ENTRE 017

OPPORTUNITY SEEKING
PRELIM

BS-ENTREP 12M1
 What is the opportunity seeking?

  The ongoing process of considering, evaluating, and

pursuing market-based activities that are believed to be
advantageous for the firm. Prior experience informs the
process, but it may also limit it: opportunity seeking calls
for continuous reconsideration and adaptive learning .
Opportunity Seeking for Entrepreneurs

 Entrepreneurs are innovative opportunity seekers. They

have endless curiosity to discover new or different ideas
and see whether these ideas will work in the marketplace.
This is what separates entrepreneurs from the ordinary
businessman whose main objective is simply to earn
profits from producing, buying, and selling goods.
 Entrepreneurs create value by introducing new products or
services or finding better ways of making them. These may
include innovation in terms of product design or addition of new
product features to existing ones. They may also tinker on
improving their operational capability by employing new
technologies that will bring them greater efficiency, better
economies, and even enable them to reach unparalleled
superiority. They may also consider expanding their reach by
creating new markets or maximizing existing market reach. At
the highest level, entrepreneurs may totally change the prevailing
business paradigm by rendering it obsolete through the
introduction of disruptive technologies, processes, and systems.
Entrepreneurial Mind Frame, Heart
Flame, and Gut Game
 The entrepreneurial mind frame allows the entrepreneur to see things in a very
positive and optimistic light in the midst of crisis or difficult situations. Instead
of being discouraged, the entrepreneur is able to use these problematic situations
as inspiration in creating something innovative. In fact, in Chinese writing, the
word crisis is composed of two characters. The first character means danger
while the second character means opportunity. 
 If there is one commonality between an inventor and an entrepreneur, it is their
surging passion or the entrepreneurial heart flame. Driven by passion, they are
drawn to find fulfillment in the act and process of discovery.
 Passion is that great desire to attain a vision or
fulfill a mission. It is about wanting something
so much that a person would be willing to
totally devote one’s self to the quest. Despite
several setbacks or disappointments, the
entrepreneur is not easily disheartened but is
rather driven to persevere even more.
 The heart flame is also about emotional intelligence or
EQ, which is often manifested in the entrepreneur’s
efforts to nurture relationships with customers,
employees, and suppliers. The entrepreneur also looks
after the interests of his or her people by motivating and
encouraging them to be the best they can become. This
creates a caring culture within the organization that brings
about synergy among the people working toward a
common vision. 
 The final ingredient is the entrepreneurial gut game.
This refers to the ability of the entrepreneur to sense
without using the five senses. This is also known as
intuition.
 Somehow, the entrepreneur just knows whether something
will work or not without necessitating logical, systematic,
and sequential thinking. The gut game also connotes
courage or, in the local dialect, “lakas ng Loob” (strong
intestinal fortitude). It is simply confidence in one’s self
and the firm belief that everything is within reach so long
as you aspire for it.
 The Many Sources of Opportunities
 There are many ways to uncover or discover opportunities.
Some have to do with looking at the big picture and
noticing emerging trends and patterns. Others have to do
with finding out what specific customer segments are
being targeted in the marketplace. Still, others come from
new technologies and new knowledge. These different
sources of opportunity are discussed in this lesson.
 Macro Environmental Sources of Opportunities
 The macro-environment refers to the “big or macro forces” that affect the
area, the industry, and the market, which the enterprise belongs to. They
influence how business should be conducted, how consumers will behave,
how supply and demand will move, how different competitors would
position themselves, and how the cost of doing business will proceed. The
macro-environment forces can be divided into five categories composed of
the Social, Political, Economic, Ecological, and Technological dimensions
or SPEET. The macro-environment forces create their own opportunities
for the enterprise to exploit, and their own threats for the enterprise to
counteract.
 1 . Socio-Cultural Environment
 The socio-cultural environment includes the demographics
and cultural dimensions that govern the relevant
entrepreneurial endeavor. Taking this aspect into
consideration helps the entrepreneur assess the trends and
dynamics of the bigger consumer population, their beliefs,
tastes, customs, and traditions. It looks at social structure and
shifts in social status and behavior.
