DEPARTMENT OF MBA- CIT ( R)
UNIT 2- ENTREPRENEURSHIP
ESTABLISHING STARTUPS:
OPPORTUNITY SCANNING AND IDENTIFICATION
In terms of the processes through which an enterprise gets established, this Unit
discusses how an opportunity is identified by one who wishes to set up his or her
own enterprise. The process by which an opportunity is identified is at times
described as Opportunity Scanning or Sensing and Identification (OSI). An
opportunity is identified and an enterprise established so that the person who carries
out all the operations is self-employed, earns some income and in some cases profit.
This whole activity is at times covered under one term entrepreneurship and
entrepreneurs are also self-employed.
In a developing economy like India there should not be dearth of opportunities. One
reads about innovative devices conceived and manufactured by engineers and
technicians. One also comes across interesting success stories of entrepreneurs and
businessmen describing a life span from rags to riches. Presently, in our country
several schemes of promotion and assistance for setting up small scale units or small
businesses, by new or first generation entrepreneurs, are being implemented by the
Central and State Governments. New product lines, new processes, new services and
new technologies have made India their home in only recent past. This Unit, after
making you understand what entrepreneurs do and how, takes you through the
process of identifying an opportunity for business and how this process ends by
deciding on what to do.
IDENTIFICATION OF AN OPPORTUNITY
In spite of increasing literature on lives of entrepreneurs and entrepreneurship
development comparatively little is known about how an entrepreneur identifies an
opportunity. It is, therefore, somewhat difficult to state in any categorical manner as
to how an intending entrepreneur should proceed. What is needed is a step-by-step
account of how should one undertake such an activity. Literature on management
science, particularly those areas which deal with business policy, corporate planning
and strategy formulation and implementation do, however, offer useful insights into
managerial processes which are at times close to entrepreneurial pursuits. In
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identifying opportunity an intending entrepreneur like an individual businessman is
required to understand the environment in which he or she would operate. At the
opportunity stage again government policy and the market for the product/service
would be the first to be taken for examination. This is generally termed as the
external environment. Government policy for large or medium industry is regulatory
but for small industry it is both developmental and promotional.
The major tools which our entrepreneur uses in this activity – OSI – are two viz.,
scanning of his or her environment and assessing one’s own strengths and
weaknesses in relation to opportunities in the market and competitive threats to the
same. The former can be a more general, all inclusive activity while the latter is a
more specific and situation-oriented activity. This is known in managerial jargon as
SWOT Analysis meaning thereby Analysis of Strength and Weaknesses on the
subjective side and Opportunities and Threats in the market on the objective side.
These tools are important and are generally employed in the working of a business
unit. But they can be extended into areas about setting up of an enterprise and
likewise identifying an opportunity.
Opportunity scanning and identification are critical processes for businesses seeking
growth, innovation, and competitive advantage. In a dynamic and ever-changing
business environment, organizations must continuously assess their surroundings to
identify emerging trends, market shifts, technological advancements, and unmet
customer needs. This proactive approach enables them to seize opportunities and
stay ahead of the curve. Here's a comprehensive overview of opportunity scanning
and identification:
1. Environmental Analysis: Conducting a comprehensive environmental analysis
involves examining various external factors that could impact the business, such as
economic trends, political developments, sociocultural shifts, technological
advancements, and legal regulations. Tools like PESTEL analysis (Political,
Economic, Sociocultural, Technological, Environmental, and Legal) help in
systematically evaluating these factors.
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2. Market Research: Market research involves gathering and analyzing data related
to consumer preferences, purchasing behavior, competitor strategies, and industry
trends. Techniques like surveys, focus groups, interviews, and data analytics are
commonly used to collect relevant insights. By understanding market dynamics,
businesses can identify gaps, niches, and emerging opportunities.
3. Competitive Analysis: Analyzing competitors' strengths, weaknesses, strategies,
and market positioning provides valuable insights into the competitive landscape.
