Pathways to
Entrepreneurship
Chapter 3
Recognizing,Assesin
g,and Exploiting
Opportunities
Opportunity Recognition Process
Opportunity – is situation or occasion that makes it
possible to do something that
you want to do.
- is an exploitable set of
circumstances with uncertain
outcome requiring a commitment
of resources and involving exposure to risk.
Opportunity Recognition – often entails phases
that potential
entrepreneurs take before introducing
a product or service to the market.
Five Stages of Opportunity Recognition
Precondition – this is a preparatory stage, during which the
individuals assesses his knowledge
of the market.
Conception – this is the gestation phase, during which
entrepreneurial intentions and ideas are
generated,using logic,creative thinking
or both.
Visioning – this third stage provides the individual a hunch that can
serve as an opportunity for business.
Assessment – this stage involves the evaluation on whether the idea
can
be realized or not.
Factors in Opportunity Recognition
Market Awareness – refers to personal exposure to the market and its
components including customers
and suppliers.
Entrepreneurial Readiness – on the other hand, refers to a variety of
features of an individual to start a
business venture.
It covers all types of resources that he
individual possesses including financial,
physical and human resources.
Connections – business opportunity recognition is heightened when
the individual has a diversity of networks. Families
and friends as well business associates can bring
about opportunities that we can pursue.
Opportunity Assessments
- refers to the process of evaluating the likelihood that the
opportunity can be realized.
Elements
Product or Service – a business opportunity is primarily the
potential of introducing a new
product or service to the market.
Market Opportunity – this elements is the assessment process
refers to the appraisal of the
characteristics of the market.
Costing and Pricing – a product which may be considered valuable
by consumers may not be
affordable.
Resource Requirements – in any business ventures, you will need
inputs in the product process.
*Intermediate inputs are also called raw materials that
need a further processing.
*Factor inputs are called the processing inputs which
include labor, capital, and technology.
Risk – any business enterprise will face risk in the course of its
operations. Risk are uncertain situations that can increase the
probability of loss or failure of a business venture.
*Internal risks, which emanate from the management of
resources, can be prepared and controlled.
*External risks, which arise from various environments
affecting business, can be managed.
Entrepreneural commitment - the last element in the process of
entrepreneurial assessment relates to the commitment of the
individual to pursue the realization of the business.
Opportunity Pathways
Rational or Traditional Approach – it uses systematic procedures in
proceeding with the implementation of a business opportunity.
Intuitive Approach – it starts with the recognition of an opportunity and
proceeds directly to the grabbing of the opportunity after sensing that it can be
done.
Product Planning and Development Process
- This section summarizes the development process of a
product from its inception, introduction in the market, and final decline
Precommercialization Phase
Idea Stage – this refers to the formation of business ideas. It starts
with an entrepreneurial intent and proceeds with the
development of a business idea using logical and
creativity.
Concept Stage - the refinement of ideas and visualization of an
idea that can serve as business opportunity is called
the concept stage.
Product Development – after the visualization of the idea the
business idea is concretized with the production
of a prototype.
Test Market Stage – at this phase the product or service is
introduced to the market after a series of
evaluation and feedback from potential customers.
Commercialization Stage Product Life Cycle
Introduction – with a positive feedback after a series of market
testing, the product is formally introduced to
the market.
Growth – with a successful marketing campaign the product is
recognized by the market.
Maturity – at this stage, the product is widely accepted with the
emergence of brand loyalty and patronage from its
target market.
Decline - once the market for the product has been saturated
and innovation possibilities for it have been fully
explored, the product might start to lose its
market power.
