Esbd Unit 2 Logo

7/18/2019 Esbd Unit 2 Logo

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Unit 2

Recognizing

Opportunities and

Generating Ideas



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Chapter Objectives1 of 3

1. Explain why it’s important to start a new firm when its“winow of opport!nity" is open.

2. Explain the ifference between an opport!nity an an

iea.

3. #escribe the three $eneral approaches entreprene!rs!se to ientify opport!nities.

%. &entify the fo!r environmental trens that are most

instr!mental in creatin$ b!siness opport!nities.

'. (ist the personal characteristics that ma)e some people

better at reco$ni*in$ b!siness opport!nities than others.



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Chapter Objectives2 of 2

+. &entify the five steps in the creative process.

,. #escribe the p!rpose of brainstormin$ an its !se

as an iea $enerator.-. #escribe how to !se library an &nternet research to

$enerate new b!siness ieas.

. Explain the p!rpose of maintainin$ an iea ban).

1/. #escribe three steps for protectin$ ieas from bein$

lost or stolen.



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0hat is n Opport!nity1 of 2

Opport!nity #efine

An opportunity is a favorableset of circumstances that

creates a need for a new

product, service or business.



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0hat is an Opport!nity2 of 2

n opport!nity has fo!r essential !alities



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4hree 0ays to &entify an Opport!nity


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5irst pproach6 Observin$ 4rens1 of 2

Observin$ 4rens4rens create opport!nities for entreprene!rs to p!rs!e.

4he most important trens are6 Economic forces.

7ocial forces.

4echnolo$ical avances.

8olitical action an re$!latory chan$e.

&t’s important to be aware of chan$es in these areas.


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5irst pproach6 Observin$ 4rens2 of 2

Environmental 4rens 7!$$estin$ 9!sinessor 8ro!ct Opport!nity :aps


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4ren 16 Economic 5orces

Economic trens help

etermine areas that are

ripe for new start!ps anareas that start!ps sho!l

avoi.

Example of Economic 4ren

Creatin$ a 5avorable Opport!nity

# wea) economy favors

start!ps that help cons!mers save money.

# n example is

:as9!y.com;

a company starte to helpcons!mers save money on $as.


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4ren 26 7ocial 5orces

7ocial trens alter how

people an b!sinesses

behave an set their

priorities. 4hese trens

provie opport!nities for

new b!sinesses to

accommoate thechan$es.

Examples of 7ocial 4rens

# <etirement of baby boomers.

# 4he increasin$ iversity of

the wor)place.# &ncreasin$ interest in health;

fitness; an wellness.

# Emphasis on alternative

forms of ener$y.

# =ew forms of m!sic an

other

types of entertainment.


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4ren 36 4echnolo$ical vances1 of 2

vances in technolo$y

fre!ently create b!siness

opport!nities.

Examples of Entire &n!stries

that >ave 9een Create as the

<es!lts of 4echnolo$ical

vances

# Comp!ter in!stry

# &nternet

# 9iotechnolo$y

# #i$ital photo$raphy



2-12

4ren 36 4echnolo$ical vances2 of 2

Once a technolo$y is

create; pro!cts often

emer$e to avance it.

Example6 >2/!io

n example is >2/!io; a

company starte by fo!r

former 7an #ie$o 7tateUniversity st!ents; that

ma)es waterproof ho!sin$s

for the pple i8o.

4 % 8 liti l ti < l t



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4ren %6 8olitical ction an <e$!latory

Chan$es1 of 2

8olitical action an

re$!latory chan$es also

provie the basis foropport!nities.

:eneral Example

(aws to protect the environment

have create opport!nities for

entreprene!rs to start firms thathelp other firms comply with

environmental laws an

re$!lations.

4 % 8 liti l ti < l t



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4ren %6 8olitical ction an <e$!latory

Chan$es2 of 2

Company create to help

other companies comply

with a specific law.

7pecific Example

4he =o Chil (eft 9ehin ct

of 2//2 re!ires states to

evelop criterion?baseassessments in basic s)ills to be

perioically $iven to st!ents in

certain $raes. @im an Aay

@leeman; two hi$h school

teachers; starte 7ha)espeare

7!are; a company that helps

hi$h schools comply with the

act.



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7econ pproach6 7olvin$ a 8roblem1 of 2

7olvin$ a 8roblem7ometimes ientifyin$ opport!nities simply involves

noticin$ a problem an finin$ a way to solve it.

