Unit-2

Entrepreneurial Idea and

Innovation
 Topics of Unit-2
Introduction to Innovation, Entrepreneurial
Idea Generation and Identifying Business
Opportunities, Management skills for
Entrepreneurs and managing for Value
Creation, Creating and Sustaining
Enterprising Model & Organizational
Effectiveness
Arrange the words in increasing
order or relevance?
• Entrepreneurship
• Creativity
• Innovation
Creativity vs Innovation
Creativity Innovation
Act of creating new ideas, Introduction of something new
imaginations and possibilities effective into the market

Imaginative Process Productive process

Thinking something new Introducing something new

No money required Money Required

Creativity
• Creativity is defines as tendency to
generate or recognize ideas, alternatives
or possibilities that may be useful in
solving problems, communicating with
other or helping others.
• Creativity is ability to develop new ideas
and solutions to problems.
Ola, zomato, swiggy, blabla, blinkit,
Messaging, whatsapp, telegram, facebook
Creativity Bottlenecks.
• Incorrect definition of problem
• Fear of Failure
• Stopping in between due to Lack of time
and knowledge.
• Lack of autonomy
• Blindly Following rules
• Believing that I am not creative
Importance of Creativity
• Ability to discover or multiple solutions
• Encourage innovation
• Foster growth
• Boost productivity/Performance
A Gift from the God or a New Phenomenon?
Or…Could Both Be True????...... Maybe?

Natures Creation? or Human Creation

Venoms & Poison or Anaesthetics
The Leaf or Solar Panel (energy from light)
The Brain or Computer/Electronic Circuitry
DNA or Computer Program
The Ear Drum or Microphone
The Eye or Camera (lens, focus, iris, film)
Eye Lid or Windshield Wiper
Incisor Teeth or Knife
The Heart or Pump
Spinal Chord/Nervous system or Communication/Telephone Cables
Birds or Music
Creativity

“There is no doubt that creativity is the most

important human resource of all. Without
creativity there would be no progress, and
we would be forever repeating the same
patterns”
(Edward de Bono).
 Three Components of Creativity
• Domain Relevant Skills
Domain relevant skills refer to the expertise and knowledge one possesses within a
specific field or domain. E.g. a graphic designer having extensive knowledge of
design principles, and color theory enable him to think and make innovative and
visually appealing designs for various projects.

• Creative Processes
Creative processes uses brainstorming, problem-solving, experimentation, and
iteration that individuals use to generate novel ideas and solutions. E.g. complex
programming problem can be solved through creative processes of breaking down
the problem into smaller components, experimenting different algorithms.

• Intrinsic Task Motivation

Intrinsic task motivation refers to the internal drive and entertainment individuals
derive from engaging in creative activities for their own sake, rather than for
external rewards or recognition. An artist who paints for the joy of self-expression
and exploration of color and thus exhibits intrinsic task motivation.
See; Amabile, Philips & Collins,
Stages in Creative Thinking
• Preparation
Gather information, acquire knowledge, and immerse themselves in the subject matter

• Incubation
• Allow their minds to unconsciously process and move over the information and ideas
gathered during the preparation stage

• Insight
• Insight, also known as the "aha moment" or "Eureka moment," is the sudden realization or
discovery of a novel solution, idea, or perspective. often occurs spontaneously and unexpectedly,
following a period of incubation

• Evaluation
Individuals critically assess and refine the ideas or solutions generated during the insight stage. A
musician composes a new piece of music and then evaluates it by playing it for a small audience
or seeking feedback

• Elaboration
Further developing and refining the chosen idea or solution into a concrete form
Unleash your creative potential ?
• Creative individuals often exhibit curiosity, open-mindedness, and a
willingness to explore unconventional solutions.
• Embrace Curiosity: Stay curious and open-minded about the world
around you
• Practice Mindfulness: Pay attention to your thoughts, emotions,
and sensory experiences.
• Engage in Divergent Thinking: generating multiple solutions or
perspectives to a problem
• Seek Inspiration: Explore art, music, literature, nature, travel, and
cultural experiences that spark your imagination
• Collaborate and Connect: Collaborate with others and engage in
meaningful conversations and exchanges of ideas
• Nurture Your Creativity:Set aside regular periods for
brainstorming, ideation, and experimentation
What is Innovation?
Innovation:
• Innovation can be defined as the practical
application or implementation of creative
ideas, concepts, or solutions to address
specific challenges, meet needs, or
capitalize on opportunities in a novel or
improved way.
What is Innovation?
Invention+Commercialization(Adding value)

