Recent Notes

Recognizing Opportunities and Generating Ideas

5 min read

  • Business Idea
    • Concept for a new product or service that would add to the innovation
    • Originates from imagination
  • Business Opportunity
    • Concept for a new product or service that would be able to address the current gaps in the market
    • Originates from potential gaps that can be exploited
  • Four Qualities of an Opportunity
    • Timely
    • Durable
    • Attractive
    • Value
  • Identify an Opportunity by:
    • Observing Trends
      • Mobile phone was created and rose to fame because of human travels and mobility
    • Solving Problems
      • Wind Farms were made to solve the increasing wind blowing problems and generate electricity through them at the same time
    • Gaps in the Market
      • Guitars only for Women
  • Entrepreneurial Alertness
    • A “sixth sense” that allows them to see opportunities that others miss
  • Weak-tie Relationship can lead to more new business ideas than Strong-tie Relationship
    • This is because in Weak-tie Relationship, one may say something to another that sparks a completely new idea
  • Creative Process of an Individual
    • Preparation
    • Incubation
    • Insight
    • Evaluation
    • Elaboration
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  • Techniques to Generate Ideas
    • Brainstorming
    • Focus Group
    • Library and Internet Research
  • SCAMPER
    • Technique that assists in introducing changes to existing products to create a new one
    • Consists of:
      • S - Substitute
        • Replace a part, material with something else
      • C - Combine
        • Add new parts or materials
      • A - Adapt
        • Modify the product to suit a new purpose
      • M - Modify
        • Enlarge, reduce or change shape if the
      • P - Put to another use
        • Put product to another using without changing it
      • E - Eliminate
        • Remove elements and reduce to essential parts
      • R - Reverse
        • Recycle it in some way
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Lecture 3

  • Feasibility analysis is the process of determining if a business idea is viable
  • Proper time to conduct a feasibility analysis is early in thinking
  • 4 Types of Feasibility Analysis
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    • Product/Service Feasibility
      • Product/Service Desirability
        • Does the product makes sense and solves a particular problem. Will someone be willing to use it?
      • Product/Service Demand
        • Talking face-to-face with customers to see if you’re making what they actually need
        • Using online tools such as Google Keywords etc to understand the current trends and demands
          • Surveys and Forums can also help
    • Industry/Target Market Feasibility
      • Industry is a group of firms making similar products
      • Industry Attractiveness
        • Younger industries are preferred
        • Early in their lifecycle
        • Are fragmented rather than concentrated
          • Concentrated industries are industries with dominant players
        • Are growing rather than sinking
      • Target Market Attractiveness
        • Find a market that’s large enough for the proposed business but is yet small enough to avoid attracting larger competitors.
    • Organizational Feasibility
      • Management Prowess
        • Ability of an organization’s management team to satisfy the organization that management has the requisite passion and expertise to launch the venture
      • Resource Sufficiency
        • Availability of space, employee and contractors etc
      • Management team and Company Structure
        • Should consist of founder(s) and key management persons
        • Organizational Chart
      • Operations Plan
        • How the business will be run and how the product or service will be produced
      • Product/Service Design and Development Plan
        • If product then prototype should be designed initially
    • Financial Feasibility
      • Total Start-Up Cash Needed
        • List down the resources
        • Estimate the Cost of Listed Resources
        • Decide about Debt and Equity Financing
          • Boot Scrapping
            • Process of building a business from scratch without attracting investment or with minimal external capital
      • Financial Performance of Similar Businesses
        • Estimate financial performance by comparing to similar, already established businesses.
      • Overall Financial Attractiveness of the Proposed Investment
        • Ability to forecast income and expenses with a reasonable degree of certainty
        • Internally generated funds to finance and sustain growth
        • Availability of an exit opportunity for investors to convert equity to cash
  • Crowd Funders
    • Reward based Crowd funding platforms help to raise funding to build a prototype and market test a great idea or product
  • If a business idea passes the Feasibility Analysis, the next step is to complete a business plan

Lecture 4

  • Business Model
    • A company’s plan for making a profit
    • The proper time to develop a business model is following the feasibility analysis stage and prior to fleshing out the operational details
  • Classes/Classification of Business Model
    • B2B
      • Business 2 Business
    • B2C
      • Business 2 Customer
    • C2C
      • Customer 2 Customer
  • Categories of Business Model
    • Standard Business Model
      • Existing plans or recipes firms can use to determine how they will create, deliver, and capture value
      • Some of these Business Models include:
        • Advertising Business Model
        • Auction Business Model
        • Bricks and Clicks BusinessModel
        • Franchise Business Model
        • Freemium Business Model
        • Low-Cost Business Model
        • Manufacturer/Retailer Business Model
        • Peer-to-Peer Business Model
        • Razor and Blades Business Model
        • Subscription Business Model
        • Traditional Retailer Business Model
    • Disruptive Business Models
      • They are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry
  • Barringer/Ireland Business Model Template
    • A template for crafting a Business Model
    • Consists of 12 elements divided into 4 categories
    • Following are the categories along with their elements:
      • Core Strategy
        • Describes how the firm plans to compete relative to its competitors
        • Business Mission
          • Why it exists and what its business model is supposed to accomplish
        • Basis of Differentiation
          • Basis of differentiation is what causes consumers to pick one company’s products over another’s
        • Target Market
          • Which sector will your product target?
        • Product/Market Scope
          • How do you plan to expand to your target market?
      • Resources
        • Core Competency
          • A specific factor or resource that supports a firm’s business model and sets it apart from rivals
        • Key Assets
          • Assets that a firm owns that enable its business model to work
          • Could be physical, financial, intellectual, or human
      • Financials
        • Revenue Streams
          • Describe the ways in which it makes money
          • Can be a single or many streams
        • Cost Structure
          • Cost analysis
          • Cost-driven or value-driven?
        • Financing/Funding
          • Indicate the appropriate amount of funding that will be needed and where the money will most likely come from
      • Operations
        • Product/Service Production
          • how a firm’s products and/or services are produced
        • Channels
          • Describe how it delivers its product or service to its customers
        • Key Partners
          • Partnerships formed to achieve a goal
          • Following types of partnerships can be formed:
            • Joint venture
            • Network
            • Consortia
            • Strategic alliance
            • Trade associations

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