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International Entrepreneurial opportunities
Introduction
There is no definite definition of entrepreneurship. However, one common theme that is noticeable is the concept of opportunity which is a central element in the process. Entrepreneurs recognize opportunities in diverse ways. They are diverse ways to innovate to make profits or enhance the state of affairs of an individual or company (Chandra et al, 2009). They may be divided in terms of the five types highlighted by Schumpeter. They include introduction of new products, new approaches to production and opening new markets. Additionally, innovations include introducing new materials and creating new organisational structures. Opportunities are different based on the significance of the potential innovation. International entrepreneurship involves entrepreneurs carrying out business activities beyond the national boundaries (Zucchella et al., 2018). Various international business literature maintain that internationalization is an entrepreneurial behavior process that takes place over time. The internationalization process is based on different ideas about the opportunity to develop and capture economic value, the decision-making process that includes assessment of international entrepreneurial opportunities and time (Chandra, 2017). Opportunity is an important element in entrepreneurship. It is due to the fact that operating in an international business is characterised by discovery, evaluation and exploitation of opportunities. There are diverse ways that entrepreneurs assess opportunities in the international market .
Entrepreneurial opportunities have diverse characteristics. The first characteristic is the probability of success. It plays a major role in the decision-making process. The entrepreneur is able to decide whether or not to exploit the opportunity (Welpe et al., 2012). In case there is a high probability of success, the entrepreneur has a high chance of exploiting the opportunity. Moreover, an entrepreneur exploits an opportunity if there is a lower chance of financial loss or perceived risk. Another characteristic of entrepreneurial opportunities is their profitability. An entrepreneur makes a decision on whether to exploit the decision based on whether it can compensate for its opportunity costs. They weigh the value of the opportunity. If they feel that it is not profitable enough they reject the opportunity. Another characteristic of entrepreneurial opportunity is personal investment. As an entrepreneur assessing an opportunity is important to gauge the individual investment. The opportunities that have low investment capital have a high chance of being exploited. Time to profit is another characteristic of entrepreneurial opportunities. It is significant for entrepreneurs to evaluate time to profit. They need to evaluate the potential break-even profits that will be achieved. In case the break-even point is expected early there is a high chance of exploiting the opportunity.
Most literature holds that entrepreneurs recognize and choose to exploit opportunities that are influenced by exogenous shocks for instance, technological advances or regulatory transformation (Reuber et al., 2018). Recognizing opportunities include realizing that a market opportunity is there for someone. There are diverse factors that lead an entrepreneur to choosing to exploit the entrepreneurial opportunity. Opportunities are conceptualized as products that would fit a market. A market is defined based on the target customer. It is significant to carry out opportunity-related cognitive study. It focuses on the market instead of the product.
There are diverse views of entrepreneurial opportunities. Kirznerian opportunities are among the perspectives. It holds that the existence of entrepreneurial opportunities is based on differential access to the available information (Angelsberger et al., 2017). The opportunities are there due to the fact that at times people make mistakes when making decisions based on the available information (Løwe and Gartner, 2017). It would lead to errors that would eventually create shortages, surpluses as well as misallocated resources. People can take advantage of the errors and benefit by purchasing, recombining and reselling the resources. Kirznerian opportunities are identified through a discovery process. In this case, entrepreneurial alertness and search play a major role. The opportunities are less innovative.
Schumpeterian opportunities are another type of entrepreneurial opportunities. They are innovative (Mishra, 2017). Various factors influence the opportunities they include political regulatory, demographic, technological transformation. They ensure that there is a constant flow of information that offers new opportunities (Angelsberger et al., 2017). Availability of new information means that individuals can buy resources at low price and transform them into valuable form. They can then sell them to help generate profit. Knightian perspective describes entrepreneurship as a process with various uncertainties.
Recognizing market opportunities is an important part of the entrepreneurial process. It is important for an entrepreneur to be alert to help in recognizing opportunities. There are different ways that opportunities in the international market are identified and exploited. For international growth to take place, entrepreneurs need to be alert of the opportunities and take advantage of them. One theory of internationalization is network theory (Ahmadian and Abdolmaleki, 2018). Based on the theory, internationalization is considered as an entrepreneurial process which is linked to the social, business and institutional web that supports a company. The support is based on the access to information, human capital and finance among others. The theory was introduced by Johanson and Mattsson in the late 1980s (Ahmadian and Abdolmaleki, 2018). They maintained that internationalisation can be influenced through establishment of network ties with other companies that are part of the foreign market network. The organisations do not need much resources to establish their operations in the international market.
However, they need ties that will help facilitate their growth. They can establish links with diverse agents such as clients, suppliers and competitors among others. Organisations with more entrepreneurial opportunities have a huge access to opportunities in foreign markets (Ahmadian and Abdolmaleki, 2018). It is made possible by the business and institutional network links. Entrepreneurial opportunities allow entrepreneurial companies to find and take advantage of opportunities in a unique manner compared to organisations that are non-entrepreneurial. Small companies with entrepreneurial orientation have a high chance of investing in exploring opportunities in international markets (Ahmadian and Abdolmaleki, 2018). International opportunity can be time consuming for new and small businesses. However, they can use socialism business and institutional networks to make up for the resource deficiencies. The approach will enable them to reach out to opportunities that they require in the international market.
