The topic chosen to be discussed in this paper is opportunity recognition. The entrepreneur going to be interviewed is Mr. Raif Youssef. He is the owner of Swan Sweet Company. He came to Perth when he was 7 years of age as student and he had opportunity recognition to live in Australia and he is following his father to open manufacturing and wholesale division of Lebanese Sweet and Catering. He came to Perth 13 years ago its took some time to start for many reason and he started with his brothers (3 brothers) and other family member started making sweet in their home till two years then they opened there office with small factory of traditional (Lebanon sweet swan sweet) they distribute sweet in many shops in Perth.
The Swan Sweet company is a small but growing family business. The company was originally founded by Raif Youssef and his father, but today Raif who is the owner and his three brothers operate the business. The main business activity is the production and distribution of
traditional Lebanese sweets. According to the company’s website, their focus is the manufacture and wholesale division of Lebanese sweets (The Swan Sweet Company, 2011). Thus, they are in the food industry. Their main products are baklava and other freshly baked treats. The group uses a number of cultural icons and symbols to help their market identify with their product, such as traditional Lebanese music. The family business was based completely at home until two years ago when they decided to open a small office and factory. Along with their new operating space, the company has launched its own website which has an online ordering function. Customers in Perth can have the product delivered to their door with 3 to 5 days. The future is exciting for the family business, however, Raif and his brothers are also concerned about the risks that they are now facing. Indeed, the very definition of an entrepreneur, that is, someone who is willing to enter into a new venture and take all the associated risks (Choo, 2006; Drucker, 1993). Managing entrepreneurial growth is an important part of business activity as it seeks to best position emerging companies in markets which may already feature fierce competition.
Opportunity recognition is the first step of entering into a business venture. The opportunity should have the potential of producing profits for it to be considered viable. Some people have the potential to identify opportunities which others cannot see. Entrepreneurs have been found to have some personal traits different from others. For instance, they have been found to creative and optimistic. Opportunity recognition has been found to be influenced by factors like prior knowledge, social network and openness to experience.
The topic being discussed is opportunity recognition which is a very crucial aspect when it comes to entrepreneurship. For one to become an entrepreneur, it depends if they have recognized a new opportunity or not. The opportunity recognized should have the potential of producing enough profits. In this context, an entrepreneur can be defined as an individual who undertakes something with the aim of making profit and they were the first to identify that opportunity. Though they may not be sure whether what they perceive as a profit making opportunity will work or not, they take the risk of going ahead with it.
Some people can identify business opportunities which are viable while there are others who cannot. Entrepreneurs have been found to have the capacity to identify opportunities which others cannot identify. They are thinkers since they identify an opportunity; think about it and they implement it to be a business.
Opportunity recognition can be defined as the identification of a possibility to make new profits. This can be in the form of finding and forming a new business venture or through improving of a business venture which already exists. Therefore opportunities can be recognized either before the business starts or during the life cycle of a business. An idea is always the first step which leads an entrepreneur to an opportunity. Several factors must be there to make an idea an entrepreneurial opportunity. For instance the idea should be supported by adequate demand for it to be a viable entrepreneurial opportunity. In addition, the entrepreneurial opportunities must have qualities like attractive, durable and timely for it to be viable (Baron, R. A. & S. A. Shane, 2007). So opportunity recognition starts with an idea whose viability depends on other factors. It is a process and not a one time process. The opportunity recognition process starts with the pre-recognition stew which can be influenced by cultural forces, market demand, environmental factors, personal attributes, social factors and technology (Baron, R. A. & S. A. Shane, 2007). Once it has been identified, the second step is to develop it considering market value, entry issues and the resources available. After the development is over one can decide to go ahead with it, modify it or quit all together.
There are factors which have influence on opportunity recognition include the socials networks surrounding the opportunity, prior information which the entrepreneur might be having about that opportunity, the pattern or the trends of recognition and how determined the entrepreneur is(Baron, R. A. & S. A. Shane, 2007) . Psychological factors like, how attentive one is, and the state of mind at that particular moment also affects opportunity recognition.
