ENTREPRENEURSHIP PAPER

Q1: What is meant by Opportunity Recognition, Entrepreneurial Alertness and

Creativity? How does creativity contribute to the opportunity recognition process?

ANS: OPPORTUNITY RECOGNITION

It is a process of perceiving the possibility of a profitable new
business or a new product or service.

ENTREPRENEURIAL ALERTNESS
It is the ability to notice things without engaging in a
deliberate research and it is a learned skill.

CREATIVITY
It is a process of generating a novel or useful ideas opportunity recognition may
in part a creative process or a creative thinking.

CREATIVITY PROCESS
There are five stages of creative process.

A. PREPARATION
Preparation tells us about the background of the problem the experience
and the knowledge of an entrepreneur because 50% to 90% of ideas emerge from prior work
experience.

B. INCUBATION
In this you think about the problem or consider. A conscious/unconscious
activity when engaged in another activity.

C. INSIGHT
A flash of recognition. When solution to a problem is seen or an ideas is born (A
moment in which entrepreneur recognizes an opportunity).

D. EVALUATION
In this the idea is scrutinized/analyzed for its viability. It’s a challenging
stage.

E. ELABORATION
In this the creative idea is put in to a final form, details are worked out,
ideas is transformed into something of value (new product, service, or business concept).
Q2: How does value chain help firms identify business opportunities and help
explain how business models emerge?

INBOUND LOGISTICS
The activities like receiving, storing, and disseminating inputs to the products,
such as material handling, inventory control, vehicle scheduling, and returns to the suppliers.

OPERATIONS
Activities involved in transforming inputs into final products. Such as machining,
packaging assembling, equipment maintenance, testing, printing and facility operations.

OUTBOUND LOGISTICS
Activities associated with collecting, storing and physically, distributing the
products to buyers, such as finished goods warehousing, material handling, delivery vehicle
operations, order processing, and scheduling.

MARKETING AND SALES

Activities associated with providing a means by which buyers can
purchase the product. Advertising, promoting, sales forces, quoting, channel selection, and pricing.

SERVICE
Activities associated with providing services to enhance or maintain the value of products,
such as installation, repair, training, parts supply, and product adjustment.
PROCUREMENT
Function of purchasing inputs used in the firm’s value chain not the purchased
inputs. Raw materials, office equipment, machinery.

TECHNOLOGY DEVELOPMENT
Every value activity embodies technology be it know-how,
procedures, or technology embodied in process equipment. Technology development that is related
with the products and its features supports the entire chain while other technology development is
associated with particular primary or supports activities.

HUMAN RESOURCE MANAGEMENT

Activities like recruiting, hiring, training, development and
compensation of all types of personnel. It supports both primary and support activities (hiring
engineers) and the entire value chain.

FIRM INFRASTRUCTURE
Activities including general management, planning, finance, accounting,
legal, government affairs, and quality management. Infrastructure supports all value chain instead of
individual activities. (Finance at corporate level but quality management is done at the business unit
level)

Q3: Briefly narrate the areas that a properly executed feasibility analysis
explains?

ANS: FEASIBILITY ANALYSIS

It comes after opportunity recognition about before development of
business plan.
TYPES OF FEASIBILITY ANALYSIS

1. PRODUCT/SERVICE FEASIBILITY
An assessment of overall appeal of product or service
TWO PRIMARY TESTS

A. CONCEPT TESTING
The product is shown to the prospective customers to gauge customer’s
interest, desirability, and purchase intent. To validate the underlying premises of product/service that
entrepreneur think is compelling. Showing product idea to the prospective customers and get feedback
from customers and entrepreneur refines the idea to the point where customers are satisfied and willing
to buy.
 B. USABILITY TESTING
In this the user of the product performs certain tasks in order to
measure the products ease of use and the user’s perception of the experience and a prototype is
developed.

2. INDUSTRY/MARKET FEASIBILITY
An assessment of overall appeal of the market for the
product/service being proposed.

PRIMARY ISSUES

A. INDUSTRY ATTRACTIVENESS
B. MARKET TIMELINESS
C. IDENTIFICATION OF NICHE MARKET

3. ORGANIZATIONAL FEASIBILITY
To examine the sufficient management expertise,
organizational competence, and resources

A. MANGEMENT EXPERTISE AND ORGANIZATIONAL

Understanding of the market in
focus knowledge of customer, extensive professional and social networks.
B. RESOURCE SUFFICIENCY
Sufficient resources to move forward to successfully develop a
product/service idea, especially the non-financial resources.

4. FINANCIAL FEASIBILITY
Capital requirements, financial rate of return, overall
attractiveness of investment

CAPITAL REQUIRMENTS
Hiring of personnel, office or manufacturing space, equipment,
training, research and development, marketing and initial product rollout.

FINANCIAL RATE OF RETURN

Return on assets, return on equity, return on investment help
determined the projected and is it adequate

FOLLOWING DETERMINED THE ADEQUACY OF ROR

1. The amount of capital invested.

2. The amount of time required to earn the return.
3. The risks assumed in launching the business.
4. The existing alternatives for the money being invested.
5. The existing alternatives for the entrepreneur time and efforts.

OVERALL ATTRACTIVENESS OF THE INVESMENT