Opportunity

Recognition
and Entry
Strategy
P R E S E N T E D B Y:
SHAFIQ AHMAD SAHAR – 22104
MAHBOBULLAH RAHMANI - 22105
Content
Introduction

Definitions

 Essential qualities of opportunity

 Ways to identify opportunity

Shafiq
Shafiq
Mahbobullah
 Mahbobullah
Mahbobullah

Opportunity Defined:
 An opportunity is a favorable set of circumstances that creates
What is An the need for a new product, service, or business idea.
Opportunity? Most entrepreneurial firms are started in one of two ways:

 Some firms are internally stimulated. An entrepreneur decides

to start a firm, searches for and recognizes an opportunity, then
starts a business.

 Other firms are externally stimulated. An entrepreneur

recognizes a problem or an opportunity gap and creates a
business to fill it.
 An opportunity
has four essential
qualities
 Window of
Opportunity The term “window of opportunity” is a
metaphor describing the time period in which a
firm can realistically enter a new market.

Once the market for a new product is established, its

window of opportunity opens, and new entrants flow
in.
At some point, the market matures, and the
window of opportunity (for new entrants)
closes.
Three Ways to
Identify An
Opportunity
First Approach:
Observing The first approach to identifying opportunities is to observe
Trends trends and study how they create opportunities for
entrepreneurs to pursue.

– Trends create opportunities for entrepreneurs to pursue.

– The most important trends are:
• Economic forces
• Social forces
• Technological advances
• Political action and regulatory change
– It’s important to be aware of changes in these areas. 2-29
 Trend 1 : Economic Trends

Economic trends help Example of Economic Trend

determine areas that are ripe Creating a Favorable Opportunity •
A weak economy favors start-ups
for new start-ups and areas that help consumers save money.
that start-ups should avoid.
• An example is GasBuddy.com, a
company started to help consumers
save money on gas.
 Trend 2 : Social Trends
Social trends alter how
people and businesses behave
and set their priorities. These
trends provide opportunities
for new businesses to Examples of Social Trends
accommodate the changes. • Aging of baby boomers
• The increasing diversity of the
workplace
• Increasing interest in social
networks such as Facebook and
Twitter
• An increasing focus on health
and wellness
• Increasing interest in “green”
products
 Trend 3 : Technological Advances

Examples of Entire Industries that

Advances in technology Have Been Created as the Result of
Technological Advances
frequently create business
• Computer industry
opportunities. • Internet
• Biotechnology
Once a technology is created, • Digital photography
products often emerge to
Example: H20Audio
advance it
An example is H20Audio, a company
started by four former San Diego State
University students, that makes
waterproof housings for the Apple
iPhone and iPod.
 Trend 4 : Political Action and Regulatory
Changes
Political action and General Example
regulatory changes also Laws to protect the environment have
created opportunities for entrepreneurs to
provide the basis for start firms that help other firms comply with
opportunities. environmental laws and regulations.

Company created to help Similarly, many entrepreneurial firms have been

started to help companies comply with the
other companies comply with Sarbanes-Oxley Act of 2002. The act requires
a specific law. certain companies to keep all their records,
including e-mail messages and electronic
documents, for at least five years.
 Sometimes identifying opportunities simply involves noticing a problem
Second Approach: and finding a way to solve it.
Solving a Problem
These problems can be pinpointed through observing trends and through
more simple means, such as intuition, serendipity, or chance.

Some business ideas are clearly initiated to solve a problem.

For example, Symantec Corp. created Norton antivirus software to guard

computers against viruses.
Third Approach:
Finding gap in Gaps in the Marketplace
the Marketplace
– A third approach to identifying opportunities is to
find a gap in the marketplace.
– A gap in the marketplace is often created when a
product or service is needed by a specific group of
people but doesn’t represent a large enough market
to be of interest to mainstream retailers or
manufacturers. 
 Third Approach: Finding gap in the Marketplace

Specific Example
Product gaps in the
marketplace represent In 2000 Tish Cirovolv
potentially viable business realized there were no
opportunities. guitars on the market
made specifically for
women. To fill this gap,
she started Daisy Rock
Guitars, a company that
makes guitars just for
women.
 I.NEW ENTRY
A New entry refers to:

What is New 1. Offering a new product to an established market or new

market.
Entry 2. Offering an established product to a new market.
3. Creating a new organization.
B. Newness can be both positive and negative.
Newness can help differentiate a firm from its competitors.

