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CHAPTER 5- - - - - - - - - - - - - - - - - - - - - - - - - -

Creativity Business idea & Opportunity analysis

OBJECTIVES

To identify various sources of ideas for new ventures To discuss methods available for generating new venture ideas To discuss creativity & techniques for creative problem solving To discuss the importance of innovation To understand an opportunity analysis plan To discuss the aspects of the product planning & development process To discuss aspects of e-commerce & starting an e-commerce business

OBJECTIVE #1 Identifying various sources of ideas for new ventures

Dont be frustrated if you have an idea but unfortunately its already out there in the market. Relax! There are many sources of ideas for your new business venture. It may come from your family member who has a problem with her pets or your friend who always has a hard time figuring out all the latest gadgets, software and other technologies. It can even come to you in a dream or it can even already exist. Here are some of the more used sources of ideas for entrepreneurs or entrepreneurs-in-training include: Consumers Existing Products and/or Services Distribution Channels Research and Development

Consumers An entrepreneur should always pay attention to what his potential customer wants. They may be friends or family members who have certain needs that need addressing. They may be interviewed formally or informally depending on how you conduct your research, but the potential customers or your target should always represent a large enough market to support a new venture.

Existing Products and/or Services Yes an entrepreneur can use an already existing idea, product or service that is available in the market but Im not talking about copying them, entrepreneurs should always provide something more something better something the competition doesnt offer. A lot of companies sell the same thing, be it product or service, its just the way they are marketed to the public or their unique selling proposition/point that differs.

Distribution Channels These channels are people. They can be the saleslady or clerk at the department stores you sell your products/services to. They are excellent sources of new ideas and suggestions because of their familiarity with the needs of the market. They can also help market the product.

Research and Development Most ideas come from the entrepreneurs own research and development. They may be formal endeavors connected to your current employment. Like discovering a new substance when youre trying to find ways to make durable plastic, wherein this new substance discovered by you can be used for a new venture. Or it can be accidental, wherein you made a product for personal use that you discovered to be useful to a large group of people as well. For example: Jera Deal of Sticks and Stones (with husband)

JERA DEAL is a mom who used her home schooling techniques to practical and lucrative use. Sticks and Stones is a unique gift/keepsake store that offer names or words that are spelled out by random objects such as sticks and stones. She came upon the idea when she was teaching her daughter the alphabet and used pictures of places, things and other objects that spelled out an alphabet so that her daughter would be more familiar with it. For a last minute gift idea for a friend she learned was getting married, she collected the photos from her daughters alphabet photos and spelled out the brides name and framed it. Everyone at the part loved it and naturally so did the bride. They made their framed names and marketed it wherever they went. And with the help of Oprah who caught their attention because she loved their products, they got their big break and boom. The rest is history.

OBJECTIVE #2 Methods for generating new venture ideas

There are many ways available to get your idea for a business venture. There are several methods available to help generate and test these ideas such as :

Brainstorming Focus Groups Problem Inventory Analysis

Brain Storming
Brainstorming is a popular tool that helps you generate creative solutions to a problem with a team or a group. They allow people to be stimulated and be more creative by participating in a group experience and sharing their thoughts with other group members. Some if not most brainstorming ideas do not actually transform into a viable and real business venture idea, there is a chance to stumble upon one great idea out of it that is worth going into business for. Brainstorming can be really efficient if the brainstorming session has a specific product or market in mind.

Focus Groups Are small number of people (usually between 4 and 15, but typically 8) brought together with a moderator to focus on a specific product or topic. Focus groups aim at a discussion instead of on individual responses to formal questions, and produce qualitative data (preferences and beliefs) that may or may not be representative of the general population. The group is stimulated by other group members answers and builds up on it, question it and/or add more information.

Problem Inventory Analysis Its very much like focus groups but instead of discussing with other members about the product. The groups are given problems in a particular category and are then asked to associate certain products with it. For example:

SENSORY (Taste) Bitter XX Crackers Salty XO Ice Cream Bland Dairys Chocolate Milk

PSYCHOLOGICAL (Health) Indigestion Misters Shakes Bad for teeth Happe Sweeteners Acidity Heart chocolates

OBJECTIVE #3 Creative Problem Solving Techniques Creativity plays an important role in a successful entrepreneur. But it tends to decline with age, education, lack of use and bureaucracy. And the creative potential of an individual may be stifled by perceptual, cultural, emotional and/or organizational factors. Here are some creative problem techniques: Brainstorming Reverse-Brainstorming Brainwriting

Gordon Method Free Association Collective Notebook Big Dream Approach Attribute Writing

Brainstorming Its one of the most well-known and widely used out of all techniques. First a problem statement is given which isnt too broad (too many ideas) or too narrow (confined responses) and within a limited time frame would continuously generate ideas for problem statement. All ideas must be recorded no matter how illogical and participants are prohibited from criticizing during the brainstorming session.

