1 30 14 Chapter 3 Recognizing Creating Opportunity What is competitiveness Creating best economic social environmental conditions for development Creating more opportunities better life for all Keeps the world on a path of sustained growth Global Competitiveness Report Switzerland is 1 United States is 5 Creativity Enables entrepreneurs to differentiate their businesses from their competitors Basis for invention Fundamental to problem solving Critical concepts of Creativity Idea Business opportunity Opportunity recognition Opportunity creation Invention Process Connection two ideas brought together Discovery once a connection has been established inventor explores in depth Invention product of effort once discovery has occurred typically arise out of the needs of the market Application for an invention to be successful it must have applications in the market Challenges to Creativity No time No confidence No creative skills Removing Roadblocks Minimize distractions Devote time daily to quiet contemplation Spend time in the places that best promote your creative thinking Develop a creative company culture Mix people up Keep track of ideas Start with the familiar Take advantage of a personal network Return to your childhood Think in opposites Sources of Innovation Customers suppliers distributors Newspapers and magazines Observation Demographic shifts Unexpected news events Trends and patterns of change New government regulation Emerging industries Anything that s bugging you 2 4 14 Chapter 4 Developing a Business Model I d rather have a Class A entrepreneur with a Class B idea than a Class B entrepreneur with a Class A idea Gifford Pinchot III A business concept is a concise description of an opportunity that contains four essential elements Value proposition and compelling story Definition of the customer Description of the product service Distribution channel The compelling story answers the questions Why the interest What problem does this solve The customer is the one who pays The end user is as important as the intermediary customer The Product Service What does the customer need What is the team s core competency The Distribution Channel How will the benefit be delivered to the customer The Concept Statement Creating clear concept statement is not difficult but telling compelling story can be Compelling story consists of a problem and a solution Elevator Pitch The problem being solved should be presented in a clear simple way Value Proposition a clear statement of the tangible results someone gets from using your product service Unique Selling Proposition what makes you and your company different from other vendors creates competitive differentiation The Value Chain and the Concept Upstream Activities related to production of product service raw materials manufacturing warehousing Downstream Activities associated with selling the product service sales transactions installation logistics Forces Affecting the Value Chain The Internet Reduced transaction costs Disintermediation Scarcity of Raw Materials Snags in Distribution Developing a distribution strategy Evaluate strategies of similar companies Look for the opportunity gaps Factors affecting the choice of strategy Cost Market coverage Speed reliability Why do businesses fail Flawed logic Limited strategic choices No Plan B Incorrect assumptions about the value chain Imperfect value creation and capture assumptions What are the size and importance of the revenue streams that the business model can generate What costs most affect the model and what is their size and importance to the model What are the cost drivers for the business How much capital is required to execute the business model and what is the timing of the cash needs What are the critical success factors to achieving the goals of the business model
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