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

As the result, a successful process of entrepreneurial opportunity recognition requires an aggregation of prior knowledge and network ties which have been nurtured for years before, alon

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 enhancing the economic development and growth in most countries The ways in which SMEs recognize their entrepreneurial opportunities need to be investigated This paper aims to explore different patterns in the processes of entrepreneurial opportunity recognition from SMEs’ founders The study adopts qualitative method and conducts 16 semi-structured in-depth interviews with the founders of currently operating SMEs to identify opportunity for entrepreneurship in Vietnam As the result, a successful process of entrepreneurial opportunity recognition requires an aggregation of prior knowledge and network ties which have been nurtured for years before, along with the employment on either or both use of entrepreneurial alertness and market analysis This study proves that possessing an ability to analyze the market is as much important as staying alert toward opportunities Besides, a level of creativity of entrepreneurs will be triggered to respond

to situations in which the entrepreneurial opportunities arise However, founders of SMEs generate more adaptive style of creativity than innovative one since being market driven

Keywords: opportunity recognition; entrepreneurship; SMEs

Introduction

SMEs are an important part of an economy and bring undeniable welfare to the society In Vietnam, they account for 97% of total enterprises, of which nearly 60% are small-sized enterprises (General Statistics Office, 2017) The Provincial Competitiveness Index (PCI) 2015 survey jointly made by attempt of Vietnam Chamber

of Commerce and Industry (VCCI) along the United States Agency for International Development (USAID) also presented the similar figures: 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 the engine of economic growth in the emerging markets and significantly contribute to national development 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 and poverty reduction in Vietnam has been widely acknowledged SMEs are not only major sources of employment opportunity, but also foster productivity and make the environment become more dynamic and competitive (Audretsch, Thurik, Verheul & Wennekers, 2002; Westhead, Uchasaran, & Wright, 2009) Detecting and electing the appropriate opportunities are the vital activities to help create successful businesses (Stevenson, Roberts, & Grousbeck, 1985)

During last 20 years, many scholars have conducted numerous researches about opportunity recognition and development from a variety of theoretical perspectives and numerous aspects like business, sociology, psychology, and economics They highly contributed to the understanding of this field; however, opportunity recognition has borne differences and conflicts causing the inhomogeneity (Ardichvili, Cardozo, & Ray, 2003) One of the reasons is that each solely focuses on only one of the various elements affecting the recognition of entrepreneurial opportunity For example, Gaglio and Katz (2001) look into the entrepreneurial alertness involved in opportunity recognition in terms of social psychology, while Shane (2000) concentrates on the essential prior experience and knowledge for successful recognition, then Dyer, Gregersen, and Christensen (2008) investigate the impact of innovation on opportunity The fact that scholars pay attention to specific elements ensue many full-scale studies about singular factors while neglecting an overview of all equally crucial 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 recognize opportunities for their business growth still appears in academic research, especially when SMEs are now confronting the fast-paced transformation of technology and the world economic integration (Thai & Chong, 2008)

Disclosure of the complex developing process of opportunities recognition is the central section of entrepreneurship research (Venkataraman, 1997) This study is dedicated to focus on the phenomenon of entrepreneurial opportunity recognition by founders of SMEs at the initial start phrase of their business venture in the area of Ho Chi Minh City In terms of academic, this paper seeks to explore and contribute a throughout the process of entrepreneurial opportunity recognition by SMEs In term of practical application, this paper shows what SMEs need to have in hands and how potential entrepreneurs can recognize opportunities that can turn into a profitable business by raising deeper knowledge about determinants 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 an entrepreneurial 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 potential venture or business form (DeTienne & Chandler, 2007), or a realistic endeavor (DeCarolis & Saparito, 2006; Mueller, 2007) The business opportunity is considered as an objective occurrence which is outward to SMEs and derives from the extraneous environment (Shane, 2003) In contrast, some defines opportunity as a subjective happening inseparably connect with 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 that business 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 the discovering process operated by the related person While some have expressed opportunity is a sequel of fortuitous findings (Long & McMullan, 1984), others have said that the opportunity-related process would come clear (Bhave, 1994; de Koning, 1999), after a meticulous 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 a process 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 idea subject (DeTienne & Chandler, 2007), while the rest operationalize it as the demand from the market for a product or service that have potential to solve a particular problem (Eckhardt & Ciuchta, 2006) In some circumstances, certain entrepreneurs possess the competence to sense 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 to detect 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 must proactively involve

