Question

b. Explain THREE (3) key steps to screen entrepreneurial opportunity. (15 marks)

Guide:
You may consider the term “real, win, worth it” and focus on the following key areas.

- Product feasibility — Is it real? Can the product be made or service delivered
using currently available, or at least feasible, technology?

- Market feasibility — Can we win? Does anyone want it? Has the product any
features that someone values and would be ready to pay for?

- Economic feasibility — Is it worth it? Can the product be developed,
manufactured and distributed while generating a profit?

Answer 1

(a) First point relates to the internal analysis of the company. It assesses if the present internal conditions and relevant factors make it possible to produce the product / service successfully and satisfactorily from the resources available Or if it needs a change, would the changes be worthwhile and financially feasible. For example a confectionary business will be easy to establish for a company which already owns a dairy and runs a bakery in comparison to the one which produces shoes.

(b) Second point to be considered is demand for the product / service in case. It would be worthwhile to know if the product /service satisfies an unmet need of the market or if there is enough population willing to purchase / afford the product /service. Example, is of a high end restaurant in a lower middle class locality of few thousand . However good the quality of the products may be, the socio economic condition of the prospective customers would never let it be financially feasible.

(c) The point is to assess whether it will be feasible for the product to be manufactured and sell at a profit. This will take into account the external environment of the company, which includes competitive activity and competing products, core competency of the company and its ability to meet the needs of customers, conditions favourable for production, marketing and distribution of the product /service, and long term sustainability of the business.