SlideShare a Scribd company logo
1 of 28
Download to read offline
Chapter 2
Recognizing
Opportunities and
Generating Ideas
Bruce R. Barringer
R. Duane Ireland
Copyright ©2016 Pearson Education, Inc. 2-1
Chapter Objectives
1 of 2
1. Explain the difference between opportunities and
ideas.
2. Describe the three general approaches entrepreneurs
use to identify opportunities.
3. Discuss the personal characteristics of entrepreneurs
that contribute to their ability to recognize business
opportunities.
4. Identify and describe techniques entrepreneurs use to
generate ideas.
Copyright ©2016 Pearson Education, Inc. 2-2
Chapter Objectives
1 of 2
5. Discuss actions to take to encourage continuous
development of new ideas in entrepreneurial firms.
Copyright ©2016 Pearson Education, Inc. 2-3
What is an Opportunity?
1 of 2
Opportunity Defined
An opportunity is a favorable
set of circumstances that
creates a need for a new
product, service, or business.
Copyright ©2016 Pearson Education, Inc. 2-4
What is an Opportunity?
2 of 2
Four Essential Qualities of an Opportunity
Copyright ©2016 Pearson Education, Inc. 2-5
Three Ways to Identify an Opportunity
Copyright ©2016 Pearson Education, Inc. 2-6
First Approach: Observing Trends
1 of 2
• Observing Trends
– Trends create opportunities for entrepreneurs to pursue.
– The most important trends are:
• Economic forces
• Social forces
• Technological advances
• Political and regulatory change
– It’s important to be aware of changes in these areas.
Copyright ©2016 Pearson Education, Inc. 2-7
First Approach: Observing Trends
2 of 2
Environmental Trends Suggesting Business
or Product Opportunity Gaps
Copyright ©2016 Pearson Education, Inc. 2-8
Second Approach: Solving a Problem
1 of 2
• Solving a Problem
– Sometimes identifying opportunities simply involves
noticing a problem and finding a way to solve it.
– These problems can be pinpointed through observing
trends and through more simple means, such as intuition,
serendipity, or change.
– Many companies have been started by people who have
experienced a problem in their own lives, and then realized
that the solution to the problem represented a business
opportunity.
Copyright ©2016 Pearson Education, Inc. 2-9
Second Approach: Solving a Problem
2 of 2
• A problem facing the U.S. and
other countries is finding
alternatives to fossil fuels.
• A large number of
entrepreneurial firms, like
this wind farm, are being
launched to solve this problem.
Copyright ©2016 Pearson Education, Inc. 2-10
Third Approach: Finding Gaps in the
Marketplace
1 of 2
• Gaps in the Marketplace
– A third approach to identifying opportunities is to find a
gap 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.
Copyright ©2016 Pearson Education, Inc. 2-11
Third Approach: Finding Gaps in the
Marketplace
2 of 2
Product gaps in the
marketplace represent
potentially viable
business opportunities.
Specific Example
Tish Cirovolv realized there
were no guitars on the market
made specifically for females.
To fill this gap, she started
Daisy Rock Guitars, a
company that makes guitars
just for women and girls.
Copyright ©2016 Pearson Education, Inc. 2-12
Personal Characteristics of the Entrepreneur
Characteristics that tend to make some people better
at recognizing opportunities than others
Prior Experience Cognitive Factors
Social Networks Creativity
Copyright ©2016 Pearson Education, Inc. 2-13
Prior Experience
• Prior Industry Experience
– Several studies have shown that prior experience in an
industry helps an entrepreneur recognize business
opportunities.
• By working in an industry, an individual may spot a market niche
that is underserved.
• 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.
Copyright ©2016 Pearson Education, Inc. 2-14
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 “sixth
sense” 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 without
engaging in deliberate search.
Copyright ©2016 Pearson Education, Inc. 2-15
Social Networks
1 of 3
• 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 opportunities
and ideas than people with sparse networks.
