UNIT-II-Business opportunity Identification and Preliminary Project Report BBA.ppt

Opportunity Search: Divergent Thinking Mode:
Meaning ,Objectives
Tools and Techniques: Environmental scanning for business opportunity Identification
Opportunity Selection: Convergent Thinking Mode:
Meaning ,Objectives
Tools And Techniques: Market Survey
Preliminary Project Report(PPR)

1. TYBBA 2020-21 TERM-I
Course-502-Entrepreneurship Development
NBN College of Commerce & Science, Lonavala

2. UNIT II
Business opportunity Identification and Preliminary Project
Report (PPR)
Opportunity Search: Divergent Thinking Mode:
Meaning ,Objectives
Tools and Techniques: Environmental scanning for
business opportunity Identification
Opportunity Selection: Convergent Thinking Mode:
Meaning ,Objectives
Tools And Techniques: Market Survey
Preliminary Project Report(PPR)

3. Business opportunity
•Abusinessopportunity,inthesimplestterms,isapackaged
businessinvestmentthatallowsthebuyertobeginabusiness.
(Technically,allfranchisesarebusinessopportunities,butnot
allbusinessopportunitiesarefranchises.)Unlikeafranchise,
however,thebusinessopportunitysellertypicallyexercisesno
controloverthebuyer'sbusinessoperations.Infact,inmost
businessopportunityprograms,there'snocontinuing
relationshipbetweenthesellerandthebuyerafterthesaleis
made.

4. According to Peter Druckerthere are three types of Opportunities:
Additive Opportunities
Complementary Opportunities
BreakthroughOpportunities
Types of Business Opportunity

5. Market oriented
Feasible
Profit oriented
Specific
Motivational
Legal
Ethical
Product
Essential requirements of Business Opportunity

6. Opportunity Identification
Opportunityidentificationandevaluationisaverydifficulttask.Mostgood
businessopportunitiesdonotsuddenlyappear,butratherresultfroman
entrepreneur’salertnesstopossibilities,orinsomecase,theestablishmentof
mechanismsthatidentifypotentialopportunities.
PrimeAreasofOpportunityIdentification:

7. A) Prime Areas of Opportunity Identification:
1) Profits:
In profit making enterprises, profit should not be the end in itself. Profit should
be the beginning, acting as seed money for more products, more payments,
more dividends, more tax payments, more jobs and more opportunities.
2) Growth:
Growth is another primary objective of business. Business should grow in all
directions over a period. An enterprise, which remains stagnant for long, is
presumed to suffer from an organic defect.
3) Power:
Business has vast resources (in the form of money, materials, men and know-
how) at its command. These resources confer enormous economic and political
power on owners and managers of business ventures.
4) Employee Satisfaction and Development:
Concern for employees continues to be an important aspect of management,
contrary to an expectation the human element will lose its significance thanks
to automation.

8. A)PrimeAreasofOpportunityIdentification:
5)QualityProductsandServices:
Thosewhoinsistedonandpersistedinqualitysurvivedcompetitionand
stayedaheadofothersonthemarketPersistentqualityearnsbrandloyalty,a
vitalingredientofsuccess.
6)MarketLeadership:
Toearnanicheforoneselfinthemarket,innovationisthekeyfactor.
Innovationmaybeinproduct,advertisement,distribution,financeorinany
otherHeld.
7)Challenging:
Businessoffersvastscopeandposesformidablechallenges.Successina
businessventuresnacksoftheabilitiesofindividualswhoownandfailure
betraystheirinabilityandincompetence.
8)JoyofCreation:
Newideasandinnovationsaregivenashapeandareconvenedintouseful
productsandservicesthroughthebusiness.