 2. Political Environment
 The political environment defines the governance system of the country or the
local area of business. It includes all the laws, rules, and regulations that govern
business practices as well as the permits, approvals, and licenses necessary to
operate the business. Specifically, it regulates the use of natural resources; the
disposal of wastes; the taxation of income; the importation of goods and
services; the accounting and reporting of business financial statements; public
and private education; health programs; use of public funds; and other such
concerns. It includes the establishment of vital infrastructures, logistical access,
and interventions that affect the cost of doing business. These factors are
important influencers in evaluating the attractiveness of any political domain
where the entrepreneur intends to locate and do business in.
 3. Economic Environment
 Supply and demand forces mainly drive the macroeconomic environment. They are the
same factors that drive the interest and foreign exchange rates that fluctuate with the
movement of the market forces. In any country, the income levels and the purchasing
power of its people as well as the competitiveness (or uncompetitiveness) of its
industries and enterprises are sources of opportunities. However, in any opportunity,
there is always a threat that lurks behind it. In this case, the entrepreneur must be able
to think critically through each and every single economic event that impacts his or her
enterprise. For example, a very fast-growing demand for housing may lead to the
overbuilding of houses. This threat is what house financing institutions are afraid of.
4. Ecological Environment
The ecological environment includes all-natural resources and the
ecosystem, habitat of men, animals, plants, and minerals. There is a
growing awareness in the world today that will make this factor more and
more important for countries, industries, and businesses. 
The threats of ecological degradation have generated countless
opportunities such as smoke and spill detectors, filters and screens,
pollution counters, and energy-saving devices. Opportunities abound for
greener, cleaner, and healthier products, whose objectives are to save the
planet and prolong lives.
 5. Technological Environment
 New scientific and technological discoveries, which often lead to the launch
and commercialization of new products with superior attributes or to
rendering the old ones obsolete, are the entrepreneur’s nightmares. In such
cases, the entrepreneur is left with no choice but to invest in new
technologies in order to keep up with competition. Technology does not only
come in the form of advanced machinery or equipment, but it can also be in
the form of new systems, new processes, or new products.
 Industry Sources of Opportunities
 After the macro environment, the next biggest sources of opportunities are the
industry and the market. One of the most difficult aspects about industry analysis is
defining what constitutes an industry in the first place. The proper classification of
what industry the enterprise is competing in is important if the entrepreneur’s
intention is to define who are the relevant customers, who are the direct and indirect
competitors, and what are the critical characteristics of the market as to the quality
of products or services to be delivered. 
 Participants in an industry include:
 Rivals or competitors in a particular type of business (e.g., Jollibee vs.
McDonald’s, Coca-Cola vs. Pepsi, Samsung Galaxy vs. Apple’s iPhone, etc.). True
rivals or competitors are those competing for the same or similar markets.
 Suppliers of input (e.g., fuel, electricity, raw materials) to rivals as well as
suppliers of machinery and equipment, suppliers of manpower and expertise, and
supplies of merchandise.
 Consumer market segments being served by rivals or competitors.
 Substitute products or services, which customers shift or turn to.
 All other support and enabling industries.
 The most common way of defining an industry is according to product
types or according to the functions of the product or service. Classic
examples of these industries include the computer industry (Microsoft
vs. Apple), beer industry (San Miguel Beer vs. Beer na Beer), fast food
industry (McDonald’s vs. Jollibee), and cola industry (Coca-Cola vs.
Pepsi Cola).
 Another way of defining an industry is by tracing the
industry from its most basic raw material down to its
various consumer applications, otherwise known as product
or value-added chain. The difference between the product
and value-added chain is the focus of the analysis. Product
chain focuses on the volume produced or converted at each
link of the chain. On the other hand, the value-added chain
focuses on the economic rather than the volume aspect of
the chain.
 To illustrate the tracing of a product chain, a good example would be
the coconut industry. The coconut tree, regarded as the ‘tree of life,’ is
useful for different purposes. Its trunk, shell, meat, husk, and leaves
find their way to all types of products such as oils, soap, handicraft,
oleo chemicals, furniture, wallboards, coir, etc. Looking at this value
chain alone presents many potential opportunities for the
entrepreneur.
 However, defining an industry with a narrower scope presents a threat
because of its limiting effect. For example, to simply classify all those
using coconuts in their production process as being in the coconut
industry per see might not be too useful. The reason is that most of the
coconuts harvested are processed into coconut oil, which is just one of
the many substitutes in the fats and vegetable oils industry traded
worldwide.
