ch#2 recognizing opportunities and generating ideas

7/17/2019 Ch#2 Recognizing Opportunities and Generating Ideas

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2008 Prentice Hall 2-1

Chapter 2

Recognizing Opportunities And

Generating Ideas


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Chapter Objectives(1 of 2)

1. Explain why its important to start a new firm whenits winow of opport!nity" is open.

2. Explain the ifference between an opport!nity anan iea.

#. $escribe the three %eneral approaches entreprene!rs!se to ientify opport!nities.

&. 'entify the fo!r environmental trens that are mostinstr!mental in creatin% b!siness opport!nities.

. ist the personal characteristics that ma*e somepeople better at reco%ni+in% b!siness opport!nitiesthan others.


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Chapter Objectives(2 of 2)

,. 'entify the five steps in the creative process.

-. $escribe the p!rpose of brainstormin% an its !se

as an iea %enerator.

. $escribe how to !se s!rveys to %enerate new

b!siness ieas.

/. Explain the p!rpose of maintainin% an iea ban*.

10. $escribe three steps for protectin% ieas from bein%lost or stolen.


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hat is n Opport!nity3(1 of 2)

4 Opport!nity $efine

5 n opport!nity is a favorable set of circ!mstances that

creates the nee for a new pro!ct6 service6 or b!siness

iea.5 7ost entreprene!rial firms are starte in one of two ways8

4 9ome firms are internally stim!late. n entreprene!r ecies to

start a firm6 searches for an reco%ni+es an opport!nity6 then starts

a b!siness.

4 Other firms are externally stim!late. n entreprene!r reco%ni+es

a problem or an opport!nity %ap an creates a b!siness to fill it.


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hat is an Opport!nity3(2 of 2)

n opport!nity has fo!r essential :!alities


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inow of Opport!nity

4 inow of Opport!nity

5 ;he term winow of opport!nity" is a metaphor

escribin% the time perio in which a firm can realistically

enter a new mar*et.4 Once the mar*et for a new pro!ct is establishe6 its winow of

opport!nity opens6 an new entrants flow in.

4 t some point6 the mar*et mat!res6 an the winow of opport!nity

(for new entrants) closes.


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;hree ays to 'entify n Opport!nity


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ro!ct Opport!nity ?aps


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;ren 18 Economic


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;ren 28 9ocial


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;ren 28 9ocial


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;ren #8 ;echnolo%ical vances

4 ;echnolo%ical vances

5 ?iven the rapi pace of technolo%ical chan%e6 it is vital that

entreprene!rs *eep on top of how new technolo%ies affect

c!rrent an f!t!re b!siness opport!nities.

5 Entire in!stries have emer%e as the res!lt of technolo%ical

avances.

4 Examples include the computer industry, the Internet,

biotechnology, and digital photography

5 Once a new technolo%y is create6 new b!sinesses form tota*e the technolo%y to a hi%her level.

4


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;ren &8 >olitical an

Ae%!latory Chan%es

4 >olitical an Ae%!latory Chan%es

5 >olitical an re%!latory chan%es provie the basis for new

b!siness opport!nities.

4


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9econ pproach8 9olvin% a >roblem(1 of 2)

9econ pproach8 9olvin% a >roblem

9ometimes ientifyin%

opport!nities simply

involves noticing a problem

and finding a !ay tosol"e it.

;hese problems can be

pinpointe thro!%h observin%

trens an thro!%h more simple

means6 s!ch as int!ition6serenipity6 or chance.

9ome b!siness ieas are clearly

initiate to solve a problem.


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9econ pproach8 9olvin% a >roblem(2 of 2)

=!sinesses Create to 9olve a >roblem


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;hir pproach8 6 or C >enney tocarry.