– Research results suggest that between 40% and 50% of
people who start a business got their idea via a social
contact.
• Strong Tie Vs. Weak Tie Relationships
– All of us have relationships with other people that are
called “ties.” (See next slide.)
Copyright ©2016 Pearson Education, Inc. 2-16
Social Networks
2 of 3
• Nature of Strong-Tie Vs. Weak-Tie Relationships
– Strong-tie relationships are characterized by frequent
interaction and form between coworkers, friends, and
spouses.
– Weak-tie relationships are characterized by infrequent
interaction and form between casual acquaintances.
• Result
– It is more likely that an entrepreneur will get new business
ideas through weak-tie rather than strong-tie relationships.
(See next slide.)
Copyright ©2016 Pearson Education, Inc. 2-17
Social Networks
3 of 3
Strong-Tie Relationships Weak-Tie
Relationships
These relationships, which
typically form between like-
minded individuals, tend to
reinforce insights and ideas
that people already have.
These relationships, which
form between casual
acquaintances, are not as
apt to be between like-
minded individuals, so one
person may say something
to another that sparks a
completely new idea.
Why weak-tie relationships lead to more new business ideas
than strong-tie relationships
Copyright ©2016 Pearson Education, Inc. 2-18
Creativity
1 of 2
• Creativity
– Creativity is the process of generating a novel or useful
idea.
– Opportunity recognition may be, at least in part, a creative
process.
– For an individual, the creative process can be broken down
into five stages, as shown on the next slide.
Copyright ©2016 Pearson Education, Inc. 2-19
Creativity
2 of 2
Five Steps to Generating Creative Ideas
Copyright ©2016 Pearson Education, Inc. 2-20
Full View of the Opportunity Recognition
Process
Depicts the connection between an awareness of emerging trends
and the personal characteristics of the entrepreneur
Copyright ©2016 Pearson Education, Inc. 2-21
Techniques for Generating Ideas
Brainstorming Focus Groups
Library and
Internet Research
Copyright ©2016 Pearson Education, Inc. 2-22
Brainstorming
• 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.
Copyright ©2016 Pearson Education, Inc. 2-23
Focus 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 the 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.
Copyright ©2016 Pearson Education, Inc. 2-24
Library and Internet Research
1 of 3
• Library Research
– Libraries are an often underutilized source of information
for generating new business ideas.
– The best approach is to talk to a reference librarian, who
can point out useful resources, such as industry-specific
magazines, trade journals, and industry reports.
– Simply browsing through several issues of a trade journal
or an industry report on a topic can spark new ideas.
Copyright ©2016 Pearson Education, Inc. 2-25
Library and Internet Research
2 of 3
Large public and
university libraries
typically have access to
search engines and
industry reports that would
cost thousands of dollars
to access on your own.
Examples of Useful Search
Engines and Industry Reports
• BizMiner
• ProQuest
• IBISWorld
• Mintel
• LexisNexis Academic
Copyright ©2016 Pearson Education, Inc. 2-26
Library and Internet Research
3 of 3
• Internet Research
– If you are starting from scratch, simply typing “new
business ideas” into a search engine will produce links to
newspapers and magazine articles about the “hottest” new
business ideas.
– If you have a specific topic in mind, setting up Google mail
alerts will provide you with links to a constant stream of
newspaper articles, blog posts, and news releases about the
topic.
– Targeted searches are also useful.
Copyright ©2016 Pearson Education, Inc. 2-27
Other Techniques
• Customer Advisory Boards
– Some companies set up customer advisory boards that meet
regularly to discuss needs, wants, and problems that may
lead to new ideas.
• Day-In-The-Life Research
– A type of anthropological research, where the employees of
a company spend a day with a customer.
Copyright ©2016 Pearson Education, Inc. 2-28

