Ch. 2 Recognizing Opportunities and Generating Ideas

Opportunity Gap

entrepreneur recognizes a problem and creates a business

Opportunity

favorable set of circumstances that creates a need for a new product, service, or business

Day-In-The-Life Research

form of anthropological research used by companies to make sure customers are satisfied and to probe for new product ideas by sending researchers to the customer's homes or business

Focus Groups

gathering of five to ten individuals who have been selected based on their common characteristics relative to the issue being dicussed

Economic Forces

help determine area that are ripe for new start-ups areas start-ups should avoid; factors include state of the economy, level of disposable income, consumer spending patterns ex.) weak economy favors start-ups that help consumers save money i.e. GasBuddy.com

Gap in the Marketplace

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

Customer-Advisory Boards

panel of individuals set up nu some companies to meet regularly to discuss needs, wants and problems that may lead to new product, service or customer service ideas

Creativity

process of generating a novel or useful idea 1.) preparation 2.) incubation 3.) insight (business idea conceived, problem solved) 4.) evaluation 5.) elaboration

Opportunity Recognition

process of perceiving the possibility of a profitable new business or a new product or service

Strong-Tie Relationships

relationships characterized by frequent interaction that form between like-minded individuals; reinforce insights and ideas that people already have, therefore not likely to introduce new business ideas

Weak-Tie Relationships

relationships characterized by infrequent interaction that form between casual acquaintances who do not have a lot in common, therefore may be the source of completely new ideas

Corridor Principle

states that once an entrepreneur starts a firm and becomes immersed in an industry, "corridors" leading to new venture opportunities become more apparent to the entrepreneur than to someone looking in from the outside

Brainstorming

technique used to quickly generate a large number of ideas and solutions to problems

Market Trend

tendency of financial markets to move in a particular direction over time

Window of Opportunity

time period in which a firm or an entrepreneur can realistically enter a new market

Four Essential Qualities of Opportunity

1.) attractive 2.) timely 3.) durable 4.) anchored in a product, service, or business that creates or adds value for its buyer or end user

Techniques for Generating Ideas

1.) brainstorming 2.) focus groups 3.) library and internet research 4.) customer advisory boards 5.) day-in-the-life research

Three Ways to Identify an Opportunity

1.) observing trends 2.) solving a problem 3.) finding gaps in the marketplace

Personal Characteristics of an Entrepreneur

1.) prior experience 2.) cognitive factors 3.) social networks 4.) creativity

Entrepreneurial Alertness

ability to notice things without engaging in deliberate search

Social Forces

alter how people and businesses behave and set their priorities; provide opportunities for new businesses to accommodate the changes; factors include social and cultural trends, demographic changes, what people think is "in" ex.) aging of baby boomers

Political and Regulatory Changes

can create companies that help others comply to new changes in political arena and new laws and regulations ex.) Shakespeare Squared w/ No Child Left Behind

Technological Advances

can create variety of business opportunities and product advancement; factors include new technologies, emerging technologies, new uses of old technologies ex.) computer industry, waterproof phone cases