BUS111 W10

creativity

= prod of new and useful ideas

• Gens original & valuable ideas.

• Starting pt of innovation.

• Provs initial spark for entrepreneurial opps

innovation

= successful exploitation of new ideas (UK Government White Paper, 2007).

• Turning ideas into something valuable.

• Can involve products, processes, positions, or business models.

• Creates value thru change.

Key Idea: Creativity produces ideas; innovation implements them.

entrepeneurship

"process thru which inds identify entrepreneurial opps & transform them into marketable products/services" (Shane & Venkataraman, as cited in Schaper et al., 2014).

• Focuses on recognising and exploiting opps.

• Not limited to starting new businesses.

• Can occur within existing organisations (intrapreneurship).

Key Idea: Entrepreneurs turn innovations into reality.

entrepreneurial mindset

Entrepreneurship is a mindset rather than personality type.

Entrepreneurs often:

• Recognise opportunities

• Combine resources

• Create value

• Accept uncertainty

• Drive change

"Innovation is the specific tool of entrepreneurs" (Drucker, 2014).

5 elements of entrepreneurship

entrepreneur, opportunity, resources, organisation, environment

1- entrepreneur

Individual who:

• Identifies opportunities

• Acquires resources

• Creates value

• Builds organisation

Factors Affecting Opportunity Recognition

-          Active Search

-          Deliberately looking for opportunities.

-          Entrepreneurial Alertness

-          Ability to notice unmet needs and opportunities.

-          Prior Knowledge

-          Past experiences help identify opportunities others miss.

-          Social Networks

-          Relationships provide information, resources and opportunities.

-          Cognitive Perspective

Entrepreneurs connect changes in:

• Technology

• Markets

• Demographics

• Government policy

to identify opportunities.

2- Opportunity

exists when product, service,/process can be introduced & sold for more than its prod cost (Schaper et al., 2014).

market-pulled vs market-pushed opportunity

Market-Pulled Opp = Driven by customer needs.

(Ex: Customers want healthier drink options)

Market-Pushed Opp = Driven by unused resources/tech

(Ex: A new technology is developed before a market exists for it)

6 resource categories

• Financial

• Physical

• Human

• Technological

• Social

• Organisational

Key Idea: Entrepreneurs must gather resources to exploit opportunities.

4- organisation. Entrepreneurship can occur through:

• Start-ups

• Franchises

• Joint ventures

• Acquisitions

• Corporate ventures (intrapreneurship)

Key Idea: Entrepreneurship is not limited to creating new businesses.

5- Environment

Opps arise from:

• Political change

• Regulatory change

• Social change

• Demographic change

• Market inefficiencies

environmental influences: community vs societal level

Community Level

• Industry density

• Business networks

Societal Level

• Culture

• Government policy

4 types of innovation (4Ps)

Developed by Bessant & Tidd.

product, process, position & paradigm

Product Innovation ("What") + business model link

= Changes to products/services offered.

Exs:

• New smartphone

• New insurance product

• New beverage flavour

Business Model Link

• Value Creation

• Creates new or improved solutions for customers.

Process Innovation ("How") + business model link

= Changes how products/services are prod & delivered.

Exs:

• Automation

• Improved manufacturing

• Chatbots

Business Model Link

• Value Configuration

• Improves efficiency and resource use.

• Can also enhance value creation thru better service delivery.

Position Innovation ("Who" and "Where") + business model link

Changes how product is marketed/who it is marketed to.

Ex:

• Lucozade repositioned from recovery drink to sports drink.

Business Model Link

• Value Creation

• Creates value by targeting new customers/uses.

4. Paradigm Innovation ("Why") + business model link

= Changes the underlying business logic or business model.

Ex: Netflix transforming video rental into streaming subscriptions.

Business Model Link

-          Affects:

• Value Creation

• Value Configuration

• Value Capture

Key Idea: Paradigm innovation is often called business model innovation.

incremental vs radical innovation

Incremental Innovation = Small improvements to existing products, services,/processes.

Exs:

• Software updates

• Product improvements

• Faster manufacturing

Low novelty, continuous improvement.

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Radical Innovation = Major breakthrough creating significant change.

Exs:

• Automobiles replacing horse-drawn transport

• Streaming replacing video rentals

High novelty, transformative change.

value creation + business model link

= What value is offered and to whom.

Most closely linked to:

• Product Innovation

• Position Innovation

value configuration + business model link

= How value is created and delivered.

Most closely linked to:

• Process Innovation

value capture + business model link

= How revenue and profit are generated.

Most closely linked to:

• Paradigm Innovation

discover theory vs creation theory

Discovery Theory = Opps alr exist & are waiting to be found.

Entrepreneurs:

• Discover opps

• Evaluate them

• Develop plans

• Launch ventures

Causation approach (goal-driven).

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Creation Theory = Opps created thru action.

Entrepreneurs:

• Act first

• Experiment

• Learn

• Adapt

Effectuation approach (means-driven).

Sarasvathy's 5 Effectuation Principles

-          Bird-in-Hand = Start with resources already available.

-          Affordable Loss = Focus on what you can afford to lose.

-          Crazy Quilt = Build partnerships.

-          Lemonade = Treat surprises as opportunities.

-          Pilot-in-the-Plane = Focus on what you can control.

creative destruction + exs

= process where new products, technologies, & businesses replace older ones

Exs:

• Streaming replacing DVD rental

• Smartphones replacing many standalone devices

Key Idea: Innovation drives eco growth by replacing outdated solutions.

Qs ab innovation

Qs ab entrepreneurship

SUM