Entrepreneurial oppurtunity( Q&A)

Date : 12.5.2020
Sub  : Entrepreneurship 
Day  : 2
Time : 10AM -10:45 & 12:20PM -1PM 
Period : 4 & 7
Class    : 12

Learning Outcome

• Students will be able to learn the chapter in a much easier way
• Revision of the chapter
• Condensed form of the chapter

A very good morning students 

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Sending you a question and answer format of chapter 1.

Please learn it well ,it will be very useful for the coming examination

Give a brief about business opportunity 
A business opportunity is an idea that can be economically exploited and it leads

·         Establishment of an enterprise

·         profits

·         future prospects to expand the enterprise.

What are the various factors that help the entrepreneur to sense an entrepreneurial opportunity? 
The following are the various factors that help the entrepreneur to sense an entrepreneurial opportunity

a.      Ability to perceive basic ideas through various sources like problems, change, inventions and competition.

b.      Ability to preserve these ideas.

c.       Ability to make best use of various sources of information.

d.      Creatively innovate new ideas

e.      Vision to convert the ideas into potential business opportunities.

How does an entrepreneur scan the environment? 

An entrepreneur scans the environment by carefully monitoring the internal and external environment to discover the potential opportunities and threats that have an impact on the enterprise’s present and future plans.

Name the factors that influence the external environment.
The factors that influence the external environment are summarized by “PESTEL” model as expanded below.

·         Political

·         Economic

·         Social

·         Technological

·         Ecological

·         Legal

What do you understand by the term ‘trend spotting’? 

Trend spotting refers to spotting the latest trends in the market, to alter the production of goods and services in sync with the market trend. (When the market started switching to smart phones, the cell phone companies started producing the cell phones in sync with the changes in the market.)

How is a spotted idea transformed into economically viable opportunity? 

The spotted ideas are transformed into viable economic opportunities through in-depth

a.      examination

b.      evaluation

c.       analysis

d.      and synthesis^?

of the spotted ideas.

Define the concept of idea generation. 

Idea generation of ideation is an essential part of the design process that can be defined as the process of

·         creating

·         developing

·         and communicating

the ideas that can be either

·         concrete

·         abstract

·         or visual

The process comprises the various stages from

·         constructing the idea

·         innovating the concept

·         develop a process

·         and actualization of the concept.

Why should an entrepreneur scan the environment? 

The scanning of the environment help the entrepreneur to spot the new opportunities that have a positive impact on the enterprise. At the same time it also help the entrepreneur to detect the negative factors that could negatively impact their enterprise. The entrepreneurs gather the information, and make the necessary changes in the various processes in their enterprise. This will help to secure the future of the enterprise and avoid failure.

Describe the various factors that help in the scanning of the environment. 
The following are the various factors that help in the scanning of the environment.

1.       Identification of the opportunities to take advantage by being the first to grab the market.

2.      Formulation of strategies and policies to exploit an opportunity or combat the causes of failure.

3.      Exploiting the required resources what could help in reducing the cost and increase the profits.

4.      Improved performance

5.      Adopt the changes in the environment to keep them in pace with the market dynamics

6.      Reputation and recognition building by molding the products or services in accordance with the consumer trends

Depict the enterprise process through a chart. 

Define and describe the “PESTEL” model. 

The “PESTEL” model is defined as the factors affecting macro environment in a business environment.
It is an acronym that defines the following environments

·         Political:

a.      Tax policies

b.      Government stability

c.       Foreign Trade regulations

·         Economic: This includes

a.      Availability

b.      Business cycle

c.       Cost

d.      Disposable

e.      Energy

f.        inFlation

g.      unemployment

h.     interest rates

·         Social: This includes

a.      Attitude to work and leisure

b.      social moBility

c.       Consumerism

d.      Distribution

e.      Education levels

f.        Income levels

g.      Lifestyle changes

h.     Population demographics

·         Technological: It includes

a.      Spending by the government on research

b.      New discoveries

c.       Development

d.      Level of focus on the technology by the industry.

e.      The pace at which the technology is changing.

f.        The rate at which the technology becomes obsolete.

