Entrepreneurship Module 2 Part 1 PDF

ENTREPRENEURSHIP Module 2 Part 1  WHAT IS INNOVATION? Innovation is the process and outcome of creating something new, which is also of value. Innovation involves the whole process from opportunity identification, ideation or invention to development, prototyping, product...

ENTREPRENEURSHIP Module 2 Part 1  WHAT IS INNOVATION? Innovation is the process and outcome of creating something new, which is also of value. Innovation involves the whole process from opportunity identification, ideation or invention to development, prototyping, production marketing and sales, while entrepreneurship only needs to involve commercialization (Schumpeter).  WHAT IS INNOVATION? Today it is said to involve the capacity to quickly adapt by adopting new innovations (products, processes, strategies, organization, etc) Also, traditionally the focus has been on new products or processes, but recently new business models have come into focus, i.e. the way a firm delivers value and secures profits.  WHAT IS INNOVATION? Schumpeter argued that innovation comes about through new combinations made by an entrepreneur, resulting in a new product, a new process, opening of new market, new way of organizing the business new sources of supply  OTHER VIEWS ON INNOVATION Gary Hamel argued that today’s market place is hostile to incumbents, who now needs to conduct radical business innovation: Radically reconceiving products and services, not just developing new products and services Redefining market space Redrawing industry boundaries  OTHER VIEWS ON INNOVATION “..if we want to succeed as a company – and as an industry – we must drive innovation into everything we do: into technology, into safety, into design and into real-world solutions for environmental issues, like the impact of energy usage on our world.” - Chairman Bill Ford's speech, NATIONAL PRESS CLUB WASHINGTON, DC November 22, 2005 “Innovation is going to be the compass by which this company sets its direction.” - Bill Ford, Remarks On Innovation, Dearborn, Michigan, September 21, 2005  DIMENSIONS OF INNOVATION There are several types of innovation Process, product/service, strategy, marketing, organizational, business model which can vary in degree of newness: Incremental to radical, and impact: continuous to discontinuous  DIMENSIONS OF INNOVATION In business and economics, innovation is often divided into five types: 1. Product innovation, which involves the introduction of a new good or service that is substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension. 2. Process innovation involves the implementation of a new or significantly improved production or delivery method. 3. Marketing innovation is the development of new marketing methods with improvement in product design or packaging, product promotion or pricing.  DIMENSIONS OF INNOVATION 4. Organizational innovation (also referred to as social innovation) involves the creation of new organizations, business practices, ways of running organizations or new organizational behavior. 5. Business Model innovation involves changing the way business is done in terms of capturing value e.g. Compaq vs. Dell.  Financial pressures to reduce costs, increase efficiency, do more with less, etc Increased competition Shorter product life cycles Value migration Stricter regulation Industry and community needs for sustainable DRIVERS FOR development INNOVATION Increased demend for accountability Demographic, social and maket changes Rising customer expectations regarding service and quality Changing economy Greater availability of potentially useful technologies coupled with a need to exceed the competition in these technologies  NEW CONDITIONS FOR INNOVATION Large firms increasingly depend on small start-ups for new product development, as suppliers of new knowledge (which they cannot develop themselves), or organizational renewal, for experimentation with busienss models, for opening new markets, etc  NEW DEVELOPMENTS IN INNOVATION RAISES NEW ISSUES AND PROBLEMS Greater emphasis on commercializing scientific discoveries, particularly in IT and the bio-sciences Speed and potential value of scientific progress leads to emphasis on solid and well-designed portfolios of research projects Universites as active drivers of innovation: Academic entrepreneurship and the entrepreneurial university University-industry partnerships Increased search for radical innovation and top-line growth.  Just Do Do not be afraid to fail Take risks A SUGGESTED It Move your idea forward INNOVATION Seek Seek novelty in design FRAMEWORK Novelty Diversify Stop looking for the right answer; look for in Design many right answers Set Goals and Define clearly your goals and objectives Objectives Identify Problems Challenge all assumptions and/or Seek opportunities to innovate Opportunities Open your mind Mental Floss Seek Opportunities Discover your creative rhythm Health Makes Wealth Become an expert in a field you love Find what you love to do Become passionate about your field  PROBLEM SOLVING, CREATIVITY, & THINKING  THINKING Remember, cognition refers to all the mental activities associated with thinking, knowing, remembering, and communicating Very often in our cognition, or thinking, we create concepts A concept is a mental grouping of similar objects, events, ideas, etc.  