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International Conference on TIM, 2012, Nepal. Opportunity Recognition Model of Successful Entrepreneurs of Nepal. Dr. Binod Krishna Shrestha, Associate Professor, Kathmandu University, School of Management Email: binod@kusom.edu.np. International Conference on TIM, 2012, Nepal.
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International Conference on TIM, 2012, Nepal Opportunity Recognition Model of Successful Entrepreneurs of Nepal Dr. Binod Krishna Shrestha, Associate Professor, Kathmandu University, School of ManagementEmail: binod@kusom.edu.np
International Conference on TIM, 2012, Nepal INTRODUCTION • Opportunity recognition an initial stage of venture creation. • Past research indicates three basic steps: Perception > discovery > creation • Incompetent execution of these steps is the main reasons of failures of business start ups (Kakati, 2003). • No empirical research in this theme of entrepreneurship in Nepal. • Findings important to guide aspiring entrepreneurs to prevent them from failure.
International Conference on TIM, 2012, Nepal OBJECTIVES The main objective: • To explore the opportunity recognition model that successful entrepreneurs used in their entrepreneurial process. Specific research objectives: • What factors inspired entrepreneurs to generate new business ideas? • How did entrepreneurs sense business opportunities? • How did entrepreneur discover fit the between the business opportunities and their resources? • How did entrepreneurs make their venture success?
International Conference on TIM, 2012, Nepal LITERATURE REVIEW • Entrepreneurs search for change, recognize change, and convert them into opportunity in the process of business innovations (Drucker, 1988) • Entrepreneurs recognize things that others do not and exploit them as opportunity (Kirzner, 1973). • Entrepreneurship is driven by perception of opportunity (Stevenson, Roberts, & Grousbeck, 1985). • The entrepreneurs discovered customers’ problems to be solved or needs to be fulfilled (Bhave, 1994).
International Conference on TIM, 2012, Nepal LITERATURE REVIEW • An opportunity may be perceived as the chance to meet a market need through a creative combination of resources to deliver superior value (Ardichvili, Cardoza & Ray 2003). • Opportunity recognition appears to include three distinct processes (Shane, 2000): • Sensing or perceiving market needs and/or underemployed resources (perception), • Recognizing or discovering a ‘fit’ between particular market needs and specified resources (discovery), and • Creating a new ‘fit’ between previously separate needs and resources in the form of a business concept (creation).
International Conference on TIM, 2012, Nepal METHOD • Case study method was used with in-depth examination of 30entrepreneurs (Yin, 1994). • Theoretical sampling used (Flick, 2006) who went through successful opportunity recognition process in the last ten years • Qualitative data collected from semi-structured interviews with entrepreneurs. • Started with a few open-ended questions
International Conference on TIM, 2012, Nepal METHOD • In what way you came up with this business idea? • How did you decide this business rather than others? • How did you make sure that this business would make money or be successful in the market? • Collected retrospective and real time data which ensures external and internal validity of the data (Bingam & Eisenherdt, 2011). • The entrepreneurs were interviewed several times to collect the complete answers. • Following Flick (2006), detailed notes of the statements of the respondents were prepared during the interview.
International Conference on TIM, 2012, Nepal METHOD • The analysis began with compilation of the data and synthesizing the results from the interviews for each entrepreneur, leading to mini cases. • Entrepreneurs’ statements in the case studies were systematically evaluated • Several themes were generated by keeping in mind the literature review • Sub-themes were collapsed into broader level themes, and they were reported below.
International Conference on TIM, 2012, Nepal RESULTS • Desire and experiences in a particular business • ‘I wanted to do something related to this business, • ‘I had certain knowledge in this sector and even asked other people about this business’. • ‘I have long experiences in this field of business. • ‘I built a casual job into a business • ‘Friends circle having experiences and interested in this business field to support me’. • ‘Parentswanted that I start this business’.
International Conference on TIM, 2012, Nepal RESULTS • Research and Business Idea • ‘mini survey on customers and people working in this business sector’. • ‘there were mismatch between demand and supply’. • Some saw that ‘there would be even more demand in the coming yearsand • ‘Changing environment signaled the potential increase in the demand of this product’. • ‘Personal inconvenient experiences from the existing product that I buy everyday provided me insight of this business opportunity. • ‘Lack of quality Nepali products and incapability of producers to provide continuous supply’
International Conference on TIM, 2012, Nepal RESULTS • Business Screening • confirmed whether they can really start the business successfully. • Self efficacy of the entrepreneurs • ‘Long experience in this field’, • ‘my determination to accomplish’, • ‘good knowledge and expertise in this field’ and • ‘ability to invest and expertise in marketing of these products’
International Conference on TIM, 2012, Nepal RESULTS • Economic feasibility and future prosperity. • ‘this business need low investment and high return’ • ‘this business would provide economic prosperity. • The market opportunities and trend • ‘there were chances to bring a new concept in the market and gain monopoly in this business’. • ‘based on a growing economy I was confident that the demand for this product would increase’. • Friends and networks • ‘I discussed this business idea with my relatives and few close friends, they were quite convinced with this brilliant idea to make money’.
International Conference on TIM, 2012, Nepal RESULTS • Successful Innovation • ‘hard work’, ‘intuition’ and analyses’. • ‘a strong creative team and their commitments and supports of their staffs and partners for the successes’. • ‘the help of existing business networks and good contact with customers’ • ‘migration pattern and demographic change created market needs of the products, but the supply was less’.
International Conference on TIM, 2012, Nepal RESULTS • competitive strategy • ‘We were able to quote a competitive price hence customer were attracted’. • ‘We focused on core target customers and their satisfaction’. • ‘We offered innovative concepts’. • ‘We offered international brand which was cheaper and better quality than those offered by others’. • ‘We were the first mover in this business over time which helped us to capture huge market’. • ‘We did not have strong competition’.
International Conference on TIM, 2012, Nepal Results: Model and criteria used in different opportunity recognition
International Conference on TIM, 2012, Nepal DISCUSSION • Nepali entrepreneurs use a specific process to recognize business opportunities and bring the opportunities into successful ventures (Drucker, 1988). • Opportunity recognition process indeed consists of perceiving a possibility of creating a new business (Christensen, Madsen, & Peterson, 1989). • They pursue model of discovering customers’ problems to be solved or needs to be fulfilled (Bhave 1994). • They also use resources in terms of personal efficacy, social networks and competitive strategies to make a business success (Ardichvili, Cardoza & Ray (2003)
International Conference on TIM, 2012, Nepal DISCUSSION • Therefore nepali entrepreneurs also go through three distinct processes of perception, discovery and creation (Shane, 2000). • They sense market needs, discover fit between the needs and their resources, create a business concept and implement them successfully. • In this process market knowledge or experiences of both personal, family and friends plays greater role (Shane, 2000; Ardichvili, Cardoza, & Ray, 2003; Kakati, 2003).
International Conference on TIM, 2012, Nepal IMPLICATIONS AND CONCLUSION • In-depth case studies was appropriate given the lack of research on the topic, but has limitations in terms generalizability. • Develop survey instruments and conduct survey research with large samples and perform more quantitative data analysis. • Nepali entrepreneurs used sophisticated model during business start up and making them success. • The entrepreneurs discovered problems to solve or needs to be fulfilled.
International Conference on TIM, 2012, Nepal IMPLICATIONS AND CONCLUSION • Opportunity recognition requires a set of skills of sensing market and assessing them. • The findings has implications on guiding and teaching students. • Enable first to recognize the market gaps to start thinking of what to innovate, • screening out the business concepts based on their self capacity, financial feasibility and market demands • equipped with management skills to sustain the business.