Topic: Social Venture Opportunity Identification

Objectives:
 Define Social Venture Opportunity.
 Identify how you seek opportunities for Social Ventures.
 Evaluate the entrepreneurial solutions to insoluble problems of the
business.
Social Venture Opportunity
-Social venture opportunity can be described as a formal agreement, a contract,
or an undertaking to solve a social problem or effect social change. Social venture
opportunities are based on the need to create social value which benefits the local
community. It is prioritized for social good along with business success.
-A social venture can be described as a formal agreement, a contract, or an
undertaking to solve social problems or effect social change. So, a social venture can
be better explained as the incorporation of business skills to solve social or societal
problems. Social ventures are commonly organized as non-profit ventures - but this is
not mandatory.
-Opportunities in social entrepreneurship are based on the need to create social
value which benefits the local community. A social enterprise usually does this by
solving a problem or providing assistance in an area of need or disadvantage. A social
enterprise usually does this by solving a problem or providing assistance in an area of
need or disadvantage.
Identify how you seek Opportunities for Social Ventures
-Typically, opportunities in social entrepreneurship are based on the need to
create social value which benefits the local community. A social enterprise usually does
this by solving a problem or providing assistance in an area of need or disadvantage.
Therefore, creating social value and not wealth is the main driver for social
entrepreneurs. Additionally, they need to achieve financial stability to maintain value.
Here is a quick glimpse at the market niches which have many social enterprises:
 Social enterprises which serve the financially poor population. In these markets, the
profit margins are very low and the risks are high. Further, in certain sectors like
microfinance, there is a constant debate as to whether a commercial operation can
fulfill the needs of the poorest client groups more effectively than modified NGO
models. In this niche, some examples of social entrepreneurship organizations are
micro-clinics in low-income zones, affordable irrigation tools for poor farmers, etc.
 New and challenging markets where the entrepreneur is required to incur heavy
expenses to stimulate demand and create opportunities. This is due to the prevalent
stigma and the challenges faced in acclimatizing people to newer and more
complex technologies as well as challenging perceptions about certain services
 which need to be provided by the state. Some examples are offering counseling
services to people living with HIV/AIDS or other socially marginalized groups,
microinsurance products for farmers, etc.
 Markets for products that offer environmental benefits but are not fully commercially
competitive. Many environment-friendly business lines are completely commercially
viable. However, there are many others that are suitable for hybrid social
entrepreneurship.
 Therefore, we can state with conviction that social entrepreneurs (individuals,
organizations, or groups) are innovative and proactive risk-takers who attempt to
create a sustainable community, social, or industry-wide change to address
endemic problems. These entrepreneurs identify, assess, and exploit opportunities
in an attempt to create social value. Further, they use a wide range of market-driven
resources (and other resources) to create this transformation.

Evaluate the Entrepreneurial Solutions to Insoluble problems of the Business

Evaluate the entrepreneurial solutions to insoluble problems of
the business as you’ve learned, entrepreneurs often visualize an opportunity gap, a gap
between what exists and what could exist.
Entrepreneurial problem-solving is the process of using innovation and creative
solutions to close that gap by resolving societal, business, or technological problems.
The entrepreneur visualizes the prospect of filling the gap with an innovative solution
that might entail the revision of a product or the creation of an entirely new product. In
any case, the entrepreneur approaches the problem-solving process in various ways:
The Two problem-solving models:
1. The adaptive model seeks solutions for problems in ways that are tested and known
to be effective. An adaptive model accepts the problem definition and is concerned with
resolving problems rather than finding them. This approach seeks greater efficiency
while aiming at continuity and stability.
2. The innovative model of entrepreneurial problem solving, which uses techniques that
are unknown to the market and that bring an advantage to an organization. An
innovative problem-solving style challenges the problem definition, discovers problems
and avenues for their solutions, and questions existing assumptions—in a nutshell, it
does things differently.
Problem-Solving Skills
-While identifying problems is a necessary part of the origin of the entrepreneurial
process, managing problems is an entirely different aspect once a venture is off the
ground and running. An entrepreneur does not have the luxury of avoiding problems
and is often responsible for all problem-solving in a startup or other form of business.
Critical thinking
-Critical thinking is the complex analysis of a problem or issue with the goal of
solving the problem or making a decision. The entrepreneur analyzes and peels away
the layers of a problem to find the core of an issue facing a business.
Communication skills
-the ability to communicate messages effectively to an intended recipient, are the
skills entrepreneurs use to pool resources for the purposes of investigating solutions
leading to innovative problem solving and competitive advantage. Good communication
allows for the free association of ideas between entrepreneurs and businesses. It can
illustrate a problem area or a shared vision and seeks stakeholder buy-in from various
constituencies.
Decisiveness
- is as it sounds: the ability to make a quick, effective decision, not letting too
much time go by in the process. Entrepreneurs must be productive, even in the face of
risk. They often rely on intuition as well as on hard facts in making a choice.
Resourcefulness
-Resourcefulness is the ability to discover clever solutions to obstacles.

