ASSIGNMENT 1A- Entrepreneur Interview Project- Literature Review

Introduction

Based on the background study and criteria given for research, selecting an entrepreneur

was initially a challenge but after we recognised our potential entrepreneur and matched it

to the relation for the coursework we began our detailed analysis and gathering more

information.

Twenty years ago in one of Perth’s prominent suburbs, South Perth Domenic and Lucy Scutti

saw an opportunity to start a small deli store selling Fruits and Greengroceries naming it

after their Last name ‘Scutti’. Today the deli has expanded into a ‘mini market’ with all kinds

of gourmet delicacies from Australia and abroad. This includes prepared meals and dishes

for either onsite dining or takeaway. They also boast a newly open coffee shop in 2008.

The mini-market has been known for its special European products comprising of the finest

oils, vinegars, pastas and much more. Its main focus is now to diversify from selling

predominantly fruit & vegetables into expand its products into unique lines sourced from all

parts of the globe.

Domenic and Lucy Scutti are passing on to their sons Nick and Michael who are already

helping in the business running’s, Domenic wants his kids to follow the attributes of

providing exceptional customer service. Nick and Michael desire is to be “We want to be

seen, and known, as a Mecca for the most comprehensive selection of local Australian

produce and fine continental European foods in Perth”.(Our story,2012)

1Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review

Opportunity recognition

My definition: Opportunity recognition is when an entrepreneur recognises a potential for a

new business opening to invest into or establish into the market, these identification maybe

from past or current market patterns and trends.

Importance

All business enterprise start out had an idea, not all ideas are good opportunities and thus

does not necessarily lead into a good venture. Hence, the successful entrepreneur-to-be

should be on the lookout for good opportunities rather than good ideas (Ralf.W, Benot.F

2008). It is therefore a significant step for setting up a new business venture, since the

results come from direct process of opportunity recognition process.

Starting from the idea

“The basic idea of opportunity recognition is that profitable business ideas surround us on a

daily basis but they are only recognized by people with an entrepreneurial mindset” (Katina

Blue, 2012). They are several ways that Entrepreneurs identify diverse opportunities ways;

one proposed way is use of cognitive frameworks, comparing patterns in technology,

demographics, markets, government’s policies and other factors. (Robert 2006, 104).

Engaging in an active search for opportunities, Alertness to opportunities and prior

knowledge of a market, industry or customer are ways in which these events and trends are

recognised and relate to an idea for the new products and services.

2Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review

From Ideas to Opportunities

Businesses collapse mainly for the reason that people don’t recognize entrepreneurial

opportunities but rather launching a business on basis of an idea. It is crucial to know the

difference between an idea and an opportunity; ideas don’t necessarily have to meet the

standards of being an opportunity. (3 ways to identify an entrepreneurial activity, 2012).

Ideas, creativity and openness come from knowledge with hard work and focus these

creates a successful opportunities. When an entrepreneurial opportunity is recognised it’s

vital to work out figures logically and study the potential value and needs, most importantly

converse with people and verify ideas and incorporate all the feedback you can get (Ralf.W,

Benoit.F 2008).

Spotting an opportunity

Spotting new products and service or business may not be necessarily a genuine

opportunity. The need to explore and research for an opportunity may be important. Some

commons ways that opportunities are observed are stated below;

1. Observing Trends

Research and observation in the changes and trends in technological, economic, political,

social and demographic are viewed closely by individuals and firms to provide them with

forecasts and market analysis. Let’s take some of the factors individually;

Economic factors- An entrepreneur will ask the following: Where is money been

spent? Who is spending the money? Which products are money been spent on? And

so on. People spend on products and services that add more value to their lives.

“When kids have money, they buy stuff. Products and services such as designer

clothing, down-loadable music services, MP3 players and all the other things that

these kids buy are a huge market and thereby have opportunity possibilities” says

Mother Thumper. (3 ways to identify an entrepreneurial activity, 2012).

Social factors- Understanding social factors trends can be a problem, they are

several categories under which entrepreneurs can seek opportunity for products and

services, i.e. the needs of relieving stress and burden for people by everyday life are

3Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review

factors that help provided opportunities e.g. Healthcare and fitness, work and family

patterns, age of population and so on.

Technology – With technology advancements endless opportunities are seen,

simply providing basic needs in a more convenient way to people creates an

opportunity. Once new technology is created, new products to advance it are usually

not far behind.(3 ways to identify an entrepreneurial activity, 2012).

Politics – Business opportunities can be establish where action and regulations

are provided and when there are laws, stability and security.

2. Solving a Problem

When an entrepreneur finds a solution to a problem that means he/she recognised an

opportunity. People normally come across challenges in their everyday live, when a

challenge is encountered and you have thought of a better way to tackling (through

research) it than you have recognised an opportunity. Mother Thumper states that “A

constant trait with entrepreneurs is that they are always looking for problems, or should

I say, always looking for opportunities to solve a problem.” (3 ways to identify an

entrepreneurial activity, 2012).

