UNDERSTANDING ENTREPRENEURSHIP

Entrepreneur • Wealth – is the abundance of money,

• Originates from the French word property, or possessions.

Provides Valuable Goods and Services

• Highly satisfy the target buyers in terms of
quality and price.
entreprendre which means “to undertake”.
• Defines value from the perspective of the
A person who strongly advocates and buyers.
correctly practices the concepts and • Adding the value is also adding the cost.
principles on entrepreneurship.
• A person who operates and manage his/her Risk-Taking Venture
own business venture. • Business Risk.
• It is a reference to individuals who have • Face business risk intelligently.
initiated the establishment of a business • Did not eliminate nor avoid business risk.
enterprise.
NSTEAD;
Entrepreneurship
• Find ways to minimize the effects of the
• The art of observing the correct practices in risk.
managing and operating a self-owned
Entrepreneurial Competencies
wealth-creating business enterprise
• The process of creating something new with • They have a strong desire to succeed.
value by devoting the necessary time and • They are risk takers.
effort, • They are creative.
• They take responsibility for their
Salient Features of ENTREPRENEURSHIP activities.
• They have high level of confidence.

Rewards of Entrepreneurship
• Money or material return or profit
(WEALTH).
• Freedom.
• Psychological rewards.
The Problems of Entrepreneurship
Art of Correct Practice • Entrepreneurship demands hard work.
• Entrepreneurship is an art not a science. • Entrepreneurship demands long
• There is constant changes, movements and working hours.
innovations. • Entrepreneurship may cause emotional
• Not static or stagnant. stress.

THEORIES ON ENTREPRENEURSHIP
Art of Correct Practice
• Responds to the changing needs of the INNOVATION THEORY by Joseph Schumpeter
people. “The Theory of Economic Development.”
• It is dynamic (political and social) • considers innovation as the primary factor
• Creativity affecting development
• There are no profits no interest rates, no
Wealth-Creating Venture savings, no investment, and no
• Wealth = Profit? unemployment
KEYNESIAN THEORY by John Maynard Keynes
 “The General Theory of Employment, Interest,  The sociological theory of Weber asserts that
and Money.” social cultures have significant contribution to
• Keynesian economics is a macroeconomic entrepreneurship.
theory of total spending in the economy
and its effects on output, employment,
and inflation. Great Depression

KALDOR’S TECHNOLOGICAL THEORY

 The technological theory of Kaldor gives
important to the advancement of technology as
an element of production.

• The Keynesian theory of John Maynard KIRZNER’S LEARNING-ALERTNESS THEORY

Keynes attribute economic growth,  The learning-alertness as the primary attributes
especially during depression to the of entrepreneurship.
government.
LEIBENSTEIN’S GAP-FILLING THEORY
ALFRED MARSHAL THEORY by Alfred Marshal  The gap-filing theory of Leibenstein advocates
the entrepreneurship fills the gap in any
“Principles of Economics” economic activity.
 Generalizes that organization plays the most
significant role among different factors IMPORTANCE OF ENTREPRENEURSHIP TO THE
of production. FILIPINO PEOPLE
 Land - Natural Resources - land & sea
Extracted and Cultivated
 Labor - Work Force of an Economy Physical
and Mental
 Capital - Fixed Capital, Infrastructure &
Equipments
 Organization - Entrepreneurship, Productive
Process

