TOPIC : 2

ENTREPRENEURIAL IDEAS, CREATIVITY

AND INNOVATION

DIBENTANG OLEH :
NURULHUDA BINTI KHAIRUDIN
POLITEKNIK UNGKU OMAR
 CHAPTER IN TOPIC :

2.1 Discuss the sources of entrepreneurial ideas

2.2 Explain techniques for generating new business ideas
2.3 Present the process of generating and evaluating business ideas
2.4 Transform ideas into business opportunities using Business Model Canvas

CLO & CLUSTER ASSESSMENT

CLO 1 Propose the value proposition of Product Pitching 35%

entrepreneurial idea using Business Model SLT : 6 hours (F2F)
Canvas (A3. CLS 3b)
5 hours (NF2F)
 CHAPTER 2 : ENTREPRENEURIAL IDEAS, CREATIVITY &

2.1 SOURCES OF
INNOVATION

ENTREPRENEU
RIAL IDEAS
 Entrepreneurial
Entrepreneurial Ideas Ideas
/ Business Ideas Opportunities
A concept that result in

1 2
The potential to create something
profits if it is turned into a new that involved changes in
tangible product or service. knowledge, technology, politics, social
and demographic conditions.
Creativity
Creative people are naturally
curious, inquisitive, bright, and
Innovation

3 4
highly flexible when thinking. They A process by which a product or
keenly observe their environment services is renewed and brought
and have an eye for spotting new up to date by applying new
trends that could spark a business processes, introducing new
opportunity. techniques, or establishing
successful ideas to create new
value.
Creativity and
innovation
ENTREPRENEURIAL IDEAS, CREATIVITY & INNOVATION

WHEN does business “

“ opportunity can exist?

# Customer needs a
# A product does not product which is not
meet customer’s available in market.
expectation.

7
 2.1.1 Sources Of
Entrepreneurial
1. PRIMARY
Ideas 2. SECONDARY
SOURCES SOURCES
Also known as library
First-hand data or research
information gathered
through observation, Involve gathering data
experiments, interviews, that have already been
and survey compiled and are
Also known as field available, often at a very
research involves reasonable cost or
conduction and sometimes even free.
compilation of research. Eg: magazines, books,
Cost of preparing for the company data, annual
research and collecting
report can be used as
data is expensive
references of identifying
and seeking business
ideas.
 Types of Primary
Sources
Observation
Observing behaviour and norms of
1 2
selected groups in an area where
business idea or our future business
project is to be carried out.
Interview
3 4
Field research covers interviews with
customers, suppliers, competitors
and industry experts. The interviews
can be conducted in two ways:
personal interview and telephone
interview.
Experiments
Product sampling. The entrepreneur
makes a number of sample
products and provides them to a
small group of consumers. The
result of this experiment can then
be used to determine how well the
product is received by consumers.
Surveys
Development of short questionnaire
with respect to the targeted product.
Question and answers provided
should be very specific.
 Types of
Secondary Sources
1. RELIABLE EXISTING DATA
That can be used by entrepreneur is
existing data which is reliable for
example information obtained from
annual report of companies
2. REFERENCES
An entrepreneur can use
references such as published
information from library, Internet,
and paid database services which
provide information on market
growth, overall industry
perspectives and customers
profiles to find information that can
help generate ideas and solutions.
3. MASS MEDIA AND ELECTRONIC MEDIA
Advertisement and information in
newspaper, magazine, and internet.
An entrepreneur can obtain business ideas
and opportunities through these sources
and may be able to duplicate businesses
that are available in other places.
Example: information on raw materials can
be a business opportunity for an
entrepreneur. An advertisement on the
vacant position of a salesman is also a
business opportunity for an unemployed
individual.
In era if information and communications
technology, the Internet becomes a vital
source of quick and accurate information
on business idea.
 2.2 CHAPTER 2 : ENTREPRENEURIAL IDEAS, CREATIVITY &
INNOVATION

TECHNIQUES
FOR
GENERATING
NEW BUSINESS
IDEAS
 brainstorming

Also known as conference technique, allows people to be stimulated to a

greater creativity by meeting with others and participating in organized group
experience.

