Chapter 2

Creation of New Ventures

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 Product development
Outline:
• Creativity And Entrepreneurship
• Problem Solving Process
• Business Idea
• Creativity And Product Development Success
• The Importance Of Innovation
• Development Of New Products
• Product Development Processes
• Intellectual Property
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From Creativity to Entrepreneurship

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Creativity, Innovation and Entrepreneurs
Creativity is thinking new things, and innovation is doing new things.

Researchers believe that entrepreneurs succeed by thinking and doing

new things or old things in new ways .

Entrepreneurship = creativity + innovation

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 What does it take to be
creative ?

 Initial Idea

 Willingness to engage in difficult

work

Customers who are willing to buy

your idea
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Business Idea?

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What is a Business Idea?
• A business idea is the response of a person or persons, or an
organization to solving an identified problem or to meeting
perceived needs in the environment (markets, community, etc.).

• Finding a good idea is the first step in transforming the

entrepreneur’s desire and creativity into a business opportunity.

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 Sources of Business Ideas
Good business ideas are a prerequisite for initiating a new
business venture. However, good business ideas do not
usually just occur to an entrepreneur. Sources:
– Hobbies/Personal Interests
– Personal Skills and Experience
– Media (newspapers, magazines, TV, Internet)
– Business Exhibitions
– Customer Complaints
– Natural scarcities and pollution
– Changes in Society
– Brainstorming
– Being Creative
– Ideas from overseas (Global) Potential Imports
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Why Generate Business Ideas?
• You need an idea to start a new business
• Business ideas need to respond to market needs
• Business ideas need to respond to changing
consumer wants and needs
• Business ideas help entrepreneurs to stay ahead of
the competition
• Business ideas use technology to do things better
• Business ideas are needed because the life cycles of
products are limited
• Business ideas help to ensure that businesses operate
effectively and efficiently
• Business ideas help to solve natural resource scarcity,
pollution and depletion.
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 Evaluating a Business Idea
Each business idea should be evaluated in terms of:
• Present market. The size of the presently available
market must provide prospects of immediate sales
volume to support operations
• Market growth. There should be prospects for rapid
growth and high return on invested capital
• Costs. Some of the costs of production will include: a)
start up costs, b) costs of raw material inputs, c) labor
costs, d) selling costs, e) efficiency of production
processes, f) service, warranty, customer complaints and
g) patents and licenses.
• Business risks. In measuring business risk consider the
following factors: Market stability in economic cycles,
Technological risks, Legislation and controls , Time
required to generate profit
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The creative process

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This is the seeding stage of a new idea.
It is the stage where the entrepreneur recognises that an
opportunity exists.
The idea germination takes place according to interest,
curiosity of the entrepreneur

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On the basis of the idea, interest and curiosity the need is
ruled by the entrepreneur and he starts looking for the
answer to implement the idea.

If the idea is to launch a new product or service then market

research is conducted.

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Give the subconscious time to reflect on the
information (daydream, relax, etc)

The entrepreneur starts thinking about the idea and

implementation in his sub-conscious mind

Study the problem/opportunity in a wholly different

environment
• E.g studying the pros and cons of manufacturing the
product before he had launched it.
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In this period of illumination the idea re-surfaces in
realistic way.

The entrepreneur comes out with viable plan to give

practical shape by collecting raw-material, arranging
funds, policy–making for the implementation of idea.

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Also called the validation or testing stage.

Validate the idea is accurate and useful (conduct

experiments, prototypes, etc)

This is the most difficult phase of creativity as obstacles

begin to appear.

This is the developing stage in which knowledge is

developed into application
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Innovation

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 Product development success
The ability to develop and launch new products successfully and
quickly is the key to business success
Two fundamental ways to succeed in product innovation:
Doing projects right (EFFICIENCY):
E.g: Employing cross-functional teams
building in the voice of the customer,
getting a sharp, early and stable product definition
Doing the right projects (EFFECTIVENESS):
project selection decisions and portfolio management
techniques
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 Types of Intellectual Property Rights
Intellectual property (IP) rights are the legally recognized
exclusive rights to creations of the mind. Under this law,
owners are granted certain exclusive rights to a variety of
intangible assets.
Common types of intellectual property rights include
• patents
• Copyrights
• Trademark
• Industrial design rights and
• trade secrets.

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 Cont…
Patents
• It grants an inventor the right to exclude others from
making, using, selling, offering to sell, and importing an
invention for a limited period of time, in exchange for the
public disclosure of the invention.
– For new and useful products and
– For processes for the manufacture of new or existing
products
• Inventions patentable
– Art, Process, Method or Manner of manufacture;
– Machine, Apparatus or other Articles;
– Substances produced by Manufacturing
– Computer Software
– Product Patent for Food/Chemical/Medicines or Drugs
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Cont…
Copyright
• It gives the creator of original work exclusive rights
to it, usually for a limited time. It means apply to a
wide range of creative, intellectual or artistic forms
or work.
– For example, musical composition, literary work such as
poems, plays etc.
Industrial design
• It protects the visual design of objects that are not
purely utilitarian.
– It can be a two or three dimensional pattern used to produce a
product, industrial commodity or handicraft.
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Trademark
– It is a recognizable sign, design or expression which
distinguished products or services of a particular trades
from the similar products or services of other traders.

Trade Secret
– Any confidential business information which provides
an enterprise a competitive edge may be considered a
trade secret.
• For example, Coca-Cola formula

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