 The value-added chain follows the product chain but concentrates on the ‘value’
added from one stage of the product to the other—a value that is given by the
market price differential between stages of production. The differential would
include the additional costs of processing the product from one stage to the next
and the profit margins added on each stage by the processor (or distributor). A
good example of the value-added chain would be a cup of designer coffee. At farm
gate prices, one would get a few pesos out of a bag of freshly picked coffee beans.
The coffee beans will then get processed and packaged by the coffee manufacturer.
Cost and profit margins are added before selling the product to distributors. Once
it gets in the hands of the distributors, the latter will have to market and sell the
finished product to coffee shops for a few more pesos added to cover for the
logistical and transportation costs incurred. The coffee shops will then proceed to
concoct their own versions of designer coffees. The fancier the coffee gets, the more
expensive a cup of designer coffee becomes. The figure shows the relationship
between product and value-added chain.
Relationship Between Product Chain and Value-Added Chain
 The entrepreneur may discover weak links in the chain that need strengthening
or gaps in the whole chain that need filling. Sometimes, the opportunity lies not
in finding gaps and weaknesses but in assailing the strongest links where there
may be a concentration of bargaining power. In this case, the entrepreneur
should determine which players produce the most volume of goods, which ones
control the flow of those goods, which ones make the most profits, and which ones
push the most volume through the market channels all the way to the final
customers. These processes may uncover strategic opportunities for industry
intervention.
 The entrepreneur should always be alert in
detecting windows of opportunities emanating
from shifts in the industry power equation or
changes in the industry rules of the game.
 Market Sources of Opportunities
 The entrepreneur must also be able to measure the actual demand and
supply as well as the potential demand and supply of the industry that the
enterprise belongs to. Equally important is the monitoring of the
prevalence of product substitutes and their market impact on the existing
players in the industry. Market trend analysis is also conducted by
determining the critical variables, which would most likely affect the
future directions of the industry. Lastly, market traits, characteristics, and
behavior are identified in order to match these customer traits with the
product offerings of the enterprise.
 Market sources of opportunities can be discovered from increased or decreased demand as well as
higher or lower supply. An example of this is the battle of the value/ combo meals, otherwise
known as “more-for-less” strategy in the fast food restaurant industry. The demand for more
affordable but filling meal is continuously growing particularly for the working population. This,
in turn, creates an increased demand in the items that come with the value/combo meal such as
rice, chicken, pasta, sidings (e.g., mashed potato, buttered corn, French fries, etc.) and beverage
drink. Although smaller in portions, the volume served is more, particularly during peak hours
(lunch and dinner). It also opens up the opportunity of offering breakfast items and strengthening
this time-of-the-day segment. More and more consumers are resorting to having their breakfast
near their workplaces or along the way to work in order to avoid getting stuck in the rush hour
traffic. However, the threat of price war remains strong such that the industry players are
compelled to strengthen their supply chain for better leverage.
 Micromarket refers to the specific target market segment of a
particular enterprise. These are the target customers that
represent the immediate customers of an enterprise, meaning
those who are currently buying the goods or services offered
by the enterprise and its direct competitors. It likewise pertains
to a clearly defined location or specific customer group that an
enterprise wishes to serve.
 The need for segmentation would be crucial in micro market analysis
because the definition of value for money differs from group to group.
If they do not differ, then the entrepreneur is better off by aggrupating
rather than segmenting. For example, the Makati office crowd has
several choices where to eat. Observing the behavior of customers
during lunch would indicate what groups of customers prefer fast food
establishments, what group brings their own pack lunches, and what.
Group goes for casual dining. Several opportunities can be spotted by
the entrepreneur, such as opening up a new food outlet or offering food
delivery services to a particular office crowd.
 Consumer preferences refer to the tastes of particular groups of
people. Some examples are the clothes people wear, the food they eat,
the music they listen to, and the movies they watch. The consumers’
age, culture, and status affect their preferences. In contrast, consumer
dislikes refer to the things that irritate customers. Either way, the
entrepreneur can explore opportunities brought about by consumer
preferences or dislikes.
 For example, if consumer trends show a rising preference for “fast
casual” dining, then this would be an opportunity worth exploring. If
customers show great annoyance at standing in long queues in fast
food outlets, then sit-down “fast casual” dining could be a great
opportunity.
 There are times when the product is not changed by the enterprise but what changes
is the way consumers perceive the product. A classic example is Listerine
mouthwash. It was first offered as a surgical antiseptic and, later, a cure for athlete’s
foot during the war.
