Planning for a New Enterprise:

Business Opportunity Identification

Prof. Sudir K. Jain*

Adjunct Professor & Former HoD
Department of Management Studies
Indian Institute of technology Delhi
New Delhi – 110016
*skjain@dms.iitd.ac.in, skjain51@hotmail.com
 Some Important Features of
WTO Era & Implications
• Reduction in Customs Duties → Increase in
International Trade → Global Opportunities
→ Global Competition

• National Treatment

• TRIPS – An Integral Part of WTO →

Importance of Technology & Patents

• International Technology Transfer

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 Future Scenario
• Globalization of industry
• Outsourcing: a general norm
• Lesser meaning of national boundaries
• Price cutting & cost cutting
• Opportunities for SMEs
• Pro-active people to win
• China, India, …

→Background for Planning for New Enterprise

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 INDIA: BACKGROUND
• India has suffered from poverty for several centuries

• Our nation needs to develop

• Entrepreneurial Success can be achieved through Training

• Any good learner can be trained for entrepreneurial

success

• Entrepreneurs are job creators

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 Some Successful Entrepreneurs
Bill Gates (Microsoft)
Laxmi Mittal (Mittal Steels, Arcelor Mittal)
Narayanamurthy (Infosys)
Ajim Premji (Wipro)
Relate these
Karsanbhai Patel (Nirma) entrepreneurs
Rajendra Pawar (NIIT) with the
Anji Reddy (Dr Reddy’s Lab) nature &
Subhash Dandekar (Camlin) importance of
Satya Prakash Mathur (Sumeet) their ventures
H. S. Ranka (Modern Syntex)
R.R.Gandhi & L.R.Gandhi (Vadilal Icecream)
Munjals (Hero Cycles & Hero Honda)
K. P. Singh (DLF)
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 MOST IMPORTANT SUCCESS FACTOR
• Own/Self Determination
• Determination
• Determination
• Determination
• Determination
• Determination
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 Steps in Entrepreneurial Success
• Start a Micro-enterprise

• Convert it into a Small enterprise

• Grow it to Medium sized enterprise

• Go for IPO and convert it to a Large enterprise

• Ethically strategize to become GLOBAL (MNC)

(Mc Donald’s has over 36,000 outlets)
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 Entrepreneurship Training &
Support Institutions (1/3)
Ministry of Skill Development &
Entrepreneurship
• National Skill Development Agency (NSDA)

• National Skill Development Corporation

• National Institute for Entrepreneurship & Small

Business Development (NIESBUD), Noida

• Indian Institute of Entrepreneurship (IIE), Guwahati

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 Entrepreneurship Training &
Support Institutions (2/3)
Ministry of MSME
• National Institute for MSME (NI-MSME), Hyderabad
[Previously: National Institute for Small Industries Extension & Training (NISIET)]

• National Small Industries Corporation (NSIC)

• 70 field offices and 21 autonomous bodies
– Tool Rooms
– Training Institutions
– Project-cum-Process Development Centers
• MSME Development Institutes (MSME-DIs): 30 + 28
branches); previously: Small Industries Service Institutes (SISIs)
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 Entrepreneurship Training &
Support Institutions (3/3)
• Ministry of Food Processing Industries → NIFTEM
• Ministry of S&T: NSTEDB → EDCs
• Ministry of HRD → IITs, NITs, Universities, other
academic institutions: EDCs, EBDCs (2003-2006)
• Industry Associations: PHDCCI, FICCI, State CCIs
• Entrepreneurship Development Institute of India (EDII)
• Other State-level EDIs

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 MSME Act (2006)
(w.e.f. October 2006)

Investment* in Plant & Machinery

Micro Enterprises : Rs. 2.5 mn

Small Enterprises : Rs. 50 mn

Medium Enterprises : Rs. 100 mn

Large Enterprises : >Rs. 100 mn

* EXCLUDING LAND, BUILDING & POLLUTION CONTROL

EQUIPMENT

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 Planning
for
New Enterprise

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 Entrepreneurship:
Why, Who, When, Where, How, …
• Why: Government interest & People’s interest
• Who should become entrepreneur?
• Areas of Planning
• Opportunity identification
• Business Plan formulation
• How to set up an enterprise?

