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Learn how to recognize market opportunities and leverage your unique resources to create a competitive advantage in the business world. Understand the importance of opportunity recognition, evaluate the potential of your ideas, analyze the market and competition, and develop effective pricing and promotional strategies. Discover where new business ideas come from and explore different organizational forms.
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Module 3Topics Opportunity RecognitionCompeting in the Market
Module 3Topics Opportunities Evaluation Model Assessing the Competitive Advantage Getting Organized
Opportunities Arise from special knowledge identified through a creative combination of resources to deliver value at a profit.
Market Opportunity Potential to create something new that has market value Creates Significant Value Solves Significant Problem Has Potential to Earn Money Has Good Fit with Owners Is Good for Society
Opportunity Recognition Opportunity recognition search for new business ideas basic aspect of entrepreneurship Entrepreneurial alertness see opportunities overlooked by others perspective on which ideas to pursue
Opportunity Recognition Depends on Alertness Creativity Optimism Social Networks Prior Knowledge
Opportunity Recognition Active Search Systematic Search Passive Search Aware of environment Discovery Surprise Creativity Action
Opportunity Matrix SOLUTIONS Known Unknown P R Known O B L E M Unknown S
Opportunity Analysis Entrepreneur Idea Opportunity Market Resources
The Entrepreneur Interest Independent Passion Vision Tenacity Operate Under Ambiguity Skills Family Support
Where New Business Ideas Come From Source of Ideas Unfilled Market Need Societal Trend
Specific Sources of New Business Ideas Personal Experiences Job Experience Hobby/Interest Unfilled Market Niche Education Systematic Search Other geographic areas Trade shows Other
Resources Human Financial Location Suppliers Technology Intellectual Property Other
Market Analysis Overall Market and Industry Local Market Competitive Advantage
Market and Industry Information Economic Economic conditions Analysis Viable economy? Time to start a business? Return on Compensate for investment of Investment time and money Customer Number of customers Demand Money customers spend
Local Market Identify Competitors Analyze Competitors Strengths and Weaknesses
Competitive Advantage Keep Simple Compete on Price or Features
Communicating with Customers Shotgun Newspaper Radio Television Targeted Newsletter Flyers Other Word of Mouth Community Involvement
Why Ideas Survive How can we make our message last longer? What principles make ideas more memorable?
Six Principles of Sticky Ideas Simple message Most important Limited information Surprise Element Break a pattern Don’t tell entire story Concrete Images Abstract - hard to remember Concrete - can be examined with senses (specific people doing specific things)
Six Principles of Sticky Ideas Establish credibility Trustworthy Authorities Vivid details or statistics Tap into emotions Feelings inspire action If I look at the masses, I will never act. If I look at one, I will act. (Mother Teresa) Tell stories Good stories generate action
Sticky Messages (US) Just Do It It’s the economy stupid Golden Arches Big Brown Nothing runs like a Deere
Summary: What Sticks Principle Impact Simplicity Focus Unexpected Pay attention Concrete Remember Credible Believe Emotional Care Stories Act
Organizational Forms Sole Proprietorship Partnership S-Corporation C-Corporation Limited Liability Company
Pricing Strategies Premium Pricing Unique product Substantial competitive advantage exists Penetration Pricing Price artificially low to gain market share Price increased once achieved Economy Pricing No frills low price Costs kept at a minimum Price Skimming High price because of competitive advantage Price later declines due to competition
Assignment Explain proposed firm’s competitive advantage. Why customers will come to your business? How will you price your product and why? What promotional methods will you use and why? What organizational form is best?