TECHNOLOGY ENTREPRENEURSHIP

(ENT600)

UNIT 3:
OPPORTUNITY ANALYSIS

ENT600/Unit 3: Opportunity Analysis Entrepreneurship Dept/FBM(2009) 1

 Definition of
Entrepreneurial Opportunity

• Opportunities are an integral component

of the entrepreneurial process

• Entrepreneurial opportunities are defined

as situations in which new products,
services and processes can be introduced
and sold at greater than the cost of
production

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 Concept of
‘Window of Opportunity’
• The entrepreneur must hit the “window of
opportunity” for which the opportunity
exists

• Window of opportunity is defined as that

too often short period of time during which
an opportunity must be acted on or
missed

• It also describes the time period in which

a firm can realistically enter a new market
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Entrepreneurship Dept/FBM(2009) 3
Analysis
 Concept of
‘Window of Opportunity’
• Once the market for a new product is established,
its window of opportunity opens

• As the market grows, firms enter and try to

establish a profitable position

• At some point, the market matures, and the

window of opportunity closes

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 Example 0f ‘Window of Opportunity’

• For example, in the case of Internet search

engines. Yahoo!, the first search engine,
appeared in 1995, and the market grew quickly,
with the addition of Lycos, Excite, Hotbot, Alta
Vista, and others. Google entered the market in
1998, sporting advanced search technology.
Since then, the search engine market has
matured, and the window of opportunity has
essentially closed

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Entrepreneurship Dept/FBM(2009) 5
Analysis
 Characteristics of an Attractive Opportunity

• Timely
• a current need, unmet demand or problem (e.g.
vaccine for bird flu, drugs to prevent obesity)

• Solvable
• a problem that can be solved in the near future with
accessible resources (e.g. a cure for cancerous
diseases, a more efficient public transport to reduce
congestion and traffic jams)

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 Characteristics of an Attractive Opportunity
• Important
– the customer deems their problem or need important to
them (e.g. energy-saving air conditioner or petrol
saving devices that work)

• Profitable
– the customer will pay for the solution and allow the
enterprise to profit (e.g. security products, multi function
printers)

• Context
– a favorable regulatory and industry situation (e.g. on-
line business transaction , genuine investment
schemes that promised high returns)

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Entrepreneurship Dept/FBM(2009) 7
Analysis
 Opportunity Analysis – A Process Approach

Opportunity Evaluate
discovery the
opportunity

Technology- Go
Exploitation
based idea decision
of
blueprint
opportunity

Reject

Look
elsewhere

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 Opportunity Discovery
Sources of business ideas include:
• Patent office
• The Intellectual Property Corporation of Malaysia is an agency
under the Ministry of Domestic Trade, Cooperative and
Consumerism. This agency can be a good source of business
ideas that can be retrieved easily from their online patent
search and patent gazette hosted on its website

• University Research & Development

• provides an endless stream of research findings that can be
commercialized. Local universities play an important role in
providing knowledge that will help businesses grow into new
market segments and develop new products

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 Opportunity Discovery
• Research Institutes
• considered as reliable sources of business ideas on various
fields. Examples of research institutes in Malaysia include the
Malaysian Agricultural Research & Development Institute
(MARDI), Standards and Industrial Research Institute of
Malaysia (SIRIM)

• Independent research firms

• these firms are where customized forecasts and market
analyses can be purchased. These forecasts allow for a fuller
understanding of how specific trends create opportunities.
Survey Research Malaysia Sdn. Bhd, Frank Small & Associates
(S.E. Asia) Sdn. Bhd and A.C. Nielson are some of the research
firms that produce these reports

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 Opportunity Pull (Market Driven) vs
Capability Push (Technology Driven)
Opportunity can either be:

• Opportunity pull (market driven)

• occurs when there is a need or problem that requires a
solution. An example is the need for a pharmaceutical that can
mitigate or cure the effects of AIDS. This type of opportunity
can be called opportunity pull, since the size of the opportunity
draws opportunity seekers to attempt to exploit it.

• Capability push (technology driven)

• occurs from the discovery of a capability or resource that can
be applied to a problem or need. An example of this type of
opportunity is the discovery of a new technology, such as digital
television. This type of opportunity can be called a capability
push, since it flows from a capability or resource availability.
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 Protecting Ideas from Being Lost or Stolen
• Intellectual property (IP) is any product of human intellect
that is intangible but has value in the marketplace.

