Creativity and
the Business
Idea
TRENDS
A Trend provides great opportunities for starting
a new venture
Seven trends that provide opportunities are:
1. Green Trend 2. Clean Energy
3. Organic Orientation 4. Economic
5. Social 6. Health
7. Web Trend
SOURCES OF NEW IDEAS
Consumers
Existing Products and Services
Distribution Channels
Federal Government
Research & Development
METHODS OF GENERATING
IDEAS
Focus Groups: Groups of individuals providing
information in a structured format.
Brainstorming: A group method for obtaining
new ideas and solutions without criticizing
anyone.
Brainwriting: Writing Brainstorming; a silent,
written generation of ideas by a group of
people. The participants write their ideas on
special forms or cards that circulate within the
group normally writing three ideas each.
Problem Inventory Analysis: A method for
obtaining new ideas and solution by
focusing on problems
CREATIVE PROBLEM SOLVING
TECHNIQUES
These are methods for obtaining new ideas
focusing on the parameters
1. Brainstorming: In creative problem
solving(obtaining ideas focusing on
parameters), brainstorming can generate
ideas about a problem within a limited
timeframe through the spontaneous
contribution of participants. A good
brainstorming starts with a problem statement
that is neither too broad nor too narrow. Than
6-12 selective individuals participate. No
member is a recognized member. All ideas
must be recorded. Avoid criticism
CREATIVE PROBLEM SOLVING
TECHNIQUES
Reverse Brainstorming: Here group obtain
new ideas focusing on the negative
Gordon Method: Method for developing
new ideas when the individuals are
unaware of the problem.
Checklist Method: Developing a new idea
through a list of related issues:
CREATIVE PROBLEM SOLVING
TECHNIQUES
Free Association: Developing a new idea
through a chain of word association
Forced Relationship: Developing a new idea by
looking at product combinations. It is five
steps process:
(i) Isolate the elements of the problem
(ii) Find the relationships between these elements (iii)
Record the Relationships between these elements
(iv) Analyze the resulting relationships to find ideas or
patterns
(v) Develop new ideas from these patterns
CREATIVE PROBLEM SOLVING
TECHNIQUES
Collective Notebook Method: Developing
new idea by group members regularly
recording ideas
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
INNOVATION
Types of Innovation
1. Breakthrough Innovation
2. Technological Innovation
3. Ordinary Innovation
Classification of New Product
Form a Consumer’s Viewpoint
Form a Firm’s Viewpoint
Continuous Innovation – with least disrupting influence on
established consumption patterns (automobiles style
changes, fashion style changes, product size or color
changes)
Dynamically Continuous Some disrupting influence on
established consumption patterns (CDs, iPod, Sony
Walkman)
Discontinuous Innovations : Involves the establishment of
new consumption patterns and the creation of previously
unknown products. These are rare and require a great deal
of new learning by the consumer because these products
perform either a previously unfulfilled function or an existing
function in a new way. Example Internet
New Product Classification System
The
major distinction between new
product and new markets is:
New Products are defined in terms of the
amount of improved technology, whereas
market development is based on the
degree of new segmentation
Product Planning and
Development Process
The product planning and Development
is divided into five major stages
1. Idea Stage
2. Concept Stage
3. Product Development Stage
4. Test Marketing Stage
5. Commercialization Stage
Opportunity Identification
Gap Analysis – a relatively simple
process of systematically examining
the difference between what is
expected and what occurs
Opportunity Analysis – examines
opportunities in the marketplace
side-by-side with the individual’s
ability to address the gaps
International versus Domestic
Entrepreneurship
International Entrepreneur: An entrepreneur doing
business across his or her national boundary. It is
more complex due to uncontrollable factors:
1. Economics:
In domestic: Single economic system, same
currency
In international: Dealing in differences in level of
economic development, Govt. regulation.
2. Stages of economic development:
Rational and regional variance.
3. Current Account:
The trade status of import/export between
countries.
International versus Domestic
Entrepreneurship
4. Type of economic system:
Distribution rights
Barter (directly exchange) or Third-party
arrangements (indirectly).
5. Political-legal environment:
Price fluctuation - VAT (value added tax)
Political risk analysis (prior to entering into
business)
critical areas (property right, contract law,
product safety & liability
6. Language:
Native tongue
Technological Environment
Technology Varies Across Countries
New Products are created
based on conditions and
infrastructure operating
in the country
Culture
Culture refers to common ways of thinking and
behaving
Culture Includes
Social Culture
Language
Religion
Manners and Customs
Culture in Entrepreneur’s Context
Crossing Cultures are the Problems for
entrepreneurs
Entrepreneur must have command over
country’s language
Both Verbal and Nonverbal languages are
important
Culture Norms and Values
Social Culture
Religion
Political Philosophy
Economics and Economic Philosophy
Education
Manners and Customs
Religion Social Culture
Language
Culture Norms
&
Value System
Economics &
Economic Philosophy
Manners & Customs
Education
Social Culture
Refers to social institutions in a culture
Social Stratification affect the behavior of the
people in one particular strata
Reference Groups provide influencing values
and attitudes
Religion
Ideas for life reflected in values and attitudes of
society
Impact on entrepreneurship varies
Impact depends on dominant religious tenets on
attitudes and values
Manners and Custom
Particularly
important for entrepreneurs in
negotiations
Giftscan be important part of developing
relationship in a culture
Available Distribution
Systems
Factors to be Considered:
Overall sales potential
Amount and type of competition
Product’s cost
Geographical size and density of the country
Investment policies of the country
Exchange rate and any controls
Level of political risk
Overall marketing plan
Motivations To Go Global
Profits
Competitive Pressures
Unique Products or Services
Excess Production Capacity
Declining Home Country Sales
Technological Benefits
Tax Benefits
Strategic Effects of going Global
New set of wide ranging problems
New set of domestic and international
regulations
Physical and Psychological closeness does
matter
Foreign Market Selection
Market selection and market entry strategies are
critical issues
Decision should base on past sales and
competitive positioning
Appropriate market-selection model should be
followed
Entrepreneurial Entry Strategies
Exporting
Nonequity Arrangements
Direct Foreign Investment
Exporting
Direct Exporting
Indirect Exporting
Nonequity Arrangements
Licensing
Turn-Key Projects
Management Contracts
Direct Foreign Investment
Minority Interests
Joint Ventures
Majority Interest
Mergers
Horizontal
Vertical
Product extension
Market extension
Diversified activity
Entrepreneurial Partnering
Amongst best methods for entering International
Market
Foreign entrepreneurs know country and culture
Finding good partner can be beneficial for the
entrepreneur
Entrepreneurial Partnering
How to find Good Partner?
Information needed on industry and potential
partners
Appropriate trade shows should be attended
Should Check References for the partner
Meet with the potential partner several times
before commitment
Barriers to International Trade
General Agreement on Tariffs and Trade
Increasing Protectionist attitudes
Trade Blocs and Free Trade Areas
Entrepreneur’s Strategy and Trade Barriers
Implications for
the global
entrepreneur
Agency theory suggests that individuals act to
maximize their own individual benefit.
*If the business makes money, the owner
makes money.”
Evaluating Your Entrepreneurial
Orientation
(1)risk tolerance
(2)prior experience
(3)personality orientation of the individual
Risk Tolerance
Break-even point – the time when a new business has
reached a level where revenue coming into the firm
is sufficient to cover expenses
Example and Caution:
For example, a risk tolerance questionnaire may ask
several questions with various market scenarios and the
investor will anticipate their reaction to the given market
scenario and answer the questions accordingly. A
sample question is, "What would you do if the stock
market fell by 20% over the course of one year? Would
you A) Do nothing, B) Wait a few months to make a
decision, or C) Sell your stocks immediately.?"
Prior Experience
Bounded Rationality – rational decision making that is
constrained by the background and history of the
person making the decision
Prior experience means that you have past
experience in the job before, also known as you
know how the job works and you know how to do it.
Ex. You are applying for a cashier job, and you have
had prior experience because you have worked as a
cashier before in another store, so you know how
things work
Community
Thereare also some formal community supports
that can lower the overall risk for a new business in
the community.
Incubators – a facility that houses new businesses
and provides many critical services
Small Business Assistance Centers – centers
funded by the Small Business Administration that
advise individuals wishing to start new businesses
