CHAPTER 4: The window of opportunity

Baphicile Mbata

Part B: The entrepreneurial process

Chapter 4:
The window of
opportunity
© VAN SCHAIK PUBLISHERS
 LEARNING OUTCOMES

 differentiate between an idea and an opportunity

 understand why large organisations leave gaps in the market
 define and understand the concept of a window of
opportunity
 identify and differentiate between the five stages of a window
of opportunity
 understand the issues pertaining to the different stages
of opportunity evaluation
 identify the facets of idea generation
 identify and understand the criteria used to evaluate an
opportunity
 understand the integrated approach to
© VAN SCHAIK PUBLISHERS
 THE OPPORTUNITY

 What is an opportunity?

 Qualities of an opportunity

 Role of the entrepreneur

© VAN SCHAIK PUBLISHERS

 THE ROLE OF IDEAS

 Finding a good idea

A good idea does not necessarily translate

into a brilliant opportunity.

© VAN SCHAIK PUBLISHERS

 WHEN IS AN IDEA AN OPPORTUNITY?

 Idea to opportunity

 Qualities of a good ‘opportunity’

idea

© VAN SCHAIK PUBLISHERS

 SOURCES AND DRIVERS OF IDEAS
AND OPPORTUNITIES

 Techniques for searching for a business idea

– Five broad approaches

 Sources

© VAN SCHAIK PUBLISHERS

 SOURCES AND DRIVERS OF IDEAS AND OPPORTUNITIES

Figure 4.1 The generation of ideas (Textbook page 103)

© VAN SCHAIK PUBLISHERS

 OPPORTUNITY EVALUATION

 Criteria to screen opportunities

– Industry and market issues
– Economics
– Harvest issues
– Management team issues
– Fatal flaw issues
– Personal criteria
– Strategic differentiation

© VAN SCHAIK PUBLISHERS

 OPPORTUNITY EVALUATION

 Industry & market issues

– Factors that influence attractiveness of a market
 Market structure
 Market size
 Market capacity
 Market share
 Cost structure

 Economics

 Harvest issues

 Management team issues

© VAN SCHAIK PUBLISHERS

 OPPORTUNITY EVALUATION

 Fatal flaw issues

– Markets that are too small
– Markets with overwhelming competition
– Markets where the cost of entry is too high
– Markets where entrants are unable to produce
a sustainable competitive advantage

 Personal criteria

 Strategic differentiation

© VAN SCHAIK PUBLISHERS

THE PURSUIT OF OPPORTUNITIES

© VAN SCHAIK PUBLISHERS

 WHY BIG BUSINESSES LEAVE
GAPS IN THE MARKET

 Common reasons for bigger or more

established business leaving gaps in the market
– Failure to see new opportunities
– Underestimation of new opportunities
– Technological inertia
– Cultural inertia
– Politics and internal fighting
– Government intervention to support new and
(smaller) entrants

© VAN SCHAIK PUBLISHERS

 THE WINDOW OF OPPORTUNITY
Figure 4.2 The window of opportunity (Textbook page 110)

© VAN SCHAIK PUBLISHERS

 SEEING, LOCATING, MEASURING AND
OPENING THE WINDOW OF OPPORTUNITY
Figure 4.3 A holistic view of the window of opportunity
(Textbook page 95)

© VAN SCHAIK PUBLISHERS

SEEING, LOCATING, MEASURING AND OPENING THE WINDOW OF OPPORTUNITY

 Seeing the window

 Locating the window

 Measuring the window

 Opening the window

 Closing the window

© VAN SCHAIK PUBLISHERS

SEEING, LOCATING, MEASURING AND OPENING THE WINDOW OF OPPORTUNITY

Figure 4.4 The bases of competitive advantage (Textbook page 113)

© VAN SCHAIK PUBLISHERS

 THE REAL-TIME WINDOW OF
OPPORTUNITY – A HOLISTIC APPROACH

© VAN SCHAIK PUBLISHERS

 CONTINUOUS OPPORTUNITY
EVALUATION AND UTILISATION

© VAN SCHAIK PUBLISHERS

 LOOKING BACK

1. What is the window of opportunity? 

2. When pursuing opportunities, what factors make

it easy for smaller entrepreneurs to effectively
take advantage of opportunities overlooked by
larger companies? 

