TECHNOLOGY ENTREPRENEURSHIP(ENT600) ENT600/Unit 3 Opportunity Analysis 1 • An opportunity is a favorable juncture of circumstances with a good chance for success or progress. It is the job of the entrepreneur to locate new ideas and to put them into action. • Opportunity is a set of favorable circumstances associated with a business idea that award it good chances of progress and future success • 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 can therefore be understood as the activity of identifying and exploiting new business opportunities ENT600/Unit 3 Opportunity Analysis 2 • • • • When referring to opportunities, the term “window of opportunity” is used. Window opportunity is a brief opportunities to do something that will be beneficial or profitable. It is the time period available for new creation that is taking a decisive action at the time or risk wondering what would happen had he acted upon. It is also defined as that too often short period of time during which an opportunity must be acted on or missed ENT600/Unit 3 Opportunity Analysis 3 If you get after then you have to compete with numerous competitors. From timing. Thus. the entrepreneur must hit the “window of opportunity” for which the opportunity exists ENT600/Unit 3 Opportunity Analysis 4 . From opportunities. You can also run the risk of entering as the window is closing. It captures the relationship between timing and opportunities. you do not want to pursue an opportunities with limited potential or open in a short period but long enough to create and maintain customer to profit.• • • Describes the time period in which a firm can realistically enter a new market. if you get to the window well before its open then you have to wait. ENT600/Unit 3 Opportunity Analysis 5 . a window of opportunity closes quickly.• • • • 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 “close” refers to the opportunity potential diminishes due to it being exploited by another entrepreneur or at that period of time has become out-ofdate or obsolete. Often. The term “open” refers to the opportunity lending itself to be exploited at that time because it has value and potential for wealth creation. meaning that someone must take a decisive action at the time or risk wondering what would have happened had he or she acted. In these cases.• • When a window of opportunity emerges. Some salespeople use a hard sell approach in which they suggest that consumers will only be able to get a deal on a certain day or at a certain moment. for example. As a consumer. you may also hear the term “window of opportunity” a lot. as the salesperson may be trying to hurry you into a choice which you will later regret. ENT600/Unit 3 Opportunity Analysis 6 . it is usually a good idea to carefully consider the terms of the sale and the item in question before reaching a decision. some people say that “opportunity is knocking. especially by people who are trying to sell you something.” suggesting that someone would be a fool to ignore the chance. Hence. the introduction of the pen drive or thumb drive fulfills the new needs of the growing user group and now we have compact disc. Data storage in the early years of desktop computing. the diskette was the key mode of data storage then to floppy disk. As time passes. the user looks to more storage capacities in a more stable form and much more compact design.Data storage in the computing age is essential to the user. ENT600/Unit 3 Opportunity Analysis 7 . They used it to listen while working. The engineers were left with a gadget that could not record. One day. portable head set. they were trying to redesign the small portable tape recorder which could reproduce sound in stereo. Mr Ibuka chairman of the board happened to come by and saw the gadget and was reminded of a development project in another part of the organization where they were working to create light. The rest is history and Walkman was born ENT600/Unit 3 Opportunity Analysis 8 . It could only play. Unfortunately it was not possible to reduce the size enough and at the end of the day. weight.In Sony’s cassette tape recorder division. g. unmet demand or problem (e.a problem that can be solved in the near future with accessible resources (e.g. a more efficient public transport to reduce congestion and traffic jams) ENT600/Unit 3 Opportunity Analysis 9 . drugs to prevent obesity) Solvable ◦ .a current need. Timely ◦ . a cure for cancerous diseases. vaccine for bird flu. g.• Important – • Profitable – • The customer deems their problem or need important to them (e.g. online business transaction .g. security products. genuine investment schemes that promised high returns) ENT600/Unit 3 Opportunity Analysis 10 . energy-saving air conditioner or petrol saving devices that work) the customer will pay for the solution and allow the enterprise to profit (e. multi function printers) Context – a favorable regulatory and industry situation (e. It is to ensure that we are on the right track. Can be shown in a diagram. ENT600/Unit 3 Opportunity Analysis 11 . Opportunity analysis is the verification of the proposed business that is viable before entrepreneur spends their time and money into doing the business plan. Opportunity discovery Evaluate the opportunity Go Decision Technology-based idea blueprint Exploitation of opportunity Reject Look elsewhere ENT600/Unit 3 Opportunity Analysis 12 . An organized means whereby new areas of value can be identified. Consists of a structured process and the methods. CONT ……. It is a process that identifies needs and desires that are the source of new concepts and ideas for new business development activities. The Opportunity Discovery process is a precursor to doing market research or creating a business case. tools and techniques that allow an organization to fully explore a new (or even existing) domain to find future potential. ENT600/Unit 3 Opportunity Analysis 13 . 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 CONT ……. Sources of business ideas include: Patent office .The Intellectual Property Corporation of Malaysia is an agency under the Ministry of Domestic Trade. front-end activity that an organization can and should undertake. This steps are the earliest phase. ENT600/Unit 3 Opportunity Analysis 14 . Standards and Industrial Research Institute of Malaysia (SIRIM) CONT …….