2.4 Where to look for opportunities
Tasks
Watch this video to understand how business opportunities are sought:
Business follows expanding knowledge and technical change. For example, in the age-old steel industry, Nucor Corporation’s (in the US) success in producing a workable system of continuous casting has led to the rise of new mini-steel mills. Another example is the technological innovations of South African banks and insurance industries.
Sometimes governments deregulate certain industries or services. Deregulationis when government reduces its role and allows industry greater freedom in how it operates. For example, agriculture in South Africa was deregulated in 1996. Our farmers were able to position themselves as players in a globally competitive environment.
People want the best for themselves and their children. When the public sector fails, people often take those responsibilities into their own hands and support companies that help them. The inability of the South African government to protect its citizens gave rise to a huge private security industry.
For example, the growth of the olive oil industry in the United States
The pressures of modern life are such that people will pay someone for cleaning the house, steam cleaning the carpets, preparing meals, mowing the lawn etc.
Big companies are set-up to address large markets and many worthy projects are rejected. These discarded opportunities, however, may be gold mines for small, entrepreneurial companies.
Change creates new opportunities but also impose threats. Opportunities originate from the need to produce new products, replace outdated products, service new demands and service the customer in a different way. The Internet is a classic example. Other examples are fitness centres, health shops, sporting equipment etc.
With growing competition and product standardisation, businesses offering superior service (from the customer’s point of view) create new opportunities. Some of the weaknesses that an entrepreneur can exploit include poor service, unreliable delivery, high prices etc.
According to Peter Drucker (1985) unexpected events may spur opportunities (and threats). The Cricket World Cup competition held in South Africa created a host of opportunities. The Earth Summit in Johannesburg is said to have brought in R 8-billion into the economy.
Tasks
Watch this video to understand how business opportunities are sought:
