SCHOOL OF ACCOUNTANCY, BUSINESS and HOSPITALITY

Second Semester
A.Y. 2020-2021

CORRESPONDENCE LEARNING MODULE

ENTR 1013 – The Entrepreneurial Mind

Prepared by:

CAMILLE JAM L. SERA

Prepared by:

MARY ANN C. BARTOLOME

Reviewed by:

Recommended by:

ALICIA S. TULIAO
Academic Dean

Approved by:

EMMANUEL JAMES PATTAGUAN, Ph.D.

Vice President for Academics

ENTR 1013 – The Entrepreneurial Mind | 1

This Week’s Time Table: (April 5 - April 9, 2021)

For this week, the following shall be your guide for the different lessons and tasks that you need to accomplish.
Be patient, read them carefully before proceeding to the tasks expected of you.
HAVE A FRUITFUL LEARNING EXPERIENCE

Date Topics Activities or Tasks

April 5-8 Innovation Read Lessons
 Learning innovation
 How to innovate the marketing mix on
demand
April 9 Submission of participation and quiz Accomplish the worksheet in the
Activities Portion of this module

ENTR 1013 – The Entrepreneurial Mind | 2

 CORRESPONDENCE LEARNING MODULE
ENTR 1013 – The Entrepreneurial Mind
AY 2020-2021

Lesson 10: Continuation about Innovation

Topic: Innovation
 Learning innovation
 How to innovate the marketing mix on demand

Learning Outcomes: At the end of this module, you are expected to:

1. Create innovative ideas in preparation for business planning.

LEARNING CONTENT

Introduction:

FRESH MORNING FUTURE CPAs/Entrepreneurs! This week is the continuation of the previous lesson
on innovation particularly on more cases in Innovation.

ENTR 1013 – The Entrepreneurial Mind | 3

Lesson Proper:

More Cases in Innovation

The next sections are examples of innovation that have occurred in each of the ten building blocks of a
business model, starting from the offering model (target market value proposition, channel, customer bonding
strategy and revenue model) to the operating model (value network, resources and processes, complementors
configuration and cost)

Innovating the Choice of Target Market.

In February 2004, Facebook (which used to refer to a printed directory with photos and basic information of
students from a particular school) initially targeted schoolmates of founder Mark Zuckerberg as members,
connecting students in Harvard University.

Viviamo launched Belle de Jour Power Planner initially for young, driven, and active fashionista
women, they subsequently expanded to doing planners for the bigger corporate market without having
to sell one planner at a time.

Innovating the Value Proposition

Martin Luther led the Protestant reformation in the 15th century and offered an alternative religious choice
based on "Faith alone" (from God's grace) rather than the "Faith and Work" principle of Catholics. Luther
allowed the Bible to be available in languages other than Latin to expand his audience and allowed priests to
marry.

Puzzles Board Game Lounge is a place to eat, relax and play board games while having old-fashioned
bonding with family or friends. The idea of a restaurant fusion with board games came because the
three founders (Anton You sent Today at 6:49 PM Valencia, Roby Camagong and Sam Bengzon) were
friends who would always find a good place in a local or restaurant to play board games, away from
the usual electronic gadgets.

Innovating the Channel Strategy

Netflix started as a DVD subscription business where customers choose a plan mat allowed Netflix to deliver a
food number of DVDs by mail, and then with the next set mailed to them after the previous set had been
mailed back

Innovating the Customer Bonding Strategy

Amazing Race is a TV show that features teams competing to reach a destination while the host country
displays the beauty of their location. They have innovated on a tourism show using gamification instead of the
usual documentary

Innovating the Revenue Model

Recession Coffee in Eastwood is located at the front area of the store of Digital Waker, which is like their traffic
builder. They had a pay-what you want offer for mer coffee which was a novelty in the industry, but has since
fixed the price at P99 • Low cost carrier (LCC) airlines charge low-ticket prices when customos book early
Their low margins are offset with revenues from various sources, such as ancillary foos (credit card fee, food
and beverage, advance seat assignment 2nd carry on bag, early boarding speedy security lines, in-flight Wi-Fi
movies reclining seats, obese seats, with infant, excess weight, fee for changing tigh They also earn
commissions (from hotel, car rental, and accident insurance) and have more seats to sell (by reducing the seat
pitch).

ENTR 1013 – The Entrepreneurial Mind | 4

Innovating the Value Network
Xiameter an affiliate of Dow Corning USA, collapsed the processes of manufacturing. warehousing and
inventory management, by shipping out on the day their silicones are produced, thus, no longer requiring
inventory management or warehouse space. This resulted in lower costs, enabling therr to reduce the prices of
commoditized products with expired patents.