in entrepreneurial activities from scratch Founders of SMEs are likely perceived as entrepreneurs in the process of pursuing new business and profit which will lead to enterprise formation (DeTienne & Chandler, 2007; Gilmore, 2011) Approaching from the behavioral aspect of entrepreneurs, entrepreneurial opportunity search includes knowledge, alertness, intuition, creativity and social interaction By searching the pattern of adopted activities of owners, the process evolves into opportunity recognition Since the more turbulent and 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 a process from observing underemployed resource or market need to disclosing

a ‘match’ between specific market need and certain resources; then formulating a fresh ‘match’ between the need and resources in the specific context of their businesses And the main determinants influencing the above processes as well as contributors to entrepreneurial opportunity 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 prior knowledge, 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 are concordant with information that they have already possessed Since information is developed through singular life experiences, everyone owns different stocks of knowledge and information It is believed that distinctive pack of prior knowledge can form a

“knowledge corridor,” which enables one to spot some certain opportunities instead of the rest (Venkataraman 1997) Shane (2000) claims that there are three main aspects of prior knowledge which are customer problems, principles of the markets, and the means to benefit from 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 will spend a tremendous amount of time and effort learning, which helps advance and deepen their abilities, thereby gain esoteric knowledge in that specified field The other type of knowledge, which is a result of rational choice, will be accumulated over the years, while owners 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 of entrepreneurs to obtain, interpret and make the most of new information in the way which those in short of that prior information cannot duplicate (Roberts, 1991)

Based on Austrian economists, the key to open, the entrepreneurial opportunity is within the combination

of knowledge and alertness (Murphy, 2011; Vaghely & Julien, 2010) As mentioned, when and where disequilibrium between market needs and the means to satisfy those needs arises, opportunities are just around the corner For such reason, the Austrian believes that alert individuals can gain new opportunities when their knowledge about market needs to be aligned with knowledge about the means to meet those needs (Kirzner, 1997; Shane, 2000) However, even though numerous empirical evidence embodies that prior experience have a substantial influence on the process of opportunity recognition and development, some entrepreneurs still successfully sense and go after opportunities that they possess no related prior experience before (Cooper, 1990)

or turbulence in the marketplace and to perceive those as significant, regardless the fact that the cause and effect of opportunity at the moment are not evident yet (Leff Bonney, & Williams, 2009) Therefore, the comprehensive dimension of alertness can be determined as the capacity of entrepreneurs to generate a holistic depiction of the surrounding marketplace by assembling all of its constituents and knowing their meanings (Endsley, 1995)

In fact, entrepreneurial opportunities may be recognized and captured by some particular individuals instead of the rest These dissimilarities result from the heterogeneity in people’s sensitiveness 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 and experience, and also the amount and sort of information they own

in a specific scope aligned with 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 constantly identify 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 the process of entrepreneurial opportunity recognition Nevertheless, lately, many scholars have debated if entrepreneurs seek for opportunities and how the process of value recognition due to the incoming of new information happens to them (Ardichvili, Cardozo, & Ray, 2003) Kirzner (1997) disclaims that “What differentiates discovery (related to hitherto unknown profitable opportunities) from successful search (related to the intentional generation of information which one knew one had fallen short of previously) is that the former includes the unexpected that accompanies along the manifestation that one had omitted something in fact readily available from the beginning.” Koller (1988) also affirms that most entrepreneurs “recognize,” rather than “look for” opportunities of their enterprises Still, the possession of being market-driven or a marketing orientation is believed to be crucial to business success (Hult, Ketchen, & Slater, 2005)

