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MODULE 4
Entrepreneurship: Introduction, Evolution of the concept of Entrepreneurship,
Entrepreneurship today, Types of Entrepreneurs, Intrapreneurship,
Entrepreneurial competencies, Capacity Building for Entrepreneurs.
Identification of Business Opportunities: Introduction, Mobility of
Entrepreneurs, Business opportunities in India, Models for Opportunity Evaluation.
ENTREPRENEURSHIP
Introduction: Entrepreneurs have altered the direction of national economies,
industries, and markets. The entrepreneurship served as a bridge between
innovation and the marketplace. Many innovations have altered the pattern of living,
and many services have been introduced to alter or create new service industries
such as banking, medical, logistics, information systems, & insurance. The ways in
which entrepreneurs can participate in the development of an economy are:
1. Contribution to GNP and per capita income: Entrepreneurship contributes to
economic stability by introducing new products and services in the market and
encouraging effective resource mobilization. This helps in increasing the gross
national product as well as per capita income of the people in the country.
2. Employment generation: Entrepreneurs play an effective role in reducing the
problems of unemployment in the country. Entrepreneurs are not only self-
employed but also provide employment to others. Entrepreneurial activities lead to
other activities, generating a multiplier effect in the economy.
3. Balanced regional development: The development of enterprises in less-
developed regions promotes balanced regional development in the country. The
entrepreneurship stimulates the distribution of wealth and income to more and
more individuals and geographical areas, thus benefiting larger sections of society.
4. Promotion of export and trade: Entrepreneurship promotes the country's
export trade and earns foreign exchange. When required, this earning can help
combat the country's import dues requirements.
5. Improvement in the standard of living: Entrepreneurs bring a wide variety of
products and services into the market. This increases competition in the market
and makes it possible for people to avail of a better quality of products and services
at lower and more competitive prices, resulting in an improvement of the country's
overall standard of living.

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6. Increased innovation: With the liberalization of the Indian economy, the
increased competition in the domestic and international market has encouraged
entrepreneurs to be more creative.
7. Overall development of the economy: Entrepreneurs create new technologies,
products, processes, and services that become the next wave of new industries, and
these in turn drive the economy. They create wealth and value, and generate
employment in society. This naturally leads to social and economic growth.
Who Is an Entrepreneur?
The word "entrepreneur" is derived from the French verb enterprendre ("to
undertake"). The word was originally used to describe people who "take on the risk"
between buyers and sellers or who "undertake" a task such as starting a venture.
The entrepreneur is a person who starts or organizes a commercial enterprise,
especially one involving financial risk. The process of creation of a business
enterprise is called entrepreneurship.
The Jeffry Timmons defined entrepreneurship as "the ability to create and
build something from practically nothing." His definition captures the idea that
entrepreneurs are like magicians, creating thriving organizations out of good ideas,
hard work, business dealing, and personal skills.
Entrepreneurship is the dynamic process of creating incremental wealth. The
wealth is created by individuals who assume the major risks in terms of equity,
time, and/or career commitment or provide value for some product or service. The
product or service may or may not be new or unique but value must somehow be
infused by the entrepreneur through receiving and locating the skills and resources.
How Do I Become an Entrepreneur?
The road to becoming an entrepreneur comprises the following steps:
Step 1: Generating business ideas and identifying business opportunities:
Business opportunities must first be identified through an evaluation of business
ideas. A business opportunity is a favourable set of circumstances that creates a
need for a new product, service, or business. Business ideas may be generated in
the following ways:
 Observing trends: Social and economic trends, technological developments, and
political and regulatory changes often create opportunities for entrepreneurship.
 Finding gaps in the market: A lack of a product or service in the market is a

