Module II
INNOVATION AND
CREATIVITY IN
ENTREPRENEURSHIP
SYLLABUS
Role of innovation in entrepreneurship, Techniques for
fostering creativity and innovation, Business Planning and
Strategy, Developing a business plan, Strategic planning and
competitive advantage
Introduction
Innovation is the process of creating and implementing
new ideas, products, services, or processes that result in
positive change.
It involves transforming inventive concepts into practical
solutions that provide value to individuals, organizations,
or society as a whole.
Innovation can manifest in various forms, including
technological advancements, business models, and
creative problem-solving.
Role of Innovation in Entrepreneurship
1.Competitive Edge: Innovation allows entrepreneurs to distinguish their
products or services from competitors, fostering a unique selling
proposition that attracts customers.
2.Market Responsiveness: Entrepreneurs use innovation to adapt to
evolving market demands, staying ahead of trends and addressing
changing consumer preferences.
3.Problem Solving: Entrepreneurs often identify gaps or challenges in the
market and innovate solutions, leading to the establishment of new
businesses.
4.Resource Efficiency: Innovation enables entrepreneurs to find more
efficient ways of utilizing resources, reducing costs and enhancing
productivity.
5.Value Creation: Through innovative products or services,
entrepreneurs create value for customers, generating growth
opportunities and building brand loyalty.
6.Risk Mitigation: Entrepreneurial endeavors inherently involve
risk, and innovation helps in developing solutions that can
mitigate potential risks and uncertainties.
7.Long-Term Sustainability: Continual innovation ensures that
businesses remain relevant and competitive over the long term,
adapting to changing environments and staying resilient.
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02 02
Opportunity Business Plan:
Identification: Meaning and significance,
Idea Generation, Screening, Business Plan Components,
Selection and Managing Feasibility study
Resources
03
Strategic Planning
for Business, Innovation and
entrepreneurship:
types and sources of innovation,
Innovations in Start Ups -
stories
Business Opportunity
A business opportunity refers to a set of
circumstances that present a chance for an
entrepreneur to create, develop, and run a business
that can fulfill the needs or wants of a market or a
group of customers. It is a situation where a potential
entrepreneur can leverage their skills, knowledge,
resources, and innovative ideas to create value and
generate profit.
▪ Idea generation or ideation is the. act of forming ideas. It is a creative process that
encompasses the generation, development and communication of new thought become the
basis of your innovation strategy.
COMPONENTS OF IDEA GENERATION
▪ Brainstorming.
▪ Mind Mapping.
▪ SCAMPER technique (Substitute, Combine, Adapt, Modify (Also magnify and minify), Put to
another use , Eliminate, and Reverse).
▪ Reverse Thinking.
▪ Collaboration.
Idea generation is a very important activity, without which we
would have nothing to work on. This activity also proves to be very
beneficial for all the parties involved.
The organization gets a lot of innovative ideas to work upon, the
employees get to be a part of the bigger picture. There’s an
increase in creativity and a lot of effective solutions are generated.
Sources of idea generation are the people and places from where you get your
ideas. Several internal and external sources help to generate ideas. Employees
and the research & development department of the company are great internal
sources.
Whereas, external sources are also very helpful. These are customers, suppliers,
competitors, distribution channels, government, educational institutions, and
focus groups.
Idea screening is the process of evaluating new product ideas early on in the development
process to ensure that they meet business objectives and customer expectations.
IDEA SCREENING STEPS
Brainstorm ideas
Evaluate ideas against specific criteria
Carry out qualitative and quantitative research
Concept Development & Testing
BUSINESS PLAN
MEANING OF
BUSINESS PLAN
◻ Business plan is a written statement
of what an entrepreneur proposes to
take up. It is a kind of guide frost or
course of action what the
entrepreneur hopes to achieve in his
business and how is he going to
achieve it.
What is business plan ?
A business plan is a roadmap for
setting up and managing a business.
It helps to structure, run, and grow a
business.
