Recognizing Opportunities & Generating Ideas Chapter 2

Learning Objectives 1. Difference between ‘opportunity’ & ‘idea’ 1. Difference between ‘opportunity’ & ‘idea’ 2. Understanding Window of Opportunity 2. Understanding Window of Opportunity 3. How Entrepreneurs identify opportunities 3. How Entrepreneurs identify opportunities 4. Personal Characteristics of Entrepreneur 4. Personal Characteristics of Entrepreneur 5. Idea generation through ‘Brainstorming’ & “Focus groups’ 5. Idea generation through ‘Brainstorming’ & “Focus groups’

Ideas & Opportunities Entrepreneurial firms are stimulated either externally or internally Entrepreneurial firms are stimulated either externally or internally 1. Idea: A thought or notion or an impression that creates excitement in the mind of a would be entrepreneur, which seems like a business opportunity, but it has to fill a need and meet the criteria for an opportunity. 1. Idea: A thought or notion or an impression that creates excitement in the mind of a would be entrepreneur, which seems like a business opportunity, but it has to fill a need and meet the criteria for an opportunity. 2. Opportunity : A favorable set of circumstances that create the need for a new product or service. However, opportunities mostly offer a limited “Window”, which can close quickly. 2. Opportunity : A favorable set of circumstances that create the need for a new product or service. However, opportunities mostly offer a limited “Window”, which can close quickly. Opportunity Recognition: Process of perceiving the possibility of a profitable new business or new product or service. Opportunity Recognition: Process of perceiving the possibility of a profitable new business or new product or service.

4 Qualities of an Opportunity Ideas to Business Opportunity Must attract Customers The market must be timed Must be a lasting idea Anchored on a product, service or business that creates/ adds value for buyer

Window of Opportunity Capitalize on the window of opportunity (time period for market entrance), which is limited and may close or narrow. Once the market for a new product is established, its window of opportunity opens. As the market grows, firms enter and try to establish a profitable position. At some point, the market matures, and the window of opportunity closes.

How Opportunities are identified ? 1. Observing Trends (not to be confused with passing fads) : ( a) Economic Forces (economy, disposable income, consumer spending pattern), (b) Social forces (social & cultural trends, demographic changes, what people think is ‘in’, (c) Technological Advances (new technologies, emerging technologies, new use of old technologies), (d) Political & Regulatory Changes (new political or legal changes) 1. Observing Trends (not to be confused with passing fads) : ( a) Economic Forces (economy, disposable income, consumer spending pattern), (b) Social forces (social & cultural trends, demographic changes, what people think is ‘in’, (c) Technological Advances (new technologies, emerging technologies, new use of old technologies), (d) Political & Regulatory Changes (new political or legal changes)

How Opportunities are identified ? 2. Solving existing problems : 2. Solving existing problems : e.g. Portable changing rooms in e.g. Portable changing rooms in Bangladeshi beaches, Bangladeshi beaches, Norton Antivirus Software 3. Finding market gaps: 3. Finding market gaps: e.g. Security Webcams in Dhaka Apartment e.g. Security Webcams in Dhaka Apartment Buildings, Lunch delivery services to offices, etc. Buildings, Lunch delivery services to offices, etc.

How Opportunities are identified ? 2. Solving existing problems : 2. Solving existing problems :

How Opportunities are identified ? 3. Finding market gaps: 3. Finding market gaps:

Personal Characteristics for Opportunity Recognition “Difference between Opportunity & opportunity recognition” 1. Prior experience in the industry (the corridor principal ) 1. Prior experience in the industry (the corridor principal ) 2. Cognitive Factors ( entrepreneurial alertness ) 2. Cognitive Factors ( entrepreneurial alertness ) 3. Social Networks ( Solo entrepreneurs vs network entrepreneurs ) 3. Social Networks ( Solo entrepreneurs vs network entrepreneurs ) 4. Creative Flair (Process of generating novel or useful idea) 4. Creative Flair (Process of generating novel or useful idea)

Importance of Networking Strong-Tie vs Weak-Tie Networks Strong-Tie vs Weak-Tie Networks