Market Opportunity Recognition

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Market Opportunity Recognition
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Definitions

• Creativity
• Characterized by originality and expressiveness
  imaginative
• Imagination
• The formation of a mental image of something that
  is neither perceived as real nor present to the
  senses.
• Idea
• Something, such as a thought or conception, that
  potentially or actually exists in the mind as a
  product of mental activity.
• Opportunity
• A favourable or advantageous circumstance or
  combination of circumstances.

Imagination is more important than
knowledge Albert Einstein (1879-1955)
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Creative v Logical Thinking
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Innovation
Is the process by which entrepreneurs convert
opportunities into marketable ideas. It is the
means by which they become catalysts for change.
The single biggest cause of failure is not lack
of money but that you havent come up with
something that the world wants. Larry C.Farrell

• New Product
• New method of doing the same product
• New Source of Raw materials
• New Market
• New way of organising your business

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Druckers Sources of Innovative Opportunity

• The unexpected. Success IBM. Failure Jacket
  Potatoes
• The incongruity. Possible v Actual. Overnight
  Delivery.
• Process needs. Sugar free products. Caffeine
  free.
• Changes in industry/market structure. Digital
  Cameras
• PLUS
• Demographic changes. Age profile
• Changes in perception, mood or meaning. Fashion
• New knowledge. Mobile phones.

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Types of Innovation

• INVENTION - totally new, product or service
  Airplane, Light bulb, Telephone
• EXTENSION New use or different application of
  existing product or service McDonalds, Holiday
  Inn
• DUPLICATION Creative replication of an existing
  concept Pizza Hut, Virgin
• SYNTHESIS Combining into a new formulation
  Internet Cafes

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HBDI Herrmann Brain Dominance Instrument
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What is an Opportunity?

• Opportunity Defined
• An opportunity is a favorable set of
  circumstances that creates the need for a new
  product, service, or business idea.
• Most entrepreneurial firms are started in one of
  two ways
• Some firms are internally stimulated. An
  entrepreneur decides to start a firm, searches
  for and recognizes an opportunity, then starts a
  business.
• Other firms are externally stimulated. An
  entrepreneur recognizes a problem or an
  opportunity gap and creates a business to fill it.

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What is an Opportunity?
An opportunity has four essential qualities
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Window of Opportunity Life Cycle
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Three Classic Life Cycles
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Three Ways to Identify An Opportunity
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Observing Trends
First Approach Observing Trends
Environmental Trends Suggesting Business or
Product Opportunity Gaps
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Environmental Scanning

• Scanning Detect Changes
• Monitoring Track Events Affecting Business
• Forecasting Making Plausible Projections
• Assessing What does it all mean?

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Trend Analysis

• Trends identify emerging needs..
• SEEDTIP analysis
• Societal/sociological trends
• Economic trends
• Environmental/Ecological trends
• Demographic trends
• Technological trends
• International trends
• Political/Legal trends
• When two or more trends come together

Café society Life coaches Ecotourism In
home care VOIP China/India emerging Health
Safety
http//www.trendhunter.com/trends/interactive-wall
paper-sl2010-allyearlong-calendar
http//www.springwise.com/
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Exploit trends

• 24 hour society
• Money rich, time poor
• Demographic change age, urban living, growth
  patterns
• Environmental issues
• Globalisation
• Legislation
• Desire for gadgets
• Communication

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Solving a Problem
Second Approach Solving a Problem
Sometimes identifying opportunities
simply involves noticing a problem and finding a
way to solve it.
These problems can be pinpointed through
observing trends and through more simple means,
such as intuition, serendipity, or chance.
Some business ideas are clearly initiated to
solve a problem.
For example, Symantec Corp. created Norton
antivirus software to guard computers against
viruses.
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Solving a Problem
Businesses Created to Solve a Problem
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How entrepreneurs found ideas

• Left xmas shopping too late, couldnt find last
  minute gadgets GADGET SHOP
• Market opportunity to sell mobile phones direct
• CAR PHONE WAREHOUSE
• Wife crying because of seven days wait for new
  glasses
• VISION EXPRESS
• Passion for making scents and lotions turned into
• JO MALONE

Create Curiosity Open Mind Observation of
Circumstances
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Finding Gaps in the Marketplace
Third Approach Finding Gaps in the Marketplace

• Gaps in the Marketplace
• A third approach to identifying opportunities is
  to find a gap in the marketplace.
• A gap in the marketplace is often created when a
  product or service is needed by a specific group
  of people but doesnt represent a large enough
  market to be of interest to mainstream retailers
  or manufacturers.
• This is the reason that small clothing boutiques
  and specialty shops exist.
• The small boutiques, which often sell designer
  clothes or clothing for hard-to-fit people, are
  willing to carry merchandise that doesnt sell in
  large enough quantities for Wal-Mart, GAP, or JC
  Penney to carry.

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Personal Characteristics of the Entrepreneur
Characteristics that tend to make some people
better at recognizing opportunities than others
Prior Experience
Social Networks
Cognitive Factors
Creativity
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Social Capital - Per Lovgren
Network of Professors of Engineering
Management Consultants Foundry Consultants
Network of Management Consultants
Birley Muzyka (200045)
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Who Do You Know?
Professional Contacts
Tutors
Family
YOU
Advisors
Friends
Other Students
Work Colleagues
Staff
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Sources Of Ideas

• Insights - experience in profession or industry
  43
• Challenge - could do better 15
• Unfilled/overlooked niche in marketplace 11
• Systematic search for business opportunities 7
• Brainstorm - cannot explain it 5
• Hobby or vocational interest 3

Source Entrepreneurship, John G Burch
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Unlocking Value
Rae (1999)
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What Kind of Business Should I Start?

• Start with what you know.
• Do what you love.
• Dont reinvent the wheel, just make it better
• Focus on a niche
• Consider the franchising option
• Know what sets you apart from the competition
• Imitate an existing product
• Buy an existing business
• Become and agent or distributor
• Sell your services as a consultant
• More?
• Above all take your time

Source entrepreneur.com