CHAPTER 5

CREATIVITY, THE BUSINESSES IDEA AND

OPPORTUNITY ANALYSIS
SOURCES OF NEW IDEAS:
i) Consumer:

The potential customers and the idea can be developed through informal monitoring or
providing them a chance to express their ideas

ii) Existing Products And Services:

Arrange a formal method to monitor and evaluate competitive products and services.

iii) Distribution Channels:

They can help due to their familiarity with market needs and also help by a suggestion
in changes required in the products.

iv) Federal Government:

They are two ways of idea generation:

1) Files of patent office. (PTO) Patent & Trademark office

2) Idea Coming in response to some government regulation

v) Research and Development:

This is the largest sources and can be formal or informal research

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METHODS OF GENERATING IDEAS:
1) FOCUS GROUPS:

Group of 8-14 people having open in depth discussion in presence of a moderator and
discussion is stimulated by comments of other group members to come up with an idea
It is also used for screening of ideas (Evaluation)
Discussion is kept focused

2) BRAINSTORMIN

A self managed group without a moderator and based on the fact that people can
stimulate greater creativity by meeting with others and participating in organized
experience.

RULES:

Four rules should be followed

1: No Criticism.
2. Freewheeling is encouraged
3. Quantity of ideas is desired
4. Combinations and improvements of ideas are encouraged

3) PROBLEM INVENTORY ANALYSIS:

It is like focus group but the difference is that the focus is on problem and a list of
problems is provided.

A Careful analysis of results is required

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CREATIVE PROBLEM SOLVING TECHNIQUES
i) BRAIN STORMING:

Most well known and widely used, unstructured, spontaneous contribution and generate
all possible ideas within limited time.
Process involves declaration of problem statement, then selection of group, discuss and
record all possible ideas with no criticism.

ii) REVERSE BRAINSTORMING:

Criticism is allowed and focus is on negative.

Identify everything wrong with idea followed by discussion how to overcome it.

iii) BRAINWRITING:

Written brainstorming that is a silent method of brainstorming. Also called as 635

method, six group members each writing down three ideas in a five minutes time period.

iv) GORDON METHOD:

Method for developing new ideas when the group members are unaware of the problem
Entrepreneur starts by a general concept related to the problem, the group responds,
concept developed, then actual problems is disclosed enabling suggestions for
implementation or refinement of solution.

v) CHECKLIST METHOD:

Developing the new idea through a list of related issues

vi) FREE ASSOCIATION

A word or phase related to the problem is written then another, then another where
each new word attempting to add something new TO on going thought process
(Creating a chain of words)
(When we mind gets tired you start creative thinking)

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 vii) FORCED RELATIOSHIP:

Developing a new idea by looking at product combinations and forcing relationships

among them
Use of DFD’s and ERD’S
DFD’s (Data Flow Diagram)
ERD’s (Entity relationship diagram)

Process

a) Isolate the elements

b) Find the relationship between the elements
c) Record the relationship in an orderly form
d) Analyze the resulting relationships to find ideas or patterns
e) Develop new ideas from these patterns

viii) COLLECTIVE NOTEBOOY METHOD:

A small Notebook with blank papers and data, consider problems and its all possible
solutions and record ideas accordingly.
These notebooks are then handed over to a central coordinator who summarize the
material and summary becomes topic of final creative focus group discussion

xi) ATTRIBUTE LISTING:

List the attribute of items and look at each from a variety of view points i.e. positive and
negatives

x) BIG DREAM APPROACH:

Developing a new idea by thinking without constraints (Thinking Big)

xi) PARAMETER ANALYSIS:

Two Aspects

a) Parameter identification that involves analyzing the variables and determine their
importance.

b) Creative Synthesis: Develop the relationship and evaluate parameter and

relationships and then develop solutions

xi) ROOT CAUSE ANALYSIS:

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Keep on asking question “why” till you reach at the root of the problem.
INNOVATION:
Improvement in an existing product
Inventions and Innovation are building blocks to the future of any economic unit.

1) TYPES OF INNOVATION:

i) Break Through Innovation:

Extremely unique and provide basis for future innovation and should be protected
through patents, trade marks and copy rights e.g. Pence line, Computers, Airplane,
Internet etc.

ii) Technological Innovation:

More frequent and in the product/Market area e.g. Fly watch with pictures, voice and
text messaging and Jet Airplane.

iii) Ordinary Innovation:

Occurs most frequently a better product having market appeal based on market pull and
not technological push

2) DEFINING A NEW INNOVATION: (Product / Service)

Newness is a dilemma
Newness can be in consumer concept e.g. decaffeinated coffee, new packing or a slight
change or modification in the products.

3) CLASSIFICATION IF NEW PRODUCTS:

New products are classified either by view-point of a customer or company.

a) From a Consumer’s Viewpoint:

How much behavioral changes or new learning is required by consumer in order to use
product

b) From a firm’s view point:

From a firm’s view point it is defined in terms of amount of improved technology.

