3. Evolution of Business Opportunity

Business Opportunities:

Evaluation of Business Opportunity Through Creative and Innovative Ideas1. Introduction2. The process of Identifying, Evaluating and Selecting a Business Opportunityi. Identifying The Needs and Wants of Customersii. Environmental Scanning and Evaluation of Self and the Communityiii. Screening of Business Opportunity3. Innovationiv. Selecting a business opportunity and preparing a business planA business opportunity is said to exist when there is room to offer a product or services in a particular market which fulfils customers demands and preferences. 1. When a product is already available in the market, BUT does not fulfil fully the demands and preferences of the customers. 2. When the customers require a product that can help to solve their problems, for instance, a product that can speed up the process of tapping rubber, a liquid that shines cars without much effort or a computer software that expedites office work.due to low quality, poor performance, not user friendly, unreasonably priced, difficult to get or has unimpressive features1. INTRODUCTIONEvery business starts with an opportunity that can be identified or taken advantage of within the current environment. CAR BUSINESSTyre shopA car accessory shopA workshopA one-stop service centreStep I: Identifying the needs and wants of customersStep II: Scanning the environment and evaluating of self and the communityStep III: Screening of business opportunityStep IV: Selecting a business opportunity and preparing a business plan2. The process of Identifying, Evaluating and Selecting a Business OpportunityThe various human needs and wants can be categorised into products and services.PRODUCTA product is something that possesses a physical form that is required to fulfil human wants directly or indirectly. Motorcycles, radios, books, pens, etcSERVICESA service does not possess a physical form but has the ability to fulfil a customers wants. Hair stylist, private doctors, cleaners, educationist, etcStep IIdentifying The Needs and Wants Of CustomersA. Environmental ScanningEnvironmental scanning can lead to an idea that can be converted into a business opportunityThere are two approaches in scanning the environment. 1. Scan the environment from the macro and micro perspectives. 2. Scan the environment from the other factors.Environment Scanning and Evaluation of Self and the CommunityStep IIAGRICULTURAL SECTORFORESTRYVeneer PlywoodLoggingFurnitureSawn timberFISHINGFishing equipmentDeep-Sea fishingFish processingWholesales/DistributionPLANTATIONClearing plantationPlantingProcessingWholesales/SuppliesPOULTRYPoultry farmingProcessing Wholesale/Supplies1. Scan the environment from the macro and micro perspectives. Structure of the population, income and tastesStudy on import and export dataStudy on local resources and technological breakthroughIndustrial linkages Development projects by the public and private sectorSearching for business opportunities in the local and foreign newspapers and magazines as well as on the internetThe study of local social problemsNew government policies and regulations2. Scan the environment from the other factors.B. Self Assessment/EvaluationIdentifying business opportunities by seeing what is available in oneself. Experience- Related to former career (engineer, fashion design lecturer,Knowledge and skill- Knowledge to construct a building (contractor)Financial situation- Financial ability will determine the success of the businessInterest- Related to entrepreneurs interestNetworking - politicians, top ranking government officer, bank, insurance, etc..C. Community Assessment/Services Evaluate the norms of the community. Business opportunities need to be coordinated with the values or norms of the community in which the business operation is going to be implemented. It is important to ensure that a potential business does not go against the values or norms of the local community.

Eg. (A four-digit business outlet is considered a profitable business opportunity and legal). However, it is against the values of the Malay community who are Muslims. Eg. A poultry farm located in a residential areaScreening of Business OpportunitiesAfter scanning the environment, evaluating oneself and the norm of community, the entrepreneur may end up with two or more interesting business opportunities that need to be developed. HOWEVER, it is BEST TO SELECT only ONE BUSINESS because it will be difficult to implement various business projects at the same time. THEREFORE, the process of SCREENING BUSINESS OPPORTUNITIES will help the entrepreneur to select a business opportunity. This process involves four factors:Step III1. Legality Make sure that the business opportunity is LEGALEg. Business which involves the buying and selling of imitation VCDs or stolen products is ILLEGAL. 2. Monopolistic Power and Level of CompetitionSelect a business opportunity which is not monopolised by any body or quarter. It will pose many problems, such as danger of sabotage and the difficulty of penetrating a controlled market. Eg. Monopolised mandarin oranges3. Capital requirementsThe business to be implemented must be appropriate for the financial resources available to ensure NO financial problems after the business has started. 4. RisksRisk is something that is uncertain and is related to success and failure. Entrepreneur must identify the risks he/she is going to encounter and take into consideration the percentage of success and failure. There are three categories of business risks. Risks that can be transferred to another party. (Eg. Insurance)

Risks that can be controlled by a entrepreneur (Eg. labour turnover, product quality, machine breakdown)

Risks that cannot be controlled by a entrepreneur (Eg. Economic downturn, natural disasters)After screening the various business opportunities we have to end up with only ONE BUSINESS OPPORTUNITY that needs to go through the next step.

WHETHER this business can be implemented of not, it depends on a comprehensive study of the various business functions of MARKETING, ADMINISTRATION, OPERATION , FINANCE and others.Step IVSelecting A Business Opportunity and Preparing Business PlanINNOVATIONEvery organizationnot just business needs one core competence: innovation.- Peter F. DruckerIntroducing something new or doing something in a new way. To take an idea from concept to realization and improve business performance. Can be a new product, a new process, or a new way of doing business.FORM OF INNOVATIONThe 4Ps of innovation ParadigmProductPositionProcessProduct innovationChanges in the things (products/services) which an organization offers.Example: a new design of car, a new insurance package.

Process innovation Changes in the ways in which things (products/ services) are created and delivered;Example: change in manufacturing methods and equipment used to produce the car

Position innovationChanges in the context in which the products/services are introducedExample: Johnson & Johnson change the product positioning not just for babies but also to adult.

Paradigm innovationWhere major shifts in thinking cause change in the organization.It concerns the change in the way something is done in the organization.Example: the shift to low-cost airlines, shift to go-green policies.

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