 Because of the many choices that customers have to struggle with every day, a
product or service must be able to win the battle for the customer’s mind. First,
awareness of the new product or service must be generated. This is followed by
arousing the customers’ interest to buy, going to the evaluation of the product, and
finally, the decision to purchase the product. After a customer purchased the
product, there is a need to build brand loyalty and retain the customer for a long
time to get a bigger share of his or her wallet, not just his or her mind.
 Other Sources of Opportunities
 As an opportunity seeker, the entrepreneur will surely discover other sources of
opportunities. Unexpected successes (or failures) can lead to good opportunities.
 Another potential source of opportunity is the entrepreneur’s own set of skills or
expertise, or hobby. New knowledge as well as new technology can be the source
of highly innovative opportunities.
 1. Customer preferences change over time.
 Example: The prevalence of sugar-free products is now becoming the new normal,
particularly to products that used to be sugar-full like soft drinks and desserts.
Cola manufacturers have long introduced their respective sugar-free cola drinks as
healthier alternatives to their regular cola drinks. This caters to the health-
conscious consumers who have shifted due to fear of obesity and diabetes.
 2. People's tastes in clothes, music, shoes, entertainment, dance, sports,
hobbies, and even careers have evolved over the years.
 Example: The 1980s could be best described as the era that gave birth to music
television or MTV. This era was all about image that went with the popular artists
at that time such as Michael Jackson and Madonna. These artists had become
iconic because of their talent, fashion styles, and persona, which defined the 80s
decade. Hip hop, new wave, and hair metal were the musical genre that emerged.
 3. What piques customers is a great source of opportunities.
 Example: Government-related services are now made more available
to the public because they have opened up satellite offices in major
malls. Before, people had no choice but to go to the main office, line
up for hours, to apply or renew their licenses, clearances, passports,
etc. Now, with these satellite services closer to the public, more
people are encouraged to transact with these government agencies
because it has become more convenient.
 5. The longer the customer wants to use the product, the greater the chances of
creating lasting loyalty.
 Example: Among Filipinos, there is this old adage of “nakasanayan no” (got used
to it) especially when it comes to loyalty to certain products. This is true in the case
of Jollibee, which has captured the hearts of the Filipinos. Jollibee has been so
successful due to the “Filipino taste” of their products such as its spaghetti, which
is a little sweeter than many of its Italian counterpart. Kids got used to the taste of
Jollibee spaghetti and became repeat customers over and over again.
 6. Opportunities abound in shaping consumer perceptions or occupying spaces
in their minds or places in their hearts that have not yet been filled.
 Example: A television commercial of a supplementary drink for diabetics instills
‘fear of death’ in the minds and hearts of its potential consumers. The product is
meant to aid in controlling the blood sugar level of diabetics, together with the
proper diet and a healthy lifestyle. The commercial ad instills fear that shapes the
consumer’s perception about what is good or bad to drink.
 7. New inventions, new systems and work processes, new insights about the human
psyche, new applications for old knowledge, new revelations about how the physical
world works, new interpretations, new combinations based on the convergence of
previous technologies, new outlooks about how life should be led, and a host of other
new things are tremendous sources of opportunities.
 Example: Due to the advancement of technology applied to the medical field, open surgery
has become a thing of the past when removing smaller cysts or tumors. This was made
possible by the invention of laparoscopy, one of the technological breakthroughs in medicine.
Laparoscopy is a type of surgical procedure that allows surgeons to access the inside of the
abdomen and pelvis without having to make large incisions on the skin. This is a go-to
procedure for people who want to avoid the surgeon’s knife.
 8.Determining personal preferences and competencies lay the foundation
for a new business venture.
 Example: The mushrooming of culinary schools indicates the booming interest
of students in pursuing their love for cooking and/or baking. One of the career
tracks offered by these culinary schools is enabling the student to put up his or
her own restaurant or pastry shop. Several weekend markets and food bazaars
have also opened up to showcase the talents of these young culinary students.
 9. Unexpected occurrences in both the external and internal environment of the
enterprise indicate that significant changes are happening and opportunities are
sprouting.
 Example: Who would have thought that videos taken by closed-circuit televisions
(CCTV) would make waves in the news headlines as one of the best evidences in a
crime? Installed practically everywhere, the use of CCTVs has created a tremendous
opportunity for entrepreneurs, particularly those already engaged in the safety and
security industry. In fact, there are cities and municipalities that have already issued
ordinances requiring the installation of CCTVs before renewing or issuing business
permits.
THANK YOU &
GODBLESS