Module 2: Entrepreneurial Stages- Idea Generation, Prototyping and

feasibility testing (10 Hours) 

2.1 Idea generation stages, Various methods of idea generation -Effectuation Theory; Problem Mapping;
2.2 Design thinking;  Idea testing and Prototyping - Product Diamond testing; Prototyping;
2.3 IPR importance; process and Entrepreneurship in Action- Creativity and Innovation. Identification of
Business Opportunities; Evaluation of Business Opportunities,
2.4 RAMP Model, Mullins 7 Domain Framework.
2.5 Feasibility Analysis- Marketing Feasibility; Financial Feasibilities; Political Feasibilities; Economic
Feasibility; Social and Legal Feasibilities; Technical Feasibilities; Managerial Feasibility, Location and
Other Utilities Feasibilities.
2.6 Market Entry Strategies;

https://www.youtube.com/watch?v=gHGN6hs2gZY&t=121s
design thinking in India https://www.youtube.com/watch?v=VuedtXtyCjs
https://www.youtube.com/watch?v=_r0VX-aU_T8

https://careerfoundry.com/en/blog/ux-design/design-thinking-process/
https://mediacenter.ibm.com/media/Designthinking/1_rr228ajg

A bag that slow cooks food

The Wonderbag is a much-needed innovation for the billions of people that cook over an open fire. It
allows food preparation without suffering from air pollution caused by firewood, charcoal or other fuels.
How it works: bring food to an initial boil, place it inside the bag, and let it slow cook for up to 12 hours. It
so reduces air pollution, carbon emissions and saves energy.
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
Bottle light bulbs

Bringing sustainable lighting to communities is the goal of “A Liter of Light”. This project open sources a
simple and innovative technology to create affordable solar light bulbs. Volunteers teach communities how
to use recycled plastic bottles and locally sourced materials to assemble the bulbs to light up homes with
limited or no access to electricity.

Energy-producing roads

Roads could work as solar panels and produce electricity for street lights, households and even the cars
driving on them. This bold vision led Solaroad to build the first energy-generating bike path.

Their main technology challenge was the top layer of the road: it had to let as much sunlight in as possible
while remaining strong and damage resistant. A “SolaRoad Kit” lets you build 10m² of SolaRoad, which
produces enough electricity to cover the yearly electricity needs of an average household.

Medical drones

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Medical delivery drones are used to deliver vital medical supplies to patients living in difficult-to-reach parts
of Rwanda. The drones, called Zips, can carry vaccines, medicines or blood to patients. Health workers
simply text an order for the medical supplies they need to a central distribution center. Within minutes a Zip
is loaded and launches, travelling at around 100 km/h to its destination, where the supplies are dropped with
a paper parachute.

2.1 Idea generation stages, various methods of idea generation

Ideas are generated based on creativity, and the need of the business is looked upon. It usually requires
many people, their feedback, and their innovative ideas. Then the selection of the best of the ideas is then
made. The making of plans then takes place so that the shortlisted idea gets implemented. In this manner, a
creative and fresh idea will be an edge over the competitors.

Importance of Idea Generation: Ever wondered what the key to innovation is. The very key to innovation
is Ideas. New ideas help in improving the present situations as per the future needs or requirements. These
ideas also provide an insight into possible solutions, might provide a solution to a problem leading to
new opportunities. And it is done by a group of managers, entrepreneurs, or businesspersons.

Sources of idea Generation: A good idea can come from anywhere and at any time. An idea generation
source refers to the people or places from where the idea was inspired. It can be affected by both external, as
well as internal sources. The R&D department or the analytics employees are a part of the internal sources.
On the other hand, external sources combine to form suppliers, focus groups, educational institutions,
distribution channels, customers, government, and competitors.

Idea generation steps; The idea generation is not compiled in a single approach; instead, it is
continuous innovation and improvement. Companies have recognized the importance of idea generation and
are supporting their employees for the same.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

 Thomas Alva Edison developed a systematic method of idea generation that includes a series of
effective steps. This made the idea generation process more convenient to apply and get the
desired results out of them. This proved to be a game-changer in the market practices. Thomas
Edison put forward the following steps:

1. Enabling: The search for the right field of innovation

2. Defining: Develop search queries and specify search paths
3. Inspiring: Search for thoughts and stimuli from other areas
4. Selecting: Generate and evaluate ideas
5. Optimizing: From the initial idea to the mature concept
6. Nurturing: Enrich ideas with various implementation strategies

Idea Generation Techniques

According to Thomas Alva Edison, he suggested some of the steps for ideas generation, which were,

1. The 5W+H Method: An ideal generated idea is the one which must answer, Who, What, Where, Why,
When and How. Which is the method of 5W and H.? These were the parameters, on which, if the ideas are
generated, might result in a great solution which on implementation might prove to be the best one.

https://www.youtube.com/watch?v=Ovq3ZfuVVAM

 What exactly is the problem? And: What should the solution contain?
 Why is it a problem? And: Why is a solution needed?
 Who reported the problem? Who is affected by the problem? And: Who benefits from the
solution? Who could additionally benefit from the solution?
 Where does the problem occur? And: Where could the solution be applied?
 When does the problem occur? And: When should the solution be available?
 How can the problem be solved? How often does the problem occur? And: How do we know if the problem
has actually been solved?