More Related Content

What's hot

Recognizing Opportunities and Generating Ideas
Recognizing Opportunities and Generating Ideas Recognizing Opportunities and Generating Ideas
Recognizing Opportunities and Generating Ideas iqra ishfaq
 
89014456 barringer-e4-ppt-02
89014456 barringer-e4-ppt-0289014456 barringer-e4-ppt-02
89014456 barringer-e4-ppt-02سعد سعید
 
Entrepreneurship: Successfully Launching New Ventures
Entrepreneurship: Successfully Launching New VenturesEntrepreneurship: Successfully Launching New Ventures
Entrepreneurship: Successfully Launching New VenturesVinayak Kaujalgi
 
Entrepreneurship Chap 4
Entrepreneurship Chap 4Entrepreneurship Chap 4
Entrepreneurship Chap 4Umair Arain
 
01 intro to_entreneurship
01 intro to_entreneurship01 intro to_entreneurship
01 intro to_entreneurshipZulkefle Idris
 
Barringer Entrepreneurship chapter 04
Barringer Entrepreneurship chapter 04Barringer Entrepreneurship chapter 04
Barringer Entrepreneurship chapter 04MalikJamshaid1
 
Entrepreneurship Chap 5
Entrepreneurship Chap 5Entrepreneurship Chap 5
Entrepreneurship Chap 5Umair Arain
 
Creativity & The Business Idea
Creativity &  The Business IdeaCreativity &  The Business Idea
Creativity & The Business IdeaMuhammad Ali
 
Entrepreneurship 01
Entrepreneurship 01Entrepreneurship 01
Entrepreneurship 01Diana Diana
 
Chapter 5 conducting a feasibility analysis and crafting a winning business plan
Chapter 5 conducting a feasibility analysis and crafting a winning business planChapter 5 conducting a feasibility analysis and crafting a winning business plan
Chapter 5 conducting a feasibility analysis and crafting a winning business planSAITO College Sdn Bhd
 
Entrepreneurship Chap 1
Entrepreneurship Chap 1Entrepreneurship Chap 1
Entrepreneurship Chap 1Umair Arain
 
Entrepreneurship hisrich chapter 1
Entrepreneurship hisrich chapter 1Entrepreneurship hisrich chapter 1
Entrepreneurship hisrich chapter 1Rao Majid Shamshad
 
Entrepreneurship Chap 3
Entrepreneurship Chap 3Entrepreneurship Chap 3
Entrepreneurship Chap 3Umair Arain
 

What's hot (20)

Recognizing Opportunities and Generating Ideas
Recognizing Opportunities and Generating Ideas Recognizing Opportunities and Generating Ideas
Recognizing Opportunities and Generating Ideas
 
Barringer e3 ppt_03
Barringer e3 ppt_03Barringer e3 ppt_03
Barringer e3 ppt_03
 
Feasibility analysis
Feasibility analysisFeasibility analysis
Feasibility analysis
 
89014456 barringer-e4-ppt-02
89014456 barringer-e4-ppt-0289014456 barringer-e4-ppt-02
89014456 barringer-e4-ppt-02
 
Entrepreneurship: Successfully Launching New Ventures
Entrepreneurship: Successfully Launching New VenturesEntrepreneurship: Successfully Launching New Ventures
Entrepreneurship: Successfully Launching New Ventures
 
Entrepreneurship Chap 4
Entrepreneurship Chap 4Entrepreneurship Chap 4
Entrepreneurship Chap 4
 
Barringer e3 ppt_06
Barringer e3 ppt_06Barringer e3 ppt_06
Barringer e3 ppt_06
 
Chapter 3.ppt
Chapter 3.pptChapter 3.ppt
Chapter 3.ppt
 
01 intro to_entreneurship
01 intro to_entreneurship01 intro to_entreneurship
01 intro to_entreneurship
 
Barringer Entrepreneurship chapter 04
Barringer Entrepreneurship chapter 04Barringer Entrepreneurship chapter 04
Barringer Entrepreneurship chapter 04
 
Entrepreneurship Chap 5
Entrepreneurship Chap 5Entrepreneurship Chap 5
Entrepreneurship Chap 5
 
Creativity & The Business Idea
Creativity &  The Business IdeaCreativity &  The Business Idea
Creativity & The Business Idea
 
Barringer e4 ppt_09
Barringer e4 ppt_09Barringer e4 ppt_09
Barringer e4 ppt_09
 
Entrepreneurship 01
Entrepreneurship 01Entrepreneurship 01
Entrepreneurship 01
 
Chapter 5 conducting a feasibility analysis and crafting a winning business plan
Chapter 5 conducting a feasibility analysis and crafting a winning business planChapter 5 conducting a feasibility analysis and crafting a winning business plan
Chapter 5 conducting a feasibility analysis and crafting a winning business plan
 
Getting Funding or Financing6 (7 12-16)
Getting Funding or Financing6 (7 12-16)Getting Funding or Financing6 (7 12-16)
Getting Funding or Financing6 (7 12-16)
 
Entrepreneurship Chap 1
Entrepreneurship Chap 1Entrepreneurship Chap 1
Entrepreneurship Chap 1
 
Entrepreneurship hisrich chapter 1
Entrepreneurship hisrich chapter 1Entrepreneurship hisrich chapter 1
Entrepreneurship hisrich chapter 1
 
Entrepreneurship Chap 3
Entrepreneurship Chap 3Entrepreneurship Chap 3
Entrepreneurship Chap 3
 
Barringer-Chapter5.ppt
Barringer-Chapter5.pptBarringer-Chapter5.ppt
Barringer-Chapter5.ppt
 

Similar to Recognizing Opportunities and generating Ideas.

