Determinants of Entrepreneurial Opportunity Recognition and Exploitation Among Businesses Under the 'One Town, One Product Next Gen' Program in Laguna

Date

12-2018

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jewel Joanna S. Cabardo

Committee Member

Jeanette Angeline B. Madamba, Dia Noelle F. Velasco, Agnes T. Banzon, Normito R. Zapata, Jr.

Abstract

Entrepreneurs always look for opportunities but seeking for opportunities becomes more difficult as more individuals create or discover these business opportunities. The One Town, One Product (OTOP) Next Gen is a program developed by the Department of Trade and Industry (DTI) which aims to ‘level up’ products to gain potential advantage. The selected businesses under the program are those whose products could improve more in terms of packaging, production, price, and marketing. Thus, the study identified these selected businesses wherein they already recognized and exploited the business opportunity.

The study aimed to determine factors influencing business firms, under the OTOP Next Gen program in Laguna so as to recognize and exploit entrepreneurial opportunities. Specifically, the study aimed to: (1) present a socio-demographic profile, business profile, and program assessment of entrepreneurs from OTOP Next Gen businesses in Laguna; (2) determine the level of entrepreneurial opportunity recognition and exploitation and its association with its factors among OTOP Next Gen entrepreneurs; (3) analyze the factors of entrepreneurial opportunity recognition and exploitation and socio- demographic profile; (4) assess the level of entrepreneurial opportunity recognition and exploitation by determining the degree of association of the factors; and (5) formulate recommendations that would improve entrepreneurial opportunity recognition and exploitation among OTOP entrepreneurs.

The study’s methodology made use of the Opportunity Identification Model as it demonstrates the process of opportunity. From that theory, the study only focused on these two important processes, entrepreneurial opportunity recognition and exploitation which are significant for entrepreneurs. These two opportunities are affected by many factors; thus, the Nomological Net Model was utilized to obtain all factors.

From the list of OTOP Next Gen 2017 and 2018 in Laguna, all 30 entrepreneurs were studied. Most of the respondents were female (23) and married (20) and most male were single (6). The average was 44. Most of the respondents had finished a college degree (22) and almost half (41%) of them graduated with an accountancy and business management degree. Majority of them were founders or the principal owners of the enterprise (80%). Most of them experienced employment (20); however, 70% of them could not relate their job to their OTOP business.

The business profile considers only two industries which are non-food – home & fashion/creative artisan (13) and arts and crafts (2) and for food – processed food (13) and agri-based products (2) for food. Almost all of them were single proprietors operating micro-scale enterprises. The food industry requires more investment than non-food industries (61.12% more). Less than half of the respondents were able to export their product (23.33%). Most them have only one physical store which are their manufacturing area (93.33%).

The study assessed the OTOP program based on the opinions and support acquired by entrepreneurs. Most of the entrepreneurs (73.33%) were aware of the program due to information acquired from other DTI programs that empower entrepreneurs (e.g. Kapatid Mentor Me Program). The program focused its project on product design. However, most of the entrepreneurs have not yet applied the assessment recommendations due to the large investment needed in terms of its raw materials.

Entrepreneurial opportunity recognition and exploitation were determined using Confirmatory Factor Analysis. The results showed that enterprises in the municipalities of Laguna namely Cabuyao City, Lumban, Nagcarlan, Pila, and Siniloan got high ratings for both entrepreneurial opportunity recognition and exploitation. However, most of the entrepreneurs are rated low in terms of recognizing and exploiting opportunities. This could be explained by the last objective as it analyzed all factors by testing its relationship to entrepreneurial opportunity recognition and exploitation.

But before the analysis, the study tested the association of all factors to entrepreneurial opportunity recognition (EOR) and entrepreneurial opportunity exploitation (EOE) using Pearson Correlation Coefficient. The results showed that all factors were all positively associated; hence, the study supported the claim of the Nomological Net Model that prior knowledge, social capital, nascent entrepreneurial behavior, risk taking, positive affect, and entrepreneurial alertness were all associated with EOR and EOE. Additionally, creativity for EOR and opportunity recognition for EOE were also positively associated.

For the association of EOR, creativity (0.1130) and risk taking (0.1964) all showed very weak associations. Positive affect (0.3273) and prior knowledge (0.3372) all showed weak associations. Nascent entrepreneurial behavior (0.4479), social capital (0.4051), and entrepreneurial alertness (0.5147) all showed moderate associations. Among these factors, entrepreneurial alertness got the highest association to EOR.

For the association of EOE, entrepreneurial alertness (0.1127) showed a very weak association. Risk taking (0.2584) showed a weak association. Positive affect (0.4879), nascent entrepreneurial alertness (0.5695), prior knowledge (0.4549), and EOR (0.4388) all showed moderate associations. Lastly, social capital (0.6599) showed a strong association which was also the highest among all factors of EOE.

Finally, the analysis of factors for EOR and EOE. The greatest influencer for EOR is the entrepreneurial alertness. Aside from that, together with the help of nascent entrepreneurial behavior, social capital, prior knowledge and creativity would contribute to increase the recognition of an individual to opportunities. Among the factors, social capital was the greatest influencer for exploitation. However, the risk-taking factor had a negative impact for both opportunity recognition and exploitation. This would mean that OTOP entrepreneurs would most likely reduce their risk especially with respect to finance.

The recommendation of the study focused on two key players of OTOP program which were the DTI and OTOP entrepreneurs. The researcher suggests that the DTI should focus on improving the marketing of the businesses by allowing LGU intervention such as putting up Negosyo Centers to support them from selling those products.

Based on the result of the study, OTOP entrepreneurs with low EOR should give priority to alertness. From that factor, they should attend and get support from the programs, seminars, and trainings to empower their entrepreneurial skills. For high EOR, on the other hand, people with this ability should help other entrepreneurs through giving tips and support to those people who had difficulty on recognizing opportunity.

OTOP entrepreneurs with low EOE must prioritize the social capital. In this factor, it was advisable to expand their networks to gain information of how to do the business. Consider also taking risk by calculating the costs and benefits from it and always start small.

Language

English

LC Subject

Business enterprises--Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2018 M17 H47

Notes

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Document Type

Thesis

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