Lesson 3: Opportunity Seeking, Screening, and

Seizing

Schedule: Time Frame: 2 weeks

Objective:

At the end of the chapter, the learner-entrepreneurs are expected to:

 Integrate the competencies, skills, and learning acquired by the student from the
enterprise business plan.
 Utilize the tools, methods and learning acquired.
 Complete an enterprise business plan for a product or service idea.
 Identify and coordinate with external partners for the identified product or service
idea; and
 Start execution and implementation of the completed enterprise business plan.

Introduction
Opportunity Seeking
Entrepreneurs are innovative opportunity seeker. They have endless curiosity to discover new or
different ideas will work in the marketplace. This is what separates entrepreneurs form the ordinary
businessman whose main objective is simply to earn profits from producing, buying, and selling goods.
Entrepreneurs create value by introducing new product or services or finding better ways of
making them. These may include innovation in terms of product design or addition of new product
features to existing ones. They may also tinker on improving their operational capability by employing
new technologies that will bring them greater efficiency, better economies, and even enable them to
reach unparalleled superiority. They may also consider expanding their reach by creating new markets or
maximizing existing market reach. At the highest level, entrepreneurs may totally change the prevailing
business paradigm by rendering its obsolete through the introduction of disruptive technologies, process,
and system.

Discussion

Entrepreneurial Mind Frame, Heart Flame, and Gut Game

Essential to an entrepreneur’s opportunity seeking are the entrepreneurial mind frame, heart
flame, and gut game.

The entrepreneurial mind frame allows the entrepreneur to see things in a very positive and
optimistic light in the midst of crisis of difficult situations. Instead of being discouraged, the entrepreneur
is able to use these problematic situations as inspiration in creating something innovative. In fact, in
Chinese writing, the word Crisis is composed of two characters. The first character means “danger” while
the second character means “opportunity”.

If there is one commonality between an inventor and an entrepreneur, it is their surging passion
or the entrepreneurial heart flame. Driven by passion, they are drawn to find fulfillment in the act an
process of discovery.

Passion – is that great desire to attain a vision or fulfill a mission. It is about wanting something so much
that a person would be willing to totally devote one’s self to the quest. Despite several setbacks or
disappointments, the entrepreneur is not easily disheartened, but is rather driven to persevere even
more.

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The final ingredient is the entrepreneurial gut game. This refer to the ability of the entrepreneur to sense
without using the five senses. This is also known as intuition. Somehow, the entrepreneur just knows
whether something will work or not without necessitating logical, systematic, and sequential thinking.
The gut game also connotes courage or, in the local dialect, “lakas ng loob” (strong intestinal fortitude). It
is simply confidence in one’s self and the firm belief that everything within reach so long as you aspire for
it.

The Many Source of Opportunities

There are many ways to uncover or discover opportunities. Some have to do with looking at the
big picture and noticing emerging trends and patterns. Other have to do with finding out what specific
customers segments are being targeted in the marketplace. Still, other come from new technologies and
new knowledge.
Macro Environment Source of Opportunity

The macro environment refers to the “big or macro forces” that affect the area, the industry, and the
market, which the enterprise belongs to. They influence how business should be conducted, how
consumers will behave, how supply and demand will move, how different competitors would positions
themselves, and how the cost of doing business will proceed.
The macro environment forces can be divided into five categories composed of the social, political,
economic, ecological, and technological dimensions or SPEET.
1. Socio-Cultural Environment
The socio-cultural environment includes the demographics and cultural dimensions that govern
the relevant entrepreneurial endeavor. Taking this aspect into consideration helps the
entrepreneur asses trends and dynamics of the bigger consumer population their beliefs, tastes,
customs, and traditions. It looks at social structure and shifts in social status and behavior.

2. Political Environment
The political environment defines the governance system of the country or the local area of
business. It includes all the laws, rules and regulations that govern business practices as well as
the permits, approvals, and licenses necessary to operate the business.