9. A)PrimeAreasofOpportunityIdentification:
9)ServicetoSociety:
Businessisapartofsocietyandhasseveralobligationstowardsit.Someof
themare:
a)Providingsafeandqualitygoodsatreasonableprices;
b)Providingemployment;
c)Patronizingculturalandreligiousactivities;
d)Maintainingandprotectingecology:and
e)SupportinglessprivilegedsectionsofpeopleinsocietylikeScheduled
CastesandScheduledTribes,physicallyhandicapped,womenand
children.
10)GoodCorporateCitizenship:
Goodcorporatecitizenshipimpliesthatthebusinessunitcomplieswiththe
rulesoftheland.paystaxestothegovernmentregularly,dischargesits
obligationstosocietyandcaresforitsemployeesandcustomers.

10. Creativity
Definition:
According to Trott“The thinking of novel and appropriate ideas”
Role of Creativity:
•Generating and identifying opportunities
•Applying opportunities
Creative Output:
•Divergent Thinking
•Convergent Thinking

11. Preliminary Evaluation
Selection of Product or Service
Conduct of Market survey
Contractual programmes to collect
sufficient information about proposed
venture
Succeeding in the market
Steps of Business Opportunity

12. Compatible with the promoter
With Government rules & regulations
Easy availability of materials
Potential market
Cost of the project
Analysis of Risk in the project
Preliminary Evaluation

13. Demand for the product or Service
Infrastructure facilities
Government policies
Environmental factor
Location benefit of the product
Selection of Product or Service

14. Raw material availability
Equipment availability
Marketing & Distribution
Consumer behaviour
Conduct of Market survey

15. Severalgovernmentorganizationsnow-a-daysassist
entrepreneursindiscoveringandevaluatingbusinessideas.
Developmentbanks,stateindustrialdevelopment/investment
corporations,technicalconsultancyorganizations,export
promotioncounciletc.
Nationalandinternationaltradefairsareaverygoodsourceof
businessideas.Avisittothesefairsprovidesinformationabout
newproducts/machines.Tradefairsandexhibitionsprovide
opportunitiesforassessingthemarkettrendsintermsofdemand
potentialandtypeofproductsrequired.
Contractual programmes to collect sufficient
information about proposed venture

16. EDP Programme
ObjectivesoftheEDPProgramme:
The EDP was considered as a part of the Industrial Policy which was
articulated in the Five Year National Economic and Social Development
Plans, with the following important objectives:
1)To identify and train potential entrepreneurs.
2)To develop necessary knowledge and skills among the participants.
3)To help in analysing the various options to select the most
appropriate product suiting to the entrepreneur and the market.
4)To give a clear picture about the process and procedures involved in
setting up an small scale Industrial unit or a bigger unit.
5)To develop and strengthen entrepreneurial quality and motivation
or need for achievement.
6)To motivate the entrepreneurial instinct.
7)To impart basic managerial skills and understandings to run the
project efficiently and effectively.

17. 8)Toanalyzetheenvironmentalissuestobeaddressedrelatingtothe
proposedproject.
9)Todevelopvariousbusiness-relatedskillsofmarketing,quality
managementproduction,distributionandhumanresource
managementetc.
10)Tomakethepotentialentrepreneursknowaboutthepossiblerisksand
failuresoftheprojectandmakethemlearnhowtoovercomethese
problems.
11)Toenabletheentrepreneurstocommunicateclearlyandeffectively.
12)Todevelopteambuilding,technologyup-gradation,growthandabove
allbroadvisionaboutthebusiness.
13)Todevelopapassionforintegrity,honestyandindustrialdiscipline.
14)TomakehimlearnthebasicsofIndustrialLaws,FactoriesActand
workersrightsandexpectationssothathecaneasilyovercomethelegal
problems.
15)ToformulatethedetailedProjectReportorprojectsfortheproducts

18. Following are the important features which help the
entrepreneur to succeed in the market:
1.Study people and their requirements before
beginning any project.
2. Recognize unsatisfied needs.
3. Design product better than competitor
4. Continuous feedback
5. Commitment to innovation
Succeeding in the market

19. EntrepreneurialOpportunitySearchandIdentification:
Inordertoestablishanentrepreneurialsystemanentrepreneurneedsto
takethefollowingsteps:
Establishing of the Enterprise
Personnel
Input Requirement
Idea Selection
Commercial Viability
Technical Feasibility
Process the Ideas
Study of Projects Profiles
Sources of Ideas
Search for Business ideas

