Chapter 2 on Entrepreneurship
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Chapter 2 on Entrepreneurship

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Chapter 2 on Entrepreneurship Chapter 2 on Entrepreneurship Presentation Transcript

  • Entrepreneurship studies – Chapter 2 © Cosmopoint International University College, School of Business – 2007
  • Business Opportunities
    • What is a Business Opportunity?
      • A business opportunity is said to exist when:
        • There is a possibility of offering a new product or service in a particular market.
        • The product or service fulfills the demands and preferences of the customers.
        • Where the product can be used to solve their problem.
  • Business Opportunities
    • When and Why is there a need to offer a product or service in a particular market:
    • When?
      • Changes in Environmental Factors
        • Political and Legal
        • Economic
        • Social
        • Technological
    • Why?
      • Because Environmental Factors effect customers’ demand for particular product or service.
  • Business Opportunities
    • The Process of Identifying, Evaluating and Selecting a Business opportunity.
      • Identify the needs and wants of customers.
      • Scanning (examining) the environment and evaluating of self (entrepreneur) and the community.
      • Screening (Process of evaluating) of business opportunities.
      • Selecting a business opportunity
      • Preparing a Business Plan.
    • Identify the needs and wants of the customer
    • Human needs and wants
      • A need is something that is basic in life, for example we need food, clothing and shelter.
      • But as human we also have wants that is, there is a desire or craving something that is far better than basic items.
      • Wants are shaped by :
        • Our life style
        • Level of Education
        • Purchasing power
        • Personality of the person
    Business Opportunities
  • Business Opportunities
    • Human needs and wants
      • Human needs and wants are unlimited and are of all types.
      • Society affluence lead to increase to human wants and needs
      • More business opportunities arises.
      • Thus entrepreneurs must take this opportunity to provide products and services
      • Entrepreneurs must be sensitive to changes in customers’ needs and wants in order to be aware of new business opportunities.
    • Scanning the environment and evaluating of self and the community.
      • Environmental Scanning (ES)
        • ES can lead to an idea that can be converted into a business opportunity.
        • Two approaches are used and what are they?
          • Scan the environment by micro perspective
          • Scan the environment by macro perspective
        • From the macro perspective for example the agricultural sector can offer business opportunity in forestry, fishing, plantation, and livestock breeding.
    Business Opportunities
    • Scanning the environment and evaluating of self and the community.
      • Environmental Scanning (ES)
        • But from micro perspective every industry can offer specific business opportunities.
        • For example in the case of forestry an entrepreneur can be involved in:
          • Logging
          • Manufacturing of veneer plywood
          • Processing of sawn timber
          • Manufacturing of furniture.
          • Making wooden doors and frames.
    Business Opportunities
    • Another approach of scanning the environment is by looking at the following factors:
      • Structure of the population, income and tastes.
      • Examine the import and export information of a country.
      • Study and examine types of local resources and technological breakthrough.
      • Examine the Industrial linkages.
      • Examine the development projects by the public and private sectors.
      • Newspaper and magazines – local and foreign as a source of business opportunities
    Business Opportunities
    • Another approach of scanning the environment is by looking at the following factors:
      • Examine what the local issues and social problems
      • Examine what new government policies and regulation have impact on small business.
    Business Opportunities
    • Self Evaluation
      • Besides Environmental scanning one is to do a self evaluation to identify what skills, experience is available in an entrepreneur that can be used in business development and engagement.
      • Skill competency, experience, knowledge that match the business opportunities.
    Business Opportunities
    • The factors that need to be considered are as follows:
      • Experience
      • Knowledge and Competency Skills
      • Financial Status and situation
      • Interest – likes and dislikes
      • Networking – circle of friends and associates
      • Cultural values and norms of the community.
    Business Opportunities
    • Screening of Business Opportunities
      • By using the process of screening business opportunities will help the entrepreneur to select a business opportunity that he or she can focus on totally and be dedicated to it success.
      • This process involves four factors as follows:
        • Legal within the law of the country.
        • Monopolistic Power and Level of Competition.
        • Capital Requirements must be adequate to business undertaking
        • Risk factor
        • Liquidity Level
        • Loans
        • Credit facilities for customers.
        • Foreign Exchange Rate – volatile or stable currency rate.
    Business Opportunities