An exploratory study of entrepreneurial opportunity recognition of small and medium sized enterprises

As the result, a successful process of entrepreneurialopportunity recognition requires an aggregation of prior knowledge and network ties whichhave been nurtured for years before, along

An Exploratory Study of Entrepreneurial Opportunity Recognition of Small and Medium Sized Enterprises

Ngo Lien Thao Tran Tien Khoa Nguyen Van Phuong

International University, Vietnam National University HCMC, Vietnam

Abstract

Small medium sized enterprises (SMEs) have been playing a crucial role in enhancingthe economic development and growth in most countries The ways in which SMEsrecognize their entrepreneurial opportunities need to be investigated This paper aims toexplore different patterns in the processes of entrepreneurial opportunity recognition fromSMEs’ founders The study adopts qualitative method and conducts 16 semi-structured in-depth interviews with the founders of currently operating SMEs to identify opportunity forentrepreneurship in Vietnam As the result, a successful process of entrepreneurialopportunity recognition requires an aggregation of prior knowledge and network ties whichhave been nurtured for years before, along with the employment on either or both use ofentrepreneurial alertness and market analysis This study proves that possessing an ability toanalyze the market is as much important as staying alert toward opportunities Besides, alevel of creativity of entrepreneurs will be triggered to respond to situations in which theentrepreneurial opportunities arise However, founders of SMEs generate more adaptive style

of creativity than innovative one since being market driven

Keywords: opportunity recognition; entrepreneurship; SMEs

SMEs are an important part of an economy and bring undeniable welfare to the society InVietnam, they account for 97% of total enterprises, of which nearly 60% are small-sizedenterprises (General Statistics Office, 2017) The Provincial Competitiveness Index (PCI) 2015survey jointly made by attempt of Vietnam Chamber of Commerce and Industry (VCCI) alongthe United States Agency for International Development (USAID) also presented the similarfigures: Among the 8,335 domestic private enterprises responding to the PCI survey, 97.3%are small and medium sized Within such diverse business environment, SMEs are theengine of economic growth in the emerging markets and significantly contribute to nationaldevelopment SMEs in Vietnam occupy more than 40% of gross domestic product (GDP),contribute 31% to the total national budget and provide more than 50% of total employment(Oxford Business Group, 2017) Moreover, SMEs’ contribution to social welfare security andpoverty reduction in Vietnam has been widely acknowledged SMEs are not only majorsources of employment opportunity, but also foster productivity and make the environmentbecome more dynamic and competitive (Audretsch, Thurik, Verheul & Wennekers, 2002;Westhead, Uchasaran, & Wright, 2009) Detecting and electing the appropriate opportunitiesare the vital activities to help create successful businesses (Stevenson, Roberts, & Grousbeck,1985)

During last 20 years, many scholars have conducted numerous researches aboutopportunity recognition and development from a variety of theoretical perspectives andnumerous aspects like business, sociology, psychology, and economics They highlycontributed to the understanding of this field; however, opportunity recognition has bornedifferences and conflicts causing the inhomogeneity (Ardichvili, Cardozo, & Ray, 2003) One ofthe reasons is that each solely focuses on only one of the various elements affecting therecognition of entrepreneurial opportunity For example, Gaglio and Katz (2001) look into theentrepreneurial alertness involved in opportunity recognition in terms of social psychology,while Shane (2000) concentrates on the essential prior experience and knowledge forsuccessful recognition, then Dyer, Gregersen, and Christensen (2008) investigate the impact

of innovation on opportunity The fact that scholars pay attention to specific elements ensuemany full-scale studies about singular factors while neglecting an overview of all equallycrucial elements and how they may engage together in the same subject of study Furthermore,there is little agreement on the main notions used to identify and operationalize the process(Hansen, Shrader, & Monllor, 2011) Vagueness around how founders of SMEs recognizeopportunities for their business growth still appears in academic research, especially whenSMEs are now confronting the fast-paced transformation of technology and the worldeconomic integration (Thai & Chong, 2008)

