UNIT 2

ENTREPRENEUR IDEAS AND INNOVATIONS

INTRODUCTION TO INNOVATION:

WHAT IS INNOVATION?
Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an
opportunity for a different business or a different service. It is capable of being presented as a
discipline, capable of being learned, capable of being practiced. Entrepreneurs need to search
purposefully for the sources of innovation, the changes and their symptoms that indicate
opportunities for successful innovation. And they need to know and to apply the principles of
successful innovation.

“It’s the introduction of novelty in a given market or industry, such as new

products, services, methods, sources of supply or organisation,”
“At the same time, there’s a strong emphasis on successful
commercialisation - that is, an innovation is more than an idea or an
invention, it’s the result of taking it to market.”
“The purpose of innovation is to continuously grow and renew an enterprise with new or
better products, more efficient processes, or enhanced business models,”

THE ROLE OF TECHNOLOGY AND DIGITAL MEDIA IN

INNOVATION AND ENTREPRENEURSHIP
By observing that today’s advancing tech, such as big data, IoT and machine learning, is
now empowering whole networks of entrepreneurs to develop interconnected ideas.
Novel technology is and has always been a major source of innovation for entrepreneurs,”
“The distinguishing feature of new technology is that it enables open innovation in innovation
ecosystems. Philips IoT-enabled light bulbs are now part of a platform that, next to giving
light, provides opportunities for others to create software that controls it.”

Different Types Of Innovation

Organizational Innovation

Organizational innovation refers to the development of a new organizational strategy

that will somehow change a company’s business practices, as well as the way its
workplace is organized and its relationship with external stakeholders.

▪ Examples of organizational innovations:

▪ The first companies adopting a four-day week working schedule of only 4 days per
week
▪ The first companies that started to use the power of digital and allowing employees
to skip the office and work from home (depending on the role)

Process Innovation
Process innovation is about implementing a new or improved production or delivery
approach, including changes in operational methods, the techniques used and the
equipment or software.

▪ Examples of process innovations:

▪ The first firms betting on SaaS (software as a service) technology, and using, for
instance, cloud contact centers from Talkdesk, changed the way their customer
support processes used to be organized

Product Innovation

Product innovation is the introduction of a new or improved good or service. These

inventions or changes may have to do with improving technical specifications, the
materials or the software used or even advancing on UX (user experience).
However, product innovations don’t need to improve all functions or performance
specifications. An improvement to or addition of a new function can also be merged
with a loss of other functions or the downgrade of some other specifications.
Moreover, a product innovation must add available to potential users but doesn’t
necessarily need to generate sales. Because if it did, then innovations with low
demand or, for instance, digital products like apps that are free would be excluded.
At the same time, routine changes or updates aren’t considered product innovations
as they are only correcting errors or making some seasonal changes.

▪ Examples of product innovations:

▪ The first electric vehicles introduced in the car’s market were also an innovation,
and new batteries with longer ranges that keep coming out are also an example of
innovation.

Marketing Innovation

Marketing innovation means developing a new marketing strategy that produces changes in,
for instance, the way a product is designed or packed, or even other decisions regarding
price or promotion.

Examples Of Famous Innovators

▪ Steve Jobs starting developed the smartphone world with the iPad
▪ Marie Curie made great researches on radioactivity
▪ Elon Musk has been making great progress on luxurious electric cars
▪ Ann Kiessling made plenty of findings on the area of biology
▪ Nikola Tesla worked on the production, transmission, and application of electric power
▪ Amanda Jones was the inventor of a vacuum method of canning
▪ Thomas Edison invented the incandescent electric light bulb
▪ Grace Hopper invented the first compiler for a computer programming language
▪ Leonardo DaVinci, among many other things, invented the parachute
▪ Josephine Cochrane invented the first mechanical dishwasher
▪ Alexander Graham Bell invented the first telephone

Idea Generation in
Entrepreneurship

Ideas are the key to innovation. Without them, there isn't much to execute and
because execution is the key to learning, new ideas are necessary for making
any kind of improvement.

it's obvious that ideas alone won't make innovation happen, as you need to be
able to build a systematic process for managing those ideas. The point of
ideation isn't just about generating tons of them but about paying attention to
the quality of those as well.

