Chapter 02 growth of a business idea

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