4hese problems can be pinpointe thro!$h observin$ trens

an thro!$h more simple means; s!ch as int!ition;

serenipity; or chan$e.



2-16

7econ pproach6 7olvin$ a 8roblem2 of 2

# problem facin$ the U.7. an

other co!ntries is finin$

alternatives to fossil f!els.# lar$e n!mber of

entreprene!rial firms; li)e

this win farm; are bein$

la!nche to solve this problem.

4hi h 5i i : i th



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4hir pproach6 5inin$ :aps in the

Bar)etplace1 of 2

:aps in the Bar)etplace thir approach to ientifyin$ opport!nities is to fin a $ap

in the mar)etplace

$ap in the mar)etplace is often create when a pro!ct orservice is neee by a specific $ro!p of people b!t oesn’trepresent a lar$e eno!$h mar)et to be of interest tomainstream retailers or man!fact!rers.

4hi h 5i i : i th



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4hir pproach6 5inin$ :aps in the

Bar)etplace2 of 2

8ro!ct $aps in the

mar)etplace represent

potentially viable b!siness opport!nities.

7pecific Example

&n 2/// 4ish Cirovolv

reali*e there were no $!itars

on the mar)et maespecifically for women. 4o

fill this $ap; she starte #aisy

<oc) :!itars; a company that

ma)es $!itars j!st for women.



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8ersonal Characteristics of the Entreprene!r

Characteristics that ten to ma)e some people better

at reco$ni*in$ opport!nities than others

%rior &'perience (o)nitive *actors

+ocial etwors (reativity



2-2$

8rior Experience

8rior &n!stry Experience7everal st!ies have shown that prior experience in an

in!stry helps an entreprene!r reco$ni*e b!siness

opport!nities. 9y wor)in$ in an in!stry; an inivi!al may spot a mar)et niche that

is !nerserve.

&t is also possible that by wor)in$ in an in!stry; an inivi!al b!ils

a networ) of social contacts who provie insi$hts that lea to

reco$ni*in$ new opport!nities.



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Co$nitive 5actors

Co$nitive 5actors7t!ies have shown that opport!nity reco$nition may be an

innate s)ill or co$nitive process.

7ome people believe that entreprene!rs have a “sixth sense"

that allows them to see opport!nities that others miss.

4his “sixth sense" is calle entreprene!rial alertness; which

is formally efine as the ability to notice thin$s witho!t

en$a$in$ in eliberate search.



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7ocial =etwor)s1 of 3

7ocial =etwor)s4he extent an epth of an inivi!al’s social networ)

affects opport!nity reco$nition.

8eople who b!il a s!bstantial networ) of social an professional contacts will be expose to more opport!nitiesan ieas than people with sparse networ)s.&n one s!rvey of +' start?!ps; half the fo!ners reporte that

they $ot their b!siness iea thro!$h social contacts.7tron$ 4ie s. 0ea) 4ie <elationshipsll of !s have relationships with other people that are calle

“ties." D7ee next slie.



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=at!re of 7tron$?4ie s. 0ea) 4ie <elationships7tron$?tie relationship are characteri*e by fre!ent

interaction an form between cowor)ers; friens; an

spo!ses.

0ea)?tie relationships are characteri*e by infre!ent

interaction an form between cas!al ac!aintances.

<es!lt&t is more li)ely that an entreprene!r will $et new b!siness

ieas thro!$h wea)?tie rather than stron$?tie relationships.

D7ee next slie.



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7tron$?4ie <elationships 0ea)?4ie <elationships

4hese relationships; whichtypically form between li)e

mine inivi!als; ten to

reinforce insi$hts an ieas

that people alreay have.

4hese relationships; whichform between cas!al

ac!aintances; are not as

apt to be between li)e?

mine inivi!als; so one

person may say somethin$

to another that spar)s a

completely new iea.

0hy wea)?tie relationships lea to more new b!siness ieasthan stron$?tie relationships



2-25

Creativity1 of 2

CreativityCreativity is the process of $eneratin$ a novel or !sef!l

iea.

Opport!nity reco$nition may be; at least in part; a creative

process.

5or an inivi!al; the creative process can be bro)en own

into five sta$es; as shown on the next slie.



