Opportunity Identification Approaches

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Table of Contents

Abstract
Identification of the Best Component
An Overview of the Approach
Reflection
Conclusion
Reference List

Abstract

This paper dwells upon the three approaches to opportunity identification. It is noted that discovery is more relevant than recognition and enactment methods. The way the approach was applied is also provided.

Identification of the Best Component

The entrepreneurial effort has been studied for several decades so far, but there are still various questions raised. Thus, researchers have different views on the way entrepreneurial opportunities come into existence. Some researchers believe that opportunities exist in the world, and they can be discovered by entrepreneurs (Gartner, 2012).

Whereas, some stress that the opportunity is a brand new creation. It is necessary to note that many researchers tend to see this approach as the most credible (Struzina, Ingram & Kraus, 2009). The two other methods are less relevant in the contemporary business world. Importantly, researchers agree that entrepreneurial alertness plays a significant role in the identification of the opportunity. However, the way alertness is manifested in the process of this identification differs significantly.

Recognition requires extensive research as well as prior knowledge, which enables them to recognize new attributes of things that were already known to them (Chea, 2008). The opportunity is not discovered but recognized. It is important to add that this approach is associated with the availability of complete information (on both supply and demand). Some researchers tend to emphasize that opportunities cannot be recognized as they are created (enacted).

Thus, an individual uses his knowledge and skills to create an opportunity and bring it to life. At that, the entrepreneur is often unaware of the supply and demand. Vaghely and Julien (2010) note that even though an opportunity can be found through analysis of information, it is still created by the entrepreneur. In other words, even though the individual uses his/her prior knowledge, he/she constructs opportunities and experiments to use the opportunity.

However, these two approaches are quite vague and do not equip with the understanding of how exactly the opportunity occurs. The process of identification of the opportunity is not well-defined. For instance, it is difficult to grasp the idea of looking for a novice opportunity among existing ones. Creation of the opportunity presupposes the development of a new setting and new approaches. The starting point of this process is also revealed in an inefficient way.

The approach based on the notion of discovery is more specific. Gartner (2012) notes that the opportunities exist in the world, and the role of the entrepreneur is to ‘discover’ them. The individual uses prior knowledge and skills to process information to identify opportunities.

Clearly, people often have different types of information processing and knowledge management, which explains why some people do not see an opportunity while others easily ‘discover’ them. This approach also provides the description of particular to be implemented.

An Overview of the Approach

As has been mentioned above, the approach is based on the notion of discovery. The entrepreneurial alertness plays a significant role in the discovery (Chea, 2008). Thus, a person uses some information that can be received from different channels (prior knowledge, research, experience).

The analysis of these data triggers the entrepreneurial alert. In other words, the entrepreneur discovers an opportunity after analyzing some data, experience and so on. An individual does not create an opportunity but elicits it among existing ones. It is noteworthy that the entrepreneur often has the information on either demand or supply.

It is important to add that networking plays an important role in the discovery of opportunities (Chea, 2008). It has been acknowledged that people who have weak ties are often unable to see the opportunity. This is closely related to the notion of knowledge and information processing.

Those having strong social ties and become a part of several networks usually have more data. They are also acquainted with various perspectives on specific matters. This enables entrepreneurs to see the situation differently, analyze facts in more detail and discover new ways and approaches.

It is noteworthy that the discovery becomes possible due to the individual’s creativity as well. It is essential to apply creative thinking to be able to identify an opportunity when analyzing things known. Successful entrepreneurs tended to use unconventional ways and methods. They can be seen as innovators to a certain extent.

Thus, Vaghely and Julien (2010) stress that the discovery of opportunities needs “a combination of creativity, innovation and market information.” The successful entrepreneur uses prior knowledge, analyzes information available from different resources, and he/she employs his/her creativity to utilize innovative approaches and discover an opportunity.