Risk and Uncertainty

-Bearing Theory by Frank Hyenman Knights
“Risk Uncertainty and Profit.”
 Frank Hyneman Knights states that an
entrepreneur faces the risk uncertainty in the IMPORTANCE TO THE FILIPINO PEOPLE
process of connecting the supplier and buyer. 1. It provides guidelines in their wealth-creating
ventures.
 Uncertainty applies to situations where we 2. It helps improve their financial and social life.
cannot know all the information we need in 3. It helps broaden their creativity.
order to set accurate odds in the first place. 4. It helps make their lives happy, fruitful and
successful.
WEBER’S SOCIOLOGICAL THEORY
IMPORTANCE TO THE LOCAL COMMUNITY
1. It provides employment in the community
 2. It creates new demand in the market. TECHNICAL SKILLS
3. It makes substantial contributions to the raising  Technical skills are not only significant in
and collection of taxes entrepreneurship but also in other fields. For
4. It facilitates the movement of the factors of entrepreneurs, these skills relate to their
production knowledge and proficiency in a specialized field
5. It creates new business opportunities. like computer technology
6. It promotes peaceful and loving community. o Without the technical skills, an idea will
7. It increases constructive competition remain to be an idea and business
opportunity will remain to be a business
opportunity.
INTERPERSONAL SKILLS
IMPORTANCE TO THE PHILIPPINE ECONOMY
 Are basically about the relationship and
1. It encourages competitiveness and thereby interaction of the entrepreneur with the
challenges entrepreneurs to keep improving their workers, suppliers, creditors, prospective
products and services. customers, and other members of the business
2. It helps find an entrepreneurial niche in the world community.
market. o Verbal communication
3. It helps hasten the economic recovery process of o Non-verbal communication
the Philippines during the financial turmoil or
o Listening skills
crackdown.
4. It facilitates the smooth flow of money in the o Leading skills
local market. o Negotiating skills
5. It assists the national government in its desire to
have favorable economic ratings in the world CORE COMPETENCIES
market.  ENTREPRENEURIAL CONCEPTS AND PRINCIPLES

SKILLS AND CORE COMPETENCIES IN  ENTREPRENEURIAL CHARACTER TRAITS

ENTREPRENEURSHIP
 These refer to the set of cognitive, technical,  ENTREPRENEURIAL SKILLS
and interpersonal skills required in the practice
of entrepreneurship.
COGNITIVE SKILLS THE CONCEPT OF NEEDS, WANTS AND BRANDING
 Refers to the mental ability of the entrepreneur
to learn new things, generate ideas, and express Needs
knowledge in both oral and written forms.  Refers to the things that a person must
o Ability to understand written materials. have in order to survive.
o Ability to learn and apply new WANTS
information.
 Refers to things that a person must have in
o Ability to solve problems
order to be happy, comfortable, and
systematically. satisfied.
o Ability to create new ideas.
Maslow’s Hierarchy of Needs
o Ability to innovate new products and
procedures or methods.

PROBLEM-SOLVING SKILLS
 Whatever the nature, type, or size of business
problem, the entrepreneur must face it, solve it,
and make a decision.
BRAND materials are transformed into the final
 Brand refers to the name, design, color, product with the aid of manpower and
symbol, quality, features, or a combination machine
of these elements that make the product
separate and distinct from similar products Output
of the competitors.  The Product
BRANDING STRATEGY Four M’s of Production

Umbrella Approach Manpower

 All products carrying the same brand name  Human workforce involved in the
Ex. Nestle, Kraft manufacture of products. It is considered
as the most critical and important factor of
production.

Method
 The process or technique of converting raw
materials to finished product.

Machine
House Brand Approach
 Refers to the manufacturing
 Every product of the same business has a equipment used in the production of goods
separate brand name that distinguishes it or delivery services.
from the rest of the company’s products. In
Materials
house brand approach, the problems and
negative perception about one product will  Refers to the raw materials needed in the
not affect the other products. production of a product. Materials basically
form part of the finished product.

MARKETING MIX
A mode or a tool used by the
entrepreneurs to position the product in the
target market segment to efficiently and
effectively deliver it to the consumers.

7Ps
PRODUCTION SYSTEM (4Ms)
Product
The three important elements in the production
 Refers to the tangible or intangible service
system
offered by the business to the target
consumers.
INPUT - PRODUCTION PROCESS - OUTPUT

Price
Input
 Price refers to the pricing strategy a
 Manpower company establishes for products or
 Materials services.
 Machine
Place
 Design
 Instructions  The term place in the marketing mix simply
refers to the place where the target
Production Process
consumers are.
 The transformation or conversion process,  The place principle focuses on where a
is the stage of production where the company makes its products available
Promotion
 In marketing mix, the term promotion
refers to the mode of conveying the
presence and attributes of the products to
the target consumers.
o Advertising
o Publicity
o Personal Selling
o Sales Promotion – Discounts,
Coupons, Cash Rewards, Gift
Certificates
o Direct marketing

People
 The term people here refers to individual
employees or workers who are directly
involved in the production
Packaging
 In the context of marketing mix, packaging
refers to the process of putting the product
in a package or container.
Positioning
 As an additional element in the modified
model of the marketing mix, refers to the
place occupied by the product in the minds
of the consumers.