CHAPTER 4

BUSINESS OPPORTUNITIES:
IDENTIFICATION, EVALUATION,
AND SELECTION

LESSON OBJECTIVES
At the end of the lesson, students should
be able to understand:
Definition

of business opportunity and two

situations in which business opportunity
can exist in the market

The approach to opportunity identification

WHAT IS
OPPORTUNITY
Opportunity is defined as a situation
that enables an entrepreneur to offer
marketable products or services to
interested buyers or end users

2 TYPES OF SITUATIONAL FACTORS

There are two situations in which
business opportunity can exist in the
market;
Product

or service is already in the market but

failed to satisfy the customers so need to be
improved.

Product

or service is still not in existence to

help solve customers problems.

EMERGENCE OF OPPORTUNITY

When people decide they have certain needs and want to

be satisfied, or when people discovered a problem of some
kind that can be helped by a product or service.

The

presence

problems

of

alerts

unfulfilled
the

needs

entrepreneur

and
to

want
the

and/or
potential

opportunity.

The entrepreneur later creates a business that is able to

fulfill the needs or want and/or solve the problem.

BUSINESS OPPORTUNITY:
IDENTIFICATION

OPPORTUNITY
IDENTIFICATION
Opportunity identification is a
process that involved the search for
and
discovery
of
business
opportunities.

APPROACH TO
OPPORTUNITY
IDENTIFICATION
1.

Observe changes in the environment.

2.

Recognize a need that customers

have that is not being satisfied.

3.

Recognize problems and find ways to

solve it.

1. OBSERVING
CHANGES IN THE
ENVIRONMENT
Changes in the environment give rise to
needs and wants and/or problems, and
an opportunity emerges.

CONT..
Important environment forces to
observe include:
Economic
Social

forces

forces

Technological
Political

advances

and regulatory statues

Examples of How Changes in the Environment Provides Openings for

New Product and Service Opportunities
CHANGES IN ENVIRONMENT
Structure of Population and Income
Number of teenagers higher than number
of elderly and children
People have higher purchasing power
Social
Increase incident of housebreaking
Increase interest in fitness
Increase mobility of population
Increasing predominance of dualincome families leaves less time to
cook at home
Technological Advances
Advances in biotechnology
Development of the internet
Increase pressure to improve economic
performance
Government Policies and Regulations
Increased driving standards

PROVIDE OPPORTUNITIES FOR:

Cyber cafes, cineplexes, recording studios
Passenger cars, household furniture, DVD
Grills, alarm, sensor, security systems
Fitness center, dancing class, in-house exercise
equipment, health food store
Handphone, laptop computers
Restaurants, food delivery services

Biotech-related pharmaceutical products, food

products, veterinary products
E-commerce, improved communication
Online marketing, cost control services

Smoke emission control, helmet, seatbelt

2. RECOGNIZE NEEDS
AND WANTS
Opportunity occurs whenever there is a need
and want to fulfill. The term needs refer to
basic needs that the consumer must have in
order to live while the term wants refers to a
personal desire for something that is more
than a basic need.

3. RECOGNIZE
PROBLEM AND FIND
SOLUTION
Problems

can

be

recognized

by

observing the challenges that people

encounter

in

their

daily

lives.

Solution to the problem represented a

business opportunity.

OPPORTUNITY IDENTIFICATION
PROCESS
Search for
Changes in
the
environment

Recognize
needs and
wants, and
solutions

Discovery
of
Opportunity

ABILITY TO SEARCH AND

DISCOVER BUSINESS
OPPORTUNITIES
Experience

and exposure

Knowledge

and skills

Special
Social

alertness

network

Creativity
Vigilant

(alert)

MECHANISM TO IDENTIFY
OPPORTUNITIES
Customers
Retailers

and distributors

Business

associates

Bankers
Consultants
Employees
Others

BUSINESS OPPORTUNITY:
EVALUATION & SELECTION

EVALUATION AND
SELECTION PROCESS
The

evaluation

process

involves

and

selection

judging

the

viability of the opportunity and

assessing its potential.

CRITERIA FOR EVALUATION AND

SELECTION

Can make money and has potential for growth

Less competition

Good fit between entrepreneur and opportunity

Has competitive advantage

Workable and efficient

Not against the norms and values of the

community

Conform with laws and regulations

THE END!