Developing & Evaluating Opportunities

1. Developing & Evaluating Opportunities

2. Session Outline • Review • Developing Ideas • Researching & Evaluating Opportunities • Market Failures

3. Full View of the Opportunity Recognition Process Depicts the connection between an awareness of emerging trends and the personal characteristics of the entrepreneur

4. Personal enterprise: relating opportunity to personal goals

5. Connecting Opportunities and Personal goals • Why do people choose the opportunities they do? – e.g. • Family background • Personal interests and hobbies • Previous career experience • Education, training, professional development • Social networks and connections • Which factors are most influential for you?

6. Unlocking Value Ideas Personality Motivation & Drivers Ability to Learn Capabilities Know How & Expertise Relationships & Contacts Unlocking Personal Value Opportunities Ventures Rae (1999)

7. Develop the Idea Idea Manufacturing Service Retail Courier Service Back packs/Satchels Letters/small parcels Manuf Items Panniers/uniforms Mapholders/uniforms Large Parcels (Car or Lorry) Football Printed t-shirts Training Services Supporters Club Pennants Gym T-shirts Collapsible Goal Posts Programmes

8. Structured Brainstorming Shoes laces soles heels,shoes in unusual materials,for different purposes shoe polish,brushes,storage Consumer products Mending, repairing, colouring, home repairs relining, made to measure Consumer Sales Consumer Services Shop, mobile(van),market stall mail order, web,door to door franchise, store within a store, railway stations, airports Shoes Swap and repair - dancing/circus/ theatrical shoes, safety shoe service Shoe advertising Business Sales Business Services Business products Mobile to offices, mail order/web to businesses, self employed rep Shoe agency specialist Shoe making equipment, shoe repairing equipment, speciality shoes, shoe protectors

9. Existing Products Modified Products New Products Women’s Shampoo Dixons/Tesco Free ISP Alternative Greeting Cards New varieties of food or clothing Existing Markets Clothes for professional women Overnight package delivery Specialty sports car Identifiable Markets Mobile pet grooming device Personal Computers Video Players Walkman New Markets AFramework to Think About Ideas for Enterprise

10. The Importance of Why? Why is the outlet buying more milkshake machines than its floor space would suggest? - attracting more customers than competitors Why? - customers prefer to competitors Why? - food is consistently tasty and no queues Why? - store staff effective Why? - menu limited and staff specialise in systemised tasks

11. From Idea to Business Plan

12. Developing the Business Concept

13. Example: West Coast location sites to film studios over the Internet • What is the product and/or service being offered? • In the information business • Who is the customer? • Film production companies • What is the benefit to the customer? • Ability to visually check sites and make decisions without travel • How will the benefit be delivered? • Via an interactive website with still and full motion video of movie location sites

14. The Business Idea THE McKINSEY & COMPANY (2000) CHECK LIST • What is new and innovative in your business idea? • How unique is your business idea? • Who is the client? • Why should somebody buy your product or service? • Why is the ”product” better than similar products already on the market? • What is your competitive advantage, and why could/would it not be copied by competitors? • Can the business idea be produced, and how much would that cost? • How would the product reach the customers? • How would you earn money on the product, what are the costs and what is the price that can be charged? • How big is the market?

15. The Big Lie • “If you build a better mousetrap, the world will beat a path to your door, even though your house be in the woods.” • Maybe they don’t want more mousetraps • Maybe they like the ones they buy now • Maybe they’ll never even hear about your mousetrap • The truth: • If you think getting the technology right is tough, try marketing. Then try sales if you want a real challenge!

16. What Is Feasibility Analysis? • Feasibility Analysis • Feasibility analysis is the process of determining whether a business idea is viable. • It is the preliminary evaluation of a business idea, conducted for the purpose of determining whether the idea is worth pursuing. • Feasibility analysis takes the guesswork (to a certain degree) out of a business launch, and provides an entrepreneur with a more secure notion that a business idea is feasible or viable.

17. Feasibilty – 4M’s Market Management Money Motivation

18. Feasibility Analysis: What Does the Market Say?

19. Feasibility Analysis Role of feasibility analysis in developing successful business ideas

20. Understanding the customer ‘It’s not about you. It’s not about your revolutionary products or services. Successful entrepreneurial ventures are about serving customers and their needs. Not just any customers. Target customers’ John Mullins, ‘The New Business Road Test’

21. The Customer Need Should Be Satisfied In A Better And Unique Way • Product/service • Customer value • Airbag • Safer • To create customer value a new product/service must offer something new or better than the existing offering • Healthier food • Organic • Internet-food store • Faster • More reliable, faster • Quick mail service • Automatic camera • More simple

22. With current machine over 2 years old Segmentation You might have an idea who your customer is… but find your ‘niche’ The global washing machine market Households only Your product/ service In the UK Earning £100k+ p.a.

23. Milestones T1 T2 T3 T4 ‘Milestones’ Your ‘milestones’ will help you to reach that customer Your product/ service

24. Segmentation Methods

25. Understanding the industry Wholesaler/ reseller Retailer Supplier Producer Retailer Customer Consumer Where are you in the chain?

26. The Value of the Five Forces Model Determining the Attractiveness of an Industry Using the Five Forces Model

27. The Value of the Five Forces Model Using the Five Forces Model to Pose Questions to Determine the Potential Success of a New Venture in a Particular Industry

28. Industry Types and the Opportunities They Offer • Emerging Industries • Industries in which standard operating procedures have yet to be developed. • Opportunity: First-mover advantage. • Fragmented Industries • Industries that are characterized by a large number of firms of approximately equal size. • Opportunity: Consolidation.

29. Industry Types and the Opportunities They Offer • Mature Industries • Industries that are experiencing slow or no increase in demand. • Opportunities: Process innovation and after-sale service innovation. • Declining Industries • Industries that are experiencing a reduction in demand. • Opportunities: Leadership, establishing a niche market, and pursuing a cost reduction strategy. • Global Industries • Industries that are experiencing significant international sales. • Opportunities: Multidomestic and global strategies.

30. Identifying Competitors Types of Competitors New Ventures Face

31. Competitor Analysis • Who are they? • Where are they? • What do they offer? • What size/ share/ growth rate are they? • What are they good at? • What are they bad at?

32. Completing a Competitive Analysis Grid Competitive Analysis Grid for Activision

33. Competitor Analysis

34. Sources of Competitive Intelligence Ways that a firm can ethically obtain information about its competitors • Attend conference and trade shows. • Read industry-related books, magazines, and Web sites. • Talk to customers about what motivated them to buy your product • as opposed to your competitors. • Purchase competitor’s products to understand their features, • benefits, and shortcomings. • Study competitor’s Web sites. • Study Web sites that provide information about companies.

35. Idea Development Process Bragg (2005) – Developing New Business Ideas

36. Take Away’s • A person with one idea is dangerous • Get a feel for the industry • Work on your idea • MR focuses and can minimise risk • MR can be unreliable and reduces intuition • MR may not be conclusive • Customer is King