paula jensen industrial engineering instructor engm 625
TRANSCRIPT
Idea Generation and Competitive
AdvantagePaula Jensen
Industrial Engineering InstructorENGM 625
Technology Ventures: From Idea to EnterpriseChapter 1: Summary
There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.
John F. Kennedy
What drives global entrepreneurship?
The entrepreneur provides the creative force in order for capitalism (free enterprise) to work. Entrepreneurs strive to make a difference in our world and contribute to its betterment. They are also motivated by achievement, independence, and the accumulation of wealth.
Summary
Economic Growth & the Technology Entrepreneur
1
Chapter 1: Figure 1.1 - Finding the Right Opportunity
• Timely
• Solvable
• Important
• Profitable
• Favorable Context
• Like to do the tasks
• Like the challenge
• Committed to do what is necessary
• Skilled at the neededtasks
TheSweetSpot
An Attractive
Opportunity
Interests, Passions, Commitment Capabilities & Skills
Finding the Right Opportunity
Economic Growth & the Technology Entrepreneur
1
Technology Ventures: From Idea to Enterprise
Chapter 1: Figure 1.5
Waves of innovation throughout history
Economic Growth & the Technology Entrepreneur
1
Technology Ventures: From Idea to Enterprise
Chapter 1: concept
Dynamic Capitalism is the process of wealth creation characterized by the dynamics of new, creative firms forming and growing and old, large firms declining and failing.
Creative Destruction is the entrepreneurial activity of destroying old models and creating new models of doing business.
Economic Growth & the Technology Entrepreneur
1
Technology Ventures: From Idea to Enterprise
Technology Ventures: From Idea to EnterpriseChapter 2: Summary
In the field of observation, chance only favors minds which are prepared.
Louis Pasteur
How can an entrepreneur identify and select a valuable opportunity?
The choice of an opportunity and the decision to act is a critical juncture in the life of an entrepreneur. With the decision to act, the entrepreneur prepares a business summary for the venture that is used to test the new venture with potential investors, employees, and customers.
Summary
Opportunity and the Concept Summary
2
Chapter 2: Figure 2.1
Identifying the Opportunity
Determining the Entrepreneur’s capabilities and interests
Evaluating the opportunity
Writing a summary of the concept
Testing the summary and the concept with potential customers
and investors
Deciding to act on the opportunityor look elsewhere
Six steps to acting as an entrepreneur
Opportunity and the Concept Summary
2
Technology Ventures: From Idea to Enterprise
Nine Categories of Opportunities Increase value of a product or service New applications of existing technologies Creating mass markets Customization for individuals Increasing reach Managing the supply chain Process innovation Increasing the scale of the firm
Evaluating Opportunity Capabilities: is it consistent with mission,
knowledge base ? Novelty: does product have sufficient
differentiating qualities that it creates value for the customer ?
Resources: are the available resources sufficient for the venture ?
Return: is expected return consistent with the risk of the venture ?
Commitment: is the entrepreneurial team sufficiently passionate about the venture that they can commit ?
Chapter 2: concept
Types of Opportunity:
Opportunity Pull:
the size of the opportunity attracts opportunity seekers to attempt to exploit it.
Example:
A drug to mitigate the effect of Alzheimer’s disease.
Opportunity and the Concept Summary
2
Technology Ventures: From Idea to Enterprise
Chapter 2: concept
Types of Opportunity:
Capability Push:
a new technology or capability causes a search for new applications.
