Republic of the Philippines

Sorsogon State University

Sorsogon Main Campus

INNOVATION MANAGEMENT

MODULE 4: Idea Generation and Management

This module will cover the following topics:

▪ Techniques for Idea Generation

▪ Idea Evaluation and Selection
▪ Market Validation Techniques

Prepared by:

LYKA G. GIPANAO
Instructor

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 Module 4: Idea Generation and Management. L.Gipanao. 2025

MODULE 4: Idea Generation and Management

Learning Objectives: Students should be able to:

1. Understand different techniques for idea generation.

2. Evaluate and select ideas based on feasibility and viability.
3. Utilize idea management systems and tools effectively.
4. Apply design thinking and user-centered innovation principles to develop
customer-driven solutions.

INTRODUCTION
Generating innovative ideas and effectively managing them is crucial for
entrepreneurial success. This module introduces students to various techniques for idea
generation, strategies for evaluating and selecting viable ideas, and market validation
techniques to ensure business feasibility. Additionally, students will explore design
thinking, user-centered innovation, and collaborative innovation practices to refine their
entrepreneurial concepts. By mastering these skills, students will be equipped to
develop innovative solutions that meet market needs and drive business growth.

A. Techniques for Idea Generation

Idea Generation - is developing new ideas by investigating various concepts and

possibilities and feedback from other stakeholders to identify the best answer. It is an
essential problem-solving component and can be done in a collaborative environment.
By engaging in the creative process and pushing your team with an idea, you might
acquire new insights and find previously neglected ideas.

Why is Idea Generation important?

Coming up with new, innovative ideas is critical in our drive to establish a firm. We can
discover numerous compelling reasons to adopt tools that assist us in organizing our
thoughts and spending time thinking creatively in our business. Here are four
compelling reasons why devoting time to brainstorming new ideas is worthwhile.

1. Discovering new opportunities

2. Generating fresh ideas
3. Improving old concepts
4. Updating current practices

There are various techniques that can be used for Idea Generation:

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1. Brainstorming - is a group problem-solving technique that involves the

spontaneous contribution of ideas from all members of the group. It is also the
mulling over of ideas by one or more individuals in an attempt to devise or find a
solution to a problem. Brainstorming is a method design teams use to generate
ideas to solve clearly defined design problems. In controlled conditions and a
free-thinking environment, teams approach a problem by such means as “How
Might We” questions.
Example: A startup team brainstorming ways to improve customer
experience in their online store.

2. Mind-Mapping - is a powerful technique to help you visually develop and

organize ideas and information.

Mind maps provide a structured way to capture and organize ideas and
information. They help users to understand concepts by breaking them down into
their component parts. The technique is used to develop new ideas, or to break
down and better understand existing information.
Example: Mapping out a business plan with branches for marketing,
finance, operations, and product development.

3. SCAMPER Technique - is a creative problem-solving method that encourages

individuals to think differently and generate innovative solutions. SCAMPER
means:
Substitute – Replace a part with something else.
Combine – Merge elements to create something new.

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Adapt – Modify for different uses or environments.

Modify – Change aspects like size, shape, or color.
Put to another use – Find a new purpose for the product.
Eliminate – Remove unnecessary parts.
Reverse – Flip or rearrange the process.
Example: Applying SCAMPER to improve an eco-friendly fire igniter by
making it reusable or adapting it for grilling restaurants.
4. Design Thinking - is a problem-solving approach that focuses on understanding
users’ needs and creating innovative solutions. It involves five key steps:
empathize, define, ideate, prototype, and test. By putting the user at the center of
the process, design thinking helps teams come up with creative ideas that truly
meet people’s needs. In this article, we’ll explore what design thinking is, why it’s
important, and how you can use it to improve your projects.
Example: Developing a mobile app for small businesses by first observing
how they currently handle sales and inventory.

5 Phases of Design Thinking

1. Empathize
This phase is basically the Information Gathering phase. Business-related
information gathered by searching and understanding the customer’s views. It is
done by interviews, group discussions, and most of the observations. Along with
this the questions related to What, How, Why take into consideration.
2. Define
In this phase, we focus on the collection and classification of the information from
the empathize phase. The information gets categorized according to ideal
customers, their problems, the solution to their problems and needs, and fears of
users that we have to consider.

