Chapter 4 Creativity and - PowerPoint Presentation

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Chapter 4

Creativity andthe Business Idea

McGraw-Hill/Irwin

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved

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Learning Objectives

To identify various sources of ideas for new venturesTo discuss methods available for generating new venture ideasTo discuss creativity and the techniques for creative problem solvingTo discuss the importance of innovation

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Learning Objectives

To understand an opportunity assessment planTo discuss the aspects of the product planning and development processTo discuss aspects of e-commerce and starting an e-commerce business

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Table 4.1 - Trends of the Next Decade

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Sources of New Ideas

ConsumersEntrepreneurs should: Formally or informally monitor potential ideasEnsure that the idea represents a large enough market to support a new venture

Existing products and servicesFormally monitor and evaluate competitive products and services on the market

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Sources of New Ideas

Distribution channelsHelp suggest and market new productsFederal governmentTaking cue from pending patents Ideas evolve in response to government regulations

Research and developmentFormal endeavor connected with one’s current employment

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Methods of Generating New Ideas

Focus groupsOpen in-depth discussion led by a moderatorBrainstormingGroup method for obtaining new ideas and solutionsRules of brainstorming

No criticismFreewheeling is encouraged

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Methods of Generating New Ideas

Quantity of ideas is desiredCombinations and improvements of ideas are encouragedBrain writingForm of written brainstormingProblem inventory analysis

Obtaining new ideas and solutions by focusing on problemsUsed to test a new product idea

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Creative Problem Solving

Method for obtaining new ideas focusing on the given parametersCan be stifled by perceptual, cultural, emotional, and organizational factors

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Table 4.3- Creative Problem-Solving Techniques

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Creative Problem Solving

BrainstormingReverse brainstormingGroup method for obtaining new ideas by focusing on the negative aspects

Care must be taken to maintain group moraleGordon methodDeveloping new ideas when the individuals are unaware of the problem

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Creative Problem Solving

Ensures that solutions are not clouded by preconceived ideas and behavioral patternsChecklist methodDeveloping a new idea through a list of related issuesFree association

Developing a new idea through a chain of word associations

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Creative Problem Solving

Forced relationshipsDeveloping a new idea by looking at product combinationsFocused on generating ideas from relationship patterns between elements of a problemCollective notebook method

Developing a new idea by group members regularly recording ideas

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Creative Problem Solving

Attribute listingDeveloping a new idea by looking at the positives and negativesBig-dream approachDeveloping a new idea by thinking without constraints

Parameter analysisDeveloping a new idea by focusing on parameter identification and creative synthesis

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Figure 4.1 - Illustration of Parameter Analysis

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Innovation

Types of innovationBreakthroughExtremely unique innovations that establish the platform on which future innovations can be developedShould be protected by patents, trademarks, and copyrights

TechnologicalAdvancements in the product/market areaNeeds to be protected

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Innovation

OrdinaryExtend technological innovation into a better product or service or one that has a different market appealResult of market analysis and pull and not technological push

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Innovation

Defining a new innovation (product or service)Newness of a product can be attributed to:Consumer concept Change in the package or containerModifications in the appearance of the product (industrial market)

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Innovation

Classification of new productsConsumer’s viewpointDetermines newness in terms of its effectDegree of newness depends on:Level of behavioral change or new learning required by the consumer

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Figure 4.3 - Continuum for Classifying New Products

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Innovation

Firm’s viewpointAn innovative entrepreneurial firm should:Make a distinction between new products and new marketsNew products - Defined in terms of amount of improved technologyMarket development - Based on the degree of segmentation

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Figure 4.4 - New Product Classification System

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Figure 4.5 - A Model of the

Opportunity Recognition Process

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Product Planning and Development Process

Product life-cycle: Stages each product goes through from introduction to declineProduct planning and development process: Stages in developing a new product

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Product Planning and Development Process

Evaluation criteriaMarket opportunityCompetitionMarketing systemFinancial factors

Production factors

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Figure 4.6 - The Product Planning and Development Process

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E-commerce and Business Start-up

Offers entrepreneurs an opportunity to be creative and innovativeFactors that facilitate growthWidespread use of personal computersAdoption of intranets in companies Acceptance of the Internet as a business communications platform

Faster and more secure systems

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E-commerce and Business Start-up

Using E-commerce creativelyAn entrepreneur has to decide whether he or she will run the Internet operations:Within the company or outsource these operations to Internet specialistsIntegrate front-end and back-end operations

Integrate customer orders, with distribution channels and manufacturing capabilitiesAllow flexibility for specific customer orders

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E-commerce and Business Start-up

Web sitesImportant features include:Ease of useSearch capabilityE-mail response system

SpeedCompatibility with different browsers and platforms

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E-commerce and Business Start-up

Tracking customer informationProvides personalized one-to-one marketingLaws protecting the privacy of individuals should be followed

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E-commerce and Business Start-up

Doing E-Commerce as an entrepreneurial company Essential criteriaEconomic and convenient delivery of productsProducts 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