Fundamentals of Entrepreneurship

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CHAPTER

OPPORTUNITY IDENTIFICATION

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Objectives
The objectives of this chapter are to:
provide an understanding of a viable(workable) business
opportunity by identifying, observing and analysing relevant
variables and trends in the environment that can be a source of
good opportunities
provide students with knowledge and skills in analysing and
identifying the most attractive and suitable business
opportunities using SWOT analysis and strategic planning
method
provide students with skills in developing a business model to
capture and turn a business opportunity into a viable business
start-up
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Learning Outcomes
At the end of this chapter, students should be able to:
develop generic skills in identifying and capturing
opportunities in their career and life
apply generic analytical skills such as the application of
SWOT analysis to their work
be creative and innovative in developing new business
models or marketable products
work in groups effectively and harmoniously
inculcate a life-long attitude and commitment toward
continuous self-improvement and professional
development throughout their career
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Introduction
Fundamentally,

all business organizations exist to provide a

service or product to their customers at a price which can give
profit to the entrepreneurs and provide value to the customers.
Therefore, most business opportunities evolve and develop from
an effort to fill a gap in the form of needs, wants and creation of
value to the customers.

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Scanning the Environment

Improvement of existing products or introduction of better
quality new products.
Fulfilling the gaps of needs, wants and creation of value to
customers.
Opportunities based on local market or business advantage
such as supply and demand, competition, cost advantage,
quality advantage, reputation and brand advantage, etc.
Opportunities based on macro factors such as

technology
demographic, geographic and psychographic factors
political
trend, etc.

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Fundamentals of Entrepreneurship
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Business Ideas
The following are examples of possible sources of business ideas:
Based on work experience.
Based on hobby and interest.
Based on chance encounters or observations while travelling.
Based on family business.
Based on suggestion from spouse( ), siblings and friends.
Based on business networks.
Based on local needs, wants, problem or finding gaps in the market
place.
Based on market trend or market growth potential.
Based on copying successful business model.
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Business Ideas (cont.)

Based on franchise business.

Based on searching and seeking of good opportunities in the
environment.
Based on experimentation, trial and error methods and better
product development.
Based on building internal strengths such as skills, capability,
experiences, resources and networks so that you become the best
and most suitable person to capture the opportunity. These
additional strengths that you build may make opportunities seek
you or single you out from your competitors.
Based on readings from magazines, books and internet.
Looking for good existing business for sale.

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Screening, Analysis and Selection

of the Opportunities
By nature, business environment is always like a competitive
game, only the best will win the competition.

In order to win the game, an entrepreneur must choose a sector that

suits his interest, aspiration, strength, capabilities and resources and
find a market opportunity that offers him attractive and positive
factors such as a sizable market, high growth market and minimum
competition.

He needs to identify a business that he enjoys doing and has the

skills to produce high quality product and can make this product
at a cheaper cost and thus, can sell at an attractive price and in
the process, makes some profit and contributes better value to
the customers.
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Critical Success Factors of an

Entrepreneur
Entrepreneurial characteristic and traits such as being
hardworking, alert to opportunities, perseverance(determination),
willing to take calculated risks, tolerance for ambiguity, high need
for achievement, internal locus of control, goal oriented, etc.
Knowledge and experience in the field.
Soft skills such as leadership, communication and negotiation
skills.

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Critical Success Factors of an

Entrepreneur (cont.)
Adequate resources such as capital and human resource.
Good networking with potential customers, suppliers, experts,
potential workers, bankers and investors.
Good viable business opportunities with many positive and
attractive environmental factors such as market size, market
growth, minimum or tolerable competition, good support system
and a good business concept, strategy, sound business plan and
meticulous execution details.

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Adequacy Threshold

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Strategic Planning For Small

Business
Strength, Weakness, Opportunities and Threat (SWOT)
Analysis
Using

the SWOT analysis, an entrepreneur can identify attractive

and favourable business opportunities that match his/her strengths.

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Strategic Planning For Small

Business (cont.)
Strength, Weakness, Opportunities and Threat (SWOT) Analysis

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Macroenvironment Analysis

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Selection of Business
Opportunities

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Business Model

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Business Identification

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