20. B) Entrepreneurial Opportunity Search and Identification:
To establish an entrepreneurial system an entrepreneur needs to take the
following steps:
1) Search for Business ideas:
The first step of entrepreneurial system is search for business ideas. The idea
may originate from various sources e.g. success story of a friend or relative,
demand for certain products, visits the trade fairs and exhibitions, study of
project profiles and industrial potential surveys, meetings with government
agencies etc.
2) Sources of Ideas:
A business idea may be discovered from the following:
a) Observing Markets:
Careful observation of markets can reveal a business idea. Market surveys
can also reveal the demand and to take into the account anticipated
changes in fashions, income levels, technology etc.
b) Prospective Consumers:
Consumers knows best what he wants and the habits/tastes which are
going to be popular in near future. Contacts with prospective consumers
can also reveal the features that should be built into a product/service.

21. B)EntrepreneurialOpportunitySearchandIdentification:
c)DevelopmentinOtherNations:
Peopleinunderdevelopedcountriesgenerallyfollowthefashiontrendsof
developedcountriesforexamplevideo,washingmachines,microovensetc,
3)StudyofProjectsProfiles:
Variousgovernmentandprivateagenciespublishperiodicprofilesofvarious
projectsandindustries.
a)GovernmentOrganizations:
Severalgovernmentorganizationsnow-a-daysassistentrepreneursin
discoveringandevaluatingbusinessideas.Developmentbanks,state
industrialdevelopment/investmentcorporations,technicalconsultancy
organizations,exportpromotioncounciletc.
b)TradeFairsandExhibition:
Nationalandinternationaltradefairsareaverygoodsourceofbusiness
ideas.Avisittothesefairsprovidesinformationaboutnew
products/machines.Tradefairsandexhibitionsprovideopportunitiesfor
assessingthemarkettrendsintermsofdemandpotentialandtypeof
productsrequired.

22. B) Entrepreneurial Opportunity Search and Identification:
4) Process the Ideas:
Once business ideas are discovered, screening and testing of these ideas is
done. The following considerations are significantly in the evaluation and testing
of business ideas.
5) Technical Feasibility:
It refers to the possibility of producing the product. Technical feasibility of an
idea is judged in terms of availability of necessary technology, machinery and
equipment, labour skills and raw materials.
6) Commercial Viability:
A cost benefit analysis is required to ascertain the profitability of the ideas. An
elaborate study of market conditions and prevailing situation is made to assess
the viability and prospectus of the proposed projects.
7) Idea Selection:
The feasibility report is analyzed to finally choose the most promising idea.

23. B) Entrepreneurial Opportunity Search and Identification:
8) Input Requirement:
Once the promoter is convinced of the feasibility and profitability of the project he
assembles the necessary resources to launch the enterprise. He has to choose
partners/collaborates, collect the required finances and acquire land and buildings,
plant and machinery, furniture and fixtures, patents, employees etc.
9) Personnel:
People are the most valuable asset of an enterprise and this asset does not
depreciate.
10) Establishing of the Enterprise:
This is the last step of the entrepreneurial system. It is very important step. In this
phase, the entrepreneur integrates their resources to establish the enterprise.

25. Divergent thinkingis a thought process or method
used to generate creative ideas by exploring many
possible solutions. It typically occurs in a
spontaneous, free-flowing, "non-linear" manner,
such that many ideas are generated in an emergent
cognitive fashion.
Divergent Thinking Mode

27. 1.Six Thinking Hats: (coloursare given)
Questions (white)
Emotional (red)
Bad points judgement (black)
Good points judgement (yellow)
Creativity (green)
Thinking blue)
2. Brainstorming
3. Lateral Thinking (Random entry idea generating tool,
Provocation idea generating tool, Challenge idea
generating tool)
Divergent Thinking Tools