• Newness & Adding Value

• Functional Value: Technology-Driven
(e.g. Self driving car)
• Symbolic Value (Meaning): Design-Driven
(e.g. Apple's design-driven approach to product development)

• Degree of Newness:
• Radical Innovation
• Incremental Innovation
Aspect Radical Innovation Incremental Innovation

Involves entirely new

Focuses on improving
Scope of Change products, services, or
existing products or services.
models.
Results in gradual
Results in significant
Degree of Disruption improvements to existing
disruption to the market.
norms.
Associated with higher levels Entails lower risk due to
Risk and Uncertainty
of risk and uncertainty. building on existing ideas.

Requires longer timeframes Implemented more quickly

Time and Resources
and substantial resources. and with fewer resources.

Has the potential to create Contributes to maintaining

Market Impact
entirely new markets. competitiveness.

Introduction of iphone by Evolution of automobile

Example
Apple in 2007 technology
So…
• Do Ideas = Opportunities?
• Do Problems = Opportunities?
• Reality - An Idea is Only an Opportunity
when It:
• Adds Value to Consumer
• It Solves a Problem
• It Can Make Some Money ( Communicate
Some Value to Other Stakeholders)
• It is a Good “Fit” with the Entrepreneurial
Team
Ideas Can Start with Solving Problems
• Solving “Points of Pain”:

• To Notice Inefficiency, Inconveniences, &

Other Forms of “Points of Pain” & Use these
to Build New Business Opportunities
Ideas Start With Solving Problems
• Any Problems are Big Opportunities.

• No Problems, No Solutions, & No Reasons

for Firms to Exist.

• No One Pays You to Solve a Non-exist

Problem (Vinod Khosla, Sun Microsystems)
Example (1): Rise of Levi’s
• Problem:
• Working Clothes for Mining Workers do Not
Last

• Solution:
• First Pair of Jeans
What is Your Opportunity for the Pizza Business?
What is Your Opportunity for the Pizza Business?
Types of Innovation
• Product Innovation: e.g. Making faster
computer
• Service Innovation: e.g.Taxi company started
using app
• Process Innovation: e.g.Using robot to
assemble cars rather manually
• Business model Innovation: changing the way
of earning money. E.g. streaming services.
Importance of Innovation
• Makes things simpler, interesting and
probably cheaper
• Helps in business growth
• Solves problem in smarter way
• Creative Development
• Brand Reinforcement
• Responding to trends and competitions
Entrepreneurial Idea Generation
• Identifying Opportunity (analyzing market trends, consumer needs,
emerging technologies, and gaps in existing products)

• Problem or pain point identification (conducting research, surveys,

and interviews to gather insights from potential customers)

• Generating Ideas/ Creativity (brainstorming sessions, mind mapping,

problem-solving workshops, and drawing inspiration from diverse sources[Through
EDISON])

• Evaluating or prioritizing ideas (evaluate and prioritize them based on

various criteria such as market potential, feasibility, scalability, and alignment with
their goals

• Concept Development and refinemen ( create prototypes, mock-

ups, or minimum viable products (MVPs) to test and validate their concepts)

• Iterative feedback and validation (continually seek feedback and

validation from stakeholders, customers, and experts.)
EDISON: Enabling, Defining,
Inspiring, selecting, optimizing,
Nurturing
EDISON
Techniques of Idea Generation
Brainstorming: This classic technique involves generating a large
number of ideas in a short period of time, without judgment or
criticism.
• E.g. Brainstorming could be done for a solar-powered camping
stove, a lightweight tent with built-in GPS tracking, or a
multifunctional hiking backpack.

