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Chapter Objectives(1 of 2)

1. Explain why its important to start a new firm whenits winow of opport!nity" is open.

2. Explain the ifference between an opport!nity anan iea.

#. $escribe the three %eneral approaches entreprene!rs!se to ientify opport!nities.

&. 'entify the fo!r environmental trens that are mostinstr!mental in creatin% b!siness opport!nities.

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Opening Case: Entrepreneur Got Success

ony /sieh

Comin% o!t of /arvar 0a!nche his first internet

company 0inExchan%e". ol it to 3ahoo in 4256 mill. tarte 7appos.com ol it to ma7on in 2889 for

41.2 ,ill.

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inow of Opport!nity

+ inow of Opport!nity

he term winow of opport!nity"

is a metaphor escribin% the time

perio in which a firm can

realistically enter a new maret.

+t some point- the maret mat!res- an the winow ofopport!nity (for new entrants) closes.

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hat is an Opport!nity*(2 of 2)

n opport!nity has fo!r essential :!alities

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hree ays to 'entify n Opport!nity

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;irst pproach< Observin% rens(2 of 2)

Environmental rens !%%estin% ,!siness or=ro!ct Opport!nity >aps

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ren 1< Economic ;orces

+ Economic ;orces? Economic forces affect cons!mers level of isposable

income.

? hen st!yin% how economic forces affect opport!nities-it is important to eval!ate who has money to spen anwho is tryin% to c!t costs.

+ n increase in the n!mber of women in the worforce an theirrelate increase in isposable income is lar%ely responsible for then!mber of bo!ti:!e clothin% stores tar%etin% professional womenthat have opene in the past several years.

+ @any lar%e firms are tryin% to c!t costs. Entreprene!rs have taenavanta%e of this tren by startin% firms that help other firmscontrol costs.

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ren 2< ocial ;orces(1 of 2)

+ ocial ;orces

? Chan%es in social trens provie openin%s for new

b!sinesses on an on%oin% basis.

? he contin!al proliferation of fastAfoo resta!rants- forexample- isnt happenin% beca!se people love fast foo. 't

is happenin% beca!se people are b!sy- an have isposable

income.

? imilarly- the ony alman was evelope not beca!secons!mers wante smaller raios b!t beca!se people

wante to listen to m!sic while on the %o.

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ren 2< ocial ;orces(2 of 2)

Examples of ocial ;orces hat llow ;or Bew,!siness Opport!nities

+;amily an wor patterns.

+he a%in% of the pop!lation.+he increasin% iversity in the worplace.

+he %lobali7ation of in!stry.

+he increasin% foc!s on health care an fitness.

+he proliferation of comp!ters an the

'nternet.

+he increase in the n!mber of cell phone !sers.

+Bew forms of entertainment.

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ren #< echnolo%ical vances

+ echnolo%ical vances

? >iven the rapi pace of technolo%ical chan%e- it is vital that

entreprene!rs eep on top of how new technolo%ies affect

c!rrent an f!t!re b!siness opport!nities.

? Entire in!stries have emer%e as the res!lt of technolo%ical

avances.

+ Examples incl!e the comp!ter in!stry- the 'nternet- biotechnolo%y-

an i%ital photo%raphy.

? Once a new technolo%y is create- new b!sinesses form totae the technolo%y to a hi%her level.

+ ;or example- ealBetwors was starte to a a!io capability to the

'nternet.

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ren &< =olitical an

e%!latory Chan%es

+ =olitical an e%!latory Chan%es

? =olitical an re%!latory chan%es provie the basis for new

b!siness opport!nities.

+ ;or example- laws that protect the environment have createopport!nities for entreprene!rs to start firms that help other firms

comply with environmental laws an re%!lations.

+ imilarly- many entreprene!rial firms have been starte to help

companies comply with the arbanesAOxley ct of 2882. he act

re:!ires certain companies to eep all their recors- incl!in%eAmail messa%es an electronic oc!ments- for at least five years.

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econ pproach< olvin% a =roblem(1 of 2)

econ pproach< olvin% a =roblem

ometimes ientifyin%

opport!nities simply

involves noticin% a problem

an finin% a way tosolve it.

hese problems can be

pinpointe thro!%h observin%

trens an thro!%h more simple

means- s!ch as int!itionor chance.

ome b!siness ieas are clearly

initiate to solve a problem.

;or example- ymantec Corp.create Borton antivir!s

software to %!ar comp!ters

a%ainst vir!ses.

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econ pproach< olvin% a =roblem(2 of 2)

,!sinesses Create to olve a =roblem

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hir pproach< ;inin% >aps in the

@aretplace

+ >aps in the @aretplace? thir approach to ientifyin% opport!nities is to fin a

%ap in the maretplace.

? %ap in the maretplace is often create when a pro!ct orservice is neee by a specific %ro!p of people b!t oesntrepresent a lar%e eno!%h maret to be of interest tomainstream retailers or man!fact!rers.

+ his is the reason that small clothin% bo!ti:!es an specialtyshops exist.

+ he small bo!ti:!es- which often sell esi%ner clothes or clothin%for harAtoAfit people- are willin% to carry merchanise that oesntsell in lar%e eno!%h :!antities for alA@art- >=- or DC =enney tocarry.

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;!ll iew of the Opport!nity

eco%nition =rocess

$epicts the connection between an awareness of emer%in% trens anthe personal characteristics of the entreprene!r

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echni:!es ;or >eneratin% 'eas

,rainstormin% ;oc!s >ro!ps

!rveys Other echni:!es

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,rainstormin%(1 of 2)

+ ,rainstormin%

? 's a techni:!e !se to %enerate a lar%e n!mber of ieas an

sol!tions to problems :!icly.

? brainstormin% session" typically involves a %ro!p ofpeople- an sho!l be tar%ete to a specific topic.

? !les for a brainstormin% sessionro!ps

+ ;oc!s >ro!p

? foc!s %ro!p is a %atherin% of five to ten people- who

have been selecte base on their common characteristics

relative to the iss!es bein% isc!sse.? hese %ro!ps are le by a traine moerator- who !ses the

internal ynamics of the %ro!p environment to %ain insi%ht

into why people feel they way they o abo!t a partic!lar

iss!e.

? ltho!%h foc!s %ro!ps are !se for a variety of p!rposes-

they can be !se to help %enerate new b!siness ieas.

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!rveys(1 of 2)

+ !rvey

? s!rvey is a metho of %atherin% information from a

sample of inivi!als. he sample is !s!ally j!st a fraction

of the pop!lation bein% s!rveye.

+ he most effective s!rveys sample a ranom" portion of the

pop!lation- meanin% that the sample is not selecte hapha7arly or

only from people who vol!nteer to participate.

+ he :!ality of s!rvey ata is etermine lar%ely by the p!rpose of

the s!rvey an how it is con!cte.? !rveys %enerate new pro!ct- service- an b!siness ieas

beca!se they as specific :!estions an %et specific

answers.