SMEs which intensely depend on the professional expertise and experiential knowledge of the founders, along with a limited operational budget, have to be flexible to adopt suitable tradition marketing procedure which is logical and well thought out, but not entail immense funding (Hulbert, Gilmore, & Carson, 2015) From marketing literature, founders of SMEs can take advantage of some tools such as PEST analysis (Fifield, 1992), situation analysis, SWOT analysis (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 evaluation tools is to clarify opportunities and gap in performance as well as to commence activities to capitalize on those opportunities Despite the confinement by impact and size, limited resources, and expertise, founders of SMEs can still manage to run their business, make sound decisions and present their market offerings to the marketplace by less formal, but more intuitive and predictive strategic planning processes (Gilmore & Carson, 2007)

Network ties

Networking is an essential business aspect, especially when SMEs have to operate along the resource constraints and impediments (Deakins, 1991; Gilmore, Carson & Grant, 2001) Hills, Lumpkin, and Singh (1997) also say that the network ties of entrepreneurs are momentous to opportunity recognition In reality, networking activities revolve around the way that entrepreneurs operate their businesses, which refers that it can be spontaneous, casual and opportunistic (Gilmore, 2011) Consequently, the network can also be haphazard and disjointed, including bilateral or multilateral connections among different individuals in some specific 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 distinctive knowledge and ideas than close friends since most people tend to possess more weak ties than strong ones in their lives Chetty and Holm (2000) express that entrepreneurs who have broad network can improve their chances to encounter various opportunities, receive new information, learn from other ones’ experiences, and gain values from the reciprocal effect of knowledge and resource current Moreover, social and business networks expand the horizon 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 only support the access and co-function

of different resources for further development and exploitation on entrepreneurial opportunities but also help back up on risks management as well as the uncertainties involved (Wilkinson & Young, 2005) Furthermore, maintaining interactions with individuals in social network and looking for information exterior the close social group will also bring about creative or unconventional idea formation (Perry-Smith, 2006)

Creativity

Creativity has been seen as a central organizational competency and a ground-breaking factor to future business success, especially within SMEs (Palus & Horth, 2002; Bridge, O’neill & Cromie, 2003) Amabile (1997) explains entrepreneurial creativity as “the construction and implementation of novel, yet appropriate ideas to set up a new venture.” Individual creativity within a business pays a tremendous contribution to organizational innovation as well as a general competitive advantage (Hirst, Van Knippenberg & Zhou, 2009) Creativity involves one’s sensitiveness to the environmental change, inducing promotion of a high or low 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 is best 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 be complicated since relatively primary responses are capable of leading to the business success Timmons (1994) adopts a viewpoint that raising a good idea is the initial step in the process 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, an appropriate environment or climate can facilitate and flourish entrepreneurial creativity from interactions between the situation 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-changing factor 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 right moment or the right place, which is favorable towards entrepreneurs Getzels and Jackson (1962) suggest the differentiation between entrepreneurial opportunities can be clarified by the 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 market functions To be more specific, sources of business opportunity can directly or indirectly derive from crisis or fluctuation in the macro-environments such as society, politics, economics or technological revolution and so forth or from the dynamic changes within the market that SMEs operate in (Hulbert, Gilmore, & Carson, 2015)

Methodology

Exploratory qualitative research is adopted to fully discover the determinants affecting the entrepreneurial opportunity recognition process by founders of SMEs and the inter-relationships among those determinants The benefit of using a qualitative approach is from its capability to seize the most of the meaning and nature

of opportunity recognition process from ways of looking by the research participants instead of an assessment about the frequency of events or responses This approach will accommodate a framework which is driven by the research participants and allow researchers to explore the complexities and the depth of phenomena and providing valuable and insightful material regarding the recognition of entrepreneurial opportunity (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 This type of method