Mind Mapping: Create a visual representation of your ideas by

starting with a central concept and branching out into related
subtopics or ideas.
• Start with the central concept of "outdoor product" and branch out
into different categories such as camping, hiking, and backpacking.
Techniques of Idea Generation
SCAMPER: an acronym for Substitute, Combine, Adapt, Modify, Put to another use,
Eliminate, and Reverse. Use these prompts to challenge existing ideas and generate
new ones by applying different perspectives and modifications. E.g. generate ideas
for improving a traditional backpack:
• Substitute: For example, substitute the standard nylon fabric with a lightweight yet
durable graphene-based material.(most lightweight, thinnest, strongest and heat-
conducting material,)
• Combine: integrate a solar panel into the backpack's design to allow users to charge
their electronic devices while hiking or traveling.
• Adapt: Adaptability could involve adding modular compartments that can be
customized for specific activities like hiking, commuting, or traveling.
• Modify: Modify the backpack's straps to incorporate ergonomic padding for increased
comfort during long.
• Put to Another Use: Explore alternative uses for the backpack beyond its primary
function of carrying belongings. For example, design the backpack with detachable
components that can be used as separate storage containers or as makeshift seating
around a campfire.
• Eliminate: Consider eliminating excess pockets or compartments to streamline the
design and reduce weight.
• Reverse:. For instance, reverse the orientation of the backpack's shoulder straps to
distribute weight more evenly and reduce strain on the wearer's back.
Techniques of Idea Generation
• Random Stimulus: Introduce a random word or object like "umbrella" and
brainstorm ways to integrate it into outdoor gear. This could lead to ideas
like a hiking umbrella that attaches to a backpack or a tent with a built-in
umbrella stand.
• Role Reversal: What if I would become director, CEO of a company, what
change I would like to bring for better growth.
• Reverse Thinking: Instead of focusing on how to make outdoor gear more
durable, consider how to make it intentionally disposable for eco-conscious
consumers. This might lead to ideas for biodegradable tents or compostable
hiking gear.
SWOT Analysis: Evaluate the strengths and weaknesses of existing
outdoor products, along with potential opportunities and threats in the
market. Identify gaps in the product landscape and areas where your
company can innovate to meet customer needs.
• Cross-Industry Inspiration: Look to other industries for inspiration, such
as automotive design, aerospace engineering, or medical technology. How
do these industries approach durability, efficiency, and user experience?
Apply insights from these fields to create innovative outdoor products.
Business opportunity
• Opportunities are positive external options that
a firm can exploit to accomplish its mission,
goals, and objectives.
• A business opportunity provides an individual or
a company with an amazing chance to expand
their current operations, initiate new offerings,
and return a profit.
• Business opportunities, improves ways of
designing work, and better ways of organizing
and operating the businesses.
Locating Business Ideas
• Products: Create Entirely New Products or New Services
• Solutions: Solve “End-to-end” Problems for Customers
• Customers: Find New Customer Segments or Unmet Needs
• Customer Experience: Change How Customers Interact With You
• Revenue Model: Change How You Get Paid
• Processes: Innovate on Operating Processes
• Value Chain: Change Position or Scope of Participation
• Logistics/Supply Chain: Change the Way You Source & Ship
• Channels: Change How you Go To Market with your Products
• R&D: Create New Technologies, Materials, Products or Processes
Methods of identifying Business
opportunities
Environment Scanning(Economical/financial changes, Internal Demand analysis)
Engage with customers
Identify unsatisfied needs
Problem-Solving
SWOT Analysis
Innovation Brainstorming
Market Research
Social Listening and monitoring
Competition Analysis
Importance/Significance of
Business opporutinity
• Business opportunities are essential for
business growth and success
• Identifying business opportunities can allow
companies to increase their revenue
• Enable organization to give unique products and
services to customers.
• Provides access to increased capital resources,
enabling businesses to invest in employee
development, technology upgrades, and other
growth strategies
Small Business opporunities
Online Business Opporunitieis:
E-commerce, Digital marketing, Content creation, e-learning, consulting
or coaching, Affiliate marketing, online marketpalce, Online survery,
Online Gaming

Home based Business opprotunities: Freelancing, consultancy,

art & craft teaching, Graphic designing, Food business, coaching,
Tutoring, Blogging, Health guide, event planning, Youtube channel.

