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CHAPTER 4BUSINESS OPPORTUNITIES:
IDENTIFICATION, EVALUATION,
AND SELECTION
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LESSON OBJECTIVES
At the end of the lesson, students shouldbe able to
understand:
Definition of business opportunity and twosituations in which
business opportunitycan exist in the market
The approach to opportunity identification
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WHAT ISOPPORTUNITY Opportunity is defined as a
situation
that enables an entrepreneur to offermarketable products or
services tointerested buyers or end users
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2 TYPES OF SITUATIONAL FACTORS There are two situations in
which
business opportunity can exist in the
market;
Product or service is already in the market butfailed to satisfy
the customers – so need to be
improved
Product or service is still not in existence – tohelp solve
customer!s problems
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EMERGENCE OF OPPORTUNITY • "hen people decide they have
certain needs and want to
be satisfied, or when people discovered a problem of some
kind that can be helped by a product or service
• The presence of unfulfilled needs and want and#or
problems alerts the entrepreneur to the potential
opportunity
• The entrepreneur later creates a business that is able to
fulfill the needs or want and#or solve the problem
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BUSINESS OPPORTUNITY:
IDENTIFICATION
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OPPORTUNITY
IDENTIFICATION
Opportunity identification is a
process that involved the search forand discovery of
businessopportunities
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OPPORTUNITY
IDENTIFICATION
$ %bserve chan&es in the environment
' (eco&ni)e a need that customershave that is not bein&
satisfied
* (eco&ni)e problems and find ways tosolve it
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1. OBSERVING
CHANGES IN THEENVIRONMENT
+han&es in the environment &ive rise to
needs and wants and#or problems, and
an opportunity emer&es
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CONT..
conomic forces
-ocial forces
Technolo&ical advancesPolitical and re&ulatory
statues
.mportant environment forces toobserve include:
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Examples of How Changes in the Environment Provides Openings
for
New Product and Service Opportunities
CHANGES IN ENI!ON"EN# P!OI$E OPPO!#%NI#IES &O!'
Structure of Population and Income• Number of
teenagers higher than number Cyber cafes, cineplexes, recording
studios
of elderly and children
• People have higher purchasing power Passenger cars, household
furniture, DVD
Social
• Increase incident of housebreaking rills, alarm, sensor,
security systems
•
Increase interest in fitness !itness center, dancing class,
in"house exercise e#uipment, health food store
• Increase mobility of population $andphone, laptop
computers
• Increasing predominance of dual" %estaurants, food delivery
services
income families leaves less time to
cook at home
Technological Advances
• &dvances in biotechnology 'iotech"related pharmaceutical
products, food products, veterinary products
• Development of the internet ("commerce, improved
communication
• Increase pressure to improve economic )nline marketing, cost
control services
performance
Government Policies and Regulations
Increased driving standards *moke emission control, helmet,
seatbelt
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2. RECOGNIZE NEEDS
AND WANTS
%pportunity occurs whenever there is a need
and want to fulfill The term /needs0 refer to
basic needs that the consumer must have in
order to live while the term /wants0 refers to a
personal desire for somethin& that is more
than a basic need
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3. RECOGNIZE
PROBLEM AND FINDSOLUTIONProblems can be reco&ni)ed by
observin& the challen&es that people
encounter in their daily lives
-olution to the problem represented abusiness opportunity
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OPPORTUNITY IDENTIFICATION
PROCESS
-earch for+han&es inthe
environment
(eco&ni)eneeds andwants, andsolutions
Discoveryof
%pportunity
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ABILITY TO SEARCH AND
DISCOVER BUSINESS
OPPORTUNITIES
xperience and exposure
1nowled&e and skills
/-pecial alertness0
-ocial network
+reativity
2i&ilant 3alert4
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MECHANISM TO IDENTIFY
OPPORTUNITIES+ustomers
(etailers and distributors5usiness associates
5ankers
+onsultantsmployees
%thers
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BUSINESS OPPORTUNITY:EVALUATION & SELECTION
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EVALUATION AND
SELECTION PROCESS
The evaluation and selection process involves
6ud&in& the
viability of the opportunity andassessin& its potential
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THE END
