Entrepreneurship

Chapter 3

Creativity, Innovation
and the Business
Opportunity

McGraw-Hill/Irwin – 10th Edition

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
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

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 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

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 Table 4.1 - Trends of the Next Decade

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 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

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 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
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 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

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 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

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 Creative Problem Solving
• Method for obtaining new ideas focusing on
the given parameters
• Can 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
• 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

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 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

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 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

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 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
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 Figure 4.1 - Illustration of Parameter
Analysis

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 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

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 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

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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 container
• Modifications in the appearance of the product
(industrial market)

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 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

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 Figure 4.3 - Continuum for Classifying
New Products

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 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

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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 decline
• Product planning and development process:
Stages in developing a new product

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 Product Planning and Development
Process
• Evaluation criteria
• Market opportunity
• Competition
• Marketing system
• Financial 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 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

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 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

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 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

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E-commerce and Business Start-up
• Tracking customer information
• Provides personalized one-to-one marketing
• Laws 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 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

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