THINKING Concepts keep things simple, without them, chaos would ensue For every concept, we create a prototype, or an example of the concept If we see an item, we place it in a category in our mind, but over time that item will “shift” towards our prototype. Concepts are very useful to speed up our thinking, but they can lead us astray at times  There are different ways to solve problems Trial and error: ‘guessing’ different possibilities until we stumble on the correct answer Algorithms: step-by-step procedures that guarantee a solution Insight: sudden and often novel realization of PROBLEM the solution to a problem SOLVING Heuristics: simple thinking strategy that often allows us to make judgments and solve problems efficiently, speedier but error- prone Availability heuristic: we base our judgments on how available mental information is Representative heuristic: judging the likelihood of things in terms of how well they represent particular prototypes  OBSTACLES TO PROBLEM SOLVING There is often one of a few things that affect our cognition process when we are trying to solve problems: confirmation bias and fixation o Confirmation bias: where we seek only the evidence that verifies our ideas, and deny information that may refute them o Fixation: the inability to see a problem from a ‘fresh’ perspective Mental set: approaching a problem in a similar way that has been successful in the past Functional fixedness: tendency to think of things only in terms of their usual functions Problem solving ability can be boosted with more divergent thinking, in lieu of convergent thinking, which leads us to be more creative  WHAT IS CREATIVITY? According to social psychologist Teresa Amabile, there are three basic ingredients to creativity: Domain skills - Domain skills are developed as one becomes an expert in a field. To be a creative mechanical engineer, one must first master the fundamentals of the discipline. Creative thinking skills - Creative thinking skills include seeking novelty and diversity, being independent, being persistent, and having high standards. Intrinsic motivation - Intrinsic motivation implies that the reasons for doing things come from within - from passion and pleasure, not as a result of external demands, pressures, or rewards. Everyday Creativity: Principles for Innovative Design. Dr. Larry G. Richards  CREATIVITY Creativity is the ability to produce ideas that are both novel and valuable On most intelligence tests, people who are more creative do not score any higher than others “Creative people pay attention to their world, see things differently, challenge assumptions, take risks, are not afraid to fail, and strive to generate multiple solutions to problems. They are passionate about creativity and seek opportunities to innovate.” Everyday Creativity: Principles for Innovative Design. Dr. Larry G. Richards  CHARACTERISTICS OF CREATIVITY According to Robert Sternberg there are 5 components of creativity: 1. Expertise: the more we know about a subject/area, the more likely we are to create something novel 2. Imaginative thinking skills: allows us to see things in a new and unique way, recognize patterns, and make connections 3. Venturesome personality: seeking new experience, tolerates ambiguity and risk, and perseveres in overcoming obstacles 4. Intrinsic motivation: is being driven more by interest and having a passion for the subject, internally motivated 5. Creative environment: sparks, supports, and refines creative ideas. ENTREPRENEURSHIP Module 2 Part 2  GENERATION, IDENTIFICATION, SELECTION OF BUSINESS OPPORTUNITIES Opportunity may be defined as a time when a particular situation makes it possible to do or achieve something. therefore, relates to creating value and developing new market, hence creating new customers. Business opportunities are the situations or circumstances the would-be entrepreneur ceases to his/her advantage in order to succeed. Business opportunities are in abundance in virtually all sphere of life. Just look around you and see what is missing, what is needed in your immediate environment (communities). If you provide a real product/service and fill a real need, you are bound to succeed.  