Opportunity Recognition Model of Successful Entrepreneurs of Nepal

1. International Conference on TIM, 2012, Nepal Opportunity Recognition Model of Successful Entrepreneurs of Nepal Dr. Binod Krishna Shrestha, Associate Professor, Kathmandu University, School of ManagementEmail: binod@kusom.edu.np

2. International Conference on TIM, 2012, Nepal INTRODUCTION • Opportunity recognition an initial stage of venture creation. • Past research indicates three basic steps: Perception > discovery > creation • Incompetent execution of these steps is the main reasons of failures of business start ups (Kakati, 2003). • No empirical research in this theme of entrepreneurship in Nepal. • Findings important to guide aspiring entrepreneurs to prevent them from failure.

3. International Conference on TIM, 2012, Nepal OBJECTIVES The main objective: • To explore the opportunity recognition model that successful entrepreneurs used in their entrepreneurial process. Specific research objectives: • What factors inspired entrepreneurs to generate new business ideas? • How did entrepreneurs sense business opportunities? • How did entrepreneur discover fit the between the business opportunities and their resources? • How did entrepreneurs make their venture success?

4. International Conference on TIM, 2012, Nepal LITERATURE REVIEW • Entrepreneurs search for change, recognize change, and convert them into opportunity in the process of business innovations (Drucker, 1988) • Entrepreneurs recognize things that others do not and exploit them as opportunity (Kirzner, 1973). • Entrepreneurship is driven by perception of opportunity (Stevenson, Roberts, & Grousbeck, 1985). • The entrepreneurs discovered customers’ problems to be solved or needs to be fulfilled (Bhave, 1994).

5. International Conference on TIM, 2012, Nepal LITERATURE REVIEW • An opportunity may be perceived as the chance to meet a market need through a creative combination of resources to deliver superior value (Ardichvili, Cardoza & Ray 2003). • Opportunity recognition appears to include three distinct processes (Shane, 2000): • Sensing or perceiving market needs and/or underemployed resources (perception), • Recognizing or discovering a ‘fit’ between particular market needs and specified resources (discovery), and • Creating a new ‘fit’ between previously separate needs and resources in the form of a business concept (creation).

6. International Conference on TIM, 2012, Nepal METHOD • Case study method was used with in-depth examination of 30entrepreneurs (Yin, 1994). • Theoretical sampling used (Flick, 2006) who went through successful opportunity recognition process in the last ten years • Qualitative data collected from semi-structured interviews with entrepreneurs. • Started with a few open-ended questions

7. International Conference on TIM, 2012, Nepal METHOD • In what way you came up with this business idea? • How did you decide this business rather than others? • How did you make sure that this business would make money or be successful in the market? • Collected retrospective and real time data which ensures external and internal validity of the data (Bingam & Eisenherdt, 2011). • The entrepreneurs were interviewed several times to collect the complete answers. • Following Flick (2006), detailed notes of the statements of the respondents were prepared during the interview.

8. International Conference on TIM, 2012, Nepal METHOD • The analysis began with compilation of the data and synthesizing the results from the interviews for each entrepreneur, leading to mini cases. • Entrepreneurs’ statements in the case studies were systematically evaluated • Several themes were generated by keeping in mind the literature review • Sub-themes were collapsed into broader level themes, and they were reported below.

9. International Conference on TIM, 2012, Nepal RESULTS • Desire and experiences in a particular business • ‘I wanted to do something related to this business, • ‘I had certain knowledge in this sector and even asked other people about this business’. • ‘I have long experiences in this field of business. • ‘I built a casual job into a business • ‘Friends circle having experiences and interested in this business field to support me’. • ‘Parentswanted that I start this business’.

10. International Conference on TIM, 2012, Nepal RESULTS • Research and Business Idea • ‘mini survey on customers and people working in this business sector’. • ‘there were mismatch between demand and supply’. • Some saw that ‘there would be even more demand in the coming yearsand • ‘Changing environment signaled the potential increase in the demand of this product’. • ‘Personal inconvenient experiences from the existing product that I buy everyday provided me insight of this business opportunity. • ‘Lack of quality Nepali products and incapability of producers to provide continuous supply’

11. International Conference on TIM, 2012, Nepal RESULTS • Business Screening • confirmed whether they can really start the business successfully. • Self efficacy of the entrepreneurs • ‘Long experience in this field’, • ‘my determination to accomplish’, • ‘good knowledge and expertise in this field’ and • ‘ability to invest and expertise in marketing of these products’

12. International Conference on TIM, 2012, Nepal RESULTS • Economic feasibility and future prosperity. • ‘this business need low investment and high return’ • ‘this business would provide economic prosperity. • The market opportunities and trend • ‘there were chances to bring a new concept in the market and gain monopoly in this business’. • ‘based on a growing economy I was confident that the demand for this product would increase’. • Friends and networks • ‘I discussed this business idea with my relatives and few close friends, they were quite convinced with this brilliant idea to make money’.

13. International Conference on TIM, 2012, Nepal RESULTS • Successful Innovation • ‘hard work’, ‘intuition’ and analyses’. • ‘a strong creative team and their commitments and supports of their staffs and partners for the successes’. • ‘the help of existing business networks and good contact with customers’ • ‘migration pattern and demographic change created market needs of the products, but the supply was less’.

14. International Conference on TIM, 2012, Nepal RESULTS • competitive strategy • ‘We were able to quote a competitive price hence customer were attracted’. • ‘We focused on core target customers and their satisfaction’. • ‘We offered innovative concepts’. • ‘We offered international brand which was cheaper and better quality than those offered by others’. • ‘We were the first mover in this business over time which helped us to capture huge market’. • ‘We did not have strong competition’.

15. International Conference on TIM, 2012, Nepal Results: Model and criteria used in different opportunity recognition

16. International Conference on TIM, 2012, Nepal DISCUSSION • Nepali entrepreneurs use a specific process to recognize business opportunities and bring the opportunities into successful ventures (Drucker, 1988). • Opportunity recognition process indeed consists of perceiving a possibility of creating a new business (Christensen, Madsen, & Peterson, 1989). • They pursue model of discovering customers’ problems to be solved or needs to be fulfilled (Bhave 1994). • They also use resources in terms of personal efficacy, social networks and competitive strategies to make a business success (Ardichvili, Cardoza & Ray (2003)

17. International Conference on TIM, 2012, Nepal DISCUSSION • Therefore nepali entrepreneurs also go through three distinct processes of perception, discovery and creation (Shane, 2000). • They sense market needs, discover fit between the needs and their resources, create a business concept and implement them successfully. • In this process market knowledge or experiences of both personal, family and friends plays greater role (Shane, 2000; Ardichvili, Cardoza, & Ray, 2003; Kakati, 2003).

18. International Conference on TIM, 2012, Nepal IMPLICATIONS AND CONCLUSION • In-depth case studies was appropriate given the lack of research on the topic, but has limitations in terms generalizability. • Develop survey instruments and conduct survey research with large samples and perform more quantitative data analysis. • Nepali entrepreneurs used sophisticated model during business start up and making them success. • The entrepreneurs discovered problems to solve or needs to be fulfilled.

19. International Conference on TIM, 2012, Nepal IMPLICATIONS AND CONCLUSION • Opportunity recognition requires a set of skills of sensing market and assessing them. • The findings has implications on guiding and teaching students. • Enable first to recognize the market gaps to start thinking of what to innovate, • screening out the business concepts based on their self capacity, financial feasibility and market demands • equipped with management skills to sustain the business.

20. Thank you