Creativity & Entrepreneurial(Iind Unit) (1)

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    2ND UNIT

    CREATIVITY AND ENTREPRENEURIAL

    PLAN: IDEA GENERATION

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    CREATIVITY & ENTREPRENEURIAL :

    Idea Generation (2nd Unit)At the idea stage, individuals find their mindobsessed & occupied with an idea which keepsgrowing. They find great potential for their idea. Awild guess indicates a business opportunity behindthe idea, as it could bring in a change, in the waythings are happening. For shaping the idea andcreating impact on the society, the idea needs tobe pursued further with the help of relevantspecific information. Therefore the need is to linkthe idea to a clear & feasible business opportunity.

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    FEATURES OF THE IDEA STAGE OF A

    BUSINESS VENTURE IDEA : Born from a single person, or at times agroup effort of few people.

    SENSE: A mission that inspires us with senseand moves us, both through the entrepreneurproject and in the personal field.

    UNCERTAINITY : A high level of uncertainty inall areas ( such as technology, market, sector,finance, regulation and rivalry) apart from senseitself.

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    FEATURES OF THE IDEA STAGE OF A

    BUSINESS VENTURESACRIFICE : Entrepreneurs work without a

    salary and with huge devotion and

    commitment. INFORMAL : Company is not yet incorporated

    PUBLIC V/S PRIVATE : Hard balance between

    keeping the project confidential and making itpublic while seeking information, advise,

    answers and feedback

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    FEATURES OF THE IDEA STAGE OF A

    BUSINESS VENTURE AUSTERITY : Care should be taken to keep the

    operational cost as low as possible.

    SIGNIFICANCE : Many key decisions are made thatwill have a deep impact (positive or negative ) on

    the future project evolution.

    LEARNING : Broad, slow & expensive due to thecomplexity of the circumstances, and to multiple

    faces of the project (technology, market, strategy,

    finance, operations, channels, sources of capital.)

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    FEATURES OF THE IDEA STAGE OF A

    BUSINESS VENTURE

    TRANSITION : Time to get ready for a change,

    assess the situation and decide whether youmake this great jump towards

    entrepreneurship.

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    FEATURES OF THE IDEA STAGE OF A

    BUSINESS VENTUREA budding entrepreneurs start their journeytowards entrepreneurship with one or few uniqueideas in their hand which, according to them, click

    in the market. The most crucial step lies inidentifying one unique idea that separates out fromhundreds of other ideas that are either impracticalor less promising. One of the prominent evaluation

    methods successfully used in this stage is thesystematic market evaluation check list, whereeach new product idea is expressed in terms of itschief value merits and benefits ( Gedimen 1965).

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    THE JOGGERS STOP WATCH

    The first digital Joggers Stop Watch was a greatidea ---- except that you could not switch from thestop watch mode to see the real time, without

    wiping out the elapsed time on the stop watchfunction. So, a jogger could not tell what time itactually was, only how long they had been running.The execution of the concept is as important as its

    abstract description. Also, it often pays to concept-test your competitors product. You can often find afatal flaw in an otherwise good concept, which iseasily correctable.

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    CONCEPT STATE ISSUES TO BE

    ADDRESSED

    Concept Stage - Issues

    Seek Customer Reaction toProducts & Services

    Incorporate necessary changes

    based on customer feedback

    Not Favourableabandon

    Product / Services Superior as

    compared to existing available

    Choices

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    Product Development is a process focused ondeveloping systematic methods for guiding all thesteps involved in & associated with getting a new

    product to market. ProductDevelopment servesas a bridge between a problem or need & providinga solution in life. A PDModel becomes relativelyeasy , in case it revolves around known customers,

    product, business model, pricing, distributionprocess and competition. Complication increaseonly when uncertainties & unknown parametersincrease.

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    PRODUCT DEVELOPMENT STAGE

    Product

    Development

    New Products to market place

    New Product to the Company

    Improved Version of existing

    Products

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    PRODUCT DEVELOPMENT STAGE

    Product development may relate to a productthat is either altogether new to themarketplace or new to the company or it

    could be improved version of an excitingproduct produced by the company.

    It is a process focused on developingsystematic methods for guiding all the stepsinvolved in & associated with getting a newproduct to the market.

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    PRODUCT DEVELOPMENT STAGE

    The New Product Development stages

    provide the last opportunity provide the last

    opportunity to twist & squeeze the product

    design to improve its performance andoutlook aesthetically. Even at this stage, the

    product development team keeps coming up

    with further opportunities for cost saving orfeature enhancement.