is considered to be one of the best ways to explore an individual’s behavior and attitude (Tull & Hawkins, 1990) A sample of 16 respondents who are founders of SMEs is gathered 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 owners are currently operating within various industries and scattering at different areas around Ho Chi Minh City Moreover, all selected companies must have been running under the management 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 literature review and including a part about general background information of the companies and founders There is a set of questions to pose as well as a clear idea about what each interview has to cover, however, the discussion is free to alter and subject to change substantially by the talking flow of participant Following this method, researchers can be confident that the obtained results about research participants’ thoughts and experiences are reasonably accurate (Fylan, 2005) Data collection was undertaken in two months, and every interview approximately lasted about 50 minutes each time The recorded interviews are all transcribed into English versions; then the data is analyzed and synthesized in accordance with 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 form patterns of inter-relationships among the determinants to discern how they cohesively influence 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 of entrepreneurial opportunity recognition In addition, the use of creativity and situational elements also plays a crucial role Nevertheless, these determinants portrayed divergent levels 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 in terms of their operating territories This proved to uphold the overall thrust of preceding researches and the literature associated with entrepreneurial opportunity recognition In fact, prior knowledge was conceded to be a precisely foundational factor to the process of entrepreneurial opportunity recognition by 15 interviewed founders of SMEs

The value of prior knowledge was adjacent to the significance of maintaining entrepreneurial alertness to potential opportunities and executing market analysis along with strategic planning While alertness was viewed as a major factor in 11 cases, market analysis was not any less important in 10 out of 16 cases Thus, both factors were found to link to the entrepreneurial opportunity recognition of SMEs closely Founders who showed high level on entrepreneurial alertness exhibited the ability to spot the problems or notice the gaps within the market, granted they were responsive to particular sorts of opportunities or working in the field 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 as evaluate the objectives of entrepreneurial opportunities, although many of them did not think that the analyzing process had to be formal, over-organized or expensive These founders intuitively and informally collected information which was helpful for the development of product offerings and the current market Unlike being proved in previous researches, founders of SMEs either utilized entrepreneurial alertness or adopted market analysis; or in this study, four entrepreneurs employed and took advantages of both approaches to reach sound decisions on whether they should exploit the opportunity and how they should turn it into a profitable business

From all positive responses in 16 interviews, it was evident that network ties were an indispensable factor

to the process of entrepreneurial opportunity recognition The founders acclaimed that network ties, both weak ties and strong ties, did not only provide the new information and insight, but also help update the market condition Through it is either intentional 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-term relationships whom had professional knowledge or experience during the process of discovering, evaluating and even developing their entrepreneurial opportunities Especially, possessing a broad social as well as business network appeared to be a prominent factor that helped founders confidently decide to start off their own ventures

Directly affecting the process of entrepreneurial opportunity recognition, the four determinants were also conjoined with one another and put in use by entrepreneurs From interviews, there are four main patterns of inter-relationships in terms of the perceived relative importance of prior knowledge, entrepreneurial alertness, market analysis and network ties The analysis is further described in the context that was linked to each process of opportunity 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, entrepreneurial alertness, and network ties, while implied that market analysis was marginalized Founders of SMEs showed that they had years of various experiences which may directly or indirectly associate 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 did not only get support from strong network ties such as family ones and close friends but also saw network in general as a factor that helped generate sources of income for the business Specified cases from 6 SMEs are shown in Table

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

Four cases exhibited the presence of prior knowledge, entrepreneurial alertness, market analysis and network ties during their processes of entrepreneurial opportunity recognition Founders of these SMEs expressed to carry their prior knowledge along from previous employment 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 an important role that helped redefine the availability of opportunities, even though founders were

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; prior knowledge is of low importance

