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Opportunity Recognition: A Clearer Understanding There are numerous theories on opportunity recognition as seen from the viewpoints of business experts and analysts, and some are in contradiction with other existing theories, but definitely possess salient points that cannot be ignored…
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Download file to see previous pages Any which way, academicians are one in saying that opportunity recognition is not limited to one theory or belief, and is in fact a confluence of three different views or theories, namely: the Creation theory; the Discovery Theory and the Allocative Theory which are discussed by other experts in their own particular ways and methods of analysis. Opportunity recognition is the ability to discern or identify a premise or an idea that may afford one to gain profit or advantage. G. T. Lumpkin describes it as “the ability to identify a good idea and transforms it into a business concept that adds value and generates revenues (2005)”. It is said to be a crucial element in business entrepreneurship (Ozgen,2011), and has been the subject of numerous research and theories by business scholars and researchers because of the various arguments and interpretations attributed to it. Opportunity recognition is based on the premise that profitable business is ever present (Blue, 2010) around us, but they are only recognized by people with cognitive, entrepreneurial mind-set, that is, people who have the genetic predisposition to recognize opportunities when they see one, because of their inherent, genetic thought processes. These are people who are said to have a business eye, and are normally open to new experiences and changes. Opportunity recognition has been given due importance because it is the initial step to entrepreneurship, which is very essential in a nation’s whole economic set-up, and is being considered as part of the educational curriculum to assist would-be entrepreneurs to effectively discern these opportunities and chances, which may escape them, if they do not possess the inherent knack for identification and recognition. The Creation Theory of Opportunity Recognition The creation theory of opportunity recognition can be described simply as the creation of new products or ideas that possess the potential to generate economic value (Baron,2006). In this theory, it is the product (or creation) which comes first, with the perception that this new product or creation will cater profitably to the market (people). In this theory, the new product or concept will likewise create the market for it (Baron,2006; Dyer, et al, 2008). Creation is based on different factors among which are: the market needs, people’s demography, social strata, government laws and policies, social preferences, economic status, people’s culture, etc. In this theory, the variables of supply and demand are still unknown and undetermined, and there is a high level of risks, as market reception to a new creation or concept is yet to be established; economic returns and prospects are anchored on perceived market behavior based on feasibility studies and surveys. Industry giants particularly those pertaining to the electronic and computer industries are creators of new gadgets and systems based on perceived market needs, and these creations are capable of generating maximum profits for the creator/entrepreneur. Consider the creations of computer software/hardware like Windows, Photoshop, Nero Media and other computer software, which are all based on existing needs, and how these products generated millions or billions of dollars for their creators. Other known creators that have generated world markets are Pierre Omidyar (eBay); the late Steve Jobs ...Download file to see next pagesRead More
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