Types of Problem Solvers

Entrepreneurs have an insatiable appetite for problem-solving. This drive motivates
them to find a resolution when a gap in a product or service occurs. They recognize
opportunities and take advantage of them.
Theorist Problem Solvers
Theorist problem solvers see a problem and begin to consider a path toward
solving the problem using a theory. Theorist problem solvers are process-oriented and
systematic. While managers may start with a problem and focus on an outcome with
little consideration of a means to an end, entrepreneurs may see a problem and begin
to build a path with what is known, as a theory, toward an outcome.

Petitioner Problem Solvers

This entrepreneur likes to consult a person who has “been there and done that.”
The petitioner might also prefer to solve the problem in a team environment. Petitioning
the entrepreneurial team for input ensures that the entrepreneur is on a consensus-
driven path.
What is international marketing?

International marketing is the marketing of products or services outside of your

brand’s domestic audience. Think of it as a type of international trade. By expanding
into foreign territories, brands are able to increase their brand awareness, develop a
global audience, and of course, grow their business.

The complexity of international marketing comes in the details. While domestic

marketing takes place in the same country, international marketing is anything that
happens outside that nation’s boundaries, with a focus on the nuance of speaking to
that international audience and trying to understand the culture, language (where
applicable), and customs that may not be familiar to your brand.

When expanding to international markets, brands must understand the right ways to
reach audiences in those regions with their messaging. That may come in the form of a
language barrier, or even something as nuanced as a cultural norm that may not be
applicable to your domestic audience. The important part of international marketing is
intention and research. Doing international marketing research up front and developing
international marketing strategies specific to the new audiences your brand is engaging
with will make all the difference when it comes to whether your foray into international
marketing is successful.

An important part of that process involves international marketplace segmentation—or

the identifying of aspects that will help inform your marketing campaign. The
geographic, economic, and cultural factors of any given audience will help to guide
your brand positioning, as well as your marketing management and communication
strategies. When developing a strategy, an important question to ask is where your
product or service fits within that given audience’s needs. Think of that cliché about
“selling sawdust to a lumber mill.” There is no need for sawdust there because the
lumber mill already has all the sawdust it could want. That’s the mindset that should be
taken when considering international business: what do they need and how do they
need it marketed to them? Marketing segmentation will also help identify the messaging
and communication style. Idioms, references, or even simple translations (like that
sawdust one, actually) can lose meaning in translation, or worse, change meaning
entirely and alienate audiences who do not share your native culture.

Why is international marketing important?

International marketing is important because it opens your business to larger,

international audiences.
On a brand level, international marketing is an opportunity for wider exposure, product
awareness, and increased sales. Opportunities abroad are countless and tap into a
wider audience than a business has access to if it conducted business domestically and
nowhere else. But a larger aspect of international marketing is the implications it has for
globalization and free trade.

What are the benefits of international marketing?

The benefits of international marketing are two-pronged. Not only does

international marketing support the economic diversification of your business,
but it helps your business reach a global audience, extending the audience reach
to areas previously untapped.

1. Globalization and audience reach

If there are customers across the globe that could benefit from access to your product
or service, why limit that to one place? International marketing and reaching
international audiences are ways of reaching your intended audience that may not be
on your domestic radar.

2. Economic diversification

While the best-performing global economies may seem obvious, they’re anything but.
For instance, though the United States was performing well on Dow and Nasdaq
throughout 2017, one of the world’s largest economies only ranked fifth in global
performance. Even if your home country is having an economic boom, there are
customers across the globe that are excited to engage with brands not currently
available to them. Prioritizing international marketing is a way to constantly monitor the
markets, from South America to the Middle East, that may be most advantageous for
you as you become an international brand.

