1. Creativity and the Business Idea
Chapter 4
Creativity
and
the Business Idea
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

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

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. Table 4.1 - Trends of the Next Decade

5. Sources of New Ideas Consumers Existing products and services
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

6. Sources of New Ideas Distribution channels Federal government
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 one’s current employment

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

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

9. Creative Problem Solving
Method for obtaining new ideas focusing on the given parameters
Can be stifled by perceptual, cultural, emotional, and organizational factors

10. Table 4.3- Creative Problem-Solving Techniques

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

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

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

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

15. Figure 4.1 - Illustration of Parameter Analysis

16. Innovation Types of innovation Breakthrough Technological
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

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

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)

19. Innovation Classification of new products Consumer’s viewpoint
Determines newness in terms of its effect
Degree of newness depends on:
Level of behavioral change or new learning required by the consumer

20. Figure 4.3 - Continuum for Classifying New Products

21. Innovation Firm’s 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

22. Figure 4.4 - New Product Classification System

23. Figure 4.5 - A Model of the Opportunity Recognition Process

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

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

26. Figure 4.6 - The Product Planning and Development Process

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

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

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

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

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