The third step in the entrepreneurship process involves exploiting an opportunity. Exploitation refers to the activities and investments that are committed to gain returns from the new product or service arising from the opportunity.31 Simply stated, exploitation occurs when an entrepreneur (or group of entrepreneurs) decides that an opportunity is worth pursuing. When an entrepreneur decides that customers would highly value a new product, exploitation entails all of those activities (i.e., marketing, production, etc.) needed to sell the new product to consumers.

Entrepreneur Bryan Green successfully exploited an opportunity he identified. Unlike many Americans, Green has always enjoyed exercising. Realizing that Americans, in general, are out of shape was the opportunity and the impetus Green needed to launch Advantage Fitness Products, a company that designs, supplies, and services fitness facilities worldwide. Green designs home gyms for celebrities as well as for professional teams like the San Francisco 49ers and the New York Mets. Green says that once he exploited his opportunity, the keys to his success were to “stay flexible and execute flawlessly.”32

Several factors can help entrepreneurs decide whether they should exploit an opportunity.33 First, entrepreneurs are more likely to exploit an opportunity when they believe that customers will value their new product or service. When customers value a new product or service, they provide market demand. This market demand, in turn, helps entrepreneurs earn the resources (i.e., profits) necessary to support the opportunity exploitation.

Second, entrepreneurs are more likely to exploit an opportunity when they perceive that they have the support of important stakeholders. Stakeholders are groups such as employees, suppliers, investors, and other suppliers of capital (i.e., banks) who directly or indirectly influence organizational performance. When entrepreneurs perceive that these groups will provide support, entrepreneurs are more likely to exploit the opportunity. This tendency makes sense intuitively because these stakeholders will help ensure the success of the entrepreneur pursuing the opportunity. Conversely, it will likely prove difficult for entrepreneurs to succeed if they do not have the support of important stakeholders.

Finally, entrepreneurs are more likely to exploit opportunities when they perceive that their management team is capable. Qualified management teams bring resources (i.e., ability, knowledge, information) to the opportunity that are likely to enhance the prospects of the opportunity.34 In contrast, when entrepreneurs feel that their management teams are incapable, they are less likely to exploit the opportunity because they will not feel that they have access to the necessary resources to ensure high levels of organizational success.

In sum, several factors influence an entrepreneur’s ability to exploit opportunities. Figure A2.3 summarizes these factors.