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3. Ideate
In this phase, we give an optimized and real-time solution to the problems. No
irrespective and illogical thinking accepted. These solutions are raised by
Sketching and Prototyping.
4. Prototype
In the prototyping phase, the basic implementation of the design thinking solution
is used to verify the solution in real life. During prototyping it finally takes our idea
in real life. The prototype must be less expensive and the very first version of the
ideal solution.

After the above phases finally, it is time to verify the product in real life.
Customers are able to use it and give feedback for their personal experience.
Also, the designer can ask questions on how to improve such products for better
usage.

B. Idea Evaluation and Selection

Once entrepreneurs generate ideas, they need to assess which ones are
worth pursuing. The following methods help evaluate and select the best
business ideas:

1. Feasibility Study - is an assessment of the practicality of a proposed plan or

project. It analyzes the viability of a project to determine whether the project or
venture is likely to succeed. The study is also designed to identify potential
issues and problems that could arise while pursuing the project.

Key components:

● Market Feasibility – Is there demand for the product/service?

● Technical Feasibility – Can the business produce or deliver the idea?
● Financial Feasibility – Is the idea profitable and sustainable?
● Legal and Regulatory Feasibility – Are there legal barriers to entry?
● Operational Feasibility – Can the business manage and scale the idea?

2. SWOT Analysis - is a framework to help assess and understand the internal and
external forces that may create opportunities or risks for an organization.

SWOT stands for:

● Strengths – What gives the business a competitive advantage?

● Weaknesses – What limitations need improvement?

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● Opportunities – What trends or gaps in the market can be leveraged?

● Threats – What risks could affect the business?

3. Business Model Canvas (BMC) for Idea Assessment - is a strategic

management tool that lets you visualize and assess your business idea or
concept. It’s a one-page document containing nine boxes that represent different
fundamental elements of a business.

Each of these blocks is explained in more detail as follows:

1. Customer Segments (CS)

These are the groups of people or organizations that a business aims to reach and
serve. Customers are the heart of a business model, and without (profitable) customers,
a business cannot survive. Customers are grouped into distinct segments with common
needs, common behaviors, or other attributes. Customer groups represent separate
segments if:

● Their needs require and justify a distinct offer.

● They are reached through different Distribution Channels.
● They require different types of relationships.
● They have substantially different profitability.

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● They are willing to pay for different aspects of the offer.

The following two questions, if answered with clarity, help a business identify its CS.
● For whom are we creating value?
● Who are our most important customers?

2. Value proposition (VP)

Value Proposition describes the bundle of products and services that create value for a
specific Customer Segment chosen by a business.

A VP is the reason why customers turn to one company over another. VP must solve a
customer’s problem or satisfy a need. A business can have more than one VP, but each
must consist of a selected bundle of products and/or services that caters to the
requirements of a specific Customer Segment.

While some VPs may be innovative and represent a new or disruptive offer, others may
be similar to existing market offers but with added features and attributes.

An organization’s VP must answer the following questions with clarity:

● What value do we deliver to the customer?

● Which one of our customer’s problems are we helping to solve?
● Which customer needs are we satisfying?
● What bundles of products and services are we offering to each CS?

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3. Channels (CH)
Channels describe how a company communicates with and reaches its Customer
Segments to deliver a Value Proposition.

Channels are customer touch points that play an important role in the customer
experience and serve several functions, including:

● Raising awareness about a company’s products and services

● Helping customers evaluate a company’s Value Proposition
● Allowing customers to purchase specific products and services
● Delivering a Value Proposition to customers
● Providing post-purchase customer support
To establish an effective channel, a company must first answer the following:

● Through which Channels do our Customer Segments want to be reached?

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● How are we reaching them now?

● How are our Channels integrated?
● Which ones work best?
● Which ones are most cost-efficient?
● How are we integrating them with customer routines?

4. Customer Relationships (CR)

Customer Relationships describe the types of relationships a company establishes with
specific Customer Segments. Relationships can range from personal to automated. An
organization’s CR strategy may be driven by one of the following motivators:

● Customer acquisition
● Customer retention
● Boosting sales (upselling)

A business can arrive at the optimum CR by asking the following questions:

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● What type of relationship does each of our Customer Segments expect us to

establish and maintain with them?
● Which ones have we established?
● How costly are they?
● How are they integrated with the rest of our business model?

5. Revenue Streams (RS)

Revenue Streams represent the company’s cash (earnings) from each Customer
Segment and are like the arteries of any business.

