CHAPTER 2

INNOVATION
IN
ENTREPRENEURSHIP

The era of the intelligent

man/woman is almost over and a
new one is emerging the era of the
creative and innovative
man/woman.
-Pinchas Noy
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 Learning Objectives:
After studying this chapter you should be able to
describe:
1. The Business Idea and How to Develop New
business Idea.
2. The definition of technology and how to create
a product (product life cycle).
3. The Important of Leadership, innovation and
consultancy skills in business.
4. The Government and Private Agencies Related
with the Innovation Activities.
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 DEVELOPING BUSINESS IDEA
Identifying and Recognizing Opportunities
Opportunity = is a favorable set of circumstances that
creates a need for a new product, service or business.
An opportunity has four essential qualities

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 Three Ways to Identify an Opportunity
1. Observing Trends

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 2. Solving a Problem

Observing
Noticing problem trends by intuition,
serendipity, or chance.

For example, Symantec Corp.

Some business ideas are clearly created Norton antivirus
initiated to solve a problem. software to guard computers
against viruses.

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3. Finding Gaps in the Marketplace

A third approach is finding a gap in the

marketplace
When a product or service is needed by a specific
group of people but doesnt represent a large
enough market to be of interest to mainstream
retailers or manufacturers.
E.g. small clothing boutiques and specialty shops.
The small boutiques, which often sell designer clothes
or clothing for hard-to-fit people, are willing to carry
merchandise that doesnt sell in large enough quantities
for Wal-Mart.
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Five Steps to Generating Creative
Ideas

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 Is the background, experience and knowledge that
Preparation an entrepreneur brings to the opportunity
recognition process.

Is the stage during which a person

Incubation considers an idea or thinks about a
problem.

Insight Is the flash of recognition when the solution to a

problem is seen or an idea is born. It is sometimes
called the eureka experience.

Is the stage of the creative process during

Evaluation
which an idea is subjected to scrutiny and
analyzed for its viability.

Elaboration Is the stage during which the creative idea

is put into a final form. 8
 Techniques for Generating Ideas
1. Brainstorming
Is a technique used to generate a large number of
ideas and solutions to problems quickly.
Sessions will involves a group of people, and
specific topic.
Rules for sessions:
No criticism.
Free wheeling is encouraged.
The session should move quickly.
Leap-frogging is encouraged.

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 2. Focus Groups

Group of five to ten people, selected based on their

common characteristics relative to the issues being
discussed.
led by a trained moderator, who uses the internal
dynamics of the group environment to gain insight
into why people feel they way they do about a
particular issue.
Can be use to help generate new business ideas.

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 3. Surveys
(
A method of gathering information from a sample of
individuals. The sample is usually just a fraction of
the population being surveyed.
The most effective surveys sample a random
portion of the population, meaning that the sample is
not selected haphazardly or only from people who
volunteer to participate.
The quality of survey data is determined largely by
the purpose of the survey and how it is conducted.
Surveys generate new product, service, and business
ideas because they ask specific questions and get
specific answers.

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 Other Techniques

Customer Advisory Boards

Some companies set up customer advisory boards
that meet regularly to discuss needs, wants, and
problems that may lead to new ideas.
Day-In-The-Life Research
A type of anthropological research, where the
employees of a company spend a day with a
customer.

2-
TECHNOLOGY AND CREATING PRODUCTS

First Definition: Is a development and the use of

tools, machine, input/raw material and process
to solve problems.
Human activities had existed ways before human
thought of science and engineering. It
encompass human knowledge regarding real
problem in the design of tools, machine and
process. Technology can be use not just for
creating machine, but also for biological field
such as stem cell research
 Technology usually is connected to design and
gadgetry by using the principle of science and
latest process. The invention of Tyre is old but
the process and materials continue to evolve till
today.

Second definition: Is used in economic. Whereby technology is

seen through the level of knowledge in the process of merging of
resource to produce a desired product. Therefore, we can say that
when our technical knowledge is increase, the technology itself will
also increase.
 Theoretically, technology can be define as the
application of science that can be put to a
good use and as a way of solving human daily
lifes problem.
 Creating Products
Differences of Product definition through varied perspective:

Business definition:
Product is a good /service that can be sold

Marketing definition:
Product is a thing of value that can be offered to the customer that can fulfill his
wants and needs.

Retailing definition:
Product is a merchandise that can be sold

Manufacturing definition:
Product is a material that comes as a raw material that will be sold as finished
product.
Raw materials can come as a commodity such as metal and agriculture produced.
 PRODUCT LIFE CYCLE
Sales

