FIRST QUARTER

MODULE 2 Recognize a Potential Market

WEEK 2
I. INSTRUCTION
This module was designed to cater your academic needs in these trying times. We hope that you
cooperate and let your parents/guardians support and guide you in answering the activities found in this
module. Use this module with care and take down notes in answering the activities in separate sheets or on
your lecture notes. Read the instruction carefully before doing each task.

II. INTRODUCTION
In this module, you are expected to:
A. Associate the market problem to be solved or the market need to be met;
B. Look solution/s in terms of product/s and service/s that will meet the need using techniques on seeking,
screening, and seizing opportunities:
C. Break down the market need;
D. Detect the possible product/s or service/s that will meet the need of your locality.
E. Screen the proposed solution/s based on viability, profitability, and customer need in developing a Business
Plan.
F. Choose the best product or service that will meet the market need.
III. CONCEPT/S TO BE LEARNED
The entrepreneurial process of creating a new venture is presented in the diagram below. (Aduana, 2017)

Essentials in Entrepreneur’s Opportunity Seeking

These are the basic foundation that the entrepreneur must have in seeking opportunities:
 Entrepreneurial mind frame. This allows the entrepreneur to see things in a very positive and optimistic
way in the midst of difficult situation. Being a risk - taker, an entrepreneur can find solution when problems
arise.
 Entrepreneurial heart flame. Entrepreneur's driven passion, they are attracted to discover satisfaction in
the act and process of discovery. Passion is the great desire of an entrepreneur to achieve his/her goals.
 Entrepreneurial gut game. This refers to the ability of the entrepreneur of being intuitive. This also known
as intuition. The gut game also means confidence in one’s self and the firm believes that everything you
aspire can be reached.
Sources of Opportunities
Some are the following sources of opportunities:
1. Changes in the environment—Entrepreneurial ideas arise when changes happen in the external
environment. A person with an entrepreneurial drive views these changes positively.
 External environment refers to the physical environment, societal environment, and industry
environment where the business operates.
1.1 The physical environment includes
a. Climate- the weather conditions.
b. Natural resources- such as minerals, forests, water, and fertile land that occur in nature and can be
used for economic gain.
c. Wildlife- includes all mammals, birds, reptiles, fish, etc., that live in the wild.
1.2 The Societal environment includes the various forces like
a. Political forces- includes all the laws, rules, and regulations that govern business practices as well
as the permits, approvals, and licenses necessary to operate the business.
b. Economic forces- such as income level and employment rate.
c. Sociocultural forces- customs, lifestyles and values that characterize a society.
d. Technological environment- New inventions and technology innovations.
1.3 The industry environment of the business includes:
a. Competitors b. Customers c. Creditors d. Employees e. Government f. Suppliers

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 2. Technological discovery and advancement—A person with entrepreneurial interest sees possibility of
business opportunities in any new discovery or because of the use of latest technology.
3. Government’s thrust, programs, and policies—The priorities, projects, programs, and policies of the
government are also good sources of ideas.
4. People’s interest—The interest, hobbies, and preferences of people are rich source of entrepreneurial
ideas. Like the increasing number of Internet Café at present could be lead to the strong attachment of young
people to computers.
5. Past experiences—The expertise and skills developed by a person who has worked in a particular field
may lead to the opening of related business enterprise.
Forces of Competition Model
It is also known as the “five forces of competition,” An industry environment is a competitive
environment. Regardless of what product or services you have, competition is always present.
Competition – it is the act or process of trying to get or win something. For example, the prices are lower
when there is a competition among the stores.
These are the five forces competing within the industry:
• Buyers • Potential new entrants • Rivalry among existing firms • Substitute products • Supplier
1. Buyers—The buyers are the one that pays cash in exchange to your goods and services. For example, the
influenced of the price or in the bargaining strategy. The buyer has a strong and magnified bargaining power.
The threat of its bargaining power will be less if the following factors notice:
a. There are several suppliers available in the market.
b. The buyer has the potential for backward integration.
c. The cost of switching the supplier cost is minimal.
d. The product represents a high percentage of the buyer’s cost.
e. The buyer purchases large portions of the seller’s product or services.
2. Potential New Entrants—A new entrant is defined as the one who enters something. For example, the
level of capital requirements, if the business requires huge capital, new entrants should decline to join the
business. This gives a threat to the business. This can be notice if there is the presence of the following
factors:
a. Substantial capital requirement. d. Economies of scale.
b. Strict government policy. . e. High cost of product differentiation.
c. Difficulty in accessing distribution channels. f. High switching cost.

3. Rivalry among Existing Firms—Rivalry is a state or situation in which people or groups are competing with
each other. For example it depends on the Marketing strategy of your competitor, like giving freebies and
special offers. The intensity of rivalry among existing firms is characterized to the following factors:
a. Diversity of rivals. d. Increased capacity.
b. Number of competing firms. e. Amount of fixed costs.
c. Characteristics of the products or services. f. Rate of industry growth.