Disclosure of the complex developing process of opportunities recognition is the centralsection of entrepreneurship research (Venkataraman, 1997) This study is dedicated to focus

on the phenomenon of entrepreneurial opportunity recognition by founders of SMEs at theinitial start phrase of their business venture in the area of Ho Chi Minh City In terms ofacademic, this paper seeks to explore and contribute a throughout the process ofentrepreneurial opportunity recognition by SMEs In term of practical application, this papershows what SMEs need to have in hands and how potential entrepreneurs can recognizeopportunities that can turn into a profitable business by raising deeper knowledge aboutdeterminants to opportunity recognition and its related process

Literature review

Entrepreneurial opportunity and opportunity-related process

For many years, researchers have been disputing what genuinely institutes anentrepreneurial opportunity They brought about a broad category of different notions,sometimes ambiguous or even conflicting, which

gives rise to a substantial extent of variety in prospects (McMullen, Plummer, & Acs, 2007).For instance, entrepreneurial opportunity has been identified as an idea (Davidsson, Hunter,

& Klofsten, 2006), as an unexploited project (Casson & Wadeson, 2007), or a potentialventure or business form (DeTienne & Chandler, 2007), or a realistic endeavor (DeCarolis &Saparito, 2006; Mueller, 2007) The business opportunity is considered as an objectiveoccurrence which is outward to SMEs and derives from the extraneous environment (Shane,2003) In contrast, some defines opportunity as a subjective happening inseparably connectwith and spring from the individual’s own perception and activities (Edelman, & Yli-Renko,2010; Sarason, Dean, & Dillard, 2006) And other scholars have suggested an argument thatbusiness world offers multitudinous types of opportunity (Alvarez & Barney, 2007; Sarasvathy,Dew, Velamuri, & Venkataraman, 2003)

Additionally, opportunity recognition calls for not only the opportunity itself but also thediscovering process operated by the related person While some have expressed opportunity

is a sequel of fortuitous findings (Long & McMullan, 1984), others have said that theopportunity-related process would come clear (Bhave, 1994; de Koning, 1999), after ameticulous searching effort (Fiet, Piskounov, & Patel, 2005) In the same vein, Baumol (1993)says that in order to discover entrepreneurial opportunity, a process to detect new means-ends relationships must be set up by a given change That also means entrepreneurs have

to analyze and brainstorm (Gaglio & Katz, 2001), like a cognitive process (Baron, 2004).Besides, the process which leads one to opportunity has been identically considered as aprocess which one generates creativity (Ardichvili, Cardozo, & Ray, 2003; Dimov, 2007;Hansen & Hills, 2004), or as an extraordinary action to solve a particular problem (Harper,2008) For instance, some operationalize business opportunity as a recently novel ideasubject (DeTienne & Chandler, 2007), while the rest operationalize it as the demand from themarket for a product or service that have potential to solve a particular problem (Eckhardt

& Ciuchta, 2006) In some circumstances, certain entrepreneurs possess the competence tosense and spot or even create opportunities (DeTienne & Chandler, 2007; Kolvereid & Isaksen,2006) Or some others have an innate trait like alertness, a special individual competency todetect opportunistic situations (Busenitz, 1996; Ozgen & Baron, 2007)

Determinants affecting the entrepreneurial opportunity recognition

With the objective to recognize opportunity and start a venture formation, SMEs mustproactively involve in entrepreneurial activities from scratch Founders of SMEs are likelyperceived as entrepreneurs in the process of pursuing new business and profit which will lead

to enterprise formation (DeTienne & Chandler, 2007; Gilmore, 2011) Approaching from thebehavioral aspect of entrepreneurs, entrepreneurial opportunity search includes knowledge,alertness, intuition, creativity and social interaction By searching the pattern of adoptedactivities of owners, the process evolves into opportunity recognition Since the more turbulentand complicated the marketplace is, the more opportunities entrepreneurs are granted;entrepreneurial opportunity recognition may also come into existence from a complex series

of phenomena with different distinct parts such as innovative insight, idea exploration,informal evaluation and concept development (Webb, Ireland, Hitt, Kistruck, & Tihanyi, 2011)

