Recognizing

Opportunities &
Generating Ideas
Chapter 2
 Learning Objectives

 1. Difference between ‘opportunity’ & ‘idea’

 2. Understanding Window of Opportunity

 3. How Entrepreneurs identify opportunities

 4. Personal Characteristics of Entrepreneur

 5. Idea generation through ‘Brainstorming’ &

“Focus groups’
 6. Analysis on The Entrepreneurial Process
 Ideas & Opportunities

 Entrepreneurial firms are stimulated either externally

or internally
 1. Idea: A notion or an impression that creates
excitement in the mind of a would be entrepreneur,
which seems like a business opportunity, but often
people confuse ideas with real opportunities.
 2. Opportunity: A favorable set of circumstances that
create the need for a new product or service. However,
opportunities mostly offer a limited “Window”, which
can close quickly.
 4 Qualities of an
Opportunity
Must
attract
Customers

Anchored
on a
product, Ideas to The market
service or
business Business must be
timed
that creates/
adds value Opportunity
for buyer

Must be
a lasting
idea
 Window of Opportunity

• Capitalize on the window of opportunity (time period for market

entrance), which is limited and may close or narrow
 How Opportunities are
recognized ?
 1. Observing Trends (not to be confused with passing fads):
(a) Economic Forces (economy,
disposable income, consumer spending pattern), (b) Social forces
(social & cultural trends, demographic changes, what people think is ‘in’,
(c) Technological Advances (new technologies, emerging technologies, new use of old
technologies), (d) Political &
Regulatory Changes (new political or legal changes)

 2. Businesses for solving existing problems :

e.g. GreatCall Inc. producing Jitterbug

 3. Finding market gaps:

e.g. Security Webcams in Dhaka Apartment Buildings,

Lunch delivery services to offices, etc.
 Examples of Fads in
Bangladesh
 All the 1st generation of domestic airlines companies
in Bangladesh have failed, as they jumped into a
partly opened market just because of the prestige of
owning an airline.
 Rush for Licenses for Call Centers

 Rush for Licenses for new Internet Exchanges

 Rush for Private Landline licenses

 Rush for private TV Channels

 Personal Characteristics for
Opportunity Recognition
“Difference between Opportunity & opportunity recognition”
1. Prior experience in the industry (the corridor
principal)
2. Cognitive Factors (entrepreneurial alertness)
3. Social Networks (Solo entrepreneurs vs network
entrepreneurs)
4. Creative Flair (Process of generating novel or useful
idea)
Importance of Networking

Strong-Tie vs Weak-Tie Networks

 The Creative Process

Preparation Investigation Transformati

on

Verification Illumination Incubation

Implementati
on
 The Creative Process
Preparation:
This step involves getting the mind ready for creative thinking.

Preparation might include:

 A formal education
 on-the job training
 work experience, and
 taking advantage of other learning opportunities.
 The Creative Process

How Can Prepare Your Mind for Creative Thinking

 Adopt attitude of life long student

 Read a lot

 Clip articles of interest to you and make a file for them

 Take time to discuss your ideas with other people

 Join professionals or trade associations

 Studying about other countries and their culture

 Developing listening skill

 Eliminate creative distraction.

 The Creative Process
Investigation:
This step requires developing a solid understanding of the problem or situation ,
decision on hand. To create new ideas and concepts in a particular field , an
individual first must study the problem and understand its basic components.

Transformation:
Transformation involves viewing the similarities and dissimilarities among the
information collected. This phase involves:
 Convergent Thinking is the ability to see similarities and connection
among various data and events
 Divergent Thinking is the ability to see differences among various data and
events
 The Creative Process

To increase the ability to transform the information

collected one should:
 Evaluate the parts of the situation several times
 Rearrange the elements of situation
 Take two nonsensical ideas and combined them.
(Amazon.com)
 Remember that, several approach might be useful
before locking into one particular approach to a
situation.
 The Creative Process

 Incubation:
The subconscious needs time to reflect on the information collected. To an
observer, this phase of the creative process would be quite boring; it looks
as though nothing is happening. Incubation occurs while the individual is
away from the problem, often engaging in some totally unrelated activity.

To enhance the incubation phase of creative process one

should:
 Walk away from the situation
 Take time to daydream
 Relax and play regularly
 Dream about the problem or opportunity
 Work on the problem or opportunity in different environment.
 The Creative Process
 Illumination:
This phase of the creative process occurs at some point during the incubation
stage when a spontaneous breakthrough causes ‘’the light bulb to go on’’.it take
place after five minutes _or five years. In illumination stage, all the previous
stages come to produce the ‘’Eureka factor’’-the creation of the innovative idea.

 Verification
Validating the idea as accurate and useful, for entrepreneurs, may include
conducting experiments, running simulations, test marketing a product or
service, establishing small-scale pilot, programs and other activities designed to
verify that the new idea will work and is practical to implement.
 The Creative Process

At verification stage, appropriate questions should be

asked:
 Is it really a better solution?
 Will it work?
 Is there a need for it?
 If so, what is the best application?
 How much will it cost?
 Can we sell it at reasonable price?
 The Creative Process

 Implementation:
The focus of this step is to transform the idea into reality. Plenty of
people come up with creative ideas for promising new products, but
most never take them beyond the idea stage. What sets entrepreneurs
apart is that they act on their ideas.
 The Entrepreneurial Process

:The Entrepreneurial Process Consists of Four Steps

.Step 1: Deciding to become an entrepreneur
.Step 2: Developing successful business ideas
Step 3: Moving from an idea to an entrepreneurial
.firm
Step 4: Managing and growing the entrepreneurial
.firm

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Education, Inc. 22
 Steps in the Entrepreneurial Process
1 of 2

Step 1 Step 2
Developing Successful Business Ideas

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Education, Inc. 23
 Steps in the Entrepreneurial Process
2 of 2

Step 3 Step 4

Copyright ©2016 Pearson 1-

Education, Inc. 24