Rules must be followed:

- No criticism is allowed by anyone in the group especially negative comments.
- Freewheeling is encouraged because as the idea is wider, it become better.
- Quality of ideas is desired. The greater the number of ideas, the greater the
likelyhood of the emergence of the useful ideas
- Combinations and improvements of ideas are encouraged because ideas of
others can be used to produced other new ideas.
 FOCUS GROUP
A focus group is a small, but demographically diverse
group of people and whose reactions are studied
especially in market research or political analysis in
guided or open discussions about a new product or
something else to determine the reactions that can be
expected from a larger population.

A focus group consists of a group of individuals who are asked questions

about their opinions and attitudes towards certain products, services, or
concepts. Focus groups are a common qualitative market research
technique used by companies or other entities, and are intended to
provide understanding of consumer perception about certain topics.
They are preferred over interviews, as they elicit group members to
interact and influence each other.
 SURVEYS
A survey is a method of gathering information from a sample of
people, traditionally with the intention of generalizing the
results to a larger population. Surveys provide a critical source
of data and insights for nearly everyone engaged in the
information economy, from businesses and the media to
government and academics.

Surveys can take multiple forms but are most common in the
form of a questionnaire, either written or online.

There are four modes of survey data collection that are commonly used.
1.Face-to-face surveys
2.Telephone surveys
3.Self-administered paper and pencil surveys
4.Self-administered computer surveys (typically online)
2.3 PROCESS OF CHAPTER 2 : ENTREPRENEURIAL IDEAS, CREATIVITY &
INNOVATION

GENERATING
AND
EVALUATING
BUSINESS
IDEAS
2.3.1 Process of Organizing,
Analyzing and Choosing
Business Opportunity
For an entrepreneur, identifying, analyzing, and choosing
business opportunities are essential to determine if the
venture can make profits and sustain its competitiveness.

Whether the opportunity is identified through input from

consumers, business associates, channel members, or
technical people, each opportunity must be carefully
screened and evaluated.

Evaluation is the most critical element in the

entrepreneurship process. There are six major steps in
recognizing, analyzing, and choosing a business
opportunity.
2.3.1 Process of Organizing,
Analyzing and Choosing
Business Opportunity
1. Recognizing customers needs and wants

2. Analyzing or scanning the environment

3. Performing self-assessment

4. Choosing Business Opportunities

5. Assessing the Values, Responses, and Acceptance of

Society

6. Preparing or constructing a business plan

2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
1. Recognizing customers needs and wants

An entrepreneur has to be sensitive in identifying the

needs and wants of customers in order to recognize
business opportunities. A need is something basic in life
such as food, clothing, and shelter. Wants are something Group Task:
Discuss and give another
that is more than basic need and is determined by an
example what are the
individual’s lifestyle, educational level, purchasing power,
products and services
and personality. Examples of wants are a motorcycle, fast that can fulfil needs and
food, radio, and recreation and entertainment. wants. Its easy guys…….
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
2. Analyzing or Scanning the environment

The business environment should be analyzed in

terms of demographic, new government policies and
regulations, data import and export, development
projects by public and private sectors, technological
breakthrough, and sources from the mass media and
electronic media.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
a. Demographics such as population structure, income, and taste

Demographics are the characteristics of people in a population. An entrepreneur who

studies the demographics of his customers will be in a better position to predict the
products or services that they will buy. Needs and wants are based on structure, income,
and taste of the population.

Example, the needs and wants of teenagers will not be the

Group Task:
Discuss and give another
example characteristic of
people based on level of
income, taste and age.
What are the products and
services suit for them???
same as those of adults and children.
Additionally, the level of income influences the purchasing
power of buyers. A higher level of income will lead to higher
purchasing power.
Consumer's tastes change from time to time. Nowadays the
Malaysian community prefers to buy their meals and not cook at
home. This leads to an increase in demand for fast food.
2.3.1Process of Organizing, Analyzing and
Choosing Business Opportunity
b. New government policies and regulations

An entrepreneur can identify business opportunities by

referring to the existing law and government regulations.