Sales

Profit

Time

Introduction Growth Maturity Decline

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 Product Life Cycle

Introduction Stage
In the introduction stage, the firm seeks to build product awareness
and develop a market for the product. The impact on the marketing
mix is as follows:
Product branding and quality level is established, and intellectual
property protection such as patents and trademarks are obtained.
Pricing may be low penetration pricing to build market share rapidly,
or high skim pricing to recover development costs.
Distribution is selective until consumers show acceptance of the
product.
Promotion is aimed at innovators and early adopters. Marketing
communications seeks to build product awareness and to educate
potential consumers about the product.
Growth Stage
In the growth stage, the firm seeks to build
brand preference and increase market share.
Product quality is maintained and additional
features and support services may be added.
Pricing is maintained as the firm enjoys
increasing demand with little competition.
Distribution channels are added as demand
increases and customers accept the product.
Promotion is aimed at a broader audience.
Maturity Stage
At maturity, the strong growth in sales diminishes. Competition may
appear with similar products. The primary objective at this point is
to defend market share while maximizing profit.
Product features may be enhanced to differentiate the product
from that of competitors.
Pricing may be lower because of the new competition.
Distribution becomes more intensive and incentives may be offered
to encourage preference over competing products.
Promotion emphasizes product differentiation.
Decline Stage
As sales decline, the firm has several options:
Maintain the product, possibly rejuvenating it by adding new
features and finding new uses.
Harvest the product - reduce costs and continue to offer it, possibly
to a loyal niche segment.
Discontinue the product, liquidating remaining inventory or selling
it to another firm that is willing to continue the product.
The marketing mix decisions in the decline phase will depend on
the selected strategy. For example, the product may be changed if
it is being rejuvenated, or left unchanged if it is being harvested or
liquidated. The price may be maintained if the product is
harvested, or reduced drastically if liquidated.
LEADERSHIP, INNOVATION AND CONSULTANCY
SKILLS IN BUSINESS
Leadership = the process of influencing
others to achieve group or organizational
goals.
Visionary Leadership = leadership that
creates a positive image of the future that
motivates organizational members and
provides direction for future planning and
goal setting.

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 Leadership Traits
Desire to lead
Honesty and integrity
Self-confidence
Emotional stability
Cognitive ability
Knowledge of the business
Drive
Have Vision
Dedication

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 Leadership & Skills
Successful Leaders Dont
Procrastinate

Successful Leaders Dont Delegate

Accountability

Successful Leaders Develop Other

Leaders
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 Negotiation Skills in Business
Informal negotiation with friends
Formal negotiation with suppliers and government agencies.
However, negotiation in business is different if it is compared to normal
daily life discussion. It is much more complex. For a professional
negotiation session, youll need preparation, planning, strategies, tactic
and interpersonal and communication skills. These are important ofr
gaining a succesful outcome which satisfy both of the dealing parties.
Basic Concept of Negotiation
They are:-

Involving two or more parties with:

An agenda
Objectives and goals
Time period
Conducive environment
Representatives/Proxies must be bestowed the power to make
decision

The Principle concept of negotiation in business

sales and communication.
You, your organisation/business and product.

Decision must be done during the deadline. Negotiation can be in:

Internal consultation between departments or managent to staff.
External consultation with bank, supplier, investor and customer.
Negotiation Preparation

Attention to Non-Verbal Communication:

Clothes, looks and image.
Gestures
Posture
Eye contact and body odour.

Create positive first impression

Hospitable ambience and avoid threatening.

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 Consultation Process
1. The key is to reach the objectives of the party of
interest.
2. Give and take. You should sometime
compromise.
3. Be calm and control your anger.
4. Sell yourself.
5. Prepare to present it yourself. Written,
powerpoint or orally.
6. Ask Feedback.
7. Take time to think. Yes or no?
8. Remember the names
9. Do not compromise towards achieving the
objectives. STOP! If you must.
10. Use your strength wisely.
11. Believe in yourself.
12. Be fair.
13. End the process with a positive note.
14. thank you and gratitude.
 Negotiation Strategy
Prepared a complete negotiation agenda. A clear and focus agenda
will leverage every impact of any compromise.

Give an early concession. Try to satissfy the other party whom you
have interest with.

Get the necessary details for the all the important issues. Evaluate
the situation and the people who involve in the matter. You may had
to revise your strategies and objectives.

There can be a rediscussion of agreed matters when the negotiation

took several days. Dont worry, because these are the times to
change you minds till youre satisfied.
 Negotiation Tactics
A polite discussion will be more effective.
Negotiate with people of power.
Be sured that youre voicing the important
issues. (at the right time).
If there has to be a second meeting, set the
venues and date.
Dont be irate when headlocking.
Take time out to discuss opinions among your
team. It is also used for cooling the heat of
discussion.
 Held back for discussing sensitive matters.
Sometimes it is better not to say anything when
youre presented with a ridiculous demand.
Agree on the small concession while keeping
ahead with the main concession. (take what you
can).
Use the positive/ negative tactic. It must be done
in a team. If the other starts to be on the
negative mood, a positive member will take over.
AGENSI KERAJAAN & SWASTA YANG TERLIBAT DALAM AKTIVITI
INOVASI
Kementerian Sains,Teknologi & Inovasi (MOSTI): Jabatan/Agensi
Kerajaan:
National Space Agency (ANGKASA)
Department of Chemistry Malaysia (JKM)
Malaysia Nuclear Agency (ANM)
Malaysian Meteorological Services (MMS)
Department Standard Malaysia (DSM)
Atomic Energy Lecencing Board (LPTA)
Syarikat Milik Kerajaan:
MIMOS Bhd (MIMOS)
Multimedia Development Corporation (MDeC)
SIRIM Bhd (SIRIM)
Technology Park Malaysia Corporation Sdn. Bhd . (TPM)
Malaysia Biotechnology Corporation (MBC)
Astronautic Technology (M) Sdn. Bhd . (ATSB)
National ICT Security and Emergency Response Centre (NISER)
Malaysia Network Information Centre (MYNIC)

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AGENSI KERAJAAN & SWASTA YANG TERLIBAT DALAM
AKTIVITI INOVASI

Syarikat Subsidiari Khazanah:

Malaysian Technology Development
Corporation (MTDC)

Badan Statutory:
Malaysia Science Academy (ASM)
Badan Bukan Kerajaan (SWASTA):
Malaysian Industry Group High Technology (MIGHT)
Inno Biologics Sdn. Bhd.

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 ASSIGNMENT/PROJECT

RESEARCH & BUSINESS PLAN

SUBMISSION DATE
WEEK 9

THANKS & GOOD LUCK

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