Unit-2

A. Innovation:

1. Innovation is the practical implementation of ideas that result in the introduction of new
goods or services or improvement in offering good or services.

2. Innovation also implies a value system which seeks to derive a positi outcome from the
inventive act.

3. For a business, innovation is a product, process, or business concept, combinations that

produce profits and growth for the organization.

4. True innovation is an advancement of what is done normally. Therefor something is an

innovation not because it is new, but because it useful

B. Role of Innovation in Entrepreneurship:

1. Creative Development: Innovation enhances the nature, creativity and design thinking
process of an organisation.

2. Persistent Improvement: Innovation gives durability to organisation when you are

making continuously improvements in products and services.

3. Reinforcing Your Brand: The process of development in branding helps an entrepreneur

to learn different ways of being more innovative.

4. Making the best of your existing products: We know that for a entrepreneur, it is
important to introduce new products but more than that, to maintain the innovation culture
making the best of old product is more important.

5. Responding to Trends and Competition: With the help of innovative in entrepreneurship,

responding to future trends can help a entrepreneur's business to come with solutions to
make their business grow more.

6. Having a Unique Selling Point: Consumer generally consider innovation cultures as

something that adds some interesting values its products Innovations in entrepreneurship
can add advantage the can help the company to get positive exposure

Following are the different types of innovations:

1. Product & Product Performance Innovation: In this type of innovation either a new
product is developed or the performance of an existing product is improved

2. Technology Innovation: New technologies can also lead to the birth of many other
innovations. The best example is Internet, which is itself an innovation but also lead to other
innovations in various fields
3. Business Model Innovation: Using different channels, technologies and new markets can
lead to new possible business models which can create, deliver and capture customer value.

4. Organizational Innovation: Managing and sharing resources in a new way can also be an
innovation.

5. Process Innovation: Possible process innovations involve production. delivery, or

customer interaction. Innovation in the processes can improve the efficiency or
effectiveness of existing methods.

On the basis of degree of novelty (change) of market and technology innovation classified
as:

1. Incremental Innovation: Incremental Innovation utilizes your existing technology and

increases value to the customer (features, design changes, etc.) within your existing market.

New

MarketArchitectural Radical
innovation innovation

Existing
Incremental Disruptive
innovation innovation

Existing New
Technology
2. Disruptive Innovation: Disruptive innovation, also known as stealth innovation, involves
applying new technology or processes to your company's current market.

3. Architectural Innovation: Architectural innovation is simply taking the lessons, skills and
overall technology and applying them within a different market

4. Radical innovation: Radical innovation involves the creation of technologies, services, and
business models that open up entirely new markets

Idea generation in entrepreneurship:

1. Idea generation is the process of creating, developing, and communicating ideas which
are abstract, concrete or visual.

2. Idea generation is the first step for any product development.

3. Idea generation simply focuses on identifying solutions for a problem.

4. Idea generation is the backbone for every organization and one of the most important
assets for marketing teams.

B. Idea generation process: Following are the various steps for idea generation process:

1. Enabling: The search for the right field of innovation.

2. Defining: Develop search queries and specify search paths.
3. Inspiring: Search for thoughts and stimuli from other areas.
4. Selecting: Generate and evaluate ideas.
5. Optimizing: From the initial idea to the mature concept.
6. Nurturing: Enrich ideas with various implementation strategies.

Various techniques of idea generation are:

1. Mind Mapping: A mind map involves writing down a central theme and thinking of new
and related ideas which radiate out from the centre.

2. Reverse Thinking: This technique asks us to think oppositely. Instead of working on the
problem in front of us, we work on the exact opposite of it.

3. Brainstorming: Brainstorming is a group creativity technique by which efforts are made to

find a conclusion for a specific problem by gathering a list of ideas.

4 SCAMPER: The word SCAMPER is an acronym. S -Substitute, C-Combine, A-Adapt, M-

Modify, P-Put to another use, E- Eliminate, R-Reverse.

5. Role-Playing: In this technique, the participants take up roles to play These roles are
different from the ones they usually play. It adds an element of fun and helps get innovative
ideas.

6. The 5 W's: Who, What, Where, When, and Why are the five W's. Answering these five
W's helps us achieve a view of the topic under discussion. And it is an efficient way to come
up with solutions and ideas.

7. Synectics: In this technique, we take apart a thing and then put it back together. This
helps us get a better understanding of how things work.

Managerial skills

Having managerial skills is important for an entrepreneur is important due to following

reasons:

1. To optimize the use of scarce resources.

2. For ensuring effective leadership.

3. To motivate employees by creating a safe and secure environment.

4. For promoting synchronization amongst industries and their relations.

5. For strategizing towards the achievement of primary goals of an organization.

6. For facilitating developmental opportunities to boost morale and help upgrade skills.

7. To provide knowledge and expertise to expand productivity.

8. To regulate competition in the market.

The managerial skills required to become a successful entrepreneur are:

1. Time Management: It is vital to get more work done in less amount of time by eliminating
interruptions, prioritizing tasks and increasing effectiveness as well as productivity.