Product Managers Use-Writing up a user persona:

 Who is this person? (Demographic information, goals, desires, fears, etc.)
 What do they do in their organization? (Job title, responsibilities, etc.)
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
  Where do they work? (Industry, size of the company, geographic region, etc.)
 How do they work? (What tools do they use, what people and departments do they work with, etc.?)
 Why would they need our help? (What can our company offer that adds value to this person’s job,
business, or life?)
 When would they need the solution we’re proposing? (Where in this person’s workflow or activities
can our product or service provide the answer to their problem?)

2. Social Listing: A problem arises when more of the competitors are into the same product line as yours.
So, to reduce the communication gap, this social listing is done. It can be done by-polls on social media sites
such as Reddit, Twitter, etc. The customers’ reactions are taken, and through this reaction, ideas are being
formatted so that the customers feel attracted towards the product and our product turns out to collect huge
revenues.

3. Brainstorming: It is prevalent as well as a popular tactic followed by every business. All the suggestions
from the overall group of people are considered; may it be right, may it be wrong. All that matters here is the
idea. A very quick session on brainstorming and filtering the final idea is done before the execution step.

Brainstorming

Brainstorming is, so to speak, the mother of all creativity techniques (linguistically from:" using
the brain to storm the problem). Ideas about a question a solution to aproblem should be express
spontaneously in a group.
 It is a group activity technique. It is designed to generate lots of ideas for solution of a problem.
 It is a commonly used tool by academicians, researchers, and businessteams.
 The Value of brainstorming is not the ideas generated; it is the shared value/evaluation
context created. The experience of brainstorming creates a group of people with a shared
perspective, and an understand of each other’s communication styles, who are then
capable of providing a useful and powerful critique of future work on the topic.

Rules of brainstorming:
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
  No criticism: Each criticism a rating is postponed to a subsequent face the so-called
killer phrases must be strictly prohibited. In this way it should be prevented that the
flow of ideas is interpreted, or participants are blocked. Comment also forbidden.
 No copyright: The ideas of others can and should be taken up, changed, and further
developed.
 Free expansion of ideas: The participant should give free rein to their imagination so
that new and original ideas can be found. You are the craziestideas are welcome.

 Quantity over quality: As many as possible should be produced in a short back. This
rule insurance the spontaneity of the ideas presented. So, these rules should be written on
the flip chart and visible to everyonedoing the brainstorming session.

Brainstorming Techniques:

I.Free-wrıtıng:

Write down whatever comes into mind.

Do not judge the quality of writing.
Do not worry about style, spelling, grammar, or punctuation.
When you have finished your writing and have reached your goal,read back over
the text, decide the solution.

ii.Nomınal Group Technıque:

Participants are asked to write their ideas anonymously. Then the moderatorcollects the
ideas and each is voted on by the group.
The best idea is chosen

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iii.Group Passıng Technıque:

Each person in a circular group writes down one idea, and then passes the piece of
paper to the next person in a clockwise direction, who adds somethoughts.
This continues until everybody gets his or her original piece of paper back. By
this time, participants will have examined each idea in detail

iv.Individual
Braınstormıng:

It typically includes such techniques as free writing, free speaking, word

association, and drawing a mind map. Individual brainstorming is useful method in
creative writing

v.Question Braınstormıng:

This process involves brainstorming the questions, rather than trying to come up with
immediate answers and short term solutions
Six Key Questions- Who? What? When? Where? How? Why?

4. Role-Playing: Working in the same office or with the same colleges, some people might feel bored. As a
result of this, all the business persons need to do is switch places, then trying to ask for ideas will help.
Trying to embrace their view does not guarantee immediate results but would act to be the best one in the
long run. It acts as a motivation for colleges and sometimes might lead to great results. This might turn out
to give incredibly new and unique ideas that can be generated.

5. Mind Mapping: Mind mapping can turn out to be another successful method in generating ideas. It can
be done by diagrammatically representing the task of the concept. A non-linear graphical layout can
represent it. Or it can be said that brain-mapping is a screenplay in which one central character that has a
leading role is placed between the maps, while the elements that link to it must be centered on the movie.

6. Think in Reverse: This being a very popular method or idea-generating step will help in the long run.
But how can this one be possible? Sometimes, if we know what is not to be done, we can get to know where
the mistake has taken place if we try thinking this way. If we aim to think about every possible mistake to
reach the desired goal, thinking in advance will help. In the end, making the idea an all-rounder hit.
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
7. Idea Capture: Some people might have the same opinion, and their ideas might clash, about any
problem in the same manner at the same time. Hence, to avoid the same situation, Idea Drop software can be
used, such as similar ideas strike off.

8. Questioning Assumptions: In the industry, many times, the work is confined to get all the things done.
Hence, this might lead to untapped opportunities and questions, leading to a barrier to generating ideas. Thus
to avoid the same situation, a creative challenge must be designed, from this collection of feedback and
assumptions might be done. Now looking for that idea or assumption that can be utilized for the present
problem must be chosen.