Reverse-brainstorming These are much like brainstorming except criticisms are allowed. Basically, when an idea is put up to solve the problem statement, others will pose problems that may arise from the idea given and so on. This technique is based on finding fault by asking the question In how many ways can this idea fail?

Brainwriting Its more silent than brainstorming. This gives the chance for ideas to simmer and members have longer thoughts on the idea rather than brainstorming which occurs spontaneously. Its done by passing a card to an individual within the group and he is given a particular time frame usually 5 minutes to write down his ideas then when the time is up, the card is then passed on to the next person in the group and so on. The facilitator then collects the card/s. In modern times this can be done through email, or live chat online. And time frame may differ depending on the facilitator.

Gordon Method The Gordon method is a method wherein the individuals are unaware of the problem. Unlike many other creative problem methods the group begins with a general statement associated with the problem and the groups/participants begin to generate thoughts about the statement. Then a concept is developed followed by the revealing of the actual problem. This is done so that the solution is not clouded by preconceived ideas or behavioral patterns.

Free Association Its one of the simplest yet effective methods that entrepreneurs use to generate new ideas. It starts with a word or phrase relating to the problem, then another word or phrase is written down and another and so on. This creates a chain of ideas that hopefully results with a new product idea.

Collective Notebook The participants of the group are given notebooks usually pocket sized so that they can be taken anywhere, that are kept throughout a certain time-period. This notebook is where the individuals ideas should be written down whenever they have them and as frequently as possible. At the end of the time period the notebooks are collected and ideas from these notebooks are summarized and discussed.

Big-Dream Approach This is where an idea is developed by thinking without constraints. Coming up with an idea, every possibility without thinking of the constraints like manufacturing, distribution etc. When a plausible idea is found then it is developed into a workable form.

Attribute Listing Its developing a new idea by looking at the positive and the negative or the pros and cons. The entrepreneur himself or maybe even a group of people will list down and attribute of an item or problem and list the pros and cons that justifies that satisfaction of the need.

OBJECTIVE #4 Importance of Innovation

Innovation is key to the development of a company, region of the country or the country itself. Technologies are progressing at an alarming rate that it is important to keep up with it. Be it through new equipment, ingredient or process. As these technologies change it is important to note that old products and services decrease in sales and old companies dwindle if it is left as is without any changes. Types of Innovation Breakthrough Innovation They are the fewest innovations. They are usually the basis for further innovation in the area and should be protected as much as possible by using patents, trade secrets and/or copyrights. Inventions like the computer, penicillin and nanotechnology.

Technological Innovation Occurs more frequently. They offer advancements in the product/market area. Inventions like the jet plan, flip watch and the personal computer. Ordinary Innovation This occurs most frequently. This type usually extends a technological innovation into a better product with more market appeal.

OBJECTIVE # 5 Understand an Opportunity Analysis Plan

What is opportunity? Its a possibility due to a favorable combination of circumstances or in other words a chance; a chance seen where others have not seen yet. Opportunity recognition as well as growing a business is fundamental to Entrepreneurs. A business opportunity represents an opportunity for an entrepreneur to answer a need and make enough sales to get profit. This knowledge is a combination of experience and education. Recognizing meaningful business opportunities with the use of both education and experience plus proper networking is the perfect strategic position to complete product planning and successfully launch a new venture.

Opportunity Analysis Plan An Opportunity Analysis Plan is not a business plan as it focuses on the idea and the market for the idea not on the venture itself. Each and every opportunity should be carefully scrutinized and not just jumped into. The Opportunity Analysis Plan, is developed to serve as basis, for the decision to either act on the opportunity or wait until another opportunity comes along, which is hopefully better. This plan usually has four sections: 1. The Idea and Its Competition 2. The Market and the Opportunity 3. Entrepreneur and Team Assessment 4. Steps needed to make idea into viable business venture The Idea and Its Competition This section focuses on the idea and the competition. The product or service should be described in detail as much as possible. A prototype is made to fully understand its features. The product should then be compared with other products to see their similarities and differences and come up with something that can be uniquely identified to stand out from the competition. This is called the USP or Unique Selling Proposition. If the product doesnt have at least 3-5 USPs compared to the competition then the Entrepreneur should reevaluate if the idea is solid enough to compete in successfully in the market.