Idea generation is described as the process of creating, developing and

communicating abstract, concrete or visual ideas.

It’s the front end part of the idea management funnel and it focuses on coming
up with possible solutions to perceived or actual problems and opportunities.

In entrepreneurship, idea generation is one of the main factors that lead to its success. The idea
thought of here should be able to solve a problem

And along with being unique, the idea should also be easy to execute. For example, let’s suppose you
feel a lot of people have a problem understanding legal proceedings.

So, in this case, your entrepreneurial idea could be setting up a platform that caters to all the legal
needs of people and helps them understand it easily.
 The ability to create and develop new ideas allows you to:

• Stay relevant
• Make positive change happen in your organization

Idea Generation Techniques

• Mind Mapping
It is a technique of presenting information. Here we show the links between the different
elements or the pieces of information. The links or connection is usually shown with the help
of lines and arrows. It’s a visual way of presenting the information.

• Reverse Thinking
Instead of working on the problem in front of us, we work on the exact opposite of it. For
example, let us assume you want to know ‘how to increase your followers on social media
platforms. According to this technique, you will instead think of ‘how will I not increase my
followers on social media platform’.
 This technique is quantitative meaning that you come up with a large number of ideas. Here a
group comes up with a different probable solution to the problem.

For example, if you along with some of your colleagues are trying to come up with a tagline
for your product. And each one of you gives your ideas, then that is called brainstorming.

• SCAMPER
The word SCAMPER is an acronym.

S -Substitute

C – Combine

A – Adapt

M – Modify

P – Put to another use

E – Eliminate

R – Reverse
 For example, if you are a clothes manufacturing company you can think of ‘substitute’ your current
material with a sustainable, eco-friendly option. You could also ‘put it to other uses’ by recycling the
waste material.

• Role-Playing
In this technique, the participants take up roles to play. These roles are different from the
ones they usually play. It adds an element of fun and helps get innovative ideas.

For example, you could take up the roles of customers and discuss your expectations and what you
want from products. This could lead you to stumble upon some good ideas.

Eight Analysis Types to Identify Market/business Opportunities:

1. Consumer segmentation

To understand your demand, you must identify consumer segments that share common
characteristics. These characteristics can be "hard" variables such as age, gender, place of
residence, educational level, occupation and level of income or "soft" variables such as
lifestyle, attitude, values and purchasing motivations.

2. Purchase situation analysis

Purchase situations must also be examined to uncover expansion opportunities. Questions

to ask when reviewing purchase analysis are:

• When do people buy our product or service?

• Is it when they need it?
• Where do people make the purchase?
• How do they pay?

3. Direct competition analysis

In addition to analysing demand and purchasing situations, it is important to analyse

supply. Knowing the existing players in the market where you are competing or going to
compete is important when evaluating opportunities. Relevant questions in this case are:

• What are the products and brands of our industry that are growing more
significantly and why?
• What is their value proposition?
• What competitive advantage do we have over them?

4. Indirect competition analysis

• Opportunities can also be found by analysing substitute industries. For example,
thanks to the decrease in airfares, airlines may look for opportunities in consumer
segments currently supplied by other means of transport. Air carriers should
research how many people travel on long-distance buses and trains, which routes
are the most in-demand, how much travelers pay for their tickets, what the
occupation rate of long-distance buses and trains is and what is necessary to
persuade a current passenger of buses or trains to choose to travel by plane instead.
This type of analysis helps establish competitive advantages against indirect
competitors and provide insight on additional opportunities for growth.