4. Substitute Products—Substitute means anything that takes the place or function of another. For example
the consumers decide to use margarine as a substitute for butter. In case the price of butter increases,
preferably the consumer will gradually switch to margarine. A substitute product can give a big threat in the
industry environment if the following factors are notice:
a. Switching cost is low. d. The quality of substitute products dramatically improves.
b. Product differentiation is highly noticeable e. The price of substitute product is substantially lower.
c. Preferences and tastes of the customers easily change.

5. Suppliers—The Suppliers are the one that provide something that is needed or wanted. For example if the
supply and services being offered is unstable or keep. The intensity of the threat is strong in this kind of the
competitive force in the industry. This can be notice if there is the presence of the following factors:
a. The supplier has the ability for forward integration. d. The switching cost is very high.
b. Suppliers in the industry are few, but the sales volume is high. e. The product or service is unique.
c. Substitute products are not readily available in the market

IV. GENERALIZATION
Business industries offers products and services. The activity of making, buying, or selling goods or providing services in exchange of
money is called business. Product is something that is made or grown to be sold or use, or something that is result of a process.
Services are those intangible products where there is a skill involve and has a value.
REFERENCES:

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Yacas, J, et al. (2020). Entrepreneurship – Grade 12. Department of Education – Bureau of Learning Resources (DepEd-BLR) Office
Address: Masterson Avenue, Upper Balulang, Zone 1, Cagayan de Oro City, Cagayan de Oro, Lalawigan ng Misamis Oriental

ACTIVITY SHEET
Date: _____________

Name: ______________________________________Grade/Section: _________Score: 30

Activity 1: WORD HUNT
Direction: Think of words or terms related to the topic and find the words in the grid horizontally, vertically, or
diagonally. Write the words or terms on the space provided on the right side. [1 point each]

1) _______________________

2) _______________________

3) _______________________

4) _______________________

5) _______________________

6) _______________________

7) _______________________

8) _______________________

9) _______________________

10) _______________________

Activity 2: COMPLETE ME
Direction: Complete the table below by supplying it with products that you consider similar. Write the product
and not the brand in their respective columns. Then describe and differentiate its characteristics and uses. [2
points each]

Substitute Product
No. Primary Product ( Product name )
( Product name )

Example Butter - expensive price used as bread Margarine – lesser price also used as bread
spread. spread

1.

2.

3.

4.

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 WORKSHEET No. 2
Date: _____________
Name: ______________________________________Grade/Section: _________Score:
30
I. Arrange the scrambled letters to form a correct word. Then, give a brief definition in each item and write your
answer on the box provided. [3 points each]

_________________1. UPSIERSPL 1.

_________________2. UTSBETIUST 2.

_________________3. NISSUBES 3.

_________________4. ICEVERS 4.

_________________5. KERTAM 5.

_________________6. PECITIONMT 6.

II. MULTIPLE CHOICE. Select only the letter that will best satisfy the statement. Then, write your answer on
the blanks provided. [1 pt. each]
_____1. It is the process of considering, evaluating, and pursuing market-based activities that are believed to
be advantageous for the firm.
A. Opportunity seeking C. Opportunity screening
B. Opportunity seizing D. Sources of opportunity
_____2. This is essential to opportunity seeking which allows the entrepreneur to see things in a positive and
optimistic light in the midst of crisis or difficult situations.
A. Entrepreneurial mind frame C. Entrepreneurial heart flame
B. Entrepreneurial gut game D. Entrepreneurial heart frame
_____3. It is the ability of entrepreneur that can sense without using the five senses, also known as intuition.
A. Entrepreneurial mind frame C. Entrepreneurial heart flame
B. Entrepreneurial gut game D. Entrepreneurial heart frame
_____4. One of the essentials of entrepreneur’s opportunity seeking that refers to the driven passion of an
individual.
A. Entrepreneurial mind frame C. Entrepreneurial heart flame
B. Entrepreneurial gut game D. Entrepreneurial heart frame
_____5. What variable of societal environment includes income level and employment rate?
A. Economic forces B. Political forces C. Sociocultural forces D. Technological forces
_____6. They are the one that pays cash in exchange to your goods and services.
A. Buyers B. sellers C. Competitors D. suppliers
For questions 7 and 8 refer to the following statements:
A. Preferences and tastes of the customers easily change.
B. The buyer has the potential for backward integration.
C. The cost of switching the supplier cost is minimal.
D. Product differentiation is highly noticeable.
_____7. Which are the factors of the substitute product that pose a great threat in the industry environment?
A. A,B,C,D B. A and D C. A and C D. B and C
_____8. Which are the factors that influenced the buyer to have a less threats because of the bargaining
power?
A. A only B. A and D C. A and C D. B and C
_____9. The following are the forces competing within the industry except one:
A. Potential new entrants and Substitute Products B. Buyers and Suppliers
C. Rivalry among existing firms D. Needs and Wants
_____10. Societal environment includes the following, except:
A. Economic forces B. Political forces C. Sociocultural forces D. Natural
resources
_____11. Which of the following good sources of entrepreneurial ideas determine the interest, hobbies and
preferences of people?

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A. Changes in the environment B. People’s interest C. Technological discovery D. Past experiences
_____12. The intensity of rivalry among existing firms is characterized to the following factors except one:
A. Diversity of rivals. B. The product represents a high percentage of the buyer’s cost.
C. Characteristics of the products or services. D. Number of competing firms.

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