2. Business Planning: Every entrepreneur needs to develop a business plan that facilitates
the entrepreneurs to make their business fit into the industry, identify their target market
and plan to capture them.

3. Employee Management: Successful entrepreneurs should know how to motivate the

employees in order to work effectively.

4. Customer Management: An entrepreneur must know how to manage his relationship

with existing customers with a focus on creating loyalty towards his business.

5. Sales Management: Understanding the sale activities helps the entrepreneurs to tackle
the challenges that they may face in their management journey.

6. Financial Management: Even if your business's finance is handier by an accountant, you

must know planning, organizing, directing and controlling the financial activities.

7. Business Management: For being a successful entrepreneur thorough understanding of

general management, finance, marketing operations management, purchasing, supply
chain, human resource and public relations is required.

Value creation:

1. Value creation is the process that creates outputs which are more valuable than the
input.

2. The creation of value is the core purpose and central process of economic exchange.
Traditional models of value creation focus on the firm's output and price.
3. It is performance of actions that increase the worth of goods, services or even a business.

4. Many business operators now focus on value creation both in the context of creating
better value for customers purchasing its products and services, as well as for shareholders
in the business who want to see their stake appreciate in value.

Value creation is important in business because:

1. It grasps customer requirements for product quality, design, and development of

products

2. It attracts customers, investors and other stakeholders

3. It creates the organization's purpose, strategy, and business model taking into account all
resources, capitals, and relationships in an integrated way.

4. It delivers stakeholders through responsible products and services at an appropriate

price.

5. It helps in retaining and protecting value internally and distribution to shareholders and
customers.

We could manage value creation by keeping good control over:

1. Quality management: Quality management is the act of overseeing all activities and tasks
that must be accomplished to maintain a desired level of excellence.

2. Quality of products or services: It includes the determination of a quality policy, creating

and implementing quality planning and assurance, and quality control and quality
improvement

3. Ability to attract, develop, and keep talented people: Organization should have ability to
manage the skilled workers

4. Use of corporate assets: Assets are important for any kind of business as it allows
businesses to gain profit, improve the business' value and keep the business up and running

5. Financial soundness: The main areas of financial soundness that should be examined are
liquidity, solvency, profitability, and operating efficiency of a company

6. Capacity to innovate: Innovation capacity refers to produce and exploit new products,
services or processes over long periods of time.

The following steps are involved in process of creating a new enterprise:

1. Identification of business opportunity: The process of identifying opportunity involves
identifying the needs and wants of the customers. scanning the environment, understanding
the competitor's policy etc.
2. Generation of business idea: The ideas that provide value for the customer, profit for the
entrepreneur and benefit for society and can be transformed into products of services are
called business ideas.
3. Feasibility Study: Feasibility study is a detailed investigation of the project to determine
whether the project is financially economically and technically viable or not.
4. Preparation of a business plan: In this step an entrepreneur prepares a good business
plan, designs and creates the organizational structure for implementation of the plan.
5 Launching the enterprise: At this step the entrepreneur hunts for suitable location, design
the premises and install machinery and fulfil some legal formalities like

i. Acquiring license

ii Permission from local authorities.

iii Approvals from banks and financial institution.

iv. Registration etc

Different strategies to grow an enterprise are:

1. Hire the right people: With hardworking employees dedicated to your company's
success, your business will be better equipped for continued growth.

2. Focus on established revenue sources: Rather than trying to acquire new customers,
direct your attention to the core customers you already have.

3. Reduce your risks: Risk is an inevitable part of starting and growing a business, but there
are many ways to limit internal and external threats to your company and its growth.

4. Be adaptable: One trait that many successful startups have in common is the ability to
switch directions quickly in response to changes in the market.

5. Boost your customer service: Another great method of growing your business is to focus
un providing superior customer service

6. Research your competitors: While this might not result in immediate growth, but
researching your competitors is one of the most important steps in launching your business.

7. Invest in yourself: In the early stages of your business, you'll likely see a very lean profit
margin (or no profit at all), so any money you do make should go directly to helping you
grow

8. Always think ahead: Thinking ahead helps in reviewing all ongoing contracts like
comparing rates and seeing if you can negotiate a better deal.
Following are the strategies for a sustainable enterprise model:

1. Maximise material and energy efficiency: Aims at less material and energy input through
more efficient processes.

2. Control resource wastage: Aims at controlling resources wastages through reuse,

remanufacturing, and recycling.

3. Deliver functionality rather than ownership: Aims at providing the user with the
functionality requires without owning the product that delivers the service

4. Adopt a stewardship role: Aims to take the responsibility that company have to
understand and manage their impacts on the environment in any of ways.

5. Encourage sufficiency: Aims at providing information that encourage less consumption of

resources

6. Inclusive value creation: Aims value creation value to stakeholders or including them into
the value creation process

7. Develop sustainable scale up solutions: Aims at scaling sustainable solutions and

technologies.