Retail Business
Mobile Business
Social Entreprise
Parameters to consider for
starting a new business
• Idea
• Team
• Business Model
• Market analysis
• Customers and clients
• Capital
• Revenue Streams sales, fees, subscriptions, and donations
• Facilities and location
• Permits and licenses
• Ownership
Tech Start-up: Virtual Reality Education Platform??
• Idea: Tech Start-up: Virtual Reality Education Platform
• Team
• Business Model
• Market analysis
• Customers and clients
• Capital
• Revenue Streams sales, fees, subscriptions, and donations
• Facilities and location
• Permits and licenses
• Ownership
 Ans.
• Idea: Developing a virtual reality (VR) education platform aimed at enhancing learning
experiences for students through immersive simulations and interactive content.
• Team: Comprised of software developers, educational experts, graphic designers, and
marketing professionals passionate about leveraging technology for education.
• Business Model: Subscription-based model offering access to a library of VR educational
content for schools, universities, and individual learners.
• Market Analysis: Targeting educational institutions seeking innovative teaching tools,
homeschooling families, and lifelong learners interested in immersive educational experiences.
• Customers and Clients: Educational institutions, teachers, students, parents, and corporate
training programs.
• Capital: Initial funding secured through venture capital investments and grants from
educational organizations and government agencies.
• Revenue Streams: Subscription fees, licensing agreements with educational institutions,
sponsorship deals with content providers, and partnerships with technology companies.
• Facilities and Location: Headquartered in a tech hub with access to skilled talent and
resources, with virtual operations facilitating global reach.
• Permits and Licenses: Compliance with data protection regulations, intellectual property
rights, and software licensing agreements.
• Ownership: Shared ownership among founders, investors, and key stakeholders, with a
commitment to innovation and educational impact.
Managerial skills for
entrepreneur
• The abilities and competencies needed to
effectively plan, organize, lead, and control
resources within an organization or
business.
Importance of Managerial skills for
entrepreneur
• Optimal use of scarce resources
• Ensuring effective leadership
• Employees motivation
• Ensuring safe and secure environment
• Synchronization amongst employees and external
agencies/industries.
• Facilitating development opportunity to boost employee
to upgrade skills.
• Regulate competition in market
• Decision making
• Strategic Planning
Types of managerial skills required for
successful entrepreneur
• Time management skills
• Business Planning skills
• Employee Management skills
• Customer Management skills
• Sales management skills
• Financial management skills
• Communication skills
• Leadership Skills.
• Supply Chain management
• Human Resource management
• Marketing management
• Public Relations
• Purchasing Management
 Value Creation?
• Value creation is the process that creates outputs which are more
valuable than the input.
• 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.
• It is performance of actions that increase the worth of goods,
services or even a business.
• Value creation in entrepreneurship refers to the process of
generating and delivering value to customers, stakeholders, and
society as a whole through innovative products, services, or
business models
• 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.
 Importance of Value Creation
• It grasps customer requirements for product quality, design,
and development of products.
• It attracts customers, investors and other stakeholders.
• It creates the organization's purpose, strategy, and business
model taking into account all resources, capitals, and
relationships in an integrated way
• It delivers stakeholders through responsible products and
services at an appropriate price.
• It helps in retaining and protecting value internally and
distribution to shareholders and customers.
Managing Value creation
We could manage value creation by keeping good control
over
• Quality Management
• Salesteam
• Keep innovating
• Quality of services and products
• Ability to attract, develop, and keep talented people
• Use of corporate assets
• Financial soundness
• Capacity to innovate
Case Study Analysis: Enhancing Value Creation in a Beginner-Level IT
Firm
• Background: You are a management consultant hired to assess the value creation
process in a beginner-level IT firm. Your client is a small IT startup aiming to
establish itself in a competitive market. Your task is to analyze the value creation
process within the IT industry and propose strategies to create additional value for
customers and the company.
Guidelines:
Objectives: •Conduct research on the IT industry, including
•Understand the concept of value trends, customer demands, and competitive
creation in the context of the IT industry. landscape.
•Analyze the value chain of the IT •Identify and describe the key stages of the IT
industry and identify key activities and value chain, from software development to