28. Environmental scanning
•Environmental scanning is a process of gathering,
analyzing, and dispensing information for tactical or strategic
purposes.
•Carefulmonitoringofanorganization'sinternalandexternal
environmentsfordetectingearlysignsofopportunitiesand
threatsthatmayinfluenceitscurrentandfutureplans.
•Itismonitoringandinterpretingsocial,political,economicand
technologicaleventstospotbuddingtrendsthatcould
eventuallyimpactindustry

29. PURPOSE OF ENVIRONMENTALSCANNING
•Effective utilisation ofresources
•Constant monitoring ofresources
•Strategyformulation
•Identification of threats andopportunities
•Useful for themanagers
•Prediction offuture

30. Factors to be considered for
Environmental Scanning
External
environment of
business
Events
Expectatio
ns of
people
Issues
Trends

31. Ad-hoc scanning -Short term, infrequent
examinations usually initiated by a crisis
Regular scanning -Studies done on a regular
schedule (e.g. once a year)
Continuous scanning (also called continuous
learning) -continuous structured data
collection and processing on a broad range of
environmental factors
Kinds of environmentalscanning

32. •SWOT Analysis
•ETOP (Environmental Threat and
Opportunities Profile)
•PEST Analysis
•Five Force Analysis
Environment Scanning Techniques

33. SWOTAnalysis
•SWOT stands for Strengths, Weaknesses,
Opportunities and Threats
Identification of the threats and opportunities in the
external environment and strengths and weaknesses
in the internal environment of the firms are the
cornerstone of business policy formulation.
It is the SWOT analysis which determines the course
of action to ensure the growth / survival of the firm.

34. A scan of the external macro-environment in which the
firm operates can be expressed in terms of the following
factors:
Political Economic Social Technological
The acronym PEST (or sometimes rearranged as
"STEP") is used to describe a framework for the analysis
of these macro environmental factors.

35. •PoliticalFactors:-Politicalfactorsinclude
governmentregulationsandlegalissuesand
definebothformalandinformalrulesunderwhich
thefirmmustoperate.Someexamplesinclude:
tax policy
employment laws
environmental regulations
trade restrictions and tariffs
political stability

36. •Economic Factors :-Economic factors affect the
purchasing power of potential customers and the firm's
cost of capital. The following are examples of factors in
the macro economy:
economicgrowth
interestrates
exchangerates
inflation rate

37. SocialFactors
Socialfactorsincludethedemographicandculturalaspectsofthe
externalmicroenvironment.Thesefactorsaffectcustomerneeds
andthesizeofpotentialmarkets.Somesocialfactorsinclude:
healthconsciousness
populationgrowthrate
agedistribution
emphasisonsafety
TechnologicalFactors:-Technologicalfactorscanlowerbarriersto
entry,reduceminimumefficientproductionlevels,andinfluence
outsourcingdecisions.Sometechnologicalfactorsinclude:
R&Dactivity
Automation
technologyincentives
rateoftechnologicalchange

38. Five forceanalysis
•Threat Of NewEntrants
•Threat OfSubstitutes
•Bargaining Power OfBuyers
•Bargaining Power OfSuppliers
•Rivalry Among ExistingFirms

39. •Macro environmental and industry scanning
are useful as they reveal current conditions of
market. it help managers to predict the future
characteristics of the organizational
environment and hence make decisions today
that will help the firm deal with the
environment of tomorrow
Why?????????

40. Opportunities Screening and Selection
Factors to be considered when assessing the
viability of an opportunity:
•Market Potential
•Routes to the Market
•Protection
•Business viability
•Crawl-out costs

41. Stages of opportunity selection
•Sensing an opportunity
•Idea Generation
•Auditing the resources
•Business Environment analysis
•Opportunity acceptance
•Selection of a project

42. Convergent thinking mode:
opportunity selection
•Convergentthinkingisthetypeofthinking
thatfocusesoncomingupwiththesingle,
well-establishedanswertoaproblem.Itis
orientedtowardderivingthesinglebest,or
mostoftencorrectanswertoaquestion.
•Itprovidesstructuralthinking

43. •Convergent thinking is about:
•finding the best solution
•Also known as analytical thinking
–Solutions arrived at via logical arguments
–Try and find the best / optimal form of the solution
•Use your knowledge / understanding of what makes the
best solution to a given type of problem
•The ideas created by divergent thinking are source
material

45. •
•
•
•
•
Knowledge
Probabilities
Logic
Decision makingstrategies
Answers evaluated from multipletechniques.
Most popular techniques used in
convergent thinking are

46. •Create categories from the data by grouping similar things
together.
•What stands out about the different categories? Establish
evaluation criteria.
Ina team use anaffinity sort to
recognizepatterns.

