IDENTIFICATION OF BUSINESS IDEAS

Creativity and the Business Idea

McGraw-Hill/Irwin Entrepreneurship, 7/e

Copyright 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Creativity & Innovation

Creativity is the ability to develop new

ideas and to discover new ways of looking at problems & opportunities

Innovation is the ability to apply creative

solutions to those problems & opportunities to enhance or to enrich peoples lives

Creativity is thinking new things & innovation

is doing new things

Entrepreneurs succeed by thinking and doing

new things or old things in new way Having a great new idea is not enough; transforming the idea into a tangible product, service or business venture is the essential next step Leadership expert Warren Bennis says. todays successful companies live and die according to the quality of their ideas

Creativity
Creativity involves generating something from

nothing Creative ideas springs up from the most unexpected places

Edwin Land, one of Americas most prolific inventors, credits his three year old daughter with the idea of the Polaroid instant camera

Entrepreneurship is the result of a

disciplined, systematic process of applying creativity & innovation to needs & opportunities in the marketplace Millions of people come up with creative ideas for new or different products & services; most of them, however, never do anything with them Entrepreneurs are those who connect their creative ideas with the purposeful action & structure of a business 3000 new product ideas, 4 make it to Thus successful development stage,entrepreneurship is a 2 are actually launched & constant process that relies on creativity,

Types of ideas
Invention Combination Variation, Twist Done elsewhere, new

here

Sources of ideas
Market Research Customers Copying & changing Inspiration, epiphany Hobby Personal experience

Best ideas are...

Easy to start by yourself Inexpensive Understood by people Quickly generate cash Scalable Automated

Sources of New Ideas

Consumers

(1 of 2)

Informal & formal monitoring of potential ideas and

needs- express their opinions. Idea & need represents a large enough market to support new venture .
Existing Companies
Potential (Entpr & Intraprnrs) should also

establish a formal method for monitoring & evluating competitive products & services on the market

Distribution channels
Channel members-Excellent source of new ideas

bcoz of their familiarity with the needs of the market Help in marketing the newly developed products

Sources of New Ideas

Federal government

(2 of 2)

Files of the Patent Office contain numerous new

product possibilities.
Suggest more marketable product ideas Official Gazette, published summarize list of patents for license or sale

New product ideas can come in response to

government regulations. (OSHA- eliminating unsafe WCs in industry)

Research and development
Largest source of new ideas is the entrepreneurs

own research and development efforts. May be:

A formal endeavor connected with ones current

employment. An informal lab in a basement or garage.

Methods of Generating New Ideas

Focus groups
number of group members from 6-12 Moderator focuses discussion of the group in a

directive or nondirective manner. Co. womens slipper-concept of warm & comfortable slipper thats fits and old shoe 12 women focus group An excellent method for initially screening ideas and concepts.
Brainstorming
A Group method for obtaining new ideas &

solutions

Brainstorming
4 Rules should be followed

Conti....

1. No criticism is allowed by anyone in the group 2. Freewheeling is encouraged- wilder the idea

the better 3. Quantity of ideas is desired- greater the no. of ideas the greater the likelihood of the emergence of useful ideas 4. Combinations and improvements of ideas are encouraged- ideas of others can be used to produce still another new idea Example: Bank to develop journal for industrial client

Methods of Generating New Ideas

2)

(2 of

Problem inventory analysis

Instead of generating new ideas themselves

consumers provided with list of problems in general product category Then asked to identify & discuss products in this category that have particular problem Can be used to test a new product idea. Effective method since its easier to relate known products to suggested problems & arrive at a new product idea than to generate an entirely new product idea by itself Results must be carefully evaluated as they may not Consumers associates particular problems actually reflect a new business opportunity.

with specific products & then develop a new Table 5.1 ? product that do not contain the identified

Creative Problem Solving

Creativity: an important attribute of a successful

entrepreneur.

Creativity tends to decline with:

Age, education, lack of use, and bureaucracy.

Creative Problem-Solving Techniques

<<Insert Table 5.2>>

Creative Problem-Solving Techniques

(1 of 3)

Brainstorming
Used in creative problem solving and idea

generation. Creative problem solving: a method for obtaining new ideas Spontaneous contribution of participants Problem statement-neither too broad nor too narrow Avoid inhibiting responses NO group member should be expert in field of problem Ideas even if illogical, must be recorded Prohibit criticizing OR evaluating during BS

 Reverse brainstorming

A group method for obtaining new

ideas focusing on the negative. Finding fault by asking questions in how many possible ways can the idea flop Maintain group morale Stimulate innovative thinking Often involves identification of everything wrong with an ideafollowed by discussion how to overcome these problems

 Brain writing Form of written brainstorming. It is a silent, written generation of

ideas by a group of people. This sheet can be passed around on e-mail as well Pass the sheet around reach its owner The only thing wrong with it is that there is no excitement of

Creative Problem-Solving Techniques

(2 of 3)
Gordon method

Method for developing new ideas when the

individuals are unaware of the problem. you dont give away too much detail about the problem headline would be i wish there was something we cuold do about the bad colors in my TV screen Or Latest trends in fashion world
Checklist method
Developing a new idea through a list of related

Product Planning & Development Process Establishing Evaluation Criteria

Criteria for evaluation need to be established at

each stage of the product planning and development process. Criteria should be:
All inclusive and quantitative to screen the product

carefully. Established to evaluate the new idea in terms of:

Market opportunity Competition Marketing system Financial factors Production factors.