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 Research Institutes Considered as reliable sources of business ideas on various fields. Examples of research institutes in Malaysia include the Malaysian Agricultural Research & Development Institute (MARDI). ENT600/Unit 3: Opportunity Analysis ENT600/Unit 3 Opportunity Analysis 15 . University Research & Development. Oriented primarily towards satisfying the needs of a specific market Occurs when there is a need or problem that requires a solution Tend to occur when customers are technologically sophisticated Occurs more frequently with older technologies Are mostly incremental innovations where an established market bases its perceptions of opportunity on known technologies. ENT600/Unit 3 Opportunity Analysis 16 . This type of opportunity can be called opportunity pull. since the size of the opportunity draws opportunity seekers to attempt to exploit it. the size of the opportunity attracts opportunity seekers to attempting to exploit it Examples: need for a pharmaceutical that can mitigate or cure the effects of AIDS & drug to mitigate the effect of Alzheimer’s disease. a new technology or capability causes a search for new applications Technical information lies mostly with the innovators. while users tend to be relatively unsophisticated Are often the major source of radical changes in market and organizational structures ENT600/Unit 3 Opportunity Analysis 17 . since it flows from a capability or resource availability. Oriented primarily towards increased technical performance Occurs from the discovery of a capability or resource that can be applied to a problem or need Require that scientists and engineers have direct experience with users in order to apply new technology successfully This type of opportunity can be called a capability push. whether it will attract customers’ attention and bring profits to the entrepreneur ENT600/Unit 3 Opportunity Analysis 18 . It involves by looking at internal and external factors The difference between an idea and an opportunity is whether the entrepreneur can turn it into a product/service and take it to market. the entrepreneur has to assess a number of factors. To evaluate opportunities. The entrepreneur may possess what appears to be an excellent idea. but whether it can be turned into a profitable opportunity has to be explored. He should not just follow established rules but question and examine his assumptions and test them. He should innovate and come up with unconventional ideas. Before pursuing an idea into a commercial opportunity. He should try to expand his idea. brainstorm and develop it considerably. ENT600/Unit 3 Opportunity Analysis 19 . the entrepreneur must analyze it critically by bringing up all possible questions. time needed to break even. The major factors that need to be considered before evaluating an opportunity are the time the entrepreneur is willing to spend on a project. among other things. if there are any barriers to its entry into the market. whether the product/service can bring financial rewards. ENT600/Unit 3 Opportunity Analysis 20 . the daily activities. who the customer is. the working capital. competition and quality of competition. expected market share and investment opportunities. its cash flow and profitability. marketing strategy. the cost involved in launching the product/service in the market. He should ascertain if his product/service is likely to provide a solution to a problem. the preliminary investment. experience.The ability or quality (knowledge. and skill) necessary to develop the business venture Resources. commitment.refer to the will. and passion to pursue the business venture ENT600/Unit 3 Opportunity Analysis 21 .It include financial. and human resources consistent with the magnitude of the business venture Interest .• Internal factors that include: Capabilities . physical. involves determining the requirements to proceed with the idea that include machineries.involves determining the costs to be incurred in developing the business venture Technical . the processes taken and infrastructure use ENT600/Unit 3 Opportunity Analysis 22 . raw materials. External factors include: Market Refer to the 4P’s. Involves determining the size of the market and the potential customers Financial . Still abundance of local resources and need to develop with help of technology.have a direct impact on the level of disposable income and consumer buying patterns.g. service.provide opportunities to help people satisfy basic needs and desires in a better or more convenient way. and business ideas is a fundamental piece of the opportunity recognition puzzle. ENT600/Unit 3 Opportunity Analysis 23 . Similarly. people are more willing to buy products and services that enhance their lives. e. a drop in interest rates typically leads to an increase in new home construction and furniture sales.an understanding of the impact of social and cultural trends and how they affect new product. Social and cultural trends. Economic forces. Technological advances . when incomes are high. Similarly. In addition.For example. customers. the persistent proliferation of fast. and families from anywhere and everywhere ENT600/Unit 3 Opportunity Analysis 24 . the Sony Walkman was developed not because consumers wanted smaller radios. friends. but because people wanted to listen to music while on the move and while exercising. the cell phone provides the mobile Population the ability to communicate with its co Workers. Food restaurants is not due primarily to people’s love of fast food but the fact that people are busy and less time to cook at home. ◦ New regulations create opportunities for entrepreneurs to start firms to help companies comply with these laws. eg speed traps. Enforcement by government indirectly lead to business opportunities. black box. global political instability and the threat of terrorism have resulted in many firms becoming more security conscious. eg. Political and regulatory changes ◦ Political change also leads to new business and product opportunities. safety helmets and OSHA standard ENT600/Unit 3 Opportunity Analysis 25 . Is the outcome of the evaluation of opportunity to identify whether the business idea is feasible or not.• • • It involves gathering. money and frustration. analyzing and evaluating information with the purpose of answering the question: "Should I go into this business?” Conducting a feasibility study before you write your blueprint can help you determine whether or not your idea has true potential to develop into a profitable business. ENT600/Unit 3 Opportunity Analysis 26 . Taking this simple step could save you a lot of time. the entrepreneur must make a difficult decision whether to act or not on a good potential opportunity. The decision is whether to proceed to the preparation of a technology-based idea blueprint or to explore other possibilities by looking elsewhere. ENT600/Unit 3 Opportunity Analysis 27 .• • • Once the opportunity is evaluated. a decision has to be made. Thus. and human resources required by the venture opportunity the expected return of the venture is consistent with the risk of the venture ENT600/Unit 3 Opportunity Analysis 28 .• The factors to be considered in making the decision include whether: the product will give significant value to the customer the entrepreneur can attract the necessary financial. physical. • • A blueprint is something intended as a guide for making something else This document summarizes the entrepreneur’s proposal of a business venture ENT600/Unit 3 Opportunity Analysis 29 . a business opportunity blueprint ideas. opportunity exploitation is a necessary step to generate revenues and thus create a successful business For technological-based product it can be done through commercialization. full-scale operations for products or services created by. Opportunity exploitation refers to activities conducted in order to gain economic returns from the discovery of a potential entrepreneurial opportunity For most entrepreneurs. ENT600/Unit 3 Opportunity Analysis 30 . or derive from.• • • • Opportunity exploitation refers to building efficient.