International trade: benefits, barriers and business

For businesses, globalization can open up a – very literal – world of opportunities.
Access to the global economy provides business leaders with new markets, new trade,
new routes to consumers and new revenue streams, and nations with fundamental
economic, social, political, and cultural advantages.
International trade refers to the exchange of products and services between people or
entities in two different countries. It’s a trading system more commonly referred to as
imports and exports: the former relating to goods that flow into a country from abroad,
the latter to goods that flow out of a country to be sold overseas.
International trade at a national level
The World Bank Group states that trade plays a central role in global poverty.
A country that participates in international trade is more likely to grow faster, innovate,
improve productivity, and provide more opportunities and higher incomes for its
population. As such, it’s key to increasing both the overall Gross Domestic Product
(GDP) of a country and the average national wages (GDP per capita) for its people.
Free trade – also known as open trade – refers to trade without restrictions, including
tariffs and quotas, between countries. It’s known to benefit lower-income households, as
consumers access more affordable goods and services, and countries with a lower
GDP who benefit from comparative advantage can become key players alongside
wealthier nations.
International trade makes cross-border exchange easier, supply chains and logistics
more reliable, and customs procedures more streamlined. On both a local and global
level, it is critical in driving economic growth.
International trade at a business level
As well as supporting the economic development of countries, there are plenty
of benefits of international trade for business leaders. Examples include:
 Increased revenues. International trade can be extremely advantageous
for increasing the number of potential consumers – leading to business
growth, larger market share from greater market access, and higher profits.
 Decreased competition. Depending on the product or service, exporting
overseas could open up new markets that are less crowded or saturated than
domestic ones.
 Longer product lifespan. Over time, domestic consumers may stop
buying goods – or start upgrading to different versions – while the same may
not be true for international markets. Keeping an eye on emerging markets
may result in further demand for products and increased sales.
 Easier cash-flow management. For multinational businesses, receiving
payment upfront for international transactions may be prudent. In home
markets, creativity and caution can be required to maintain cash flow while
waiting to receive payment.
 Better risk management. Diversification is critical to businesses wishing
to remain relevant, competitive and resilient. International trade offers this
advantage; while a domestic market may be disrupted due to economic,
political and environmental factors, operating in multiple markets helps to
manage risk and weather adversity.
 Benefitting from currency exchange. Global trade and currency
fluctuations can be advantageous for exporters. When domestic currency is
down, businesses may be able to export more as international buyers benefit
from a favorable exchange rate. Currency conversion – from selling in
markets where the currency is stronger than the domestic currency – can
boost bottom lines once converted back.
 Disposal of surplus goods. When goods are no longer selling well in a
domestic market, exporting to international markets can offer alternatives to
help shift otherwise superfluous stock.
 Enhanced reputation. Selling internationally can raise a company’s
profile, increase trust and credibility and boost brand reputation. Success in
one country can influence success in others.
Taking advantage of international markets can also offer business leaders opportunities
to access export financing, as well as capitalize on specialization. This is where
traders specialize in different areas to serve particular markets, making the most of
upgrades, innovations, and efficiencies.
What are the barriers to international trade?
On the face of it, trade may appear simple, with two parties benefitting from the
exchange: one receiving required goods or services, the other payment. However, there
exists a wealth of theory, policy, and business strategy that constitutes international
trade – including trade barriers. These can include:
 Voluntary Export Restraints (VERs)
 Regulatory barriers
 Anti-dumping duties
 Subsidies
 Tariffs
 Quotas

6 Main Types of Trade Barriers

VERs – or Voluntary Export Restraints

Exporting and importing countries make agreements that limit the number of products
that can be exported during a given period. The term uses the word “voluntary” but it’s
not the case most of the time. A country can increase prices and revenue by reducing
the amount they export.

Regulatory Trade Barriers

Any type of legal barrier designed to restrict imports is regulatory. Regulatory barriers
are set by governments. They provide a standard that must be met before products can
be exported. These include product standards, safety standards, and pollution
standards.  One common example affects the automobile industry. Manufacturers often
need to pass specific safety ratings for the vehicle to be sold in the importing country.