Chapter2.ppt
Chapter2.pptChapter2.ppt
Chapter2.pptGul Naz
 
2a. Recognizing Opportunities and Generating Ideas.pptx
2a. Recognizing Opportunities and Generating Ideas.pptx2a. Recognizing Opportunities and Generating Ideas.pptx
2a. Recognizing Opportunities and Generating Ideas.pptxSaad Khan
 
Economic of Chapter 02 Presentation.pptx
Economic of Chapter 02 Presentation.pptxEconomic of Chapter 02 Presentation.pptx
Economic of Chapter 02 Presentation.pptxManahilAftab4
 
barringer_e3_ppt_02.ppt
barringer_e3_ppt_02.pptbarringer_e3_ppt_02.ppt
barringer_e3_ppt_02.pptSaadSial4
 
Chapter 2.ppt
Chapter 2.pptChapter 2.ppt
Chapter 2.pptdhonggipa
 
Haseeba_IE_Unit 1_Idea_Generation and opportunities.ppt
Haseeba_IE_Unit 1_Idea_Generation and opportunities.pptHaseeba_IE_Unit 1_Idea_Generation and opportunities.ppt
Haseeba_IE_Unit 1_Idea_Generation and opportunities.pptDavid Raju N
 
Recognizing Opportunities And Generating Ideas | Ways To Identify An Opportun...
Recognizing Opportunities And Generating Ideas | Ways To Identify An Opportun...Recognizing Opportunities And Generating Ideas | Ways To Identify An Opportun...
Recognizing Opportunities And Generating Ideas | Ways To Identify An Opportun...FaHaD .H. NooR
 
Part 2 Developing Successful Business Ideas updated 20_8_2019.pptx
Part 2 Developing Successful Business Ideas updated 20_8_2019.pptxPart 2 Developing Successful Business Ideas updated 20_8_2019.pptx
Part 2 Developing Successful Business Ideas updated 20_8_2019.pptxrokonbawaqne9
 
Chapter 1 Introduction to Entrepreneurship.ppt
Chapter 1 Introduction to Entrepreneurship.pptChapter 1 Introduction to Entrepreneurship.ppt
Chapter 1 Introduction to Entrepreneurship.pptSaidAbdirahman2
 
barringer_e5_ppt_01.ppt
barringer_e5_ppt_01.pptbarringer_e5_ppt_01.ppt
barringer_e5_ppt_01.pptDavid Raju N
 
Barringer-Chapter3.ppt Analysing Small Businesses
Barringer-Chapter3.ppt Analysing Small BusinessesBarringer-Chapter3.ppt Analysing Small Businesses
Barringer-Chapter3.ppt Analysing Small BusinessesSrikantKapoor1
 
barringer-Chapter3-Feasibility Analysis.ppt
barringer-Chapter3-Feasibility Analysis.pptbarringer-Chapter3-Feasibility Analysis.ppt
barringer-Chapter3-Feasibility Analysis.pptAsadJaved304231
 
Startup Feasibility Analysis
Startup Feasibility AnalysisStartup Feasibility Analysis
Startup Feasibility Analysisazlaan
 
Entrepreneurship chapter 3 full slides ppt
Entrepreneurship chapter 3 full slides pptEntrepreneurship chapter 3 full slides ppt
Entrepreneurship chapter 3 full slides pptbahmed0192
 
UNIT 4_Idea to opportunity.pptx
UNIT 4_Idea to opportunity.pptxUNIT 4_Idea to opportunity.pptx
UNIT 4_Idea to opportunity.pptxphinahDiwanga
 

Similar to Recognizing Opportunities and generating Ideas. (20)

Chapter2.ppt
Chapter2.pptChapter2.ppt
Chapter2.ppt
 
2a. Recognizing Opportunities and Generating Ideas.pptx
2a. Recognizing Opportunities and Generating Ideas.pptx2a. Recognizing Opportunities and Generating Ideas.pptx
2a. Recognizing Opportunities and Generating Ideas.pptx
 
