Creativity and Business Idea

 SOURCES OF NEW IDEAS

 Some of the more fruitful sources of ideas for entrepreneurs include consumers, existing

products and services, distribution channels, the federal government, and research and

 development.

 Consumers

 Bidding entrepreneurs pay close attention to potential customers.

 It may be informally monitoring potential ideas and needs or formally giving consumers

 an opportunity to express their opinions. The idea or need has to have a large enough market to support a
new

 venture.
 Existing Products and Services

 Potential entrepreneurs can monitor and evaluate competitive products/services in the

market. On the basis of their evaluation they can produce a new product/service that
has more market appeal and sales and profit potential.

 Distribution Channels

 Members of the distribution can be a good source to collect market information as they
have direct contact with end user. Channel members can give suggestions on
completely new products, as well as help marketing newly developed products.
 Federal Government
 The files of the Patent Office contain numerous new product
possibilities. Although the patents themselves may not be feasible,
they can suggest other more feasible product ideas. Several
government agencies and publications are helpful in monitoring
patent,
 Second, new product ideas can evolve in response to government
regulations. Eg.Fastag
 Research and Development
 The largest source of new ideas is the entrepreneur’s own “research
and development” efforts, which may be a formal endeavour
connected with one’s current employment or an informal one in a
basement.
METHODS OF GENERATING IDEAS/ CREATIVE PROBLEMSOLVING
TECHNIQUES

 Focus Groups

 In a focus group, a moderator leads a group of people through an open, in-depth

discussion to solicit participant response. For a new product area, the moderator
focuses the discussion of the group in either a directive or a nondirective manner. The
group of 8–14 participants is stimulated by comments from each other in creatively
conceptualizing and developing a new product/service idea to fill a market.

 In addition to generating new ideas, the focus group is an excellent method for initially
screening ideas and concepts.
 Brainstorming
 The brainstorming method encourages people to be creative when in company of other
likeminded members. Out of 100s of idea generated only few may be put to practice.

 When using brainstorming, four rules need to be followed:

 No criticism is allowed by anyone in the group—no negative comments.

 Freewheeling is encouraged—the wilder the idea, the better.

 Quantity of ideas is desired—the greater the number of ideas, the greater the likelihoo
of the emergence of useful ideas.

 Combinations and improvements of ideas are encouraged; ideas of others can be used
to produce still another new idea.

 A large commercial bank successfully used brainstorming to develop a journal that

would provide quality information to its industrial clients. The brainstorming among
financial executives focused on the characteristics of the market, the information
content, the frequency of issue, and the promotional value of the journal for the bank .
 Brainwriting

 Brainwriting is a form of written brainstorming. It was created by Bernd Rohrbach at

the end of the 1960s under the name Method 635 and it gives members more time to
think.

 Brainwriting is a silent, written generation of ideas by a group of people. The

participants write their ideas on special forms or cards that circulate within the group,
which usually consists of six members. Each group member generates and writes down
three ideas during a five-minute period. The form is passed on to the adjacent person
who writes down three new ideas, and so on, until each form has passed all
participants.

 A leader monitors the time intervals and can reduce or lengthen the time given to
participants according to the needs of the group. Participants can also be spread
geographically with the sheets rotated electronically.
 Problem Inventory Analysis

 Problem inventory analysis uses individuals to generate new product ideas by listing
down problems in the existing product category .

 This method is more effective as it is easy to find problems in existing product and
produce new product which eliminates problems in the existing product rather than a
completely new product idea Problem inventory analysis can also be used to test a new
product idea.

 Reverse Brainstorming

 Reverse brainstorming is brainstorming where criticism is allowed.

 In fact,the technique works by asking such questions as “In how many ways can this
idea can fail?” Since the focus is on the negative aspects of a product, service, or idea,
care needs to be taken to maintain the group’s morale. Reverse brainstorming can be
effectively used better than other creative techniques to stimulate innovative thinking.