Anti-Dumping Duty
When exporters sell products below their cost, it’s considered dumping. When this
occurs, governments can impose duties on the good. The duty is in effect until the
World Trade Organization can decide the issue. Sometimes, firms claim that goods are
produced below the cost just to buy themselves more time. It can be difficult to
determine how much the product costs the firm.

The Subsidy
Subsidies are often offered by governments so firms can lower their costs and be more
competitive.

The Tariff
Tariffs are levied as a tax on imports. A tariff is used to raise the price of imports so they
are not consumed. It might be in the form of an ad valorem tax or a specific tax. When
the price increases, consumers are more likely to choose local options.
The Quota
Quotas are types of trade barriers that restrict how much of a product can be imported
into a country. A quota and a tariff are the same, however, the government collects
revenues from tariffs, and exporting firms collect revenue from quotas.

The World Trade Organization (WTO) is a global international organization that exists to

monitor and uphold trade policy agreements between nations, supported by trade data.
Trading nations worldwide – and their parliaments – collaborate to establish, negotiate
and sign WTO agreements, which aim to help producers, exporters, and importers to
conduct business. 
Supporting trade negotiations, such as regional trade agreements, and examining data
sets – such as a country’s balance of payments – helps to establish and uphold a global
trading system that is more reliable, open, and predictable for all involved.

What is Competitive Advantage?

Competitive advantage refers to the ways that a company can produce goods or deliver
services better than its competitors. It allows a company to achieve
superior margins and generate value for the company and its shareholders.

A competitive advantage is something that cannot be easily replicated and is exclusive

to a company or business. This value is created internally and is what sets the business
apart from its competition.

Key Highlights

 A competitive advantage is what sets a company apart from its competitors, in

the eyes of its consumers.
 These advantages allow a company to achieve and maintain superior margins, a
better growth profile, or greater loyalty among current customers.
 A competitive advantage is often referred to as a “protective moat.”
 Strong and repeatable competitive advantages can create sustained success for
a business and attract capital more readily and cheaply.

Examples of Competitive Advantage

Competitive advantages come in many shapes and sizes. They include, but are not
limited to, some of the following:

 Access to natural resources not available to competitors

 Highly skilled labor
 Strong brand awareness
  Access to new or proprietary technology
 Price leadership

Components of Competitive Advantage

For a competitive advantage to be established, it is important to know the following:

1. Value Proposition – A company must clearly identify the features or services

that make it attractive to customers. It must offer real value in order to generate
interest.
2. Target Market – A company must establish its target market to further engrain
best practices that will maintain competitiveness.
3. Competitors – A company must define competitors in the marketplace, and
research the value they offer; this includes both traditional as well as non-
traditional, emerging competition.

To build a competitive advantage, a company must be able to identify its value

proposition that will be sought after by the target market, which cannot be replicated
by competitors.

Building a Competitive Advantage

Michael Porter, the famous Harvard Business School professor, identified three
strategies for establishing a competitive advantage: Cost Leadership, Differentiation,
and Focus (which includes both Cost Focus and Differentiation Focus) [ 1 ] .

1. Cost Leadership
The goal of a cost leadership strategy is to become the lowest cost manufacturer or
provider of a good or service. This is achieved by producing goods that are of standard
quality for consumers, at a price that is lower and more competitive than other
comparable product(s).

Firms employing this strategy will combine low profit margins per unit with large sales
volumes to maximize profit. Companies will seek the best alternatives in manufacturing
a good or offering a service and advertise this value proposition to make it impossible
for competitors to replicate.

2. Differentiation

A differentiation strategy is one that involves developing unique goods or services that
are significantly different from competitors. Companies that employ this strategy must
consistently invest in R&D to maintain or improve the key product or service features.

By offering a unique product with a totally unique value proposition, businesses can
often convince consumers to pay a higher price which results in higher margins.