Or through the argument by Ardichvili, Cardozo, and Ray (2003), entrepreneurs undergo aprocess from observing underemployed resource or market need to disclosing a ‘match’between specific market need and certain resources; then formulating a fresh ‘match’ betweenthe need and resources in the specific context of their businesses And the maindeterminants influencing the above processes as well as contributors to entrepreneurialopportunity recognition that are in need of further exploration include prior knowledge,entrepreneurial alertness, market analysis, creativity, network ties and situational elements

Prior knowledge

Knowledge plays an indispensable role to reach any sound and substantial decision-making

as well as to spot business opportunities Shane (2000) claims that because of priorknowledge, owners can perceive the

value of new information, which leads them to the recognition of new opportunity.Venkataraman (1997) also declares that entrepreneurs recognize opportunities which areconcordant with information that they have already possessed Since information is developedthrough singular life experiences, everyone owns different stocks of knowledge andinformation It is believed that distinctive pack of prior knowledge can form a “knowledgecorridor,” which enables one to spot some certain opportunities instead of the rest(Venkataraman 1997) Shane (2000) claims that there are three main aspects of priorknowledge which are customer problems, principles of the markets, and the means to benefitfrom the markets.

In another way of classification, two types of prior knowledge are postulated by Sigrist(1999) The first is knowledge in a field of entrepreneurs’ special interest so that they willspend a tremendous amount of time and effort learning, which helps advance and deepentheir abilities, thereby gain esoteric knowledge in that specified field The other type ofknowledge, which is a result of rational choice, will be accumulated over the years, whileowners constantly work in a certain job Whether derived from education or working experience

or by fluke and any other ways, prior information makes a huge difference in the ability ofentrepreneurs to obtain, interpret and make the most of new information in the way whichthose in short of that prior information cannot duplicate (Roberts, 1991)

Based on Austrian economists, the key to open, the entrepreneurial opportunity is within thecombination of knowledge and alertness (Murphy, 2011; Vaghely & Julien, 2010) Asmentioned, when and where disequilibrium between market needs and the means tosatisfy those needs arises, opportunities are just around the corner For such reason, theAustrian believes that alert individuals can gain new opportunities when their knowledgeabout market needs to be aligned with knowledge about the means to meet those needs(Kirzner, 1997; Shane, 2000) However, even though numerous empirical evidenceembodies that prior experience have a substantial influence on the process of opportunityrecognition and development, some entrepreneurs still successfully sense and go afteropportunities that they possess no related prior experience before (Cooper, 1990)

Entrepreneurial alertness

Kirzner (1979, 1985), who is the first one to present the term ‘alertness’ into theentrepreneurship literature, describes it as “the ability to notice, without search, opportunitiesthat have been hitherto overlooked” or as “a motivated propensity of man to formulate animage of the future.” It is implied in the first interpretation that one can spot opportunitieseven when the person doesn’t intentionally seek for those In fact, when individuals possesshigh alertness, they may experience “passive search,” a condition in which they aresensible of opportunities, without conducting any formal, systematic search On the otherhand, the second interpretation means ability to “connect the dots” that empowers one tonotice the nexus among the changes or turbulence in the marketplace and to perceive those

as significant, regardless the fact that the cause and effect of opportunity at the momentare not evident yet (Leff Bonney, & Williams, 2009) Therefore, the comprehensivedimension of alertness can be determined as the capacity of entrepreneurs to generate aholistic depiction of the surrounding marketplace by assembling all of its constituents andknowing their meanings (Endsley, 1995)

In fact, entrepreneurial opportunities may be recognized and captured by some particularindividuals instead of the rest These dissimilarities result from the heterogeneity in people’ssensitiveness to opportunities to create as well as to deliver new solutions (Ardichvili, Cardozo,

& Ray, 2003), which origins from differences in people’s innate ability, background andexperience, and also the amount and sort of information they own in a specific scope alignedwith the opportunity Endsley (1995) asserts that some individuals are so sensible of market

gaps or problems that in any environment they find themselves, they can constantlyidentify possibilities of creating new products or services Besides that, Gaglio and Kats(2001) also contribute to

entrepreneurship literature that alert individuals possess a greater deal of knowledge and information within the marketplace than non-alert individuals who may neglect or disregard fluctuations within the marketplace.

