idea buyer identifying startup ideas for business

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© 2015 Idea Buyer. All rights reserved. Starting from Scratch or Joining an Existing Business Part 2

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Page 1: Idea buyer   identifying startup ideas for business

© 2015 Idea Buyer. All rights reserved.

Starting from Scratch or Joining an Existing BusinessPart 2

Page 2: Idea buyer   identifying startup ideas for business

1. Identify several factors that figure out whether an idea for a medical is a smart investment opportunity.

2. Give several reasons for starting a new company on your own rather than buying a series or a preexisting company.

3. Distinguish among the different types and types of start-up ideas.

4. Describe exterior and inner studies that might shape medical possibilities.

5. Explain broad-based strategy options and focus strategies.

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After you have read this chapter, you should be able to:

Page 3: Idea buyer   identifying startup ideas for business

Chance Recognition Identification of prospective new services or

items that may cause appealing businesses Entrepreneurial Alertness Readiness to act on current, but unseen,

business opportunities Good Financial commitment Qualities Products that provide clear and important

needs Products that clients know about Products that clients can afford A wise decision is not the same as an excellent

chance.

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Page 4: Idea buyer   identifying startup ideas for business

© 2015 Idea Buyer. All rights reserved.

Market Factors

Competitive AdvantageJudging a

Business Opportunity

Management Capability Economics

Fatal Flaws

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To tap into unique

resources that are available

To avoid undesirable features of

existing companies

To develop a commercial market for

new product or service.

Wanting the challenge of succeeding

(or failing) on your own

Motivations To Start

a Business

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What other start-up kinds might be considered? What are some resources for more new ideas? How to recognize a authentic chance that

produces value, for both the organization and the company’s owners?

How should the concept be refined? What can be done to enhance the possibilities

that the organization will be successful? What aggressive benefits does the organization

have over its rivals?

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Page 7: Idea buyer   identifying startup ideas for business

© 2015 Idea Buyer. All rights reserved.

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ATTRACTIVENESSCriterion Favorable Unfavorable

Market Factors Need for the product Well identified Unfocused

Customers Reachable; receptive Unreachable; strong loyalty to competitor’s product or service

Value created for customers Significant Not significant

Market structure Emerging industry; not highly competitive

Mature or declining industry; highly concentrated competition

Market growth rate Growing by at least 15% a year Growing by less than 10% a year

Competitive Advantage Control over prices, costs, and distribution Moderate to strong Weak to nonexistent

Barriers to entry:

Proprietary information or regulatory protection

Have or can develop Not possible

Response/lead time advantage Competition slow, nonresponsive Unable to gain an edge

Legal/contractual advantage Proprietary or exclusive Nonexistent

Contacts and networks Well developed; accessible Poorly developed; limited

Economics Return on investment 25% or more; sustainable Less than 15%; unpredictable

Investment requirements Small to moderate; easily financed Large; difficult to finance

Time required to break even or to reach positive cash flows

Under 2 years More than 4 years

Management Capability Management team with diverse skills and relevant experience

Solo entrepreneur with no related experience

Fatal flaws None One or more

Source: Adapted from Jeffrey A. Timmons and Stephen Spinelli, New Venture Creation: Entrepreneurship for the 21st Century (Boston: McGraw-Hill Irwin, 2007), pp. 128–129.

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Marketing Factors◦Need for product

Identified or unfocused◦Customers

Reachable or not, brand loyal◦Value created for customer

Significant or insignificant◦Life of product

Recovery of cost by customer

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Page 9: Idea buyer   identifying startup ideas for business

Marketing Factors (cont’d)◦Market structure

Emerging or mature Market size (known or unknown?) Market growth (how fast?)

Competitive Advantage◦Cost structure

Management over price, expenses, programs of supply Barriers to entry: regulating security, response/ lead-

time benefits, lawful, connections and networks

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Page 10: Idea buyer   identifying startup ideas for business

Economics◦ Return on investment?

Investment requirements Break-even point

Management Capability◦ Diverse skills or solo entrepreneur

with no related experience Fatal Flaws

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Page 12: Idea buyer   identifying startup ideas for business

Type A◦Are based around offering clients with a preexisting item not available in their market.

Type B◦Include new concepts, involve new technology, focused on offering clients with a new product.

Type C◦Are focused on providing customers with a greater product.

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Page 13: Idea buyer   identifying startup ideas for business

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Source: Data developed and provided by the National Federation of Independent Business and sponsored by the American Express Travel Related Services Company, Inc.

