FM 11 - MIDTERM

• Opportunity


  An entrepreneur's business idea that can potentially become a commercial product or service in the future
• The 3 S of Opportunity Spotting

  1. Seeking

  2. Screening

  3. Seizing
• Seeking the Opportunity


  • The first step and is the most difficult process of all due to the number of options that the entrepreneur will have to choose from
• Various Sources of New Ideas

  • Macroenvironmental sources
  • Micromarket
• Macroenvironmental Sources


  STEEPLED- socio-cultural, technological, economic, environmental, political, legal, ethical and demographic factors
• Macroenvironmental Sources


  • Industry
  • New discovery or knowledge
  • Futuristic opportunities - STEEPLED
• Micromarket


  • Consumer preferences, interests & perception
  • Competitors
  • Unexpected opportunities from customers
  • Talents, hobbies, skills, and expertise
  • Irritants in the marketplace such us deterrents, problems, complaints, and delays
  • Location
• Need


  Recognized when a customer believes that there is a difference between his or her current situation versus his/her desired condition
• Want


  Recognized when a customer believes that there is a specific product or service that can perfectly suit the need
• Talents, Hobbies, Skills and Expertise


  Business opportunities can come from the entrepreneur's own talents, hobbies, skills or expertise
• Irritants in the Marketplace


  Recurring problems or issues that customers are sick and tired of
• Location


  Entrepreneurs can spot business opportunities by looking at their ecosystem
• Methods of Generating Ideas

  • Focused group discussion (FGD)
  • Brainstorming
  • Brain writing or Internet brainstorming
  • Problem inventory analysis
• Focused group discussion (FGD)


  The moderator handles an open, free flowing, and in-depth discussion with a group of people who can provide insightful ideas about a new product or service that will fill a market need
• Brainstorming


  • No destructive criticism or judgment is allowed
  • Wilder ideas are accepted
  • More ideas are preferred
  • Improvement of other ideas is allowed
• Brainwriting


  An idea generation technique where participants write down their ideas about a particular question for a few minutes without talking, then pass their ideas to the next person
• Problem inventory analysis


  Participants identify compelling problems from a given list of product or service problems
• STEEPLED ANALYSIS Findings


  • Sociocultural factors
  • Technological factors
  • Economic factors
  • Environmental or ecological factors
  • Political factors
  • Legal factors
  • Ethical factors
  • Demographic factors
• Screening the Opportunity


  The process of cautiously selecting the best opportunity based on the entrepreneur's internal and external intent
• Internal Intent


  The main objective that the business will accomplish in the entrepreneur's life
• External Intent


  Addressing the compelling needs of the target market
• Risk Appetite


  The entrepreneur's tolerance of business risks
• Business Opportunity Elements


  • Has superior value to the customers
  • Solves a compelling problem, issue, a need, or a want
  • Is a potential cash cow
  • Matches with the entrepreneur's skills, resources, & risk appetite
• Opportunity Attractiveness Test (OAT)


  A framework to measure how compelling an opportunity is, designed to detail each entrepreneurial aspect into small chunks to come up with a sound entrepreneurial decision

  
• OAT Components


  • The "concept and the "strategy"
  • Opportunity Metrics
• 4 macro environmental sources

  steepled , industry , new discovery of knowledge, futuristic opportunities
• The "concept and the "strategy" Components

  • Vision Statement
  • Value Creation Proposition
  • Timing of the business
  • Differentiator or Positioning Strategy
• Opportunity Metrics Components


  • Market Potential
  • Financial Feasibility
  • Exit Strategies or Harvest Options
  • Competitive Advantage
  • Management Team
  • Strategic Differentiation
  • Assessment of Personal Resources

  
• Strategy


  The difference the new business will inculcate to the target customers as compared with the rest
• The 3 S of Opportunity Spotting

  • Seeking
  • Screening
  • Seizing
• Opportunity Attractiveness Test (OAT)


  Determines attractiveness of the new venture

  
• Opportunity Metrics

  • Market Potential
  • Financial Feasibility
  • Exit Strategies or Harvest Options
  • Competitive Advantage
  • Management Team
  • Strategic Differentiation
  • Assessment of Personal Resources

  
• Value Proposition


  Lena's business will cater to the family's holistic needs of beautification, relaxation, and bonding with their loved ones. It will remove the problem of going to different shops. Family packages and bundled services will also be offered to entice more customers
• Elements of OAT

  • Market Potential
  • Financial Feasibility
  • Exit Strategies or Harvest Options
  • Competitive Advantage
  • Management Team
  • Strategic Differentiation
  • Assessment of Personal Resources
• Market Potential


  Attractiveness of the market for the new venture
• Factors for Market Potential

  • Market Need
  • Market Structure
  • Market Size
  • Growth Rate
  • Market Capacity
• Financial Feasibility


  Attractiveness of the financial aspects of the new venture
• Factors for Financial Feasibility

  • Net Income
  • Return on Investment and Capital Recovery Period
  • Capitalization
  • Free Cash Flow
• The 3 S of Opportunity Spotting are Seeking, Screening, and Seizing
• Opportunity Seizing


  The last step in Opportunity Spotting and Assessment, where the entrepreneur's idea can be any type of innovation