Idea Generation and

Opportunity
Unit 2
 Source of Idea Generation
 Going through certain professional magazines catering to
specific interests like electronics, computers, etc.,
 Making visits to trade fairs and exhibitions displaying new
products and services,
 Meeting with the Government agencies,
 Ideas given by the knowledgeable persons,
 Knowledge of potential customer needs,
 Watching emerging trends in demands for certain products,
 Scope for producing substitute product,
 Distribution Channel
 Knowledge about the Government policy, concessions and
incentives, list of items reserved for exclusive manufacture in
small-scale sector,
 Success stories of known entrepreneurs or friends or relatives
 Difference between an ‘idea’ and an
‘opportunity’.
Situation I
Having completed their Master of
Business Administration (MBA), Rahul
and Abhijit met after one year. The
two were conversing with each other
about who is doing what. Rahul is
running his business of travel agency
and Abhijit is still searching for a job.
Rahul suggests Abhijit to start some
business. Observe and read the
market scenario and produce what
the consumers actually want.
Situation II
Ajay got a job in UP State Transport
Corporation. He was the in-charge of
the purchase department. Having
worked in the purchase department
for over ten years, he had gained good
idea about which components have
more demand and who are the buyers
of these parts in bulk. He, therefore,
thought good prospects of
manufacturing of some of the
components having good demand in
bulk.
Opportunity/Product Identification:
After going through above process, one might
have been able to generate some ideas that
can be considered to be pursued as ones
business enterprise.
1. Nut and bolt manufacturing (industry)
2. Footwear manufacturing (industry)
3. Photocopying unit (service-based industry)
4. Electro-type writer servicing (service-based
industry).
4. Polythene bags for textile industry (ancillary
industry)
• Here
•situation I is at the ‘idea stage’ and
•situation II at the ‘opportunity stage’.
• At the idea stage, there is simply an idea about
what to do. But at the opportunity stage, idea has
actually been germinated about what to start/do.
• The understanding of such a difference between
an ‘idea’ and ‘opportunity’ is very important for
the intending entrepreneurs who are seriously
trying to identify an ‘opportunity’ to be pursued
as an enterprise.
• Innovative Entrepreneur -----
• Adaptive Entrepreneur --------
 Identify Business Opportunities
• To be successful entrepreneurs, we need to
be continually innovating and looking for
opportunities to grow our startups.
• As a growing business, you would prefer
more leads that can be easily converted
than those that will take months to mature
• Proper framework will allow you to assess
the feasibility of the opportunities and
devise steps to improve conversion rates.
 Customer analysis
• You can do that perhaps in a very technical way, by
conducting surveys. Or perhaps, in a less technical way,
you can attempt to answer the “W” questions,
• Who is my customer?
• What does the customer want to buy?
• When does the customer want to buy?
• What price is the customer willing to pay?
• At the end of the day, the one thing every entrepreneur is
looking for is revenue, and the revenue will come from
customers.
• That is why you need to ask yourself, is there a market
here?
 Competitor analysis
• Ask yourself
• Who else is in this market?
• What are they doing for the customers?
• Are they supplying a similar substitute product or
service as you have in mind?
• That is the second thing you have to establish, and by
doing that, you can understand better what need is not
met at the moment.
• That will also give you the opportunity to zero in on the
price points and feature points of where you can
differentiate yourself from existing players in the market.
 Industry analysis
• You also need to conduct a broader industry analysis to
understand the attractiveness of the industry you’re
going to enter.
• Is the industry growing or shrinking?
• What power do the suppliers have in this industry?
• How many buyers are there?
• Are there substitute products? Are there any
barriers to entry? If so, what are they?
• That is very important for you to understand, because it
will help you realize whether the industry you’re
thinking of entering is attractive.
 Regulations Analysis
• In addition, you may want to look at regulations that affect that
industry. Are there any regulations that you would be subject to?
• This especially applies in the life sciences sector, where there are
strict regulations that control the supply of products into the
market. In the United States, the FDA, the Food and Drug
Administration, is a significant regulator. Every country around
the world has a regulator in the life science sector. So, these are
the high level questions that you may want to ask yourself.
• Coverage of drones under Drone Rules 2021 increased from 300
kg to 500 kg to include heavy payload-carrying drones & drone
taxis. No security clearance required before any registration or
licence issuance. Fees for permissions reduced to nominal levels
 Assess similar markets

• If you are trying to enter a market, it helps to do full-

fledged market research by deploying a renowned
agency.
• However, do not forget to assess similar needs where
you may have prior experience.
• You can use all your expertise to understand the
behaviour of the audience in these markets.
• It also helps to do a test market for a pre-defined
timeframe. It will help you assess the market trends
and fine-tune your marketing strategies before you
enter.
 Doing a PESTEL analysis
• The PESTEL analysis is used by renowned brands that can help them assess
the macro-environmental factors they have to face while taking advantage of
a business opportunity. It allows you to determine these factors critical
business factors:
• P – Political
• E – Economic
• S – Social
• T – Technological
• E – Environmental
• L – Legal
• It provides a comprehensive study of various external and internal factors that
could affect your operations. You must keep in mind that while opportunities
in evolving technologies, there is also a risk that the technology will be
obsolete within the next few years. There comes the need to have a holistic
view of any opportunity by studying all actors associated with the
opportunity.
 Brainstorm and get people involved

• If the business opportunity involves millions of dollars, it

is better to brainstorm with the experts.
• Bring onboard renowned consultants who can help you
understand the opportunities and the pitfalls associated
with the new market. You can understand the internal
strengths and weaknesses and fine-tune them to address
the external threats and overcome them.
• You can also enter into alliances with suitable, like-minded
entities who can provide you with the necessary support
to have a foothold in the new market. It is also required to
onboard a team who can help you in the operations of the
business.
 Four major steps in identifying, evaluating and selecting a business opportunity.

1. Identifying the needs and wants of customers

2. Scanning the environment and evaluating
yourself and the community.
3. Screening of business opportunities.
4. Selecting a business opportunity and
preparing a business plan.