Academic journal article South Asian Journal of Management

Business Opportunity Recognition and Development Process: A Study of Nepalese Entrepreneurs [Dagger]

Academic journal article South Asian Journal of Management

Business Opportunity Recognition and Development Process: A Study of Nepalese Entrepreneurs [Dagger]

Article excerpt

INTRODUCTION

Opportunity recognition is a crucial process of a venture creation. In this stage, entrepreneurs perceive a possibility of initiating new businesses or improving existing businesses (Christensen, Madsen and Peterson, 1989). Past research indicates three basic steps in opportunity recognition, namely, perception, discovery and creation in which entrepreneurs perceive about the opportunity and create a new business concept matching their resources with the identified market needs (Shane, 2000).

Christensen and Peterson (1990) have stated that sources of venture ideas are specific problems and social encounters. In addition relevant business knowledge develops entrepreneurial mind set and ability to recognize the problems and exploit the problems into opportunities. Such mind set is characterized by the capacity to sense, act and mobilize within dynamic environments (Haynie, Shepherd, Mosakowski and Earley, 2010). For opportunity recognition and evaluation of potential business opportunities entrepreneurs need to be alert to notice factors in their domain of experience (Ardichvili, Cardoza and Ray, 2003). Therefore, opportunity recognition involves a process from perception to creation of a successful business and the intricacies of skills and behavior of entrepreneurs in different stages in the process. However, research on how a specific person identifies opportunities is not known (Baron, 2007). In addition there is less empirical research in this theme of entrepreneurship especially in developing countries like Nepal which is characterized by dynamic and uncertain business environment. In addition, entrepreneurship practices in South Asian countries are multi-cultural specifics.

The main objective of this research was to explore the opportunity recognition model that successful entrepreneurs used in their entrepreneurial process and corresponding factors and their relationships. This study investigated the factors that inspire entrepreneurs to opt for the particular business idea, the factors that determine the entrepreneur's business ideas generations, the process that entrepreneurs sense the business opportunities, discover fit between the business opportunities and their resources and convert the ideas into successful ventures and finally sustain the entrepreneurial ventures through adjustment and readjustments.

LITERATURE REVIEW

OPPORTUNITY RECOGNITION

Entrepreneurship is driven by perception of opportunity (Stevenson, Roberts and Grousbeck, 1985). Business opportunities are defined by different researchers. De Bono (1978), states that opportunity is a possible and worth pursuing course of action using non-linear creative thinking. Kirzner's (1979) definition states that an opportunity is entrepreneur's knowledge and recognition of commercial value of products or services to be sold in new markets at profit. Similarly, opportunity is a detail plan to translate the business concept into reality (Long and McMullean, 1984). These definitions suggest that business opportunities are creative plans of entrepreneurs to convert business ideas into commercial reality. The researchers also emphasize on meeting customers' needs while defining business opportunities. Hulbert, Brown and Adams (1997), define business opportunity as the possibility to meet an unsatisfied need in profitable manner. Ardichvili, Cardozo and Ray (2003), emphasized about delivering superior value through a creative combination of resources to meet a market need or interest or want. Drucker (1985) states that entrepreneurs search for change in customers' needs, recognize the change, and convert them into opportunity in the process of business innovations. Therefore, opportunity recognition involves a process of perceiving business opportunity in fulfilling customers' unmet needs, and planning for it for achieving a commercial success by selling products and services.

OPPORTUNITY RECOGNITION PROCESS

It appears that opportunity recognition to happen the ultimate stage is confirming whether business idea can be converted into commercial reality through a process starting from insight followed by different stages of evaluation to finally develop a way out of starting a business with commercial success. …

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