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barely-disguised opportunity for entrepreneurs.
Step 2: Conducting a feasibility analysis: A feasibility analysis is the process of
determining the validity of a business idea. The important facets of a feasibility
analysis are market analysis technical analysis, financial analysis, economic
analysis, and ecological analysis. If the proposed business is found to be feasible
after the conduct of a feasibility study, then a business plan is sketched out.
Step 3: Making a business plan: A business plan is a written document, typically
20-30 pages in length, which describes what a venture intends to accomplish and
how it plans to achieve its goals.
Step 4: Arranging funds: Once a project is selected, the two most common sources
of funding for a venture are equity and debt financing. Equity financing means
exchanging ownership in a firm for funding. The various forms of equity financing
are angel investing, venture capital, private equity, personal savings, and
investments from family and friends. In debt financing, money is borrowed to run a
business. The various forms of debt financing are: funding through bank loans,
financial institutions, and credit cards.
Step 5: Setting up an enterprise and building a venture team: To set up an
enterprise, building a new venture team is very important. A venture team, also
called promoters of the venture, is made up of the people who will transform an idea
of a venture into a fully functioning firm. While setting up an enterprise, it is
important to ensure the following things:
 Smooth management of the enterprise: The different facets of managing an
enterprise comprises managing, finance, strategy, markets, operations,
technology, and human resources.
 Nurturing growth: Once the business is set up and sustainability is assured,
the entrepreneur should look at growing the business organically or
inorganically.
 Exit strategies: An exit strategy involves planning for the termination of one's
ownership of a company. In case an entrepreneur wants to close the existing
business and start a new business, he has to wind up the existing business.
Advantages of Being an Entrepreneur
There are many advantages of being an entrepreneur. Some of them are listed below:
 An entrepreneur has enough scope for innovation.

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 An entrepreneur is an independent person who makes his/her own decisions
and acts on them.
 An entrepreneur often has the opportunity of realizing dreams and achieving
excellence while simultaneously contributing to the welfare of society.
 An entrepreneur usually has immense job satisfaction.
 An entrepreneur can bring about the socioeconomic transformation of a region
by generating employment for others and creating wealth.
 An entrepreneur can make a significant contribution to the development of the
country.
TYPES OF ENTREPRENEURS
Innovation is one of the most important characteristics of an entrepreneur.
Entrepreneurs may be classified on the basis of functional characteristics,
personality types or schools of thought.
Based on personality types, entrepreneurs may be classified as the improver,
the advisor, the superstar, the artist, the visionary, the analyst, the fireball, the
hero, and the healer. Based on schools of thought on entrepreneurship,
entrepreneurs are classified as belonging to the "great person” school of
entrepreneurship, the psychological characteristics school of entrepreneurship, the
classical school of entrepreneurship, the management school of entrepreneurship.
Based on functional characteristics, entrepreneurs are classified as:
 Innovative entrepreneur: Innovative entrepreneurs are innovative in their
approach to business and introduce new products, new production methods, or
discover new markets or new form of organization in their enterprise.
 Imitative or adoptive entrepreneur: Entrepreneurs belonging to this category
imitate products, production methods, and new forms of organization in their
enterprise. This category can be found especially in developing & underdeveloped
countries, partly due to a lack of investment in research and development.
 Fabian entrepreneur: Fabian entrepreneurs are not proactive in nature and do
not respond very much to changes in the environment. Instead, they change only
when there is a threat to the existence of their enterprise.
 Drone entrepreneur: Drone entrepreneurs are conservative and complacent in
nature and like to maintain the status quo. These entrepreneurs may incur
losses and have to close down their enterprises.

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INTRAPRENEURSHIP
Intrapreneurship, or corporate entrepreneurship, is the process by which teams
within an established company conceive, foster, launch, and manage a new
business that is distinct from the parent company but leverages the parent's assets,
capabilities, market position, and other resources.
Intrapreneurs are employees within an organization who use their
entrepreneurial spirit to introduce new products, new processes, new methods, and
new forms within the corporation. Intrapreneurship describes the innovation that
occurs inside established companies through the efforts of creative employees.
Intrapreneurship is a top-down approach, wherein the top management plays
the role of a facilitator and empowers employees to effectively utilize resources and
try out new ideas. The top management must devise and put in place a system that
would unleash employees' potential and build a reward and recognition mechanism
for them. The differences between Entrepreneurs and Intrapreneurs are:

Difference between a Manager and an Entrepreneur

 The entrepreneur starts a venture and is the owner of the enterprise, whereas
the manager is an employee in an enterprise.
 The entrepreneur starts an enterprise and creates wealth and generates profit.
The manager receives a salary for the services rendered to the enterprise.
 An entrepreneur is an employer whereas a manager is an employee.
 An entrepreneur is a job provider whereas a manager is a job seeker.
 An entrepreneur assumes more risk and uncertainty than a manager does.
 Entrepreneurs take mainly strategic decisions, whereas managers take
operational decisions.

