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Explain how each of the following can be a source of new business opportunity: unexpected events?
Occurring in the external environment or within the firm. For example political change policy change, economic events (GFC) or natural events (disasters)
Explain how each of the following can be a source of new business opportunity: incongruities in the market place:
The difference between what is available in the market place and what people desire to be available in the market place. For example people would want a harmless cigarette (market pulled opportunity), or in the 40-50’s need for fast loading onto and off of shipping vessels, solved by shipping containers as opposed to loading via hand. Or subway diversifying fast food with ‘healthy fast food’
Explain how each of the following can be a source of new business opportunity: process needs:
- Finding solutions to problems that arise in the process of trying to achieve an overall
- goal. For example building better, faster and safer cars or with advances in computer technology there is a need for improvements in hardware and software.
- Opportunities as all of the small steps of a process
Explain how each of the following can be a source of new business opportunity: industry and market changes:
- Changes to industry operating conditions and changes to demand. Industry changes may include competitor changes, changes to tariffs or policy changes that may expand or reduce
- capabilities. Market changes may include changes to demand patterns, customer
- tastes, values, culture or income, for example fashion tastes or food tastes.
Explain how each of the following can be a source of new business opportunity: demographic changes:
Demand pattern changes, for example targeting a new market like young women in the corporate industry that may not have previously been a viable target market.
Explain how each of the following can be a source of new business opportunity: changes in perception and social attitudes:
Demand pattern changes. For example a shift towards environmentally friendly products, e.g. Earth brand cleaning products.
Explain how each of the following can be a source of new business opportunity: new knowledge:
New inventions, for example the steam power, automobiles, aeroplanes, the internet, mp3 music etc
How would you go about calculating the expected value of an opportunity?
- Is a function of the value of:
- The perceive size if the
- reward if successful
- The perceived riskiness of the
- The cost to the entrepreneur
- is unsuccessful
What is the value to an entrepreneur in calculating the expected value of a possible business opportunity?
It will allow the entrepreneurs another factor to assess whether the opportunity is feasible in term of their personal finances and if they are willing to risk X amount to achieve Y amount of profit. And to assess whether the buying price (if applicable) is appropriate.
Conversely, what are the limitations in using an ‘expected value’ approach to determining whether or not the business opportunity you are assessing
is worth pursuing?
Could be based on little factual information, trends and profits will always vary throughout time. It is difficult to adequately set a value for the perceived reward or riskiness.
If provided with the same resources and encouragement would two different groups of people be likely to identify a similar number of new opportunities and devise a comparable range of innovations? That is, will they display the same level of creativity and entrepreneurial spirit? Why/Why not?
- No they will not, essentially some people
- are more ‘creative’ than others. Individuals will vary in traits that are generally associated with the ability to creative and entrepreneurial activity including psychological characteristics, information and knowledge availability, ability to be creative and cognitive abilities. Given these characteristics it would be expected that individuals with different knowledge bases would likely identify a different range of opportunities.
Explain each of the following and how each can be part of systematic process in identifying new business opportunities:
Environmental scanning, the board environment and specifically target markets will allow opportunities to be identified through analysis of ‘what is missing’. Identifying gaps in markets will allow products/services to be tailored to providing market pulled opportunities.
Focus groups allow more detailed products/services to be assessed by potential buyers to assess whether the product/service is likely to be successful. Is it a product that the market actually wants/needs.
- Market research allows for potential competitors to be identified, has this product already been made by someone else? Can you be competitive in terms of cost and features? Is there a market
- for this product?
- Research and development effort will allow potential entrepreneurs to assess where there
- product will sit in the market and provide all the necessary background information to assess whether the opportunity again is likely to be viable in the context of the wider market.
Identify and explain the factors required for a person to be creative, such that they are able to creatively identify business opportunities and find creative solutions to business problems.
Creative approach to thinking (left and right side of the brain, thinking logically and by association), reservoir of knowledge (broad knowledge base, type and depth) and motivation (extrinsic and intrinsic sources, how motivated one is to be creative)
What actions could you take to improve
your creativity skills (ie starting this year), such that over time you develop your ability to both recognise business opportunities and to realize those opportunities? Explain
- Build a broad rich knowledge base, having a wide knowledge base will allow a wider range of opportunities to be assessed, with more aspects or potential opportunities being understood it is
- likely that better judgement could be employed when identifying opportunities.
- Increase your access to knowledge, would allow for more up to date, relevant information to be accessed allowing
- opportunities to be identified more readily and before others identify them.
Actively try and create connections between the knowledge that you collect, this would allow for knowledge to be link potentially identify a wider range of opportunities by adopting ideas from one area and applying them to another. For example, cameras being put into phones.
Build your practical intelligence – problem solving and analytical, having heighten skills in the area will allow potential entrepreneurs to overcome obstacles that may be holding back potential opportunities.
Identifying what motivates you, will allow you to stay motivated and focus on projects that are of genuine interest and will therefor likely be more successful due to your motivation to make them successful.