EDS 121

Opportunity Identification
Introduction
 In writing business plans, students are
expected to come up with business ideas,
and how to subsequently explore their market
potential and feasibility.
 Nobody writes a good business plan without
idea generation and opportunity identification.
 However, a good business idea is not usually
a good opportunity.
Cont’
 According to Timmons (1990) the
environment in which business is launched is
usually given and cannot be easily altered.
Changes in the business and anticipation of
these changes are so critical in
entrepreneurship that constant vigilance for
these changes is a valuable habit.
Cont’
 Experience has shown that most successful
entrepreneurs are opportunity focused. They
usually start with customers and market place
and do not lose sight of it.
 Ideas usually interact with real world
conditions and entrepreneurial creativity. The
product of this interaction is
opportunity(Kunda, 1990).
CONT’
 Opportunity Identification is the heart of
entrepreneurship and an important element in
entrepreneurship education.
 Opportunities are situational and the
condition varies
Cont’
 Opportunities are spawned when there are
changing circumstances, chaos, confusion,
inconsistencies, lags, or leads, knowledge
and information gaps and a variety of
vacuums in an industry or market (Kunda,
2004).
What is an Opportunity
 Opportunity is having the qualities of being
attractive, durable and timely and is anchored
in a product or service which creates or adds
value for its buyer or user (Timmons, 1990).
 Kaish and Gilad (1991) define opportunities
as market gaps resulting from disequilibrium.
Cont’
 Hills, Lumpkin &Singh (1997) referred to
opportunities as either the possibility to create
new businesses or significantly improve the
position of an existing business, in both cases
resulting in new profit potential.
 Opportunities are therefore defined as unmet
demand that currently exists in a particular
market.
Attributes of an Opportunity
 According to Timmons (1990) an opportunity
should have the following attributes;
 (i) The ‘window’ of opportunity is opening and
remains open long enough
 (ii) Entry into the market feasible and
achievable
Cont’
 (iii) the business has or is able to achieve
some competitive advantage
 (iv) The business economies are rewarding
and allow significant profit and growth
potential
Entrepreneurial Opportunity
 Casson, Shane (2000) defined
entrepreneurial opportunities as opportunities
to bring into existence new goods, services,
raw materials, and organizing methods that
allow outputs to be sold at more than their
cost of production.
Cont’
 Entrepreneurial opportunities generally refer
to situations that hold the potential for new
economic value (Alvarez & Barney, 2007).
 Opportunity can be created or built using
ideas and entrepreneurial creativity.
Cont’
 In the fostering of opportunity identification,
attempts should be made to identify, teach
and stimulate learning to apply effective
creativity.
 Creativity plays an important role in the
fostering of opportunity identification.
Cont’
 Creativity is the recombination of existing
information, declarative as well as procedural.
 Opportunity identification can be considered
as a domain specific form of creativity.
 To be creative, one needs to learn to be a
critical thinker.
Forms of Entrepreneurial Opportunities
 Schumpeter (1934) outlined five forms of
entrepreneurial opportunities:
 (i) the introduction of new goods,
 (ii) the introduction of a new method of
 production,
 (iii) the opening of a new market,
 (iv) the control of a new source of raw
materials,
 (v) the creation of a new type of industrial
organization.
Examples of changes that can
lead to opportunities in market
 (i) Deregulation in the telecommunications
industries
 (ii) Diversification of the economy
 (iii) Vertical integration of agricultural services
 (iv) Fragmented and traditional industries
such as pharmacies, waste management,
hardware stores, auto repairs etc.
 (v) Advancement in computer and IT
 (vi) Deregulation in education, training, air
traveling etc.
How to Select the Right
Opportunity
 Step 1:Identify Your Business and Personal
Goals
 Step 2:Research Your Favourite Industries
 Step 3:Identify Promising Industry Segments
 Step 4:Identify Problem Areas and
Brainstorm Solutions
Cont’
 Step 5: Compare Possible Solutions with
Your Objectives and Opportunities in the
Marketplace
 Step 6:Focus on the Most Promising
Opportunities
Strategies to foster Students’ Competences
in Identifying Opportunity
 Nab, Pilot and Bulte, 2009 proposed seven
strategies on how to foster students’
competences to identify opportunities. These
include;
 1) Stimulate knowledge and skills on idea
generation techniques,
2) Stimulate the conceptualization and
evaluation of business opportunities,
CONT’
 3) Application of knowledge and skills in
authentic tasks in order to promote transfer
4) Challenge Students to abandon their
comfort zone.
5) Provide authentic feedback on business
ideas
6) Selection of the business ideas
7) Provide incubation time for the idea.
Cont’
1) Stimulate Knowledge and Skills on Idea
Generation Techniques-
Students need to be stimulated in the area of
the required knowledge and skills for proper
understanding of the business.
Meaning that they must be acquitted with the
theories, concepts, techniques and instruments
about creativity that can be of value in
opportunity identification.
Cont’
The following components are involved in
stimulating knowledge and skills
(i) idea generation techniques
(ii) reflection on experiences with idea
generation
(iii) domain knowledge
(iv) demands on quantity and quality
Cont’
 2) Stimulate the conceptualization and
evaluation of business opportunities.
 New schemes on opportunity identification
should be developed, elaborated, and be
recombined with existing mental structures in
the students’ knowledge and learning
environment.
Cont’
 Conceptualization has to do with cognitive
focus which according to Valcke (2007) are
connected with;
 (i) activating pre-knowledge,
 (ii) elaboration of knowledge
 (iii) combination of knowledge,
 (iv) application of knowledge in varying
contexts and developing learning methods.
Cont’
 Five components can be identified:
 (a) Identifying the type of business
opportunities
 (b) Elaborating on concepts of opportunities
 (c)Judging business opportunities by use of
criteria
 (d) Assessment of business ideas by external
experts
 (e) Identifying special demands on
opportunities
Cont’
 3) Application of knowledge and skills in
authentic tasks –
 In order to promote transfer, there is need to
apply the knowledge and skills in authentic
tasks.
 The transfer of concepts and learning
methods is stimulated by application of these
skills in professional tasks and contexts.
CONT’
 Transfer of knowledge and skills can be
achieved by introducing authentic elements in
the learning environment;
 (a) conducive atmosphere of the learning
 environment,
 (b) the roles of students,
 (c) type of tasks and activities,
 (d) role of instructors
 (e) assessment methods.
Cont’

