Chapter 14: Identifying Business Opportunities Flashcards
Development process
Idea generation Product screening Concept development Feasibility study Prototype development Test marketing Product and launch
Market Segmentation
Divides consumers into different categories
Young females, elderly
Market niche
A specific gap in the market for a new product or service
Internal Sources of Ideas for Entrepreneurs
Hobbies and interests Skills and knowledge Frustrating experiences (Richard Brierley and Fiacla Toothpaste) Brainstorming Personality
External Sources of Ideas for Entrepreneurs
Friends and family Media Networking State-agencies Franchising
Internal Sources of Ideas for Businesses
Customer feedback
Market niche
Staff suggestions
Research and development
External Sources of Ideas for Businesses
Universities and third level linkages
Market research companies
International business trends
Market research
Processes of researching, gathering and analyzing information about the potential market for a product
Purpose of Market Research
Identifies competitors
Predicts sales
Test consumer reaction
Indicates the size of the market
Desk Research
Secondary Research
Analyzing information already gathered by others
• Reports, newspaper, feedback, internet
• Low cost, quick information
• Lack detail, out of date
Field Research
Going into the marketplace and gathering the business information directly from customers and competitors
• Observations, surveys
• More accurate and detailed
• Time-consuming
Break-Even Analysis
Calculates break-even point
Shows effect of price changes
Simplistic
Ignores the fact that change in prices impact sales
Break-Even Point
Amount of sales that must be achieved at a particular price in order to cover costs and break-even
FC ——————— CPU (SP-VC)
Idea Generation
Internal and external Sources
Product Screening
- Identifying workable ideas
- Sorting the promising product/ service ideas from the weak ones
- Unrealistic/ marginal but some potential/ worth further investigation
