Lecture II-identification of Entrepreneurial Opportunity

MKT 203: FUNDAMENTALS OF
ENTREPRENEURSHIP
Iddrisu Abdul-Rashid
LH 1 & 4
7:30-9:30
MKT 203: FUNDAMENTALS OF
ENTREPRENEURSHIP
Identification of Entrepreneurial
Opportunities
GF 4
1:00-4:00
OUTLINE OF PRESENTATION
 What are business ideas and

opportunities?
 Entrepreneurial process
 Creativity Methods
 Generating small business ideas
 Assessing entrepreneurial ideas
INTRODUCTION
• One of the tenets of entrepreneurship is the
ability to create new and useful ideas that
solve the problems and challenges people
face every day.
• Entrepreneurs achieve success by creating

value in the marketplace when they
combine resources in new and different
ways to gain a competitive edge over rivals
INTRODUCTION
• At its core, entrepreneurship revolves
around the questions of why, when and how
opportunities for the creation of goods and
services in the future arise in an economy.
IDENTIFICATION OF
ENTREPRENEURIAL OPPORTUNITIES
Throughout history, we see that entrepreneurs’ ideas
have changed the world. They have;
• Invented new products and services
• Developed new technology
• Discovered new knowledge
• Improved existing products or services
• Found different ways of providing more goods
And services with fewer resources
IDENTIFICATION OF
What are business ideas and opportunities?

IDENTIFICATION OF
• A business idea is a concept that could be used

to make money. Business ideas are thoughts or
intentions with a potential to be turned into a
business.
Please note that all ideas cannot be successfully
converted into a business
IDENTIFICATION OF

• An opportunity has proven commercial
value.
• All opportunities are based on an idea
but all ideas do not represent genuine
opportunities.
• Opportunities are ideas that work, ideas
that can be transformed into a
successful business
IDENTIFICATION OF
How do you tell the difference between an idea and an

opportunity?
A business opportunity is an idea that has the

potential to become a viable enterprise, with a
place in one or more markets. It earns the title
of ‘an opportunity’ if it:
IDENTIFICATION OF
How do you tell the difference between an idea and an
opportunity?
• Forecasts high gross margins
• Has the potential to break even within 12-36
months
• Has a really dedicated, passionate team
behind it
• Only faces low level, or manageable, risk
(and there are strong contingencies in place)
IDENTIFICATION OF
Opportunity Seeking, Screening,

and Seizing
IDENTIFICATION OF
Entrepreneurial Mind Frame

Entrepreneurial Heart Flame
Entrepreneurial Gut Game
IDENTIFICATION OF
Entrepreneurial Mind Frame

The entrepreneurial mind frame
allows the entrepreneur to see
things in a very positive and
optimistic light in the midst of
crisis or difficult situations.
IDENTIFICATION OF
Entrepreneurial Heart Flame

The entrepreneurial heart flame, also
known as surging passion, refers to
the entrepreneur’s fulfillment in the
act and process of discovery.
IDENTIFICATION OF
Entrepreneurial Gut Game

The entrepreneurial gut game, also
known as intuition, refers to the
ability of the entrepreneur to sense
without using the five senses.
IDENTIFICATION OF
Sources of Opportunities
IDENTIFICATION OF
Macro Environmental Sources of

Opportunities
1. Socio-cultural Environment
2. Political Environment
3. Economic Environment
4. Ecological Environment
5. Technological Environment
IDENTIFICATION OF
Industry Sources of Opportunities
 Participants in industry include:

1. Rivals or competitors in a particular type
of business. True rivals or competitors are
those competing for the same or similar
markets.
IDENTIFICATION OF
 Participants in industry include:

2. Suppliers of input to rivals as well as
suppliers of machinery and equipment,
suppliers of manpower and expertise, and
supplies of merchandise.
IDENTIFICATION OF
3. Consumer market segments being served by
rivals or competitors.
4. Substitute products or services, which

customers shift or turn to.
5. All other support and enabling industries.

IDENTIFICATION OF
Micromarket
 Micromarket refers to the specific
target market segment of a particular
enterprise. These are the target
customers of an enterprise, meaning
those who are currently buying the
goods or services offered by the
enterprise and its direct competitors.
IDENTIFICATION OF
Micromarket
 It likewise pertains to a clearly defined
location or specific customer group
that an enterprise wishes to serve.
IDENTIFICATION OF
Consumer Preferences, Piques, and
Perceptions
 Consumer preferences refer to the tastes of
particular groups of people. In contrast,
consumer dislikes refer to the things that
irritate customers. Either way, the
entrepreneur can explore opportunities
brought about by consumer preferences or
dislikes.
IDENTIFICATION OF
Consumer Preferences, Piques, and
Perceptions
 There are times when the product is not
changed by the enterprise but what changes
is the way consumers perceive the product.
IDENTIFICATION OF
Other Sources
 Another potential source of opportunity is
the entrepreneur’s own set of skills or
expertise, or hobby.
 New knowledge as well as new technology

can be the source of highly innovative
opportunities.
1. Customer preferences change over time.
IDENTIFICATION OF
2. People’s tastes in clothes, music, shoes,
entertainment, dance, sports, hobbies, and even
careers have evolved over the years.
3. What piques customers is a great source of