Market analysis

Actively searching for information is broadly acknowledged as a vital step during theprocess of entrepreneurial opportunity recognition Nevertheless, lately, many scholars havedebated if entrepreneurs seek for opportunities and how the process of value recognitiondue to the incoming of new information happens to them (Ardichvili, Cardozo, & Ray,2003) Kirzner (1997) disclaims that “What differentiates discovery (related to hithertounknown profitable opportunities) from successful search (related to the intentionalgeneration of information which one knew one had fallen short of previously) is that the formerincludes the unexpected that accompanies along the manifestation that one had omittedsomething in fact readily available from the beginning.” Koller (1988) also affirms that mostentrepreneurs “recognize,” rather than “look for” opportunities of their enterprises Still, thepossession of being market-driven or a marketing orientation is believed to be crucial tobusiness success (Hult, Ketchen, & Slater, 2005)

SMEs which intensely depend on the professional expertise and experiential knowledge ofthe founders, along with a limited operational budget, have to be flexible to adopt suitabletradition marketing procedure which is logical and well thought out, but not entail immensefunding (Hulbert, Gilmore, & Carson, 2015) From marketing literature, founders of SMEs cantake advantage of some tools such as PEST analysis (Fifield, 1992), situation analysis, SWOTanalysis (Ansoff, 1969), marketing audit, Ansoff’s (1975) product-market matrix, Porter’s(1979) five forces model… Cravens and Piercy (2003) perceive the benefit of such evaluationtools is to clarify opportunities and gap in performance as well as to commence activities tocapitalize on those opportunities Despite the confinement by impact and size, limitedresources, and expertise, founders of SMEs can still manage to run their business, makesound decisions and present their market offerings to the marketplace by less formal, butmore intuitive and predictive strategic planning processes (Gilmore & Carson, 2007)

Network ties

Networking is an essential business aspect, especially when SMEs have to operate alongthe resource constraints and impediments (Deakins, 1991; Gilmore, Carson & Grant, 2001).Hills, Lumpkin, and Singh (1997) also say that the network ties of entrepreneurs aremomentous to opportunity recognition In reality, networking activities revolve around the waythat entrepreneurs operate their businesses, which refers that it can be spontaneous, casualand opportunistic (Gilmore, 2011) Consequently, the network can also be haphazard anddisjointed, including bilateral or multilateral connections among different individuals in somespecific situations

Based on Granovetter’s argument (1977), network consists of both strong and weak ties.Weak ties, which comprise easygoing acquaintances, are more likely to yield distinctiveknowledge and ideas than close friends since most people tend to possess more weak tiesthan strong ones in their lives Chetty and Holm (2000) express that entrepreneurs who havebroad network can improve their chances to encounter various opportunities, receive newinformation, learn from other ones’ experiences, and gain values from the reciprocal effect

of knowledge and resource current Moreover, social and business networks expand thehorizon of SME owner-managers, offering the means of approaching to new and different kinds

of information that would otherwise be faced (Wilkinson & Young, 2005) They do not onlysupport the access and co-function of different resources for further development andexploitation on entrepreneurial opportunities but also help back up on risks management as

well as the uncertainties involved (Wilkinson & Young, 2005) Furthermore, maintaininginteractions with individuals in social network and looking for information exterior the closesocial group will also bring about creative or unconventional idea formation (Perry-Smith, 2006).

as well as a general competitive advantage (Hirst, Van Knippenberg & Zhou, 2009) Creativityinvolves one’s sensitiveness to the environmental change, inducing promotion of a high orlow frequency of creative effort However, for many instances, entrepreneurs have a tendency

to get higher score results in different creativity tests than other individuals Schumpeter