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ENTREPRENEURIAL COMPETENCIES
The term entrepreneurial competencies refers to the key characteristics that should
be possessed by successful entrepreneurs in order to perform entrepreneurial
functions effectively. The most successful entrepreneurs do share the competencies
given below:
 Creativity and innovation: Creativity is the ability to develop new ideas and to
discover new ways of looking at problems and opportunities, thinking new things.
Innovation is the application of creative solutions to problems or opportunities
to enhance or to enrich people's lives, or doing new things.
The creative process for an idea involves five stages: germination, preparation,
incubation, illumination, and verification.
 Leadership and team building: Leadership is the basic quality of an
entrepreneur. Good business leaders are great visionaries. They create a vision
for the company, share the vision passionately, own a vision, and relentlessly
drive it towards completion.
An entrepreneur should have an ability to build a team. A good team will be
able to share knowledge, core competency, and goals. With mutual trust in place,
collaborative work breeds the organizational climate needed for developing a
perfect team.
 Opportunity seeking and initiative: Entrepreneurs can pursue opportunities
in any industry at any time.
An entrepreneur needs to have the urge to take initiatives. The initiative to
start a business can't be enough-entrepreneurs must have the initiative to
continue to grow and expand not only the business but their own minds.
 Risk-taking and decision-making ability: There is always the risk of loss in
any endeavor, and entrepreneurs have the right amount of confidence to take
calculated risks to achieve their objective.
An entrepreneur performs the function of calculated risk-bearing. Risk-
bearing and decision-making call for absolute clarity of thought and action. The
focus should always be on the market. A good entrepreneur should avoid
excessively high as well as low risk situations.
 Tolerance of ambiguity and uncertainty: The challenges and potential for
success associated with business start-ups are by nature unpredictable.

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Tolerance of ambiguity is the ability to respond positively to ambiguous
situations, and this is an important quality for entrepreneurs to have because
they continually face more uncertainty in their everyday environment that do
managers of established organizations.
 Motivation to excel: Entrepreneurs are motivated primarily by the desire to
create something new, the desire for autonomy, wealth and financial
independence, the achievement of personal objectives, and the propensity for
action. The excitement and the thrill of starting a new venture is another major
motivator.
 Problem solving: Successful entrepreneurs are problem solvers. A formal
problem-solving model helps entrepreneurs solve problems in a logical manner.
The model consists of six steps:
1. Define the problem.
2. Gather information.
3 Identify various solutions.
4. Evaluate alternatives and select the best option.
5. Take action.
6. Evaluate the action taken.
 Goal orientation: Goal setting is the process of setting both long-term and short-
term objectives for the successful performance of an entrepreneur. A clear set of
goals helps to measure the performance standards of employees.
Goals must be measurable so that employees are able to feel a sense of
achievement when a goal is attained. Once goals are achieved, team members
should receive feedback on their performance.
 Self-efficacy and adaptability: Self-efficacy is the belief in one's ability to master
and implement personal resources, skills, and competencies to attain a certain
level of achievement on a given task. In other words, self-efficacy can be seen as
task specific self-confidence. An individual with high self-efficacy for a given task
will exert more effort for a greater length of time, persist through setbacks, set
and accept higher goals, and develop better plans and strategies for the task.
Successful entrepreneurs are adaptive and resilient. Change is inevitable, and
there will be plenty of times when entrepreneurs need to correct course and
modify plans so that business isn't left behind. Entrepreneurs should not be