L2-02.ppt
L2-02.pptL2-02.ppt
L2-02.ppt
 
Economic of Chapter 02 Presentation.pptx
Economic of Chapter 02 Presentation.pptxEconomic of Chapter 02 Presentation.pptx
Economic of Chapter 02 Presentation.pptx
 
barringer_e3_ppt_02.ppt
barringer_e3_ppt_02.pptbarringer_e3_ppt_02.ppt
barringer_e3_ppt_02.ppt
 
Chapter 2.ppt
Chapter 2.pptChapter 2.ppt
Chapter 2.ppt
 
Haseeba_IE_Unit 1_Idea_Generation and opportunities.ppt
Haseeba_IE_Unit 1_Idea_Generation and opportunities.pptHaseeba_IE_Unit 1_Idea_Generation and opportunities.ppt
Haseeba_IE_Unit 1_Idea_Generation and opportunities.ppt
 
Recognizing Opportunities And Generating Ideas | Ways To Identify An Opportun...
Recognizing Opportunities And Generating Ideas | Ways To Identify An Opportun...Recognizing Opportunities And Generating Ideas | Ways To Identify An Opportun...
Recognizing Opportunities And Generating Ideas | Ways To Identify An Opportun...
 
Part 2 Developing Successful Business Ideas updated 20_8_2019.pptx
Part 2 Developing Successful Business Ideas updated 20_8_2019.pptxPart 2 Developing Successful Business Ideas updated 20_8_2019.pptx
Part 2 Developing Successful Business Ideas updated 20_8_2019.pptx
 
Chapter 1 Introduction to Entrepreneurship.ppt
Chapter 1 Introduction to Entrepreneurship.pptChapter 1 Introduction to Entrepreneurship.ppt
Chapter 1 Introduction to Entrepreneurship.ppt
 
barringer_e5_ppt_01.ppt
barringer_e5_ppt_01.pptbarringer_e5_ppt_01.ppt
barringer_e5_ppt_01.ppt
 
barringer_e5_ppt_01.ppt
barringer_e5_ppt_01.pptbarringer_e5_ppt_01.ppt
barringer_e5_ppt_01.ppt
 
Chapter 3.ppt
Chapter 3.pptChapter 3.ppt
Chapter 3.ppt
 
Barringer-Chapter3.ppt Analysing Small Businesses
Barringer-Chapter3.ppt Analysing Small BusinessesBarringer-Chapter3.ppt Analysing Small Businesses
Barringer-Chapter3.ppt Analysing Small Businesses
 
barringer-Chapter3-Feasibility Analysis.ppt
barringer-Chapter3-Feasibility Analysis.pptbarringer-Chapter3-Feasibility Analysis.ppt
barringer-Chapter3-Feasibility Analysis.ppt
 
Startup Feasibility Analysis
Startup Feasibility AnalysisStartup Feasibility Analysis
Startup Feasibility Analysis
 
2 Entreprenurship.ppt
2 Entreprenurship.ppt2 Entreprenurship.ppt
2 Entreprenurship.ppt
 
Entrepreneurship chapter 3 full slides ppt
Entrepreneurship chapter 3 full slides pptEntrepreneurship chapter 3 full slides ppt
Entrepreneurship chapter 3 full slides ppt
 
UNIT 4_Idea to opportunity.pptx
UNIT 4_Idea to opportunity.pptxUNIT 4_Idea to opportunity.pptx
UNIT 4_Idea to opportunity.pptx
 
Ch_03.pptx
Ch_03.pptxCh_03.pptx
Ch_03.pptx
 

Recently uploaded

Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Winbusinessin
 
7movierulz.uk
7movierulz.uk7movierulz.uk
7movierulz.ukaroemirsr
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinAnton Skornyakov
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhangmcgroupjeya
 
Project Brief & Information Architecture Report
Project Brief & Information Architecture ReportProject Brief & Information Architecture Report
Project Brief & Information Architecture Reportamberjiles31
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
Entrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsEntrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsP&CO
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfAnhNguyen97152
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfJohnCarloValencia4
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
Tata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakTata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakEditores1
 
Mihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZMihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZKanakChauhan5
 