 The process usually involves the identification of everything wrong with an idea,
followed by a discussion of ways to overcome these problems
 Gordon Method

 The Gordon method begins with group members not knowing the exact nature of the
problem. This ensures that the solution is not clouded by preconceived ideas and
behavioural pattern.

 The entrepreneur starts by mentioning a general concept associated with the problem.
The group responds by expressing a number of ideas. Then a concept is developed,
followed by related concepts, through guidance by the entrepreneur. The actual
problem is then revealed, enabling the group to make suggestions for implementation
or refinement of the final solution.

 Checklist Method

 In the checklist method, a new idea is developed through a list of related issues or
suggestions.

 The entrepreneur can use the list of questions or statements to guide the direction of
developing entirely new ideas or concentrating on specific “idea” areas. The checklist
may take any form and be of any length.


 Free Association

 One of the simplest methods that entrepreneurs can use to generate new ideas is free association.

 This technique is particularly helpful in developing an entirely new slant to aproblem. First, a
word or phrase related to the problem is written down, then another andanother, with each new
word attempting to add something new to the ongoing thought processes,thereby creating a chain
of ideas ending with a new product/service idea emerging.

 Forced Relationships

 Forced relationships, as the name implies, is the process of forcing relationships amongsome
product combinations. It is a technique that asks questions about objects or ideas in an effort to
develop a new idea.

 The new combination and eventual concept is developedthrough a five-step process:

 1. Isolate the elements of the problem.

 2. Find the relationships between these elements.

 3. Record the relationships in an orderly form.

 4. Analyze the resulting relationships to find ideas or patterns.

 5. Develop new ideas from these patterns.

 Collective Notebook Method

 In the collective notebook method, a small notebook containing a statement of the problem and any
pertinent background data—is distributed. Participants study problem and note down its possible
solutions thrice in a day in the notebook. At the end of a week, a list of the best ideas is developed,
along with any suggestions. This technique can also be used with a group of individuals record their
ideas, giving their notebooks to a central coordinator who summarizes all the material and lists the
ideas.

 Attribute Listing

 Attribute listing is a technique in which the entrepreneur lists down all the attributes of the product
negative as well positive to arrive a a new product or service.

 Big-Dream Approach

 The big-dream approach means the entrepreneur should think big . he should think about new ideas
without thinking about problems or constraints.

 Ideas should be conceptualized without any constraints until an idea is developed into a workable
form.

 Parameter Analysis

 A final method for developing a new idea—parameter analysis—involves two aspects:parameter

identification and creative synthesis.


 Innovation

 Innovation is very important for the economic

development of any company, region of a country, or
country itself. With technological changes older
products/services decrease in sales and old industries
dwindle. Inventions and innovations are the building
blocks of the future of any economic unit.
 Types of Innovation

 There are various levels of the degree of innovation based on the uniqueness of the idea.
 Breakthrough Innovation .These are unique innovations on which future innovations in an area are developed. These
innovations are protected by strong patents, trade secrets, and/or copyrights.
 Breakthrough innovations include such ideas as penicillin, the steam engine, the computer, the airplane, the automobile, the
Internet, and nanotechnology
 Technological Innovation .These innovations occurs more frequently and is not the same as scientific discovery and
advancement.
 These are very meaningful innovations, as they do offer advancements in the product/service/market area. As such, they usually
need to be protected. Eg.Personal computers, Jet Airplane.
 Ordinary Innovation. It is the one that occurs most frequently.These more numerous innovations usually extend an existing
innovation into a better product or service or one that has better market appeal.
 These innovations come from market analysis and pull, not technology push. In other words, the market has a stronger effect
on the innovation (market pull) than the technology (technology push).

.
Defining a New Innovation (Product or Service)

 Entrepreneurs often face a dilemma in defining a “new” product/service or identifying

 what is actually new or unique idea. Sony made the Walkman one of the most
popular new products of the 1980s, although the concept of cassette players had been in
existence for many years.