Requires carefully planned strategy e.g. replacements, extensions, product
improvements, reformulations and remerchandising (fig 5.3 pager 151) (fig 5.4 pager
152)

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OPPORTUNITY RECOGNITION:

Business Opportunity represents a possibility for entrepreneur to successfully fill a large

enough unsatisfied need that may results in enough sales and profits.

Education and experience makes the entrepreneur knowledgeable who then becomes
alert and use networks resulting in successful opportunity reorganization
Fig 5.5 Page 153

OPPORTUNITY ANALYSIS PLAN:

Opportunity analysis plan focus on idea and market not the venture.

SECTIONS:

1- THE IDEA AND ITS COMPETITION:

Description of product and service and identify and list all competitions
The product differentiation features find out after matching with competitors

2- THE MARKET AND THE OPPORTUNITY:

The size and characteristics of market (3 years data) from secondary data sources
Whether the market and opportunity are large enough and worth spending time and
effort

3- ENTREPRENEUR AND TEAM ASSESSMENT:

Assess entrepreneur and his team and have at least one person having experience in
industry area of new idea.

4- THE NEXT STEPS:

Make the idea a reality in market place, Time and money required, Sources of Capital

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PRODUCT PLANNING AND DEVELOPMENT PROCESS

IDEA CONCEPT PRODUCT TEST COMMERCIALISATION

STAGE STAGE DEVELOPMENT MARKETING STAGE
STAGE STAGE Product Life cycle
Laboratory development

Semi Commercialization
Pilot production
Evaluate

Evaluate

Evaluate

Evaluate
Idea

Run

ESTABLISHING EVALUATION CTERIA:

Evaluation is needed at every stage and it shall be broad yet quantitative

i) Market Opportunity:

It is far most important and must exist.

Elements include characteristics and attitudes of potential buyers, size of potential
market in dollar and unit terms, nature of market with respect to product life cycle and
the market share it may get.

ii) Current Competition:

Evaluation of competitors marketing mix, their market share and product differentiation
features.

iii) Marketing system:

Compatibility with existing system, degree of sales force adaptability, distribution and
promotion

iv) Financial Factors:

Manufacturing cost per unit, Sales cost per unit, capital and inventory required, Break-
even point and long term profit.

v) Production Factors
In relation to existing plant, machinery and personnel

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1) IDEA STAGE:

Prepare a systematic market evaluation checklist where new product idea is expressed
in terms of its chief values, merits and benefits
Elements for need assessment includes timing, satisfaction, alternatives, benefits and
risks, future expectations, price vs product performance, market structure and size and
economics condition

2) CONCEPT STAGE:

The refined product idea is tested to determine consumer acceptance without incurring
manufacturing cost.
Methods include conversational interviews, and questionnaires

3) PRODUCT DEVELOPMENT STAGE

Assess the consumer reaction to a physical product (sample)

Use of consumer panel and provide samples of yours and competing products

4) TEST MARKETING STAGE:

This increases certainty, a limited scale production and sale activity of the new product
e.g. 5-8%

5) COMMERCIALIZATION STAGE:

The product goes through its natural life cycle stages that are introduction, growth,
maturity and decline. Where every stage requires different strategies

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 [Link] AND BUSINESS
START UP:
E. Business:-

The business conduct with computer mediated networks

It can be B 2 B, B to C and within the company (intranet) e.g. Sales, purchase, training
sessions etc.

E-Commerce:

Transfer of ownership through computer mediated networks

FACTORS FOR GROWTH

Increased used for personal computers (PC’s)

Wide Spread of Internet facilities
Acceptance of internet as a business communication platform
Access to broader customer base
Low cost of communication
Low transaction cost
Interactivity (Two way communication b/w buyer & Seller)

USING E-COMMERCE CREATIVITY:

It can be done by existing companies or start ups and suitable for small, medium, large
companies.

STARTING

In House Out sourcing

IN HOUSE: Servers, Routers, telephone line, website, software’s

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OUT SOURCING Through some web development and updating company

COMPONENTS:

Front end Operations:

Functionality, Search, shopping carts and secured payments

Back End Operations:

Distribution Channels, Manufacturing capabilities, delivery

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WEB SITES:-

Verifiers:-
They provide authentication, validation and payment services e.g. Pay Pal , Verisign,
GTE Cyber Trust

Search:-

It shall be easy, user friendly and have an email response system (3 click formula)
Use of subject browsing, site map and advance search tools
Secure Servers that is https:// and Merchant Accounts.

Speed:

Dial up or broad band

Early download
Navigational Clarity
Easy to use, customized and Compatibility with various browsers.
Website promotion can be done through search engines, banners, advertisement, email
and classified ads

TRACKING CUSTOMER INFORMATION:

Data base marketing or direct marketing through electronic data bases.

Customer information can be obtained through membership programs offering free
services, websites statistics, Internet cookies and Hit Counters

DOING [Link] AS AN ENTREPRENEURAL COMPANY:

Decision shall be made on case to case basis

Economic delivery of products
Product shall get interests of large enough people
Online operations shall be cost – efficient significantly
Attract customers through websites.

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