduction-This is the stage in which the product has been introduced first time in the market. If consumer
awareness and acceptance of product are low, launch through the use of marketing activities, which make the
profit low due to cost of development and marketing activities.

 Growth-In this growth stage, the product is present already in the market and consumers of the product are
habitual of the product and also there is quick growth in the product sales as more new and new customers are
using and trying and are becoming aware of the product.
To meet the growing demand, product distribution is expanded. Sales rise rapidly as product becomes popular.

 Maturity-In maturity stage, the cost of the product has been decreased because of the increased volume of the
product and the product started to experience the curve effects. Also, increase in competitors entering the
market.
Sales are still rising, but rate of increase has declined. At latter part, a sale reaches its peak, while profits begins
to fall.

 Decline/Saturation Stage-In this stage, there is a sharp fall in sales volume, while profit curve becomes almost flat
or horizontal. There is also decline in the number of competitors. The only survivors are those who specialize in
marketing the product. Once product is no longer profitable, it is eliminated from the market.
 Venturing into a business projects demands a timely and clear decision as to which area or business concern to
deal with. In the selection process, one has to begin with choosing or focusing on a particular business by category or
sector.

The service-based business

Common examples of service-based businesses are consultancy, barber shops, beauty parlors, care giving, designing
works, rendering professional services, such as engineers, dentistry, medical doctor, and others where there is no need to
manufacture something.

Trading or product-based business

This is a buy-and-sell transaction that can happen in your storehouse, showroom, or any other structure less environment.
Selling involves a lot of customer contact and requires a great deal of persistence on the entrepreneurs’ part.

An example of this is putting up a grocery store, bakery products, or general construction materials.

Manufacturing business
This is a manufacturing or production-based business by creating a product. Manufacturing can be as simple as hand-
painted T-shirts or ceramic vases and now, the most popular is candle making, which can done in your home.

Licensed business opportunities

If you find some difficulties in launching a product or service, it is a good idea to look for licensed business opportunities.
Franchising is a business format somehow very similar to licensed business operations.

Distributorship
This is where an independent entrepreneur, company, or individual enters into an agreement or contract to offer, sell, or
distribute a particular product, but is not entitled to use the manufacturer’s trade name as part of its own trade name.

Rack Jobber
This involves an agent or buyer entering an agreement with a parent company to market its goods to various stores by
means of strategically located store racks.

Wholesalers
These sell the product of manufacturers or producers to retailers and other distributors who have direct dealings with the
end users or customers.

Vending machines routes

These are placed in various places or locations. The entrepreneur needs to have substantial capital outlay as he had to pay
for the vending machine, including the stocks to be vended.

IDEATION
The beginning of a business endeavour is ideation. This should be the first investment of anyone who seeks to be
an entrepreneur; and to be called an entrepreneurial business opportunity, such idea has to be new, or if not, should be
innovative. The best source of ideas are the consumers in general, since they are the ones who are in need for certain
product or service.

The more idea a person produces, the more original and the better quality ideas one will find among them.

The most common way of developing ideas is as follows:

 Recognizing the need

Develop an idea or a product that can satisfy a need, and respond to the need by establishing business concern.

 Improving an existing product

The result of consumer dissatisfaction to existing product could open the door to introduce innovations or
improvements.
  Recognize trends
Entrepreneurs should be able to recognize the opportunity to develop a product and set trends that can make
them leading entrepreneurs.

 Be aware of everything
There is no other way to know about what is happening around you, but to research and read.

 Questions and assumptions

Anybody can question the relevance or quality of any product or services, provided, that there is an effort
to improve the product.

Once you generate an idea, it has to be protected because it can make you a potential millionaire, like in the case
of Bill Gates. There are many ways of protecting your idea from being stolen or claimed by others, and losing
opportunity to be known as the creator and the originator of the ideas. Aside from this, no company will pay you
a royalty if the idea presented is not legally protected.

This following are the ways of protecting your ideas:

Confidentiality Agreement
It specifically provides that a signer will not share the idea to anyone. This is a typical agreement or
contract where one should ask advice to a patents attorney or those with experience and expertise in the
intellectual property.

Patents
These gives the inventor exclusive legal rights to exclude anyone else from manufacturing, selling,
importing, or using an invention during the life of the patent. The three general classifications are: Design, Utility,
and Plants Patents.

Trademarks
This is a word, name, symbol, or device used by manufacturers on merchants to identify their goods and
distinguish them from others sold in the market. This should be sed in conjunction with a business or a product,
otherwise, this will not be granted.

Copyrights
A copyright protects the creative works of composers, authors/writers, artist, and others. This is the
easiest form of protection for intellectual property.

CREATIVITY

ENTREPRENEURIAL CREATIVITY- Creativity, innovation, and entrepreneurs are inseparable. Creativity is an essential part
of innovativeness, the starting point of a process, which is skilfully managed, and brings an idea into innovation. It is
considered as a characteristics that is innate or inherent to every individual, but the social environment can influence
both the level and frequency of creative behaviour.

INNOVATION

THE CONCEPT OF INNOVATION-Innovation is doing something different. It could be introducing either something new
or different. Innovativeness is a characteristic of an individual, team, or organization. This is also the capacity to create
ideas and develop them to usable products or services.

IMPACTS OF INNOVATION
Efforts on innovation must have impacts-positive impacts. It must have a positive implication that is supportive of
organizational goals and objectives. The innovative accomplishment exists if the following happens:

1. Effecting a new policy- creating change or orientation or direction

2. Finding new opportunities- developing an entirely new products or opening a new market.
3. Designing a new structure- Changing the formal structure, reorganizing or introducing a new structure.
4. Devising a fresh method- Introducing a new process, procedure, or technology for continued use.
Innovation is not only for a change, but also for the search in excellence, not only in producing a product, but also in the
form of innovative systems and services. The innovativeness and creativity of an individual could be the greatest assets
any business could have, so this should be developed and properly taken care of.