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afraid of failure. Mistakes and failure come with the territory of being successful
entrepreneurs, and if they are not making mistakes, they are probably engaging
in a very easy task, where there is little chance of failure.
 Internal locus of control: Locus of control refers to how a person perceives the
causes of events in one's life. Individuals high on the internal locus of control
assume that any success or failure they experience is due to their personal
actions and that they have the ability to influence events. Successful leaders and
entrepreneurs typically show a high internal locus of control.
 Persistence, persuasion, and networking: Entrepreneurs display persistence,
and are not discouraged into quitting by difficulties and problems that come up
in business or in their personal life. Entrepreneurs with a track record of success
are much more likely to succeed than first-time entrepreneurs. In essence, they
have exhibited persistence in selecting the right industry and the right moment
to start new ventures. Networking is something all successful entrepreneurs are
good at. While networking, it is important to open all avenues by getting involved
in every kind of social media, to build relationships by being open-minded, and
to follow through any business opportunity you may have identified with
personal interaction. Businesses have always relied on networks of clients,
suppliers, associates and contacts to spread the word about their work and their
products.
CAPACITY BUILDING FOR ENTREPRENEURS
In order to build an entrepreneurial society, following five areas has to be focused:
Create the right eco-system: The various elements of the ecosystem for
commercialization are venture capitalists, institutional support systems,
government schemes, and incubators. An ecosystem is a system of interconnected
stakeholders-institutions and individuals whose linkages enable efficient
production, and the spread of new and economically useful knowledge.
Build skills: The five most important skills needed for an entrepreneur are personal
skills, communication skills, negotiation skills, leadership skills, and sales skills.
The education system in India can ensure that the curriculum in schools, colleges,
and universities is modified to address business needs and to build centres of
entrepreneurial excellence in institutions that will actively support
entrepreneurship.

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Provide access to capital: Determining capital requirements, crafting financial and
fund-raising strategies, and managing the financial process are critical to a new
venture's success. Government policy should be congenial for foreign investors,
financial institutions, venture capitalists, and angel investors to enable them to
invest in new ventures.
Enable networking and exchange: In professional or business networking, people
use their personal contacts for succeeding in their businesses. A network serves to
provide a lot of support to the entrepreneurial enterprise in times of crisis. Some
ways to network are through social networking Web sites, business associations,
alumni networks, and during trade fairs.
Create tax benefits, incentives and simplify the bureaucratic process: One way
to encourage entrepreneurial activity would be to allow entrepreneurs to keep more
of what they earn by lowering tax rates. Incentives to entrepreneurs, such as
reduction of legal costs to hiring, would be beneficial. A reduced requirement of
government mandated paperwork at various points while running a business could
be desirable.
SMART is an acronym for a goal-setting technique that is popular among
entrepreneurs because of its simplicity and effectiveness. The acronym stands for
"Specific, Measurable, Achievable, Realistic, Timely”. Set your goals according to the
following set of criteria:
Specific: Specific" is the what, why, and now of the SMART model. Ensure that your
goals are very specific and easy to understand.
Measurable: If you can't measure your goal, you can't manage it. Choose a goal with
measurable progress, so that you can see the changes occurring. Establish concrete
criteria for measuring progress toward the achievement of your goal.
Achievable: Set the bar high enough for a satisfying achievement but, at the same
time, get an understanding of how big this challenge actually is for you. There's
always someone who's first, and you may be that person, but make sure you know
the true difficulty level of the goal you're setting before you get started.
Realistic: The goal set by you should be realistic and should yield results.
Timely: Set a time frame for the goal. If you don't set a time frame, the commitment
is too vague and it gives you the opportunity to procrastinate.