3. Economic Environment
Suppl and demand forces mainly drive the macro economic environment. They are the same
factors that drive the interest and foreign exchange rates that fluctuate with the movement of the
market forces. In any country, the income levels and purchasing power of its people as well as the
competitiveness (or un-competitiveness) of its industries and enterprise are source of
opportunities.

4. Ecological Environment
The ecological environment includes all natural resources and the ecosystem, habitat of the men,
animals, plants, an minerals. There is a growing awareness in the world today that will make this
factor more and more important for countries, industries, and business.

5. Technological Environment
New scientific and technological discoveries, which often lead to the launch and
commercialization of new products with superior attributes or to rendering the old one obsolete,
are the entrepreneur’s nightmares.
Legal Factors
Are the elements and bodies that are directly involved in the legislation and interpretation of laws
and ordinances directly affecting the business.
Industry Environment
Government - refers to the system or institution that handles the affairs of a particular country.
Five Types/Classifications of Government:
 democracy
 autocracy
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  republic
 monarchy
 dictatorship

Suppliers - refer to individual persons or companies that provide the required materials, parts, or services
to the business.
 criteria of Selecting the Supplier:
 quality of the goods or services
 terms of payment
 stability
 ability to respond to urgent needs
 proximity of the location
Customers - are the buyers of goods or services produced or rendered by the business.
- it must constantly evaluate and study the behavior, tastes, preferences, inclinations, and
even future activities of the customers.
Competitors - are the forces existing in the industry environment that produce, sell, or render products or
services which are similar to those of the business.
 Direct Competitors – produce and sell similar products or services.
 Indirect Competitors – produce and sell substitute products.
Employees - are the workers of the business who are highly responsible for the production of goods or
delivery or services to the customers.
- They help ensure the quality and quantity of products or services provided to the
customers.
- They are the backbone of the business
Creditors - refer to banks, financial institutions, and financial intermediaries engaged in the lending of
money to the borrower usually for a fee or charge in the form of interest.

SEEKING THE OPPORTUNITY

Internal / Microenvironment - refers to the environment within the business.

a. Business Resources
 are assets or properties owned or controlled by the business.
 can either be tangible or intangible.
Tangible Resources – are assets of the business that have physical appearance and form.
 Current Resources – are used, applied, or consumed within a short period or one
year.
 Noncurrent or fixed Resources – are properties whose usefulness or benefits extend
beyond one year.
Intangible Resources – are assets of the business that do not have physical appearance of form.
 A business without resources cannot exist and a business with insufficient resources
cannot sustain the operation.

b. Business Culture
 a collection of values, beliefs, principles, and expectations learned and shared by employees,
founders, stakeholders, and members of the managements.
 reflects the overall image of the business to the community.
 reflects the identity of the employees but not dependent on the culture of dominant employees in
the business.

Types of Cultures operating in the Internal Environment:

 Culture of the Business or Organization
 Individual Culture of the Employees

The entrepreneur has the primary responsibility to handle the level of cultural acceptance and cultural
integration among Filipino workers in the business.
 Cultural Acceptance – refers to the degree by which the employees accept the culture of the unit or
business.

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  Cultural Integration – refers to the degree by which all units across the business accept and share
a common culture.

c. Business Structure
 refers to the formal organizational arrangement of the business in terms of hierarchy of positions,
flow of communication, relationship of functional areas, and production and marketing processes
 the complexity of the business structure depends on the type of business, nature of operation,
capital base requirement, leadership style, and scope of operation.

