Download Opportunity

Identifying
Opportunities
Entrepreneurial Process
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Identify and Evaluate the Opportunity
Develop the Business Plan
Determine Resources Required
Manage the Resulting Enterprise Created
Identify & Evaluate Opportunity
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Fruitful Sources: consumers, distributors, technical
people, business associates
Evaluation of opportunity most critical element
Window of opportunity (size & duration) are primary
basis for determining risks/rewards
Opportunity must fit personal skills and goals of
entrepreneur
Opportunity Assessment Plan
Opportunity Assessment Plan
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What market need does it fill?
Personal observations reflect market need?
What social condition underlies market need?
Market research to support need?
Are patents required?
What competition exists in marketplace?
International competition?
Where is the money to be made in this activity?
Develop a Business Plan
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Executive Summary
Description of Business
Description of Industry
Marketing Plan
Financial Plan
Production Plan
Organization Plan
Operational Plan
Summary
Appendices
Entrepreneurial Interest
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Small firms play a major role in job creation and
innovation
Most large organizations provide little opportunity
for self-actualization
New ventures by female entrepreneurs 3 times that
of males
Life-Cycle Approach
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9 areas of development
little statistical significance
tend to have self-employed fathers
generally know for strong work values and dominant
management style
Concept Development
Identify
Needs
Target
Specs
Test
Concept
Set Final
Specs
Product
Concepts
Plan
Downstream
Select
Concept
Development
Plan
Concept Development
Identify
Needs
Target
Specs
Test
Concept
Set Final
Specs
Product
Concepts
Plan
Downstream
Perform Economic Analysis
Benchmark Competitive Products
Test Models / Prototypes
Select
Concept
Development
Plan
Opportunity Identification
Identify
Opportunity
Determine
Capabilities
Evaluate
Opportunity
Select Best
Opportunity
Summary of
Concept
Test Concept
Nine Categories of Opportunities
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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
Trends / Opportunities
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Genetic Engineering, genomics
Information technology
Food preservation / distribution
Video gaming
Speech recognition
Security systems
Nanotechnology
Trends / Opportunities
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Fuel Cells
Superconductivity
Designer enzymes
Smart cards
Software security
Robots
Social / Cultural Trends
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Aging baby boomers
Increasing diversity
Two-working parent families
Rising middle class in developing nations
Changing role of religious organizations
Changing role of women
Media – DVDs, Internet
Growth of Latino population in U.S.
Convergence
Applications
Opportunity
Customer Needs
Technology
Capacity
Evaluating Opportunity
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Capabilities: is it consistent with mission, knowledge
base ?
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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 ?
Team:
accept risk
knowledge base
commitment
100%
50%
Resources:
financial
processes
human
Context:
timeliness
industry conditions
market conditions
Opportunity:
novelty
potential market
good risk vs reward
Team:
accept risk
knowledge base
commitment
100%
50%
Resources:
financial
processes
human
Holiday Inn
Opportunity:
novelty
potential market
good risk vs reward
Context:
timeliness
industry conditions
market conditions
Team:
accept risk
knowledge base
commitment
100%
50%
Resources:
financial
processes
human
Electric
Auto
Opportunity:
novelty
potential market
good risk vs reward
Context:
timeliness
industry conditions
market conditions
Product Development Approach
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Identify Opportunities
Evaluate and Prioritize
Allocate Resources and Plan Timing
Complete Pre-Project Planning
Reflect / Evaluate Results
Product Development Approach
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Identify Opportunities
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Marketing & sales
R&D
Manufacturing
Current / potential customers
Third party (competitors)
Product Development Approach
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Evaluate and Prioritize
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Competitive Strategy
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Technology leadership
Cost leadership
Customer focus
Imitative
Market segmentation
Technological trajectories
Product platform planning
Sales Force Composite
Natl.
Sales F.
P1
520
P2
425
Regional Sales Forecast
RMS1
RMS2
RMS3
P1
P2
P1
P2
P1
P2
180 135
190
170
150
120
Sales Force Forecast
Dudes Reg 1
P1 P2
100 75
Dudes Reg 2
P1 P2 P1 P2
80 60 120 90
P1 P2
70 80
Dudes Reg 3
P1 P2
60 50
P1 P2
90 70
Marketing Research
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Systematic, formal, and objective application of
scientific method
Advantages
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Accuracy
Disadvantages
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Costly
Requires experience, knowledge
Can be wrong (New Coke)
Market surveys
Hire a consultant
Generating Creative
Business Ideas
Ken Olsen
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Ph.D. student at MIT research team building first MIT
computer
Liason team with IBM
Disgruntled with IBM’s production inefficiencies
Started DEC with $70,000
 Introduced PDP-1 in 1960 (first small computer)
 1964 senior entrepreneurs each totally in charge of a
single product line
 1979 future in systems and networks, company spent 5
years reorganizing DEC into a unified marketing
organization
1994 sales at roughly $14 billion
Sources of Ideas
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Consumers
Existing Companies
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Distribution Channels
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distributors keenly aware of market trends
Federal Government
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can we improve existing products
Patent Office (Official Gazette)
Regulations (OSHA)
Research & Development
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Ken Olsen
Generating Ideas
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Focus Groups
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8-12 market group conceptualize new product need
Brainstorming
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structured
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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
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Variations to Brainstorming
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visual brainstorming
analogies/free-word association
6-3-5 method
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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
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Nominal Group Technique (NGT)
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generate list of ideas (brainstorm)
each member rank orders ideas highest to lowest
idea with highest total score gets worked on first
Variations
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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
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easier to relate to known products and criticize to arrive
at a new product idea
Creative Problem Solving
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Brainstorming
Reverse brainstorming
Synetics
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2 step problem solving through one of four analogies:
personal, direct, symbolic, and fantasy
generally requires considerable training
limited success with some groups (male eng.)
Gordon Method
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group responds to a general concept
respond to related concepts
finally respond to actual problem
Creative Problem Solving
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Checklist Method
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Free Association
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modify, adapt, put to other uses, substitute, . . .
similar to brainstorming - create chain of ideas
Forced Relationships
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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
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Value Analysis
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Attribute Listing
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maximize value by constructively skimping
list attributes of a problem
e.g. SD has little economic development, what
types of industry/products/services do well here
Matrix Charting
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similar to house of quality
Creative Problem Solving
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Big-Dream Approach
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ideas should be conceptualized without constraints
Parameter Analysis
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2 aspects, parameter identification & creative synthesis
Market Need
Technology
Observation
Need
Analysis
Parameter
identification
Creative
synthesis
Realization
New Product
Product Development Process
EVALUATE
Idea Concept Develop Test Introduction
Market
Growth
Maturity
Decline
t
Evaluation Criteria
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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
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Idea Stage
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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
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refined product idea tested to determine consumer
acceptance
conversational interview - consumers respond to statements
that reflect product attributes, quality, reliability, price,
promotion, distribution
Evaluation
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Product Development Stage
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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
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New Coke
Evaluation Questions
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How will this venture do in the short run? long
run?
Why does this opportunity exist? Is this likely to
last?
Who will be the first customer to buy?
Will it possible for this company to withstand
competition if it comes?
Who else could enter the market and become
competitors?
Evaluation Questions
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What are the 3 critical assumptions upon which
success is projected? Can these assumptions be
tested?
How sensitive are these projections to variations
in key assumptions?
What is the downside loss if things go
unfavorably?
What has to happen for break-even to occur?
Check Market Fit
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Target Customers
Segmentation
Nichemanship
Positioning
Price/Performance
Comparison Grids
Relative Market Share