One out of 16 cases illustrated that all elements served as critical factors to recognize entrepreneurial opportunity, except prior knowledge Founder of SMEs studied and had a successful management career in another business field Still, he was alert to coffee issue around the environment and conducted some market analysis to evaluate potential development of his future business Founder indicated using similar strategic planning process with his business in construction He also, like other founders of SMEs, expressed a level of importance of possessing network ties in the business world This specified case is shown in Table 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 applicable ideas of solving Those were embedded in products or services of these SMEs, becoming their competitive advantages that differentiated their businesses from the rest For such contribution, creativity can be believed to hold an important position in the process of entrepreneurial 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 respectively demonstrate 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 idea and concept into a new one In this case, the founders of SMEs saw the span between what they knew from prior knowledge and the solution in need to grasp the opportunity And they decided to remove the span by adapting their products or services to match the demand of the market And through all the interviews, 12 founders of SMEs implied that they adopted this style of creativity

problem-Innovative creativity problem-Innovative creativity refers to the activities to invent a new and distinguishing idea and concept Only four out of 16 founders of SMEs indicated that they adopted this style of creativity The common was that these founders were all the first ones in their 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 be the changing factor to their businesses If the founders were not at the right time or the right place to encounter the sources of opportunities, they could not manipulate other factors and achieve such successes Table 5-6 respectively demonstrate a brief of situations that entrepreneurial opportunities revolved around, along with the creativity generated by SMEs In the following section, eight special cases of 8 SMEs in which the situational elements were highly important, are illustrated in details

game-Benefit from the dynamic market In a fluctuating market such as real estate, founder of SME 07 grasped the opportunity right at the time that this market was vigorously active after being gloomy for a long time A

“fever” over villas and luxury apartments in the new urban was widely outspread This led to the need of increasing demand for advertising and marketing activities in real estate industry If the founder started off a year earlier, then it could not work out since the market was still stagnant And in the year after, market uncertainty increased

Benefit from changes in the environment Changes in the environment can also offer numerous entrepreneurial opportunities In the cases of SMEs 05, 08 and 12, these founders noticed the opportunities arising from politic and economic changes After Vietnam government issued or amended the law and regulation, these events induced and benefited more SMEs to flourish For SME 11, founder established his construction venture after 1 year when Vietnam officially became a member of WTO This economic change allowed his business to receive benefit from the exceeding FDI influx into construction and real estate sectors

As another major change affecting every other aspect, new technology development was found to link to SMEs

03, 09 and 13 closely These founders sensed the potential enlargement in demand for products and services related to computers and technology solution in both B2C and B2B markets And it is crucial to choose the correct time interval since the market needed to reach a level of maturity to be ready to accept technology into the daily life as well as business operation, while the entrepreneurs were still forerunners to catch the opportunities in their fields

Conclusions

This study intends to explore the determinants and their inter-relationships that have an impact on the process of opportunity recognition of SMEs from the first place It can be concluded that six determinants including prior knowledge, entrepreneurial alertness, market analysis, network ties and situational elements have their particular role during the process Prior knowledge and network ties that founders accumulated from previous work and study appear to be the fundamental determinants which all founders of SMEs have

to possess before startup Then comes the practice of entrepreneurial alertness and market analysis Founders

of SMEs exhibit to tend to take advantage of either or both determinants Entrepreneurial opportunity can be recognized through a scrupulous market analyzing either the mechanism or being alert to turbulences within the environment or maybe by a combination of both two determinants, along with the help from expertise and network The process of entrepreneurial opportunity recognition also requires SMEs to employ a certain level

of creativity Products or services of SMEs tend to show more adaptive style of creativity than innovative style

of creativity since being market driven And last but not least, sources of opportunities arising from market dynamics and changes in the environment, so entrepreneurs who can quickly approach and respond to the situation will gain opportunity and bloom

Due to the complexity and the depth of this research, it hopes to contribute to the framework building of entrepreneurial opportunity recognition by SMEs However, further researches with bigger sample size in different contexts of cultures as well as economies need to be conducted to affirm, broaden and validate the findings

Limitation of research

Despite the attempt to avoid impediments, this study still bears some limitations Firstly, the research respondents are only SMEs within Ho Chi Minh City area, which is the most dynamic and prosperous city of Vietnam Secondly, this study is written in English Thus, transcriptions from interviews in Vietnamese may not comprehensively convey all ideas and expressions of the respondents

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