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Module 2 - Objective 4 - Sources of Entrepreneurial Opportunities

Entrepreneurial opportunities arise from the intersection of a need, the means to fulfill it, a method to apply those means, and a way to benefit. These opportunities can be influenced by societal changes, emerging markets, new technologies, social innovations, changing demographics, and political or regulatory shifts. Entrepreneurs must recognize these opportunities and innovate solutions that provide value to customers while ensuring financial viability.

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3 views

Module 2 - Objective 4 - Sources of Entrepreneurial Opportunities

Entrepreneurial opportunities arise from the intersection of a need, the means to fulfill it, a method to apply those means, and a way to benefit. These opportunities can be influenced by societal changes, emerging markets, new technologies, social innovations, changing demographics, and political or regulatory shifts. Entrepreneurs must recognize these opportunities and innovate solutions that provide value to customers while ensuring financial viability.

Uploaded by

Antonia Pierre
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Entrepreneurship Unit 1

MODULE 2 – Objective 4
Lecture Notes – Discuss Sources of Entrepreneurial Opportunities

A business opportunity consists of four elements, all of which are to be present within the same
time frame (window of opportunity) and most often within the same domain or geographical
location before it can be claimed as a business opportunity. These four elements are:
● A need
● The means to fulfil the need
● A method to apply the means to fulfil the need and;
● A method to benefit

Entrepreneurial Opportunities
Many different conditions in society can create entrepreneurial opportunities for new goods and
services. Opportunity conditions arise from a variety of sources. At a broad societal level, they
are present as the result of forces—such as changes in knowledge and understanding, the
development of new technology, shifting demographics, political change, or changing attitudes
and norms—that give rise to new preferences and concerns. These forces constantly open up new
opportunities for entrepreneurs. In relation to sustainability concerns, certain demographic shifts
and pollution challenges create opportunities.

The entrepreneur must first recognize the opportunity and then innovate by proposing a business
solution that provides an attractive alternative to customers. A solution is just the first step in the
process; the entrepreneur must also investigate the economic value of and business proposition
emanating from that opportunity. They must research the market to understand how their
potential product or service provides value to a customer and whether the amount a customer is
willing to pay, which reflects the value of the product or service to the customer, exceeds the
costs to provide that value, product, or service to the customer. In this way, the entrepreneur is
contributing to economic growth and society by providing customers with goods and services
whose costs to provide are less than their value to consumers. An entrepreneur can come up with
a new approach that meets a customer’s need or want, but if not enough customers are willing or
able to pay a price above the cost of that product or service, it will not be financially viable.
Therefore, the opportunity becomes a true business opportunity when it is of sufficient scale and
value—that is, revenues will cover costs and promise to offer net revenue above operating costs
after the initial start-up investment expenditures are repaid.

Sources of Entrepreneurial Opportunities

1. Emerging markets
For many business people, the definition of an emerging market has been simply a country that
was once a developing country, but has achieved rapid economic growth, modernization, and
industrialization. An emerging market country can be defined as a society transitioning from a
dictatorship to a free market-oriented economy, with increasing economic freedom, gradual
integration within the global marketplace, an expanding middle class, improving standards of
living and social stability and tolerance, as well as an increase in cooperation with multilateral
institutions.
Emerging markets, such as Brazil, Russia, India, and China (also collectively known as the BRIC
countries), don’t have the same needs or capabilities as those found in developed economies. For
instance, disposable income levels are relatively low, the availability of basic utilities like water
or electricity can be varied, and transportation and transportation infrastructure can be non-
existent. While these emerging economies are attractive by virtue of their massive size, their
different needs and capabilities pose unique challenges that are often overcome only through
corporate innovation.

2. New Technologies
The technological changes that damage established companies are usually not radically new or
difficult from a technological point of view. They do, however, have two important
characteristics: First, they typically present a different package of performance attributes—ones
that, at least at the outset, are not valued by existing customers. Second, the performance
attributes that existing customers do value, improve at such a rapid rate that the new technology
can later invade those established markets. The process of how disruptive technology, through its
requisite support net, dramatically transforms a certain industry. When the technology that has
the potential for revolutionizing an industry emerges, established companies typically see it as
unattractive: it is not something their mainstream customers want, and its projected profit
margins are not sufficient to cover big-company cost structure. As a result, the new technology
tends to get ignored for what’s currently popular with the best customers. However, then another
company steps in to bring the innovation to a new market. Once the disruptive technology
becomes established there, smaller-scale innovation rapidly raises the technology’s performance
on the attributes that mainstream customers’ value.
Technology entrepreneurship lies at the heart of many important debates, including those
around launching and growing firms, regional economic development, selecting the appropriate
stakeholders to take ideas to market, and educating managers, engineers, and scientists.
Technology entrepreneurship is an investment in a project that assembles and deploys specialized
individuals and heterogeneous assets to create and capture value for the firm. What distinguishes
technology entrepreneurship from other entrepreneurship types (e.g., Social entrepreneurship,
small business management, and self-employment) is the collaborative experimentation and
production of new products, assets, and their attributes, which are intricately related to advances
in scientific and technological knowledge and the firm’s asset ownership rights.

3. Social Changes
Social innovations are new strategies, concepts, ideas and organizations that meet the social
needs of different elements which can be from working conditions and education to community
development and health — they extend and strengthen civil society. Social innovation includes
the social processes of innovation, such as open-source methods and techniques and also the
innovations which have a social purpose — like online volunteering, microcredit, or distance
learning.

4. Changing demographics

5. Political and regulatory changes

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