3. For what reasons do larger organisations leave gaps

in the market that smaller firms can effectively take
advantage of? 

4. What is the difference between an idea and

an opportunity? 
© VAN SCHAIK PUBLISHERS
 LOOKING BACK

5. What are the common generators of business

ideas and opportunities in southern Africa? 

6. What criteria are used to screen opportunities? 

7. What actions are required of the entrepreneur when

‘seeing’ the window of opportunity? 

8. What actions are required of the entrepreneur when

‘locating’ the window of opportunity? 

9. What actions are required of the entrepreneur when

‘measuring’ the window of opportunity? 

© VAN SCHAIK PUBLISHERS

 KEY TERMS

 Ambiguity
 Closing the window
 Entrepreneur
 Fatal flaw issues
 Idea
 Idea generation
 Locating the window
 Market
 Market capacity
 Market conditions
 Market share
© VAN SCHAIK PUBLISHERS
 KEY TERMS

 Market size
 Measuring the window
 Opening the window
 Opportunity
 Opportunity evaluation
 Seeing the window
 Stakeholders
 Sustainable competitive advantage
 Uncertainty
 Value addition
 Venture
 Window of opportunity
© VAN SCHAIK PUBLISHERS
 LOOKING BACK - ANSWERS

1. What is the window of opportunity?

– The window of opportunity is the time period available for
creating new ventures.

© VAN SCHAIK PUBLISHERS

2. When pursuing opportunities, what factors make
it easy for smaller entrepreneurs to effectively take
advantage of opportunities overlooked by larger
companies?
– Larger organisations’
• organisational inertia
• organisational complacence
• bureaucracy.

© VAN SCHAIK PUBLISHERS

3. For what reasons do larger organisations leave gaps
in the market that smaller firms can effectively take
advantage of?
– Failure to take advantage of new opportunities
– Underestimation of opportunities
– Technological inertia
– Cultural inertia
– Politics and internal fighting
– Government intervention to support SMMEs

© VAN SCHAIK PUBLISHERS

4. What is the difference between an idea and
an opportunity?
– An idea does not necessarily automatically translate into
an opportunity.
– An opportunity is an idea that is attractive, durable and
timely and anchored in a product or service that
creates
or adds value for the end-user.

© VAN SCHAIK PUBLISHERS

5. What are the common generators of business
ideas
and opportunities in southern Africa?
– Skills, expertise and aptitude
– Common needs
– Existing problems
– Everyday problems
– Other sources

© VAN SCHAIK PUBLISHERS

6. What criteria are used to screen
opportunities?
– Industry and market issues
– Economics
– Harvest issues
– Management team
– Fatal flaw issues
– Personal criteria
– Strategic differentiation

© VAN SCHAIK PUBLISHERS

7. What actions are required of the entrepreneur when
‘seeing’ the window of opportunity?
– Actively searching the market for gaps that have been
left open by competitors
– Identifying ways that customer needs can be
served while providing and making use of a
sustainable
competitive advantage
– Creativity and innovation

© VAN SCHAIK PUBLISHERS

8. What actions are required of the entrepreneur when
‘locating’ the window of opportunity?
– Understanding the location of the window of opportunity
– Positioning the product or service favourably in relation to
competitors’ products and services

© VAN SCHAIK PUBLISHERS

9. What actions are required of the entrepreneur when
‘measuring’ the window of opportunity?
– Ensuring that the opportunity is feasible and viable by
carrying out feasibility and viability studies

© VAN SCHAIK PUBLISHERS