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Entrepreneurship 8th EditionAuthor:Robert D Hisrich,Micheal P. PetersDean a Shepherd

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Creativity & Innovation Creativity is the ability to develop new

ideas and to discover new ways of looking at problems & opportunities

Innovation is the ability to apply creative solutions to those problems & opportunities to enhance or to enrich people’s lives Innovator

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Creativity = Ideas

Creativity involves generating something from nothing

Creative ideas springs up from the most unexpected places

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Edwin Land, one of America’s most prolific inventors, credits his three year

old daughter with the idea of the Polaroid instant camera

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What an idea!!!!

But not valued in Business until implemented!!!

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Innovation = Ideas + Action

Entrepreneurship is the result of a disciplined, systematic process of applying creativity & innovation to needs & opportunities in the marketplace

Millions of people come up with creative ideas for new or different products & services; most of them, however, never do anything with them

Entrepreneurs are those who connect their creative ideas with the purposeful action & structure of a business

Thus successful entrepreneurship is a constant process that relies on creativity, innovation & application in the marketplace

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3000 new product ideas, 4 make it to development stage,

2 are actually launched & only ONE becomes a success in the market

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Creativity should be accompanied with Innovation!!

Entrepreneurs succeed by thinking and doing new things or old things in new way

Having a great new idea is not enough; transforming the idea into a tangible product, service or business venture is the essential next step

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Trends

• Green Trend

• Clean-Energy Trend

• Organic-Orientation Trend

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•Social Trend

•Health Trend

•Web Trend

Trends (continued)

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Sources of New Ideas (1 of 2)

Consumers.

Existing Companies

Distribution channels

fd

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Sources of New Ideas (2 of 2)

Federal government

Research and development

df

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Methods of Generating New IdeasFocus groups

number of group members from 6-12 Moderator focuses discussion of the group in a

directive or nondirective manner.Co. women’s slipper-concept of “warm &

comfortable slipper that’s fits and old shoe” – 12 women focus group

An excellent method for initially screening ideas and concepts.

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Brainstorming A Group method for obtaining new ideas &

solutions 4 Rules should be followed1.No criticism is allowed by anyone in the group2.Freewheeling is encouraged-wilder the idea

the better3.Quantity of ideas is desired- greater the no. of

ideas the greater the likelihood of the emergence of useful ideas

4.Combinations and improvements of ideas are encouraged- ideas of others can be used to produce still another new idea

Brainwriting is similar to Brainstorming…

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Focus group and brainstorming is different in the sense that FG is structured or moderated...while BS is not a debate or discussion

like that....its people giving lots of ideas without criticism allowed

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Methods of Generating New Ideas (2 of 2)

Problem inventory analysis

Consumers associates particular problems with specific products & then develop a new

product that do not contain the identified fault

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Problem inventory analysis (continued)Instead of generating new ideas themselves

consumers provided with list of problems in general product category

Then asked to identify & discuss products in this category that have particular problem

Effective method since its easier to relate known products to suggested problems & arrive at a new product idea than to generate an entirely new product idea by itself

Results must be carefully evaluated as they may not actually reflect a new business opportunity.

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Creative Problem SolvingCreativity: an important attribute of a successful

entrepreneur.

Creativity tends to decline with: Age, education, lack of use, and bureaucracy.

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Creative Problem-Solving Techniques

<<Insert Table 5.2>>

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Creative Problem-Solving Techniques (1 of 3)Brainstorming

Used in creative problem solving and idea generation.

Creative problem solving: a method for obtaining new ideas

Spontaneous contribution of participants Problem statement-neither too broad nor

too narrow Avoid inhibiting responses NO group member should be expert in field

of problem Ideas even if illogical, must be recorded Prohibit criticizing OR evaluating during BS

session

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Reverse brainstorming A group method for obtaining new ideas focusing on the negative.

Finding fault by asking questions “in how many possible ways can the idea flop”

Maintain group morale Stimulate innovative thinking Often involves identification of everything wrong with an idea- followed by discussion how to overcome these problems

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Brainwriting Form of written brainstorming. It is a silent, written generation of ideas by a group of people.

This sheet can b passed around on e-mail as well

Pass the sheet around – reach its owner

The only thing wrong with it is that there is no excitement of verbal discussion

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Creative Problem-Solving Techniques (2 of 3)

Gordon methodMethod for developing new ideas when the

individuals are unaware of the problem.u don’t give away too much detail about

the problemheadline would be “i wish there was

something v cud do about the bad colors in my TV screen” Or Latest trends in fashion world”

Checklist methodDeveloping a new idea through a list of related issues.