 . Other types of products not necessarily new in concept, have also been defined as
new. When coffee companies introduced naturally decaffeinated coffee, the initial
promotional campaigns made strong use of the word new in the copy.
 When soft drinks started to be sold in cans, some consumers viewed the product as
new, even though the only difference was the packaging
Classification of New Products

 New products may be classified from the viewpoint of either the consumer or the firm.
Both points of view should be used by the entrepreneur to facilitate the successful launch
of any new product.


From a Consumer’s Viewpoint

 There is a broad interpretation of what is a new product from the consumer’s viewpoint.
O new products classifies the degree of Newness of a product can be determined by
how much behavioural change or new learning is required by the consumer to use the
product. This technique looks at newness in terms of its effect on the consumer rather
than whether the product is new to a company, is packaged differently, has changed
physical form, or is an improved version of an old or existing product.
 Examples are annual automobile style changes, fashion style changes, package changes, or
product size or colour changes. Products such as compact discs, the Sony Walkman, and the
iPod tend toward the “dynamically continuous” portion of the continuum. The truly new
products, called “discontinuous innovations,” are rare and require a great deal of new
learning by the consumer because these products perform either a function or an existing
function in a significantly new way. The Internet is one example of a discontinuous
innovation that has radically altered our society’s lifestyle. Another is digitalization and
digital media.
 From a Firm’s Viewpoint
 The innovative entrepreneurial firm, in addition to recognizing the consumer’s perception of
newness, should also classify its new products on some dimensions. Others include
nanotechnology and social media. One way of defining new products is when an important
distinction is made between new technology and new markets (i.e., market development).
New products/services are defined in terms of the amount of improved technology, whereas
market development is based on the degree of new segmentation.
 When a new technology is used to produce a product meant for new market the risk
becomes higher. In this case the firm will need carefully planned and new marketing
strategy. The new marketing strategy can be a combination of replacements, extensions,
product improvements, reformulations and remerchandising.

Various steps from Idea to end use

 Idea stage
 Concept stage
 Product development stage
 Test marketing stage
 Ecommerce and Business startup
 Using E-Commerce Creatively An entrepreneur has three basic options when it comes to
managing an e-commerce site: full in-sourcing, full outsourcing, or a hybrid approach.
 E-Commerce Channels : Websites and Dedicated Mobile-Optimized Web Sites and Apps


Domestic and international opportunities

 The key to successful domestic and international entrepreneurship is to develop an idea

that has a market for the new product/service idea conceived.
 One way to evaluate an opportunity is through developing an opportunity assessment
plan.
 An opportunity assessment plan has four sections :
 The first major section discusses and develops the product/service idea, analyzes the
competitive products and companies, and identifies the uniqueness of the idea in terms
 of its unique selling propositions.
 This section includes:
 • A description of the product or service.
 • The market need for the product or service.
 • The specific aspects of the product or service.
 • The competitive products presently available filling this need and their features
 and prices.
 • The companies in this product/service market space.
 • The unique selling propositions of this product/service
 The second major section of the opportunity assessment plan focuses on the market—
 its size, trends, characteristics, and growth rate. It includes:
 • The market need filled.
 • The social condition underlining this market need.
 • Any data available to describe this market need.
 • The size, trends, and characteristics of the domestic and/or international market.
 • The growth rate of the market.