·         Ecological: This includes the focus to preserve the environment.

·         Legal: This includes

a.      Employment laws

b.      Environmental protection laws

c.       Law

d.      Legislation

e.      Monopoly

f.        Taxation

What are the sources that an entrepreneur should be looking at to get basic ideas? 
The following are the various sources of information that will help the entrepreneur to perceive the basic idea.

1.       Entrepreneurs usually depend on the following sources of information to perceive an idea

1.       Problems: Problems prevailing in the society will lead to ideas to resolve the problems. These ideas can become economically viable entrepreneurial opportunities.

2.      Change: Changes that occur in the political, legal, trend-set of the consumer, technology will be good sources to perceive new business ideas.

3.      Inventions: New inventions will help the entrepreneurs to perceive new ideas to start a new product or service.

4.      Competition: The urge to overcome the competition help the entrepreneurs to perceive new ideas.

5.      Innovation: Innovation is the process of creating something of value or improve the existing product or service to improve its value.

2.      Ability to exploit multiple sources of information:
The entrepreneurs should consult various sources of information like

a.      Books

b.      Customers

c.       Family members

d.      Friends

e.      Journals

f.        Magazines

g.      Seminars

to help them perceive preliminary idea. They should be able to gather all the knowledge and information from these sources and scrutinize it. The process will help to recognize an economically viable business opportunity.

Write the meaning of product identification in-terms of business opportunity? 

While going through the entrepreneurial process, the entrepreneur will spot an opportunity and scan the environment, This will generate idea. All the ideas, identified should be transformed into a definite product, which has good marketability. Then only the it would be termed as a business opportunity. Product identification requires obtaining a concept of the product or service, after analyzing the idea. After product identification, the entrepreneur should verify whether the product is already available in the market or not. If the product is not available in the market, they can introduce it into the market. If it already exists in the market, they should have a strong reason for releasing the same product or service into the market. Otherwise, they have to drop this idea, and start the process again to identify a new product.
Thus we can say that the product identification plays a crucial role in-terms of a business opportunity.

Describe the various factors that need to be assessed by the entrepreneur before entering into the market. 

The various factors that need to be assessed by the entrepreneur before entering into the market are as follows:

1.       Demand: The size of the market give an assessment of the demand for the product or service. The study of other factors like

·         the targeted group of consumers

·         consumer preferences

·         other variables

would help The entrepreneur to assess the demand.

2.      Supply: They should also assess the current supply of the product. The competitors might have a good supply of the product into the market.

3.      Cost and Price: The product should be assessed in-terms of cost. The various factors involved in determining the cost like transit, wastage during production, inventory etc have to be considered. This would affect the final price determined and can have an advantage over the competitors.

4.      Product innovation :The advancement in the technology would have a significant effect on the cost and price. The entrepreneur should carefully study the competitors in-terms of the technology that they’re using.

Enlist the trend spotting methodologies which will help the entrepreneur in this process. 
The following ways help the entrepreneur to spot the trends.

a.      Reading: The entrepreneurs read the trends dominating both in-house and overseas through publications and online resources. This will help them to spot the trends.

b.      Talk: They discuss with people from a specific industry’s trade associations both online and offline through various resources like events, forums, social networking etc. They also gather consumer preferences through various sources.

c.       Watch: They directly watch the potential customers by spending time at the place where the customers gather like malls, business meeting places, trade shows, restaurants etc.

d.      Think: They start putting together all the sources of information and start thinking about a potential trend that could emerge from their thoughts.

How does the needs and problems will lead to a potential business opportunity? 

a.      Needs and problems exist in every wake of life. Various sources of information like literature, online resources, their contacts etc. help the entrepreneur to identify the needs and problems that exist in the society. These sources help them to gather the required information.

b.      The entrepreneurs will do a careful analysis of information gathered, evaluate this information and formulate creative solutions to these needs and problems. This will help them to identify the right opportunity to establish an enterprise.

c.       The entrepreneurs by their innovative nature will be able to innovate the product or services that could become the best solution for these needs and problems. These products or services are further evaluated for economical viability. The most profitable among these products or solutions is chosen.

d.      The product or service identified thus becomes the basis for establishing an enterprise to exploit it economically.