3. Finding Gaps in the Marketplace

To identify a gap in the market can be a complicated and lengthy task, mainly because

people desire possible about anything or everything. The truth is not everything can be

done, but the ability to observe a potential gap and working on it can be identified as an

opportunity and can be potentially very rewarding.

4Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review

Where do opportunities occur?

Opportunities occur everywhere, and just waiting to be uncovered. Let’s look at ways to

identify an opportunity;

Unexpected Occurrences

In existing businesses today we find that unexpected failures and success and

commonly encountered. Entrepreneurs sometimes don’t recognise that failing

experiences are an opportunity to go and explore further and come up with better

results. While other companies make high turnovers and strike success, some

opportunities go unnoticed from non-core products that can help them achieve even

higher sales.

Incongruities

“Incongruities are discrepancies between what is and what is ought to be or what

everyone assumes it to be” (Ralf.W, Benot.F 2008). Opportunities emerge for

companies who can first respond to prominent discoveries and act.

Process needs

Redesigning a process or eliminating weak links in existing processes can help piercingly

focus on what is required and can help recognising an opportunity effectively.

Industry and market changes

Opening to wide range of business opportunities can be a good indicator for emerging

opportunities especially for fast growing industries who have access to modern

telecommunication and technologies.

Demographic Changes

The source of opportunities comes from the shifts in population trends i.e. ‘What will be

bought by whom?’ Population contains of different age, size, peoples income,

employment status, and this all impacts on what you want to create and build.

5Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review

Change in perception

Similar to demographic, to see how an opportunity can be recognised entrepreneurs

need to try increase the awareness and change perceptions to perceive how the

population and their perception and attitude to the market of products and services

are.

New Knowledge

The knowledge and its appearance in new products can determine large opportunities;

occasionally having too much knowledge and sources can make an operation more

difficult and doubtful.

Conclusion

After looking at different ways opportunity recognition is applied we can enlighten the

fact that opportunities play a critical role the entrepreneurial processes. Opportunities

need to exploited, although ties may exist the value and understanding for further

business is vital. Sources of information plays a central role in opportunity recognition

and the patterns and trends involving change in conditions for instance, changes in

technological, economical, political or demographic circumstances. Opportunities come

into existence at a certain point because of a certain confluence.

“Nevertheless, on an individual level, cognitive structures defining the identification of

opportunities are developed through the previous life experience of the person in

question. Different values have different abilities to “connect the dots” they have

perceived. Hence opportunity recognition is the cognitive process through which

individuals conclude that they have identified an opportunity” (Kontinen.T and Ojala

2011,492)

6Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review

Appendix

The Five Questions I believed are appropriate to the Topic and can help in the interview are

as follows:

1. Did you think your venture was a good opportunity to get into?

2. Where do you think are sources of a potential and promising opportunity?

3. So was the opportunity a win situation?

4. Did you consider whether you should tell anyone else about you opportunity?

5. Do you think the skills you have will enable you to seek more opportunities?

7Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review

References

Books

Frederick, H.H. & D.F.Kurakto.2010. Entrepreneurship: Theory, process and practice, 2nd Asia-Pacific edition. Melbourne, Australia: Cengage Learning

Ralf.W, Benoit.F & Christopher .L.2008. Nurturing Science-based Ventures: An International Case Perspective. Lausanne, Switzerland: Springer

Journals

Baron Robert.2006. “Opportunity recognition as Pattern Recognition: How Entrepreneurs “Connect the Dots” to identify New Business Opportunities”. Academy of Management Perspectives 20(1): 104-119. http://old.ied.econ.msu.ru/cmt2/lib/c/186/File/fa4_1.pdf

Kontinen.T & Ojala.2011. “International Opportunity Recognition among small and medium-sized family firms” Journal of small Business Management 49(3):490-514. http://onlinelibrary.wiley.com/doi/10.1111/j.1540-627X.2011.00326.x/pdf

Baron Robert.2004. “Opportunity recognition: A Cognitive Perspective” Academy of

Management Conference. http://faculty.insead.edu/andersonp/VOBM_MAYJUN2005/Anderson%20VOBM%20readings/Session%202%20How%20venture%20opportunites%20are%20screened/Baron,%202004.pdf

Websites

Katina.B. 2012.What is opportunity Recognition? http://www.ehow.com/facts_7501598_opportunity-recognition.html

Thumper.M.2012. 3 ways to indentify an entrepreneurial opportunity 92. http://motherthumper.hubpages.com/hub/3-Ways-to-Identify-an-Entrepreneurial-Opportunity

Dragan.2012. Opportunity Recognition & Idea Generation – Part 1. http://www.entrepreneurshipinabox.com/1257/opportunity-recognition-idea-generation-part-1/

8Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review

9Ronak Shah.15552664.ENT300.Asselment 1(a) Literature Review