Opportunity recognition can also depend on how one is open to experience. His determines how an individual is open minded and the probability of coming up with original work. People who are open minded can easily notice circumstances which are changing and take the opportunity to identify a new opportunity or come up with a more profitable idea. Individuals who are open to experience are likely to get information which required for opportunity recognition. It is normally related to collection of information, analysis and judgment which facilitates opportunity recognition. These people who are open to experience are likely to be creative hence very first in identifying problems and coming up with solutions. They are also likely to be divergent thinkers (Frederick, H. H. & D.F. Kurakto, 2010).
Theory of Opportunity Recognition
A theory helps in identifying problems which came with an issue, hence providing solutions. The theory of opportunity recognition can be developed using five phases provided by Dubin. The first phase is development process in which opportunities which may be a chance to meet a pending market need using the available resources (Ardichvili, A, Cardozo, R and Ray, S, 2002). An opportunity can arise due to underutilized resources or technology or goods and services of value to consumers but are not provided. Once the opportunity is identified, it is developed through a lot of dedication and efforts and the product is the new or improved business. Next is the recognition of the opportunity which involves being aware of the underutilized resources or unmet market needs, recognizing how the underutilized resources meet the market needs and coming up with a way separate the needs and the resources which is mostly in for of a business (Ardichvili, A, Cardozo, R and Ray, S, 2002). Opportunities are supposed to be evaluated throughout the business development. This helps to identify the level of success of the development process.
Though discussed earlier, the theory also states the factors which influence the whole process. These factors include first entrepreneurial alertness which is basically being aware information in the environment and are able to identify the existing problems, unmet needs, and unutilized resources. The people who are highly alert are likely to identify opportunities first. Second is the information asymmetry and prior knowledge will help one recognize an opportunity with the similar information (Ardichvili, A, Cardozo, R and Ray, S, 2002). The third factor is the accidental discovery versus systemic search which states that opportunities are recognized from a thorough search. Others argue that opportunity recognition can be an accident discovery but this can only occur on condition of high level of alertness (Ardichvili, A, Cardozo, R and Ray, S, 2002). The fourth factor is social network in that through social networking one can get information which can lead to opportunity recognition. The fifth factor is personality trait which argues that entrepreneurs have some traits which are different from other people. This has been challenged but two differentiating traits have come up. There has been a close association between optimism and higher opportunity recognition (Ardichvili, A, Cardozo, R and Ray, S. 2002). This is personality trait found mostly in entrepreneurs. The other personality trait is creativity because entrepreneurs have been found to identify opportunities which other people do not see.
The process of opportunities development may also differ depending on the factors. This leads to different in opportunities also. They differ depending on origin and degree of development.
The law of interaction states how one concept affects the other. This shows how a success business results when an opportunity is well recognized, (Ardichvili, A, Cardozo, R and Ray, S, 2002) well evaluated and then well developed.
Individuals can also be trained to recognize opportunities even if their alertness level is low. People should look for the best places and the best ways of recognizing opportunities. They should focus on the changing technology, demographics, markets and other factors which create business opportunities. They should also go ahead to find out how changes or trends are connected. Once profitable opportunities have been identified, it is important to try as much as possible to sustain them. For one to recognize profitable opportunities they should choose suitable and exploitable markets, choose markets which meet special needs, open new markets, stay away from overcrowded markets, and try to offer unique products. Some of pitfalls o selecting opportunities include; lack of objective evaluation, lack of knowledge about the market, inadequate understanding of the requirements, poor financial understanding and lack of venture uniqueness.
Entrepreneurs are able to see opportunities which other people cannot see. In this context, an entrepreneur can be defined as an individual who undertakes something with the aim of making profit and they were the first to identify that opportunity. Though they may not be sure whether what they perceive as a profit making opportunity will work or not, they take the risk of going ahead with it. Opportunity recognition is the first step in entering to a business venture and can be influenced by prior knowledge, social knowledge, psychological factors and openness to experience.
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Swan Sweet. 2011. “Swan Sweet Company.” Viewed on March 29, 2011< http://www.swansweet.com.au/>