opportunities.
4. Before the customer is won over, there is first a

battle for the mind. Next, there is a battle for the
heart. Finally, there is a battle for the wallet.
IDENTIFICATION OF
5. The longer the customer wants to use the
product, the greater the chances of creating
lasting loyalty.
6. Opportunities abound in shaping consumer

perceptions or occupying spaces in their minds
or places in their hearts that have not yet been
filled.
.
IDENTIFICATION OF
7. New inventions, new systems and work
processes, new insights about the human
psyche, new applications for old knowledge,
new revelations about how the physical world
works, new interpretations, new combinations
based on the convergence of previous
technologies, new outlooks about how life
should be led, and a host of other new things
are tremendous sources of opportunities.
IDENTIFICATION OF
8. Determining personal preferences and
competencies lay the foundation for a new
business venture.
9. Unexpected occurrences in both the external

and internal environment of the enterprise
indicate that significant changes are happening
and opportunities are sprouting.
IDENTIFICATION OF
Opportunity Screening
IDENTIFICATION OF
The Personal Screen

In screening opportunities, the entrepreneur first has to
consider his or her preferences and capabilities by asking
three basic questions:
1. Do I have the drive to pursue this business

opportunity to the end?
2. Will I spend all my time, effort, and money to make

the business opportunity work?
IDENTIFICATION OF
The Personal Screen

3. Will I sacrifice my existing lifestyle, endure emotional
hardship, and forego my usual comforts to succeed in
this business opportunity?
If “YES” is your answer to all of the above, then you can

begin your earnest pursuit of that opportunity
IDENTIFICATION OF
Risk-Return Grid for
Screening Opportunities
IDENTIFICATION OF
The 12 Rs of Opportunity Screening
1. Relevance to vision, mission, and objectives of the
entrepreneur. The opportunity must be aligned with
what you have as your personal vision, mission, and
objectives for the enterprise you want to set up.
2. Resonance to values. Other than vision, mission, and
objectives, the opportunity must match the values
and desired virtues that you have or wish to impart.
3. Reinforcement of Entrepreneurial Interests. How
does the opportunity resonate with the
entrepreneur’s personal interests, talents, and skills?
IDENTIFICATION OF
4. Revenues. In any entrepreneurial endeavor, it is
important to determine the sales potential of the
products or services you want to offer. Is there a big
enough market out there to grab and nurture for
growth?
5. Responsiveness to customer needs and wants. If the
opportunity that you want to pursue addresses the
unfulfilled or underserved needs and wants of
customers, then you have a better chance of
succeeding.
IDENTIFICATION OF
6. Reach. Opportunities that have good chances of
expanding through branches, distributorships,
dealerships, or franchise outlets in order to attain
rapid growth are better opportunities.
7. Range. The opportunity can potentially lead to a wide

range of possible product or service offerings, thus,
tapping many market segments of the industry.
IDENTIFICATION OF
6. Reach. Opportunities that have good chances of
expanding through branches, distributorships,
dealerships, or franchise outlets in order to attain
rapid growth are better opportunities.
7. Range. The opportunity can potentially lead to a wide

range of possible product or service offerings, thus,
tapping many market segments of the industry.
IDENTIFICATION OF
9. Returns. It is a fact that products with low costs of
production and operations but are sold at higher
prices will definitely yield the highest returns on
investments. Returns can also be intangible;
meaning, they come in the form of high profile
recognition or image projection.
10.Relative Ease of Implementation. Will the
opportunity be relatively easy to implement for the
entrepreneur or will there be a lot of obstacles and
competency gaps to overcome?
IDENTIFICATION OF
9. Resources Required. Opportunities requiring fewer
resources from the entrepreneur may be more
favored than those requiring more resources.
10.Risks. In an entrepreneurial endeavor, there will
always be risks. However, some opportunities carry
more risks than others, such as those with high
technological, market, financial, and people risks.
IDENTIFICATION OF
Opportunity Seizing
IDENTIFICATION OF
The question for the entrepreneur in

Opportunity Seizing is…
“Will I be able to manage, to my

advantage, the critical success factors
and avoid the critical failure factors?”
THANK YOU

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MKT 203: FUNDAMENTALS OF

 What are business ideas and

• Entrepreneurs achieve success by creating

What are business ideas and opportunities?

What are business ideas and opportunities?

• A business idea is a concept that could be used

What are business ideas and opportunities?

How do you tell the difference between an idea and an

A business opportunity is an idea that has the

Opportunity Seeking, Screening,

Entrepreneurial Mind Frame

Entrepreneurial Mind Frame

Entrepreneurial Heart Flame

Entrepreneurial Gut Game

Macro Environmental Sources of

 Participants in industry include:

 Participants in industry include:

4. Substitute products or services, which

5. All other support and enabling industries.

 New knowledge as well as new technology

3. What piques customers is a great source of

4. Before the customer is won over, there is first a

6. Opportunities abound in shaping consumer

9. Unexpected occurrences in both the external

The Personal Screen

1. Do I have the drive to pursue this business

2. Will I spend all my time, effort, and money to make

The Personal Screen

If “YES” is your answer to all of the above, then you can

7. Range. The opportunity can potentially lead to a wide

7. Range. The opportunity can potentially lead to a wide

The question for the entrepreneur in

“Will I be able to manage, to my

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