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHelene Heckrotte
 
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 Building Your Personal Brand on LinkedIn - Expert Planet-  2024 Building Your Personal Brand on LinkedIn - Expert Planet-  2024
Building Your Personal Brand on LinkedIn - Expert Planet- 2024Stephan Koning
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursKaiNexus
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGlokeshwarmaha
 
Upgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsUpgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsIntellect Design Arena Ltd
 
Live-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarLive-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarNathanielSchmuck
 

Recently uploaded (20)

Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024
 
7movierulz.uk
7movierulz.uk7movierulz.uk
7movierulz.uk
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup Berlin
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhang
 
Project Brief & Information Architecture Report
Project Brief & Information Architecture ReportProject Brief & Information Architecture Report
Project Brief & Information Architecture Report
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Entrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsEntrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizations
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
Tata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakTata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerak
 
Mihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZMihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZ
 
WAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdfWAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdf
 
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
 
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 Building Your Personal Brand on LinkedIn - Expert Planet-  2024 Building Your Personal Brand on LinkedIn - Expert Planet-  2024
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, Ours
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
 
Upgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsUpgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking Applications
 
Live-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarLive-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry Webinar
 

Recognizing Opportunities and generating Ideas.

  • 1. Chapter 2 Recognizing Opportunities and Generating Ideas Bruce R. Barringer R. Duane Ireland Copyright ©2016 Pearson Education, Inc. 2-1
  • 2. Chapter Objectives 1 of 2 1. Explain the difference between opportunities and ideas. 2. Describe the three general approaches entrepreneurs use to identify opportunities. 3. Discuss the personal characteristics of entrepreneurs that contribute to their ability to recognize business opportunities. 4. Identify and describe techniques entrepreneurs use to generate ideas. Copyright ©2016 Pearson Education, Inc. 2-2
  • 3. Chapter Objectives 1 of 2 5. Discuss actions to take to encourage continuous development of new ideas in entrepreneurial firms. Copyright ©2016 Pearson Education, Inc. 2-3
  • 4. What is an Opportunity? 1 of 2 Opportunity Defined An opportunity is a favorable set of circumstances that creates a need for a new product, service, or business. Copyright ©2016 Pearson Education, Inc. 2-4
  • 5. What is an Opportunity? 2 of 2 Four Essential Qualities of an Opportunity Copyright ©2016 Pearson Education, Inc. 2-5
  • 6. Three Ways to Identify an Opportunity Copyright ©2016 Pearson Education, Inc. 2-6
  • 7. First Approach: Observing Trends 1 of 2 • Observing Trends – Trends create opportunities for entrepreneurs to pursue. – The most important trends are: • Economic forces • Social forces • Technological advances • Political and regulatory change – It’s important to be aware of changes in these areas. Copyright ©2016 Pearson Education, Inc. 2-7
  • 8. First Approach: Observing Trends 2 of 2 Environmental Trends Suggesting Business or Product Opportunity Gaps Copyright ©2016 Pearson Education, Inc. 2-8
  • 9. Second Approach: Solving a Problem 1 of 2 • Solving a Problem – Sometimes identifying opportunities simply involves noticing a problem and finding a way to solve it. – These problems can be pinpointed through observing trends and through more simple means, such as intuition, serendipity, or change. – Many companies have been started by people who have experienced a problem in their own lives, and then realized that the solution to the problem represented a business opportunity. Copyright ©2016 Pearson Education, Inc. 2-9
  • 10. Second Approach: Solving a Problem 2 of 2 • A problem facing the U.S. and other countries is finding alternatives to fossil fuels. • A large number of entrepreneurial firms, like this wind farm, are being launched to solve this problem. Copyright ©2016 Pearson Education, Inc. 2-10
  • 11. Third Approach: Finding Gaps in the Marketplace 1 of 2 • Gaps in the Marketplace – A third approach to identifying opportunities is to find a gap 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. Copyright ©2016 Pearson Education, Inc. 2-11