A huge number of entrepreneurs used simple rules to assess the early stage international entrepreneurial opportunities. They are divided into different categories that include heuristic-based emotion based and action-based (Chandra, 2017). Also, there is outside-opinion based. Heuristics-based rules are used to assess International entrepreneurial opportunities. It involves targeting the largest entities for instance international clients, producers as well as trade shows Heuristic reasoning is a procedure that is based on comparing a source and a target. Heuristics allow entrepreneurs to operate effectively in situations that need opportunity recognition. They also allow them to recognize, reject, and adopt opportunities in cases where there is pressure of limited time and information. Research carried by Bryant (2006) shows that heuristic was mainly utilized as a simple test to decide whether the opportunity deserves being considered.
Also, there are some entrepreneurs that use heuristic to compare an opportunity with the entrepreneur’s vision (Bryant, 2006). In case the opportunity did not fit in the main strategy or vision it was rejected. Using the approach the entrepreneurs were able to assess the opportunity based on its risks. Nevertheless, if the opportunity matched the entrepreneur’s vision or it was urgent the entrepreneur would take advantage of it. Another heuristic that was used by entrepreneurs was whether they understood the market. It was utilised as a simple decision rule on whether to explore the opportunity or not (Butler, 2004). Moreover, heuristic was utilised to evaluate risk in opportunity recognition. It enables entrepreneurs to reject some opportunities. Entrepreneurs also used heuristic to evaluate whether they could trust the other party. In case they felt that it was difficult to trust their partners, they rejected the opportunities immediately.
For an entrepreneur to recognize opportunity they need to create a new men-ends approach. International opportunities are linked to international entrepreneurship. There are different definitions of international opportunity recognition (Angelsberger et al., 2017). First, the definition is linked to cognitive abilities of an entrepreneur. However, there are other definitions that focus on the exchange in new international markets. Entrepreneurial opportunities are identified by individuals instead of companies and groups (Léger-Jarniou and Tegtmeier, 2017). In most cases, entrepreneurs recognize international opportunities through networks and connections. Family firms are able to recognize opportunities through alertness. They need to be alert to identify opportunities in the international market. Entrepreneurs identify opportunities in the international market through the gained knowledge that they get from their networks. Also, their understanding of the international markets help them identify the opportunities. There are different factors that influence the ability of recognizing opportunities.
There is the role of genetics in identifying opportunities. Genetic predispositions influence the ability of a person in identifying opportunities (Filser et al., 2020). There are people with a creative mind that helps them identify opportunities. The creativity can be passed genetically. There is a link between individual factors and environmental factors that influence identification of opportunities. It is important for companies to identify the factors that help them identify opportunities (Filser et al., 2020). Social networks play an important role in identifying opportunities. Entrepreneurs need to take advantage of social networks. However, they also need to understand that they need strong ties for the process to be successful. Weak ties tend to hinder the internationalisation process. Technological transformation offers possibilities for new opportunities. Hence, they play a major role in identifying new opportunities.
Demographic change also helps entrepreneurs in recognizing opportunities. Companies focusing on the international market need to take into consideration environmental factors and technological factors in recognizing opportunities. Additionally, having prior knowledge of the international market helps entrepreneurs in their quest to invest in foreign markets (Filser et al., 2020). Alertness is linked to cognitive processes and they are significant in identifying opportunities in the foreign markets (Brännback and Carsrud, 2017). Environmental factors play a major role in exploiting opportunities (Filser et al., 2020). The demographic transformation offers new inputs to help entrepreneurs. International entrepreneurship involves entrepreneurs carrying out business activities beyond the national boundaries. Various international business literature maintain that internationalization is an entrepreneurial behavior process that takes place over time.
Recognizing opportunities include realizing that a market opportunity is there for someone. There are diverse factors that lead an entrepreneur to choosing to exploit the entrepreneurial opportunity (Filser et al., 2020). Opportunities are conceptualized as products that would fit a market. A market is defined based on the target customer. It is significant to carry out opportunity-related cognitive study. It focuses on the market instead of the product.
The internationalization process is based on different ideas about the opportunity to develop and capture economic value, the decision-making process that includes assessment of international entrepreneurial opportunities and time (Chandra, 2017). When a company decides to invest in the international market, it means that it has identified opportunities in the market. It may realise that there are areas that need to be explored due to the technological advancements (Li, 2013). Changes taking place in the environment. As an entrepreneur assessing an opportunity is important to gauge the individual investment. The opportunities that have low investment capital have a high chance of being exploited. They can establish links with diverse agents such as clients, suppliers and competitors among others. Organisations with more entrepreneurial opportunities have a huge access to opportunities in foreign markets. It is made possible by the business and institutional network links. Entrepreneurial opportunities allow entrepreneurial companies to find and take advantage of opportunities in a unique manner compared to organisations that are non-entrepreneurial.
Conclusion
There are various definitions of international entrepreneurial opportunities. Nevertheless, they all include identifying opportunities in the foreign market. Entrepreneurs may take advantage of the changes taking place to invest in the international markets. There are opportunities that are innovative while others are not. The internationalization process is based on different ideas about the opportunity to develop and capture economic value, the decision-making process that includes assessment of international entrepreneurial opportunities and time (Chandra, 2017). Most literature holds that entrepreneurs recognize and choose to exploit opportunities that are influenced by exogenous shocks for instance, technological advances or regulatory transformation. Recognizing market opportunities is an important part of the entrepreneurial process. It is important for an entrepreneur to be alert to help in recognizing opportunities. There are different ways that opportunities in the international market are identified and exploited. For international growth to take place, entrepreneurs need to be alert of the opportunities and take advantage of them. One theory of internationalization is network theory.
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