The Market and the Opportunity This section focuses on the size and the characteristics of the market. How big is the need that needs to be addressed? And the characteristics such as, how geographically sparse is the market? What are the social conditions present in this market? Etc. The Entrepreneur should be able to justify the answers if the need is large enough and sustainable enough for it to warrant a business plan and actually enter the market.

Entrepreneur and Team Assessment Both the Entrepreneur and the team need to be assessed in terms of how much knowledge and experience he has about anything in the business idea. At least one person has to have at least some sort of experience and knowledge in the area of the idea. Things like competencies in oral/written communication, knowledge about goal setting, record-keeping, decision making, organization, planning and research and creative thinking.

The Next Steps The steps that need to be identified here are the steps to make the idea a reality in the marketplace. The steps need to be identified, put in sequential order and proper estimates of resources like time and money for each step. Funding should be identified if the money would not come from the entrepreneur itself.

OBJECTIVE # 6 The Aspects of Product Planning and Development Process Once the idea is put down, it still needs to be refined and developed further. This refining process called Product Planning and Development, has five major stages. 1. The idea stage 2. The concept stage 3. The product development stage 4. The test marketing stage 5. Commercialization The Idea Stage In this stage, promising ideas of product and/or services should be identified and impractical ones eliminated for maximum and efficient use of the companys resources. If there is no need for a suggested product then the development should be discontinued. The idea should have a benefit or use to the company and there should be enough market need to sustain it. To determine the need for a new idea it is helpful to define the needs, benefits

and risks, economic conditions, alternatives and market structure and size. The cash flow and return of investments need to be stated to determine whether the product or service idea should be pursued. Factors like the type of need (continuing, declining, emerging, future need) , timing of need (duration of need, frequency of need, demand cycle, position in life cycle) and perceived benefits/risks (utility to customer, appeal, customer tastes/preferences, buying motives, consumption habits) need to be taken into consideration when pursuing a business idea.

Concept Stage After the new product or service idea has been evaluated through the idea stage. It should be further developed and refined through interaction with the consumers. Initial reactions are gathered through a group of potential customers. One method is through interview in which respondents are exposed to statements that reflect the service or product idea. Favorable and unfavorable comments and responses made by the participant should be analyzed and the favorable ones somehow incorporated into the new product/service.

Product Development Stage In this stage, consumer reaction to the physical product/service is determined. Usually in this stage a product sample is given to potential customers. These customers keep a record of their use of said product/service along with its benefits and deficiencies. They can also be given the product/service along with the competitors simultaneously for comparisons.

Test Marketing Stage The product development stage may already provide the basis of a final marketing plan but a market test can be done to increase the certainty of success in commercialization. This stage provides actual results that indicate acceptance levels of the customers. Positive test results indicate a high probability in market acceptance.

OBJECTIVE # 7- Aspects of E-Commerce and Starting an E-Commerce Business

What is E-Commerce? Electronic Commerce is the use of the internet to market your business. It enables businesses to minimize marketing costs to reach a broader audience. Electronic commerce or ecommerce is a term for any type of business, or commercial transaction that involves the transfer of information across the Internet. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge. Nowadays everyone has access to the Internet. Everyone is connected. And the use of social media is astounding. Most companies make use of these free social sites to connect to their customers, both existing and potential to further gather information about their product and services. Some issues need to be addressed if you want your product or service be available online and processed online as well. Issues like, web development, web design, shopping carts, social profiles and who would make and update these; do you need to outsource or hire? An entrepreneur should understand that one of the keys of a website should be the ease of use. Its a communication tool that tells your customers what kind of business you have. Certain questions like, what do you want your customers to do upon entering the site?

What do you want the customers to see? The entrepreneur should organize the website in such a way information is clearly understood while keeping the audience engaged and not bombarded with pure facts and text.

SUMMARY You can get business ideas anywhere Look for opportunities that have not yet been tapped yet Refine your business idea by continuously developing it Put your business on the map by having a virtual presence Website Social networking sites

Innovation is key to success. Change business according to changing technologies and processes

SOURCES http://www.topbusinessentrepreneurs.com/ http://www.mindtools.com/brainstm.html/ http://www.networksolutions.com/education/what-is-ecommerce/

GRADE BREAKDOWN Hard Copy : Powerpoint Presentation : Final Grade : Remarks :