Chapter 4 Creativity and the Business Idea Mc

Learning Objectives • To identify various sources of ideas for new ventures • To discuss methods available for generating new venture ideas • To discuss creativity and the techniques for creative problem solving • To discuss the importance of innovation 4 -2

Learning Objectives • To understand an opportunity assessment plan • To discuss the aspects of the product planning and development process • To discuss aspects of e-commerce and starting an e-commerce business 4 -3

Table 4. 1 - Trends of the Next Decade 4 -4

Sources of New Ideas • Consumers • Entrepreneurs should: • Formally or informally monitor potential ideas • Ensure that the idea represents a large enough market to support a new venture • Existing products and services • Formally monitor and evaluate competitive products and services on the market 4 -5

Sources of New Ideas • Distribution channels • Help suggest and market new products • Federal government • Taking cue from pending patents • Ideas evolve in response to government regulations • Research and development • Formal endeavor connected with one’s current employment 4 -6

Methods of Generating New Ideas • Focus groups • Open in-depth discussion led by a moderator • Brainstorming • Group method for obtaining new ideas and solutions • Rules of brainstorming • No criticism • Freewheeling is encouraged 4 -7

Methods of Generating New Ideas • Quantity of ideas is desired • Combinations and improvements of ideas are encouraged • Brain writing • Form of written brainstorming • Problem inventory analysis • Obtaining new ideas and solutions by focusing on problems • Used to test a new product idea 4 -8

Creative Problem Solving • Method for obtaining new ideas focusing on the given parameters • Can be stifled by perceptual, cultural, emotional, and organizational factors 4 -9

Table 4. 3 - Creative Problem-Solving Techniques 4 -10

Creative Problem Solving • Brainstorming • Reverse brainstorming • Group method for obtaining new ideas by focusing on the negative aspects • Care must be taken to maintain group morale • Gordon method • Developing new ideas when the individuals are unaware of the problem 4 -11

Creative Problem Solving • Ensures that solutions are not clouded by preconceived ideas and behavioral patterns • Checklist method • Developing a new idea through a list of related issues • Free association • Developing a new idea through a chain of word associations 4 -12

Creative Problem Solving • Forced relationships • Developing a new idea by looking at product combinations • Focused on generating ideas from relationship patterns between elements of a problem • Collective notebook method • Developing a new idea by group members regularly recording ideas 4 -13

Creative Problem Solving • Attribute listing • Developing a new idea by looking at the positives and negatives • Big-dream approach • Developing a new idea by thinking without constraints • Parameter analysis • Developing a new idea by focusing on parameter identification and creative synthesis 4 -14

Figure 4. 1 - Illustration of Parameter Analysis 4 -15

Innovation • Types of innovation • Breakthrough • Extremely unique innovations that establish the platform on which future innovations can be developed • Should be protected by patents, trademarks, and copyrights • Technological • Advancements in the product/market area • Needs to be protected 4 -16

Innovation • Ordinary • Extend technological innovation into a better product or service or one that has a different market appeal • Result of market analysis and pull and not technological push 4 -17

Innovation • Defining a new innovation (product or service) • Newness of a product can be attributed to: • Consumer concept • Change in the package or container • Modifications in the appearance of the product (industrial market) 4 -18

Innovation • Classification of new products • Consumer’s viewpoint • Determines newness in terms of its effect • Degree of newness depends on: • Level of behavioral change or new learning required by the consumer 4 -19

Figure 4. 3 - Continuum for Classifying New Products 4 -20

Innovation • Firm’s viewpoint • An innovative entrepreneurial firm should: • Make a distinction between new products and new markets • New products - Defined in terms of amount of improved technology • Market development - Based on the degree of segmentation 4 -21

Figure 4. 4 - New Product Classification System 4 -22

Figure 4. 5 - A Model of the Opportunity Recognition Process 4 -23

Product Planning and Development Process • Product life-cycle: Stages each product goes through from introduction to decline • Product planning and development process: Stages in developing a new product 4 -24

Product Planning and Development Process • Evaluation criteria • • • Market opportunity Competition Marketing system Financial factors Production factors 4 -25

Figure 4. 6 - The Product Planning and Development Process 4 -26

E-commerce and Business Start-up • Offers entrepreneurs an opportunity to be creative and innovative • Factors that facilitate growth • Widespread use of personal computers • Adoption of intranets in companies • Acceptance of the Internet as a business communications platform • Faster and more secure systems 4 -27

E-commerce and Business Start-up • Using E-commerce creatively • An entrepreneur has to decide whether he or she will run the Internet operations: • Within the company or outsource these operations to Internet specialists • Integrate front-end and back-end operations • Integrate customer orders, with distribution channels and manufacturing capabilities • Allow flexibility for specific customer orders 4 -28

E-commerce and Business Start-up • Web sites • Important features include: • • • Ease of use Search capability E-mail response system Speed Compatibility with different browsers and platforms 4 -29

E-commerce and Business Start-up • Tracking customer information • Provides personalized one-to-one marketing • Laws protecting the privacy of individuals should be followed 4 -30

E-commerce and Business Start-up • Doing E-Commerce as an entrepreneurial company • Essential criteria • Economic and convenient delivery of products • Products should cater to a wide market • Feasibility of shipping outside own geographical location • Significant cost reductions • Ability to economically draw customers to its Web site 4 -31