5. Analysis of complementary products and services

Companies should monitor the performance of other companies’ products, which are
complementary to their own. For instance, a packaging company should monitor sales of
products that it could potentially package, while a company producing coffee machines
should gather insights on the evolution of different types of coffee sales. Trends in
complementary markets should be taken into account when making investment decisions.
6. Analysis of other industries

In some cases, the objective of companies is not to continue operating within an industrial
sector but to expand a certain business model or philosophy. For example, a British holding
of companies, Easy Group, started maximising the occupancy rate of flights with the airline
Easy Jet. Easy Group understood that it was preferable to sell a seat at a lower price than
not selling it at all. Easy Jet opted for a rate management model that depended on the
occupancy rate of flights and the time remaining until the day of the flight. With this
business model, it managed to increase occupancy

rates. Easy applied the same model to cinemas when it created Easy Cinema and then with
buses for Easy Bus. In any case, to enter a new industry it is important to learn about
competition first: market sizes, market shares, growth rates, unit prices, per capita sales and
brands positioning.

7. Foreign markets analysis

When a company operates in a mature or saturated market, exploring other countries may
lead to additional opportunities. Markets in different countries grow at different paces for
several reasons, including disparities in the level of economic development and local
habits. Knowing the evolution of per capita consumption of a given product in a given
country can serve as an indicator of the maturity of the product's life cycle. Having
information on the size of the market and competitors in other countries will help to
estimate the business potential.

8. Environment analysis

Market opportunities can also be identified by analysing changes in the environment with
technological and scientific developments generating new business opportunities. For
example, the growth of the Internet and smartphones’ penetration has enabled the arrival
of companies with new business models such as Airbnb and Uber.

Management skills required to become an

entrepreneur
An entrepreneur is a leader, innovator, thinker and motivator for his team. However, it
isn’t an easy task to be an entrepreneur. There are specific managerial skills that an
entrepreneur must master in order to be successful in his ventures.

The essential managerial skills to become a successful entrepreneur are stated below:
Time Management

The most valuable asset for young entrepreneurs is their time. As an entrepreneur, you
have to take care of so many things together and time management is the key to keep
everything on track. It is vital to get more work done in less amount of time by eliminating
interruptions, prioritising tasks and increasing effectiveness as well as productivity.
Effectual time management allows entrepreneurs to assign specific time slots to the
activities as per their importance. It also gives them the ability to participate in economic
forecasting and market research.

Business Planning

Every entrepreneur needs to develop a business plan or a blueprint of how will he

develop his new business. A good business plan consists of a single document divided
into several sections including the description of the organisation, market research, sales
strategies, competitive analysis and financial data. A well-planned blueprint or project
outline acts as a strong foundation for the success of the venture. It facilitates the
entrepreneurs to make their business fit into the industry, identify their target market and
plan to capture them.

Employee Management

An entrepreneur must know how to manage the people. He should be a good judge of
character and abilities of an individual such as hiring the right employee is the foremost
step for the success of a company. Successful entrepreneurs should know how to
motivate the employees in order to work effectively and contribute to garner customer
experience.

Customer Management

An entrepreneur must know how to manage his relationship with existing customers with
a focus on creating loyalty towards his business. This is the easiest and most effective
method to increase revenues. Entrepreneurs must have problem-solving skills,
communication skills, attentiveness and patience to manage customers effectively.
Sales Management

Selling or sale management is an essential skill every entrepreneur must master. You
need to completely understand the sale activities. This helps the entrepreneurs to tackle
the challenges that they may face in their sale management journey.

Financial Management

Even if your business’s finance is handled by an accountant or a finance professional,

you must know planning, organising, directing and controlling the financial activities such
as procurement and utilisation of funds. With a good financial management system, one
can make decisions to improve the business operations.

Business Management

Being a successful entrepreneur involves more than enthusiasm and a good eye for new
opportunities. A thorough understanding of the essential business functions is a
prerequisite for entrepreneurs who want to take their business to the next level. They
must have the complete know-how of general management, finance, marketing,
operations management, purchasing, supply chain, human resources and public
relations.