Chapter 2. Recognizing
Opportunities and Generating Ideas
·
The
Differences Between Opportunities and Ideas
Essentially, entrepreneurs must be able to recognize
an opportunity and turn it into a successful business. Opportunity is where we
can create a new product. An entrepreneur recognizes an opportunity gap and create
a business to address the problem or fill the identified gap.
Opportunity and idea is diferrent. An idea is a
thought or impression and idea is needed to meet the criteria of an
opportunity. It’s important to know wheter the idea fills a need and meets the
criteria for an opportunity.
·
Three Ways to Identify Opportunities
1.
Observing
Trends
The first approach to identifying opportunities is to
observe trends. The most important trends to follow are economic
trends, social
trends, technological
advances, and political
action and regulatory
changes.
§
Economic Forces
Understanding economic
trends is helpful to determining areas for business area, as well as areas to
avoid. It’s important to evaluate who has money to spend and what they spend it
on
§
Social Forces
An
understanding of the impact of social forces on trends and how they affect new
product, service, and business ideas is a fundamental piece of the opportunity
recognition puzzle. Changes in social trends change how people and businesses
behave and how they set their priorities.
§
Technological
Advances
Technological Advances along with
economic and social changes can create opportunities. Another aspect of
technological advances is that once a technology is created, products often
emerge to advance it.
§
Political
Action and Regulatory Changes
Political and regulatory changes also provide
the basis for business ideas. Political change also create a new business and
product opportunities. An entrepreneur should learn more about the trend in an
effort to shape and mold their idea when the environmental trend is changed.
2.
Solving
a Problem
The second approach to identifying opportunities is to
recognize problems and find ways to solve them.
Problems can be recognized by observing the challanges that people encounter
in their daily lives. Commenting and noticing on this problem can lead to
recognizing business ideas. If you’re having difficulty solving a particular
problem, try to find an instance where a similar problem was solved and then
apply that solution on your business.
3.
Finding
Gaps in the Marketplace
Gaps in the marketplace are the third source of business
opportunities. There are many examples of products that consumers need that
aren’t avaiable. A simple technique to find the gaps in marketplace is recognize
when people become frustrated because they can’t find a product or service that
they need. One thing that entrepreneurs must remain mindful of in pursuing
business opportunities is finding the gaps in the marketplace and fill the consumers
needs.
·
Personal Characteristics of the
Entrepreneur
Researches have identified several charactersitics that
tend to make some people better at recognizing opportunities than others. These
are some specific charactersitics shared by those who excel at recognizing an
opportunity.
1.
Prior
Experience
Prior experience in an industry helps entrepreneurs
recognize business opportunities. Prior experience is important in an industry
in most instances.
2.
Cognitive
Factors
Opportunity recognition may be an innate skill or a
cognitive process. Some people think that entrepreneurs have a “sixth sense” called
entrepreneurial alertness. Entrepreneurial alertness is formally defined as the
ability to notice things without engaging in deliberate search. Entrepreneur
may be better than others at sizing up the marketplace and inferring the likely
implications.
3.
Social
Networks
The extent and depth of an individual’s social network
affects opportunity recognition. People who build a network of social will be
exposed to more opportunities and ideas than people with sparse networks. Social
network is important and can lead to new business start. The difference between
solo entrepreneurs and network entrepreneurs is found that network
entrepreneurs identified significantly more opportunities than the other one.
There is relationship called Strong-tie relationships and
Weak-tie relationships, the difference is on the frequent relationship such as
tie between coworkers, firends and spouses. The strong-tie relationship are
characterized by frequent interaction and weak-tie relationship are
characterized by infrequent interaction.
·
Creativity
Creativity
is the process of generating a novel or useful idea. The creative process can
be broken into five stages.
1.
Preparation
Preparation is the background,experience and knowledge
that an entrepreneur brings to the opportunity recognition process.
2.
Incubation
Incubation is the stage during which a person considers
an idea or thinks about a problem.
3.
Insight
Insight is the flash of recognition when
the solution to a problem is seen or an idea is born.
4.
Evaluation
Evalutation is the stage of the
creative process during an idea is subjected to analyzed.
5.
Elaboration
Elaboration is the stage during which the creative idea is
put into a final form. The details are worked out and the idea is transformed
into something.
·
Techniques for Generating Ideas
In general, entrepeneurs identify more ideas than
opportunities because many ideas are typically generated to find the best way
to capitalize on an opportunity. These are several techniques can be used to
stimulate and facilitate the generation of new ideas for products, services,
and businesses.
1. Brainstorming
A common way to generate new business ideas is through
brainstorming. Brainstorming is simply the process of generating several ideas
about a specific topic. Brainstorming sessions dedicated to generating new
business ideas are often less formal.
2.
Focus
Groups
A focus group is a gathering of 5 to 10 people who are
selected because of their relationship to the issue being discussed. Focus
group typically involve a group of people who are familiar with a topic, are
brought together to respond to questions through the group discussion.
3.
Library and Internet Search
A third approach to generating new business ideas is to
conduct library and internet research. Libraries are often an underutilized
source of information for generating business ideas. Internet research is also
important, with internet you can search the topic of your interest.
4.
Other Techniques
A Company use a variety of other
techniques to generate ideas.
·
Encouraging the Development of New Ideas
These
are steps to build an organization that encourages and protects new ideas.
1.
Establishing
a Focal Point for Ideas
Some firms meet the challenge of encouraging, collecting,
and evaluating ideas by designating a specific person to screen it.
2.
Encouraging
Creativity at the Firm Level
There is an important distinction between creativity and
innovation. Creativity is the raw material that goes into innovation. The
extent to which an organization encourages and rewards creativity affects the
creative output of its employees.
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