Opportunity Recognition and Market Formation in Entrepreneurial Ventures: Cognitive and Strategic Mechanisms of New Market Creation
Keywords:
entrepreneurial cognition, opportunity recognition, strategic positioning, market formation, entrepreneurship theory, new market creationAbstract
Entrepreneurial ventures frequently operate in uncertain environments where markets are not yet clearly defined and opportunities remain ambiguous. While prior research has extensively examined opportunity recognition as a cognitive process, limited attention has been given to how recognized opportunities evolve into new market structures. This article develops a conceptual framework explaining how entrepreneurial ventures transform recognized opportunities into emerging markets. Drawing on opportunity recognition theory, entrepreneurial cognition research, and market formation literature, the study proposes that opportunity recognition functions as a strategic mechanism linking cognitive interpretation and market creation. The framework suggests a sequential process in which entrepreneurs first interpret environmental signals through entrepreneurial cognition, enabling opportunity recognition. Recognized opportunities subsequently guide strategic positioning decisions that frame value propositions and shape stakeholder perceptions in emerging markets. These positioning activities ultimately contribute to market formation by influencing demand structures, establishing legitimacy for new offerings, and constructing new market categories. By integrating previously fragmented research streams, the study advances entrepreneurship theory by connecting cognitive opportunity recognition processes with strategic market formation dynamics. The proposed framework provides a mechanism-based explanation of how entrepreneurial ventures translate uncertain opportunities into viable markets.
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