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 Why Is Govt. Keen to
Promote Entrepreneurship
• SMEs support LSEs & MNCs
• Employment generation
• Low per unit investment for employment
generation
• Low recession-induced unemployment
• Need of the citizens
• Low priced products to masses
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 Who Should Become Entrepreneur

• Need to achieve

• Perseverance

• Moderate risk taker

• Willing to face uncertainty

• Independence
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 When to Become Entrepreneur

• Family background: Business or Orgn. Employment

• Academic Merit – Alternatives → Opportunity Cost

• Confidence to employ & manage people

• Needed experience

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• Where
• Near to your place
• Govt. incentives
• Near the market
• Near the availability of raw material
• How
– Areas of Planning
– Major Decisions
– Identification of Business Opportunity
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 Areas of Planning
• Resource Market
• Internal – company size etc.
• Market – distributors/dealers/retailers
• Market – customers
• Environment – media

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 Major Decisions

• Decision to become an entrepreneur

• Identification of Business Opportunity
• Business plan formulation and its
implementation
• Entrepreneurial continuum (variety, scale etc.)

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 Selection of Right
Business Opportunity

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Identification of Business Opportunity – 1/8
• SWOT Analysis: Understanding of one’s own
capabilities, strengths, weaknesses limitations
(incl. gender, education etc.) & preferences
• Exploring all possible and suitable opportunities
available within given conditions & environment
• Taking final decision about product/service, after
comparative analysis
• PLC Stage: Early Growth Stage

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Identification of Business Opportunity – 2/8
Resource based ideas:
• Industry based on mineral, agricultural,
marine and forest resources

• Waste-based products such as agro-waste,

wood-waste, metal-waste, flyash etc.

07 Feb’2024

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Identification of Business Opportunity – 3/8

Linkage Related Ideas:

• Backward or forward integration from existing
lines of manufacture

• Ancillary development projects

• Industry based on substitution

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Identification of Business Opportunity – 4/8

Export or Import Related Ideas:

• Export-oriented activities
• Import substituting products/services

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Identification of Business Opportunity – 5/8
Market Shift or Growth-Related Ideas:
• Changing Pattern of Consumption
(eating out, tourism etc.)

• Growth in New Products’ Demand

– (Instant Photograph) Polaroid camera
– Movie camera
– Digital camera
– Camera in Mobile handset
– Instant Noodles (1980s onwards)
– OHP (1980s & 1990s); LCD Projector (2000s)
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Identification of Business Opportunity – 6/8

Govt. Policy-based Ideas:

• Service Sector Ideas
• Government Policies, Priorities and Plans
– Toilets in every house (2014-19)
– Water tap in every house (2019-23)
– Infrastructure: Roads, Railways, Airports, Hospitals,
Housing, Piped gas connection in each house,
Manufacturing, Millets, Educational Institutions (Medical
Colleges, Foreign type universities), Energy (Hydrogen,
Ethanol), Solar Energy for Zero Electricity bill),

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Identification of Business Opportunity – 7/8

Special Product Ideas:

Research and Invention-based Products
• Skill/Knowledge-based Products (s/w)

• Products based on institutional or Government purchases

• Products bought in bulk by Institutions such as

Hospitals/Schools etc.

• Foreign collaborations for products (or high-quality

expensive products) that are generally not available locally

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Identification of Business Opportunity – 8/8

Ideas Based on Unserved Needs:

• Needs remaining unserved
• Needs unsatisfactorily served
• Needs served at higher costs
• Potential needs
• Emerging needs

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 Business Opportunity Ideas: Needs

• Education Sector
• Health Sector
• Transportation Sector
• Communication Sector
• Needs unsatisfactorily served
• Needs served at higher costs
• Potential needs
• Emerging needs
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 Thank you

30 Prof. Sudhir K. Jain, IIT Delhi 2/11/2024

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