(1934) is the first scholar to put forward the argument that because of creativity,entrepreneurs can benefit from the opportunities that the rest cannot In reality, creativity isbest obtained while one is in the flexible and non-predetermined state (Amabile, 1983).Meanwhile, Fillis and Rentschler (2006) claim that creative solutions do not have to becomplicated since relatively primary responses are capable of leading to the businesssuccess Timmons (1994) adopts a viewpoint that raising a good idea is the initial step in theprocess of turning an entrepreneurial opportunity into an actual business Moreover, founders

of SMEs are believed to display either an innovative or adaptive style of creativity (Filipczak,1997) Innovative creativity refers to activities of inventing new and different ideas, while

creativity relates to the modification of existing ideas and concepts Besides that, anappropriate environment or climate can facilitate and flourish entrepreneurial creativity from

interactions between thesituation and the individual (Lee, Florida & Acs, 2004; Hunter, Bedell & Mumford, 2007)

Situational elements

In many cases, the situation that entrepreneurs involve around can be the game-changingfactor leading the whole process of opportunity recognition Hulbert, Gilmore, and Carson(2015) say these external factors include serendipity or luck when things happen at the rightmoment or the right place, which is favorable towards entrepreneurs Getzels and Jackson(1962) suggest the differentiation between entrepreneurial opportunities can be clarified bythe origins and developing level Various sources for new opportunities emerge when there is

an understanding of the market, along with the business climate in which that marketfunctions To be more specific, sources of business opportunity can directly or indirectly derivefrom crisis or fluctuation in the macro-environments such as society, politics, economics ortechnological revolution and so forth or from the dynamic changes within the market thatSMEs operate in (Hulbert, Gilmore, & Carson, 2015)

Methodology

Exploratory qualitative research is adopted to fully discover the determinants affecting theentrepreneurial opportunity recognition process by founders of SMEs and the inter-relationshipsamong those determinants The benefit of using a qualitative approach is from its capability toseize the most of the meaning and nature of opportunity recognition process from ways oflooking by the research participants instead of an assessment about the frequency of events orresponses This approach will accommodate a framework which is driven by the researchparticipants and allow researchers to explore the complexities and the depth of phenomenaand providing valuable and insightful material regarding the recognition of entrepreneurialopportunity (Bamberger, 2000; Bryant, 2006) Besides that, such type of study is implicitly

correct to induce credible causal explanation for further extending managerial practice(Maxwell, 2005).

The method used for collecting primary data is a semi-structured in-depth interview Thistype of method is considered to be one of the best ways to explore an individual’s behaviorand attitude (Tull & Hawkins, 1990) A sample of 16 respondents who are founders of SMEs isgathered primarily based on the definition

and qualifying criteria of Small and medium-sized enterprises (SMEs) in Law of Enterprise:Article 3, Decree 56/2009/ND-CP by Vietnam government The companies of these ownersare currently operating within various industries and scattering at different areas around HoChi Minh City Moreover, all selected companies must have been running under themanagement of the initial founders and successfully functioning for at least three years

In addition, the interview guide is based on the key themes developed from the literaturereview and including a part about general background information of the companies andfounders There is a set of questions to pose as well as a clear idea about what eachinterview has to cover, however, the discussion is free to alter and subject to changesubstantially by the talking flow of participant Following this method, researchers can beconfident that the obtained results about research participants’ thoughts and experiences arereasonably accurate (Fylan, 2005) Data collection was undertaken in two months, and everyinterview approximately lasted about 50 minutes each time The recorded interviews are alltranscribed into English versions; then the data is analyzed and synthesized in accordancewith the themes determined and discussed earlier in the literature review Identical cases,along with the background and nature of the businesses, would be grouped together to formpatterns of inter-relationships among the determinants to discern how they cohesivelyinfluence the entrepreneurial opportunity recognition

Findings

The findings of this study demonstrate how prior knowledge, entrepreneurial alertness,market analysis and network ties are extremely essential for the process ofentrepreneurial opportunity recognition In addition, the use of creativity and situationalelements also plays a crucial role Nevertheless, these determinants portrayed divergentlevels of importance in the companies studied