However, newness creates a number of challenges for

entrepreneurs ,in a way that maximizes the benefits of newness
and minimizes its costs.
  Entrepreneurial strategy

1. represents the set of decisions, actions, and reactions

that first generate, and then exploit over time.
Entrepreneurial
strategy  The elements of an entrepreneurial strategy are:

1. The generation of a new entry opportunity, .

2. The exploitation of a new entry opportunity.
3. A feedback loop.
GENERATION How can a Resources be a Source of Competitive
Advantage ?
OF A NEW Resources are the basic building blocks to a firm’s
ENTRY performance HOW?
OPPORTUNITY 1. These resources are the inputs into the production process.

2. These can be combined in different ways to achieve better

performance.
These resources need to be considered as a bundle rather
than just the resources that make up the bundle.
In order for a bundle of resources to be the basis of a firm’s
better performance, the resources must be valuable, rare,
and inimitable (impossible to copy).
Continue..
A bundle of resources is:
1. Valuable when it enables the firm to pursue opportunities, and to offer products and
services that are valued by customers.
2. Rare when it is possessed by few, if any, competitors.
3. Inimitable when replication of this combination of resources would be difficulty or costly
for competitor (impossible to copy)

The resource bundle is created from the entrepreneur’s market knowledge, technological
knowledge, and other resources.
 Being first can create advantages that can enhance
Advantages for performance by:
new entry 1. First movers can select and develop strong relationships
EXPLOITATION with the most important suppliers and distribution channels
2. First movers are better positioned to satisfy customers:
They have the chance to:
 Select the most attractive segments of a market.

1. First movers gain expertise through participation BY:

A.Learn from the first generation of user products experience.
B. Monitor changes in the market that might be difficult to
detect for firms not in the market.
 1. Set clear goals:

Creating a winning The first step is to decide on what you want to achieve with your
market entry exporting project and some basics about how you’ll do so.
Details to spell out include:
strategy to expand
business goals for the expansion
into a new market
your targeted level of sales

the specific product or service you’ll export

the target market

major action items and a timeline for achieving them

budget and other available resources

 2. Research your market
 size of the market
 consumer trends, needs and perceptions of products like yours
 domestic and international competition
 your unique value proposition in the market
 regulatory, certification, trade and other barriers and opportunities
 potential support from Canadian and foreign governments for your exports

This information should give you a good sense of whether a target market is suitable or not for your
business.

“One of your purposes is to figure out why buyers should buy your product or service, versus from
someone local or a competing exporter,” Chigrin says. “Businesses often underestimate the degree of
competition in new markets. If you don’t see how you would be different, it’s better not to go to the
target market.”
3. Choose your mode of entry
You may need to rethink how you get your products or services to market. Do you sell directly to the
end-user, or do you work with intermediaries such as wholesalers or distributors? And even if you sell
directly to a target clientele, do you require the assistance of an in-country sales agent to “open the
doors” and facilitate sales.

You can consider choosing from or combining a number of options.

 Using the services of an in-country distributor or agent.

 Acquiring an existing local business.
 Partnering with a local business. This can take various forms, such as franchising, licensing, a joint
venture, co-production and cross-manufacturing.
 Opening a physical presence. This can be anything from buying or renting an office to hiring a local
representative.
 Selling through online marketplaces.
 Offering direct sales through your e-commerce site.
 Selling indirectly to a target market through another company that exports your products or uses
them as components.
4. Consider financing and insurance needs

To determine the amount and type of financing needed to support your export venture, it’s important to
do calculate how the initial investment in production, shipping, hiring and other costs will affect working
capital. Keep in mind that foreign buyers may want longer payment terms.

See your banker about any financing needs to cover shortfalls. Better to arrange a line of credit or loan
ahead of time than risk a cash crunch while you wait for sales to ramp up.

You may also want to consider getting insurance to protect your company from the unexpected. Export
Development Canada offers various products, including:

• credit insurance in case a customer doesn’t pay or a contract is cancelled

• performance security insurance in case a customer wrongfully calls a letter of guarantee or in the
event of political risks
 Be sure to write down the details of your market entry
strategy. Don’t keep it all in your head. This document
5. Develop the will be handy for arranging any needed financing and as
strategy a framework for your export marketing plan. You can
ask your accountant, lawyer, banker or an outside expert
document to give you comments for improvements.

“You should regularly revisit your market entry strategy

to monitor how you’re doing and make updates,”

“It’s an important blueprint to keep you on track, ensure

buy-in from your team and have everyone in the
business pulling in the same direction.”