Businesses can identify underserved segments, areas where competitors are
vulnerable, or potential collaborations to gain a competitive edge.
4. Technology Assessment: Keeping abreast of technological advancements and
disruptions is crucial for identifying opportunities for innovation and efficiency
improvement. Technologies such as artificial intelligence, blockchain, Internet of
Things (IoT), and augmented reality can open up new possibilities for businesses
across various industries.
5. Customer Feedback and Insights: Actively soliciting feedback from customers
through surveys, reviews, and direct interactions helps businesses understand their
needs, preferences, and pain points. By listening to the voice of the customer,
organizations can identify opportunities for product/service enhancements, new
offerings, or tailored solutions.
6. Networking and Collaboration: Building and nurturing networks with industry
peers, suppliers, customers, and other stakeholders can provide access to valuable
information, resources, and opportunities. Collaborative partnerships, joint ventures,
or alliances with complementary businesses can help leverage each other's strengths
and expand market reach.
7. Scenario Planning: Scenario planning involves envisioning various future
scenarios and assessing their potential implications for the business. By anticipating
different outcomes and their likelihood, organizations can proactively prepare
strategies to capitalize on favorable scenarios or mitigate risks associated with
adverse ones.
8. Innovation and Creativity: Cultivating a culture of innovation and encouraging
creativity within the organization can foster the generation of novel ideas and
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solutions. Techniques like brainstorming sessions, design thinking workshops, and
hackathons can stimulate innovative thinking and uncover new opportunities.
9. Flexibility and Adaptability: Remaining flexible and adaptable in response to
changing circumstances is essential for capitalizing on opportunities as they arise.
Businesses must be willing to pivot their strategies, reallocate resources, and
embrace experimentation to seize emerging opportunities effectively.
10. Continuous Monitoring and Evaluation: Opportunity scanning and
identification are ongoing processes that require continuous monitoring and
evaluation. Regularly reviewing and reassessing the business environment, market
dynamics, and internal capabilities ensure that organizations stay agile and
responsive to evolving opportunities and challenges.
CREATIVITY
MEANING OF CREATIVITY
Entrepreneurial creativity is defined as the paradigm shiftt in generation and
implementation of novel, appropriate ideas to establish a new venture that results in
the improved efficiency or effectiveness of a system. Its two important aspects are
process and people. Process is goal-oriented and designed to attain a solution to a
problem. People are the active resources that determine the solution. They will
sometimes adapt a solution and at other times, they will formulate a highly
innovative solution. As Henry Miller said, “One’s destination is never a place, but a
new way of seeing things.” Creativity begins with a foundation of knowledge,
learning a discipline and mastering a novel way of thinking which comes from
experimenting, exploring, questioning, assumptions, using imagination and
synthesizing information.
DEFINITION OF CREATIVITY
Some of the important definitions are: Joseph Schumpeter introduced the economic
theory of “creative destruction,” to describe the way in which old ways of doing
things are endogenously destroyed and replaced by the new. Drevdahl says,
“Creativity is the capacity of a person to produce compositions, products or ideas
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which are essentially new or novel and previously unknown to the producer.”
Therefore, creativity is the capacity to produce ideas that are both new and useful
through divergent thinking.
CHARACTERISTICS OF CREATIVITY
(a) Imaginative: Creative thinking starts with imagination as it brings about
something that did not exist or was not known before, so it has to be imagined first.
(b) Purposeful: Creative imagination must have a purpose, an objective to serve the
responsibilities of the business.
(c) Original: Originality means inventiveness or the ability to think independently
and creatively or the quality of being novel or unusual.
(d) Valuable: It means that the product or result must be held in great esteem for
admirable qualities especially of an intrinsic value.
(e) Ability: Ability is to imagine or invent something new. It is not only qualification
but also need skills to do a particular task in a productive manner.