47. 47

52. Isthisa convergent or
divergent learning activity?

53. Difference between Convergent and
Divergent Thinking
S.No. Convergent Thinking DivergentThinking
1 Aimsfor single correct
solution
Creative generationsof
multiple ideas
2 Exact, Literal and orderlyCreative, associate facts to
generate new ideas
3 Logical solution, focus on
particular aspect and ignore
irrelevant information
Generating alternatives
4 narrowing down of the
choices and choosethe
best solution
Try new perspectives and
making connections across
categories
5 Depend on logics Its a natural brainstorming

54. A general view, examination, or
description of someone or
something.
look closely at or examine (someone
or something).
What is Survey???

55. Amarketsurveyisatoolusedtogather
informationaboutexistingorpotential
customersinacertainmarketorpopulation.
Thestudyofthespendingcharacteristicsand
purchasingpoweroftheconsumerwhoare
withinyourbusiness'sgeographicareaof
operation;aresearchmethodfordefiningthe
marketparametersofabusiness.
Marketing Survey

56. Problems faced by any organization in marketare:-
Customer related
Productrelated
Pricerelated
Promotionrelated
Placerelated
Competition
Problems inMarket

57. Problem Definition
Development of an approach to the problem
Research design formulation
Analyzing the sources of information
Preparation of Data collection forms
Data processing and analysis
Report preparation and presentation
Stages of the Market Survey
Process

58. Maintaincompetitiveness
Analyze market size
Analyze Customer need
Regulation of price
Effectivepromotion
Distribution ChannelManagement
Solution= Marketing Survey

59. Telephonicinterview
Face to faceInterview
Focus groupinterview
Direct mailinterview
E-mail interview
Questionnaire
GroupDiscussion
Marketing SurveyTools

60. Define objectives & specify information to
be collected
Select a sample
Prepare questions for survey
Collect data & analyze information
Prepare report based on data analyzed
Designing MarketSurvey

61. Areas for information collection

64. Desk Research
Observation Method
Experimentation
Depth Interview
Projective Interview
Survey Techniques
Techniques of MarketSurvey

65. Itisaformaldocumentthatdescribesspecificactivities,
events,occurrences,orsubjectsofaprojecttoexplain
progressoftheprojectuptoacertainpointintime.
Thisdocumentispresentedandcommunicatedatproject
statusmeetingstoexplainwhatgoals,deliverablesand
resultsareproducedandwhatactivitiesarestillin
progress.Thedocumentservesasthebasisfordeveloping
thefinalprojectreport.
ItisalsoknowsasFeasibilitystudy.
Preliminary Project Report (PPR)

66. A typical preliminary report for projects highlights the following
data:
•Problem/need: A clear description of the problem or need
the project aims to handle.
•Proposed solution: a brief description of how to address the
problem/need.
•Work effort: An analysis summary of work relevant to the
project.
•Status: current state of project work, including activities
completed and unfinished.
•Evaluation: an analysis and assessment of project work by
specific criteria such as cost-effectiveness, feasibility,
manageability, performance, others.
•Schedule: a timeline with specific milestones and events
related to project work.

67. UnderstandingDemand
AssessingResources
MarketingFeasibility
MarkingaTimeline
Need of Preliminary Project Report

68. BackgroundoftheProject
TermsofReference
ExistingSystem
SystemRequirements
ProposedSystems
FinancialAspects
AlternativesConsidered
Contents of Preliminary Project Report