players involved. customer support.
•Propose strategies to enhance value •Analyze each stage of the value chain to
identify opportunities for value creation and
creation for the IT startup and its
potential challenges.
customers. •Propose specific strategies and initiatives that
•Present recommendations based on the IT startup can implement to enhance value
your analysis and provide justification creation.
for your proposed strategies. •Consider factors such as product innovation,
customer service, scalability, and cost efficiency
in your recommendations.
•Prepare a written report outlining your analysis
and recommendations, including supporting
evidence and examples.
Sample Solution: Title: Maximizing Value Creation in a
Beginner-Level IT Firm
Introduction: The IT industry is dynamic and rapidly evolving, characterized by
technological advancements, changing consumer preferences, and intense
competition. In this report, we will analyze the value chain of the IT industry and
propose strategies to enhance value creation for a beginner-level IT firm.
Analysis of the IT Value Chain:
• Software Development: Software development is the core activity in the IT value
chain, where products and solutions are conceptualized, designed, and built. Our
company should focus on delivering innovative and user-friendly software solutions
that address customer needs and pain points.
• Quality Assurance and Testing: Quality assurance and testing are crucial stages in
the software development process to ensure product reliability, performance, and
security. Our company should implement robust testing procedures and quality
control measures to deliver high-quality software products to customers.
• Deployment and Implementation: Successful deployment and implementation of
software solutions require effective project management, technical expertise, and
customer support. Our company should provide comprehensive deployment services,
including installation, configuration, and training, to ensure a seamless transition for
customers.
• Customer Support and Maintenance: Providing ongoing customer support and
maintenance services is essential for maintaining customer satisfaction and loyalty.
Our company should offer timely and responsive technical support, software updates,
and troubleshooting assistance to address customer inquiries and issues.
 Recommendations for Value Creation:
• Product Differentiation: Differentiate our software
products from competitors by focusing on unique
features, functionalities, and user experiences
• Customer-Centric Approach: Adopt a customer-centric
approach by actively soliciting feedback, understanding
customer pain points
• Scalability and Flexibility: Design software solutions
that are scalable, flexible, and adaptable to
accommodate evolving customer requirements
• Strategic Partnerships: Form strategic partnerships
with industry stakeholders, technology vendors, and
software developers for better product delivery.
Enterprise model/ Business model
• It is a strategic framework that outlines how a
business operates, generates revenue, and
creates value for its stakeholders.
• It serves as a blueprint that guides the
organization's activities, resources allocation,
and decision-making processes.
• The enterprise model defines the fundamental
aspects of a business's operations and helps
articulate its value proposition to customers and
other stakeholders.
Key components of creating enterprise model
• Value Proposition: Define the unique value proposition that your business offers to customers.
• Customer Segments: Identify and understand your target customer segments.
• Revenue Streams: Determine how your business will generate revenue. Explore various revenue streams
such as product sales, subscription services
• Channels: Define the channels through which you will reach and engage with your customers. This may
include online platforms, physical stores, distribution partners
• Customer Relationships: Determine the type of relationships you will establish and maintain with your
customers. This may involve personalized interactions, customer support services
• Key Activities: Identify the key activities and processes that are essential for delivering your value
proposition and running your business effectively. This may include product development, manufacturing,
marketing, sales
• Key Resources: Identify the key resources and assets required to support your business operations.
• Key Partnerships: Identify strategic partnerships and alliances that can help your business enhance. This
may include suppliers, distributors, technology providers, industry associations
• Cost Structure: Determine the cost structure of your business and how resources will be allocated to support
various activities and operations.e.g. fixed costs, variable costs, and other expenses.
• Strategic Differentiation: Identify and articulate the factors that differentiate your business from competitors.
• Scalability and Growth: Consider the scalability of your enterprise model and how it can adapt to changing
market dynamics
 Types of enterprise model
• E-commerce Model: Examples include Amazon, eBay, and Etsy.
• Subscription Model: Examples include Netflix, Spotify, and Dollar Shave