METHODS OFGENERATING IDEAS

1. Focused Group Discussion (FGD)
 is conducted by an entrepreneur with the assistance of a moderator to gather the views of selected
consumers on certain issues related to their buying behavior.
2. Brainstorming
 is an activity similar to an FGD, that allows the participants to share creative ideas using the
following rules:
(a) no destructive criticism or judgement is allowed;
(b) wider ideas are accepted;
(c) more ideas are preferred; and
(d) improvement of others’ ideas is allowed. In short, brainstorming is a fun discussion with
lenient rules.
3. Brainwriting or Internet brainstorming
 it is exactly the same as brainstorming except that the channel used is not face-to-face, but in
writing or online.
4. Problem inventory analysis
 is similar to the FGD except that the participants are already given an inventory of product or
service problems. participants will just identify from the list given the compelling problem(s) of a
potential product or service instead of generating the ideas from them.

Opportunity Screening
 is the process of cautiously selecting the best opportunity.
 the selection will depend on the entrepreneur’s internal intent and the external intent which will
address the compelling needs of the target market.
 Risk Appetite – refers to the entrepreneur’s tolerance of business risks.
 The crafting of a business plan starts only when entrepreneurs already said no to many
opportunities and said yes to one forceful opportunity, to which they will devote their time and
resources.

The entrepreneur should say no to an opportunity if it does not contain any of these business opportunity
elements:
 Has superior value to customers
 Solves a compelling problem, issue, a need, or a want
 It’s a potential cash cow.
 Matches with the entrepreneur’s skills, resources, and risk appetite

Opportunity Screening Matrix (OSM) aims to assist entrepreneur concretize the evidence that the chosen
opportunity (or opportunities) is well worth pursuing.

The 12 Rs of Opportunity Screening

1. Relevance to vision, mission, and objectives of the entrepreneur.
2. Resonance to values.
3. Reinforcement of Entrepreneurial Interests
4. Revenues – determine the sales potential of the products or services you want to offer.
5. Responsiveness to customer needs and wants.
6. Reach – attainment of rapid growth
7. Range – potentially lead to a wide range of possible product or service offerings
8. Revolutionary Impact – “next big thing” or a game-changer that will revolutionize the industry
9. Returns – high returns on investment
10. Relative Ease of Implementation – easy to implement
11. Resources Required – fewer resources is better than those requiring more resources
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 12. Risks

Opportunity Seizing
 It is the last step in opportunity spotting and assessment.
 the “pushing through” with the chosen opportunity.
Innovation
 is the process of positively improving an existing product or service.
 it is a key driver for economic growth.
Three (3) types of Innovations according to the degree of distinctiveness:
1. Breakthrough innovation
 may also include inventions, occur infrequently as these establish the platform on which future
innovations in an area are developed.
 must be protected by patent, a trade secret, or a copyright.
 Examples: Internet, computer, or airplane
2. Technological innovation
 occur more frequently than breakthrough innovations.
 are technological advancements of an existing product or service. These innovations need to be
protected too.
 Examples: wireless fidelity or Wi-Fi, laptop, and jet airplane.
3. Ordinary innovations
 occur ordinarily as the name implies.
 are commonly originating from market analysis and technology pull instead of a technology push.
 This means that the market has a strong influence in the implementation of an innovation.
 Examples: unlimited Internet plans of telecommunications companies, a wireless mouse, and
airbus for economical travellers.
The last process, called the seizing process, involves refining and developing this opportunity. The
refining process is called product or service planning and development process.
Four (4) stages:
 Idea stage – in this stage, the entrepreneur determines what are the feasible products and/or
services that will perfectly suit the opportunity.
- Market evaluation
- Assessment of the value of new products/services
- Elimination of unappealing products/services
 Concept stage – the developed idea will undergo a consumer acceptance test. This test includes
getting the initial reactions of the primary target market and the distribution channel.
- Conversational interviews

 Product development stage – in this stage, the entrepreneur leverages on the information
generated from the prospective customers via the concept stage.
- Determine actual reactions from prospective customers
- Conduct consumer panel
 Test marketing stage – this stage validates the work done from the first three stages to measure
success in the commercialization of the product or service.
- Actual sales results

Once the 3S of opportunity spotting and assessment have been diligently done, the entrepreneur
should now be ready to prepare a comprehensive business plan that covers marketing, operations, and
financial plans.

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