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>ersonal Characteristics of the Entreprene!r

Characteristics that ten to ma*e some people better

at reco%ni+in% opport!nities than others

>rior Experience 9ocial @etwor*s

Co%nitive


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>rior 'n!stry Experience

4 >rior 'n!stry Experience

5 9everal st!ies have shown that prior experience in an

in!stry helps an entreprene!r reco%ni+e b!siness

opport!nities. ;here are several explanations for this.

4 =y wor*in% in an in!stry6 an inivi!al may spot a mar*et niche

that is !nerserve.

4 't is also possible that by wor*in% in an in!stry6 an inivi!al

b!ils a net!or$ of social contacts who provie insi%hts that lea

to reco%ni+in% new opport!nities.


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Co%nitive


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9ocial @etwor*s(1 of #)

4 9ocial @etwor*s5 ;he extent an epth of an inivi!als social networ*

affects opport!nity reco%nition.

5 >eople who b!il a s!bstantial networ* of social anprofessional contacts will be expose to more opport!nitiesan ieas than people with sparse networ*s.

5 'n one s!rvey of , startB!ps6 half the fo!ners reportethat they %ot their b!siness iea thro!%h social contacts.

4 9tron%B;ie Ds. ea*B;ie Aelationships5 ll of !s have relationships with other people that are

calle ties." (See next slide.)


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9ocial @etwor*s(2 of #)

4 @at!re of 9tron%B;ie Ds. ea*B;ie Aelationships

5 9tron%Btie relationship are characteri+e by frequent

interactionan form between cowor*ers6 friens6 an

spo!ses.5 ea*Btie relationships are characteri+e by infrequent

interactionan form between cas!al ac:!aintances.

4 Aes!lt

5 't is more li*ely that an entreprene!r will %et new b!sinessieas thro!%h wea*Btie rather than stron%Btie relationships.

(See next slide.)


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9ocial @etwor*s(# of #)

9tron%B;ie Aelationships ea*B;ie Aelationships

;hese relationships6 which

typically form between li*eB

mine inivi!als6 ten to

reinforce insi%hts an ieas that

people alreay have.

;he relationships6 which form

between cas!al ac:!aintances6

are not as apt to be between

li*eBmine inivi!als6 so one

person may say somethin% to

another that spar*s a completely

new iea.

hy wea*Btie relationships lea to more new b!siness ieasthan stron%Btie relationships


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Creativity(1 of 2)

4 Creativity

5 Creativity is the process of generating a no"el or useful

idea

5 Opport!nity reco%nition may be6 at least in part6 a creativeprocess.

5


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Creativity(2 of 2)


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Aeco%nition >rocess

$epicts the connection between an awareness of emer%in% trens anthe personal characteristics of the entreprene!r


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;echni:!es


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=rainstormin%(1 of 2)

4 =rainstormin%

5 's a techni:!e !se to %enerate a lar%e n!mber of ieas an

sol!tions to problems :!ic*ly.

5 brainstormin% session" typically in"ol"es a group ofpeople6 an sho!l be tar%ete to a specific topic

Rules for a brainstorming session'

4 @o criticism.

4


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=rainstormin%(2 of 2)

4 =rainstormin% (continued)

5 ;here are two reasons brainstormin% %enerates ieas that

mi%ht not arise otherwise8

4 =eca!se no criticism is allo!ed6 people are more li*ely to offer

ieas than they wo!l in a traitional settin%.

4 =rainstormin% sessions can generate more ideas than a

traditional meetingbeca!se brainstormin% foc!ses on creativity

rather than eval!ation.

5'n most meetin%s6 one person s!%%ests an iea6 an immeiately therest of the %ro!p be%ins eval!atin% it. ;his happens beca!se most

people are better at critici+in% ieas than they are at s!%%estin% new

ones.


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2008 Prentice Hall


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9!rveys(1 of 2)

4 9!rvey

5 s!rvey is a metho of gathering information from a

sample of indi"iduals. ;he sample is !s!ally j!st a

fraction of the pop!lation bein% s!rveye.