Innovating the Resources and Processes

Ikea furniture is known for ready-to-assemble furniture in flat packs. Its late founder, Ingvar Kamprad, was in
the mail order business when he was young, and knew the importance of easy-to-ship/transport products. he
flat pack process enabled them to save on space in the warehouse as well as in transportation, while also
reducing the cost for the customers who can opt to save delivery charges by picking up and assembling the
furniture themselves.

Innovating the Complementors

Hindustan Unilever offers income opportunities to women in rural India. They De with micro lending institutions,
non government offices (NGO) for sell help groups, local government, geographical stockists and local drama
troops to deliver their brand message via comedy shows.

Innovating the Configuration

TV networks avoid paying high toes to superstars by launching reality TV shows (like the Survivor series)
where the major prize is a small fraction of what they would be paying for known stars. These reality TV shows
emphasize the mumph of the human spirit and they earn money from product placements and partly from text
revenues, aside from traditional advertising, making the category more viable with a lower breakeven point.

Innovating the Cost Model

Ton Ton Thai Massage is about pressure points and stretching. They do not offer sauna, shower, bed,
aromatherapy, big towel and locker in a separate room. This reduces their electricity, water and laundry costs
tremendously while charging about the same price as other massage service chains.

How to Innovate the Marketing Mix on Demand

One tool used to innovate marketing mix is a 5-Point Marketing Innovation Tool used by Marismith and Fielders
Inc, and adopted by the White Space Club It provides five ways to "reinvent" each element of the marketing
mix.The tool, which expands the framework of Blue Ocean Strategy, promotes critical Thinking in generating
alternatives., solves problems and helps in creating new ideas The choice of which of the five ways to use,
depends on what can help solve the pain points effectively in a novel way.

An example can be provided in the restaurant business where different product concepts have been applied.
The tool can also be used for each of the elements of the marketing mix
• Butter is an example of a plus (+) since the quantity has been raised.
• Buffet cross over from Dad's to Saisaki is an example of a multiply (x) since they multiplied the buffet options
• Masuki is an example of a minus (-) since they offer only limited menu composed of mami, siopao, siomai
and drinks.
• The Third Floor in Bangkok is an example of a division (-) since they split the menu according to blood type.
• Go Halfsies, combined the concept of fighting food waste when people are on a diet plus charity by serving
half meal portions at full price to guests while the other half of the meal is given to a charity that addresses
hunger.

SCENIC Innovation Questions

Another way to foster innovation thinking through the SCENIC frame shared by Mansmith and Fielders Inc. to
help entrepreneurs and innovators reflect on innovation possibilities based on pain points they are focused on
solving. Below are some examples:

A. Special - What are you willing to do if someone special like your own mother experienced pain points?
Some outlets of Store Specialists offer up to a year to exchange the merchant bought. This is because

ENTR 1013 – The Entrepreneurial Mind | 5

 shoppers may have bought something in January but gave it as a gift only in December, removing the
problem of having the v Size of items.

B. Crisis - Suppose your sales target has been increased 500% what else vil you consider doing? Waters
Philippines had a successful water purifier show in Alabang in the ean 1990s, but the owner was
dissatisfied and thought the market could be much bigger than that He then decided to launch a multi-
level marketing type of direct selling of water purifiers with installment plan, while pulling out of the retail
stores eventually.

C. Else - Who else have you not considered? What else can you do? How else can you do it? Omron
realized housewives were a bigger market than doctors so instead of launching another manual blood
pressure machine with stethoscope, they launched a premium priced electronic blood pressure monitor
saving the housewives time, effort and money visiting doctors just for a blood pressure reading.

D. Not - Instead of thinking things are impossible, think "Why Not and look for new possibilities Microsoft
Kinect 3D supplies clothing stores with a virtual trial mirror that allows shoppers to try on clothes
virtually. Imagine trying on as many as 50 clothes in 2-3 minutes time saving shoppers time and effort.

E. If-Scenario building is another possibility with "What if questions. French Baker was launched in 1989
with many innovations - onsite baking of breads in malls normally available only in hotels, no
preservatives, premium price and no media advertising.

F. Constraint - Suppose the government imposed restrictions and you cannot do what you are doing
what else would you do? Go Negosyo is an advocacy started by Joey Concepcion of RFM Corporation
when he was appointed presidential adviser on entrepreneurship by then President Gloria Macapagal-
Arroyo, and reappointed by President Rody Duterte. Part of Go Negosyo's initiative is to encourage big
companies to voluntarily have more SMEs be part of their supply chain to spur growth of
entrepreneurship in the country while voluntary, it may be a requirement in the future for businesses to
be more inclusive.

