entrep: recognize a potential market

project investment and detailed cost estimates

In this stage, the entrepreneur needs to determine how much money is required to start the business opportunity considering the technologies and operating levels acquired.

direct statements; silent issues

It (market problems) is expressed through ___ from the users or through ____

market potential

____ is the estimated maximum sales revenue of a particular product in a certain period

innovation

_____ is the process of positively improving an existing product or service

need

a motivating force that compels action for its stisfaction

penetrated market

a set of customers or clients who are already using a particular product or service

determine analyze select technical financial

a study was undertaken to ___, ___, and ____ the best opportunity in terms of ____ and _____ aspects

irritants in the marketplace, such as deterrents, problems, complaints and delays

generally, entrepreneurs see opportunities in situations where there is a recurring problem or sometimes no more hope in solving the problem

*reinforcements* of entrepreneur interests

how does the opportunity resonate with the entrepreneur's interest, talents and skills?

*responsiveness* to customer needs and wants

if the opportunity that you want to pursue addresses the unfulfilled or underserved needs and wants of customers, then you have a better chance of succeeding.

*risks*

in an entrepreneurial endeavor, there will always be risks

feasibility study market research product development initial promotional costs

included in pre-operating costs

sociocultural environment

includes demographic and social factors, including beliefs, tastes, customs and traditions

ecological environment

includes living and non-living things around us

identifying participants determine the logic of the industry

industry sources of opportunities

*returns*

it is a fact that products with low production and operations costs but are sold at higher prices will yield the highest returns on investments

*revenues*

it is essential to determine the sales potential of the products or services you want to offer in an entrepreneurial endeavor

working capital investment

it is the amount of money needed to expand your business, meet short-term business responsibilities, and cover business expenses

seeking the opportunity

most challenging process of all due to the number of options the entrepreneur will have to choose

basic survival needs social requirements

needs range from _____, satisfied by necssities, cultural, intellectual, and _______

technological environment

one of the nightmares of entrepreneurs is to be left behind by the newest trends and technological discoveries that will make their products obsolete

*resources required*

opportunities requiring fewer resources from the entrepreneur may be more favore than those requiring more resources

consumer preferences, interests and perception competitors unexpected opportunities from customers talents, hobbies, skills, and expertise irritants in the marketplae, such as deterrents, problems, complaints and delays

other sources of opportunities:

*resonance* to values

other than vision, mission, and objectives, the opportunity must match the values and desired virtues you have or wish to impart

potential market

part of the total population that has shown some interest in buying a product or service

rivals or competitors in a business suppliers of competitors consumer market segments being served by competitors substitute products or services, which customers turn to all other support and enabling industries

participants in the industry include:

target market users

people in your target market who are not currently looking for a solution

prospects

people who have not yet purchased your product but are considering it

available market

propsects who are willing and capable (have sufficient resources) buyers and have access to a particular market or service

quality of input or raw materials quality assurance process in transforming the output quality output that meets the operations, standards set end quality outcomes for the customers who will be looking for specific results

quality specifications required - this would dictate the following

competitors

recognizing and understanding potential _______ will help the entrepreneur develop a unique product or service and stand out from the competition

cultural forces

refer to the integrated characteristics of a group of people or ethnic group in a particular society

target market

refers to a group of potential customers to whom a company wants to sell its products and services

market problems

refers to the limitations experienced by the users, shortcoming and non-ideal arrangments (everyday problems)

production /service facilities investment

refers to the long-term investment for the actual business establishment

external/macroenvironment

refers to the significant forces that affect the area, industry, and the market, which the enterprise belongs to

pre-feasibility study

since the goal of opportunity screening is to narrow down the choices into a few, it is best to conduct a ____.

external/macroenvironment industry sources of opportunities other sources of opportunities

sources for seeking the opportunity

climate physical resources wildlife

subcategories of ecological environment

social forces cultural forces

subcategories of sociocultural environment

age location income lifestyle

target markets are usually categorized by ___, ___, ___, and___

*relevance* to vision, mission and objectives of the entrepreneur *resonance* to values *reinforcements* of entrepreneur interests *reveneus* *responsiveness* to customer needs and wants *reach* *range* *revolution impact* *returns* *relative ease of implementation* *resources required* *risks*

the 12 Rs of opportunity screening

has superior value to customers solves a compelling problem, issue, a need, or a want is a potential source of income matches with the entrepreneur's skills, resources and risk appetite

the entrepreneur should say no to an opportunity if it does not contain any of these business opportunity elements:

*relevance* to vision, mission and objectives of the entrepreneur

the opportunity must be aligned with what you have as your vision, mission, and goals for the enterprise you want to set up

*reach*

the opportunity that you have good chances of expanding through branches, distributorships, dealerships, or franchise outlets to attain rapid growth are better opportunities.

existing customers

the people who have already purchased your product

total addressble market

the potential market is also called _____

opportunity screening

the process of cautiously selecting the best opportunity

ask the market; "if only" statements

the way to find market problem is to ___ and to look out or their ______

urgency pervasiveness willingness

there are three ways of determining a market problem: ___, ____, and ____

*revolution impact*

there is a significant potential for the chosen opportunity

pre-operating costs

these are the costs related before the opening of the business

consumer preferences, interests and perception

these are the current needs and wants of potential customers that should be discovered right away by a budding entrepreneur

technological innovation

these innovations are technological advancements of an existing product or service

technological innovation

these innovations occur more frequently than breakthrough innovations

breakthrough innovation

these innovations, which may also include inventions, occur infrequently as these establish the platform on which future innovations in an area are developed

ordinary innovation

they are commonly originating from market analysis and technology pull instead of a technology push

opportunity seizing

this is the "pushing through" with the chosen opportunity that is usually through innovation

pre-operating costs production/service facilities investment working capital investment

three investments that need to be funded

is the need real? does the solution I am providing meet the need? is the customer willing to pay for the solution

value creation in innovation

total population potential market available market target market penetrated market

venn diagram of population (outer to inner)

make it larger modify make it strong/fast substitute

ways to innovate

internal intent external intent

what is screening dependent on?

market

where two parties, buyers and sellers, can gather to facilitate the exhange of goods and services

*relative ease of implementation*

will the opportunity be relatively easy to implement for the entrepreneur?

existing customers prospects target market users

your market consists of:

breakthrough innovation technological innovation ordinary innovation

3 types of innovations (acc to degree of distinctiveness)

seeking the opportunity screening the opportunity seizing the opportunity

3s of opportunity spotting and assessment

sociocultural environment political environment economic environment ecological environment technological environment

SPEET

financial forecast

The __________ refers to the monetary transactions that the business is expected to engage in.

*range*

The opportunity can potentially lead to a wide range of possible product or service offerings, thus tapping many industry segments.

talents, hobbies, skills, and expertise

business opportunities do not just come from outside forces, but also from within the entrepreneur

economic environment

characterized by the income level of a region, which dictates the customers' purchasing poweer

political environment

depicts the governance system of an area or the local region of the business enterprise

social forces

elements of society resulting from human interactions that can influence the thoughts, behaviors, attitudes, actions, and even the people's beliefs and customs

income statement balance sheet cash flow statement funds flow statement

four critical financial statements that compose the financial forecast

market potential and prospects availability and appropriateness of technology project investment and detailed cost estimates financial forecast and determination of economic feasibility

four factors to consider in a pre-feasibility study

quantities demanded quality specifications required delivery expectations price expectations

four target customer expectations affecting the scale and complexity of an enterprise's operation

unexpected opportunities from customers

frequently, the most brilliant venture comes from the most unexpected opportunities