Business Opportunities

1. Business Opportunities • Identifying a Business Opportunity means identifying an unfulfilled need in the market, for which there is a customer willing pay for in exchange of the service or product. • It is easy to identify an existing opportunity then totally new or innovative ideas • The success rate of any new idea is 1:100 , hence quite risky

3. Types of Opportunities • An unmet need is met by a new service or product • A new product or services replaces an existing product or service • A new product or service may be created because of a new technology, or pure innovation or changing social or economic conditions. • The new product or service may create additional value to the customer, reduced cost, saves time or increases convenience or saves energy or makes him happy.

4. Connecting personal vision to business strategy Business Opportunity Personal Vision Business Strategy Business Vision

5. Constructing & Deconstructing Personal & Business Vision Personal and / or Business Vision (1) Core Ideology Envisioned Future Core Values Core Purpose 10 to 30 yr “BHAG” Vivid Description • A clear picture of what the future will look like • Guided by passion, emotion and conviction • A compelling image to which everyone can relate • “Big, Hairy, Audacious Goals” • Can be quantitative • or qualitative • Involves David vs. • Goliath type of thinking • Dreaming “the impossible dream” • The individual and / or company’s essential mores and principles that guide its choices and actions • Enacted and not merely espoused values • The individual and / or company’s essential reason for existing and for going forward • Long term mission (1) Model adapted from Building Your Company’s Vision by James Collins and Jerry Porras (HBR, Sep-Oct, 1996)

6. Using PESTLE framework to identify growth opportunities Ideas for business opportunities Categories of Entrepreneurial Business Opportunity Investment criteria Strategic Forces (PESTLE framework) Top 5 Opportunities P E S T L E • PESTLE Forces: • Political • Economic • Social • Technology • Legal • Environmental Model developed by Audax Ideas Management Consulting

7. Combining the PESTLE analysis with an industry structure analysis to identify growth opportunities Political Technological New Entrants Supplier Power Buyer Power Industry Rivalry Legal Economic Substitutes Environmental Social Adapted from model in Competitive Strategy - by Michael Porter

8. Linking personal vision, business vision, business opportunity and business strategy RA: a measure of the combined attractiveness of: (1) The venture in terms of its economic profile and harvest potential (2) The market in terms of its capacity to generate large, sustainable and growing profits (3) The industry in terms of the relative power of various forces which determine the size and share of margins Ideal New Venture Position Venture Market Relative Attractiveness (RA) Industry Opportunity Relative Competitive Position (RCP) Capabilities Customers Core Competencies Personaland business Vision RCP: a measure of: (1) The extent of our capabilities to provide a product or service, (2) which our customers want and are willing to pay for, (3) in a manner which is better than our competitors, in a sustainable and value-adding manner Competitors Entry Point: What are the ventures out there that: (1) we want to create or develop (2) represents a business opportunity (3) we can (or could) do well at Model developed by Audax Ideas Management Consulting

9. The RA/RCP matrix provides a useful approach to mapping out a business strategy • Business economics, risks and projected returns on investment • Market size, growth and potential margins • Industry structure and degree of competitiveness • Macro-economic, political & regulatory environment (2) Build required capabilities (1) Invest & pursue opportunity High Relative Attractiveness of Opportunity (4) Avoid / Wait & Re-assess in future (3) Identify niche opportunities Low Low High Relative Competitive Position • Customer needs & wants • Competitor capabilities • Our capabilities

10. The Business Development Matrix is another way to map out different strategies for growing a business • Identify opportunities for each type of business development • Assess relative attractiveness of different opportunities • Assess our relative competitive position in the pursuit of different opportunities • Agree overall business development strategy Product Development New Business Development New Products & Services Existing Market Penetration Market Development Existing New Target Customers & Markets

11. The industry and the company and its products / services Market research and analysis Economics of the business Marketing plan Design and development plans Manufacturing and operations plan Management team Overall schedule Critical risks, problems, and assumptions The financial plan Proposed company offering Executive Summary • Description of the business concept, the business opportunity and the business strategy • Target market and projections • Competitive advantages • Costs • Economics, profitability • Harvest potential • The lead entrepreneur & the management team • The offering to investors • Appendices • Financial Analysis • Industry and Market Analysis • Manufacturing / Operations Analysis • Organisation Design • Product Design • Other The work done on business strategy fits into an overall Business Plan framework Detailed Contents Source: New Venture Creation, by Timmons and Spinelli - Chapter 12

12. The Prioritization Matrix may be used to structure a more detailed Action Plan 2. Other quick hits - second level of priority 1. Quick Hits - actions with highest priority High Ease of Implementation (in terms of complexity, resource requirements, etc 4. List actions now, review later to see if priority has changed 3. Medium term actions - detailed plan may be required Low Low High Potential Impact of the Action (in terms of positive contribution to business objectives List the actions and then evaluate, categorize and prioritize according to the above matrix