Opportunity Recognition and the Screening Process L 3 Ing. Jiří Šnajdar 2016

Today’s Objectives Understand where business ideas come from Understand how to perform an initial high level screening / evaluation of business opportunities Understand the influence of the external environment Take away action – screening checklist

Business Creation & Start-up Process Adapted from Deakins (2006) Idea formulation Opportunity Recognition Pre-start Planning and Preparation Entry and Launch Post-entry Development

where can you find BIG IDEAs?

Sources of Ideas Every day problems / needs / complaints E.g. Sports Division / Cisco / Netflix Personal experience Work, home, education, skills and talents Hobbies and interests Lifestyle entrepreneurs Newspapers, magazines, media

Sources of Ideas Other countries Deliberate Search Business Opportunity Profiles On-line databases Patents and licensing Factors of Change

Pizza Express Founded Peter Boizot – 1965 Influenced by Italian and German experiences – pizzaiolos Formed an exclusive alliance with London’s only mozzarella maker By 2003 over 300 outlets in UK, Ireland, Spain and France

Drucker’s 7 Sources of Innovative Opportunities Organisational / Sectoral The unexpected (event or success or failure) The incongruity – between what actually happens and plan The inadequacy in underlying processes The changes in industry or market structure External Demographic changes Changes in perception, mood and meaning New knowledge (both scientific and non scientific) Last is most difficult, least reliable and least predictable

Opportunity Recognition Converting an idea into a business opportunity is the key element of the process of business creation Entrepreneurs are attuned to opportunity Opportunity must take priority over innovation Opportunities are generated by change

Opportunity has Four Essential Qualities Barringer and Ireland, 2006 Attractive Durable Timely Anchored in product/service which adds value to buyer/end user

“I never perfected an invention that I did not think about in terms of the service it might give others... I find out what the world needs, then I proceed to invent” Thomas Edison Wow products /services such as the Dyson vacuum cleaner and the bar and massage service in Virgin Upper Class, Amazon… etc.

Dyson vacuum cleaner took 5 years and 5,127 prototypes Vacuums, washing machines, Airblade hand dryer (sales $6 billion worldwide), Air Multiplier

Window of Opportunity Varies Internet Search Engines 1995 – Yahoo Quickly followed by Lycos, Excite, AltaVista, etc – Google (advanced technology)

Evaluating Idea / Opportunity Must be a clearly defined market need Customer analysis, segments, motivations, unmet needs, gaps in market Idea needs to be economically viable Market attractiveness e.g. size? growth? trends? entry barriers? Profit potential? Resources needed / available? Technical feasibility

Evaluating Idea / Opportunity Competitive advantage / USP Competitor analysis Fit with your personal / company objectives / experiences / core competencies Timing must be right – window of opportunity Risks / threats – Environmental analysis

What to look for ? Limitations of what’s currently available Trends and changes Something new and different Unfilled niche Technological advances Speed to market

Conclusions Generating ideas and new products is easy - but you need customers and markets The real challenge is converting ideas into a business opportunity The better you understand your consumer the better your chances of winning in the market place Evaluation and assessment of markets is key to developing business ideas and new products and services Thank you for your attention.