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Unit 1: Entrepreneurial Opportunities (Environment Scanning # (Importance…
Unit 1: Entrepreneurial Opportunities
Definition
entrepreneur as one who always searches for an opportunity. The basic test of a successful entrepreneur is the identification of business opportunity in the idea environment and initiating steps to produce and sell goods and service to make use of the opportunity
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Business Opportunity
What is a Business Opportunity
A business opportunity may be described as an attractive economic idea which could be implemented to create a business, earm profits and ensure further growth
Before selecting an opportunity, the entrepreneur has to ensure two things in order to be succesfull
There is a good market for the product he is going to produce
The rate of return on inverstment is attractive to be accepted by him
Can all ideas be converted into opportunities
If the entrepreneur conceive an idea and start their business without even analysing the masrket, they launch a product that has a few customers
an economic idea which can be implemented to create a business enterprise and earn profits
Elements of a business opportunity
Assured market scope
An attractive and acceptable rate of return on investment
Practicability of the idea
Competence of the entrepreneur to encash it
Potential of future growth
Perceiving and sensing opportunities
The entrepreneurs perceive opportunities, systhesize the available information and analyse emerging patterns that escape the attention of other people. they are people with vision, capable fo persuading others such as customers, partners, employees and suppliers to see the opportunity, share and support it
Factors involved in sensing opportunities
Ability ot perceive and preserve basic ideas which could be used commercially
Problems
when a problem exists and an idea leads to solution to resolve that problem, it emerges as a business opportunities
Change:
A change in social, legal, technological aspects etc. leads to new opportunities to start a business
Inventions:
Invention of new products or service leads to new business opportunities
Competition:
Competition often results in emergence of new and better ideas that result in new business opportunities
Innovation:
It includes creating new things of value as well as new and creative process that add value to the existing products or services. Eg. Computers or tablets
Ability to Harness different sources of information
Various sources help in getting information
Entrepreneur brings together various sources of information, analyzes it to the best possible extent to identify of the right opportunity
Vision and creativity
Overcome the adversity
Will be able to excercise control over the business
Will be capable of making significant difference
Environment Scanning
Business environment may be defined as all those conditions and forces external to a business unit under which it operates
Entrepreneurship does not emerge and grow spontaneously. Rather it is dependent upon several economic, social, political, legal and other factors
What is environment scanning?
Careful monitoring of an organization's internal and external environments for detecting early signs of opportunities and threats that may influence its current and future plans
Exploring Opportunities in the Environment
Opportunity should be suitable for him in terms of customers to be served and profits expected. An opportunity may be derived from the needs and problems of the society
Sensing entrepreneurial opportunities is a process of converting an idea into an opportunity into an enterprise
Environment Scanning
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Business environment may be defined as all those conditions and forces external to a business unit under which it operates.
Entrepreneurship does not emerge and grow spontaneously. Rather it is dependent upon several economic, social, political, legal and other factors
What is environment scanning?
Careful monitoring of an organization's internal and external environments for detecting early signs of opportunities and threats that may influence its current future plans
Why do we need to scan our environment?
Careful monitoring of an organization's internal and external environments for detecting early signs of opportunities and threats that may influence its current and future plan.
Importance of environment:
Sensitivity to environmental factors is crucial for an entrepreneur. If a company is able to adapt to its environment, it would succeed in the long run.
Eg. Sony failing to understand the changing trends in mobile phones and therefore losing its market share.
Identification of opportunities to get first mover advantage
an enterprise can
identify opportunities and find strategies to capitalise on the opportunities
Formulation of strategies and policies
basis of formulation of strategies to counter threats and capitalise on opportunites
Tapping Useful resources
tap raw materials, technology and even financial resources from the market at economical prices at the right time
Better Performance
proper take timely action to deal with the threats and avail opportunities for the purpose of improvement in the performance of the firm
Sensitisation of entrepreneurs to cope up with rapid changes
Sensitise the entrepreneur to the changing technology, competition, govt.policies and changing needs of the customers
Image building
it will come out with new products and services to meet the requirements of the customers. This would build the image or reputation of the firm in the eyes of the general public
Analysis of Environment
Environment analysis is the process of monitoring the economic and non-economic environment to determine the opportunities and threats to an organization
such analysis involves
Data collection
Information and processing
Forecasting to provide a rational basis for developing goals and strategies for business survival and growth
Information can be collected from several sources
Verbal information from people
Records of companies
Government publications
publications by various financial insitutions
Formal Studies conducted by strategic planners
Opportunity - Project Interface
Environmental Scan
External Analysis
Threats
Opportunities
SWOT MATRIX
Internal Analysis
Weaknesses
Strengths
Entrepreneur
Entrepreneurship
Enterprise
The Person
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The Process
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The Ourcome
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Needs and Problems
Creative Solutions
Entrepreneurial Opportunities