NECESSITY OF CREATIVITY IN ENTREPRENEURSHIP
Globalization, advanced technology and excessive industrialization have created
immense business opportunities. Imports and exports have provided easy access to
products. So what does a business person do in a market flooded with products? How
can someone think of manufacturing and supplying a product in markets where
consumers already have their trusted preferences and so many choices? How can we
make a product stand out from the rest? The answer to all these lies in creativity and
innovation.
Creativity and entrepreneurship go hand in hand. However, both are important to
each other and one cannot guarantee success without the other.
1. Foster Innovation: Creativity is the heart and innovation, the oxygen for the
success of the organization. An idea which is unique is an invention, but an idea
which is unique as well as useful, is an innovation. In simple terms, innovation refers
to the commercialization of invention.
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2. Leads to Higher Overall Success: Organisations need creative people. They could
bring great benefits if their skills are adequately shaped and harnessed.
3. Encourages People to Think: Thinking is a pre-requisite for creativity. Thinking
works best when coupled with sharp, highly focused and disciplined way of thinking.
4. Helps Transcend Boundaries: Most path-breaking discoveries are made when two
or more unrelated disciplines collide in a positive way.
5. Helps Increase Productivity: Creativity may result in creative products and
services which may increase productivity by creating demand in the markets.
6. Help Exploit Employee Potential: Today’s employees are realising that there is
an ocean of information and creative ideas that are dormant and untapped at all
levels. By encouraging employees to be creative, organisations are essentially
utilising the untapped potential.
7. Development of Creativity: Creativity is an intrinsic trait with renewable
resources that can be tapped anytime and be learned. We are all born with creative
potential and thought process which can be developed and reinforced. Inculcating
new skills or train mind to think differently leads to creative thinking.
8. Increased Revenue: Creativity gives a competitive edge to business to increase
turnover as a result of consumers’ satisfaction.
9. Greater Market Share: Business is selling experiences in addition to
products/services, which leads to increase market share or the share of enterprise
sales in total market sales.
PRODUCT DEVELOPMENT PROCESS
The product development process typically involves several stages, each aimed at
taking an idea from conception to market launch. Here's a simplified overview of
the product development process along with examples:
1. Idea Generation: This is the stage where new product ideas are brainstormed.
This can be done through market research, customer feedback, or internal
innovation sessions. Example: A technology company brainstorming ideas for
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a new smartphone feature based on customer surveys and emerging market
trends.
2. Idea Screening: Once ideas are generated, they need to be evaluated to
determine their feasibility and alignment with the company's goals and
resources. Not all ideas make it past this stage. Example: An automobile
manufacturer reviewing various concepts for a new car model and eliminating
those that are not economically viable or not in line with their brand identity.
3. Concept Development and Testing: Selected ideas are further developed
into concepts, which are then tested with potential customers to gather
feedback and refine the concepts. Example: A beverage company creating
prototype flavors for a new energy drink and conducting taste tests with focus
groups to assess consumer preferences.
4. Business Analysis: This involves a detailed analysis of the potential costs,
revenues, and profitability of the product. Factors such as production costs,
pricing strategy, market size, and competition are considered. Example: A
software company conducting a cost-benefit analysis to determine whether
developing a new productivity app is financially viable.
5. Product Development: Once the concept is approved, the actual
development of the product begins. This stage may involve engineering,
design, prototyping, and testing. Example: A clothing retailer working with
designers and manufacturers to create prototypes of a new clothing line,
conducting fittings and quality tests along the way.
6. Market Testing: Before a full-scale launch, the product may undergo market
testing in a limited geographic area or among a specific target audience to
gauge customer response and make any necessary adjustments. Example: A
fast-food chain introducing a new sandwich in select locations to test customer
preferences and gather feedback on taste, portion size, and price.
7. Commercialization: This is the final stage where the product is launched into
the market. This involves marketing, distribution, and sales efforts to promote
the product and make it available to customers. Example: A technology
company launching its latest smartphone model globally, coordinating
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marketing campaigns, setting up distribution channels, and making the
product available for purchase online and in retail stores.