4 ;he most effective s!rveys sample a ranom" portion of the

pop!lation6 meanin% that the sample is not selecte hapha+arly or

only from people who vol!nteer to participate.

4 ;he :!ality of s!rvey ata is etermine lar%ely by the p!rpose of

the s!rvey an how it is con!cte.5 9!rveys %enerate new pro!ct6 service6 an b!siness ieas

beca!se they as$ specific questions and get specific

ans!ers


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Other ;echni:!es

(ustomer Ad"isory )oards5 9ome companies set !p c!stomer avisory boars that meet regularly

to discuss needs, !ants, and problemsthat may lea to new ieas.

5 C!stomer avisory co!ncils or boars typically consist of 10 to 1

c!stomersselecte to represent a cross section of the c!stomer base.

5 avise company mana%ement on in!stry trens6 b!siness priorities6an strate%ic irection.

*ay-In-+he-ife of a customer*IO.Research

5 type of anthropolo%ical research6 where the employees of a

company spend a day !ith a customer

5 ;he process involves obser"ing and inter"ie!ing one c!stomer at a

time

5 the $'O approach is most helpf!l when the or%ani+ation is ea%er to

moify its core offerin% at a fairly f!namental level.
http://en.wikipedia.org/wiki/Customershttp://en.wikipedia.org/wiki/Customers


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Enco!ra%in% @ew 'eas

4 Establishin% a oint for 'eas5 9ome firms meet the challen%e of enco!ra%in%6 collectin%6

an eval!atin% ieas by designating a specific person toscreen and trac$ themFfor if its everyboys job6 it may

be no ones responsibility.5 nother approach is to establish an idea ban$ or "ault.,

which is a physical or i%ital repository for storin% ieas.

4 Enco!ra%in% Creativity at the


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>rotectin% 'eas


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A##licati!n +$esti!ns

,ha#ter 2


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A##licati!n 2 - 1

% evin' a s!ft*are engineer' #lans t! *rite a "e"! t! his &!ssdescri&ing an idea he has f!r a ne* s!ft*are #r!d$ct( evin *antst! c!nvince his &!ss that his idea re#resents an !##!rt$nit the fir"sh!$ld #$rs$e(

% .n !$r !#ini!n' *hat sh!$ld evin #$t in the "e"!/

Ans*erevin sh!$ld first "ae the case that the idea has the f!$r essential$alities !f an !##!rt$nit that it is

1 attractive'2 d$ra&le'

3 ti"el' and4 is anch!red in a #r!d$ct' service' !r &$siness that creates val$e f!r its&$er !r end $ser(

He sh!$ld then "ae the case that the ideas *ind!* !f !##!rt$nit is!#en(


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A##licati!n 2 - 2

% elanie is ver #erce#tive and &elieves she has identified an !##!rt$nit f!ra ne* &$siness in the fashi!n ind$str( he *ants t! "ae s$re' h!*ever'that she isnt $st f!ll!*ing a h$nchthat the !##!rt$nit is s!$nd(

% :hat criteria can elanie $se t! deter"ine *hether she has identified anattractive !##!rt$nit/

Ans*er

Again' elanie sh!$ld "ae s$re that' in her !*n "ind' the idea is% 1 attractive'% 2 d$ra&le'% 3 ti"el' and that it is% 4 anch!red in a #r!d$ct' service' !r &$siness that creates val$e f!r its &$ers !r end

$sers(

he sh!$ld als! deter"ine *hether the ideas *ind!* !f !##!rt$nit is!#en(


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A##licati!n 2 - 3

atri; .nd$stries is interested in #r!d$cinghandheld devices si"ilar t! the #r!d$cts s!ld &Pal" and


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A##licati!n 2 - 3

Ans*er

)he ter" >*ind!* !f !##!rt$nit? is a "eta#h!r descri&ing the ti"e#eri!d in *hich a fir" can realisticall enter a ne* "aret(

