What is a Product Opportunity Gap

1. What is a product opportunity gap? How can an entrepreneur tell if a product opportunity gap exists? - Product opportunity gap is when there is a gap with what is on the market and the possibility of new products that result from emerging trends. An entrepreneur can tell if there is a POG by considering the three factors such as social trends, economic forces and technological advances. 2. What is an opportunity? What are the qualities of an opportunity, and why is each quality important? - Opportunity is a good chance of advancement and progress. It is also a favorable set of circumstances that create a need for a new product, service or business. The qualities of one are attractive, timely, and durable and anchored in a product that adds values for the buyer. Each quality is important because it shows knowledge in the product. it is important to make sure the opportunity is at the right time for the market as well as making the product valuable to the entrepreneur and customers. 3. What four environmental trends are most instrumental in creating business opportunities? Provide an example of each environmental trend and the type of business opportunity that it might help create. 1. Economic Forces - State of the economy. - Level of disposable income. - Consumer spending patterns - Economic trends help determine areas that are ripe for new startups and areas that startups should avoid Example of Economic Trend Creating a Favorable Opportunity • A weak economy favors startups that help consumers save money. • An example is GasBuddy.com, a company started to help consumers save money on gas. 2. Social Forces - Social and cultural trends. - Demographic changes. - What people think is “in” - Social trends alter how people and businesses behave and set their priorities. These trends provide opportunities for new businesses to accommodate the changes. Examples of Social Trends • Retirement of baby boomers. • The increasing diversity of the workplace. • Increasing interest in health, fitness, and wellness. • Emphasis on alternative forms of energy. • New forms of music and other types of entertainment. 3. Technological Advances - New technologies. - Emerging Technologies. - New uses of old technologies. - Advances in technology frequently create business opportunities. Examples of Entire Industries that Have Been Created as the Results of Technological Advances • Computer industry • Internet • Biotechnology • Digital photography - Once a technology is created, products often emerge to advance it. Example: H20Audio An example is H20Audio, a company started by four former San Diego State University students, that makes waterproof housings for the Apple iPod. 4. Political and regulatory changes - New changes in political arena. - New laws and regulations. - Political action and regulatory changes also provide the basis for opportunities. General Example Laws to protect the environment have created opportunities for entrepreneurs to start firms that help other firms comply with environmental laws and regulations. - Company created to help other companies comply with a specific law. Specific Example The No Child Left Behind Act of 2002 requires states to develop criterion-based assessments in basic skills to be periodically given to students in certain grades. Kim and Jay Kleeman, two high school teachers, started Shakespeare Squared, a company that helps high schools comply with the act. 4. Explain how “solving a problem” can create a business opportunity. Provide an example that was not mentioned in the chapter of a business opportunity that was created in this way. Solving a Problem – Sometimes identifying opportunities simply involves noticing a problem and finding a way to solve it. – These problems can be pinpointed through observing trends and through more simple means, such as intuition, serendipity, or change. Example • A problem facing the U.S. and other countries is finding alternatives to fossil fuels. • A large number of entrepreneurial firms, like this wind farm, are being launched to solve this problem. 5. Explain how finding a gap in the marketplace can create a business opportunity. Gaps in the Marketplace – A third approach to identifying opportunities is to find a gap in the marketplace – A gap in the marketplace is often created when a product or service is needed by a specific group of people but doesn’t represent a large enough market to be of interest to mainstream retailers or manufacturers. 6. What is meant by opportunity recognition? - Opportunity recognition (OR) represents one of the most important early aspects of entrepreneurship. Opportunity recognition means proactively brainstorming a new business venture or expansion idea. A small-business owner typically engages in opportunity recognition at the point where he realizes he has an idea, strength or capability that matches well with a particular target market. Entrepreneurial business owners constantly seek new revenue streams. Those that seize ripe opportunities tend to perform best financially. 7. In what ways does prior industry experience provide an entrepreneur an advantage in recognizing business opportunities? - Several studies have shown that prior experience in an industry helps an entrepreneur recognize business opportunities. There are several explanations for this. • By working in an industry, an individual may spot a market niche that is underserved. • It is also possible that by working in an industry, an individual builds a network of social contacts that provide insights that lead to recognizing new opportunities. 