MARKET SURVEY AND ASSESSMENT
Introduction
In today's dynamic business environment, market dynamics are constantly evolving,
necessitating businesses to stay abreast of changing consumer preferences, emerging
trends, and competitive landscapes. A market survey and assessment serve as
indispensable tools for gathering relevant information to make informed decisions.
However, it's imperative to conduct these assessments ethically and avoid
plagiarism, as it undermines the credibility of the findings and can have legal
ramifications.
Understanding the Market Survey Process
The market survey process typically involves several key steps:
1. Define Objectives: Clearly outline the objectives of the survey, such as
understanding customer needs, assessing market potential, or evaluating
product satisfaction.
2. Identify Target Audience: Determine the demographic characteristics of the
target audience, including age, gender, income level, geographic location, and
psychographic factors.
3. Design Survey Instrument: Develop a survey questionnaire or interview
guide tailored to gather relevant information aligned with the research
objectives.
4. Choose Survey Methodology: Select the appropriate survey methodology,
such as online surveys, telephone interviews, face-to-face interviews, or focus
groups, based on the target audience and research objectives.
5. Data Collection: Execute the survey by administering questionnaires,
conducting interviews, or organizing focus groups to collect data from the
target audience.
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6. Data Analysis: Analyze the collected data using statistical tools and
techniques to derive meaningful insights and identify trends, patterns, and
correlations.
7. Interpretation and Action: Interpret the findings of the survey in the context
of the research objectives and devise actionable recommendations to address
identified opportunities or challenges.
Importance of Market Survey and Assessment
A robust market survey and assessment play a pivotal role in guiding strategic
decision-making and driving business success in several ways:
1. Customer Understanding: Gain deeper insights into customer preferences,
behaviors, and needs to tailor products, services, and marketing strategies to
effectively meet their requirements.
2. Competitive Analysis: Assess competitors' strengths, weaknesses, and
strategies to identify market gaps, capitalize on opportunities, and mitigate
threats.
3. Market Segmentation: Segment the target market based on demographic,
psychographic, and behavioral characteristics to customize marketing efforts
and enhance customer engagement.
4. Product Development: Solicit feedback from customers to refine existing
products or develop new offerings that align with market demand and address
unmet needs.
5. Risk Mitigation: Anticipate market trends, shifts, and disruptions to
proactively mitigate risks and capitalize on emerging opportunities, ensuring
long-term business sustainability.
INNOVATION TRIAL
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Introduction:
Innovation trials play a pivotal role in the evolution of industries and societies. They
are structured experiments aimed at testing new ideas, technologies, or processes in
real-world settings. This lecture note delves into the significance, principles, and
methodologies of innovation trials, highlighting their role in fostering sustainable
progress.
Significance of Innovation Trials:
Innovation is the lifeblood of progress, driving advancements in various domains
such as technology, healthcare, and business. However, the journey from concept to
implementation is fraught with uncertainties and risks. Innovation trials serve as a
crucial bridge, allowing innovators to validate their ideas, gather feedback, and
refine their solutions before widespread adoption. By providing a controlled
environment for experimentation, these trials mitigate the inherent risks associated
with innovation, ultimately accelerating the pace of change.
Principles of Innovation Trials: Several principles underpin effective innovation
trials:
1. Iterative Testing: Innovation is an iterative process characterized by
continuous learning and adaptation. Trials should be structured to facilitate
rapid experimentation and feedback loops, enabling innovators to refine their
concepts incrementally.
2. Real-World Relevance: Innovation trials must simulate real-world conditions
as closely as possible to ensure the validity of results. By testing solutions in
authentic settings, trial outcomes are more indicative of their potential impact
when scaled.
3. Collaborative Approach: Collaboration is key to the success of innovation
trials. Stakeholders from diverse backgrounds, including academia, industry,
and government, should collaborate to provide multidimensional perspectives
and resources.