Example:
Digital Television
Opportunity and the Concept Summary
2
Technology Ventures: From Idea to Enterprise
Team: accept risk knowledge base commitment
Opportunity: novelty potential market good risk vs reward
Context: timeliness industry conditions market conditions
Resources: financial processes human
100%
50%
Team: accept risk knowledge base commitment
Opportunity: novelty potential market good risk vs reward
Context: timeliness industry conditions market conditions
Resources: financial processes human
100%
50%
Holiday Inn
Team: accept risk knowledge base commitment
Opportunity: novelty potential market good risk vs reward
Context: timeliness industry conditions market conditions
Resources: financial processes human
100%
50%
Electric Auto
Microtrends vs MegaTrends MicroTrends
◦ Mark J. Penn --Pollster ◦ Single Women Head of House Record◦ Soccer Moms decrease◦ Women majority of Car buyers◦ Men majority of Truck Buyers◦ Majority of purchasing power is 49 plus
Trends
Sources of Ideas Consumers Existing Companies
◦ can we improve existing products Distribution Channels
◦ distributors keenly aware of market trends Federal Government
◦ Patent Office (Official Gazette)◦ Regulations (OSHA)
Research & Development◦ Ken Olsen
Generating Ideas Focus Groups
◦ 8-12 market group conceptualize new product need
Brainstorming◦ structured
central question is stated each member gives idea in turn (no criticism) ideas written on flip chart ideas generated until all members pass review written list for clarity and discard duplicates
◦ unstructured
Generating Ideas Variations to Brainstorming
◦ visual brainstorming◦ analogies/free-word association◦ 6-3-5 method
6 people 5 minutes 3 ideas pass sheets of 3 ideas to the right 5 minutes 3 ideas which build on first 3 complete 6 rotations (or as many as there are
members)
Generating Ideas Nominal Group Technique (NGT)
◦ generate list of ideas (brainstorm)◦ each member rank orders ideas highest to
lowest◦ idea with highest total score gets worked on
first◦ Variations
One half plus one; eliminate half at a time until arrive at a manageable number
Multivoting; rate each idea on scale of 1 to 100 Problem Inventory Analysis
◦ easier to relate to known products and criticize to arrive at a new product idea
Creative Problem Solving Checklist Method
◦ modify, adapt, put to other uses, substitute, . . . Free Association
◦ similar to brainstorming - create chain of ideas Forced Relationships
◦ Isolate elements of a problem◦ Find relationships between elements◦ Record relationships in an orderly form◦ Analyze relationships to find ideas or patterns◦ Develop new ideas from patterns
Creative Problem Solving Value Analysis
◦ maximize value by constructively skimping Attribute Listing
◦ list attributes of a problem ◦ e.g. SD has little economic development, what
types of industry/products/services do well here Matrix Charting
◦ similar to house of quality
Creative Problem Solving
Big-Dream Approach◦ ideas should be conceptualized without
constraints Parameter Analysis
◦ 2 aspects, parameter identification & creative synthesis
TechnologyObservation
Need Analysis
Parameter identification
Creative synthesis
Realization
Market Need
New Product
Product Development Process
tIntroduction Growth Maturity Decline
Product Development Process
tIntroduction Growth Maturity DeclineIdea Concept Develop Test
Market
EVALUATE
Evaluation Criteria Evaluation of market demand is most
important criterion of a proposed new product idea
Competing producers, prices, and marketing strategies should be evaluated
New product compatible with existing management
New product should contribute to company’s financial structure
New product compatible with existing facilities
Evaluation Idea Stage
◦ each new idea expressed in terms of values & benefits
◦ consumers presented with cluster of ideas determine which should be pursued
◦ Table 4.4 & 4.5 Concept Stage
◦ refined product idea tested to determine consumer acceptance
◦ conversational interview - consumers respond to statements that reflect product attributes, quality, reliability, price, promotion, distribution
Evaluation
Product Development Stage◦ consumer reaction to physical product is
determined◦ consumer panel tracks use of product◦ consumer panel records virtues, deficiencies of
product and competing products Test Marketing Stage
◦ New Coke
Technology Ventures: From Idea to EnterpriseChapter 3: Summary
Success in any enterprise requires the right product, methods, and workers, and each must complement the others.
Joseph Burger
How do successful entrepreneurs create a compelling business design for their new ventures?
To design a new business, the entrepreneur must cogently and clearly describe the customers and their needs and how the new venture will satisfy those needs.
Summary
Vision and the Business Model
3
Create a vision Mission statement State the value proposition Create the business model Describe the core competencies &
competitive advantage Act
Competitive Advantage
Vision Clarity Consistency Uniqueness Purposeful
We strive to preserve and improve life through the innovation of biomedical devices while supporting, training, and inspiring our employees so that individual ability and creativity is leased and rewarded. Our goal is to be the leader in our industry by 2006 and be widely known throughout the world.
Chapter 3: Table 3.3 - Elements of a Mission Statement
A mission statement is a description of the course of action to implement the vision.
