BUSINESS OPPORTUNITY AND SELECTION

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					BUSINESS OPPORTUNITY
         AND
      SELECTION
     Dr. Hashim Hussein
    Opportunity Identification &
    Selection (OIS) :The Process
 OIS 7 Step Process:
  1. Preparation of personal profile
  2. Development of OS (decision making)
     framework
  3. Generation of ideas
  4. Snap investigation
  5. Evaluation in terms of OS (decision making),
     framework & short listing of ideas
  6. Pre-feasibility studies
  7. Opportunity selection
        Step 1.: Preparation of
           Personal Profile
About the entrepreneur:

 May include following details:
  1. Background : Personal, educational, experience,
     personality
  2. Objectives for establishing enterprise
  3. Investment preparedness
  4. Attitude to risk taking
  5. Personal considerations
Step 2: Development of opportunity
      selection (OS) framework
 Investment
     How much are you willing to invest?
     P & P expenses
     Contingency & escalation
     Working capital margin


 Technology sophistication
   Quality & Quantity of technology to acquire
Step 2: Development of opportunity
 selection (OS) framework (cont’d)
 Managerial/ Organization demands
   Size or intensity or organizational task
   How skills & expertise match?


 Market Competition
   Market research
   Aggressiveness & determination to „sell‟
   Export industry consideration
Step 2: Development of opportunity
 selection (OS) framework (cont’d)
 Sector preference
 Government intervention/ dependence
 Implementation time
 Profitability
 Degree of risk & its form
 Location
 Personal considerations
 Taboos/ Religious Sentiments
Step 2: Development of opportunity
 selection (OS) framework (cont’d)

 Lifestyle
 Relative importance of money
 Amenability takeover by children
 Speculative orientation
        Step 3: Generation or
        identification of ideas
 To hit up ideas – the heart of OIS process
 Strong creative dimension to be present
 Stretch one‟s mind for opportunity
 Idea generation
Step 4: Snap Investigation of Ideas
 Idea not enough – must examine
  preliminary viability
 Preliminary investigation
 Questions like:
     What exactly is the product or service?
     Application & uses
     Possible scales of production or operation
     Project cost to a given scale of production/
      operation
Step 4: Snap Investigation of Ideas
 Market / competition
 Unit sale price
 Degree of technological complexity
 Expected annual turnover
 Expected profit margin (range)

And any other information you can collect
 without incurring too much expenditure
Step 5: Evaluation in terms of OS
 framework & short listing ideas
 Will you be able to learn and get grip over
  business?
 Securing term loans, financial assistance
  or commercial bank… will it pose a
  problem?
 Key determinants: success & risks
 Must cross check all judgments
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont’d)
  Portion a highly individualistic process
  Generation of ideas will depend on
    Interest in sending opportunity over time
    Sense of urgency of business enterprise
    Ability to harness courses of knowledge &
     information
    Vision & creativity
    Lateral thinking
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont‟d)
 7 approaches to generation of ideas
  1. Natural resources
  2. Existing anticipated industries
  3. Market driven
  4. Service sector scanning
  5. Extension/ modification of present work
     content
  6. Creative effort
  7. Other ways
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont’d)
 1. Natural resources – to convert into profitable
       enterprises
        Forest
        Horticulture
        Agro-waste
        Marine or aqua
        Mineral
        Animal
        Animal
        Wind
        Sun
        Human
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont’d)
 1. Natural resources – must pay attention to:
   1.   Exploitation
   2.   Resource quantification & life
   3.   Resource stability
   4.   Critical infrastructure for resource utilization
   5.   Commodity/ trading dimension
   6.   Legal dimension
   7.   Other considerations
   8.   Where will you pick resource based ideas?
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont’d)
 2. Existing anticipated industries
      Similar projects
      Raw material for existing industry
      Further processing of output of existing industry
      Projects based on waste or by- products of existing
       industry
      Packaging materials
      Service requirements
      Projects based on skills/ technology developed
       through existing industry
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont’d)
 2. Existing/ anticipated industries – keep
       following in view
        Outlook for existing industry of your interest
        Ancillary parent industry syndrome
        Captive arrangement
        Nature of decision making
        Projects in the pipeline
        Motivated feedback
        Look beyond local industries
        Well trenched non- local supply industries
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont’d)
 3. Demand driven or market driven opportunities
      Trade flows
      Import substitution
      Growth products
      Product positioning/ differentiation
      Exports
      Basis of import
      Competitive advantage, not just potential
      100% export
      Networking
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont’d)
4. Service sector opportunities
     Existing industrial enterprises
     Medium and large projects in pipeline
     Commercial establishment
     Public utility orgs.
     Social infrastructure
     Business enterprises catering to community needs
     Government/ quasi- government orgs. & local bodies
     Citizens
     households
   Step 5: Evaluation in terms of OS
framework & short listing ideas (cont’d)
 5. Creative effort
       Development of problem solving products/ services
       Exploitation of new technology or material to meet a
        widely felt need
       Creating a demand for a psychological product
       Technical extension of an established product concept
       Creating a demand implicit in emerging lifestyle
       Technical work
       Introducing products/ services alien to region or country
       Value addition through technical or managerial
        innovation
               Final selection
 Basic guidelines
   Imperfect knowledge
   Comprehensive comparison

 Key issues
     Technology comfortability
     Degree of difficulty of market position
     Risks
     Profitability
     Government dependence
     Success & risks calculated
     Final selection – Errors in
             selection
1. “Me too” syndrome
2. Fallacy of numbers
3. “Story of an elephant” syndrome
4. Square peg in a round hole
5. Undifferentiated enterprise
6. Failure to grasp key elements of success
7. Lack ownership
8. Catch the first bus
9. Inaccurate information
10. Unwillingness to step back

				
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