2. Who is an Entrepreneur ?
An entrepreneur is characterized as “someone who
demonstrates initiative and creative thinking, is able to
organize social and economic mechanisms to turn resources
and situations to practical account, and accepts risk and
failure” - Hisrich (1990)
3. An entrepreneur is someone who…
Perceives opportunity
Organizes resources
Come up with new ideas for products,
markets or techniques( Innovators)
4. The Nature of Entrepreneurial Start-ups
An entrepreneurial venture brings something to the
marketplace.
Three primary characteristics are :
1. Innovative
2. Value-creating
3. Growth-oriented
5. New Business Formation
Entrepreneurs use identifiable milestones to measure their
progress:
Steps in the Entrepreneurial Process
1. Discovery
2. Concept Development
3. Resourcing
4. Actualization
5. Harvesting
We are
here
Identify
Business
Opportunity
6. 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”
An opportunity may be the chance to meet a market need
(or interest or want) through a creative combination of
resources to deliver superior value
7.
8. TYPES OF SITUATIONAL FACTORS
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
9. Opportunity Identification
Opportunity identification is a process that
involved the search for and discovery of
business opportunities.
Opportunity identification in business refers to
the process of identifying potential market
opportunities that a business can pursue to
grow and expand its operations.
10. Opportunity Identification
Business opportunity identification is central to the domain of
entrepreneurship.
Recognizing an opportunity often results from the knowledge and
expertise of the individual entrepreneur. The entrepreneur must
always be ready to use his knowledge and experience and turn his
ideas into a powerful business opportunity and create a successful
venture.
Opportunity identification and selection are like corner stones of a
business enterprise.
The first step for every entrepreneur is the identification of a business
opportunity and generate a new business idea.
11. Opportunity Identification Know How to
Identify and Exploit Opportunities
Ray Kroc, who is affiliated with the McDonald’s chain,
began his career as an entrepreneur when he invented a
machine to make milkshakes. To sell the machines, he went
from store to store throughout the United States and offered
them to the shop owners.
The moment when he saw an opportunity for another
initiative was when he entered to sell his wares at the
McDonald’s Brothers' burger restaurant. After attending the
restaurant several times, he realized that the fast-food concept
had great potential.
He made the move to the hamburger venture gradually. At
first, he acquired a franchise for a single branch, and then
expanded until he bought the entire chain from the founders
and turned it into an international fast-food chain.
The restaurant was
owned by two
brothers, Maurice and Ric
hard McDonald
12. Importance of Opportunity Identification
1. Gain a Competitive Advantage
2. Identify and address Important but Unmet Customer
Needs
3. Enabler for Innovation
4. Improve Decision Making
13. 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
14. 1. 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:
Economic forces
Social forces
Technological advances
Political and regulatory statues
15. PESTLE Analysis
The PESTLE analysis refers to the
screening of political, economic,
sociological, technological, legal, and
environmental aspects of the macro
environment.
This concept was first introduced in
1967 as PEST analysis by Francis
Aguilar. Francis was an American
scholar and Harvard professor.
16. Political analysis
These factors determine the extent to which a government may
influence the economy or a certain industry.
For example, a government may impose a new tax or duty due to
which entire revenue generating structures of organizations might
change.
Political factors include tax policies, Fiscal policy, trade tariffs, etc.
that a government may levy around the fiscal year and it may affect
the business environment (economic environment) to a great extent.
17. Economic analysis
Economic factors significantly affects the business decisions related
to the demand, supply, and pricing of goods or services.
Economic factors include interest rates, inflation, foreign exchange
rates, GDP, unemployment, economic growth rate, disposable
income, savings, and investments.
18. Social analysis
Society and people also influence business operations. The various
social factors comprise consumer beliefs, demographics, attitudes,
buying patterns, customer preferences, literacy, living standard,
status, ethics, values, and religion.
19. Technological analysis
The advancement of science and technology greatly impacts the
business process. Technological factors include research and
development, innovation, quality, automation, cyber security,
patents, information technology, communication, etc.
20. Legal analysis
The regulatory and legal compliance like consumer protection laws,
environmental laws, labor laws, industrial regulations, licenses and
permits, and intellectual property play a major role in shaping a
company’s policies and practices.
21. Environmental analysis
Organizations need to plan their course of action based on nature,
environment, and ecology. Ecological factors include climatic
changes, weather conditions, geographical location, carbon emission
standards, natural resources, and environmental protection laws.
22. 2. Recognize a need that customers have
that is not being satisfied
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.
23. 3. Recognize problems and find ways to
solve it
Problems can be recognized by observing the challenges
that people encounter in their daily lives.
Solution to the problem represented a business
opportunity
24. 3. Recognize problems and find ways to
solve it
Problems can be recognized by observing the challenges
that people encounter in their daily lives.