Example, rules and regulations pertaining to the emission

Group Task:
of smoke, speed traps, installation of black boxes for
Discuss and give another
express buses, installation of a third brake light, the use of
example regarding rules
helmets and safety belts, and the use of plastic containers
and regulation we need to
to rear fish can be perceived as business opportunities
follow during Pandemic
and not problems.
Covid – 19 where lead to
business opportunity
2.3.1Process of Organizing, Analyzing and
Choosing Business Opportunity
c. Data on import and export

The continuous increase in the value and quantity of imported and

exported products or services reflect a potential market at the local and
international level. The same goes for policies on import substitution
industries and export promotion. These issues can be seen as
profitable opportunities.

Example, the pattern of import and export can provide information

pertaining to business opportunities.

The demand for imported commodity increases yearly,

indicating that there is a chance to offer new products as
an import substitution. Meanwhile, there is a tremendous
increase in exported products, which would enable the
entrepreneur to offer goods for export purposes.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
d. Development projects by the public and private sectors
There are various development projects by the
government and firms that have directly or indirectly
opened up business opportunities for entrepreneurs.

e. Technology
New technology breakthrough can create new markets and opportunities for business.

Example, the invention of semi-conductors has created business opportunities in the

computer, handicraft, and agriculture-related industries in terms of design, product
formulation and manufacturing, materials, and distribution.

f. Mass media and electronic media

Advertisements and information in daily newspapers, magazines, and the Internet can
be sources for generating business ideas
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
3. Performing Self- Assessment

In choosing business opportunity, self-assessment

must be made before making a commitment. It
should be based on the individual’s experience,
knowledge, skills, financial ability, interest and
networking ability.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
a. Experience

Years of
experience An entrepreneur runs a business that suits his experience
working in the profession.
as a CHEF at a
HOTEL will
enable the
individual to set The intelligence to find an
up and operate a opportunity from past experience can be a
restaurant on his way gain success in business.
own.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
b. Knowledge

Experience alone is not enough to run a business. The entrepreneur has to

be equipped with the knowledge on operating a business.

Example, when a chef opens restaurant, he must know how to prepare food,
manage the business, prepare accounts, arrange his staff’s duty schedule,
and how to serve his customers well. Although he can hire someone to
perform these jobs, it is better if the entrepreneur himself does the work to
make better understanding.
c. Skills
The entrepreneur must have necessary skills in carrying out his job. Skills are usually
born from experience and knowledge. As skills are not possessed by everyone, it is
considered to be an important asset. This is an advantage that is difficult to obtain.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
d. Financial ability
If the entrepreneur wants to run a big business, he needs a huge sum
of money in the form of capital, and his desire may not be fulfilled due
to insufficient capital. Capital is the most basic aspect to think about
before opening a business. If the financial ability is limited,
entrepreneur can start with small business or order platform with zero
capital.

As such, starting a business that is less capital than other business

does not mean that an entrepreneur cannot be successful. As a small
business grow, the entrepreneur’s financial ability will grow with the
corresponding increase in profits.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
e. Interest

Interest is an important aspect that must be taken seriously as it

can give self – confidence and a sense of responsibility towards
the business. With interest, entrepreneur will be able to
concentrate and put effort.

f. Networking ability

Creating a network with relevant parties and seeking their

cooperation will result in a win-win situation. Entrepreneur also need
to reduce unnecessary procedures and bureaucracy in business.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
4. Screening or choosing business opportunities

The entrepreneur must choose a business

opportunity according to several criteria which are:
a. Legality
b. Competitors
c. Capital requirement
d. Risk
 2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
a. Legality

Group Task: A business idea that has been suggested must be approved by the law.
Discuss what are the Although the business can produce high profits, it should not be one which is
unlawful businesses? against the law.

