Unit 3 Opportunity Analysis (FINAL VERSIION)

7/31/2019 Unit 3 Opportunity Analysis (FINAL VERSIION)

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ENT600/Unit 3 Opportunity Analysis

UNIT 3:OPPORTUNITY ANALYSIS

Entrepreneurship Dept/FBM (2009) 1

TECHNOLOGY ENTREPRENEURSHIP

(ENT600)


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Definition ofEntrepreneurial Opportunity

Opportunities are an integral componentof the entrepreneurial process

Entrepreneurial opportunities are definedas situations in which new products,services and processes can be introduced

and sold at greater than the cost ofproduction

ENT600/Unit 3 Opportunity AnalysisEntrepreneurship Dept/FBM (2009) 2


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Concept ofWindow of Opportunity

Often when referring to opportunities, the termwindow of opportunity is used

The entrepreneur must hit the window ofopportunity for which the opportunity exists

Window of opportunity is defined as that toooften short period of time during which anopportunity must be acted on or it will be

missed

It also describes the time period in which a firmcan realistically enter a new market

Entrepreneurship Dept/FBM(2009)

ENT600/Unit 3 Opportunity Analysis 3


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The window of opportunity is deemed to be open

or close to denote the degree of attractiveness or

exploitation possibilities at a particular time

The term open refers to the opportunity lendingitself to be exploited at that time because it has value

and potential for wealth creation

The term close refers to the opportunity potentialdiminishes due to it being exploited by another

entrepreneur or at that period of time has become

out-of-date or obsoleteEntrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 4

Concept ofWindow of Opportunity


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Changing Opportunity An Example

Data storage in the computing age is essential tothe user. In the early years of desktop computingand data storage, the diskette was the key modeof data storage

As time passes, the user looks to more storagecapacities in a more stable form and much more

compact design. Hence, the introduction of thepen drive or thumb drive fulfills the new needsof the growing user group




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Characteristics of an Attractive Opportunity

Timely

- a current need, unmet demand or problem (e.g.vaccine for bird flu, drugs to prevent obesity)

Solvable

- a problem that can be solved in the near future withaccessible resources (e.g. a cure for cancerous

diseases, a more efficient public transport to reducecongestion and traffic jams)



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Characteristics of an Attractive Opportunity

Important The customer deems their problem or need importantto them (e.g. energy-saving air conditioner or petrolsaving devices that work)

Profitable the customer will pay for the solution and allow the

enterprise to profit (e.g. security products, multi functionprinters)

Context a favorable regulatory and industry situation (e.g. on-

line business transaction , genuine investmentschemes that promise high returns)




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Opportunity Analysis A Process Approach



Opportunity Evaluate the

discovery opportunity

Go

Decision Technology-based Exploitation

idea blueprint of opportunity

Reject

Look

elsewhere


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Opportunity Discovery

Sources of business ideas include:

Patent officeThe Intellectual Property Corporation of Malaysia is an agencyunder the Ministry of Domestic Trade, Cooperative andConsumerism. This agency can be a good source of business

ideas that can be retrieved easily from their online patentsearch and patent gazette hosted on its website

University Research & Development

Provides an endless stream of research findings that can becommercialized. Local universities play an important role inproviding knowledge that will help businesses grow into newmarket segments and develop new products



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Research InstitutesConsidered as reliable sources of businessideas on various fields. Examples of researchinstitutes in Malaysia include the Malaysian

Agricultural Research & Development Institute(MARDI), Standards and Industrial ResearchInstitute of Malaysia (SIRIM)

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Opportunity Discovery

ENT600/Unit 3: Opportunity Analysis ENT600/Unit 3 Opportunity AnalysisEntrepreneurship Dept/FBM(2009)


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Opportunity Pull (Market Driven) vsCapability Push (Technology Driven)

Opportunity can either be:

Opportunity pull (market driven)

Occurs when there is a need or problem that requires asolution. An example is the need for a pharmaceutical that can

mitigate or cure the effects of AIDS. This type of opportunitycan be called opportunity pull, since the size of the opportunitydraws opportunity seekers to attempt to exploit it.