How to Kill innovation

Not long ago, we asked our businessmen-friends why they think companies like Philippine Air Lines (PAL) did
not create their own low cost carrier (LCC) before the entry of Cebu Pacific Air. Or even Mercury Drugstore
before the entry of The Generics Pharmacy (now TGP). Or banks before the entry of Bayad Center catering
initially to the unbanked customers. Was it the fear of cannibalization? Institutional blindness? Complacency of
market leadership?

Protecting financials came out as the most frequently cited answer why market leaders freeze when it comes
to innovation, though there is evidence that also shows how innovation, and not just incremental improvement,
can be introduced by incumbent market leaders These 10 reasons are shared below and entrepreneurs can
spot opportunities to innovate from the weaknesses of bigger companies.

1. Protecting Financials
The CFO's role is ensuring healthy financials. This means increasing revenues and profitability, and not
necessarily launching innovation, which may be seen as an expense rather than as an investment. To
get approval for an innovation endeavor, all new proposals need to be aligned in order for management
to make quick and timely decisions. Innovation, especially radical ones, has elements that are new and
unfamiliar, hence it may be hard to predict if it will improve or dilute profitability. There is after all Plan B,
which is to allow other companies to initiate innovation and hopefully the entrepreneur - innovator would
be willing to sell to the market leader. From a financial perspective, the premium paid for such
acquisition may make more sense than the risk of launching one's own innovation.

2. Culture of Complacency, Status Quo and Conservative Attitude

ENTR 1013 – The Entrepreneurial Mind | 6

 Market leaders often become too comfortable with their success. They have succeeded based on what
they have done in the past and are no longer as hungry and driven to change their success 'formula' for
growth; after all, they already have a name and the money Some companies are trapped in their
traditions and the culture of conformity that is expected from its members. Another is the 'not-invented-
here' syndrome where new ideas are rejected if not coming from specific people in the company Still
another is the annual strategic planning ritual where companies go out of town and do a lot of number-
crunching tactical reviews extending what they have been doing as long as possible, without actually
having anything new innovation ideas as output. Status quo is the name of their game. Their marketing
plan is the cut-and-paste type, as they do not bother to get new insights or test any new offers. These
executives also tend to be conservative about everything.

3. Limited Paradigm Knowledge and Methodologies

A high market share can blind recipients of the need to improve market penetration radically. Also,
being better is the greatest enemy of being different, so they do not bother innovating as they feel their
customers have accepted and are already used to their Existing offerings and practices. After all,
market leaders are already better in many areas of the market. Another is the limited work experience
of the owners and marketers. The more one is exposed in a particular industry such as consumer
goods, the more one will follow the logic of that industry and accept the marketing mix as the only way
to differentiate, unmindful of the fact that there are more advanced ways to distinguish themselves from
the rest.

4. Arrogance and Pride

When a company is at its peak and has a lot of resources. some of its key officers may think they are
indestructible for having high brand loyalty. So instead of innovating, they will just drop prices or launch
promotions temporary when new entrants come in as their own form of defense marketing without
bothering to think of other ways to defend their leadership Without the benefit of a 360-degree view of
competitive scenarios, timing as well as what to protect first, market shares and leadership will be
compromised in no time. Dominant players often also take great pride in what got them there: they
underestimate the smaller, newer players, forgetting that they were once like them

5. Focus on other strengths

Market dominance may inhibit strategic thinking, especially of new market spaces. Market leaders have
many areas they consider strengths and may just allow a new player to do their thing, just observing
how they operate, instead of wasting precious time debating how the innovation will affect them

6. Industry Conditions, especially Speed to Exploit Technology and New Knowledge

Availability of new technology online has given rise to many new innovations and many new billionaires.
Instead of embracing new technology, incumbents may decide to stretch the use of their old technology
hoping the new thing may just be an unsustainable fad. While some markets have high entry barriers
and high start-up costs, there may be lack of motivation to innovate when there are few (if any) new
entrants in the beginning

7. Lack of an Idea Channel

Employees may have very restricted access to top management or may somehow be limited to what
their immediate bosses will endorse or not endorse for management approval, prematurely killing good
ideas in the process.

8. Operational Issues
Some companies are affected with many internal inefficiencies that keep them in a perennial trouble-
shooting crisis. Innovation is then relegated to another timetable.

9. Lack of the right marketing talent in the team

ENTR 1013 – The Entrepreneurial Mind | 7

 The ability to be innovative and creative is a capability that not all people have. Managers should not
only be able to provide directions with the usual planning, organizing and allocating they should be able
to make sense of the fast-changing needs and wants of customers

10. Focus and lack of vision or foresight

Major innovations happen when the proponents are able to connect the dots and see a different future.
Incumbents some of whom were innovators once, may fail to see a disruptive innovation coming as
their focus is on the operations and efficiency of their ongoing business Incumbents may have decided
to stick to an existing market segment leaving newcomers to enter with an innovative offering. This
enables new players to occupy a white space, which may lead them to enter their natural adjacency the
segment of the incumbent

*** END of LESSON 10***

ENTR 1013 – The Entrepreneurial Mind | 8

PARTICIPATION (for recitation purposes)

Why is it important to be innovative?

