Opportunity

Recognition
Week 1– Lecture1

Dr. Christabel Divine Brownson

Ag. Director, CED
Akwa Ibom State University
Starting and Managing a New Enterprise
 OpportunityRecognition: a vital first step in
the entrepreneurial process
A search and capture of new ideas that leads
to business opportunity is called opportunity
recognition. The process involves creative
thinking that leads to discovery of new and
useful ideas
 Opportunity is a perceived means of
generating economic value (i.e profit) that
previously has not been exploited and is not
currently being exploited by others.
Starting and Managing a New Enterprise
 Components of Opportunity Recognition Process:
 Engaging in active search for opportunities: access
to appropriate information, entrepreneurs are more
likely than managers to engage in active search for
opportunities and potential but un-tapped sources
of profit.
 Alertness to opportunities: opportunities can be
recognized by individuals who are not actually
searching for them but possess a unique
preparedness to recognize them when they appear.
Depends on an individuals cognitive capacities such
as high intelligence and creativity
 Prior knowledge of a market, industry or customers .
Starting and Managing a New Enterprise
 Sources of innovative Opportunity
 Within the Enterprise or organization:
 The unexpected: unexpected success (unexpected
success in a line of business could be exploited), failure
(unexpected failure can create opportunity) or
unexpected outside event (e.g, book sales amazon)
 The incongruity(the quality of disagreeing being
unsuitable and inappropriate): a discrepancy between
reality as it actually is and reality as it is assumed to be
or at it ‘ought to be’
 Innovation based on process need
 Changes in industry structure or market structure that
catch everyone unawares
Starting and Managing a New Enterprise
 Sources of innovative Opportunity
 Outside the Enterprise, organization or industry:
 Demographics
 Changes in perception, mood & meaning
 New knowledge, both scientific and
nonscientific
 Other Sources of Innovative opportunity
 Work experience
 A similar business
 Hobby or personal interest
 Chance Happening
Starting and Managing a New Enterprise
 Sources of Innovative opportunity
 Family and friends
 Education and Expertise
 Technology transfer
 Discussion with potential or existing customers, existing
suppliers or distributors, discussions with potential or existing
investors/lenders others
 Tool to aid in opportunity identification
 SCAMPER
 S- Substitute: thinking of opportunities that come as a result
of substituting or replacing something that already exist.
 C-Combine: think of ways of combining separate product,
services or whole business to create another distinct
business
Tool to aid in opportunity identification
 SCAMPER
 A- Adapt: what product or service you could adapt
from other industries or fields to your business
 M- Magnify or modify: think of what you could make
more noticeable or dramatic or different in some way
from your competitors. E.g Advert, customer service
 P-put to other uses: think of new ways to use old
products or items could lead to a new business
formation
 E-Eliminate: think of what to get rid of or reduce that
would eliminate something my customer has to do, and
as a result give the customer more thank the or she
expected?
 R-Rearrange: what could you rearrange or reorder in the
way your product or service appear or the way
businesses in your industry look or are decorated or
located?
Evaluation of New Venture Opportunities
 Revenue generating ability: How viable is the idea? Will
the idea generate actual revenues not just assuming
that people like your product/service?
 People: Who are the people behind the idea? Good
and fit team, do you have what it takes to turn the
idea into a business?
 Resources: what resources are required to transform
the idea to something tangible or intangible for
customers consumption?
 Information: what do you know or need to know about
the industry and market for the idea? Info on market
trends, forecasts, competition, customer’s preferences
etc that will affect the way the idea is turned into a
business.