entrepreneurship.pptx

7/27/2019 entrepreneurship.pptx

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OPPORTUNITY

RECOGNITION

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OPPORTUNITY

An opportunity is a favorable set of circumstances that creates a need for a new product, service, or business.

Examples:

1. Capturing emotion, not characters- Disney

2. Sells lifestyle, not Apparel – Polo Ralph Lauren

3. Capitalizing on the E- Readers space with Kindle - Amazon

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Timely

Durable

Attractive

Anchored in a product,service or business that

adds value to its buyers10/29/2013 3



WINDOW OF OPPORTUNITY

• The term “window of opportunity” is ametaphor describing the time period in whicha firm can realistically enter a new market.

• Once the market for a new product isestablished, its window of opportunity opens,and new entrants flow in.

•

At some point, the market matures, and thewindow of opportunity (for new entrants)closes.

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IDEA OPPORTUNITY

IS EVERY IDEA AN OPPORTUNITY?

• An idea is a thought, impression, or notion

• May or may not meet the criteria of an

opportunity.

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IDENTIFYING AND RECOGNIZING

OPPORTUNITIES

OBSERVING TRENDS

SOLVING A PROBLEM

FINDING GAPS IN THEMARKET PLACE

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OBSERVING TRENDS

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ECONOMIC FORCES

• Economic forces affect consumers’ level of disposable

income. Individual sectors of the economy have a direct

impact on consumer buying patterns.

• You must analyze the impact of economic changes on yourbusiness by seeing it from all aspects.

• When studying how economic forces affect opportunities,

it is important to evaluate who has money to spend and

who is trying to cut costs

• For example : When interest rates fall, the sale of houses,

car and furniture goes up.

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SOCIAL FORCES

There are various social forces that affect your business :

•Family and work patterns.

• The aging of the population.

• The increasing diversity in the workplace.

• The globalization of industry.

•

The increasing focus on health care and fitness.• The proliferation of computers and the Internet.

• The increase in the number of cell phone users.

•

New forms of entertainment.10/29/2013 9



TECHNOLOGICAL ADVANCES

• Entire industries haveemerged as the result of

technological advances.

•

Once a new technology iscreated, new businesses form

to take the technology to a

higher level.

• Advances in technology are

usually correlated with

economic and social changes to

create opportunities.

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POLITICAL AND REGULATORY CHANGES

Political and regulatory changes provide the basis for new businessopportunities.

• For example, laws that protect the environment have created

opportunities for entrepreneurs to start firms that help other

firms comply with environmental laws and regulations.

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SOLVING PROBLEMS

Notice a problem

Find a Solution

Pinpointed through observing

trends, intuition, serendipity, or chance.

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BUSINESSES CREATED TO SOLVE A

PROBLEM

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GAPS IN THE MARKETPLACE

• A gap in the marketplace is often created when aproduct or service is needed by a specific group of people but does not represent a large enough

market to be of interest to mainstream retailers ormanufacturers.

• A gap can also occur when customer needs are notbeing met at all.

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PERSONAL CHARACTERISTICS OF THE

ENTREPRENEUR

Prior Experience

Social Networks

Cognitive Factors

Creativity

Characteristics that tend to make some people better at recognizingopportunities than others

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Prior Industry Experience

• Prior Industry Experience

– Several studies have shown that prior experience in an

industry helps an entrepreneur recognize business

opportunities. There are several explanations for this.

• By working in an industry, an individual may spot a market niche

that is undiscovered.

• It is also possible that by working in an industry, an individual

builds a network of social contacts who provide insights that lead to

recognizing new opportunities.

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Cognitive Factors

• Cognitive Factors

– Studies have shown that opportunity recognition may be an

innate skill or cognitive process.

–

Some people believe that entrepreneurs have a “sixthsense” that allows them to see opportunities that others

miss.

– This “sixth sense” is called entrepreneurial alertness, which

is formally defined as the ability to notice things withoutengaging in deliberate search.

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Social Networks

–The extent and depth of an individual’s social network affects opportunity recognition.

– People who build a substantial network of social and professional contacts will be exposed to more opportunitiesand ideas than people with sparse networks.

– In one survey of 65 start-ups, half the founders reportedthat they got their business idea through social contacts.

Strong-Tie Vs. Weak-Tie Relationships

– All of us have relationships with other people that arecalled “ties.” (See next slide.)

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CREATIVITY

• Creativity is the process of generating a novelor useful idea. It is also the process of

generating an innovation from a new idea.

PREPARATION INCUBATION INSIGHT EVALUATION ELABORATION

PROCESS

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Where Do Entrepreneurs Get Their Ideas?

71%

%

5% 4%

Discovered through

systematic research for

opportunities

Swept into the PC revolution

Discovered serendipitously:

Built temporary or casual

job into a business (7%)

Wanted as an individual

consumer (6%)

Happened to read about

the industry (4%)

Developed family

member’s idea (2%) Thought up during

honeymoon in Italy (1%)

Source: 100 founders of the 1999 Inc. *500* fastest growing private companies.

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SOURCES OF NEW BUSINESS IDEAS

Previous Job

Hobbies

Personal Observation

Deliberate SearchPublications

Inventor’s Shows, Trade Shows and Conventions

Patent Brokers and Product Licensing Information Services

Friends, Acquaintances, and Other Social Contacts

Federal and Provincial Government Agencies and Departments

Using Creative Thinking- Brainstorming, focus groups

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BRAIN-STORMING

– Is a technique used to generate a large number of ideas

and solutions to problems quickly.

– A brainstorming “session” typically involves a group of

people, and should be targeted to a specific topic.

– Rules for a brainstorming session:

• No criticism.

• Freewheeling is encouraged.

•

The session should move quickly.• Leap-frogging is encouraged.

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FOCUS GROUPS

• A focus group is a gathering of five to ten people, who have been

selected based on their common characteristics relative to the

issues being discussed.

• These groups are led by a trained moderator, who uses the

internal dynamics of the group environment to gain insight into

why people feel they way they do about a particular issue.

• Although focus groups are used for a variety of purposes, they can

be used to help generate new business ideas.

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ENCOURAGING NEW IDEAS

• Establishing a Focal Point for Ideas

– Some firms meet the challenge of encouraging, collecting,and evaluating ideas by designating a specific person toscreen and track them—for if its everybody’s job, it may

be no one’

s responsibility. – Another approach is to establish an idea bank (or vault),

which is a physical or digital repository for storing ideas.

• Encouraging Creativity at the Firm Level

–

Creativity is the raw material that goes into innovation andshould be encouraged at the organizational and individualsupervisory level.

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Opportunity evaluation phase

Evaluating an opportunity (Can it be developed into a

full-fledged new venture?)

• Talk to potential target customers

• Discuss it with production or logistics managers

• Conduct feasibility analysis

- Market potential

- Product concept testing

- Focus groups

- Trial runs with end users

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