BUSINESS OPPORTUNITY AND SELECTION

BUSINESS OPPORTUNITY
WHAT IS OPPORTUNITY ?
TYPES OF SITUATIONAL FACTORS
EMERGENCE OF OPPORTUNITY
OPPORTUNITY IDENTIFICATION
OBSERVING CHANGES IN THE ENVIRONMENT
RECOGNIZE PROBLEM AND FIND SOLUTION
BUSINESS OPPORTUNITY AND SELECTION
THINKING MODES

1. BUSINESS OPPORTUNITY

2. 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

3. 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

4. •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

5. 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

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

7. 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
Cyber cafes, Cineplex's, recording
studios
People have higher purchasing powerPassenger cars, household furniture,
DVD
Social Increase incident of housebreakingGrills, alarm, sensor, security systems
Increase interest in fitness Fitness center, dancing class, in-house
exercise equipment, health food store
Increase mobility of populationHand 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
Regulations
Increased driving standards Smoke emission control, helmet, seatbelt

8. 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.

9. RECOGNIZE PROBLEM AND FIND
SOLUTION
OPPORTUNITY IDENTIFICATION PROCESS
Search for
Changes in
the environment
Recognize
needs and
wants, and
solutions
Discovery of
Opportunity

10. 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.

11. 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

13. Divergent Thinking Mode
Convergent Thinking Mode

14.  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.

15. 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

17. 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

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

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

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

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

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

23. 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

24. 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

25. 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

26. 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

27. 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

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

29. 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?

30. 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

31. 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

32. 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

33. 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

34. 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

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

36. “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