4) Challenge Students to Abandon their

Comfort Zone
Students usually acquire early in life or from
their educational activities to some extent
relevant set of skills and competences in
problem solving.
These competences can be applied consciously
or unconsciously as time goes on for business
execution.
CONT’
 When students are brought into
entrepreneurial circumstances of uncertainty
and ambiguity, sometimes they are faced with
the ineffectiveness of their problem solving
ability.
 Challenging circumstances force students to
reflect on the need to develop new, creative
and innovative solutions based on their
residual knowledge and competences.
Cont’
5) Provide Authentic Feedback on Business
ideas-
 The business ideas generated can be
assessed by peer students and instructors.
 After analysis of the market potential and
feasibility of the business idea, and for
adaptation of a particular business idea, the
resulting business plans will be assessed (in
an authentic way) by potential sponsors such
as entrepreneurs, investors, venture
capitalists, other assessor/ financiers.
Cont’
 6) Selection of the Business Idea-
 The business ideas need to be matched
against the required knowledge.
 The business ideas will be assessed and
selected based on the quality of its potential
and ability to satisfy the users.
 Explicit and intuitive criteria can be used in
assessing the business ideas.
Cont’
 7) Provide Incubation time for the Idea.
 Generating business ideas early and
announcing it in time, will enable students to
have more time to analyze their ideas,
compare, evaluate them and further refine
them on time if need be.
Cont’
 This can be achieved by subjecting the
business ideas to incubation period which
should not be too long, in order not to
discourage the students who may want to act
as soon as possible once a particular
opportunity is identified.
Conclusion
 The above listed points, if religiously followed,
can be feasible and effective strategies in
fostering students’ competences in
opportunity identification
 THANKS
AND
GOD BLESS YOU