Lecture Entrepreneurship: Chapter 3 - Zacharakis, Bygrave, Corbett

Chapter 3 - Opportunity recognition, shaping, & reshaping. This chapter focuses on evaluating ideas and assessing whether they are indeed good opportunities. While an idea is necessary to entrepreneurship, it isn’t sufficient. To have a successful entrepreneurial endeavor, your idea needs to be an opportunity.

OPPORTUNI TY  RECOGNI TI ON,   SHAPI NG,   &  RESHAPI NG

Chapt e r   3

Visualizing Opportunity

Visualizing Opportunity

• How do you spend your spare time?

• What activities provide you with happiness?

• Talk to people in your sphere of influence.

Find Your 

Passion

See the 

Competition

Test the 

Market

• How are customers currently meeting the need that you propose to fill?

• Can you differentiate between your direct and indirect competition?

• Is this an attractive opportunity?

• A series of Market Tests will allow you to gauge the viability of your opportunity.

Idea-to-Opportunity Transition

See Yourself

Experience/Knowledge is often the

“long pole in the tent”

Multiply  Stimuli

• Brain  storm /write

• No judging

Gather 

Stimuli

• Observe

• Ask

• Record

Create  Concepts

• Build a simple  mock­up

• Plan to iterate

Optimize  Practicality

• Observe

• Ask

• Record

Idea Multiplication:

IDEO Technique

The Opportunity Space

(Global) Business  Environment

Customer

s

Your  Company

Supplier

s

Government Regulations

Competitor

s Competitors Competitors

The Customer

Psychographics Demographics

Common Demographic/Psychographic Categories

Target Audience Categories

Primary Target Audience

Secondary Target Audience

Tertiary Target Audience

• Age

etc.)

orientation, materialistic, active, athletic, etc.)

shy, extroverted, etc.)

open-minded, traditional, etc.)

Macro Trends:

Last 50 years

Dual Income Households Child care, In-Home Services –

landscaping, housecleaning, prepared meals

Touch Computing Tablet computers and eReaders—iPad,

Amazon Kindle Fire, Samsung Galaxy, Motorola Xoom Touch-based operating systems—Windows 8 and Mac OS X Lion

Obesity Drain on healthcare system, growth of

diet industry, changes in food industry, health clubs, home gyms

Sharing Economy Connecting people to excess capacity,

like Uber, Lyft, AirBnB

The Diffusion of Product Acceptance Over Time

Time

W ind

ow  of

Op po rtu nit y

Ne w

Co mp eti tor s

En ter

  Ob sol

esc en

ce  

Ph ase

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Setting Prices

Price

Penetration Pricing

Strategy

Cost-plus Pricing

Strategy

Assessing Market Prices for Competing

Products

Strategy

Requires Enormous Financing

Price May Not Match The Value

The Best Option

The Value Chain:

Reaching Customers

Example: Value Chain of Gourmet Stew

Base Ingredients

Sauce, etc.

G M

 2 5

30 %

G M

 1 0

25 %

G M

 1 5

35 %

G M

 2 0

30 %

Gourmet

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Find “Stealth” Competitors

Opportunity Checklist

Customer

Growth

Price, Frequency,

Competition

Key Success Factors

Evaluate your idea to see if it is a strong opportunity.

Evaluate several ideas simultaneously to see which is most

promising.

Examine weaknesses and see how you can modify your business

model.

growing market

idea and know the customer

competition can Four favorable elements: customer,