Notably, the discovery can be accidental and purposeful. The latter type of the opportunity has been described above. Some people may argue that accidental discovery pertains to the world of innovation and even creation of the opportunity. However, it is clear that accidental discovery of an opportunity is based on the implicit processes of analysis of prior knowledge and information.

In other words, the entrepreneur does not implement a research waiting until the opportunity becomes visible. He/she is not focused on the search, but his/her mind remains concentrated, and when the analysis is completed, and creativity is applied, an opportunity is discovered.

Reflection

In this project, we have used the approach based on the notion of discovery. First, we chose the area that was quite well-known to us. It is necessary to add that we used prior knowledge to discover the opportunity. Thus, we knew that there were many accidents involving divers and inefficient buddy systems. This was the area where we saw an opportunity.

However, it was still quite vague, and we started collecting data on the matter. We all knew that there were several buddy systems used by divers. Of course, the level of our awareness was different, and some of us did not know some technological peculiarities while others were not aware of the scale of the problem. We needed comprehensive information on the matter.

We shared the knowledge and decided to implement further research to explore the demand. We tried to identify characteristics important to customers. We also took into account divers’ opinions on flaws in existing systems. This information helped us ‘crystalize’ the opportunity.

Clearly, we needed extensive data on the matter, and, hence, we interviewed many people to learn more about their values, needs, and expectations. We understood that there was an opportunity to provide a product that would better satisfy customers’ needs. The new buddy system could be positively accepted by potential buyers as it included major features divers value.

Importantly, we gathered data, and we used our creativity to come up with an opportunity that could be implemented. The innovation and creativity we used were concerned with the features of the new system. At that, we did not try to focus on features that had been in the place. We did not create some revolutionary ideas. We simply spotted the gap existing between the available systems and desires of customers. We discovered the opportunity that was in place all the time.

It is necessary to note that understanding ways entrepreneurs use to find opportunities is very helpful. We used to do everything intuitively, but now we understand key components of the effective discovery of opportunities. The entrepreneur should simply follow the steps described by theorists and practitioners.

Of course, they should also concentrate on the area they know well. I also know that entrepreneurial alert is closely connected with such notions as knowledge, information processing, innovation, and creativity. I will be able to use this understanding in my future. I believe that having a clear idea on the effective process of opportunity identification will facilitate my entrepreneurial capacity.

Conclusion

On balance, it is possible to note that there are three major approaches to the identification of the opportunity. These are recognition, discovery, and enactment. The notion of discovery is the most relevant as it reflects the process of the identification of opportunities. This process is closely connected with prior knowledge, research, innovation and creativity. It is also important to add that it is beneficial to understand the processes that lead to the identification of the opportunity.

The entrepreneur better sees steps to undertake to find and ‘crystalize’ the opportunity. I have benefited significantly from learning about ways to identify opportunities. I used to lack for skills to reveal opportunities, which undermined my entrepreneurial capacity. I had to use intuition. However, the knowledge about the discovery approach equipped me with the necessary knowledge, skills, and, what is important, confidence. I believe I will be able to identify opportunities easier in the future.

Reference List

Chea, A.C. (2008). Entrepreneurial venture creation: The application of pattern identification theory to the entrepreneurial opportunity-identification process. International Journal of Business and Management, 3(2), 37-53.

Gartner, W.B. (2012). Entrepreneurship as organization creation. In D. Hjorth (Ed.), Handbook on organizational entrepreneurship (pp. 21-31). Northampton, MA: Edward Elgar Publishing.

Struzina, J., Ingram, T., & Kraus, S. (2009). Small enterprises from Poland. In M. Fink & S. Kraus (Eds.), The management of small and medium enterprises (pp. 125-141). New York, NY: Routledge.

Vaghely, I.P., & Julien, P.A. (2010). Are opportunities recognized or constructed? An information perspective on entrepreneurial opportunity identification. Journal of Business Venturing, 25(1), 73-86.

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