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Product Planning & Development Process Establishing Evaluation Criteria Criteria for evaluation need to be established at

each stage of the product planning and development process.

Criteria should be: All inclusive and quantitative to screen the

product carefully. Established to evaluate the new idea in terms of:

Market opportunity Competition Marketing system Financial factors Production factors.

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Market opportunity

Competition

Marketing system

Financial factors

Production factors.

•Need for the product idea must exist•Characteristics & attitudes of consumers that might buy the product, size & nature of market •Share of that market that product could capture • competing producers, prices, & marketing policies

should be evaluated•Product should be able to compete successfully with products already on the market by having features that will meet or overcome current or anticipated competition

•New product should be compatible with existing management capabilities & marketing strategies•Firm should be able to use its marketing experience & other expertise in this new product effort•Example: GE would have less difficult time adding a new kitchen appliance to its line than P&G• product should be able to be supported by & contribute to Co. financial structure•Break even point & Long term profit outlook for product need to be determined • if the new product idea cannot be integrated into

existing manufacturing processes, not only is the new idea is less positive- but new plan & production cost – plant space need to be determined

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Product Planning and Development ProcessDivided into five major stages:

Idea stage.Concept stage.Product development stage.Test marketing stage.Commercialization.

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The Product Planning and Development Process (1 of 3)

<<Insert Figure 5.6>>

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The Product Planning and Development Process (2 of 3)

Idea stage Promising new product/service ideas should

be identified. Impractical ones eliminated. Evaluation method – systematic market

evaluation checklist. Concept stage

Refined idea is tested to determine consumer acceptance.

Consumer acceptance can be measured through the conversational interview method.

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The Product Planning and Development Process (3 of 3)

Product development stage Determines consumer reaction to the physical

product/service. A tool frequently used – consumer panel. Consumer preference is determined through:

multiple brand comparisons, risk analysis, level of repeat purchases, or intensity of preference analysis.

Test marketing stage Increases certainty of successful

commercialization. Provides actual sales results, which indicate the

acceptance level of consumers. Positive test results indicate probability of

successful product launch

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E-commerce and Business Start-up E-commerce offers entrepreneurs an

opportunity to be creative and innovative.

Factors that facilitate a high-growth in electronic commerce: Widespread use of personal computers. Adoption of intranets in companies. Acceptance of the Internet as a business

communications platform. Faster and more secure systems.

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Using E-Commerce Creatively

Entrepreneurs starting an Internet commerce venture need to address the same strategic and tactical questions as any other entrepreneur.

Entrepreneurs have to decide to: Run Internet operations within the company,

or Outsource these operations to Internet

specialists.

Another option is to use the packages for e-commerce.

•Internet operations-company primary business•Availability of resources –web professional

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Components of Internet Commerce Two major components of Internet

commerce are: Front-end operations. Back-end operations.

Integration of front-end and back-end operations represents the greatest challenge for doing

Internet business. provides the opportunity for developing a

sustained competitive advantage.

The biggest mistake of many companies on the internet is believing that an attractive & interactive website will

secure success- leads to underestimating imp of end operations

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Web Sites- connection btw Co & its Customers

Keys to a good Web site: Ease of use ( info product /services ) Structure and organization of information Visibility Search capability E-mail response system Speed. Technical aspects

Should work properly in different browsers and platforms.

Should appear in all marketing materials.

professional

design Web

designer

Indicator of

legitimacy

Shopping cart- credit card

payments Secure

servers httpsAdvertise-

search engines,

banner ads, emailSecure servers https

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Tracking Customer Information Database:

Tracks activity of the: Industry. Segment. Company.

Supports personal marketing targeted at individual clients.

Should be able capture customer attention with customized one-to-one marketing.

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Doing E-Commerce as an Entrepreneurial Company

To do business through the Internet:Products should be delivered economically and conveniently. Products need to interest a wide market

Company must be ready to ship the product outside its own geographical location.

Online operations have to bring significant cost reductions-as compare to brick & mortar operation

Company must possess the ability to economically draw customers to its Web site.

Fresh fruits &

vegitables ?

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Summary Starting point –successful Co.-

product/Service they offerSources of ideas ranges – comments of

consumers TO changes in Govt regulationsMonitoring comments of ConsumersEvaluating new products offered by

competitorsFamiliar with the ideas contained in

previously granted patents

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Becoming actively involved in R&D Specific tech’s entrepreneur use to generate

ideas

After idea generation the planning and developing process begins

Large number ideas screened/ evaluated Potential ideas moved- concept, product

development, test marketing, commercialization stage

Focus group-Brainstorming-Problem inventory analysis