Starting A Business

Topics: Marketing, Entrepreneurship, Management Pages: 16 (1591 words) Published: March 25, 2015
Starting a Business
Dr Nazatul Shima Abdul Rani (PhD)

Learning Outcome
After studying this chapter, student should be able to:
1. Distinguish among the different types and sources of
startup ideas, and identify the most common sources of
startup ideas.
2. Use innovative thinking to generate ideas for highpotential startups. 3. Describe external and internal analysis that might shape
the selection of venture opportunities.
4. Explain broad-based strategy options and focus strategies. 5. Assess the feasibility of a startup idea before writing a business plan.

Introduction
• Startups
– new business ventures created “from scratch”

• Opportunity Recognition
– Identification of potential new products or
services that may lead to promising businesses

• Entrepreneurial alertness
– Readiness to act on existing, but unnoticed,
business opportunities

Types of ideas that develop into startups
Type A ideas





Type B ideas

Type C ideas

New Market

New Technology

New Benefit

Example: Targeting
the “New Age”
beverage market by
selling soft drinks
with nutritional value

Example: Using hightech computers to
develop a simulated
helicopter ride.

Example: Developing
a personal misting
device to keep
workers cool.

Type “A” Ideas: startup ideas centered around providing customers with an existing product or service not available in their market.
Type “B” Ideas: Startup ideas involving new or relatively new technology, centered around providing customers with a new product.
Type “C” Ideas: Startup ideas centered around providing customers with new or improved products or services.

Common Sources of Startup Ideas

Prior work experience
45%
Personal interest/hobby
16%
Chance Happening 11%

Suggestion 7%;
Education/courses;
family business 6%;

Friends/relatives
5%; Other 4%

Change Based Sources of Entrepreneurial
Opportunities
Change Factor

Definition

Illustration

The unexpected

Unanticipated events lead to either enterprise
success or enterprise failure

Pet pharmaceuticals

The incongruous

What is expected is out of line with what will
work

Low-fat ice cream for those trying to
reduce weight

Process needs

Current technology is insufficient to address as
emerging challenge

GM creates an electric car “VOLT” to deal
with rising energy costs

Structural change

Changes in technologies, markets, etc., after
industry dynamics

The use of digital cinema technology had
led to the widespread showing of 3 D
movies

Demographics

Shifts in population size, age structure, ethnicity,
and income distribution impact product demand

The rapid growth of the Hispanic markets
in the United States has spawned a flood
of Spanish language news papers

Changes in perception

Perceptual variations determine product demand

Perceived security threats have led to the
development of gated communities

New knowledge

Learning opens the door to new product
opportunities with commercial potential

Breakthroughs in solar power
technologies have fueled the growth of
“green” residential developments

Industry or Enterprise Factors

External Factors

Using innovative thinking
to generate business ideas
1. Ideas, borrow from existing products or services or other industries 2. Combine two businesses into one to create a market opening 3. Begin with a problem in mind, or think of a “pain” that you can relieve

4. Recognize a hot trend and ride the wave
5. Study an existing product or services and explore ways to improve function
6. Think of possibilities that would streamline a customer’s activities 7. Consider ways to adapt a product or service to meet customer needs in a different way
8. Imagine how the market for a product or service could be expanded 9. Study a product or service to see of you can make it “green” 10. Keep an eye on new technologies

Using Internal and External Analyses
to Assess...

References: •

Petty, J.W., Palich, L.E., Hoy, F., and Longenecker, J.G. (2012), Managing
Small Business: An Entrepreneurial Emphasis, 16 th edition, South-Western,
Cengage Learning.
Scarborough, N.M. (2014) Essentials of Entrepreneurship and Small
Business Management, 7th edition, Pearson.
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