It is a tool for thinking through the key
elements of the business.
Business Plan- Key Components
1. Executive Summary:
Purpose: Summarizes the entire business plan, highlighting key aspects.
Content: Mission, vision, goals, and critical points from each section.
2. Business Description:
Purpose: Provides a detailed overview of the business.
Content: History, objectives, products or services offered, and the unique value
proposition.
3. Market Analysis:
Purpose: Examines the industry and market conditions.
Content: Competitor analysis, target audience identification, market trends, and a
SWOT analysis.
4.Organization and Management:
Purpose: Describes the organizational structure and introduces key team members.
Content: Overview of the company's structure and profiles of team members.
5.Product or Service Line:
Purpose: Focuses on the offerings and their unique features.
Content: Detailed information about products or services, competitive advantages.
6. Marketing and Sales:
Purpose: Outlines the strategies for reaching and attracting customers.
Content: Marketing strategy, sales plan, customer acquisition and retention strategies.
7.Funding Request (if applicable):
Purpose: Details financial needs for potential investors or lenders.
Content: Amount needed, use of funds, and potential return on investment
8. Financial Projections:
Purpose: Presents future financial estimates.
Content: Income statements, balance sheets, cash flow projections,
break-even analysis.
9. Appendix:
Purpose: Contains additional supporting documents.
Content: Resumes of key team members, market research data, legal
documents.
10. Review and Refinement:
Purpose: Ensures the plan remains up-to-date and relevant.
Content: Regularly review and update the plan based on changes in the
business environment.
Why should we need a business plan ?
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To identify potential sources To identify
of funding. potential risks and
develop strategies
To articulate the business To provide a roadmap for for mitigating
To benchmark
vision and objectives. success. them.
progress and
measure success
1. TO ARTICULATE THE BUSINESS VISION
AND OBJECTIVES.
Establish a clear direction
Facilitate decision making
Motivate and inspire employees
2 . TO IDENTIFY POTENTIAL SOURCES
OF FUNDING
Equity financing
Debt financing
Grants
3 .TO PROVIDE A ROADMAP FOR
SUCCESS
Formulate a clear mission statement
Create a comprehensive business plan
Set realistic goals and establish milestones
4. TO IDENTIFY POTENTIAL RISKS AND
DEVELOP STRATEGIES FOR MITIGATING
THEM
Identify the risks
Assess the risks
Develop mitigation strategies
5. TO BENCHMARK PROGRESS AND
MEASURE SUCCESS
Establish clear goals and objectives
Measure performance against goals and objectives
Track financial performance
IMPORTANCE OF
BUSINESS PLAN
◻ It will help you steer your business as you start
and grow.
◻ It’s not as hard as you think.
◻ It will help you to reach business milestones.
◻ It can help you get funding.
◻ There’s no wrong way to write a business plan.
What Is a Feasibility Study?
◻ A feasibility study is an analysis that considers all of a
project's relevant factors—including economic,
technical, legal, and scheduling considerations—to
ascertain the likelihood of completing the project
successfully
Feasibility analysis
◻ Feasibility analysis is the process of
determining whether a business idea is
viable.
Benefits of feasibility analysis
◻ To access the merit of your business idea
◻ Determine whether there is a market for your idea
◻ Whether the idea is financially viable
◻ Overall demand for new products , services or ideas
◻ Characteristics of likely competitors
◻ Characteristics of likely customers
BUSINESS STRATEGIC PLANNING
STRATEGIC PLANNING IS KEY FOR
SUCCESS IN BUSINESS.BY PLANNING
STRATEGICALLY FOR THE FUTURE, A
BUSINESS CAN ACHIEVE ITS GOALS.ITS
EASIER SAID THAN DONE,BUT THE MORE
YOU KNOW ABOUT STRATEGIC
PLANNING,THE BETTER CHANCE YOU
HAVE AT SUCCEEDING.
