MODULE

4
Creativity, Innovation
&
The Business
Opportunity
McGraw-Hill/I rwin
Copyright 2013 by The McGraw-Hill Companies, I nc. All rights reserved.
4-2
Learning Objectives
To identify various sources of ideas for new
ventures
To discuss methods available for generating
new venture ideas
To discuss creativity and the techniques for
creative problem solving
To discuss the importance of innovation
4-3
Learning Objectives
To understand an opportunity assessment
plan
To discuss the aspects of the product planning
and development process
To discuss aspects of e-commerce and starting
an e-commerce business
4-4
Table 4.1 - Trends of the Next Decade
4-5
Sources of New Ideas
Consumers
Entrepreneurs should:
Formally or informally monitor potential ideas
Ensure that the idea represents a large enough market
to support a new venture
Existing products and services
Formally monitor and evaluate competitive
products and services on the market
4-6
Sources of New Ideas
Distribution channels
Help suggest and market new products
Federal government
Taking cue from pending patents
Ideas evolve in response to government
regulations
Research and development
Formal endeavor connected with ones current
employment
4-7
Methods of Generating New Ideas
Focus groups
Open in-depth discussion led by a moderator
Brainstorming
Group method for obtaining new ideas and
solutions
Rules of brainstorming
No criticism
Freewheeling is encouraged
4-8
Methods of Generating New Ideas
Quantity of ideas is desired
Combinations and improvements of ideas are
encouraged
Brain writing
Form of written brainstorming
Problem inventory analysis
Obtaining new ideas and solutions by focusing on
problems
Used to test a new product idea
4-9
Creative Problem Solving
Method for obtaining new ideas focusing on
the given parameters
Can be stifled by perceptual, cultural,
emotional, and organizational factors

4-10
Table 4.3- Creative Problem-Solving
Techniques
4-11
Creative Problem Solving
Brainstorming
Reverse brainstorming
Group method for obtaining new ideas by focusing
on the negative aspects
Care must be taken to maintain group morale
Gordon method
Developing new ideas when the individuals are
unaware of the problem
4-12
Creative Problem Solving
Ensures that solutions are not clouded by
preconceived ideas and behavioral patterns
Checklist method
Developing a new idea through a list of related
issues
Free association
Developing a new idea through a chain of word
associations
4-13
Creative Problem Solving
Forced relationships
Developing a new idea by looking at product
combinations
Focused on generating ideas from relationship
patterns between elements of a problem
Collective notebook method
Developing a new idea by group members
regularly recording ideas

4-14
Creative Problem Solving
Attribute listing
Developing a new idea by looking at the positives
and negatives
Big-dream approach
Developing a new idea by thinking without
constraints
Parameter analysis
Developing a new idea by focusing on parameter
identification and creative synthesis
4-15
Figure 4.1 - Illustration of Parameter
Analysis
4-16
Innovation
Types of innovation
Breakthrough
Extremely unique innovations that establish the
platform on which future innovations can be developed
Should be protected by patents, trademarks, and
copyrights
Technological
Advancements in the product/market area
Needs to be protected
4-17
Innovation
Ordinary
Extend technological innovation into a better product
or service or one that has a different market appeal
Result of market analysis and pull and not technological
push


4-18
Innovation
Defining a new innovation (product or service)
Newness of a product can be attributed to:
Consumer concept
Change in the package or container
Modifications in the appearance of the product
(industrial market)

4-19
Innovation
Classification of new products
Consumers viewpoint
Determines newness in terms of its effect
Degree of newness depends on:
Level of behavioral change or new learning required by the
consumer

4-20
Figure 4.3 - Continuum for Classifying
New Products
4-21
Innovation
Firms viewpoint
An innovative entrepreneurial firm should:
Make a distinction between new products and new markets
New products - Defined in terms of amount of improved
technology
Market development - Based on the degree of
segmentation

4-22
Figure 4.4 - New Product Classification
System
4-23
Figure 4.5 - A Model of the
Opportunity Recognition Process
4-24
Product Planning and Development
Process
Product life-cycle: Stages each product goes
through from introduction to decline
Product planning and development process:
Stages in developing a new product

4-25
Product Planning and Development
Process
Evaluation criteria
Market opportunity
Competition
Marketing system
Financial factors
Production factors

4-26
Figure 4.6 - The Product Planning and
Development Process
4-27
E-commerce and Business Start-up
Offers entrepreneurs an opportunity to be
creative and innovative
Factors that facilitate growth
Widespread use of personal computers
Adoption of intranets in companies
Acceptance of the Internet as a business
communications platform
Faster and more secure systems

4-28
E-commerce and Business Start-up
Using E-commerce creatively
An entrepreneur has to decide whether he or she
will run the Internet operations:
Within the company or outsource these operations to
Internet specialists
Integrate front-end and back-end operations
Integrate customer orders, with distribution
channels and manufacturing capabilities
Allow flexibility for specific customer orders

4-29
E-commerce and Business Start-up
Web sites
Important features include:
Ease of use
Search capability
E-mail response system
Speed
Compatibility with different browsers and platforms

4-30
E-commerce and Business Start-up
Tracking customer information
Provides personalized one-to-one marketing
Laws protecting the privacy of individuals should
be followed

4-31
E-commerce and Business Start-up
Doing E-Commerce as an entrepreneurial
company
Essential criteria
Economic and convenient delivery of products
Products should cater to a wide market
Feasibility of shipping outside own geographical
location
Significant cost reductions
Ability to economically draw customers to its Web site

4-32
END OF MODULE 4