Revenue streams
There are two distinct categories of Revenue Streams:

● Transaction Revenues which are one-time customer payments

● Recurring Revenues that are ongoing payments to either deliver a Value
Proposition to customers or provide post-purchase customer support

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A business may have one or more Revenue Streams, each with different pricing
mechanisms. The choice of pricing mechanism greatly influences the revenues
generated.

There are two main types of pricing mechanisms, Fixed and Dynamic, as follows:

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6. Key Resources (KR)

The Key Resources describe the most important assets required to make a business
model work.

These resources allow an enterprise to create and offer a Value Proposition, reach
markets, maintain relationships with Customer Segments, and earn revenues. Different
Key Resources are needed depending on the type of business model.

Key Resources can be owned or leased by a business or acquired from its key partners.
They can be identified by answering the following questions:

● What Key Resources do our Value Propositions require?

● What resources are required to sustain our Distribution Channels, Customer
Relationships and Revenue Streams?
Key Resources can be categorized as follows:

7. Key Activities (KA)

Key Activities describe the most important things a company must do to make its
business model work. They are required to create and offer a Value Proposition, reach
markets, maintain Customer Relationships, and earn revenues.

Key Activities differ depending on the business model type. For example, Microsoft’s
Key Activity is software development, while for Dell, it is Supply Chain Management. For
a consultancy firm like McKinsey, Key Activity is problem-solving.

A business can identify its Key Activities by answering the following questions:

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● What Key Activities do our Value Propositions require?

● What activities directly contribute to maintaining our Distribution Channels,
Customer Relationships and Revenue Streams?

8. Key Partnerships (KP)

The Key Partnerships describe the network of suppliers and partners that make the
business model. There are four types of partnerships:
A business must ask the following questions before forming partnerships:
● Who are our key partners?
● Who are our key suppliers?
● Which Key Resources are we acquiring from partners?
● Which Key Activities do partners perform?

9. Cost Structure (CS)

Cost Structure describes all costs incurred to operate a business model. A business
incurs costs in creating and delivering value, maintaining customer relationships, and
generating revenue. Costs are business-specific, where some are more cost-driven
than others.

A business must answer the following questions to arrive at an optimum cost structure:

● What are the most important costs inherent in our business model?
● Which Key Resources are most expensive?
● Which Key Activities are most expensive?

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While costs should be minimized in every business model, it is useful to distinguish

between two broad classes of business model Cost Structures:

● Cost Driven: This model focuses on minimizing costs wherever possible. This
approach aims at creating and maintaining the leanest possible Cost Structure,
using low-price Value Propositions, maximum automation, and extensive
outsourcing. Examples: No frills airlines like Southwest & easyJet, Fast food
joints such as McDonald’s & KFC.

● Value Driven: Premium Value Propositions and a high degree of personalized

service usually characterize value-driven business models. Examples: Luxury
hotels, Expensive Cars like Rolls-Royce

Putting-it-all together
The nine business model Building Blocks form the basis for a handy tool, which is called
the Business Model Canvas (figure below). This tool resembles a painter’s canvas
preformatted with nine blocks that allow painting pictures of new or existing business
models. It is a hands-on tool that fosters understanding, discussion, creativity, and
analysis.

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C. Market Validation Techniques

Market validation techniques are methods to test the viability and demand of a product
or service before launching it.Some common market validation techniques are:

● Customer interviews: In-depth interviews of target customers or focus groups to

collect qualitative data about customer needs and expectations.
● Surveys: Online surveys to collect customer insights at scale.
● Market validation research: Market research techniques such as competitor
analysis, market sizing, and trend analysis.
● Fake door testing: Creating a landing page or an ad to measure customer
interest and willingness to pay.
● Prototype testing: Creating a minimum viable product (MVP) to get feedback
from early adopters.
● Beta testing: Releasing a limited version of the product or service to a selected
group of customers to evaluate its performance and usability.

CONCLUSION

Innovation is the foundation of entrepreneurship, and the ability to generate,

evaluate, and manage ideas effectively is essential for business success. Throughout
this module, students have explored various idea generation techniques, design

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thinking principles, and idea evaluation methods to transform creative insights into
viable business opportunities. By leveraging crowdsourcing, collaborative innovation,
and digital tools, students are now better equipped to develop and refine entrepreneurial
ideas that address real-world challenges. Applying these strategies will enable them to
create sustainable and competitive businesses in today’s fast-evolving marketplace.

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