ecd lecture 2 - generation of business opportunities

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ECD Oct 14/Lecture 2/kce

Enterprise Creation & Development

Lecture 2:

Generation of Business Opportunities

Mr Khoo Chen En

(6460 8016; [email protected])

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Lecture Objectives

• Ideas, Innovation and Opportunities• The Creative Process• The Innovation Process• How do you know whether your

business idea has the potential to become a business opportunity?

• How do you protect your business ideas?

2ECD Oct 14/Lecture 2/kce

Recommended Reading

• Donald F. Kuratko ENTREPRENEURSHIP – THEORY, PROCESS AND PRACTICE, 9th Edition, CENGAGE, Chp 5 & 9


Opportunity Identification: The search for new ideas

• Opportunity Identification is central to the domain of entrepreneurship.

• At its core, entrepreneurship revolves around the questions of WHY, WHEN & HOW opportunities for the creation of goods & services in the future arise in an economy.

• Thus, opportunity recognition is the origin of both personal & societal wealth.

• First step for any entrepreneur is to IDENTIFY A GOOD IDEA.


Sources of Innovative Ideas

• Mobile technology, internet advances, e-commerce

• Health & fitness growth, ageing demographics

• Higher disposable income, inflation

• Increased regulations, terrorism

Technological trends

Societal trends

Economic trends

Government trends

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1) TRENDS

ECD Oct 14/Lecture 2/kce

http://sg.yfittopostblog.com/2011/03/03/apple-unveils-thinner-faster-ipad-2/



2) UNEXPECTED OCCURRENCES• Unanticipated, unplanned

Eg. 3M Post-It note

3) INCONGRUITIES• Gap between what is and

what should be. Demand for product is high but sales is flat.Eg. overnight package delivery

http://creativecommons.org/licenses/by/2.0/deed.en



4) PROCESS NEEDS • process gaps or bottlenecks. Exist

whenever a demand arises to innovate and answer a particular need Eg .buying air ticket online, or ATM, internet/mobile banking

5) INDUSTRY & MARKET CHANGES• Continual shifts in marketplace

occur, caused by developments eg consumer attitudes, technology advancements, industry growth.

PAIN. PAINKILLER.

Home healthcare, preventive medicine have replaced hospitalisation &

surgery as focus.



6) DEMOGRAPHICS• Trend changes in population, education, income

changes, age, occupations, geographic locations Eg. TV programs , facilities that cater to the elderly

7) PERCEPTUAL CHANGES• People’s interpretation of facts & concepts.

Eg. fitness fad8) KNOWLEDGE BASED CONCEPTS• Creation or development of something brand

new. Usually require longest time Eg. cellphone technology, internet


SCAMPER

•SubstituteS•Combine with somethingC•Adapt somethingA•Magnify/ add or modifyM•Put it to some other usesP•Eliminate somethingE•Rearrange or reverseR

A method for innovation


SCAMPER


Entrepreneurial Imagination & Creativity

• Entrepreneurs blend imaginative & creative thinking with a systematic, logical ability.

• Sense economic potential ability in business problems by continually asking ‘what if…? Or ‘why not..?


• First rule for developing entrepreneurial vision is to recognise that problems are solutions what demand is to supply.

• Entrepreneurs will analyse a problem from every possible angle. What is the problem? Whom does it affect? How does it affect them? What costs are involved? Can it be solved? Would the market pay for a solution?

Entrepreneurial Imagination & Creativity


The Role of Creativity• Creativity is the generation of ideas that results

in the improved efficiency or effectiveness of a system.

• Creativity is ‘the ability to create meaningful new forms’.

• ‘Human creativity is the key factor in our economy and society…the decisive source of competitive advantage’.

• The ‘creative class’ are entrepreneurs, scientists, engineers, architects, educators, writers, artists and entertainers – Florida (2005)


Creativity

PROCESS

•Goal oriented•To attain a solution to the problem.

PEOPLE

•Resources that determine the solution

Process remains the same, but the approach that people use will vary.

Two aspects


Creative Problem Solving


YOU can develop your creative potential

• Some individuals have a greater aptitude for creativity

• For others the process is more difficult

• Real barriers to creative thinking are sometimes the inadvertent ‘killer phrases’


IDEA STOPPERS!!!• ‘NAAAH’

• ‘Can’t’ (said with a shade of the head and an air of finality)

• ‘That’s the dumbest thing I’ve ever heard’

• ‘We already tried that – years ago

• ‘Let’s get back to reality

• ‘Are you kidding?’

• ‘Where do you get these weird ideas?’Source: Adapted from Angela M. Biondi (ed), The Creative Process (The Creative Education Foundation,1986)


The Creative Process

CREATIVE PROCESS

2) Incubation

3) Ideas

4) Evaluation & implementation

1) Knowledge accumulation


The Innovation Process

What is the difference between creativity and innovation?