% @nce the "aret f!r a ne* #r!d$ct is esta&lished' its *ind!* !f

!##!rt$nit !#ens(% As the "aret gr!*s' fir"s enter and tr t! esta&lish a #r!fita&le

#!siti!n(% At s!"e #!int' the "aret "at$res' and the *ind!* !f !##!rt$nit

cl!ses(

=i" sh!$ld tr t! deter"ine *hether the *ind!* !f !##!rt$nit f!rhandheld devices is still !#en' !r if it is cl!sed !r near &eing cl!sedf!r ne* entrants(


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A##licati!n 2 - 5

i" is the f!$nder !f a s"all fir" that #r!d$ces highl s#ecialiedc!"#!nents f!r the se"ic!nd$ct!r ind$str( ales re#s fr!" &!th B!rrester


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A##licati!n 2 - 5

Ans*er

Ans*ers *ill var f!r this $esti!n(

.t is a $dg"ent call regarding *hether sitting thr!$gh sales #itches fr!"c!ns$lting fir"s lie B!rrester


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A##licati!n 2 - 8


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A##licati!n 2 - 8

.dentif a #r!&le" *ith the activit !$ arec!nsidering and rec!""end a &$siness t!s!lve the #r!&le"(

% ,lass c!ntri&$ti!ns re$ired here(


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2008 Prentice Hall2-45

A##licati!n 2 - 15

Breed!" Dlectr!nics is a start-$# *ith a&!$t 20 salesre#resentatives(

)he c!"#an has a s!lid #r!d$ct line &$t n!*s that t!

re"ain c!"#etitive' it "$st c!ntin$e rec!gniing!##!rt$nities f!r ne* #r!d$cts and services(

)he fir" has n!t devel!#ed a sste"atic *a f!r itssales staff t! re#!rt ne* ideas(

$ggest s!"e *as that Breed!" can rec!rd and#r!tect the idea !f its sales re#s(

Ans*ers -


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A##licati!n 2 - 15

Ans*er% Breed!" sh!$ld set $# an idea &an' *hich is a #hsical !r digital

re#!sit!r f!r st!ring ideas( An e;a"#le !f an idea &an *!$ld &e a#ass*!rd-#r!tected l!cati!n !n a fir"s intranet that is availa&le t!$alified e"#l!ees(

%)! #r!tect its ideas' Breed!" sh!$ld !&tain intellect$al #r!#ert#r!tecti!n *hen #!ssi&le( :hen an idea has n!t reached the #!int*here intellect$al #r!#ert #r!tecti!n is #!ssi&le !r #ractical' itsh!$ld i"#le"ent the f!ll!*ing three-ste# #r!ced$re

1( te# 1 )he idea sh!$ld &e #$t int! a tangi&le f!r" either entered int!a #hsical idea l!g&!! !r saved !n a c!"#$ter dis(

2( te# 2 )he idea' *hether it is rec!rded in a #hsical idea l!g&!! !rsaved in a c!"#$ter file' sh!$ld &e sec$red(

3( te# 3 Av!id "aing an inadvertent !r v!l$ntar discl!s$re !f an ideain a *a that f!rfeits !$r clai" t! its e;cl$sive rights(


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E!$ Fe the G,


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E!$ Fe the G,


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E!$ Fe the G,


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,ase 2(2 - .ntellfit


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.ntellfit

$iscussion Question %:

Acc!rding t! the cha#ter' *hat are the attri&$tes !f an !##!rt$nit/ Nsethese attri&$tes t! eval$ate .ntellifit( Fased !n !$r eval$ati!n' is.ntellifit an !##!rt$nit !r $st an interesting idea/

Ans*er

Ans*ers t! this $esti!n *ill var( .n the instances *here *e have$sed the .ntellifit case in !$r classes' st$dents have &een fairlcritical !f the idea' and d!nt &elieve it "eets the attri&$tes !f an!##!rt$nit( an st$dents "ae the #!int the #e!#le !ften d!nt&$ cl!thes that #erfectl fits!"e #e!#le lie l!!se fitting cl!thes