• Core Values
• Customers and/or Stakeholders
• Products
• Competitive Advantage
• Values Provided to Customer
• Markets or Industry
Possible elements of a mission statement
Vision and the Business Model
3
Technology Ventures: From Idea to Enterprise
Ex. Our mission is to design and manufacture electronic devices that serve the needs of the aerospace industry on a timely basis and at reasonable prices.
Chapter 3: Concept
The Value Proposition defines the company to the customer.
Vision and the Business Model
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Technology Ventures: From Idea to Enterprise
Chapter 3: Table 3.6
The Value Proposition defines the company to the customer.
Five values offered to a customer
1. Product: • Performance, quality, features, brand, selection, search, easy to use,
safe2. Price:
• Fair, visible, consistent, and reasonable3. Access:
• Convenient, location, nearby, at-hand, easy to find, in a reasonable time
4. Service: • Ordering, delivery, return, check-out
5. Experience: • Emotional, respect, ambiance, fun, intimacy,
relationships, community
Vision and the Business Model
3
Technology Ventures: From Idea to Enterprise
Chapter 3: concept
The Unique Selling Proposition is a short version of firm’s value proposition.
Example:
Intel has a USP:
The best product with great service.
Example of a value proposition:Intel offers product as their primary value and service as their secondary value.
Vision and the Business Model
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Technology Ventures: From Idea to Enterprise
Chapter 3: Table 3.8
Customer Selection Who is the customer?
Is our offering relevant to this customer?
Value Proposition What are the unique benefits?
Differentiation and Control How do we protect our cash flow and relationships?
Do we have a sustainable competitive advantage?
Scope of Product and Activities
What is the scope of our product activities?
What activities do we do and which are outsourced?
Organizational Design What is the organizational architecture of the firm?
Value Capture for Profit How does the firm capture some of the total value for profit?
How does the firm protect this profitability?
Value for Talent Why will good people choose to work here?
How will we leverage their talent?
Elements of A Business Model
Vision and the Business Model
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Technology Ventures: From Idea to Enterprise
Chapter 3: Table 3.9
• Customer Selection: High RelevanceFour Segments: Corporate, Government, Education, Consumer.
• Value Proposition: Unique BenefitsA customized computer at a good price with great service readily accessible via phone or the Internet.
• Differentiation and control: Sustainable competitive advantageCustomized products via a direct sales channel on the phone or Internet with strong
service and customer relationships.
• Scope of Product and ActivitiesDesktop, laptop, and servers.Strong supply chain management.
• Organizational DesignDivisional organization for each customer segment.
• Value Capture for ProfitOpportunities for cross-sell and up-sell. Avoid price as the key value and focus on
service and accessibility.
• Value for Talent: Learn, Grow, ProsperTraining, Learning, and Career Opportunities.
Dell Computer Business Model
Vision and the Business Model
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Technology Ventures: From Idea to Enterprise
Value Proposition
Product Price Access Service Experience
Product Wal-Mart Amazon Honda Disney World
Price Target Holiday Inn Olive Garden
Access Barnes & Noble Priceline Dell Starbucks
Service Toyota SW Airlines McDonald's
Experience Mercedes AOL Nordstrom
Primary Value
Seco
ndar
y V
alue
Business Model Customer selection Value proposition Differentiation Scope of product/activities Organizational design Value capture for profit Value for talent
Business Model (Dell)
Customer Corp, Govt, Ed, Indiv Value customized computer Differentiation direct sales, service Scope desktops, laptops,
servers Organization divisional by customer
seg Value capture focus on service,
access Value for talent career opportunities
Business Model
American SW Airlines
CustomerWorld traveler U.S. Traveler
ValueProduct / Accessibility Price / Service
DifferentiationWide scope - goes almost anywhere
limited point-to-point flights
ScopeBroad: connects everywhere
Narrow:
OrganizationHub and Spoke High fixed cost
Point-to-point Lower, flexible costs
Value CaptureDominate hub city high occupancy
Value Talenthigh pilot salaries stock options
Core Competencies
Core competency of Google is the design and operation of a software search engine. It is the dominant online search engine. While starting as a search tool for finding information on diverse subjects, it has also become a tool for people searching for an online site selling a product of interest.
Sustainable Competitive Adv. High quality Toyota Service Starbucks Price Wal-Mart Mrkt Segment Dell Product Breadth Amazon Innovation Medtronic Intellectual Prop. MicroSoft