BUSINESS OPPORTUNITY

WHAT IS OPPORTUNITY ?
Opportunity is defined as a situation
that enables an entrepreneur to offer
marketable products or services to
interested buyers or end users

Product or service is still not in existence
Product or service is already in the market but failed to
satisfy the customers – so need to be improved
TYPES OF SITUATIONAL
FACTORS

• When 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.
EMERGENCE OF
OPPORTUNITY

Opportunity identification is a process that involved the
search for and discovery of business opportunities.
OPPORTUNITY IDENTIFICATION
APPROACH TO OPPORTUNITY
IDENTIFICATION
1. Observe changes in the environment
2. Recognize a need that customers have that is not being satisfied
3. Recognize problems and find ways to solve it

OBSERVING CHANGES IN THE
ENVIRONMENT
Changes in the environment give rise to needs and wants and/or
problems, and an opportunity emerges
Important environment forces to observe include:
1. Economic forces
2. Social forces
3. Technological advances
4. Political and regulatory statues

Examples of How Changes in the Environment Provides Openings for
New Product and Service Opportunities
Structure of
Population
and Income
Number of teenagers higher than
number of elderly and children
People have higher purchasing power
Cyber cafes, Cineplex's, recording
studios
Passenger cars, household furniture,
DVD
Social Increase incident of housebreaking Grills, alarm, sensor, security systems
Increase interest in fitness Fitness center, dancing class, in-house
exercise equipment, health food store
Increase mobility of population Hand phone, laptop computers
Increasing predominance of dual-
income families leaves less time to
cook at home
Restaurants, food delivery services
Technological
Advances
Advances in biotechnology Biotech-related pharmaceutical
products, food products, veterinary
products
Development of the internet E-commerce, improved communication
Increase pressure to improve
economic performance
Online marketing, cost control services
Government
Policies and
Increased driving standards Smoke emission control, helmet, seatbelt

RECOGNIZE NEEDS AND WANTS
Opportunity occurs whenever there is a need and want
to fulfill. The term “needs” refer to basic needs that the
consumer must have in order to live while the term
“wants” refers to a personal desire for something that is
more than a basic need.

RECOGNIZE PROBLEM AND FIND
SOLUTION
OPPORTUNITY IDENTIFICATION PROCESS
Searchfor
Changesin
theenvironment
Recognize
needs and
wants, and
solutions
Discoveryof
Opportunity

ABILITY TO SEARCH AND DISCOVER
BUSINESS OPPORTUNITIES
Experience and exposure
Knowledge and skills
“Special alertness”
•Social network
•Creativity
•Vigilant
MECHANISM TO IDENTIFY OPPORTUNITIES
•
•
•
•
Customers
Retailers and distributors
Business associates
Bankers
•
•
•
Consultants
Employees
Others
•
EVALUATION AND SELECTION PROCESS
The evaluation and selection process involves judging the viability of the
opportunity and assessing its potential.

CRITERIA FOR EVALUATION AND
SELECTION
1. Can make money and has potential for growth
2. Less competition
3. Good fit between entrepreneur and opportunity
4. Has competitive advantage
5. Workable and efficient
6. Not against the norms and values of the community
7. Conform with laws and regulations

Divergent Thinking Mode
Convergent Thinking Mode

Out-of-the-box thinking -
thinking that moves away in diverging directions so as to involve
a variety of aspects and which sometimes lead to novel ideas and
solutions; associated with creativity.
Divergent thinking is a thought process or method used to
generate creative ideas by exploring many possible solutions.
Divergent thinking typically occurs in a spontaneous, free-
flowing manner, such that many ideas are generated in an
emergent cognitive fashion.
Many possible solutions are explored in a short amount of time,
and unexpected connections are drawn. After the process of
divergent thinking has been completed, ideas and information are
organized and structured using convergent thinking.