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IDENTIFICATION OF BUSINESS OPPORTUNITIES
Introduction: A business opportunity may be defined as a set of favourable
circumstances in which an entrepreneur can exploit a new business idea that has
the potential to generate profits. Business opportunities have the following four
fundamental features:
 They create or add significant value to the customer.
 They solve a significant problem by removing pain points or meeting a significant
want or need for which someone is willing to pay a premium.
 They have a robust market, margin, and money making characteristics that will
allow the entrepreneur to estimate and communicate sustainable value to
potential stakeholders.
 They are a good fit with the founder(s) and management teams at the time and
marketplace along with an attractive risk-reward balance.
What Defines a Good Business Opportunity?
An idea is a thought or a concept that comes into existence in the mind as a product
of mental activity. A business idea is an idea that can be used for commercial
purposes. There can be many sources of business ideas, including the following:
 A resolved problem faced by an actual or potential entrepreneur.
 An unmet customer need discovered by an actual or potential entrepreneur at a
place of employment.
 Changes in the business environment.
Not all business ideas are found to be good business opportunities. This simple
five-step framework helps screen ideas and find out whether a business idea truly
represents a good business opportunity. An opportunity is characterized by:
1. Urgency of the market need: The business idea should envision a product or
service that satisfies a market need or a need of the customer. The market need
has to be carefully assessed by consulting industry experts as well as potential
customers. The greater the market need, the greater the opportunity for a
profitable business.
2. Adequate market size: A business usually targets a particular market segment
after assessing their demographic, geographical, and lifestyle factors. In order to
make the business viable, a large number of potential customers should exist.
There is a need to find out the potential market size for the product or service.

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3. Sound business model: A business model clearly gives the outline or the
rationale of how the potential entrepreneur intends to satisfy a customer need
and create value. A business model that presents a plan to generate profits within
three to five years is considered to be relatively good.
4. Potential brand value: The product/service being offered must be differentiated
from those being offered by competitors to maintain a competitive advantage in
the market. It is necessary to assess the potential brand value of the product or
service envisioned in order to ensure a fair chance of survival against competition
by existing as well as future products.
5. An able management team: The ability and passion of team members to use a
business opportunity is important to success. The team should have contacts
among suppliers, competitors, and customers. The business should be big
enough to make it worthwhile and the team should be looking forward to being
involved with it for a long time.
When Is an Idea an Opportunity?
A business opportunity is a set of favourable circumstances that creates a need for
a new product or service. A business idea becomes a good business opportunity
when it has the following four essential qualities:
 Attractiveness.
 Timeliness.
 Durability.
 The quality of being anchored in a product or service that creates or adds value
for its buyer or end user.
How to Generate Business Ideas?
The ways to generate business ideas are:
Brainstorming: Brainstorming is a technique used to quickly generate a large
number of ideas and solutions to problems. The brainstorming session is conducted
to generate ideas that might represent business opportunities. Brainstorming works
well individually as well as with a varied group of people. A group brainstorming
session requires a facilitator, white board, and space to accommodate the
participating people. Brainstorming works well with 8-12 people and should be
performed in a relaxed environment. Participants are encouraged to share every idea
that enters their mind with the assurance that there is no right or wrong answer.

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Survey Method: The survey method is used to collect information by direct

observation of a phenomenon or systematic gathering of data from a set of people.
The survey method involves gathering information from a representative sample
population. Surveys generate new products, services, and business ideas because
they ask specific questions and get specific answers.
Reverse Brainstorming: This is a method that is similar to brainstorming, with the
exception that criticism is allowed. It is, therefore, also called "negative
brainstorming”. In this technique, the focus is on the negative aspects of every idea
that has been generated through brainstorming. Also called the "sifting" process,
this process most often involves the identification of everything that is wrong with
an idea, followed by a discussion of ways to overcome these problems.
The Gordon Method: This is a creative technique developed by A. F. Osborn to
develop new ideas. This method is similar to brainstorming. Collective discussion
addresses every aspect of the planned product in an uninhibited solution-oriented
way. This discussion encourages a fresh, creative, and unusual approach to
developing a new product.
What Leads to the Creation of Opportunities?
Entrepreneurial opportunities often come into being because of certain external
changes, such as technological change, regulatory and political change, social and
demographic change, and economic change.
Technological Changes: Technological changes lead to entrepreneurial
opportunities because they make it possible for people to do things in new and more
productive ways. Technological changes can take the form of five forms of business
opportunity: new products and services, new methods of production, new markets,
new ways of organizing, and new raw material.
Political and Regulatory Changes: Political and regulatory changes lead to
business opportunities by paving the way for new, more productive use of resources
or a redistribution of wealth from one person to another. Statutory and regulatory
requirements create opportunities for entrepreneurs to start firms that help other
firms and the community to comply with the requirements.
Social and Demographic Changes: Social and demographic changes, such as
changes in family and work patterns, the ageing of the population, increasing focus

