ENTR Ch 4, 5, 6

Chapter 4

Sources of New Ideas:

  • the entrepreneur’s knowledge/experience

  • Consumers:

    • formally and informally monitor

    • market size

  • Existing products or services- improve

  • The Federal Government- patents

  • Research and development

Focus Groups:

  • Open in depth discussion led by moderator; 10-12 is the perfect range in terms of numbers of participants

  • Brainstorming:

    • group method

    • no criticism

    • quantity over quality

    • freewheeling is encouraged

    • combinations of ideas

Brainwriting: written form of brainstorming, ideas written and passed around, typically there’s a timer and everyone writes something until the buzzer goes off

Problem Inventory Analysis: focus on problems, used to test new product ideas

Reverse Brainstorming: focus on negative aspects

Gordon Method: unaware of problem/slowly reveals problem, unbiased solutions, start out with something very vague and get refined solution

Free Association: chain of ideas

Forced Relationships: product combinations, relationships between problem elements

Collective Notebook Method: regularly record ideas in a notebook, similar benefits as brainwriting, keep in a common area, pocket notebook option

Big Dream Approach: thinking without constraints

Chapter 5

The product classification is classified by what is needed by the consumer

Most products fall into continuous innovations

Product life cycle:

  • Introduction: Sales are slow, need to increase awareness

  • Growth: “Boom time”, production increases/lower unit costs

  • Maturity: sales growth peaks/slows, more competitors surface, number one priority is to defend market share

  • Decline: drop in sales, discontinue or sell off

Opportunity Recognition and the Opportunity Assessment Plan:

  • Opportunity Assessment Plan (not a business plan):

    • Profitability of a product/service idea, four sections

    • First section:

      • Uniqueness of the idea- USP

      • Available competitive products

      • Companies in the product market space

    • Second section:

      • Size

      • Trends

      • Characteristics

      • Growth rate

    • Third section- the entrepreneur’s and management team’s skills and experience

    • Fourth section- time line; steps to successfully launch the venture

The Nature of International Entrepreneurship: this is the process of conducting business activities across national boundaries

  • Constitutes exporting, licensing, or opening a sales office in another country

Aspects of Culture:

  • Language: verbal and nonverbal

  • Social structure: family unit, living standards, social structures in organizations

  • Religion: morals, values

  • Political philosophy: rules and regulations, the way business is conducted

  • Economics/Economic Philosophy: trade/trade restrictions, currency, trading policies

  • Education: formal, informal, education levels, literacy rates

  • Manners and Customs: negotiations and gift giving

Motivations to go global:

  • Profits (number one reason)

  • Competitive pressures

  • Unique product(s) or service(s)

Foreign Market Selection- Five Step Approach:

  • Develop appropriate indicators (ex market size/growth rate)

  • Collect data

  • Establish a weight of importance for each indicator in percents

  • Analyze data

  • Select the market you will go into from the market rankings

Chapter 6

Patent: contract between the government and an inventor; grants protection from others making, using, or selling a similar period of time

  • Issued by the U.S. Patent and Trademark Office (USPTO)

  • Utility patent- duration of twenty years; functional, operational, and technical aspects of a new or improved product

  • Design patent- duration of fifteen years; reflects the appearance or ornamental design of an item (rather than how it works)

  • Plant patent- duration of twenty years; granted to those who invent or discover new plant varities

Claims section of a patent: This is the most important part of a patent because it defines the precise legal boundaries and scope of the exclusive rights granted to the inventor; it is the primary and definitive tool used to determine infringement

The provisional patent application- provides evidence of being first to market, establishes a date of conception, determines rights based on the concept of first to file

Trademark- distinguishing word, name, or symbol used to identify a product

  • Duration: can last indefinitely

  • Also managed by USPTO

  • Entitles you to use the Notice of Registration (the R with the circle around it)

Copyrights- prevents others from printing, copying, or publishing any original works of authorship

  • Increasingly relevant due to the Internet

  • Duration: author’s lifetime plus an additional seventy years

  • U.S. Copyrights Office operates under the Library of Congress

Trade Secrets- confidential business information, formulas, or processes that provide a competitive economic advantage and are actively kept secret

  • Covered by federal laws in the U.S.

  • Duration: can last indefinitely, as long as the information remains confidential and economically valuable

Consumer Product Safety Act (CPSA)- a federal law designed to protect the public from risks associated with consumer products

  • Vital for entrepreneurs because it prescribes safety standards, regulates labeling or advertising, and determines product recalls (and potential fines)

Sarbanes-Oxley Act (SOX)- federal law designed to protect investors from corporate fraud by improving financial reporting accuracy and coporate accountability

  • While SOX primarily applies to publicly traded companies, it is crucial for entrepreneurs to understand because it shapes the roadmap for scaling a startup, building credibility, and preparing for an eventual public offering (IPO) or acquisition