Every business strategist/owner should be entrepreneurial, ie spot the opportunity

Every generation needs a revolution - entrepreneurial revolution

Ateneo Professional School
Makati City
June 18, 2016

In the strama defense, there is a portion there that uses Porter;s five forces of competition.   If the competition is high for all the 4 sectors, that means to say, there is an opportunity in the industry where the enterprise is to make money.  If the competition is high, the more money is to be made. If there is more money and there is growth, there is a possibility for the enterprise to grow its sales, cash flow, and profit.

Thus the student for strama must have a keen eye on the opportunity and must balance the risk aversion vs the benefit the money to be made.

Thus:

1.  In the yarn factory that shifts to cotton toll manufacturing.  It makes a cotton bud each for 4 cents, which the the brand owner sells for 20 cents.  The l6 cents is the opportunity window. The brand owner makes a lot more money that the producer.  It is worth looking into the business of making and selling cotton buds.




2.  In the smartphone remanufacturing, the opportunity is not on the millions being made by the factory of $30 a piece for millions of remanufactured phones.  The money is the opportunity is in the 99.99 of the revenue of the insurer for the 120 million subscribers in the USA.  The margin, what is left is a lot of money running into billions.  The remanufacturing profits are just drop in the bucket. Only the insurance company could generate that margin for the factory.

3. In the Lontoc case, the opportunity is not on  the hog raising (the sow farm) or the abattoir, but on Elnar's  lechon.  The lechon makes P300 a piece at that time (Cebus lechon margin is higher as they sell at as much as P800.00 per kg. vs 2 digit margin on the abattoir.   And the low farm gate prices for live hogs, further squeezed by high feed prices.  It makes sense that the owner establish a means by which he gets pigs elsewhere  with less head ache and costs.  The abattoir is merely a means to an end to scale up his lechon business.

Sometimes the focus of the businessman/entrepreneurs is on the obvious, but wealth can be made somewhere else, and he must have a keen eye for that.  The seasoned leaders know intuitively where they lie