Module 2

Business Model and Innovation

Business models describe how a company creates, sells, and delivers value to its customers. The three areas where business model change can drive innovation are: Value proposition: What is sold and delivered to the market. Supply chain: How it is created and delivered to the market. Target customer: To whom it is delivered.

Who is an Entrepreneur?

Innovation
Process - bringing an invention to market and users Innovation is planned - does not happen by chance Requires team work and cooperation inventors and researchers process, product and design engineers lawyers and marketing specialists financial and production managers sales, advertising and distribution specialists entrepreneurs

Innovation Process
Translation of Creative Idea into Useful Application

Analytical Planning To Identify Product Design Market Strategy Financial Need

Organizing Resources To Obtain Materials Technology Human Resources Capital

Implementation To Accomplish Organization Product Design Manufacturing Services

Commercial Application To Provide Value to Customers Rewards to Employee Revenue to Investors Satisfaction of Founders

Types of innovation
Incremental Innovation Continuous Innovation Breakthrough Innovation

Innovation behavior of the enterprise

External factors Internal factors

Obstacles to Innovation

Innovation idea
Analyze market, customers and environment; Analyze your existing business

Sources for innovative idea

Evaluation level

Implementation

Results

Check your idea; Check yourself

New-Product Development Process

Methods of Generating New Ideas

Focus groups Brainstorming Problem inventory analysis Reverse brainstorming Brain writing

Preliminary screening

Compatibility with the promoter Consistency with governmental priorities Availability of inputs Adequacy of market Reasonableness of cost Acceptability of risk level

Feasibility Analysis
INTERNAL ENVIRONMENT

IDEA COLLECTION
New product development

EXTERNAL ENVIRONMENT

Feasibility Study
MARKET APPRAISAL 1. Demand 2. Supply 3. Competition 4. Cost 5. Import & Export 6. Consumer Behavior

TECHNICAL APPRAISAL 1. INPUTS 2. PRODUCTION TECHNOLOGY 3. PRODUCTIVITY 4. EQUIPMENT CHOICE 5. LOCATION & SITE 6. LAYOUT 7. WORK SCHEDULE

FINANCIAL APPRAISAL 1. Investment 2. Financial 3. Cost 4. Profitability 5. Breakeven 6. Cash flow 7. Investment Worthiness

Economic Appraisal 1. Cost & Benefit 2. Impact on Society 3. Self sufficiency 4. Employment

7. Distribution Channels