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Creativity2 of 2

5ive?7teps to :eneratin$ Creative &eas



2-2

5!ll iew of the Opport!nity <eco$nition

8rocess

#epicts the connection between an awareness of emer$in$ trensan the personal characteristics of the entreprene!r



2-2!

4echni!es 5or :eneratin$ &eas

rainstormin) *ocus /roups

0ibrary and

nternet esearch



2-2"

9rainstormin$

9rainstormin$&s a techni!e !se to $enerate a lar$e n!mber of ieas an

sol!tions to problems !ic)ly.

brainstormin$ “session" typically involves a $ro!p of

people; an sho!l be tar$ete to a specific topic.

<!les for a brainstormin$ session6 =o criticism.

5reewhellin$ is enco!ra$e.

4he session sho!l move !ic)ly.

(eap?fro$$in$ is enco!ra$e.



2-3$

5oc!s :ro!ps

5oc!s :ro!p foc!s $ro!p is a $atherin$ of five to ten people; who have

been selecte base on their common characteristics relative

to the iss!es bein$ isc!sse.

4hese $ro!ps are le by a traine moerator; who !ses the

internal ynamics of the $ro!p environment to $ain insi$ht

into why people feel they way they o abo!t a partic!lar

iss!e.ltho!$h foc!s $ro!ps are !se for a variety of p!rposes;

they can be !se to help $enerate new b!siness ieas.



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(ibrary an &nternet <esearch1 of 3

(ibrary <esearch(ibraries are an often !ner!tili*e so!rce of information

for $eneratin$ new b!siness ieas.

4he best approach is to tal) to a reference librarian; who can

point o!t !sef!l reso!rces; s!ch as in!stry?specific

ma$a*ines; trae jo!rnals; an in!stry reports.

7imply browsin$ thro!$h several iss!es of a trae jo!rnal or

an in!stry report on a topic can spar) new ieas.



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(ibraries an &nternet <esearch2 of 3

(ar$e p!blic an

!niversity libraries

typically have access tosearch en$ines an

in!stry reports that wo!l

cost tho!sans of ollars

to access on yo!r own.

Examples of Usef!l 7earch

En$ines an &n!stry <eports

# (exis?=exis caemic

# 8roF!est# &9&70orl

# Bintel

# 7tanar G 8oor’s =et

vanta$e



2-33

(ibrary an &nternet <esearch3 of 3

&nternet <esearch&f yo! are startin$ from scratch; simply typin$ “new

b!siness ieas" into a search en$ine will pro!ce lin)s to

newspapers an ma$a*ine articles abo!t the “hottest" new

b!siness ieas.

&f yo! have a specific topic in min; settin$ !p :oo$le or

HahooI e?mail alerts will provie yo! to lin)s to a constant

stream of newspaper articles; blo$ posts; an news releasesabo!t the topic.

4ar$ete searches are also !sef!l.



2-34

Other 4echni!es

C!stomer visory 9oars7ome companies set !p c!stomer avisory boars that meet

re$!larly to isc!ss nees; wants; an problems that may

lea to new ieas.

#ay?&n?4he?(ife <esearch type of anthropolo$ical research; where the employees of

a company spen a ay with a c!stomer.



2-35

Enco!ra$in$ =ew &eas

Establishin$ a 5ocal 8oint for &eas7ome firms meet the challen$e of enco!ra$in$; collectin$;

an eval!atin$ ieas by esi$natin$ a specific person to

screen an trac) themJfor if its everyboy’s job; it may beno one’s responsibility.nother approach is to establish an iea ban) Dor va!lt;

which is a physical or i$ital repository for storin$ ieas.

Enco!ra$in$ Creativity at the 5irm (evelCreativity is the raw material that $oes into innovation an

sho!l be enco!ra$e at the or$ani*ational an inivi!als!pervisory level.



8rotectin$ &eas 5rom 9ein$ (ost or 7tolen

7tep 14he iea sho!l be p!t in a tan$ible form s!ch as entere

into a physical iea lo$boo) or save on a comp!ter is);an the ate the iea was first tho!$ht of sho!l be entere.

7tep 24he iea sho!l be sec!re. 4his may seem li)e an obvio!s

step; b!t is often overloo)e.

7tep 3

voi ma)in$ an inavertent or vol!ntary isclos!re of aniea; in a manner that forfeits the ri$ht to claim excl!siveri$hts to it.

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