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Business Plan Business Plan Entrepreneurial Opportunity RecognitionEntrepreneurial Opportunity Recognition
Week3Week3
ELIB 203ELIB 203
Entrepreneurial Opportunity Recognition
Entrepreneurial Opportunity Recognition
Entrepreneurship process starts with opportunity recognition and
idea generation
Entrepreneurial Opportunity Recognition
Entrepreneurial Opportunity Recognition
What is an Opportunity?
An opportunity is a favorable set of circumstances that creates the need for a new product, service, or business idea
Entrepreneurial Opportunity Recognition
Entrepreneurial Opportunity Recognition
Most entrepreneurial firms are started in one of two ways:
An entrepreneur decides to start a firm, searches for and recognizes an opportunity, then starts a business.
An entrepreneur recognizes a problem or an opportunity gap and creates a business to fill it.
What is an Opportunity?What is an Opportunity?
Opportunity is NOT the same as an idea.
Attractive Timely
Durable
Anchored in a product, service or business that creates or adds value
for its buyer or end user
Opportunity(rather than just an idea)
Recognizing OpportunitiesRecognizing Opportunities
Three Ways
Observing Trends
Solving Problem
Finding Gaps in the
Marketplace
1. Observing Trends1. Observing Trends
Trends Suggesting Business or Product Opportunity Gaps
Economic Forces: State of economy
Level of disposable incomeConsumer spending patterns
Social Forces: Social and cultural changes
Demographic changesWhat people think “in”
Technological Advances:New technologies
Emerging technologiesNew uses of old technologies
Political and Regulatory changes:
New changes in political arenaNew laws and regulations
Business or Product
Opportunity Gaps: Difference
between what’s available and
what’s possible
New Business, Product or
Service Idea
2. Solving a Problem2. Solving a Problem
Sometimes identifyingopportunities simply
involves noticing a problemand finding a way to
solve it.
These problems can bepinpointed through observing
trends and through more simplemeans, such as intuition,serendipity, or chance.
Some business ideas are clearly initiated to solve a problem.
For example, Symantec Corp. created Norton antivirus
software to guard computersagainst viruses.
3. Finding Gaps in the Marketplace
3. Finding Gaps in the Marketplace
A gap in the marketplace is often created when a product or service is needed by a specific group of people but doesn’t represent a large enough market to be of interest to mainstream retailers or manufacturers.This is the reason that small clothing boutiques
and specialty shops exist.
The small boutiques, which often sell designer clothes or clothing for hard-to-fit people, are willing to carry merchandise that doesn’t sell in large enough quantities for Wal-Mart, GAP, or JC Penney to carry.
Personal CharacteristicsPersonal Characteristics
Characteristics that tend to make some people better at recognizing opportunities
than others
Prior Experience Social Networks
Cognitive Factors Creativity
Recognizing OpportunitiesRecognizing Opportunities
Connection between an awareness of emerging trends and the personal characteristics of the entrepreneur
Environmental Trends
Economic factorsSocial factors
Technological advancesPolitical and regulatory
advances
Personal Characteristics of an
EntrepreneurPrior experienceCognitive factorsSocial networks
Creativity
Business or Product Opportunity Gaps:
Difference between what’s available and
what’s possible
New Business,Product and Service Ideas
BrainstormingBrainstorming
Brainstorming
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.
Focus GroupsFocus Groups
Focus Group
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.
SurveysSurveys
A survey is a method of gathering information from a sample of individuals. The sample is usually just a fraction of the population being surveyed.
• The most effective surveys sample a “random” portion of the population, meaning that the sample is not selected haphazardly or only from people who volunteer to participate.
• The quality of survey data is determined largely by the purpose of the survey and how it is conducted.
Surveys generate new product, service, and business ideas because they ask specific questions and get specific answers.
Protecting Ideas From Being Lost or Stolen
Protecting Ideas From Being Lost or Stolen
Step 1The idea should be put in a tangible form such as entered into a physical idea logbook or saved on a computer disk, and the date the idea was first thought of should be entered.
Step 2The idea should be secured. This may seem like an obvious step, but is one that is often overlooked.
Step 3Avoid making an inadvertent or voluntary disclosure of an idea, in a manner that forfeits the right to claim exclusive rights to it.
Case StudyCase Study
Sofia’s passion was candy. She wanted to make and sell her own candy, but her family told her to choose something more stable. She took an office job, but her position was downsized. She considered her love of candy, and a little research showed that there was a market for her interests. There was one problem; however, she never made candy outside of her home and was not sure how to sell it in mass. Her family told her that she lacked the necessary skills to create her own business, and she found another office job.
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