• It can be protected through tools such as patents,

trademarks, copyrights and trade secrets, which will be
discussed in depth in Unit 7

• As a rule, a mere idea or concept does not qualify for

intellectual property protection; that protection comes later
when the idea is translated into a more concrete form

• At the opportunity discovery stage, however, there are three

steps that should be taken when a potentially valuable idea is
generated:

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 Protecting Ideas from Being Lost or Stolen
Step 1
• The idea should be put into a tangible form – either entered into a physical
idea logbook or saved on a computer disk and dated
• When using a physical logbook, be sure that it is bound so that it cannot be
alleged that a page was added and make all entries in ink and have them
witnessed and signed
Step 2
• The idea, whether it is recorded in a physical idea logbook or saved in a
computer file, should be secured
• The extent to which an idea should be secured depends on the
circumstances because a firm may want new ideas to be discussed in the
early stages of refining a business idea
Step 3
• Avoid making a voluntary disclosure of an idea in a way that forfeits your
claim to its exclusive rights
• In general, the intellectual property laws seek to protect and reward the
originators of ideas as long as they are prudent and try to protect the ideas

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 Ownership of Technology Idea

• When the technology idea is already being

owned, there must be negotiation or discussion
between the would-be entrepreneur and the IP
owner before embarking on the business project

• The IP owner could be a researcher-scientist

whose only interest is in doing research but not
in commercializing the research output

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 Evaluate the Opportunity
• Evaluating opportunities Involves internal
and external factors
• Internal factors relate more to the
entrepreneurial individual capabilities and
intentions
• External factors relate to the company
and business environment

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Entrepreneurship Dept/FBM(2009) 15
Analysis
 Evaluate the Opportunity
Internal factors that include:
• Capabilities
• the ability or quality (knowledge, experience, and
skill) necessary to develop the business venture
• Resources
• include financial, physical, and human resources
consistent with the magnitude of the business venture
• Interest
• the will, commitment, and passion to pursue the
business venture

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 Evaluate the Opportunity
External factors include:
• Market
– involves determining the size of the market and the potential
customers

• Financial
– involves determining the costs to be incurred in developing
the business venture

• Technical
– involves determining the requirements to proceed with
the idea that include machineries, raw materials, the
processes and infrastructure

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 Evaluate the opportunity (cont external factors)

• Economic forces
• have a direct impact on the level of disposable income
and consumer buying patterns. For e.g., increased
interest in the branded high-end market for consumer
goods

• Social and cultural trends

• increasing predominance of two-income households
leaves less time to cook at home and the increasing
focus on health care and fitness, as the result of new
medical information warning of the hazards of being
overweight
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 Evaluate the opportunity
(cont: external factors) )

• Technological advances

– provide opportunities to help people satisfy

basic needs and desires in a better or
more convenient way.
– For e.g. the cell phone provides the mobile
population the ability to communicate with
its co-workers, customers, friends, and
families from anywhere and everywhere

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 Evaluate the opportunity
(cont: external factors )
• Political and regulatory changes
– New regulations create opportunities for
entrepreneurs to start firms to help companies
comply with these laws.
– E.g. OSHA standard, has opened up business
opportunities for consulting companies to help
other companies ensure compliance.
– Political change also leads to new business and
product opportunities.
– E.g., global political instability and the threat of
terrorism have resulted in many firms becoming
more security conscious.

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Entrepreneurship Dept/FBM(2009) 20
Analysis
 Feasibility Study
• The outcome of the evaluation of opportunity is a feasibility study

• A feasibility study is a preliminary study undertaken before the

real work of a project starts to ascertain the likelihood of the
project’s success

• A well-prepared feasibility study can be an effective evaluation

tool to determine whether an entrepreneurial idea is a potentially
successful one

• In addition, the feasibility study can serve as a basis for the

preparation of a technology-based idea blueprint

• This topic will be discussed in detail in Unit 5

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 Making decision
• Once the opportunity is evaluated, a decision has to be made
whether to proceed to the preparation of a technology-based idea
blueprint or to explore other possibilities by looking elsewhere

• The entrepreneur must make a difficult decision whether to act or

not on a good potential opportunity

• The factors to be considered in making the decision include

whether:
- the venture opportunity is consistent with the entrepreneur’s
capabilities, knowledge, and experience
- the product will give significant value to the customer
- the entrepreneur can attract the necessary financial, physical,
and human resources required by the venture opportunity
- the expected return of the venture is consistent with the risk of
the venture
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 Technology-based idea blueprint

• This document summarizes the entrepreneur’s

proposal of a business venture

• It is like a road map for the entrepreneur, offering

him directions for his new venture and allowing
him to chart out his strategies

• This topic will be dealt with in greater detail in

Unit 4

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 Exploitation of Opportunity
There are three key options to exploit opportunities
• Outright sale
• in the context of Intellectual Property (IP), it involves an outright sale of IP by
the owner to a third party. This outright sale can also be termed as an
assignment. This implies that the seller retains no obligation for ongoing support
or management of the IP. This is in contrast to Licensing

• Licensing
• involves a legal permission from a patent owner that allows a third party to use
or practice an invention. Licensing technology is one way for inventors to
commercialize their ideas

• Spin-off company
• A spin-off company is a new company formed by a split from a larger one, such
as a new company formed from a university research group or business
incubator.

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