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    PRODUCT DEVELOPMENT STAGE

    Product development model becomes

    relatively easy, in case it revolves around

    known customers, product, business model,

    pricing, distribution process & competition.However, complication increase as

    uncertainties and unknown parameters

    increase.

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    PRODUCT DEVELOPMENT STEPS

    Collate Critical Inputs Received

    Through Focus Groups, Consumers

    Generate design specifications &

    Incorporate in the product.

    Continuous Evaluation based on

    predetermined Objective Criteria

    Prototype Development

    Full Working Model

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    Test Marketing provides actual salesoutcomes in terms of turnover & specificpreferences revealed by the customers from a

    promotion & distribution point of viewrevealing the acceptance level on the part ofthe customers.

    The results of the test marketing are carefullymonitored, to derive its advantage in terms oflaunching the product on a larger scale.

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    The Test Marketing can be undertaken in anyarea or combination of areas, such as televisionarea, internet online test, test town & residentialneighbourhood and this stage requires basically

    decisions to be taken related to thefollowing.

    Which test market ?

    What exactly is to be tested ?

    How long does a test need to be conducted ?

    What are the success criteria ?

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    STEPS INVOLVED IN TAPPING

    OPPORTUNITY

    E Seizing theopportunity

    Evaluating

    Opportunity

    Understanding time

    frame of an

    opportunity

    Computingthe worth of

    an

    opportunity

    EstablishingNeed,

    undertaking

    Market Research

    Identifying need

    for partners, if

    any

    Identifying Resources

    required & sources to

    acquire

    Managing the

    Venture

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    SEIZING THE

    OPPORTUNITY

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    Opportunity evaluation basically starts withcustomer pain points or needs that can befulfilled. There should be concrete evidence

    backed up by a customers response to aproposed solution and its acceptance by thecustomer.

    One needs to clearly define a valuepreposition to the customer with the helpof clearly & concretely identified gains.

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    Every opportunity has a time horizon for whichit exists. Opportunity does not exist before aparticular time and ceases after a given time

    horizon. Therefore, the entrepreneurs need tobe ready with delivery of their product / serviceexactly at a time during which opportunityexists.

    Successful ventures identify & exploit market in

    time, while others miss those opportunitiesbecause of lack of sense about timings.

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    COMPUTING THE WORTH OF AN

    OPPORTUNITY

    Opportunity cost is defined as the cost

    related to the next-best choice available to

    someone who has picked from among several

    mutually exclusive choices.

    The notion of opportunity cost plays a crucial

    part in ensuring that scarce resources are

    used efficiently.

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    Suppose one has 5 acres of land in the heart ofthe city and decides to build a hotel on it. Theopportunity cost of building a hotel is the value

    of the benefits that would be foregone byputting the funds on the next best alternativeuse to which the same land could have been put

    to.

    By putting the land to hotel use, the possible

    alternative opportunities foregone could bebuilding a hospital, school & shopping complex.

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    COMPUTING THE WORTH OF AN

    OPPORTUNITY

    It is important to remember that the total

    opportunity cost of choosing an option

    amongst exclusive alternative options can

    never be estimated with certainty, and aretherefore called Hidden Costs or Hidden

    Losses as what has been prevented from

    being produced cannot be seen or known.

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    Will customers take interest in the proposed product orservice ?

    What is going to be the market opportunity?

    What is the range in which customers will be willing to

    pay for the product? How do you propose to expand the market?

    What will be the distribution and packaging strategy andcost ?

    Who are the competitors and what are their strength &

    weaknesses. Can you create exclusive rights on the product through

    patenting, copy right, design, trademark or trade secret ?

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    While making a plan for the venture, theentrepreneur depending upon the businessventure has to develop a clear understanding ofthe need for inducting co-founders if any.

    This basically depends on the nature of thebusiness and the size of the operations.

    Whenever required, it is desirable to engagesuch development partners in the beginning

    phase of the venture itself. These partners add a lot of value by way of

    technical and business expertise to the venture.

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    IDENTIFYING RESOURCES REQUIRED

    AND SOURCES TO ACQUIRE

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    Managing the venture requires a managementstructure and style in place, to be duly filled upwith a right set of people to respond tochallenges, difficulties and blocks that may comeon the way of implementation.

    To fetch returns on investments made, theentrepreneur needs to invest on people --- build

    teams, operating procedures & practices, andinformation technology to make quick & gooddecisions.

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    Entrepreneurs should always under-promise and

    over-deliver to the customer, to ensure building

    customer good will.

    The growth of the venture depends much upon

    developing several types of products around corecompetence and related themes.

    Development requires more research andexperimentation & the unending cycle continues.

    Thus, innovation is the constant challenge for anyventure and vital to retaining competitive advantage

    in the long term.