3. Focus

A focus strategy uses an approach to identifying the needs of a niche market and then
developing products to align to the specific need area. The focus strategy has two
variants:

 Cost Focus: Lowest-cost producer in a concentrated market segment

 Differentiation Focus: Customized or specific value-add products in a narrow-
targeted market segment

Competitive Advantage in the Marketplace

Three notable examples are:

1. Walmart: Walmart excels in a cost leadership strategy. The company offers

“Always Low Prices” through economies of scale and the best available prices of
a good.
2. Apple: Apple uses a differentiation strategy to appeal to its consumer base. It
provides iconic designs, innovative technologies, and, therefore, highly sought-
after products; this ensures that consumers are willing to pay a premium for
Apple devices. 
3. Whole Foods Market: Whole Foods Market’s advantage relies on a
differentiation focus strategy. The company is a leader in the premium grocery
market and charges more premium prices because its products are unique. This
is appealing to a niche market with higher disposable income.
Importance of Competitive Advantage

A competitive advantage is what sets a business apart from its competitors. It is

essential in order for a business to succeed, whether it’s by ensuring higher margins,
attracting more customers, or achieving greater brand loyalty among existing
customers. 

Higher margins, a better growth profile, and lower customer churn tend to also be very
popular among both investors and creditors – making capital more readily available
(and cheaper) for firms that are able to maintain a strong competitive advantage among
their peers.

The Advantages of a Social Entrepreneur

More Personal Satisfaction

The most obvious advantage of being a social entrepreneur is the personal

satisfaction you achieve when you "do well by doing good." Social entrepreneurs often
pick businesses that make a product or deliver a service that is near and dear to their
hearts. The late movie actor, Paul Newman, loved to create recipes and cook for
friends and family.

He turned his love of food into Newman's Own food company, a business that donated
100 percent of its profits and royalties to charities around the world via the Newman's
Own Foundation. The company has donated more than half a billion dollars to charity
since 1982

More Capital Options

In addition to regular investors, social entrepreneurs might qualify for government or

private foundation grants to help them get started. For example, a company trying to
make solar panels more affordable for residential homes might receive a grant if it
researching a new technology that has practical applications.

Big businesses that would benefit from a new company's product or service might buy
into the business to provide it with enough working capital to get off the ground. For
example, a small company researching a longer-lasting car battery might receive
funding from a large automaker that is trying to enter the electric vehicle market.

Social entrepreneurs often have to weigh the benefits of selling part of all of their
companies to keep their dreams alive. In some cases, these dreamers have great
product knowledge, but aren't skilled running a business. Often, investors who put
millions of dollars into a company require that the founder appoint a chief executive
officer of the investor's choice to handle the day-to-day operations of the company and
long-term strategic business planning.

Fewer Direct Competitors

Many companies don't have the luxury of practicing as much corporate social
responsibility as they'd like. This is especially true when a business is publicly traded
and management needs to make continuing profits and boost stock prices. A social
engineer is often either the only one in her space, or has significantly less competition
to claim "green" and "caring" brand status.

One benefit of social enterprise is that this type of business ethos attracts all or most
of the customers who strongly desire to purchase from companies that practice
corporate social responsibility. This might be a smaller percentage of the market, but
many new, smaller companies only need a small percentage of a large market to
make a profit. And, these types of customers are often willing to pay a higher price to
get "green" products and services.

A social entrepreneur doesn't have to make and sell green products or run his
business on solar power to be a progressive executive. Companies can find ways to
reduce their energy use, recycle, plant a green roof, pay higher wages, provide
benefits like child care help or extended family leave, and donate money to charities.

The business can still make a regular widget and make profits, but it changes its
impact on the surrounding community, environment and potentially its country and
industry, as well.

Employer of Choice

Human resources surveys reveal that more and more (especially younger) workers
value jobs that provide personal satisfaction over jobs that offer a bit more pay.
Companies that practice corporate social responsibility attract more loyal employees
because their staff members want to work at that particular company and feel good
about their work. These companies see higher retention rates and more engaged
employees.

When employees are engaged in their work, they perform better. Their passion leads
them to use and examine the company's products or services on a regular basis. This
often leads to employees coming up with new ideas for products or services, or better
ways to make the company's goods.

Sustainable Development and Corporate Social Responsibility

Sustainable development and corporate social responsibility are closely related

business concepts that have greatly affected corporate governance in the early 21st
century. Sustainable development involves the use of environmentally responsible and
efficient operational practices. Corporate social responsibility, or CSR, involves
balancing corporate citizenship and environmental responsibility to give back to the
communities in which they operate, which also supports long-term business success.
Socially responsible companies preserve environmental resources crucial to future
generations, according to the International Institute for Sustainable Development .