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on health and fitness, the increase in the number of cell phone and internet users,
and new forms of entertainment, lead to the creation of business opportunities
because they alter people's preferences or demand for products and services, and
consequently make it possible to generate new ideas to meet new demands.
Economic Changes: Economic forces affect business opportunities by determining
who has money to spend. An increase in the number of women in the workforce over
the last few decades and their related increase in disposable income is largely
responsible for the number of boutique clothing stores, targeting professional
women that have opened in the past few years.
How to Identify a Business Opportunity?
The three general approaches entrepreneurs use to identify an opportunity are:
1. Observing trends: Entrepreneurs can identify business opportunities by
carefully observing trends. The most important trends to follow are economic, social,
technological, and political trends. For example, the development of the Internet and
the miniaturization of electronics goods led to the development of e-commerce and
laptop computers, respectively.
2. Solving a problem: Another approach to identifying business opportunities is to
recognize and solve a pressing problem that customers are facing today. From an
entrepreneur's point of view, every problem is a disguised opportunity.
3. Finding gaps in the marketplace: A third approach is to find a gap between
what is needed by the customer and what is actually provided to the customer.
Finding such gaps can help entrepreneurs develop new products and improve
existing ones.
MOBILITY OF ENTREPRENEURS
Entrepreneurial mobility is the movement of entrepreneurs from one location to
another (geographical mobility) or from one occupation to another (occupational
mobility) based on business opportunities. Entrepreneurial mobility is usually
caused by political, economic, cultural, and social factors. The various factors that
influence entrepreneurial mobility are listed below:
Political conditions: Entrepreneurial mobility is influenced by political factors. For
example, Tata Motors shifting of the Tata Nano project from Singur, West Bengal,
to Gujarat clearly demonstrated that politic Bengal conditions are more congenial
to business in Gujarat than in West Bengal.

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Education: Education imparts knowledge and hones one's analytical thought
process. An educated entrepreneur will be able to scan and understand the business
environment in order to exploit both domestic and international business
opportunities. An educated entrepreneur will also usually be able to communicate,
interact, and network more effectively.
Experience: Entrepreneurs with experience in business and industry are quick to
exploit opportunities. Their past experiences enable entrepreneurs to take up
various types of ventures in distant places, leading to entrepreneurial mobility
Size of enterprise: The larger the size of the business, the greater is the
entrepreneur's mobility. Large business houses want to grow organically and
inorganically through diversification, expansion, mergers, acquisitions, and joint
ventures.
Availability of facilities: Availability of labour, land, water and power, and
proximity to market, transport, suppliers, clusters, and communication increases
the mobility of entrepreneurs. We can see more IT industries located in cities such
as Bangalore and Chennai due to the availability of knowledgeable workers and
other infrastructural facilities.
Geographical Mobility of Entrepreneurs
The factors responsible for geographical mobility of entrepreneurs are the
availability of raw material, new and emerging markets, skilled labour, government
incentives, better infrastructural facilities, and access to resources.
There are three stages in the mobility of entrepreneurs. In the initial stages,
an entrepreneur sets up a venture at one place and sticks to one place of working.
In the next stage, as the business grows, entrepreneurs start moving out within a
limited area of business development. In the third stage, as the business expands
and there is an increase in the entrepreneurs' resources and network size, there will
be a greater degree of mobility as they cross boundaries and start working in the
global arena.
Occupational Mobility
The occupation chosen by an entrepreneur is not always the same as that of his/her
family. Studies have revealed that though business communities still constitute the
dominant source of entrepreneurship, people from technical backgrounds, and
those working in corporate and government jobs, are also swelling the ranks of