Prior knowledge, a crucial key component in recognition of entrepreneurial opportunities,evolved from actively spending time within some specific marketplace or field of activities.Prior knowledge from the education system and experiential learning about the development

of product and service was found to be highly relevant to the answers of the founders interms of their operating territories This proved to uphold the overall thrust of precedingresearches and the literature associated with entrepreneurial opportunity recognition Infact, prior knowledge was conceded to be a precisely foundational factor to the process ofentrepreneurial opportunity recognition by 15 interviewed founders of SMEs

The value of prior knowledge was adjacent to the significance of maintaining entrepreneurialalertness to potential opportunities and executing market analysis along with strategicplanning While alertness was viewed as a major factor in 11 cases, market analysis was notany less important in 10 out of 16 cases Thus, both factors were found to link to theentrepreneurial opportunity recognition of SMEs closely Founders who showed high level onentrepreneurial alertness exhibited the ability to spot the problems or notice the gaps withinthe market, granted they were responsive to particular sorts of opportunities or working in thefield long enough to catch sight of its pattern

On the other hand, other entrepreneurs expressed that using analytic tools enabled them

to perceive available resources obviously, and recognize their pros, and cons as well asevaluate the objectives of entrepreneurial opportunities, although many of them did notthink that the analyzing process had to be formal, over-organized or expensive Thesefounders intuitively and informally collected information which was helpful for thedevelopment of product offerings and the current market Unlike being proved in previousresearches, founders of SMEs either utilized entrepreneurial alertness or adopted market

analysis; or in this study, four entrepreneurs employed and took advantages of bothapproaches to reach sound decisions on whether they should exploit the opportunity and howthey should turn it into a profitable business

From all positive responses in 16 interviews, it was evident that network ties were anindispensable factor to the process of entrepreneurial opportunity recognition The foundersacclaimed that network ties, both weak ties and strong ties, did not only provide the newinformation and insight, but also help update the market condition Through it is eitherintentional or unintentional, many admitted to be opportunity-driven, which meant they had

a tendency to make new acquaintances that were beneficial to their businesses Moreover,some founders said they received monumental assistant from family ones or long-termrelationships whom had professional knowledge or experience during the process ofdiscovering, evaluating and even developing their entrepreneurial opportunities Especially,possessing a broad social as well as business network appeared to be a prominent factor thathelped founders confidently decide to start off their own ventures

Directly affecting the process of entrepreneurial opportunity recognition, the fourdeterminants were also conjoined with one another and put in use by entrepreneurs Frominterviews, there are four main patterns of inter-relationships in terms of the perceived relativeimportance of prior knowledge, entrepreneurial alertness, market analysis and network ties.The analysis is further described in the context that was linked to each process ofopportunity recognition by each entrepreneur

Inter-relationships among prior knowledge, entrepreneurial alertness, market analysis and network ties Prior knowledge, entrepreneurial alertness and network ties are of high

importance; market analysis is of

low importance

Six cases illustrated the application and significance of prior knowledge, entrepreneurialalertness, and network ties, while implied that market analysis was marginalized Founders ofSMEs showed that they had years of various experiences which may directly or indirectlyassociate with the spheres of their business operation, but all prior experiences appeared to

be helpful Since possessing meticulous observation, sensitiveness, and knowledge in hands,they were alert to opportunities rising within the environment For such reasons,entrepreneurs were well-perceived of opportunities and did not need any further analysis.During the process of opportunity recognition, founders of SMEs acknowledged that they didnot only get support from strong network ties such as family ones and close friends but alsosaw network in general as a factor that helped generate sources of income for the business.Specified cases from 6 SMEs are shown in Table 1

Prior knowledge, market analysis and network ties are of high importance; entrepreneurialalertness is of low importance

