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BUSINESS OPPORTUNITY
IDENTIFICATION
Ahmedabad Management Asso/EDIShiv Kothari
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Contents Individual Characteristics that lead to Opportunity
Recognition
Factors Affecting Opportunity Recognition Entrepreneurial Alertness Information asymmetry and prior knowledge;
Discovery versus purposeful search;
Social networks;
Personality traits, including risk-taking, optimism and self efficacy,and creativity.
Active Search
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Pattern Recognition Pattern recognition plays a central role in opportunity
identification:
Opportunity emerge from a complex pattern of changingconditions they come into existence at a point in timebecause of juxtaposition of conditions which did not existpreviously
Recognition of Opportunity depends, in part, on individualcognitive structures framework developed from
experiences that provide the cognitive basis for ConnectingDotsinto pattern suggestive of new business opportunities
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Opportunity recognition Opportunities develop as individuals shape elemental ideas
into full-blown business plans.
Opportunity recognition appears to include three distinctprocesses:(1) sensing or perceiving market needs and/or underemployed
resources
(2) recognizing or discovering a fit between particular marketneeds and specified resources,
(3) creating a new fit between heretofore separate needs andresources in the form of a business concept.
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Recognition of opportunities depends, in part, on
individual cognitive structures - frameworks
developed from experience that provide thecognitive basis for connecting the dots into
patterns suggestive of new business opportunities
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Factors affecting Opportunity
Recognition Entrepreneurial Alertness
Information asymmetry and prior knowledge;
Discovery versus purposeful search;
Social networks;
Personality traits, including risk-taking, optimism and
self efficacy, and creativity. Active Search
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Entrepreneurial Alertness A set of perceptual and information processing skills
Any recognition of opportunity by a prospective entrepreneur ispreceded by a state of heightened alertness to information.
Definition - a propensity to notice and be sensitive to informationabout objects, incidents, and patterns of behaviour in theenvironment, with special sensitivity to maker and user problems,unmet needs and interests, and novel combinations of resources.
More alert to new opportunities and use information differently
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Alertness
Opportunities often recognized by people not
engaged in active search
Abundant natural curiosity and a broad range of
interests is helpful
Related to cognitive capacities such as high
intelligence and creativity
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The Alert Individual
Perceive the market environment correctly
Identify the true driving forces and critical factors
Infer the real relational dynamics among theseelements
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Alertness Schema*** What is really going on here
Be
Objectively
Accurate
What are
Three Other
Ways to
See/ThinkAbout This
What is
Everyone
Else Doing
What is
The Opposite
Of this
*** Anything that is/could be seen asunusual, unexpected, anomalous*** How Can I make money
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Information asymmetry and prior
knowledge Tend to notice information that they know.
Prior knowledge triggers recognition of the value of the new information.
Three major dimensions of prior knowledge are important to the process of
entrepreneurial discovery: Personal Interest
Domain know how and expertise
Process Related Knowledge
Market related knowledge,
Ways to serve markets, and
Customer related knowledge.
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Prior knowledge access to
appropriate information Information gathered through rich and varied life
experience
Leveraging a rich and varied network of contacts
and associates
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Social Networks Entrepreneurs who have extended networks identify significantly
more opportunities
Social network includes the entrepreneurs inner circle (the set of people with whom an entrepreneur has long-term, Stable relationships, (they are not partners in the venture),
action set (people recruited by the entrepreneur to provide necessaryresources for the opportunity),
partnerships (start-up team members),and
a network of weak ties (a network used to gather general informationthat could lead to identifying an opportunity or to answering a generalquestion)
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Personality traits, including risk-taking,
optimism and self efficacy, and creativity.
Perceived self-efficacy leads to optimism and a
higher propensity to see opportunities rather than
threats in any given situation.
Successful entrepreneurs discover opportunities that
others do not see.
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Active Search
Entrepreneurs are more likely to engage in active
search for opportunities
Focused in a particular domain: rely more heavily
on personal contacts and specialized publications
than on sources of general information
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Pattern Recognition in Opportunity
Recognition
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Thanks forThanks foryour participation!your participation!
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Email: [email protected]
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