METRO BUSINESS COLLEGE

2OO Arnaiz Street, Avenue Pasay City

CHAPTER - 3

Subject: The Entrepreneurial Mind

Topic: Recognizing, Assessing, and Exploiting Opportunities
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
• Explain the process of recognizing opportunities
• Explain the importance factors in opportunity recognition
• Create an opportunity assessment plan
• Discuss the different pathway to seizing opportunities
• Explain the product planning and development process

INTRODUCTION
The previous two chapters gave us a glimpse of what
entrepreneurship is all about. In Chapter 1, we defined the process of
entrepreneurship, identified the qualities of an entrepreneur, discussed
the key elements of the entrepreneurial process, and examined how
entrepreneurial intentions are formed. In Chapter 2, we focused on the
use of logic and creativity in generating business ideas and in solving
problems.
 OPPORTUNITY RECOGNITION PROCESS

Opportunity is a situation or occasion that makes it possible to do

something that you want to do. There are three elements in this simple
definition. First, you want to do something. In this case you want to
establish your own business enterprise. Second, there are conditions
for the realization of the objective. Third, you must make decisions or
take action on these conditions to realize your objective.
Opportunity recognition often entails phases that potential
entrepreneurs take before introducing a product or service to the
market. The five stages of opportunity recognition, according to Hill,
Shrader, & Lumpkin are summarized as follows:

1. Precondition: individuals assess his knowledge of the market.

His knowledge of the market is extensively shaped by his
educational background.

2. Conception: this is the gestation phase, during which

entrepreneurial intentions and ideas are generated, using logic,
creative thinking both.

3. Visioning: provides the individual a hunch that can serve as an

opportunity for business.

4. Assessment: involves the evaluation on whether the idea can be

realized or not.
 5. Realization: this is the stage when the mental construct or idea is
now felt in its tangible or physical form.
FACTORS IN OPPORTUNITY RECOGNITION
According to them a successful recognition of business
opportunities is influenced by three factors:
a. Market awareness
b. Entrepreneurial readiness
c. Connections

Market awareness refers to personal exposure to the market and its

components including customers and suppliers.
Entrepreneurial readiness refers to a variety of features of an
individual to start a business venture. It covers all types of resources
that individuals possess including financial.
Connections refers to a business opportunity recognition that is
heightened when the individual has a diversity of networks.

OPPORTUNITY ASSESSMENT

Once an idea has been generated and an opportunity has been

recognized from it, there is a need to assess whether this opportunity is
feasible to implement. Several studies found the following elements in
opportunity assessment: product, market, cost, profitability, capital
requirements, and commitment.
Product or Service: Is primarily the potential of introducing a new
product or service to the market.
Market Opportunity: Refers to the appraisal of the characteristics of
the market.
Costing and Pricing: A product which may be considered valued by
consumers may not be affordable.
Profitability: The primary motivation of venturing into business is to
earn profit.
Resource Requirements: In any business venture you will need inputs
in the production process.
Risks: Are uncertain situations that can increase the probability of loss
or failure of a business venture.
Entrepreneurial commitment: The last element in the process of
entrepreneurial assessment relates to the commitment of the individual
to pursue the realization of its business idea.

OPPORTUNITY PATHWAYS
Once the opportunity has been identified, the individual can
subject it to an assessment as described above, proceed with its
implementation, or put the business idea on hold. These two
opportunity pathways are called the rational approach and the intuitive
approach.
PRODUCT PLANNING AND DEVELOPMENT PROCESS

This section summarizes the development process of a product

from its inception, introduction in the market, and final decline. It takes
two main phases, pre-commercialization phase and the
commercialization phase.

• Ideal stage – refers to the formation of business ideas.

• Concept stage – refinement of ideas and visualization of an idea
that can serve as a business opportunity is called the concept
stage.
• Product stage – after visualization of the idea the business idea
is concretized with the production of a prototype.
• Test marketing stage – at this phase the product or service is
introduced in the market after a series of evaluation and feedback
from potential customers.

The various stages of the product life cycle are summarized as follows:

• Introduction: At this stage, the entrepreneur has to devote

resources and time for the marketing of the product.
• Growth: This market recognition is translated into a decision to
purchase the product.
• Maturity: At this stage the product is widely accepted with the
emergence of brand loyalty and patronage from its target market.
• Decline: The decline becomes real when competitive products
with newer innovations and differentiations are introduced and get
accepted by the market.
 METRO BUSINESS COLLEGE
200 St. Arnaiz, Pasay City

Name of Learner: ___________________________

Grade & Section: ___________________________
Subject: The Entrepreneurial Mind

Submission of activities on ______________

QUESTION FOR DISCUSSION?

1. Individuals with high IQs would be better entrepreneurs

than those with lower IQs. Do you agree or disagree with
this statement? Explain your answer.
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2. Given that priority knowledge is an important factor in
opportunity recognition does this mean that younger people
are less likely to recognize business opportunities
compared to older people?
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SUGGESTED LEARNING ACTIVITIES

1. Choose a successful Filipino entrepreneur of your choice.

Search for his/her profile on the Internet. Based on the
write-up on him/her, cite examples on how the role of
connection, market awareness, and entrepreneurial
readiness contributed to his ability to seize business
opportunities.
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