Entrepreneurial Strategy and Competitive Dynamics

Chapter 8

Entrepreneurial Strategy and Competitive Dynamics

Recognizing Entrepreneurial Opportunities

        Entrepreneurship is the creation of a new value by an existing organization or new venture that involves the assumption of risk. The new value can be created in some different contexts, namely; start-up venture, major corporations, family-owned business, non-profit organizations, and established institutions.

Opportunity Analysis Framework

        Three factors that are important in determining whether a value-creating opportunity should be pursued or not. Those factors are; the nature of opportunity, the resources available to undertake it, and the characteristics of the entrepreneurs pursuing it.

         Opportunity Recognition, is the process of discovering and evaluating changes in the business environment, such as a new technology, sociocultural trends, or shifts in consumer demand that can be exploited. Those opportunities comes from different sources such as: current or past work experiences, hobbies that grow into businesses, suggestion by friends or family, and chance events.

        There are two phases of opportunity recognition. First stage is discovery phase. It is the period when venture first become aware of a new business concept. It could be spontaneous and unexpected, or another time occur as the result of deliberate search for new venture projects. The second phase is opportunity evaluation phase. During this phase, one would evaluate an opportunity by talk to potential target customers, discuss it with production or logistics manager, or conduct feasibility analysis.

        Entrepreneurial resources is second part of opportunity framework. The most important resource for new venture is money. Other available resources are personal savings, bank and public financing, and venture capital. Aside from the financial resources, there are human capital, social capital and government resources.

        Entrepreneurial leadership is last essential part of opportunity framework. When launching a new venture, they require a special kind of leadership that has the characters of courage, beliefs in ones conviction, and energy to work hard. The character also demand vision, dedication and commitment to excellence. Vision especially is recognized as the most important asset. With vision, leaders are able to exercise a kind of transformational leadership that creates something new and, in some way, change the world.