  • 12. Third Approach: Finding Gaps in the Marketplace 2 of 2 Product gaps in the marketplace represent potentially viable business opportunities. Specific Example Tish Cirovolv realized there were no guitars on the market made specifically for females. To fill this gap, she started Daisy Rock Guitars, a company that makes guitars just for women and girls. Copyright ©2016 Pearson Education, Inc. 2-12
  • 13. Personal Characteristics of the Entrepreneur Characteristics that tend to make some people better at recognizing opportunities than others Prior Experience Cognitive Factors Social Networks Creativity Copyright ©2016 Pearson Education, Inc. 2-13
  • 14. Prior Experience • Prior Industry Experience – Several studies have shown that prior experience in an industry helps an entrepreneur recognize business opportunities. • By working in an industry, an individual may spot a market niche that is underserved. • 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. Copyright ©2016 Pearson Education, Inc. 2-14
  • 15. 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 “sixth sense” 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 without engaging in deliberate search. Copyright ©2016 Pearson Education, Inc. 2-15
  • 16. Social Networks 1 of 3 • 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 opportunities and ideas than people with sparse networks. – Research results suggest that between 40% and 50% of people who start a business got their idea via a social contact. • Strong Tie Vs. Weak Tie Relationships – All of us have relationships with other people that are called “ties.” (See next slide.) Copyright ©2016 Pearson Education, Inc. 2-16
  • 17. Social Networks 2 of 3 • Nature of Strong-Tie Vs. Weak-Tie Relationships – Strong-tie relationships are characterized by frequent interaction and form between coworkers, friends, and spouses. – Weak-tie relationships are characterized by infrequent interaction and form between casual acquaintances. • Result – It is more likely that an entrepreneur will get new business ideas through weak-tie rather than strong-tie relationships. (See next slide.) Copyright ©2016 Pearson Education, Inc. 2-17
  • 18. Social Networks 3 of 3 Strong-Tie Relationships Weak-Tie Relationships These relationships, which typically form between like- minded individuals, tend to reinforce insights and ideas that people already have. These relationships, which form between casual acquaintances, are not as apt to be between like- minded individuals, so one person may say something to another that sparks a completely new idea. Why weak-tie relationships lead to more new business ideas than strong-tie relationships Copyright ©2016 Pearson Education, Inc. 2-18
  • 19. Creativity 1 of 2 • Creativity – Creativity is the process of generating a novel or useful idea. – Opportunity recognition may be, at least in part, a creative process. – For an individual, the creative process can be broken down into five stages, as shown on the next slide. Copyright ©2016 Pearson Education, Inc. 2-19
  • 20. Creativity 2 of 2 Five Steps to Generating Creative Ideas Copyright ©2016 Pearson Education, Inc. 2-20
  • 21. Full View of the Opportunity Recognition Process Depicts the connection between an awareness of emerging trends and the personal characteristics of the entrepreneur Copyright ©2016 Pearson Education, Inc. 2-21
  • 22. Techniques for Generating Ideas Brainstorming Focus Groups Library and Internet Research Copyright ©2016 Pearson Education, Inc. 2-22
  • 23. Brainstorming • 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. Copyright ©2016 Pearson Education, Inc. 2-23
  • 24. Focus 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 the 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. Copyright ©2016 Pearson Education, Inc. 2-24
  • 25. Library and Internet Research 1 of 3 • Library Research – Libraries are an often underutilized source of information for generating new business ideas. – The best approach is to talk to a reference librarian, who can point out useful resources, such as industry-specific magazines, trade journals, and industry reports. – Simply browsing through several issues of a trade journal or an industry report on a topic can spark new ideas. Copyright ©2016 Pearson Education, Inc. 2-25
  • 26. Library and Internet Research 2 of 3 Large public and university libraries typically have access to search engines and industry reports that would cost thousands of dollars to access on your own. Examples of Useful Search Engines and Industry Reports • BizMiner • ProQuest • IBISWorld • Mintel • LexisNexis Academic Copyright ©2016 Pearson Education, Inc. 2-26
  • 27. Library and Internet Research 3 of 3 • Internet Research – If you are starting from scratch, simply typing “new business ideas” into a search engine will produce links to newspapers and magazine articles about the “hottest” new business ideas. – If you have a specific topic in mind, setting up Google mail alerts will provide you with links to a constant stream of newspaper articles, blog posts, and news releases about the topic. – Targeted searches are also useful. Copyright ©2016 Pearson Education, Inc. 2-27
  • 28. Other Techniques • Customer Advisory Boards – Some companies set up customer advisory boards that meet regularly to discuss needs, wants, and problems that may lead to new ideas. • Day-In-The-Life Research – A type of anthropological research, where the employees of a company spend a day with a customer. Copyright ©2016 Pearson Education, Inc. 2-28