Entrepreneurship Theory and Practice | Questions

Running head: ENTREPRENEURSHIP THEORY AND PRACTICE
ENTREPRENEURSHIP THEORY AND PRACTICE
Name of the student
Name of the university
Author’s note

ENTREPRENEURSHIP THEORY AND PRACTICE1
Table of Contents
Question 1(a)...................................................................................................................................2
Entrepreneurial opportunities......................................................................................................2
Opportunity creation and opportunity discovery.........................................................................2
Similarities between opportunity creation and opportunity discovery........................................3
Differences between opportunity creation and discovery...........................................................4
Opportunity exploitation..............................................................................................................6
Question 1b......................................................................................................................................7
Entrepreneurial orientation..........................................................................................................7
Reflection.....................................................................................................................................8
References......................................................................................................................................10

ENTREPRENEURSHIP THEORY AND PRACTICE2
Question 1(a)
Entrepreneurial opportunities
Entrepreneurial opportunities are the situations or conditions where products and services
can be sold at higher prices than the cost of production. It is described as a situation where
entrepreneurs can make profits. There are different schools of thought concerning entrepreneurial
opportunities. The economic school of thought says that the distribution of information and
knowledge concerning the availability of resources gives rise to entrepreneurial opportunities.
The other school of thought that is cultural cognitive says that the presence of cultural resources
and environmental ambiguity determines the existence of entrepreneurial opportunities. The
socio-political school explains that the network and structure of politics have a significant role in
defining entrepreneurial opportunities (Maine, Soh and Dos Santos 2015).
Opportunity creation and opportunity discovery
Opportunity creation is defined as the efforts made by entrepreneurs for creating newer
means to create new market orders and applications. The entrepreneurs develop an approach to
recognize the available opportunities in the market. So that they can be benefitted from the
existing opportunities and can make changes to the existing product or develop new products to
adapt to the market and create sustainability of the business. This will help the business to meet
the market expectations of the entrepreneurs (Fairlie and Fossen 2018).
Opportunity discovery- opportunity discovery is a process that involves the generation of ideas
and innovative strategy for forming the potential opportunities. After finding out different
opportunities, it involves identifying the most effective opportunity so that business can utilize
those opportunities for its growth and development (Jarvenpaa and Välikangas 2014).

ENTREPRENEURSHIP THEORY AND PRACTICE3
Similarities between opportunity creation and opportunity discovery
Handling Market imperfections
Entrepreneurs have the capability to reverse the effects of negative trends present in the
business environment. They can lead the business to the next industrial revolution. Big
businesses suffer pressure from the government to improve the business profession. There are
certain market imperfections present in the environment that degrades the business performance.
The entrepreneurs see it as an opportunity through which they can introduce a new product or
service in the market and can show the new entrepreneurship. The entrepreneurs who are capable
of identifying the market imperfections as opportunities create sustainability and long term
growth for their business. Some of the market imperfections are, : Firms are not perfectly
efficient, externalities exist in the market, imperfect pricing mechanism and imperfect
distribution of information. Thus it can be concluded that both discovery and creation of
opportunity helps to minimize the degradation by the market competition so are similar to each
other in this aspect (Foss and Klein 2017).
Evaluation and exploitation process
Entrepreneurs always in seek of new opportunities either they create it or discover it. One
type of entrepreneurs always tries to find out the existing opportunities in the market which is not
seen by others yet. These entrepreneurs are proactive than others. While another type of
entrepreneurs think that without innovations, opportunity cannot be seen in the market.they think
that there is nothing to discover in the market rather every opportunity is created. However, in
both cases, opportunity cannot be beneficial for the company until it is evaluated and exploited
(Gümüsay 2018). The entrepreneur first evaluates the opportunity. In this process, the
entrepreneur finds out information regarding the availability and usage of resources that will help