THC ENT

ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY

A PERSPECTIVE ON
ENTREPRENEURSHIP
CHAPTER 1
 ENTREPRENEURSHIP AND ECONOMIC
DEVELOPMENT

• Economic Development
• Is a scheme aimed at improving the living standards of the nation’s citizenry.

To achieve economic development goals, proper management of the following elements is

necessary:
1. Human Resource ( Labor supply, education, discipline, motivation);
2. Natural Resources ( Land, Minerals, fuel, climate)
3. Capital formation ( machine, factories, roads); and
4. Technology ( Science, engineering, management, entrepreneurship)
WHAT IS ENTREPRENEURSHIP

• Entrepreneurship
• Refers to the economic activity of a person who starts, manages,
and assumes the risk of a business enterprise.

Entrepreneur – refers to the person who undertakes entrepreneurial

activities
 Example of Entrepreneurial Activity

Entrepreneur’s Concern Problem at Hand Entrepreneur’s Action

1. Identifying an economic 1. High Income families are not 1. Establish a high school
need satisfied with services education with higher
provided by high schools in standards than the current
their area. high schools are providing.

2. Resources must be made 2. Acquire funds, hire people,

2. Assembling resources available construct buildings , and the
required like
3. Venture must be made 3. Prepare project study,
3. Assuming Risk advertise, maintain good
relationship with employees
and customers, among others
• A review of contributions of entrepreneurs will reveal that no business, big
or small started without the hands of the entrepreneur.
• Enterprises survived and are responsible for providing the following:
• Products and services for customers and producers
• Employment
• Taxes
• Demand for suppliers products and services; and
• Training facilities for future entrepreneurs
 The Entrepreneur’s Task

Land Labor Capital

( Natural Resources ) ( Human Resources ) ( Human Resources )

Entrepreneur

Production Process

Finished Goods
and Services
In attempt to make profits, the entrepreneur performs the following
specific functions:

1. To supply necessary capital;

2. To organize production by buying and combining inputs like materials and labor;
3. To decide on the rate of output, in the light of his expectation about demand; and
4. To bear the risk inherent to the venture.
ASSIGNMENT
INNOVATION : THEN AND NOW
ENTREPRENEURSHIP AND
INNOVATION
ENTREPRENEURSHIP AND INNOVATION

Innovation may be defined as the introduction of a new method, procedure, custom,

device, among others. Innovation could be any of the following.
1. New product
2. New process of production;
3. Substitution of a cheaper material in an unaltered product;
4. Reorganization of production, internal function, or distribution arrangement leading to
increased efficiency, better support for a given product, or lower cost; or
5. Improvement in instruments or methods of doing innovation. Innovation may also be viewed as the last stage
in an important process consisting of the following:
a.Invention - which refer to the discovery or devising of new products and processes
b.Development – which refers to the process by which the ideas and principles generated from the stage of
invention are embodied in concrete products and techniques; and
c.Innovation - which refers to the actual introduction of a new product or process
Examples of successful innovations are the following:

1.Cordless microphone;
2.Microwave oven;
3.Cellular phone;
4. etc.
NEW VENTURES AND LONG-TERM ENTERPRISE

• The transition from a new venture to a successful long term enterprise consist of at least
four major stages. The stages are as follows:
1. Prestart-up stage;
2. Start-up stage;
3.Early growth stage; and
4.Late growth stage.
 REWARDS FOR SUCCESSFUL
ENTREPRENEURSHIP
The Factors of Production and their Rewards
Factors of Production Economic Rewards Limiting Factors for Rewards
Received
Land Rent Supply and Demand
Capital Interest Industry rate / government
mandated rates
Labor Wages / Salary Supply and Demand legislation
Entrepreneur Profits Skill of Entrepreneur
THE ENTREPRENEUR’S PREDICAMENT

• In the race for winning the all-important consumer’s pesos, the

business will have to offer products or services that have certain
advantages over the competition’s wares.
 Innovation and its Possible effects on competing Firms

Entrepreneur 1 Entrepreneur 2 Entrepreneur 3

Year 1 Introduce Inactive Inactive
innovative

product
Year 2 Reap moderate Introduce innovative product Inactive
profits
Year 3 maximize profit Reap moderate profits Introduce innovative product
Year 4 Profits decline Maximize profits Reap moderate profits
Year 5 Introduce Profits decline Maximize profits
innovative
product
ENTREPRENEURSHIP AND BUSINESS SIZE

To many people, entrepreneurship means running a small business. New

business ventures, however, can also be undertaken on a large scale. Both
small and large businesses are confronted by problems that are
entrepreneurial in nature.
To effectively compete, the business of whatever size must adapt innovative
approaches
To its activities. Examples of innovations are the following

1. Offering business services Sundays and holidays

2. Manufacture and sale of new products; and
3. Selling on a deferred payment scheme.