IDEA GENERATION

Sources of Business Opportunities

Change as a Source of Opportunity
Status-quo is good for incumbent players (established companies) – they have products or services, smooth operations, established business models, loyal set of customers, functional teams ……
Change brings in disruption – that in consumer tastes, cost structures, business models, expectations, level of expertise needed, distribution channels, payment mechanisms, availability of finance
Change produces a level-playing field which is actually loaded in favour of a new player because of his flexibility, adaptiveness

Examples of Entrepreneurs Exploiting Change
Japanese car manufacturers (1973)
Microsoft (1976-78)
Amazon and Dell (1990s)
Infosys (1989)

Broad Categories of Change
Demographic – whole population (age distribution)
Economic – Emerging markets
Socio-Cultural -- Value systems, role models
Technological -- Variety, performance, cost
Political – democratic, authoritarian/totalitarian regimes. Free market vs socialistic policies (Britain in early 1980’s)
Legal and Regulatory -- liberalization (internal and external), enforcement of IP protection laws

Demographic Changes
§Median age
§Working population as the % of total population
§Life expectancy
§Healthcare and Social Security Needs
§Urban-Rural Ratio
§Literacy
§Male-Female ratio

Socio-Cultural Changes
§Value systems -- globalization and local assertions
§Accepted norms of behaviour
§Role of religion and spirituality
§Pursuit of expertise, knowledge, wealth, possessions
§Aspirations, fears, desires, anxieties
§Measure of “time” – attention span, priorities, conveniences

Technological Changes
Availability and wide-spread assimilation of technology
Information Technology and it pervasiveness
Costs and disposable incomes
Performance, variety, ease of acquisition
Cross applications – interdisciplinary developments
Comfort level of technology usage
Examples: CD ROM drives and mobile phones

Economic Changes
§Gross Domestic Product and Per Capita Income
§Level of exports and imports
§Inflation and interest rates
§Availability of credit at all levels
§Size of the middle class
§Various growth rates – industrial growth, productivity growth, exports growth
§Level of unemployment

Political and Regulatory Changes
§Transition from centrally planned to market economy (India, 1991)
§Transition from communism to “market socialism” (China, 1978-1980)
§Regulated, protected, closed economy
§No IPRs (copyrights, patent laws)
§Contract Enforcement and right to property
§Labour and land reforms

India in the New Millennium
§“Young” country with rising literacy and prosperity
§GDP growth rate of 7-8 % per annum
§Growing middle class
§Liberal, business like values, pursuit of wealth
§High unemployment, imbalance in the development
§Passages of IP laws (new patent regime)
§Respect in the global community (functional democracy)
§Atmosphere conducive to business -- no xenophobia, no insularity, no misplaced importance to “self-reliance”
§Well developed “Institutions” – judiciary, capital markets, stock exchanges, media (free and independent), educational institutions, regulatory bodies (SEBI, FDA, ISI)

NEW PRODUCT DEVELOPMENT BY
Enhancement -- improvement / refinement of features – cheaper, better, faster, more user-friendly
Extension to features
Specialization -- niche’ creation

Examples of Enhancement
§DOS to Windows
§Mechanical watch to quartz watch
§Modem to ADSL modem
§Ordinary TV to a flat screen TV
§Desktop PC to a laptop PC to a tablet PC
§Propeller engine to a jet engine
Most industrial innovations

Examples of Extensions
§Toothbrush with a built in toothpaste
§Pen with a torchlight
§Mobile handset with camera, FM radio,MP3 player ….
§Memory sticks with MP3 players
§Wristwatch with a calculator
§Cinema Multiplexes
§Day care centers (crèche) with tuitions
§Swiss army knife

Examples of Specialization
§Low cost airlines (Ryanair, Easyjet, Air Deccan)
§Boutique financial advisory services
§Super-specialty hospitals
§Finishing schools
§Executive search firms (CxOs only, finance professionals only)

The Possible Service Opportunities
§Schools
§Restaurants
§Travel agency and tour operators
§Pet shops
§Bookshops
§Gyms / weight loss clinics
§Oxygen bars