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GROWTH OF A BUSINESS IDEA
CHAPTER 2
ENTREPRENEURSHIP
Chapter Objectives To understand the importance of the business idea To explain the significance of a ‘new’ business idea To formulate a pre-selection process to precede the
search for a business idea To list the possible source of business ideas To describe the process of researching a business
idea To develop a comprehensive framework for
evaluating business ideas
Warren Buffer says, “Today’s successful companies live and die according to the quality of their ideas”.
Peter Drucker, “Innovation is the specific instrument of entrepreneurs, the means by which they exploit change as an opportunity for a different business”
First MoverAdvantages Technological
leadership: can also lead to Cost advantages Economies of scale
Obtain and secure scarce resources before crowding
Impose switching costs on buyers
Disadvantages Reveal underlying business
concept Others can try different
resource combinations Investments in resolving
problems: others can benefit from learnings
Inertia makes it difficult to abandon strategy no longer effective
Pre-selection
Uncover your personal traits Knowledge and Experience Goals and aspirations
Technical knowledge Domain knowledge Contacts
Sources of Business Ideas Past work experience Hobbies and interests Strengths and abilities Friends and family Distribution channels Travel Books and magazines Current trends Research organizations The web
Brainstorming
Some of the important ‘rules’ are as follows: Focus on quantity. Postpone criticism. Build on others’ ideas. Encourage crazy ideas. Work with a deadline.
Preliminary Research
Cost structure Market structure Technology HR issues Government regulations
Mind Maps
Five Questions Framework
Q1. Which is the market segment being targeted?
Q2. What is the business model?
Q3. How big is your market?
Q4. How can you protect your business?
Q5. What are you getting out of it?
Porter’s Five Forces
SWOT Analysis
STRENGTH WEAKNESS
OPPORTUNITY THREAT
Thank You
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