Capability push (technology driven)

Occurs from the discovery of a capability or resource that canbe applied to a problem or need. An example of this type ofopportunity is the discovery of a new technology, such as digitaltelevision. This type of opportunity can be called a capabilitypush, since it flows from a capability or resource availability.



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Evaluate the Opportunity

Evaluating opportunities Involves internaland external factors

Internal factors relate more to theentrepreneurial individual capabilities andintentions

External factors relate to the companyand business environment




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Evaluate the Opportunity (Internal Factors)

Internal factors that include:

Capabilities

the ability or quality (knowledge, experience, andskill) necessary to develop the business venture

Resources include financial, physical, and human resources

consistent with the magnitude of the business venture

Interest

the will, commitment, and passion to pursue thebusiness venture



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External factors include:

Market

involves determining the size of the market and the potentialcustomers

Financial involves determining the costs to be incurred in developing

the business venture

Technical involves determining the requirements to proceed with the

idea that include machineries, raw materials, the processesand infrastructure

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Evaluate the Opportunity (External Factors)

ENT600/Unit 3 Opportunity AnalysisEntrepreneurship Dept/FBM (2009)


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Evaluate the opportunity (cont external factors)

Economic forcesHave a direct impact on the level of disposable

income and consumer buying patterns. For e.g.,

when incomes are high, people are more willing to

buy products and services that enhance their lives.Similarly, a drop in interest rates typically leads to

an increase in new home construction and

furniture sales.



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Evaluate the opportunity (cont external factors)

Social and cultural trends- an understanding of the impact of social and culturaltrends and how they affect new product, service, andbusiness ideas is a fundamental piece of the opportunityrecognition puzzle.

- For example, the persistent proliferation of fast-foodrestaurants is not due primarily to peoples love of fastfood but rather to the fact that people are busy theincreasing predominance of two-income householdsleaves less time to cook at home. Similarly, the SonyWalkman was developed not because consumers wantedsmaller radios, but because people wanted to listen tomusic while on the move and while exercising.




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Technological advances

provide opportunities to help people satisfy basic needsand desires in a better or more convenient way.

For e.g. the cell phone provides the mobile populationthe ability to communicate with its co-workers,customers, friends, and families from anywhere andeverywhere. Similarly, people who shave have alwayswanted to minimize the number of nicks and shaving

time and get as close a shave as possible. These andother shaving-related desires will probably neverchange. What does change is the degree to which newtechnologies can better satisfy these needs and desires.

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Evaluate the opportunity(cont: external factors)

ENT600/Unit 3 Opportunity AnalysisEntrepreneurship Dept/FBM (2009)


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Evaluate the opportunity(cont: external factors )

Political and regulatory changes New regulations create opportunities for

entrepreneurs to start firms to help companiescomply with these laws.

E.g. OSHA standard, has opened up businessopportunities for consulting companies to helpother companies ensure compliance.

Political change also leads to new business andproduct opportunities.

E.g., global political instability and the threat ofterrorism have resulted in many firms becomingmore security conscious.




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Feasibility Study

The outcome of the evaluation of opportunity is afeasibility study; which is a tool to identify whether thebusiness idea is feasible or not.



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Making decision

Once the opportunity is evaluated, a decision has to be madewhether to proceed to the preparation of a technology-based idea

blueprint or to explore other possibilities by looking elsewhere

The entrepreneur must make a difficult decision whether to act ornot on a good potential opportunity

The factors to be considered in making the decision includewhether:

- the product will give significant value to the customer

- the entrepreneur can attract the necessary financial, physical,

and human resources required by the venture opportunity- the expected return of the venture is consistent with the risk of

the venture



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Technology-based idea blueprint

This document summarizes the entrepreneursproposal of a business venture



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Exploitation of Opportunity

Exploitation of opportunity for technological-based product can be done throughcommercialization.


Unit 3 Opportunity Analysis (FINAL VERSIION)

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