Generating Business

Ideas through Trends

in Business
Environment
- The systematic methodologies and creative ways of generating business ideas
as discussed on previous topic are focused on the product or service or idea.
But there are other ways of generating business ideas with focus on the
business environment. Some of the methodologies used include Porter’s Five
Forces of competition, SWOT analysis and environmental scanning. These
methods like market analysis, discussion, and Delphi technique are intense in
the use of logical and systematic analysis.

- Based on the trends on the business environment an entrepreneur can get business
ideas from the bargaining powers of its competitors and suppliers, major shifts in
government involvement in business, sociodemographic changes, as well as
technological developments.
• Given the products and services offered by competitors, one possible
business idea is to lower the selling price. As we know the theory of demand,
consumers are encouraged to demand more of a product if its price is lower
than its competitors. However, this option may not be feasible in all cases,
given that the firms in an industry are faced with similar inputs and same
prices.
• Another alternative for the firm or potential entrepreneur is to differentiate
its product from existing product lines in the industry. Product
differentiation can alter the shape, contents, and package of a product to
create a brand that would establish loyalty from its customers. Because of
this brand loyalty, even if the price of the differentiated product is higher
than the current product lines in the industry, there will still be a significant
number of customers that will purchase the commodity.
- The suppliers of the major inputs can also provide business ideas to potential
entrepreneurs. The increase in the price of raw materials for example, can put
pressure on firms to seek alternatives types and source of raw materials. For
example, the cost of printing packaging materials made the producer of Safeguard to
combine three bars into one packaging unit instead of packing them individually.

-This practice has reduced the price of packaging soaps significantly and has
encourage volume sales. The abundance of water lilies along Pasig River inspired
entrepreneurs to produce mats, bags, and other handicrafts made of water lilies.
Similarly, after the eruption of Mount Pinatubo in the 1990s many enterprising
individuals used the larva and mud from lahar to craft figurines and other
collectibles.