Emergence of Corporate Social Responsibility

The development of corporate social responsibility has been driven in part

byincreased consumer social consciousness and expectations of accountability. Due
to prominent business scandals, such as public outrage over a passenger being
dragged off an overlooked United Airlines flight in 2018, and increased emphasis on
environmental preservation, the public pays more attention to company practices.

Companies are increasingly coming to appreciate the role of CSR in sustainable

development. Operating in a way that benefits society now and in the future can earn
favor with core customers, while ignoring expectations for responsible activities can
lead to negative public relations, boycotts and general backlash from communities in
which you do business.

Responsiveness to Stakeholders

Consumers prefer to do business with companies that give back to the communities
they serve, according to Business News Daily.  To achieve full congruence with these
areas of responsibility, a company must operate with fairness and honesty with
customers and suppliers.

Socially aware companies give back to and actively participate in local communities,
and value employees, while earning profits for shareholders. Meeting expectations of
each of these stakeholder groups is a tall order. Companies at times have created
jobs specifically in CSR to emphasize its importance.

Protection of the Environment

One factor integral to both sustainable development and CSR is the environment.
CSR and sustainable development goals both emphasize stronger environmental
preservation, recycling and renewal programs. Employers interested in supporting the
environment may involve all employees in efforts to promote green-friendly operations,
offer paid time off for employees to participate in green activities or create recycling
programs promoted internally and with customers.

Companies may also encourage employees to reuse materials and resources

whenever possible to cut down on costs and waste. Organizations truly committed to
environment protection often invest in green-friendly resources and business
processes.
Sustainable Economic Development Practices

Sustainable and responsible companies also recognize the importance of promoting

economic development domestically and abroad, according to the United Nations
Industrial Development Organization . Companies can demonstrate an emphasis on
sustainable development by investing in suppliers that produce more natural products.

Global businesses can establish operations in less industrious nations and train or
support local farmers or producers to help build up their local supply network. This
may include sending employees to foreign markets to train local workers and help
build stronger infrastructures that serve both local economies and the company.

Industry rivalry—or rivalry among existing firms—is one of Porter’s five forces used
to determine the intensity of competition in an industry. Other factors in this competitive
analysis are:

 Barriers to entry
 Bargaining power of buyers
 Bargaining power of suppliers
 Threat of substitutes
Industry rivalry usually takes the form of jockeying for position using various tactics (for
example, price competition, advertising battles, product introductions). This rivalry tends
to increase in intensity when companies either feel competitive pressure or see an
opportunity to improve their position.

In most industries, one company’s competitive moves will have a noticeable impact on
the competition, who will then retaliate to counter those efforts. Companies are mutually
dependent, so the pattern of action and reaction may harm all companies and the
industry.

Some types of competition (for example, price competition) are very unstable and
negatively influence industry profitability. Other tactics (for example, advertising battles)
may positively influence the industry, as they increase demand or enhance product
differentiation.
Structural factors affecting industry rivalry

A number of structural factors can affect industry rivalry:

Numerous or equally balanced competitors

When there are many competitors, some companies believe that they can make
competitive moves without being noticed. When companies are relatively balanced in
strength, they are more likely to engage in competitive battles and attack and retaliate
as they strive for market leadership.

Slow industry growth

In a slow growth market, companies can only grow by capturing market share from each
other, which leads to increased competition.

High fixed or storage costs

High fixed costs create pressure for all companies to fill capacity, thus leading to price
cutting when there is excess capacity. High storage costs push companies to decrease
prices to ensure sales.

Lack of differentiation or switching costs

When products are perceived as commodities, choice is often determined by price and
service, which then leads to increased competition in price and service.

Capacity increased in large increments

When economies of scale require large increases in capacity, it causes disruptions in
the industry supply/demand balance, which then leads to periods of overcapacity and
price cutting.

Diverse competitors
Companies with diverse strategies, origins, personalities and relationships to parent
companies (especially foreign competitors) also have different competitive goals and
strategies than “typical” companies within the industry. Their diverse approaches to the
market and unique competitive strategies can upset the status quo of doing business.
High strategic stakes
Companies with high stakes in achieving success may sacrifice profitability for
expansion. Also, companies with high market share may feel threatened by competitors
seeking to reduce their market share.

High exit barriers

Economic, strategic and emotional factors can prevent companies from leaving the
industry, even when they are earning low or negative returns on investments.