Entrepreneurial Opportunity

This page contains the CBSE entrepreneurship class 12 chapter Entrepreneurial opportunity notes. You can find the questions/answers/solutions for the chapter 1 / Unit 1 of CBSE class 12 entrepreneurship in this page.

A business opportunity is an idea that can be economically exploited and it leads

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

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.

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

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.)

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

of the spotted ideas.

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

the ideas that can be either

The process comprises the various stages from

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.

The following are the various factors that are involved in sensing the opportunities.

The “PESTEL” model is defined as the factors affecting macro environment in a business environment.

It is an acronym that defines the following environments

The following is the list of various sources which lead to the emergence of basic ideas.

The entrepreneurs should consult various sources of information like

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.

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.

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

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.

The following ways in which the entrepreneur to spot the trends.

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

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

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

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.

They help the enterprise to grow in the following ways.

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.

The following are the various stages of the creative process.

Innovation can be defined as a process followed by an entrepreneur to transform an idea into a commercially viable product or service. Innovation requires

The following are the elements that play a crucial role in the innovation process.

The entrepreneurs should posses

for them to sense the ideas that could be turned into potential entrepreneurial opportunities. The process of sensing an entrepreneurial opportunity depends on the following factors.

Business ideas originate from various sources as described below.

Definition:Trend spotting refers to the recognition of the latest market trends. It helps the entrepreneur to bring changes in their products or services in accordance with the trends prevailing in the market. The success of the enterprise depends on the effectiveness of the trend spotting.

Entrepreneurs identify the trends themselves or with the help of the trend-spotter. In general trend spotting takes places through one of the following activities. It includes but not limited to.

1. Reading the trends: Entrepreneurs spot the trends by reading through various sources like

Usually these trends originate from international cities like London, Paris and Tokyo. So entrepreneurs keep an eye on the changes in the trend taking place in these places. Not all trends will be useful. Entrepreneurs use their discretion to make quick decision regarding accepting or discarding these trends.

2. Discuss about the trends: Entrepreneurs discuss about the trends with

3. Watching the trends: The trend among the consumers can be perceived by visiting the frequent hang out locations of their consumer group like

The entrepreneurs spend time watching what their consumer group is eating or drinking or wearing or showing interest in.

4. Think of a new trend: All the information gathered through reading, discussion and careful observations is analyzed. This help the entrepreneur to build trend-spotter-brain. The analysis will open up connections between different observations which will help in coming up with a potential entrepreneurial opportunity by improving an existing product or service or coming up with a new one altogether.

Idea fields are well defined frames of reference that guide the generation of ideas.

Various idea fields are examined below.

1.Natural resources: The idea for a product or service can be derived from the available natural resources like

Entirely new products or service related ideas can be generated from these resources or ideas to supplement these natural resources can be derived.

2. Current products or services:It requires careful analysis of the existing products or services and put the expertise and imagination to improve the current products or services. The demand for a product or service or the need to tackle the competition will also help in origination of a new idea. As the value addition to the existing product or service is as good as inventing a new product, the existing products or services also act as a good source of new ideas.

3. Demand or Market: Conducting a research in the market to procure the information relation to the gap between demand and supply, changing consumer preferences, trends, technology helps in the generation of new ideas for products or services. The data gathered is analyzed using business intelligence and helps as a good sources of new ideas.

In addition to this, the demand prevailing in the market will also help in generation of new ideas.

The analysis of the products and services offered by the competitors will also act as a valuable source for generating a new idea.

4. Trade: As the globalization has expanded the scope of business to the entire world, a careful analyis of the prevailing trades and methods will act as a good source of idea generation. Earlier the trading was limited to local distribution network or grocery stores. However the trade has expanded from the local market to import and export of goods. The most recent revolution in the trade is e-commerce and has broadened the scope of trading globally and is not time bound. Thus it became a valuable, most effective, less risk prone area for originating new ideas.

5. Service sector: As the society is becoming more educated and the as there is tremendous growth in information and technology, it opened up new challenges and opportunities and became a great source for generation of new ideas in various entrepreneurial sectors. Few of the sources are in the

6. Creativity Creativity being one of the most important competency of an entrepreneur plays a vital role in getting an idea for a new product or service or improving an existing product or service. Most often it is noticed that the need to solve a problem triggers creativity to come up with new ideas. It helps in

Starting a Gym in the outhouse is not a potential business idea. A business opportunity refers to an idea that can be economically exploited into a successful venture, generate profits and have potential growth possibilities. However the idea in this case lack the following elements of a potential business opportunity.

1. Guaranteed market: As the Gym is located near the outhouse there are very number of houses near by. So, the number of customers joining the Gym will be very less. If the concept of the Gym is highly innovative, very few people might join from far off places. However, as they have to travel a whole lot of distance, they might drop off over a period of time. Moreover, there are number of Gyms in the city limits and people might prefer joining them.

2. A profitable ROI (return on investment): As the number of customers joining the Gym are very less in number, the business may not be so profitable and it is likely to get into losses and may not last long.

3. Practicability: As the investment to purchase the fitness equipment is huge, the entrepreneur may have to procure investments. However due to low possibility of success, the investors may not be willing to put their money into this business.

4. Competence of the entrepreneur: It will be very difficult to procure customers and make them stay with the Gym. The competence of the entrepreneur may not be sufficient because the Gyms within the city limits will grab all the market and people may not be willing to travel lot of distance. It is also possible that they end up spending more time traveling than the time they spend in the Gym working out.

5. Growth prospects: Even in the future there is very less possibility that the area will have lot of residential houses which might increase its marketability and bring more customers for the business.

All the above factors will not support the starting of a new Gym in the out house. So, this is not a potential business opportunity and if started without considering all these factors it is likely to be a failure.

Faisal has to go through the following elements in the innovative process to bring his idea to reality.

1. Analytical planning: He has to thoroughly analyze and prepare a plan to

2. Organizing the resources: Once the product or service is thoroughly analyzed and planning is done, he has to procure

3. Implement the plan: The organized resources are put in use to bring the production of the product or deliver the service.

4. Commercialization: In this stage

The various environment factors involved in the micro and macro environment influence upon each other and act together. An enterprise is completely dependent on this factors and the way the enterprise deals with these factors contribute and influence its success. Market in otherwords is defined as the effective relation maintained by the buyers and sellers. The forces of demand directly influence the demand and supply. They thus have a great influence on the buyers and sellers and play a significant role in determining the competitive prices and the supply of the goods into the market.

For instance the micro environmental factors like

Thus all these micro economic factors are dependent on each other and directly influence the market.

On the otherhand the various macro economic factors like demographic population, economic factors, technological, natural, cultural and political forces are all dependent on each other and influence each other and the market.

For instance the population determines the economy of the society. The economic factors influence the population to incline towards the technology. The technology might change the culture. The economic factors can influence the political factors. The political factors influence the cultural factors. The technology and the economic factors can control the natural forces. The natural forces can siginificantly impact the economy.

Thus we can say that the various factors comprising the micro and macro environment are interdependent.

For the organizations to retain their customers and stay ahead of the competition they need to adapt the changes in the environment. For instance, if they do not adapt the latest technology, the market will be in favour of the competitors and the production cost will be very high. So, the organizations should quickly adapt the latest changes in the technology. For this they need to constantly scan the environment and adapt the changes taking place in the market. They should continuously keep on gathering the information about the various environmental factors and change their internal processes in accordance with the changes in the environmental factors. Their ability to gather the required information, analyze and adapt to the changes will determine their future prospects. On the otherhand ignoring the changes taking place in the environment will result in a failure.

Thus we can say that for sustaining, the organizations should adapt.

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