Thinking that brings together information focused on
solving a problem (especially solving problems that
have a single correct solution)
Convergent thinking is the type of thinking that focuses on
coming up with the single, well-established answer to a
problem.
It is oriented toward deriving the single best, or most often
correct answer to a question. Convergent thinking
emphasizes speed, accuracy, and logic and focuses on
recognizing the familiar, reapplying techniques, and
accumulating stored information

Preparation of personal profile
Development of OS (decision making)
framework
Generation of ideas
Snap investigation
Evaluation in terms of OS (decision making),
framework & short listing of ideas
Pre-feasibility studies
Opportunity selection

About the entrepreneur:
May include following details:
Background : Personal, educational, experience,
personality
Objectives for establishing enterprise
Investment preparedness
Attitude to risk taking
Personal considerations

Investment
How much are you willing to invest?
Contingency & escalation
Working capital margin
Technology sophistication
Quality & Quantity of technology to acquire

Managerial/ Organization demands
Size or intensity or organizational task
How skills & expertise match?
Market Competition
Market research
Aggressiveness & determination to ‘sell’
Export industry consideration

Sector preference
Government intervention/ dependence
Implementation time
Profitability
Degree of risk & its form
Location
Personal considerations
Taboos/ Religious Sentiments

To hit up ideas – the heart of OIS process
Strong creative dimension to be present
Stretch one’s mind for opportunity
Idea generation

Idea not enough – must examine preliminary
viability
Preliminary investigation
Questions like:
What exactly is the product or service?
Application & uses
Possible scales of production or operation
Project cost to a given scale of production/
operation

Market / competition
Unit sale price
Degree of technological complexity
Expected annual turnover
Expected profit margin (range)
And any other information you can collect
without incurring too much expenditure

Will you be able to learn and get grip over
business?
Securing term loans, financial assistance or
commercial bank… will it pose a problem?
Key determinants: success & risks
Must cross check all judgments

Portion a highly individualistic process
Generation of ideas will depend on
Interest in sending opportunity over time
Sense of urgency of business enterprise
Ability to harness courses of knowledge &
information
Vision & creativity
Lateral thinking

7 approaches to generation of ideas
Natural resources
Existing anticipated industries
Market driven
Service sector scanning
Extension/ modification of present work content
Creative effort
Other ways

Natural resources – to convert into profitable
enterprises
Forest
Horticulture
Agro-waste
Marine or aqua
Mineral
Animal
Wind
Sun
Human

Natural resources – must pay attention to:
Exploitation
Resource quantification & life
Resource stability
Critical infrastructure for resource utilization
Commodity/ trading dimension
Legal dimension
Other considerations
Where will you pick resource based ideas?

Existing anticipated industries
Similar projects
Raw material for existing industry
Further processing of output of existing industry
Projects based on waste or by- products of existing
industry
Packaging materials
Service requirements
Projects based on skills/ technology developed through
existing industry

Existing/ anticipated industries – keep following in
view
Outlook for existing industry of your interest
Ancillary parent industry syndrome
Captive arrangement
Nature of decision making
Projects in the pipeline
Motivated feedback
Look beyond local industries
Well trenched non- local supply industries

Demand driven or market driven opportunities
Trade flows
Import substitution
Growth products
Product positioning/ differentiation
Exports
Basis of import
Competitive advantage, not just potential
100% export
Networking

Service sector opportunities
Existing industrial enterprises
Medium and large projects in pipeline
Commercial establishment
Public utility orgs.
Social infrastructure
Business enterprises catering to community needs
Government/ quasi- government orgs. & local bodies
Citizens
households

Creative effort
Development of problem solving products/ services
Exploitation of new technology or material to meet a widely
felt need
Creating a demand for a psychological product
Technical extension of an established product concept
Creating a demand implicit in emerging lifestyle
Technical work
Introducing products/ services alien to region or country
Value addition through technical or managerial innovation

Basic guidelines
Imperfect knowledge
Comprehensive comparison
Key issues
Technology comfortability
Degree of difficulty of market position
Risks
Profitability
Government dependence
Success & risks calculated

“Me too” syndrome
Fallacy of numbers
Failure to grasp key elements of success
Lack ownership
Catch the first bus
Inaccurate information
Unwillingness to step back