Club.
• Freemium Model: Examples include Dropbox, LinkedIn, and Evernote.
• Marketplace Model: Examples include Airbnb, Uber.
• On-Demand Model: Examples include UberEats, DoorDash
• SaaS (Software as a Service) Model: Examples include Salesforce, Slack,
and Adobe Creative Cloud., amazon
• Brick-and-Mortar Model: Examples include Walmart, Starbucks, and
Target.
• Franchise Model: Examples include McDonald's, Subway, and KFC.
• Direct Sales Model: Examples include Avon, Mary Kay, and Amway.
• Social Enterprise Model: Examples include TOMS Shoes, Ben & Jerry's,
and Grameen Bank
Sustaining enterprise model
• Sustaining an enterprise model refers to the
ability of a business to maintain its operations,
profitability, and relevance over time.
• It involves ensuring the long-term viability and
success of the business model in the face of
changing market dynamics, evolving customer
preferences, and competitive pressures.
• Sustaining an enterprise model requires
proactive strategies and ongoing efforts
 Key Aspects for sustaining enterprise model
• Continuous Innovation: Businesses must innovate and evolve their products, services, and
processes to stay competitive
• Adaptability: Successful businesses are adaptable and responsive to changes in the business
environment.
• Customer Focus: Sustaining an enterprise model requires a deep understanding of customer
preferences, behaviors, and expectations.
• Operational Efficiency: Efficient operations are essential for sustaining profitability and
managing costs effectively.
• Financial Stability: Sustaining an enterprise model involves maintaining financial stability and
resilience against economic downturns and market volatility.
• Strategic Partnerships: Collaborating with strategic partners can enhance the capabilities and
reach of a business. Partnerships with suppliers, distributors, technology providers, and
industry associations can provide access to new markets, resources, and expertise.
• Talent Management: People are a critical asset in sustaining an enterprise model. Businesses
should attract, retain, and develop top talent
• Risk Management: Businesses must identify, assess, and mitigate risks that could impact the
sustainability of their enterprise model.
• Strategic Planning: Sustaining an enterprise model requires long-term strategic planning and
vision.
Organization effectiveness
• Organization effectiveness refers to the
ability of an organization to achieve its
goals and objectives efficiently and
successfully.
• It involves the extent to which an
organization utilizes its resources,
processes, and capabilities to produce
desired outcomes and deliver value to
stakeholders.
 Dimensions of organizational effectiveness.
• Goal Attainment: The organization's ability to accomplish its strategic objectives, mission, and vision within
specified timeframes and with optimal use of resources.
• Resource Utilization: Efficient allocation and utilization of human, financial, technological, and other
resources to support organizational activities and initiatives.
• Adaptability and Agility: The organization's capacity to adapt to changes in the internal and external
environment, anticipate emerging trends, and respond effectively to new challenges and opportunities.
• Innovation and Creativity: Encouraging and fostering a culture of innovation and creativity that enables the
organization to develop new ideas, products, services, and processes to meet evolving customer needs and
market demands.
• Customer Focus: Prioritizing customer satisfaction and delivering high-quality products, services, and
experiences that meet or exceed customer expectations and build long-term relationships and loyalty.
• Employee Engagement and Satisfaction: Creating a positive work environment, fostering employee
morale, motivation, and engagement, and providing opportunities for professional growth, development, and
fulfillment.
• Leadership Effectiveness: The ability of organizational leaders to inspire, guide, and motivate employees,
establish clear direction and expectations, and foster a shared vision and sense of purpose.
• Communication and Collaboration: Promoting open, transparent communication channels and fostering
collaboration, teamwork, and knowledge sharing across different levels and functions within the organization.
• Ethical and Social Responsibility: Demonstrating commitment to ethical behavior, integrity, and corporate
social responsibility by adhering to legal and regulatory standards, promoting diversity and inclusion, and
contributing positively to the communities and environments in which the organization operates.
• Financial Performance: Achieving sustainable financial results, profitability, and growth while maintaining
sound financial practices, managing risks, and maximizing shareholder value.
• Culture: maintaining culture that value the organization effectiveness parameters.
Factors to ensure organization
effectiveness
• Clear vision and mission
• Strategic goals and objective
• Clear decision rights
• Strong leadership commitment
• Talent Management
• Continuous improvement
• Business-unit involvement
• Holistic approach
• Balance authority and responsibility