THE PROCESS FOR BUSINESS OPPORTUNITY Enterprise Entrepreneur Environment (Types of Economic Activities) Social Economic Location peculiarities Nature of Activity Profile Infrastructure Size of investment Background Competition Product Interest Social Cultural factors Technology Preference Resource availability Resources Economic conditions Skills Local market potentials  THE SEARCH FOR A GOOD BUSINESS OPPORTUNITY There are mainly two ways to generate business ideas: I. Generate your own ideas II. Develop other persons ideas III. Other sources of business ideas: Poor delivery of a product or service Advances in technology Failure of a product or a company Monopoly Adaptation or imitation  GENERATION OF BUSINESS IDEAS The generation and selection of business ideas (opportunities) start with the environment The key to entrepreneurship is the ability to generate, pursue and capture the value from venture ideas No one can call him/herself an entrepreneur until he/she has generated and at least begun to pursue a venture idea Idea may be defined as a business concept that is turned into a tangible product or service offered by a business enterprise that will result into financial profit  GENERATION OF BUSINESS IDEAS Idea, therefore, is related to creating value and developing new market, hence creating new customers In search of a good business opportunity, the entrepreneur needs to enlarge his/her coast; that is like the Politician, the entrepreneur must reach out to the masses. Press the flesh and talk to people. SOURCES OF BUSINESS IDEAS  SOURCES OF BUSINESS OPPORTUNITIES The sources of business opportunity to an enterprise may be broadly classified as: Internal External  SOURCES OF BUSINESS OPPORTUNITIES Drucker argue that opportunity identification can be systemized, and opportunities can be by monitoring seven basic sources: demographic changes, new knowledge, incongruities (gaps between reality and expectations) industry or market structure, unexpected successes or failures, process, needs, and changes in perception  EVALUATING BUSINESS OPPORTUNITIES A new business opportunity should only be pursued after it is assured that it is both valid and right for the enterprise or individual. The enterprise or individual has a business strategy and plan to which they are committed. Is the opportunity consistent with the organization's strategy or the individual’s aspiration? The entrepreneur must be consistent, persistent, and committed to their objectives, so as to see the potential of the market and evaluate the business concept.  EVALUATING BUSINESS OPPORTUNITIES The following questions should be asked and answered about any new business concept to properly evaluate its worth: What Produces the Opportunity? What are the Character and Size of the Market? Is it worth the Effort? Is the Opportunity Feasible?  ROOT OF OPPORTUNITY PROBLEMS YOU CAN SOLVE CHANGES IN TRENDS, SITUATION, LAW COMPETITION- price, quality, service delivery, time, location TECHNOLOGICAL INVENTIONS UNIQUE KNOWLEDGE  TOP MAJOR EXPORTS OF THE PHILIPPINES 1. Coconut oil parts (fuse, batteries, 2. Cathodes and sections of transformers) cathodes, refined copper 6. Metal components 3. Wiring sets used in vehicles, 7. Chemicals (Oleochemicals aircrafts and ships from bio-based plant and 4. Other manufactured animal materials and goods(plastics and zippers, petrochemicals derived from mechanical, electro-mechanical oil and gas products) appliances, bamboo/wood furniture) 8. Electronic products 5. Electronic equipment and 9. Other mineral products  TOP MAJOR STARTUP BUSINESS IN THE PHILIPPINES (AS OF 2021) 1. RTW Clothes Online 8. Network Marketing 2. Healthy / Low-Calorie Meal 9. Food catering Plan with Delivery 10. Pet grooming 3. Discounted Authentic Perfumes 11. Food carts 4. Patisserie 12. Events Design 5. Handicrafts 13. Blogging 6. Gardening 14. Cryptocurrency 7. Computer Services  C R I S I S - P RO O F BU S I N E S S I D E A S Online Therapy or Counseling. One-on-One Academic Tutorial. Mentoring or Coaching for a Specific Field. Art Selling. Live Game Streaming. Mobile Coffee Shop. Writing Services. Video Editing for Vloggers or Businesses. Product Rebranding/White Labeling/Private Labelling. Accounting Services for Freelancers and Small Business Owners (Bookkeeping and Tax Filing).  GOVERNMENT AND BUSINESS OPPORTUNITIES Business opportunities are abundanct in the country. Government should strive to make the environment entrepreneurship friendly by providing the basic infrastructure for private business to flourish Good Regulatory and Legal Framework Effective Facilitatory Role Protection of Life and Property Comprehensive and total Government Support and commitment  FACTORS THAT AFFECT EXPLORING OPPORTUNITIES Fear is a giant and only a human colossus and a giant killer Do not procrastinate Improve your craft Plan plan plan Get expert advice Persist and persevere Avoid uniformed optimism Do risk management Surround yourself with positive and helpful people  THE SELECTION PROCESS Is it practical? Are there opportunities for Is it legal? linkages with bigger firms and cooperation with peer firms? What service or product will I sell? How quickly can I adapt to meet changes in users’ need Does it satisfy the need(s) of and taste? other people? Is there a prototype of the Are they willing and able to product? pay for it? What is my business advantage Am I ready to produce the over existing firms? right quality and sufficient volume to earn economic Can I create a special demand returns? for my business output?