TECHNOLOGY ENTREPRENEURSHIP(ENT600) UNIT 3: OPPORTUNITY ANALYSIS Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 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. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 2 • Window of opportunity is defined as that too often short period of time during which an opportunity must be acted on or missed. the term “window of opportunity” is used. Concept of ‘Window of Opportunity’ • Often when referring to opportunities. • It also describes the time period in which a firm can realistically enter a new market. • The entrepreneur must hit the “window of opportunity” for which the opportunity exists. Entrepreneurship Dept/FBM ENT600/Unit 3 Opportunity Analysis 3 (2009) . • The term “close” refers to the opportunity potential diminishes due to it being exploited by another entrepreneur or at that period of time has become out-of-date or obsolete. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 4 . Cont… Concept of ‘Window of Opportunity’ • The “window of opportunity” is deemed to be “open” or “close” to denote the degree of attractiveness or exploitation possibilities at a particular time. • The term “open” refers to the opportunity lending itself to be exploited at that time because it has value and potential for wealth creation. Data storage in the early years of desktop computing. the user looks to more storage capacities in a more stable form and much more compact design. Hence. Changing Opportunity – An Example • Data storage in the computing age is essential to the user. the diskette was the key mode of data storage. • As time passes. Entrepreneurship Dept/FBM ENT600/Unit 3 Opportunity Analysis 5 (2009) . the introduction of the pen drive or thumb drive fulfills the new needs of the growing user group. g Twitter or Facebook.e.OPPORTUNITIES IN CYBER ENTREPRENEURSHIP • Unlimited on-line opportunities Examples: • Web designing • Web hosting • On-line business • Cyber business.eg. maintenance services and accessories • Using social media for business . Instagram • On-line market places • Training and consultancy . a current need. a cure for cancerous diseases. unmet demand or problem (e. Solvable .g. Timely . drugs to prevent obesity). a more efficient public transport to reduce congestion and traffic jams) Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 7 .g. a problem that can be solved in the near future with accessible resources (e. vaccine for bird flu. CHARACTERISTICS OF AN ATTRACTIVE OPPORTUNITY 1. 2. Important – The customer deems their problem or need important to them (e. Cont… Characteristics of an Attractive Opportunity 3. multi- function printers). Context – a favorable regulatory and industry situation (e. genuine investment schemes that promised high returns). 4. energy-saving air conditioner or petrol saving devices that work).g. 5.g. on- line business transaction. security products. Profitable – the customer will pay for the solution and allow the enterprise to profit (e.g. Entrepreneurship Dept/FBM ENT600/Unit 3 Opportunity Analysis 8 (2009) . OPPORTUNITY ANALYSIS – A PROCESS APPROACH Opportunity Evaluate the Discovery Opportunity Go Technology- Decision based Idea Blueprint Reject Exploitation Look of Elsewhere Opportunity Entrepreneurship Dept/FBM ENT600/Unit 3 Opportunity Analysis 9 (2009) . Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 10 . • 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. OPPORTUNITY DISCOVERY Sources of business ideas include: • Patent Office The Intellectual Property Corporation of Malaysia (MyiPo) 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. Examples of research institutes in Malaysia include the Malaysian Agricultural Research & Development Institute (MARDI). Entrepreneurship Dept/FBM ENT600/Unit 3 Opportunity Analysis ENT600/Unit 3: Opportunity Analysis 11 (2009) . Standards and Industrial Research Institute of Malaysia (SIRIM). Cont… Opportunity Discovery • Research Institutes Considered as reliable sources of business ideas on various fields. This type of opportunity can be called opportunity pull. 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. An example of this type of opportunity is the discovery of a new technology. 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. such as digital television. since it flows from a capability or resource availability. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 12 . This type of opportunity can be called a capability push. • Internal factors relate more to the entrepreneurial individual capabilities and intentions. EVALUATE THE OPPORTUNITY • Evaluating opportunities involves internal and external factors. • External factors relate to the company and business environment. Entrepreneurship Dept/FBM ENT600/Unit 3 Opportunity Analysis 13 (2009) . Cont… Evaluate the Opportunity (Internal Factors) Internal factors that include: • Capabilities the ability or quality (knowledge. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 14 . and passion to pursue the business venture. and human resources consistent with the magnitude of the business venture. • Interest the will. physical. experience. • Resources include financial. and skill) necessary to develop the business venture. commitment. • Financial involves determining the costs to be incurred in developing the business venture. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 15 . the processes and infrastructure. Evaluate the Opportunity (External Factors) External factors include: • Market involves determining the size of the market and the potential customers. raw materials. • Technical involves determining the requirements to proceed with the idea that include machineries. when incomes are high. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 16 . people are more willing to buy products and services that enhance their lives. Cont… (external factors) Evaluate the opportunity • Economic forces Have a direct impact on the level of disposable income and consumer buying patterns.g. For e. Similarly. a drop in interest rates typically leads to an increase in new home construction and furniture sales. service. the Sony Walkman was developed not because consumers wanted smaller radios. Entrepreneurship Dept/FBM ENT600/Unit 3 Opportunity Analysis 17 (2009) . and business ideas is a fundamental piece of the opportunity recognition puzzle. For example. Cont… (external factors) Evaluate the opportunity • Social and Cultural Trends an understanding of the impact of social and cultural trends and how they affect new product. the persistent proliferation of fast-food restaurants is not due primarily to people’s love of fast food but rather to the fact that people are busy – the increasing predominance of two-income households leaves less time to cook at home. but because people wanted to listen to music while on the move and while exercising. Similarly. For e. people who shave have always wanted to minimize the number of nicks and shaving time and get as close a shave as possible.g. These and other shaving-related desires will probably never change. Cont… (external factors) Evaluate the opportunity • Technological Advances provide opportunities to help people satisfy basic needs and desires in a better or more convenient way. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 18 . What does change is the degree to which new technologies can better satisfy these needs and desires. customers. Similarly. the cell phone provides the mobile population the ability to communicate with its co-workers. and families from anywhere and everywhere. friends. – E.g. – E.g. Cont… (external factors) Evaluate the opportunity • Political and Regulatory Changes – New regulations create opportunities for entrepreneurs to start firms to help companies comply with these laws. has opened up business opportunities for consulting companies to help other companies ensure compliance. Entrepreneurship Dept/FBM ENT600/Unit 3 Opportunity Analysis 19 (2009) . – Political change also leads to new business and product opportunities. OSHA standard. global political instability and the threat of terrorism have resulted in many firms becoming more security conscious. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 20 . Feasibility Study • The outcome of the evaluation of opportunity is a feasibility study a tool to identify whether the business idea is feasible or not. the product will give significant value to the customer . • The entrepreneur must make a difficult decision whether to act or not on a good potential opportunity. Making Decision • Once the opportunity is evaluated.the entrepreneur can attract the necessary financial. and human resources required by the venture opportunity .the expected return of the venture is consistent with the riskDept/FBM Entrepreneurship of the(2009)venture ENT600/Unit 3 Opportunity Analysis 21 . • The factors to be considered in making the decision include whether: . physical. 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. TECHNOLOGY-BASED IDEA BLUEPRINT • This document summarizes the entrepreneur’s proposal of a business venture. Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 22 . Entrepreneurship Dept/FBM (2009) ENT600/Unit 3 Opportunity Analysis 23 . EXPLOITATION OF OPPORTUNITY Exploitation of opportunity for technological- based product can be done through commercialization.