(10 points)

EVALUATION:

Matching Type:

Ans. Column A Column B

1.Protecting Financials a. Market leaders have many areas they consider
strengths and may just allow a new player to do their
thing.
2. Culture of Complacency, Status Quo and b. Market leaders often become too comfortable with
Conservative Attitude their success.
3. Limited Paradigm Knowledge and c. Availability of new technology online has given rise
Methodologies to many new innovations and many new billionaires.
4. Arrogance and Pride d. Innovation is then relegated to another timetable.

5. Focus on other strengths e. Major innovations happen when the proponents are
able to connect the dots and see a different future.
6. Industry Conditions, especially Speed to f. Employees may have very restricted access to top
Exploit Technology and New Knowledge management or may somehow be limited to what their
immediate bosses will endorse or not endorse for
management approval, prematurely killing good ideas
in the process.

7. Lack of an Idea Channel g. Innovation, especially radical ones, has elements

8. Operational Issues
9. Lack of the right marketing talent in the
team
10. Focus and lack of vision or foresight
that are new and unfamiliar, hence it may be hard to
predict if it will improve or dilute profitability.
h. When a company is at its peak and has a lot of
resources
i. The ability to be innovative and creative is a
capability that not all people have.
j. A high market share can blind recipients of the need
to improve market penetration radically.

True or False:

___________1. No innovation can happen unless there is a new truth or an insight discovered, so
entrepreneurs must hunt for the new truths.
___________2. Whether as entrepreneur or intrapreneur, creative thinking can help generate more innovation,
a kind of input-and-output relationship, being creative does automatically make one innovative.
___________3. Creativity is offering a new idea, while innovation is making the new idea come to life
profitably.
___________4. Many companies like to have more innovation, but are dissatisfied with their efforts.
___________5. Innovation can be learned.

ENTR 1013 – The Entrepreneurial Mind | 9

REFERENCES

Textbooks

Go, Josiah and Escareal-Go, Chiqui (2018) Entrepreneurship: Starting an Enterprise. Having an Innovation
Mindset

ENTR 1013 – The Entrepreneurial Mind | 10

 SCHOOL OF ACCOUNTANCY, BUSINESS and HOSPITALITY
Second Semester
A.Y. 2020-2021

CORRESPONDENCE LEARNING MODULE

ENTR 1013 – The Entrepreneurial Mind
Lesson 10

WORKSHEET – TASKS

NAME:
COURSE & YEAR:
INSTRUCTOR:

PARTICIPATION (for recitation purposes)

Why is it important to be innovative?

(10 points)

EVALUATION:

Matching Type:

Ans. Column A Column B

1.Protecting Financials
2. Culture of Complacency, Status Quo and
Conservative Attitude
a. Market leaders have many areas they consider
strengths and may just allow a new player to do their
thing.
b. Market leaders often become too comfortable with
their success.

ENTR 1013 – The Entrepreneurial Mind | 11

 3. Limited Paradigm Knowledge and c. Availability of new technology online has given rise
Methodologies to many new innovations and many new billionaires.
4. Arrogance and Pride d. Innovation is then relegated to another timetable.

5. Focus on other strengths e. Major innovations happen when the proponents are
able to connect the dots and see a different future.
6. Industry Conditions, especially Speed to f. Employees may have very restricted access to top
Exploit Technology and New Knowledge management or may somehow be limited to what their
immediate bosses will endorse or not endorse for
management approval, prematurely killing good ideas
in the process.

7. Lack of an Idea Channel g. Innovation, especially radical ones, has elements

8. Operational Issues
9. Lack of the right marketing talent in the
team
10. Focus and lack of vision or foresight
that are new and unfamiliar, hence it may be hard to
predict if it will improve or dilute profitability.
h. When a company is at its peak and has a lot of
resources
i. The ability to be innovative and creative is a
capability that not all people have.
j. A high market share can blind recipients of the need
to improve market penetration radically.

True or False:

___________1. No innovation can happen unless there is a new truth or an insight discovered, so
entrepreneurs must hunt for the new truths.
___________2. Whether as entrepreneur or intrapreneur, creative thinking can help generate more innovation,
a kind of input-and-output relationship, being creative does automatically make one innovative.
___________3. Creativity is offering a new idea, while innovation is making the new idea come to life
profitably.
___________4. Many companies like to have more innovation, but are dissatisfied with their efforts.
___________5. Innovation can be learned.

ENTR 1013 – The Entrepreneurial Mind | 12