Opportunity Recognition (OR): Definition & Examples

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  • 0:04 Opportunities Realized
  • 1:32 Opportunity Recognition
  • 4:03 Lesson Summary
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Lesson Transcript
Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

How are business solutions born? Through the process of opportunity recognition. In this lesson, you'll learn more about this business concept, see why it's important and explore a few popular brands who've benefited from it.

Opportunities Realized

Consumers today have many different choices. From automobiles to computers to cosmetics, we can trace some of our favorite brands back to one word: opportunity.

The cosmetics company named The Body Shop got its start because its founder wanted to buy natural and organic products without the hefty price tag associated with the fancy packaging used by other cosmetics brands. She realized an opportunity in natural products with less waste.

Some of the world's most famous smartphones and computers began in the garage of two young men who saw the opportunity to provide smaller personal computers to ordinary people instead of simply meeting the needs of big corporations. Today, we see that brand, Apple, everywhere.

In the early 20th century, a man named Henry Ford found opportunity in automobile design. Once thought to be only for the very wealthy, automotive travel became a possibility for every home in America through Ford's determination.

Even recently, companies like Amazon have pioneered opportunity in multiple forms, first by selling books to customers online, then by adding digital editions that could be immediately downloaded. Amazon continues to find new opportunities in music, video, food and even shipping services.

Many of today's most famous brands started because someone recognized an opportunity to fill a need and then created a business that would fulfill it. These entrepreneurial-minded leaders and organizations understand the concept of opportunity recognition (OR).

Opportunity Recognition

So, what is opportunity recognition? Opportunity recognition is actually a process that's found in the way that individuals and businesses with an entrepreneurial mindset approach new business ventures or ideas. In many ways, it is a constant brainstorming in which individuals look for ''new and improved ways'' of addressing problems. It could be a brand new business idea or even new products or services that fulfill customers' needs and expectations.

You've probably had a thought at some point and considered, ''Hey, I bet I could make money doing this!'' That's an example of opportunity recognition. You recognize that you have an idea or a capability that could be beneficial to a particular audience. Some people seize on these ideas and turn them into new opportunities that drive business growth by creating new streams of revenue.

Opportunity recognition is important because it helps a business stay relevant and be successful long-term. What would have happened to Amazon if it had not embarked on digital books, the buyout of Whole Foods and new ways of shipping to customers quickly, and instead focused solely on selling books on its website? It may not even still be around, and it certainly wouldn't be as relevant of a player as it is in the retail environment.

The Basis of OR

Researchers who have studied opportunity recognition look at it as a process that involves three steps:

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