What we can do if our Example, the pirated compact discs (CD) business can make profits easily.
business ideas to sell However, it is against the law to produce and sell pirated CDs.
the product or service
already exist in the b. Competitors
market? How can you An entrepreneur in a new venture must really analyze his competitors in the industry.
do to make sure that Competitors are those who are in the same business, fulfilling customers’ needs which are
your business can similar to those of entrepreneur, or have the potential to serve the entrepreneur’s
challenge competitors customers. An entrepreneur can identify competitors by asking customers from his
in same industry? existing business or potential customers through business directories. Once competitors
are identified, the entrepreneur should identify the strengths and weaknesses of his
competitors in term of organizational resources, such as human resources, financial and
physical asset, and reputation.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
c. Capital Requirement

Capital refers to amount invested in the company so that it can carry

on its activities.

There are three types of capital required for business operation which
are fixed, or permanent capital purchased of assets of durable nature
that are to be used repeatedly and over a long period for example
building, land, equipment, machine, and others.

Working capital. It referred to as operating capital. This capital can be

used to support business operation involving a short period of time for
example, salaries, pay bills, buy inventories, buy materials, rent,
promotion and others.

Growth capital. This capital is needed when businesses undergo

development or changes according to the direction of the business.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
d. Risk

Risk can be defined as a period of uncertainty experienced by a business as a result of unforeseen events
which leads to either poor earnings and resultant failure, or inadequate cash flow on operating expenses.
Risk faced by entrepreneur are often based on the following aspects:

a. The level of difficulties in entering the business field

b. The size or amount of capital to be invested
c. The amount of profit that can be gained from the revenue
d. The ability and competency of existing workforce or human resources in managing the business
e. Management of energy resources
f. The product’s potential to penetrate the market.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
d. Risk

Business risk are the factors which have the tendency and potential of adversely affecting a
business operation and ultimately its profitability. There are two types of business risk which are
controllable and uncontrollable. Controllable business risk are those that can be managed by the
entrepreneur such as quality of products, strong competition and defect of machines. Uncontrollable
business risk are those that are almost impossible to prevent such as economic recession, natural
disasters and also pandemics in term of health.
Financial risk is normally any risks associated with any form of financing.
Example of financial risk are credit risk when clearing or settlement of
Group Task:
payments are not made when due, and when debtors are not able to meet
Discuss the business
that obligation. Next is liquidity risk when the liquid resources (cash)
risk and financial risk
insufficient to make all payments on the due date and also running the
regarding current
business operation. Next is loan risk where entrepreneur borrow money as a
situation of Pandemic
source of capital to conduct his business and he fails to make payment on
Covid – 19.
time and the last one is currency exchange risk where most currency are
valued according to the marketplace which keeps constant change to
exchange rate.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
5. Assessing the Values, Responses, and
Acceptance of Society

The chemistry between a business idea and the

society is an important aspect that must be taken into
consideration before starting a business. A business
Group Task:
opportunity must be consistent so as not to oppose
Discuss and give example the society’s acceptance in term of consumers’
what are the products and values, norms and culture.
services that you must
consider about society’s
acceptance in term of
values, norms and culture.
2.3.1 Process of Organizing, Analyzing and
Choosing Business Opportunity
6. Constructing the Business Plan

The ability to plan is a key skill for entrepreneurs. They

must be able to develop plans to meet goals in a variety
of areas, including finance, marketing, production, sales
and personnel (hiring and maintaining productive and
satisfied employees).

Preparing business plan is the final step taken by an

entrepreneur in recognizing, analyzing, and choosing a
business opportunity. (will discuss in Chapter 4)
 2.3.2 Identify the Business Idea
Using Creative Thinking
Techniques
Brainstorming technique Recognizing customers needs and wants

Analyzing or scanning the environment

Focus Group and Survey technique

Choosing Business Opportunities

Example, we can use brainstorming technique to recognize customers needs and wants then try to
find 5 business ideas. After that try to use survey technique to get business idea about customer’s
demographics. What are the products or services that suit to each customer preference in term of age,
gender, income level and taste. Furthermore, use focus group to find as much information, pro and
cons also knowledge from other people or expertise in small group for example about policies and
regulations, import export data, development project, capital requirement and business risk that will
help us to choose the best business ideas and opportunity.
 2.3.3 Transform Ideas into Business
Opportunities
Step 02
Step 01 IDEA CONVERSION Step 03 OPPORTUNITY
PROCESS