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Change Factor Definition Industry FactorsThe unexpected Unanticipated events lead to either enterprise success or

failure.

The incongruous What is expected is out of line with what will work.

Process needs Current technology is insufficient to address an emerging challenge.

Structural change Changes in technology, markets, etc., alter industry dynamics.

Human and Economic Factors

Demographics Shifts in population size, age structure, ethnicity, and income distribution impact product demand.

Changes in perception Perceptual variations determine product demand.

New knowledge Learning opens the door to new product opportunities with commercial potential.

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1. Lend ideas from current products and services or other sectors.

2. Combine two businesses into one to create a industry starting.

3. Begin with a problem in mind.

4. Recognize a hot trend and drive the trend.

5. Explore ways to improve an item or service’s function.

6. Think of how to improve a customer’s activities.

7. Adapt services or products to meet customer needs in a different way.

8. Imagine how the industry for services or products could be extended.

9. Keep an eye on technology.

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Page 16: Idea buyer   identifying startup ideas for business

Outside-In Analysis◦Checking perspective of the project to recognize

businesses and determine which concepts are eligible as possibilities.

◦General Environment◦A wide atmosphere, covering factors that effect most

businesses in a community.◦Industry Environment◦The mixed causes that straight effect a given firm and

its opponents.◦Competitive Environment◦The atmosphere that concentrates on the strength,

position, and likely goes and countermoves of opponents in an market.

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Bargaining Power of Buyers

Threat of Substitute Products or Services

Bargaining Power of Suppliers

Intensity of Rivalry Among

Existing Competitors

Threat of New Competitors

Attractiveness and Profitability of a

Target Market

Page 19: Idea buyer   identifying startup ideas for business

Who are the new venture’s present competitors? What sources do they control? What are their strong points and weaknesses? How will they react to the new venture’s choice to

get in the industry? How can the medical respond? Who else might be able to notice and manipulate

the same opportunity? Are there methods to co-opt prospective or real

opponents by developing alliances?

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Page 20: Idea buyer   identifying startup ideas for business

Inside-Out Analysis Assessing the firm’s inner aggressive potential Resources Basic information that a company uses to perform its

business Tangible resources: noticeable and simple to

evaluate. Intangible resources: unseen, challenging to quantify Capabilities Integration of various business sources that are

implemented together to the firm’s benefits. Core Competencies Resources and abilities offering a company with an

aggressive edge on its competitors.

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Page 21: Idea buyer   identifying startup ideas for business

Strong points, Weak points, Possibilities, and Risks (SWOT) Analysis

A type of evaluation that provides a brief review of a firm’s ideal scenario.

Helps recognize opportunities that coordinate the project.

Seeking Aggressive Insight Will the chance result in others in the future? Will the chance develop abilities that start the

entrance to new opportunities in the future? Will quest for the chance be likely to enjoy to

competitive reaction by prospective rivals?

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Page 22: Idea buyer   identifying startup ideas for business

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Page 24: Idea buyer   identifying startup ideas for business

Strategy A technique that harmonizes the time and

responsibilities of an company to obtain excellent efficiency.

Strategic Decision A choice regarding the route a company will

take in pertaining to its customers and opponents.

Sustainable Aggressive Advantage A value-creating industry position that is

likely to have over time.

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Cost-Based Strategy

Focus Strategy

Broad-Based Strategy

Differentiation-Based

Strategy

Strategies That Capture

Opportunities

Page 27: Idea buyer   identifying startup ideas for business

Focus Strategy Implementation◦Restricting focus to a single subset of customers.◦Emphasizing a single products or services.◦Limiting the market to a single geographical region.

◦Concentrating on superiority of products or services.

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Page 28: Idea buyer   identifying startup ideas for business

Advantages◦ Niche market shields from direct competition.◦ Allow development of unique expertise

Disadvantages◦ Focus markets can quickly erode if:

1. The main focus technique is replicated.2. The focus on section is structurally unpleasant.3. The focus on segment’s variations from other

sections filter.4. New companies subsegment the industry.

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Page 29: Idea buyer   identifying startup ideas for business

opportunity recognition entrepreneurial

alertness competitive advantage Type A ideas Type B ideas Type C ideas serendipity general environment industry environment competitive

environment resources

tangible resources intangible resources capabilities core competencies SWOT analysis strategy cost-based strategy differentiation-based

strategy focus strategy strategic decision

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