Five cases displayed how essential prior knowledge, market analysis, and network ties are,while entrepreneurial alertness was a minor factor In this pattern, founders of SMEs referredthey were all experts having long-term experiences in their current industries Because ofthe feature of the industry and the awareness on the importance of market analysis,founders of SMEs conducted some evaluations and form strategies by using some marketingtools It was proved that market analysis by SMEs was mostly informal but practical andhelpful Moreover, these founders did not foresee or expect opportunities or exhibit alertnesstowards his/her opportunities Instead, they were confident with their professional skills, alongwith strong network ties that they could successfully function in the right market with the righttarget segment Specified cases from 5 SMEs are shown in Table 2

All four elements prior knowledge, entrepreneurial alertness, market analysis and networkties are of high importance

Four cases exhibited the presence of prior knowledge, entrepreneurial alertness, marketanalysis and network ties during their processes of entrepreneurial opportunity recognition.Founders of these SMEs expressed to carry their prior knowledge along from previousemployment Only one founder from company 16 did not get education aligned with his field

of current business However, he expressed the knowledge came handy, and a businessman

should flexibly take advantage of all available resources Market analysis also played animportant role that helped redefine the availability of opportunities, even though founderswere

alert before Once again, network ties appeared as a fundamental factor that entrepreneurs needed to have before startup Specified cases from 4 SMEs are shown in Table 3.

Entrepreneurial alertness, market analysis and network ties are of high importance; priorknowledge is of low importance

One out of 16 cases illustrated that all elements served as critical factors to recognizeentrepreneurial opportunity, except prior knowledge Founder of SMEs studied and had asuccessful management career in another business field Still, he was alert to coffee issuearound the environment and conducted some market analysis to evaluate potentialdevelopment of his future business Founder indicated using similar strategic planning processwith his business in construction He also, like other founders of SMEs, expressed a level ofimportance of possessing network ties in the business world This specified case is shown inTable 4

Utilization of creativity to capitalize on sources of

opportunities The role of creativity

16 founders fostered various shades of creativity to generate distinctively, yet applicableideas of problem- solving Those were embedded in products or services of these SMEs,becoming their competitive advantages that differentiated their businesses from the rest Forsuch contribution, creativity can be believed to hold an important position in the process ofentrepreneurial opportunity Through this study, creativity by SMEs is identified and evaluated

in terms of adaptive style or innovative style (Filipczak, 1997) Table 5 and 6 will respectivelydemonstrate further these two styles of creativity within the context of each SME’s opportunity.Adaptive creativity Adaptive creativity relates to the modification of already existing ideaand concept into a new one In this case, the founders of SMEs saw the span between whatthey knew from prior knowledge and the solution in need to grasp the opportunity And theydecided to remove the span by adapting their products or services to match the demand ofthe market And through all the interviews, 12 founders of SMEs implied that they adopted thisstyle of creativity

Innovative creativity Innovative creativity refers to the activities to invent a new anddistinguishing idea and concept Only four out of 16 founders of SMEs indicated that theyadopted this style of creativity The common was that these founders were all the first ones intheir field to invent these distinguished products or services

The role of situational elements

As mention in the literature review, situations that entrepreneurs were involved in could bethe game- changing factor to their businesses If the founders were not at the right time orthe right place to encounter the sources of opportunities, they could not manipulate otherfactors and achieve such successes Table 5-6 respectively demonstrate a brief of situationsthat entrepreneurial opportunities revolved around, along with the creativity generated bySMEs In the following section, eight special cases of 8 SMEs in which the situationalelements were highly important, are illustrated in details

Benefit from the dynamic market In a fluctuating market such as real estate, founder ofSME 07 grasped the opportunity right at the time that this market was vigorously active afterbeing gloomy for a long time A “fever” over villas and luxury apartments in the new urbanwas widely outspread This led to the need of increasing demand for advertising andmarketing activities in real estate industry If the founder started off a year earlier, then itcould not work out since the market was still stagnant And in the year after, marketuncertainty increased

Benefit from changes in the environment Changes in the environment can also offernumerous entrepreneurial opportunities In the cases of SMEs 05, 08 and 12, these foundersnoticed the opportunities arising from politic and economic changes After Vietnamgovernment issued or amended the law and regulation, these events induced and benefitedmore SMEs to flourish For SME 11, founder established his construction venture after 1 year