Entrepreneur may generate the idea based
on his personal knowledge. For example, to
open a new branch, to manufacture a new
product or to offer discount for attracting
new customers etc. For the successful
business development, an entrepreneur
should follow a process of evaluating a
business idea or concept, as to determine
whether to move ahead with the project or
not and then setup a business.
Entrepreneur will conduct a study or
survey based on the four factors i.e.,
his skills, knowledge, competencies
and creative thinking. Entrepreneur
may analyze the generated ideas
based on those four factors whether
the idea is advantageous or not for the
success of his enterprise. In short this
step is the main cause for the
transformation of ideas into
opportunity.
An opportunity in business refers to
business proposal that an entrepreneur
would like to pursue by considering
both risk and reward involved in it.
It is very common that many people
come with many ideas but only few can
properly transform their ideas using
required skills and knowledge of
business into an opportunity for their
business enterprise.
2.4 TRANSFORM CHAPTER 2 : ENTREPRENEURIAL IDEAS, CREATIVITY &

IDEAS INTO INNOVATION

BUSINESS
OPPORTUNITIES
USING
BUSINESS
MODEL
CANVAS
business
model
“A business model describes the
rationale of how an organization
creates, delivers, and captures value”
From Business Model Generation
By Alexander Osterwalder & Yves Pigneur (2010)
4
 BUSINESS MODEL CANVAS (BMC)

2010 Simple and 9 blocks Hands on

Easy tools
Introduce by BMC is a simple and Consist of 9 building The objective is to creates
Osterwalder and easy framework to blocks to understand hands on tools that foster
Pigneur in year 2010 give an overview of the overall picture of understanding, discussion,
our chosen business
the business. creativity and easily can see
the idea in one blueprint.
building
blocks

9
BUSINESS STRATEGY BY BUSINESS
MODEL CANVAS (BMC)
 Your Business Model Canvas
KEY KEY VALUE RELATIONSHIPS CUSTOMER
PARTNERS ACTIVITIES PROPOSITION SEGMENT

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

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 Customer Segments

which customers and users are you serving?

which jobs do they really want to get done?

10
 Value Proposition

what are you offering them? what is that

getting done for them? do they care?

11
 Channels

how does each customer segment want to be reached?

through which interaction points?

12
 Customer Relationships

what relationships are you establishing with each segment?

personal? automated?

13
 Revenue Streams

what are customers really willing to pay for? how?

are you generating transactional or recurring revenues?

14
 Key Resources

which resources underpin your business model?

which assets are essential?

15
 Key Activities

Click to add text

which activities do you need to perform well in

your business model? what is crucial?

16
 Key Partners

which partners and suppliers leverage your model?

who do you need to rely on?

17
 Cost Structure

what is the resulting cost structure?

which key elements drive your costs?

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EXAMPLES
EXAMPLES

21
Kelly’s Lemonade Stand: Refreshing Lemonade
KEY KEY VALUE RELATIONSHIPS CUST OMER
PARTNERS ACTIVITIES PROPOSITION SEGMENT

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

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 Skype
KEY KEY VALUE RELATIONSHIPS CUSTOMER
PARTNERS ACTIVITIES PROPOSITION SEGMENT

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

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 task
1. Assemble in teams
2. Create canvas
3. Write key words on sticky notes
4. Place sticky notes on the canvas
5. Present your canvas

Choose Any Successful Company And Explain Its Business Model By Using Business
Model Canvas

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ASSESSMENT PRODUCT PITCHING
BMC of your online business project in
social media marketing platform

CLO1 – Propose the value

propositions of entrepreneurial
idea using Business Model
Canvas (A3 , CLS 3b)

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ENTREPRENEURIAL IDEAS, CREATIVITY & INNOVATION

SAMPLE OF PREVIOUS STUDENT ASSESSMENT

Watch here: https://youtu.be/_oHe6GTHP5I

https://youtu.be/EiR4J25lBs8

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