 The third section (a minor one) focuses on the entrepreneur and the management team
 in terms of their background, education, skills, and experience. It should include answers
 to the following questions:
 • What is exciting about this opportunity?
 • How does the product/service idea fit into the background and experience of the
 entrepreneur and team?
 • What business skills and experience are present?
 • What business skills and experience are needed?
 • Is there someone who has these needed skills and experience?
 The final section of the opportunity assessment plan develops a time line indicating
 what steps need to be taken to successfully launch the venture by translating the idea
into a viable business entity. This section should focus on:
 • Identifying each step.
 • Determining the sequence of activities and putting these critical steps into some
sequential order.
 • Identifying what will be accomplished in each step.
 • Determining the time and money required at each step.
 • Determining the total amount of time and money needed.
 • Identifying the source of this needed money
 International Entrepreneurship
 International entrepreneurship is the process of an entrepreneur conducting business
activities across national boundaries. It may consist of exporting, licensing, opening a
sales office in another country, or something as simple as placing a classified
advertisement in the Paris edition of the International Herald Tribune.
 When an entrepreneur executes his or her business model in more than one
country,international entrepreneurship is occurring.
 International business has become very important to firms of all sizes today as every
firm is competing in a hypercompetitive global economy.
 Both international and domestic entrepreneurs are concerned with sales, costs, and
profits, what differentiates domestic from international entrepreneurship is the variation
in the relative importance of the factors affecting each decision.
Factors effecting global entrepreneurial decisions

 Political
 As government continues to play a greater role in regulating business activity, it is
important that the entrepreneur understand all the political and legal aspects that can
facilitate or impede business growth. This includes the following:
 • Methods of enacting public policy
 • Influencers on policymaking
 • Wars and conflicts between governments
 • Government stability and risk
 Economic

 A country’s political environment is inextricably tied to the economic environment,

especially when issues of taxation and trade are concerned. These and the following
listed below are some of the important factors to consider when conducting a proper
economic environment analysis:
 • Taxation and trade
 • Monetary policy
 • Distribution
 Trends
Social

 Trends are closely related to social influencers that should be analyzed to ensure your
 product has market appeal. Four types of social factors include:
 • Psychographics
 • Language
 • Ethics
 • Major events
 Technological
 The rate of technology adoption (such as the Internet connection speed) and general
technology maturity and availability are often surprising, particularly to an
entrepreneur from a developed country
 Corporate Social Responsibility
It is very important than ever that a company’s CSR efforts are aligned with company
operations. When a company’s day-to-day operating procedures do not align with the
socially responsible image portrayed in their marketing, it can quickly give way to
customer mistrust.
Motivation to go Global

 Profits
 • Competitive pressures
 • Unique product(s) or service(s)
 • Excess production capacity
 • Declining home country sales
 • Unique market opportunity
 • Economies of scale
 • Technological advantage
 • Tax benefits
Entrepreneural Entry Strategies

 There are various ways an entrepreneur can market products internationally. The
method of entry into a market and the mode of operating overseas are dependent on the
goals of theentrepreneur and the company’s strengths and weaknesses.
 Exporting
 Non Equity arrangement
 Direct foreign investment
Exporting
involves the sale and shipping of products manufactured in one country to a
customer located in another country.

 Exporting is of 2 types
 Direct exporting Direct exporting is done through independent distributors or the
company’s own overseas sales office

 Indirect exporting. Indirect exporting involves having a foreign purchaser in the local
market or using an export management firm.
Non equity arrangements
It allows the entrepreneur to enter a market and obtain sales and profits without any direct equity
investment.

 3 types of non equity arrangements.

 Licensing involves an entrepreneur who is a manufacturer (licensee) giving a foreign
manufacturer (licensor) the right to use a patent, trademark, technology, production
process or product in return for the payment of a royalty.
 Turn Key Projects One solution to enter foreign markets is to have a foreign
entrepreneur build a factory or other facility, train the workers, train the management, and
then turn it over to local owners once the operation is going—hence the name turnkey
operation.Entrepreneurs have found turn-key projects to be an attractive alternative.
 Management Contracts A final nonequity method the entrepreneur can use in
international business is the management contract. The management contract allows the
purchasing country to gain foreign expertise without giving ownership of its resources to
a foreigner.
Foreign Direct Investment

 The wholly owned foreign subsidiary has been a preferred mode of ownership for
entrepreneurs using direct foreign investment for doing business in international
markets.
Joint ventures and minority and majority equity positions are also methods for making
direct foreign investments.