*hile !thers lie tight fitting cl!thes( .n these cases' .ntellifitstechn!l!g *!$ld add n! val$e( .n additi!n' "!st st$dents said the"ight $se the .ntellifit "achine !nce' as a n!velt' &$t d!nt seethe"selves $sing it re#eatedl( !st st$dents als! re#!rted thatthe are fairl c!nfident that the n!* their cl!thing sie' andact$all en! tring cl!thes !n in st!res(


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.ntellfit

$iscussion Question :

% :hat envir!n"ental trends are *!ring in .ntellifits fav!r/ .f .ntellifit has$nc!vered a #r!"ising &$siness !##!rt$nit' *hat envir!n"ental trendshave "ade .ntellifits sste" #!ssi&le and #!tentiall attractive t!c!ns$"ers/

Ans*er )here are three envir!n"ental trends that #!tentiall *!r in .ntellifitsfav!r )echn!l!gical trends*hich "a i"#r!ve .ntellifits techn!l!g and "ae

#e!#le less rel$ctant t! tr a device lie the .ntellifit "achineO !cietal trendsthis trend c$ts &!th *as( .n !ne res#ect' the >cas$al? nat$re

!f "an *!r#laces *!rs against .ntellifit &eca$se #e!#le d!nt need t! &eshar#l dressed and have #erfectl fitted cl!thes( .n an!ther res#ect' there isan !ng!ing h$"an desire t! l!! g!!d *hich "a &e relative ter"' de#ending!n a #ers!ns #eer gr!$#' *hich "a *!r in .ntellifits fav!rO

Dc!n!"ic trendsif .ntellifit can hel# c!"#anies sell "!re cl!thes !r &etter"anage their invent!ries' th!se fact!rs *!r in .ntellifits fav!r(


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.ntellfit

$iscussion Question ':

% @n t*! #revi!$s !ccasi!ns' .ntellifit as .ntellifit and ade4e devel!#eda##r!aches f!r hel#ing #e!#le get &etter-fitting cl!thes that didnt *!r !$t(

% :hat is different a&!$t .ntellifits c$rrent a##r!ach/ :hat' if anthing' gives .ntellifitsc$rrent a##r!ach a &etter chance !f s$cceeding/

Ans*er

.ntellifits c$rrent a##r!ach is less !f a hassle f!r the $ser than the #revi!$sa##r!aches(

)he d!*nside is that s!"e #e!#le "a see the techn!l!g as intr$sive' and *!nder ifthere are an #!tential negative health ra"ificati!ns t! &eing e;#!sed t! .ntellifits#r!ced$re(

.ntellifits c$rrent a##r!ach als! ena&les the fir" t! "eas$re a large n$"&er !f #e!#lefairl $icl' and give the" acc$rate and detailed fitting inf!r"ati!n(


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.ntellfit

$iscussion Question (:

% :hich !f the three #!tential "arets that .ntellifit has identified f!r itsdevice d! !$ &elieve is the "!st #r!"ising/ :hich is the least#r!"ising/ .f .ntellifit decides t! #lace a large n$"&er !f its"achines in "alls' h!* i"#!rtant is it that a large #ercentage !f theretailers in the "all #artici#ate/

Ans*er

!st st$dents see the s#ecialt retail "aret as the "!st #r!"ising( .t ishard f!r st$dents t! see the .ntellifit "achine &eing *idel $sed in thef!!d c!$rt !f a "all !r in a large st!re( F$t in a s#ecialt st!re c!nte;t'lie a sh!# that sells *edding dresses !r a st!re that sells t! hard-t!-fit#e!#le' it is "$ch "!re #la$si&le t! &elieve that the device *!$ld &e$sed(

ch#2 recognizing opportunities and generating ideas

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