STRATEGIC PLANNING PROCESS IN 3 STEPS
01 SET BUSINESS 02 CONDUCT A SWOT
ANALYSIS
GOALS
03 DEVELOP A BUSINESS
STRATEGY &
STRATEGIC PLAN
HOW TO DEVELOP A STRATEGIC
PLAN
01 WHERE IS THE BUSINESS ?
02 WHERE DO YOU WANT TO GO?
03 HOW CAN YOU GET THERE ?
KEY COMPONENTS
1.MISSION STATEMENT
2.VISION STATEMENT
3.CORE VALUE
4.BUSINESS OBJECTIVES
5.SWOT ANALYSIS
6.ACTION PLAN
7.FINANCIALS
8.PERFORMANCE MEASUREMENTS
BUSINESS STRATEGIC PLAN EXAMPLE
1 MISSION,VISION & CORE VALUES
• MISSION STATENENT
• VISION STATEMENTS
• CORE VALUES
2 BUSINESS OBJECTIVES
• BUSINESS OBJECTIVE 1
• BUSINESS OBJECTIVE 2
• BUSINESS OBJECTIVE 3
3. SWOT ANALYSIS
• STRENGTHS
• WEAKNESS
• OPPURTUNITIES
• THREATS
4. ACTION PLAN
• BUSINESS OBJECTIVE 1
• BUSINESS OBJECTIVE 2
• BUSINESS OBJECTIVE 3
INNOVATION AND
ITS IMPORTANCE
INNOVATION
Innovation means to improve or
replace something, for example, a
process, a product, or a service.
Innovation means
developing original
concepts and is a driver
of reimaging business.
Differentiation
Innovation helps entrepreneurs create
product or services that are unique and
differentiate them from their competitors.
By offering something new or improved,
entrepreneurs can standout in a crowed
market and attract more customers.
Competitive Advantage
Innovative products or services can
provide a competitive advantage by
creating a barrier to entry for competitors.
It can be difficult for competitor to copy
or replicate innovative solutions, giving
entrepreneurs an edge in the market
Increased Revenue
Innovation can lead to development of
new product or services that can generate
additional revenue streams for the
entrepreneur. By creating new product or
services, entrepreneurs can tap into market
and expand their customer base.
Improved Efficiency
Innovation can also help entrepreneurs
improve their processes and increase
efficiency, leading to cost savings and
improved profitability.
Adaptability
In todays fast – paced business
environment, innovation is crucial for
entrepreneurs to stay relevant and
adaptable. By constantly innovating,
entrepreneurs can respond quickly to
changing market conditions and
customer needs.
Types of Innovation
SOURCES OF INNOVATION?
◻ Anything that leads to innovation can be termed as sources
of innovation. Most innovations, however, especially the
successful ones, result from a conscious, purposeful search
for innovation opportunities, which are found only in a few
situations.
◻ Innovation is a specific function of entrepreneurship and
must precede it
◻ DRUCKER’S VIEW OF OPPORTUNITY – INCLUDES 7
INNOVATION
PETER DRUCKER
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Austrian-American consultant
According to Drucker, the best source for
successful innovation is from an
Unexpected Success or Failure.
Exploitation of this requires analysis
simply because an unexpected success is a
symptom.
SOURCES OF INNOVATION OF
ENTREPRENEURIAL VENTURE
◻ Unexpected Occurrences
◻ Incongruities
◻ Process Needs
◻ Industry and Market Changes
◻ Demographic Changes
◻ Changes in Perception
◻ New Knowledge
1. Unexpected Occurrences
◻ The business world is full of surprises - not only the unexpected failures
but also the unexpected success that comes to the organization can be a
great source of inspiration for innovation.
◻ Economic shocks, technology breakthroughs, political changes and shifts
in customer tastes can all dramatically affect product and service markets.
◻ Your focus should be in identifying what opportunity these changes create.
2. Incongruities
❑ Incongruities refers to the perceived expectation of a
product and the difference between customer
expectation.
❑ Many companies fall into the trap of developing their
product without to actually do the appropriate research to
determine what the target customers really want.