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entrepreneurs. This emerging class of entrepreneurs is characterized by better
education and technical knowledge.
Liberalization, privatization, and globalization of the Indian economy have
brought about drastic changes in the occupation of people. Earlier, most people
followed one vocation throughout their lives. Today, the rapid changes happening
in the economy demand that people learn, unlearn, and relearn, leading to a higher
level of occupational mobility. The major factors influencing occupational mobility
are one's personal preference, motivation, opportunities, and skill set.
Occupational mobility is termed as "horizontal" when it happens between
occupations of equal rank and "vertical" when it happens between occupations of
unequal rank, perhaps due to promotion or demotion.
BUSINESS OPPORTUNITIES IN INDIA
India has a growing market and is a land of opportunities. The opportunities for
importing, exporting, trading, investing, and franchising are immense. A potential
entrepreneur needs to take into account the economy, the consumer, and business
trends. One should also understand that what may be a good business opportunity
for one entrepreneur may not be a good opportunity for another. It’s essential for
entrepreneurs to pick opportunities that they are passionate about.
The factors that create favourable business opportunities in India:
 India is a well-established democratic country with a free & fair judicial system.
 The country also has a well-established banking system consisting of public and
private banks and other financial institutions.
 The country has a huge middle-class with enhanced purchasing power. Coupled
with a high- growth economy, this creates the potential for a huge growth in
manufacturing, services, and the retail sector.
 India has vibrant trade links with the South Asian Association for Regional
Cooperation (SAARC) nations such as Sri Lanka, Pakistan, Nepal, Bhutan,
Bangladesh, and the Mal dives.
 India has a competitive advantage in the global market with the availability of a
huge pool of cheaper labour and knowledgeable workers to enhance industrial
productivity.
 Economic reforms and policy changes have created an investment-friendly
environment.

Mr. Mohammed Saleem Department of EC PACE, Mangalore

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TECHNOLOGICAL INNOVATION
MANAGEMENET & ENTREPRENEURSHIP – 21EC61
 The capital markets in India are one of the fastest-growing markets in the world,
attracting huge foreign investments. A lot of international companies have
started outsourcing and set- ting up international operations in the country.
 The country is self-sufficient in agriculture and rich in natural resources.
 India is a part of the BRICS group of nations comprising Brazil, Russia, China,
and South Africa. India has developed vibrant trade links with these nations.
MODELS FOR OPPORTUNITY EVALUATION
1. The RAMP Model
While analysing your business idea, it can be passed through the RAMP test to see
if it is truly a valid business opportunity. RAMP is an acronym for four factors:
return, advantage, market, and potential.
Return on Investment-Ask the following questions
 Will your revenues be higher than your expenses? Is the business profitable?
 How much time will the business take to break even?
 How much investment is needed to start the business? How are you going to
raise this investment?
 What is the exit strategy?
Advantages-Ask the following questions
 What are the barriers to entry?
 What will be your distribution channel for selling your product?
 Do you have a proprietary advantage such as a patent or exclusive license on
what you will be selling?
 What is the cost structure taking into account things like suppliers & sourcing?
Market-Ask the following questions:
 Is there a value proposition? What is the need you will fill or problem you solve?
 How do you define the targeted market? Are you selling to consumers?
Businesses? What are the demographic features of your targeted market?
 What per cent of the market do you believe you could gain? How fast is the
market for your product growing?
 How is the competition? What will be the price of your product?
Potential-Ask the following questions:
 How will you differentiate your company from what is already out there?

