Sources of Opportunities Hand Out

Sources of Opportunities
There are many ways to discover opportunities. Looking at the big picture some have noticed the emerging trends and patterns
for business opportunities. While others are trying to find out their target market. Some are the following sources of
opportunities:
1. Changes in the environment

Entrepreneurial ideas arise when changes happen in the external environment. A person with an entrepreneurial drive views
these changes positively.
External environment refers to the physical environment, societal environment, and industry environment where the business
operates.
1.1 The physical environment includes
a. Climate- the weather conditions.
b. Natural resources- such as minerals, forests, water, and fertile land that occur in nature and can be used for economic
gain.
c. Wildlife- includes all mammals, birds, reptiles, fish, etc., that live in the wild.
1.2 The Societal environment includes the various forces like
a. Political forces- includes all the laws, rules, and regulations that govern business practices as well as the permits,
approvals, and licenses necessary to operate the business.
b. Economic forces- such as income level and employment rate.
c. Sociocultural forces- customs, lifestyles and values that characterize a society.
d. Technological environment- New inventions and technology innovations.
1.3 The industry environment of the business includes:
a. Competitors
b. Customers
c. Creditors
d. Employees
e. Government
f. Suppliers
For example, one factor in the physical environment that can easily change is the climate. The temperature is very high
during summer but very low during the rainy season. An individual with entrepreneurial drive can be extremely imaginative
and inventive in identifying opportunities. He/she can venture a business that responds to the needs of the people during
summer and rainy season.
2. Technological discovery and advancement
A person with entrepreneurial interest sees possibility of business opportunities in any new discovery or because of the
use of latest technology.
For example, an individual with knowledge in repair and installation of a machine engine discovers that additional
engine parts that considerably reduce fuel consumption
3. Government’s thrust, programs, and policies

The priorities, projects, programs, and policies of the government are also good sources of ideas.
For example, the use of firecrackers to celebrate New Year’s Eve is strictly prohibited. People without entrepreneurial interest
will view the ordinance as a plain restriction. However, for an entrepreneur, it is a business opportunity to come up with a new
product that will serve as a substitute for firecrackers.
4. People’s interest
The interest, hobbies, and preferences of people are rich source of entrepreneurial ideas. Like the increasing number of
Internet Café at present could be lead to the strong attachment of young people to computers.
5. Past experiences
The expertise and skills developed by a person who has worked in a particular field may lead to the opening of related
business enterprise. For example an accountant who has learned the appropriate accounting and management skills and
techniques in a prominent accounting firm can start his/her business venture by opening his/her own accounting firm.
Forces of Competition Model

It is also known as the “five forces of competition,” An industry environment is
a competitive environment. Regardless of what product or services you have, competition is always present
Competition – it is the act or process of trying to get or win something.

For example, the prices are lower when there is a competition among the stores.
These are the five forces competing within the industry:

• Buyers
• Potential new entrants
• Rivalry among existing firms
• Substitute products
• Supplier
1. Buyers
The buyers are the one that pays cash in exchange to your goods and services . For example, the influenced of the
price or in the bargaining strategy. The buyer has a strong and magnified bargaining power. The threat of its
bargaining power will be less if the following factors notice:
a. There are several suppliers available in the market.

b. The buyer has the potential for backward integration.
c. The cost of switching the supplier cost is minimal.
d. The product represents a high percentage of the buyer’s cost.
e. The buyer purchases large portions of the seller’s product or services
2. Potential New Entrants
A new entrant is defined as the one who enters something . For example, the level of capital requirements, if the
business requires huge capital, new entrants should decline to join the business. This gives a threat to the business.
This can be notice if there is the presence of the following factors:
a. Substantial capital requirement.

b. Strict government policy.
c. Difficulty in accessing distribution channels.
d. Economies of scale.
e. High cost of product differentiation.
f. High switching cost
3. Rivalry among Existing Firms
Rivalry is a state or situation in which people or groups are competing with each other . For example it depends on the
Marketing strategy of your competitor, like giving freebies and special offers. The intensity of rivalry among existing
firms is characterized to the following factors:
a. Diversity of rivals.
b. Number of competing firms.
c. Characteristics of the products or services.
d. Increased capacity.
e. Amount of fixed costs.
f. Rate of industry growth
4. Substitute Products
Substitute means anything that takes the place or function of another. For example the consumers decide to use
margarine as a substitute for butter. In case the price of butter increases, preferably the consumer will gradually
switch to margarine. A substitute product can give a big threat in the industry environment if the following
factors are notice:
a. Switching cost is low.
b. Preferences and tastes of the customers easily change.
c. Product differentiation is highly noticeable
d. The quality of substitute products dramatically improves.
e. The price of substitute product is substantially lower.
5. Suppliers
The Suppliers are the one that provide something that is needed or wanted. For example if the supply and services
being offered is unstable or keep. The intensity of the threat is strong in this kind of the competitive force in the
industry. This can be notice if there is the presence of the following factors:
a. The supplier has the ability for forward integration.
b. Suppliers in the industry are few, but the sales volume is high.
c. Substitute products are not readily available in the market
d. The switching cost is very high.
e. The product or service is unique.

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Sources of Opportunities

1. Changes in the environment

2. Technological discovery and advancement

3. Government’s thrust, programs, and policies

Forces of Competition Model

Competition – it is the act or process of trying to get or win something.

These are the five forces competing within the industry:

a. There are several suppliers available in the market.

a. Substantial capital requirement.

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