CHAPTER 5

OPPORTUNITY IDENTIFICATION
AND SELECTION
Enterprise Planning
Process
Step 1. Idea Generation

Step 2. Selection and Screening

Step 3. 1 Resource Analysis

Step 3.2 Environmental Analysis
Step 3.3 Personal Value Analysis
Identifying Business
Opportunities
 Environment
 Needs and wants
 Market segmentation
 Socio-cultural
 Technology
 Nature and political environment
 Demand and supply analysis
 Product Substitution
 People’s skills
 Government Assistance Program
Selecting an Entrepreneurial
Undertaking
A. Availability of Raw Materials

B. Availability of Market

C. Availability of Technology

D. Availability of Skills

E. Government Priority

F. Strategic Fit

G. Ease of Implementation

H. Risk Exposure

I. Profitability

J. Field of Interest
STRENGTHS, WEAKNESSES,
OPPORTUNITIES, THREATS
Strengths
Strengths are within the control of the entrepreneur and
they occur at present. Strengths should be capitalized
and harnessed to make the weaknesses redundant.

 Cheap raw materials

 Technical expertise
 Good network with customers
 Managerial experience
 Distribution systems
Weaknesses
Weaknesses are within the control of the
entrepreneur; they occur at present. They are “lack
of…”, “missing…”, or weak points. Weakness should
be eliminated as fast as possible.
 No control over raw materials availability
 Technological obsolescence
 Inexperienced managers/owners
 Lack of working capital
 Low levels of stocks in times of peak sales
 Lack of promotion

 Limited product life

Opportunities
Opportunities are positive or favourable factors in
the environment which the entrepreneur should take
advantage of or which make his project idea
potentially viable.
 Few and weak competitors
 Rising income of target market
 Growing demand
 Similar products making profit
 Technical assistance available

 Low interest on loans

 No such products in the market
 Scarcity of product in the locality
 Favourable government policy
 Favourable government programs and priorities
Threats
Threats are negative or unfavourable external factors
in the environment and normally beyond the control
of the entrepreneur. They affect adversely the
business if not eliminated or overcome.

 Rising raw material costs

 Government bureaucracy
 Raw materials shortages
 Natural disasters
 Graft and corruption
 Changing government regulations

 Too much competition

 Restive labor force
 Piracy of skilled labor
 Insufficient power
 Poor infrastructure
 Smuggling
Coverage of SWOT Analysis
Financial Aspects
Physical Aspects
Management, Supervisory and Operator Capabilities
Market
Management Information
Supply of Raw Materials
Social Environment
Production Process
 SWOT
Analysis Framework
OPPORTUNITY IDENTIFICATION
AND SELECTION
 Informal Screening
CRITERIA

Marketability of the product

Availability of raw materials
Availability of technology for making the product
Availability of skilled workers
Investment requirement
Perceived profitability
Government priority or support
Environmental considerations
I. Screening of Top 10 Business Opportunities

Legend: Rating:

R - Rating 5 - Excellent
W - Weight 4 - Very
Satisfactory
WS - Weighted Score 3 -
Satisfactory
2 - Fair
1 - Poor
Note:

1. Total of the Weights (W) of the criteria used in rating one project must equal
to 100%.
2. Multiply Rating by Weight (W) to arrive at Weighted Score (WS) for each
opportunity.
3. Other relevant criteria not listed may also be used.
II. Screening of Top 5 Business Opportunities

Rating:

5 - Excellent
4 - Very Satisfactory
3 - Satisfactory
2 - Fair
1 - Poor
II. Screening of Top 5 Business Opportunities
Rubric:

CRITERIA DESCRIPTION
FINANCIAL ASPECT: This aspect Cost The cost of the resources
refers to the level of cost the needed
opportunity will incur and the level
profit the opportunity is likely to Likely Profit Profitability of the
gain. product

Range of potential
MARKETING ASPECT: This aspect Target Market customers
refers to the target market of the
opportunity and its likely Competitors that are
competition. Competition already established in
the
market
Duration of making the
PRODUCTION ASPECT: This refers Time product
to the production time and the
risks of production. The risks of producing &
Risk launching the product
Materials and equipment
TECHNICAL ASPECT: This refers to Availability that will be used in
the availability of materials and making the product
the technology for enhancing the Technological equipment
product. Technology available for enhancing
the product quality
III. SWOT ANALYSIS OF TOP 3