8. What is the corridor principle? How does this corridor principle explain why the majority of business ideas are conceived at work? - The corridor principle is the idea that with every venture launched, that entrepreneur has new and unintended opportunities that often arise even if the venture itself fails. Once an entrepreneur starts a firm, new venture opportunities become apparent. This is called the corridor principle, which states that once an entrepreneur starts a firm, he or she begins a journey down a path where “corridors” leading to new venture opportunities become apparent. The insight provided by this principle is simply that once someone starts a firm and becomes immersed in an industry, it’s much easier for that person to see new opportunities in the industry than it is for someone looking in from the outside. 9. What is entrepreneurial alertness? Why is it important? - There are some who think that entrepreneurs have a “sixth sense” that allows them to see opportunities that others miss. This sixth sense is called entrepreneurial alertness, which is formally defined as the ability to notice things without engaging in deliberate search. Entrepreneurial alertness is important, because individuals with higher levels of entrepreneurial alertness will presumably identify more business opportunities. 10. In what ways does an extensive social network provide an entrepreneur an advantage in recognizing business opportunities? - The extent and depth of an individual’s social network affects opportunity recognition. People who build a substantial network of social and professional contacts will be exposed to more opportunities or ideas than people with sparse networks. This exposure can lead to new business starts. 11. Describe the difference between strong-tie relationships and weak-tie relationships. Is an entrepreneur more likely to get new business ideas through strong-tie or weak tie relationships? Why? - Strong-tie relationships are characterized by frequent interaction and form between coworkers, friends, and spouses. Weak-tie relationships are characterized by infrequent interaction and form between casual acquaintances. According to research in this area, it is more likely that an entrepreneur will get a new business idea through a weak-tie than a strongtie relationship because strong-tie relationships, which typically form between like-minded individuals, tend to reinforce insights and ideas the individuals already have. Weak-tie relationships, on the other hand, which form between casual acquaintances, are not as apt to be between like-minded individuals, so one person may say something to another that sparks a completely new idea. 12. Define creativity. How does creativity contribute to the opportunity recognition process? - At the heart of entrepreneurial success in creative industries are entrepreneurial creativity and opportunity recognition, which influence entrepreneurs’ ability to create new venture or significantly improve the position of an existing business. Entrepreneurial resource availability is pivotal to whether entrepreneurs can convert the creative ideas and identified opportunities into lucrative businesses. Recently, entrepreneurship research has suggested that resource availability represents a double-edged sword, simultaneously facilitating and impeding new venture outcomes, while little research has explored how entrepreneurial creativity, opportunity recognition, and resource availability jointly affect entrepreneurial career success. To address the theoretical gap, this paper reviews relevant literature and proposes a research framework, which aims to explain how resource availability moderates the effect of entrepreneurial creativity and opportunity recognition on entrepreneurial career success. To better reflect the career success perceived by entrepreneurs in creative industries, this paper also incorporates four indicators of entrepreneurial success, including career achievement, entrepreneurial happiness, capability enhancement, and financial satisfaction. Implications for future research and practice are discussed. 13. Briefly describe the five stages of the creative process for an individual. - Creativity does not just happen. It is a cognitive process that produces new ideas or transforms old ideas into updated concepts; an individual can form seemingly random thoughts into an ideal combination or solution. Preparation During the preparation step of the creative process model, an individual becomes curious after encountering a problem. Examples of problems can include an artistic challenge or an assignment to write a paper. During this stage, she may perform research, creates goals, organize thoughts and brainstorm as different ideas formulate. For example, a marketing professional may prepare for a marketing campaign by conducting market research and formulating different advertisement ideas. Incubation While the individual begins to process her ideas, she begins to synthesize them using her imagination and begins to construct a creation. Gabora states that during this step, the individual does not actively try a find a solution, but continues to mull over the idea in the back of her head. Illumination As ideas begin to mature, the individual has an epiphany regarding how to piece her thoughts together in a manner that makes sense. The moment of illumination can happen unexpectedly. For example, an individual with the task of putting together an office party may have an idea for a theme while driving home