Need for the product idea must exist Characteristics & attitudes of consumers Market opportunity that might buy the product, size & nature of market Share of that market that product could competing producers, prices, & marketing policies capture should be evaluated Product should be able to compete successfully with Competition products already on the market by having New product should overcome current or features that will meet or be compatible with existing management capabilities & anticipated competition marketing strategies Firm should be able to use its marketing Marketing system experience & other expertise in this new product effort Example: GE would have less difficult time adding ashould be able to be supported by & product new kitchen appliance to its line than P&G contribute to Co. financial structure Break Financial factors even point & Long term profit outlook for product new product idea cannot be integrated into if the need to be determined

Production

existing manufacturing processes, not only is the new factors.less positive- but new plan & production cost idea is plant space need to be determined

Product Planning and Development Process

Divided into five major stages:
Idea stage. Concept stage. Product development stage. Test marketing stage. Commercialization.

The Product Planning and Development Process (1 of 3)

<<Insert Figure 5.6>>

The Product Planning and Development Process (2 of 3)

Idea stage
Promising new product/service ideas should

be identified. Impractical ones eliminated. Evaluation method systematic market evaluation checklist.
Concept stage
Refined idea is tested to determine consumer

acceptance. Consumer acceptance can be measured through the conversational interview method.

The Product Planning and Development Process (3 of 3)

Product development stage
Determines consumer reaction to the physical

product/service. A tool frequently used consumer panel. Consumer preference is determined through:

multiple brand comparisons, risk analysis, level of

repeat purchases, or intensity of preference analysis.

Test marketing stage

Increases certainty of successful

commercialization. Provides actual sales results, which indicate the acceptance level of consumers. Positive test results indicate probability of successful product launch

E-commerce and Business Start-up

E-commerce offers entrepreneurs an

opportunity to be creative and innovative.

Factors that facilitate a high-growth in

electronic commerce:
Widespread use of personal computers. Adoption of intranets in companies. Acceptance of the Internet as a business

communications platform. Faster and more secure systems.

Using E-Commerce Creatively

Entrepreneurs starting an Internet

commerce venture need to address the same strategic and tactical questions as Internet operationsany other entrepreneur.
Entrepreneurs have to decide to:
Run Internet operations within the

or Outsource these operations to Internet specialists.

company primary business Availability of resources company, web professional

Another option is to use the packages for

Components of Internet Commerce

Two major components of Internet

commerce are:
Front-end operations. Back-end operations.

Integration of front-end and back-end

operations
represents the greatest challenge for doing

Internet mistake The biggestbusiness. of many companies provides the opportunity for developing a on the internet is believing that an sustained competitive advantage. attractive & interactive website will secure success- leads to underestimating

nal acy design Shoppin Web Keys to a good Web site: g cartdesign er Ease of use ( info product /servicescredit ) card Structure and organization of information payment Secure Visibility s servers Search capability https Advertise E-mail response system search Speed. engines, Technical aspects banner ads, email Should work properly in different browsers and Secure platforms. servers Should appear in all marketing materials. https

Web Sites- connection btw Co & its Indicat or of Customers professio legitim

Tracking Customer Information

Database:
Tracks activity of the: Industry. Segment. Company. Supports personal marketing targeted at

individual clients.
Should be able capture customer attention

with customized one-to-one marketing.

Doing E-Commerce as an Fresh Entrepreneurial fruits & Company

To do business through the Internet:

vegitable s?

Products should be delivered economically and

conveniently. Products need to interest a wide market

Company must be ready to ship the product outside its

own geographical location.

Online operations have to bring significant cost

reductions-as compare to brick & mortar operation Company must possess the ability to economically draw customers to its Web site.

Summary
Starting point successful Co.-

product/Service they offer Sources of ideas ranges comments of consumers TO changes in Govt regulations Monitoring comments of Consumers Evaluating new products offered by competitors Familiar with the ideas contained in previously granted patents

 Becoming actively involved in R&D Specific techs entrepreneur use to generate

ideas

Focus group-BrainstormingProblem inventory analysis

After idea generation the planning and

developing process begins Large number ideas screened/ evaluated Potential ideas moved- concept, product development, test marketing, commercialization stage