Entrepreneurship

refers to a particular field of practice or process Includes small and medium enterprises (SMEs)
as compared to an entrepreneur which is a
person practicing entrepreneurship.

Theories on Entrepreneurship

It is also the art of observing correct

practices in managing and operating a
Theory
self-owned wealth-creating business enterprise
by providing goods and services that are a generalization that explains a set of facts or
valuable to customers. phenomena

It is not an absolute truth.

Definition of Entrepreneur It can be supported by another observation or

proven to be otherwise.
-Derived from the French word entrependre,
which means “to undertake”

Innovation Theory

For Joseph Schumpeter, an Austrian economist  Contributed by Joseph Schumpeter, an

and political scientist. He described Austrian economist and political scientist
entrepreneur as
 Wrote The Theory of Economic
an individual with distinct social characteristics Development book.
or attributes.
 Strongly believed that innovation is the
force that will propel the revolutionary
change.
Comparison

It becomes the primary role of the entrepreneur

Small Business
to introduce innovation in any forms:
Refers to a business or enterprise that correctly
 New product
adopts and practices the principles of
entrepreneurship.  New production method

 New market

Ordinary Small Business  New supplier

Pertains to a business enterprise managed and  New industry structure

operated by an owner who is not an advocate of
and does not practice the concepts and
principles of entrepreneurship.
Keynesian Theory

 Developed by John Maynard Keynes, a

Owned by one person with limited workforce of British economist.
not more than 20 persons.
 The key concepts of the theory were
included in his book, The General Theory
of Employment, Interest and Money. Leibenstein’s Gap-Filling Theory

 Emphasizes the role of the government in

entrepreneurial and economic
The gap-filling theory of Henry Leibenstein
development.
advocates that entrepreneurship fills the gap in
any economic activity.

Alfred Marshall Theory Kirzner’s Learning-Alertness Theory

 Alfred Marshall, an English economist

 Principles of Economics Book. The learning-alertness theory of Israel

 Strongly asserted that there are four
factors in the production (land, labor,
capital and organization) of goods and
services in the economy, he considered
organization as the coordinating element.
Risk and Uncertainty-Bearing Theory
Kirzner focuses on learning and alertness as the
primary attributes of entrepreneurship.
Misconceptions on Entrepreneurship
Entrepreneurship applies only to
manufacturing businesses but not to
merchandising and service.

 By Frank Hyneman Knight, an American Entrepreneurship applies only to small

economist businesses.

 Risk, Uncertainty and Profit book Entrepreneurship applies mostly to

persons with good educational background in
 He states that an entrepreneur faces the business courses.
risk of uncertainty in the process of
connecting the supplier and buyer. Entrepreneurship is simply opening a
small business
Other Theories on Entrepreneurship
Entrepreneurship applies to good
Weber’s Sociological Theory economy

Entrepreneurial Character Traits, Skills, and

Competencies
The sociological theory of Max Weber
asserts that social culture have significant
contributions to entrepreneurship.
Entrepreneurial Character Traits

Kaldor’s Technological Theory

Character trait refers to the mark or attribute
that distinguishes an entrepreneur from the
owner of an ordinary small business
The technological theory of Nicholas
Kaldor gives importance to the advancement of
technology as an element of production.
Major Groupings of Entrepreneurial
Characteristics
 Information technology
1. Achievement Cluster
 Feasibility study and business plan
This is directly related to the preparation
entrepreneur’s desire to be an achiever in the
field of entrepreneurship.  Technical writing skill

 Marketing

2. Planning Cluster  Management and finance

is a set of characteristics of successful

entrepreneur that basically supports the
3. Interpersonal Skill
character traits in the achievement cluster.
Basically about the relationship and interaction
of the entrepreneur with workers, suppliers,
3. Power Cluster creditors, customer and other members of
business community
includes a set of character traits that
reflect the degree of the interpersonal relations
maintained by successful entrepreneur.
 Skills in verbal communication

 Skills in non verbal communication

Skills and Competencies in Entrepreneurship
 skills in listening
1. Cognitive skills
 Skills in leading
refers to the mental ability of the entrepreneur
 Skills in negotiating
to learn new things, generate new ideas and
express knowledge in both oral and written
forms.
Consumer Marketing

 Ability to understand written materials,
 Ability to learn and apply new information,
 Ability to solve problems systematically,
Strategies
Consumer Buying Behavior
-Refers to the behavior of consumers in buying
goods or availing of services

 Ability to create new ideas, and

 Ability to innovate new products and

procedures or methods.

2. Technical Skills

Relate to the knowledge and proficiency in

specialized field
Research

 Defines as a scientific investigation.

 It involves the collection, presentation,

analysis and interpretation of gathered
data.

Marketing Mix

- refers to the set of actions, or tactics, that a

company uses to promote its brand or product
in the market.
 The Environment of the Entrepreneurial
Venture

Three Layers of the Environment

1. Physical Environment

2. Societal Environment

3. Industry Environment

Internal Or Micro Environment

Refers to the environment within business.

There are several forces operating with the

internal environment:

 Business resources

 Business culture

 Business structure

Environmental scanning tools:

SWOT
Forms of Entrepreneurial Venture

Sole Proprietorship Market Identification

 Oldest and simplest form of ownership

 Denotes single owner

 Can be established easily

 Example: beauty salons, dental clinics Market Identification

-It is a strategic approach and process intended

Partnership
 Two or more people contribute money,
property or industry for common fund
 Profit is divided among partners
to define the specific customer of the product
Three Entrepreneurial Marketing Strategies to
identify the market

Corporation Market Segmentation

 Formed by at least five but not more than
15 persons.
 The principal administrator are the ff:
President, VP, Corporate Secretary and
Treasurer.
the process of dividing a market of potential
customers into groups, or segments, based on
different characteristics.
Commonly Used Methods for segmenting the
market:

 Geographic Segmentation

 Demographic

 Psychological

 Behavorial

Classification as to Nature

Service

Merchandising

Manufacturing

Agriculture

Hybrid Business

Special Business
Market Targeting

The second stage of market identification

process that aims to determine the set of
buyers with common characteristics.

Market Positioning

refers to the ability to influence consumer

perception.