Solution to the problem represented a business
opportunity
25. A Good Business Idea
IDEAS stand for:
I- Identification of opportunities
D- Designing into prototype to show to segment of society
E- Exclusive or Unique that is different from competitors
A- Acceptable to segment of society
S- Satisfying to the segment of the society for which made.
In other words, ideas are referred to as problems expressed by the people in
the society. Any problem stated by the consumers becomes a business
opportunity to be fulfilled by providing necessary goods or services as a
solution to their problems.
26. Sources of Business Ideas
Business ideas are thoughts that when implemented can lead to
income generation. Coming up with new and feasible business
ideas is a crucial initial step to become a great entrepreneur.
Some of these business ideas emerge from market analysis and
consumer needs, while others emerge from a long research
process.
Sources of new product ideas include: company employees,
customers, competitors, outside inventors, acquisitions, and
channel members
27. Sources of Business Ideas
Sources of Idea
Generation
Internal
Research & Development
Intrapreneurship
Hobbies & Interests
External
Need recognition of
customers
Existing product & services
Distribution network
Trade journals, Business
magazines & newspapers
Trade fairs & exhibitions
Government schemes
28. Techniques Of Idea Generation
Brainstorming: Brainstorming is a creative problem-solving technique and
also an informal approach to business ideas generation. It encourages people to
come up with thoughts and ideas that can, at first, seem a bit crazy.
Brain Writing: Brain writing is an idea-generating method that involves
everyone in a group activity. It is silent technique where the group of people
(usually six) are required to write minimum three ideas on special forms or cards
which are circulated to each participant for a pre-specified duration.
29. Techniques Of Idea Generation
Focus Groups: The group is lead by a moderator to conduct an in-depth
discussion. The group usually consists of 8-14 recruited participants.
Mind mapping: It is a powerful graphical technique which is used to
translate whatever is running into the minds into a visual is running into the
minds into a visual. The process of mind-mapping involves penning down a
central involves penning down a central theme and coming out with new and
associated ideas that branch out from the central idea.
30. Techniques Of Idea Generation
Heuristic Ideation Technique: HIT is an idea generation technique
that facilitates generation of new product ideas by exploring different products’
features and making different combinations in order to search for a new product
idea.
SCAMPER: SCAMPER is an acronym which stands for: S-Substitute; C-
Combine; A-Adapt; M-Modify; P-Put to another use; E-Eliminate; R-Rearrange.
Substitute means thinking about substituting different parts of the product or its
processing for something else. Combine means thinking about combining
different products’ features or processes in order to develop completely new
product.
31. Techniques Of Idea Generation
Problem Inventory Analysis: The procedure involves two steps: One,
providing consumers a list of specific problems in a general product category.
Two identifying and discussing the products in the category that suffers from the
specific problems.
Free Association: Free association is a method of developing new idea
through a chain or a cycle of word association. The process involves a word
relating to the problem being written down, then another and another.
32. Scanning And Screening Of Business
Ideas
• Attractiveness of Idea
• Ability to undertake
• Practicality
• Potential Market Demand
• Ability to Combat Competition
• Ability to Differentiate
•Price Potential
•Resource Availability
34. Concept of Product Selection
Product selection is a decision process, in which the design team selects one or few product
concept for further development.
An entrepreneur establishes a business unit with a modest investments in a small scale level. •
As he senses business opportunities from the changing environment, keeps on adding,
improving and dropping different types of product.
A small business unit progressively becomes large through additional investments. • The new
product investment areas are as under:
(i) Introduction of new product.
(ii) Expansion of the existing product.
(iii) Diversification in a new line of product by an already existing unit.
(iv) Business integration investments- the business is a step-by-step and sequential conversion
of raw material into finish product. E.g. a raw cotton is converted into finished cloths through
spinning, weaving, and processing.
35.
36. Precautions Regarding Product Selection
1) The production process should not be very long or time-
taking.
2) The employed production process should be smooth and
straight forward.
3) There should be adequate and consistent demand for the
selected product.
4) The product industry must have potentials for growth and
development.
5) The product should be accepted by consumers and a healthy
competition should exist for the same.
37. Precautions Regarding Product Selection
6) There should be easy availability of plant and machinery
and other equipment required for the production of the
product.
7) There should be availability of adequate raw materials.
8) Personnel required for technical, artistic and manual
work/labour should be easily available at reasonable costs.
9) The product should be capable of introducing in overseas
markets.
38. New product development process
• STAGE 1- Idea Generation
• STAGE 2 - Idea Screening Practicality
• STAGE 3 - Concept Development and Testing
• STAGE 4 - Marketing strategy
• STAGE 5 - Technical and Marketing Development
• STAGE 6 - Test Marketing and Validation
• STAGE 7 - Commercialization
39. Critical Factors Of The New
Venture Development
• Uniqueness - For example: - ‘Taaza ho le’ by Taaza tea
reflecting the freshness of their tea differentiating it from
other competitors.
• Investment
• Growth of Sales
• Product Availability
• Customer Knowledge about their requirements (customer
connect)