From the above facts it is evident that the needs and problems of the society lead to a potential opportunity.

Why should an entrepreneur be sensitive to the environment? 
The entrepreneur should always keep a watch on the trends in the environment. They should change in accordance with the environment to move their enterprise towards its goal. This helps them in

a.      Identify the opportunities and move ahead of their competitors: When the enterprise changes its strategy according to the changes in the environment they would be the first to capitalize on the opportunity and stay ahead of competitors.

b.      New or changed strategies and policies: By being sensitive to the environment the entrepreneur would be able to sense the opportunities and threats to their enterprise. They can then form new strategies and policies to grab the opportunities and overcome threats.

c.       Utilize useful resources: Changes in the environment bring about the use of the available resources. (for example discovery of a new medicine increases the demand for a specific plant which has those medicinal values). By being sensitive to the environment, they would be able to monetize the available resources.

d.      Improved performance: By being sensitive and reacting to the threats and opportunities will help them to improve the productivity and performance of the enterprise.

e.      Keep pace with rapid changes: By being sensitive to the environment entrepreneur will get early information about the rapid changes in the market, government policies, consumer trends, technology etc and they will have enough time to implement this change.

f.        Image Building: By being sensitive to the environment, it is possible for an organization to adopt and bring about the latest changes. This helps them to build an image in the consumer. This reputation will keep them ahead of their competitors and build and maintain their reputation.

From the above facts we can say that the entrepreneur should be sensitive to the environment.

What is the significance of the environmental factors on the growth of the enterprise? 

The growth of an enterprise depend upon several environment factors. These factors operate together to influence the enterprise growth.
They various environmental factors are defined by the “PESTEL” model, as given below.

·         Political

·         Economic

·         Social

·         Technological

·         Ecological

·         Legal

They help the enterprise to grow in the following ways.

a.      Identify the opportunities and move ahead of their competitors: When the enterprise changes its strategy according to the changes in the environment they would be the first to capitalize on the opportunity and stay ahead of competitors.

b.      New or changed strategies and policies: By being sensitive to the environment the entrepreneur would be able to sense the opportunities and threats to their enterprise. They can then form new strategies and policies to grab the opportunities and overcome threats.

c.       Utilize useful resources: Changes in the environment bring about the use of the available resources. (for example discovery of a new medicine increases the demand for a specific plant which has those medicinal values). By being sensitive to the environment, they would be able to monetize the available resources.

d.      Improved performance: By being sensitive and reacting to the threats and opportunities will help them to improve the productivity and performance of the enterprise.

e.      Keep pace with rapid changes: By being sensitive to the environment entrepreneur will get early information about the rapid changes in the market, government policies, consumer trends, technology etc and they will have enough time to implement this change.

f.        Image Building: By being sensitive to the environment, it is possible for an organization to adopt and bring about the latest changes. This helps them to build an image in the consumer. This reputation will keep them ahead of their competitors and build and maintain their reputation.

Thus the growth of the enterprise is not a single step move, but it is a continuous and is completely dependent on its sensitivity to various environmental factors.

What are the various stages involved in the creative process? 
The following are the various stages of the creative process.

a.      Idea germination: Based on the interest or need or problem an idea is germinated and the entrepreneur recognizes a potential opportunity.

b.      Preparation: The idea germinated in the above step is evaluated and a solution is identified. If the solution leads to an innovative product or service, a market research is performed to identify the opportunities to exploit the idea. Once it is concluded that the idea has potential growth opportunity, the entrepreneur will proceed.

c.       Incubation: In this phase, all required information is gathered from various sources. The information is analyzed to evaluate the various pros and cons of implementing the idea.

d.      Illumination: In this phase, a detailed plan to implement the idea is laid out. The entrepreneur will start accumulating the capital, procuring the raw material, laying out the process, deciding the policy etc starts out.

e.      Verification: In this stage, the idea is turned into reality and the entrepreneur will start monitoring the outcome. The entrepreneur will start seeing obstacles and take necessary steps to overcome the obstacles, to move the enterprise towards its goal.