❑ The customer reviews, feedback, and complaints are
often the best way to determine incongruity.
❑ MP 3 case
3.Process Needs
o Sources of innovation can rise from process needs, to be
able to identify a unique solution to a process problem
economic and performance benefits.
o Here the source of opportunity for innovation comes after
looking closely at the processes of the company and
identifying clearly the weak spots and the ways they can be
improved.
4. Industry and Market Changes
• Industry and market changes are sources of
innovation. Such changes often result as people change their
preferences, tastes, and values.
• Companies must be able to identify current market
changes and develop innovation which foster growth.
• Here the source of opportunity for innovation comes after
looking closely at the processes of the company and
identifying clearly the weak spots and the ways they can be
improved
5. Demographic Changes
• The emphasis on innovation amongst the largest and fasting
growing age groups. These groups will have their own
consumer demand and preference.
Demographic change describes the changes in population size and
structure caused by changes in birth rates, death rates, and by migration.
Demographic change in the Western developed countries of today is
marked by low birth rates below population replacement and by rising life
expectancy.
6. Changes in Perception
Capitalising on people or society's perception. Sources of innovation
in this area can be risky if they are inaccurate perceptions.
✔ Perception changes over time, and, nowadays, due to the involvement of technology
and the power of social networks, these changes happen faster than ever.
✔ EXAMPLE ON SMOKING
7. New Knowledge
New knowledge is the main driver behind innovation in the advanced
economy and it is the entrepreneurs' duty to translate this innovation,
through their initiatives and business, into economic development.
Knowledge has great value since it is inherently unique to your
organisation. It shapes and drives your business activity, your
ability to sell or do more,and stand apart from your competitors.
Individual knowledge is easily lost, especially when key employees leave.
START UP STORIES
About Nykaa
❑ Indian beauty retail company
❑ Started as an e-commerce platform.
❑ Nowadays, Nykaa has three kinds of
stores namely, Luxe, On Trend, and
kiosks.
❑ Comprehensive customer support.
❑ Ships all across Indian subcontinent
including Nepal.
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Origin
Falguni Nayar the founder became
❑ Established in 2012 an entrepreneur at 50, after 25
years experience in the corporate
The market for beauty and cosmetic
sector as an investment banker.
products in India was not at par with the
scope of the products.
Gradually, Nykaa has become popular
for its wide range of BPC products, and
fashion items that the company makes
available on its website and app.
Business Model
❑ D2C ecommerce brand
❑ Inventory based business model
Resulting in high-profit margins. Besides, the
company also ensures the authenticity of products
and follows competitive pricing.
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Marketing Strategy
❑ Youtube marketing
❑ Email marketing
❑ Social media marketing &
influencer marketing
❑ Content marketing
❑ Event marketing
Social network distribution
Key takeaways from Nykaa
1.Define business 3. Seek valuable
process 2. Target customers business partnerships
4. Build an irresistible 5. Craft a demand creation
value proposition strategy
Future Plans
❑ Expansion of offline business
❑ Expansion of warehouse capacity by 40%
❑ Expand its fulfilment centres across the country to boost
customer experience
SPOTIFY.
Spotify
01 Since 02 Creator
2006 Daniel EK
Spotify
❑ Most used music platform.
❑ Over 299 million subscribers across over 100 markets.
❑ Provides international streaming platform.
❑ Finest quality audios.
❑ Offline mode.
Spotify targets audiences in different sections :
Criteria Age
Total market
Spotify target Mainly 18 – 24
years 178+
audience
Gender Top countries Type
More men than USA , Europe , Latin Students and young
women America , North business
America
professionals
Marketing Strategy of Spotify :
1. Freemium Model is the USP of Spotify
2. A Minimalistic App Interface
3. Connecting With Artists for Collaborations
4. Emotional Ads for Promotion
5. Personalized at its Core
Innovation is the ability to
see changes as an
opportunity – not as a threat
— Steve Jobs
Thank you
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