Mr. Mohammed Saleem Department of EC PACE, Mangalore

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TECHNOLOGICAL INNOVATION
MANAGEMENET & ENTREPRENEURSHIP – 21EC61
 What is the risk involved? What is the reward for the founders and investors if
the company succeeds?
 Does the team have the potential to successfully launch and sustain the
business? What will be the nature of the business entity (e.g., sole proprietorship,
partnership, cooperative, etc.)?
 Is the business concept compatible with the business mission of the team?
2. Mullins's Seven-domain Framework
Successful entrepreneurship comprises three critical elements: market, industry,
and the key people that make up the entrepreneurial team. Mullins developed a
seven-domain model for evaluating entrepreneurial opportunity. The domains are:
1. Market domain-macro level
2. Market domain-micro level
3. Industry domain-macro level
4. Industry domain-micro level
5. Team domain-aspirations
6. Team domain-capability of execution
7. Team domain-connections or networks
These seven domains address the following central elements in the assessment
of any entrepreneurial opportunity:
 Are the market and the industry attractive?
 Does the opportunity offer compelling customer benefits as well as sustainable
advantage over other solutions to the customer’s needs?
 Can the team deliver the results they suck and promise to others?
Market Domain-Macro Level: This domain requires an analysis of the
attractiveness of the overall market based on certain factors. These factors are:
 The number of customers is the market.
 The amount of money spent by customers on the relevant goods or services.
 The number of relevant products of usage occasions for services bought annually
Market Domain-Micro Level: This domain requires an analysis of the benefits and
attractive of the targeted market segment. Some of the factors on the basis of which
the analysis is made are:
 Identifying the target market and the market segment where customers are ready
to pay premium prices.

Mr. Mohammed Saleem Department of EC PACE, Mangalore

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TECHNOLOGICAL INNOVATION
MANAGEMENET & ENTREPRENEURSHIP – 21EC61
 Product / service differentiation.
 The size of the market segment and the phase of growth.
 Future growth potential and the future plan of the business.
Industry Domain-Macro Level: This domain requires an analysis of the
attractiveness of the industry, based on certain factors. Some of these factors are:
 The threat of displacement by competitors.
 The bargaining power of suppliers and buyers.
 Competitive rivalry and the threat of substitutes.
Industry Domain-Micro Level: This domain requires an analysis of the sustainable
advantages of the industry. Ask yourselves the following questions:
 Does the venture have proprietary elements patents, trade secrets, and so on-
that other firms are unable to duplicate or imitate?
 What will be the likely presence of superior organizational processes, capabilities,
or resources that others would have difficulty duplicating or imitating?
 Is there an economically viable business model?
Team Domain-Aspiration: This domain requires an analysis of the team's mission,
aspirations and propensity for risk taking. A question this analysis will answer is:
 Does the opportunity fit the team's business mission, personal aspirations, and
risk propensity?
Team Domain-Capability of Execution: This domain requires the ability of the
team to execute tasks or the basis of the identified critical success factors. One
question that needs to be addressed is:
 Does the team have what it takes, in a human sense in terms of experience and
industry know how to deliver a superior performance for this particular
opportunity, given its critical success factors?
Team Domain-Connections or Networks: This domain requires an analysis of the
team member’s connectedness-up, down, and across the value chain. A question
you may ask yourself is:
 Is the team connected well enough to notice any opportunity of need to change
its approach if conditions warrant?

Mr. Mohammed Saleem Department of EC PACE, Mangalore

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TECHNOLOGICAL INNOVATION
MANAGEMENET & ENTREPRENEURSHIP – 21EC61
Assignment Questions:
1. Explain how entrepreneurs can contribute to the development of an economy?
2. Describe the steps required to become an entrepreneur.
3. Discuss the types of entrepreneurs.
4. Explain Intrapreneurship? List the difference between an entrepreneur and
intrapreneur.
5. What are the differences between a manager and an entrepreneur?
6. Briefly explain the competencies shared by successful entrepreneurs.
7. What are the areas to be focused to build an entrepreneurial society? Explain.
8. Define business opportunity? Mention its fundamental features.
9. List & explain five-step framework that represents a good business opportunity.
10. Explain the ways to generate business ideas.
11. What are the factors that leads to the creation of business opportunities? Explain
12. Discuss various factors that influence entrepreneurial mobility.
13. Mention the factors that create favourable business opportunities in India.
14. Briefly explain the RAMP model for opportunity evaluation?
15. Briefly explain the Mullins's Seven-domain Framework for opportunity
evaluation?

Mr. Mohammed Saleem Department of EC PACE, Mangalore