4. Ethical Considerations: Ethical considerations must guide the design and
execution of innovation trials, ensuring that the rights and well-being of
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participants are safeguarded. Transparency, informed consent, and data
privacy are paramount in maintaining ethical integrity.
Methodologies of Innovation Trials: Various methodologies can be employed in
innovation trials, depending on the nature of the innovation and the context of the
trial. Some common methodologies include:
1. Randomized Controlled Trials (RCTs): RCTs are gold standard experiments
used to assess the efficacy of interventions by randomly assigning participants
to control and treatment groups. They are particularly effective in healthcare
and social sciences.
2. Field Experiments: Field experiments involve testing innovations in real-
world settings while maintaining experimental control. These trials offer a
balance between internal validity and external relevance, making them
suitable for assessing complex interventions.
3. Pilot Studies: Pilot studies involve conducting small-scale trials to assess the
feasibility and acceptability of innovations before full-scale implementation.
They help identify potential challenges and inform the design of larger trials.
Choice of Technology and Selection of Business Sites
Introduction: In the dynamic landscape of business operations, strategic decisions
regarding technology and site selection play pivotal roles in determining the success
and sustainability of enterprises. This essay delves into the critical aspects involved
in the choice of technology and the selection of business sites, elucidating their
significance and providing insights into effective decision-making processes.
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Choice of Technology: The choice of technology encompasses a multifaceted
evaluation of available options tailored to meet organizational objectives and
operational requirements. Several key factors influence this decision-making
process:
1. Operational Needs: Understanding the specific operational needs and
requirements is fundamental. Whether it's manufacturing, service provision,
or data management, the technology chosen should align seamlessly with the
organization's core activities.
2. Scalability and Flexibility: Scalability and flexibility are crucial
considerations, especially in today's rapidly evolving business environment.
The chosen technology should possess the capacity to adapt and grow
alongside the organization, accommodating future expansions and
technological advancements.
3. Cost-Benefit Analysis: Conducting a comprehensive cost-benefit analysis is
imperative. This involves evaluating not only the initial investment but also
the long-term implications, including maintenance costs, upgrades, and
potential savings or revenue generation facilitated by the technology.
4. Integration Capabilities: Compatibility and integration with existing
systems and processes are vital for seamless operations. Investing in
technology that can integrate with other platforms enhances efficiency and
reduces operational friction.
5. Security and Compliance: In an era marked by increasing cyber threats and
regulatory scrutiny, prioritizing security and compliance features is non-
negotiable. Implementing robust cybersecurity measures and ensuring
adherence to relevant regulations safeguard the organization's assets and
reputation.
Selection of Business Sites: The selection of business sites entails a strategic
evaluation of geographic locations conducive to achieving organizational objectives
and maximizing operational efficiency. Key considerations in this regard include:
1. Market Access and Proximity: Proximity to target markets and suppliers
significantly influences site selection decisions. Access to a customer base,
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distribution channels, and necessary resources can confer a competitive
advantage and streamline logistical operations.
2. Infrastructure and Amenities: Assessing the availability and quality of
infrastructure and amenities is paramount. Factors such as transportation
networks, utilities, telecommunications, and proximity to educational
institutions and healthcare facilities contribute to the overall attractiveness of
a business site.
3. Regulatory Environment: Understanding the regulatory landscape of
potential business sites is essential for compliance and risk mitigation. Factors
such as zoning laws, tax incentives, environmental regulations, and labor laws
can impact operational costs and legal obligations.
4. Workforce Availability and Skillsets: The availability of a skilled
workforce is a critical determinant of business site suitability. Evaluating
factors such as labor market dynamics, educational institutions, and
specialized skill sets relevant to the industry can inform decisions regarding
talent acquisition and retention.
5. Risk Assessment: Conducting a thorough risk assessment is indispensable to
identify and mitigate potential risks associated with specific locations. This
includes considerations such as geopolitical stability, natural hazards, and
socio-economic factors that may impact business continuity.
