Chapter 14: Business Ideas

Question 1

Differentiate between internal and external sources of ideas.

Answer 1

Internal source of ideas come from looking at your own Strengths and Weaknesses.
External Sources of idea come from looking at Opportunities and Threats.

Question 2

Explain 5 internal sources of ideas.

Answer 2

1. Skills and Hobbies-set up a business based on what you are good at.
2. Experiences-E.g. Reed Hastings had idea for Netflix after returning a video late.
3. R&D - Research & Development: Established business sets up dedicated department to come up with ideas. E.g. Coca Cola R & D comes up with new flavours.
4. Employee Suggestions-Intrapreneurship
5. Brainstorming-Leader calls out ideas and others build on them.

Question 3

Explain 6 external sources of ideas.

Answer 3

1. Family and friends-Solve a problem that you heard about from family and friends.
2. Media-See something in the media. Use trends to create profitable business.
3. Import Substitution-Irish company launches an Irish version of an imported foreign product. E.g. Ballygowan Water, Tayto.
4. State Agencies-Enterprise Ireland helps business come up with idea.
5. Competitors-Copy a competitor’s idea. Buy a successful idea.
6. Customer Feedback-Find out what customers like/dislike (survey). Get ideas from customer suggestions. E.g. Pizza Hut.

Question 4

Name the seven stages of the development process of a product in order.

Answer 4

1. Idea Generation
2. Product Screening
3. Concept Development
4. Feasibility Study
5. Prototype
6. Test Marketing
7. Launch Product

Question 5

Explain idea generation as part of the product development process.

Answer 5

Idea generation involves coming up with ideas for a business. There are many external and internal sources of ideas. An internal source of ideas would be employees who come up with ideas through Intrapreneurship. E.g. Microsoft employees coming up with Xbox. An external source of ideas is import substitution where you create a business to provide an Irish version of an imported foreign product. E.g. Tayto

Question 6

Explain product screening as part of the product development process.

Answer 6

Involves critically evaluating one of the ideas.

Using SWOT analysis to decide on the best idea and which one is likely to be the most successful.

Question 7

Explain concept development as part of the product development process.

Answer 7

A written document detailing exactly what the product is to consumers. Explains what the product will do and what it will look like. A USP (Unique Selling Point) is developed which makes the product unique from competitors and more valuable to consumers.

Question 8

Explain feasibility study as part of the product development process.

Answer 8

Investigation into the chances of the product being successful. Make sure it is possible, for the product to be made and for a profit to be made. What will product cost and is there demand for it?

If not feasible business shouldn’t waste anymore time and resources on the idea.

Question 9

Explain prototype as part of the product development process.

Answer 9

Is a first working model of a product.
Sample a product to see if it works and if consumers like it. Fix any problems. Ensure the product is perfect before it goes to market and save money on any returns.

Question 10

Explain test marketing as part of the product development process.

Answer 10

Launch product to a small segment of the market.
Evaluate customer’s response to it.
Helps with marketing and pricing.
Refine the product and reduce the risk by releasing to a small market.

Question 11

Explain launch product as part of the product development process.

Answer 11

Full scale launch.
Product available everywhere.
Full marketing campaign.