Creativity means coming up with bright ideas. Innovation means bringing those ideas to life.

Innovation is both conceptual and perceptual. Innovation often involves more work than genius.

‘Genius is 1 per cent inspiration and 99 per cent perspiration’. Thomas Edison


Innovation

• Is the combination of the creative process of invention, and the entrepreneurial process of creating economic value.

• Is the process by which entrepreneurs convert opportunities (ideas) into marketable solutions


Types of Innovation

• Creation of a NEW product, service or process. Novel/untried. Usually revolutionary

Invention

• New use or different application of an already existing product, service or process

Extension

• CREATIVE replication of an already existing product, service or processDuplication

• Combination of existing concepts & factors into a new formulationSynthesis


Segway Human Transporter

Examples of Innovation

http://creativecommons.org/licenses/by/2.0/deed.en


http://tokyo5.files.wordpress.com/2009/04/mcdonalds-logo.jpg

Innovation: More than just a bright idea

• Big difference between mere speculation and extended thinking, research, experience and work.

• Innovation is a combination of vision and perseverance.

• Entrepreneurs blend creative thinking with logical process.

• They see OPPORTUNITIES where others find problems.


From Idea to Opportunity

IDEA INNOVATION OPPORTUNITY

• Good ideas do not necessarily provide good opportunities.

• For a business idea to be a business opportunity, it must be an innovation that meets a clear need in the marketplace.

• Not every business idea is an innovation.

• Not every innovation represents a business opportunity.


In Search of Opportunities

Solving a ProblemEg purse sitter

Finding Gaps in the Marketplace Eg portable iphone charger

Observing Trends in the Environment


• Can I communicate the idea clearly and completely?

• How interested and passionate am I in this idea?

• What is the window of opportunity for the idea?

• How good is the idea’s timing?

• Is it attractive to customers? How will it create value or advantage to the customer?

Potential to Become a Business Opportunity


• How unique is this idea? How will it differ from what competitor offer?

• What competitive, technical and financial risks are involved?

• Can the product or service be replicated at acceptable quality and cost so that you can sell at a price that will attract customers, yet earn a profit?

• Do I have the skills and resources to create this business; do I know someone who does and might want to help bring it into existence?

Potential to Become a Business Opportunity


Protect your Business Ideas!

Patents Trademarks

Copyrights

www.uspto.govwww.ipos.gov.sg


International Protections for Intellectual Property

• 5-7% of trade is in counterfeit goods

• 35% of software installed on PCs worldwide is pirated

• Intellectual property theft costs 750 000 jobs a year in the US alone

• The US loses up to US$3.8 billion a year in pirate materials in China alone

• Counterfeit drugs make up more than 10% of the global medicines market


Patent

• A patent is an intellectual property granted to an inventor giving him/her the exclusive rights to hold, transfer, & license the production & sale of the invention for a limited time period (usually 20 years).

• Process, machines, products, plants, composition of elements (chemical compounds), & improvements on already existing items can be patented.


Patents – often a waste of money

• Only a small percentage of issued patents are commercially valuable

• Entrepreneurs waste money on protecting IP

• Suits are very expensive

http://www.pcmag.com/article2/0,2817,2392920,00.asp?obref=obinsite#fbid=76_awJO5jqa

• Better to use money for marketing and product development

• Better to roll out new products faster than people can copy them


http://www.pcmag.com/article2/0,2817,2392920,00.asp?obref=obinsite




Copyright

• A copyright is the right of a person to hold exclusive rights to protect his/her work.

• Protection of literary or artistic works (including software)

• Not possible to copyright an idea, we copyright the way an idea is expressed


Copyright• Copyright is granted automatically

• Owner of copyright may: • reproduce the work • prepare derivative works based on it • distribute copies of the work by sale or

otherwise • perform the work publicly • display the work publicly

• Each of these rights, or a portion of each, also may be transferred


Understanding Copyright Protection

• Must be in a tangible form – written or recorded

• Must be author’s own work

• Formal registration is a requirement

• Violators are liable for infringement


Understanding Copyright Protection

• Normal remedy is recovery of actual damages plus any profits the violator receives

• Always use the copyright notice (©), although you are automatically protected

• Not necessary to register copyrights with the Copyright Office unless and until you want to sue somebody for infringement


Trademarks

• A trademark is a distinctive name, mark, symbol, or motto identified with a company’s product(s).

• Registered at the National Trademark Office of one’s resident company.

• Lasts for 10 years. Renewable for further 10 years, for an indefinite period.


Recall Lecture Objectives

• Ideas, Innovation and Opportunities• The Creative Process• The Innovation Process• How do you know whether your

business idea has the potential to become a business opportunity?

• How do you protect your business ideas?


ecd lecture 2 - generation of business opportunities

Documents

trends ecd

lecture objectives ideas

business ideas

business opportunity

innovation process

creative process

income changes

process needs process