from work. Evaluation After a solution reveals itself in an epiphany, the individual then evaluates whether the insight is worth the pursuit. He may make changes to his solution so it is clearer. He may consult with peers or supervisors regarding his insights during this step before pursuing it further. If he works with clients, he may seek a client’s input and approval before moving on to the next step. Implementation The implementation of an idea or solution in the creative process model is when an individual begins the process of transforming her thoughts into a final product. For example, during this step, a painter may begin outlining shapes on a canvas with charcoal before applying oil paints to the medium. According to Gabora, an individual may begin this step more than once in order to reach the desired outcome. For example, a graphic designer may open a new digital canvas if he did not have the scale calculated correctly on a previous work, and he will continue to implement his ideas and make adjustments until he reaches a pleasing final product. 14. Explain the difference between an opportunity and an idea. - There is a big difference between Ideas and Opportunities. An idea is the seed of a successful product or service. Without proper care and maintenance, it will not bloom. An opportunity is when you have favorable weather condition, good soil and excellent water resources to germinate the seed. Ideas require solid research of the market, a good strategy and a sound business plan to back it up. Opportunities are driven by customer needs where the demand and the economics of the business are favorable for the entrepreneur to harness it. Ideas are a plenty, but success for any entrepreneur lies in turning them into opportunities that can make a difference. 15. Describe the brainstorming process. Why is “no criticism” the number one rule for brainstorming? Brainstorming - Is a technique used to generate a large number of ideas and solutions to problems quickly. - A brainstorming session typically involves a group of people, and should be targeted to a specific topic. - Rules for a brainstorming session: • No criticism. • Freewhelling is encouraged. • The session should move quickly. • Leap-frogging is encouraged. Criticism of ideas are withheld during the brainstorming session as the purpose is on generating varied and unusual ideals and extending or adding to these ideas. Criticism is reserved for the evaluation stage of the the process. This allows the members to feel comfortable with the idea of generating unusual ideas. 16. Describe how a focus group is set up and how it is used to generate new business ideas - A focus group is a gathering of five to ten people, who have been selected, based on their common characteristics relative to the issues being discussed. - These groups are led by a trained moderator, who uses the internal dynamics of the group environment to gain insight into why people feel they way they do about a particular issue. - Although focus groups are used for a variety of purposes, they can be used to help generate new business ideas. 17. Describe how library and Internet research can be used to generate new business ideas. - Libraries are an often underutilized source of information for generating new business ideas. - The best approach is to talk to a reference librarian, who can point out useful resources, such as industry-specific magazines, trade journals, and industry reports. - Simply browsing through several issues of a trade journal or an industry report on a topic can spark new ideas. - Large public and university libraries typically have access to search engines and industry reports that would cost thousands of dollars to access on your own. 18. What is the purpose of day-in-the-life research? - Day-in-the life research refers to a form of anthropological research used by companies to make sure customers are satisfied and to probe for new product ideas by sending researchers to the customer’s homes or business. In this stage the company routinely sends teams of testers to the homes and business of its users to see how its products are working and to seek insights for new product ideas. 19. What is the purpose of an idea bank? - An ideas bank is a widely available shared resource, usually a website, where people post, exchange, discuss, and polish new ideas. Some ideas banks are used to develop new inventions or technologies. Many corporations have installed internal ideas banks to gather the input from their employees and improve their ideation process. 20. Describe how an idea bank can be set up in a firm. Creativity is the raw material that goes into innovation and should be encouraged at the organizational and individual supervisory level. Some firms meet the challenge of encouraging, collecting, and evaluating ideas by designating a specific person to screen and track them for if it’s everybody’s job, it may be no one’s responsibility. Another approach is to establish an idea bank (or vault), which is a physical or digital repository for storing ideas. 21. What are the three main steps to protect ideas from being lost or stolen? Step 1 – The idea should be put in a tangible form such as entered into a physical idea logbook or saved on a computer disk, and the date the idea was first thought of should be entered. Step 2 – The idea should be secured. This may seem like an obvious step, but is often overlooked. Step 3 – Avoid making an inadvertent or voluntary disclosure of an idea, in a manner that forfeits the right to claim exclusive rights to it.