9. Collaboration: As the name suggests, two or more people work together to achieve a particular goal.
This method is again the most popular one. Many people join their hands for a particular project or so; this is
done because a team always has more ideas and innovations than one business person.

10. The Story Boarding Method: It is a method in which the ideas or the concepts are placed to look like
that of a cartoon strip. Then a story is being developed from it. Ideas are being taken from every colleague,
and then a sticky note is then being passed on aboard. This makes a story. In this manner, the ideas interact,
and a connection is established in them.

11. Sketching as a Group: As we know, if something is drawn as a picture or sketch, our sensors of the
brain start acting, and the sketch which has been visualized by the eyes remains in the memory for a longer
time as compared to the discussions being made. Thus, if a rough sketch of ideas is made on the whiteboard
or so, it could be easier for others to understand, and if they have innovative ideas, they can come up with
them.

12. Forced relationship: in this technique or step, all the ideas are combined, leading to the production or
invention of a completely new idea.

13. Visualization and visual prompts: It is the visualization of the issues that are being first overlooked,
and in the subconscious mind, the ideas are functioning for the problem that is being occurred. It is the
illumination in which the person thinks of the problems related to the ideas and pen them down on paper.
This visualizes the actual problem, the real solution is then looked upon, and the ideas are crafted in that
particular style.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

14. Use online Tools: Ideas can too be identified across the multidimensional internet. Ideas are available
here in great abundance. One of these platforms can be Ever note, which provides solutions that are well-
formatted and helpful. And this allows one to write thoughts instantly.

15. Scamper: scamper stands for the acronym in which each letter stands for action verbs. Let us check:

 S- Substitute
 C- Combine
 A-Adapt
 M- Modify
 P- Put to another use
 E- Eliminate
 R- Reserve
SCAMPER is a useful creativity tool that helps to generate ideas for new products and services, or to
improve existing ones
16. Synectics: With this research technique’s help, it can now be possible to describe and teach the process
and churn out more innovative ideas. Synectics is a method that works with problem analogies and put them
in a different, seemingly not at all linked, environment. Method is based on assumption that people are more
creative when they understand how creativity works.

17. Daydreaming: It can help in triggering the most innovative ideas. In this technique, a scenario is created
to establish an emotional connection between the goal and the task. It is a thought process in which
creativity and resources are combined so that a new and innovative solution to the present problem can be
figured out effectively.

18. Accidental Genius: It is a very new and innovative technique, which focuses on triggering the
participant’s best ideas, which will help improve the business’s position.

Effectuation theory

What is the effectuation theory of entrepreneurship?

Dr. Saras Sarasvathy is an Indian born business school professor researching strategy, entrepreneurship and
business ethics, currently appointed at the University of Virginia. Sarasvathy proposed the theory of
effectuation in the early 2000s after studying a sample of expert entrepreneurs with diverse backgrounds.
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
Effectuation theory is often considered a process theory because it explains the process that entrepreneurs
use to create new ventures. Effectuation theory stems from the way that expert entrepreneurs think about
problems and how they go about solving them. Effectuation logic contrasts with what Sarasvathy calls
"causation theories" of entrepreneurship, where it is proposed that entrepreneurs start with a goal and then
acquire the resources needed to achieve the goal, in a linear fashion. Each resource acquisition is a step
toward the goal. In stark contrast, effectuation logic involves evaluating resources that are available to use
today and then deriving goals out of what can be made from the recombination of those resources.

The four principles of effectuation are:

1) The bird in the hand principle: A bird in the hand beats two in the bush—This refers to maximizing the
use of what an entrepreneur knows (i.e., their background and experience), who they know (e.g., friends,
family and others around them), and aligning options based on who they are (i.e., what are the
entrepreneur’s abilities).
2) The affordable loss principle: Only take on affordable losses—don’t obsess about windfall profits, but
do try to minimize potential losses. This involves taking low probability bets, but only with a small
investment of resources lost with each failure.

3) The crazy quilts principle: Make crazy quilts—Weave potential deals with potential partners until
something sticks. Much iteration is often required.
4) The lemonade principle: Make lemonade means to see potential in depressed or under-utilized
resources. This is similar to the alertness principle.

5) The pilot in the plane principle—Focus on today, not next year. Which describes the future as
something you can influence by your actions, i.e. you can create your own opportunities.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

Problem mapping:
Problem mapping is a technique that analyses a central problem by evaluating related ideas and determining
how each connects. It represents these connections visually in the form of a map and provides the foundation
for solving recognised issues systematically. The approach is frequently used to support the idea generation
process through the identification of relevant factors and their relationships

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Using ‘Problem Mapping’

Step 1: A clear definition of the focal problem is recorded in the form of a statement.

Step 2: Potential causes of the problem that occur above, or prior to the organisation in the supply chain are
identified.

Step 3: Potential causes of the problem that occur below, or after the organisation in the supply chain are
identified.

Step 4: The previous 3 steps are performed iteratively until the problem has been thoroughly defined and
analysed. All the causes identified are represented visually and mapped to the focal problem in order to depict
their relationships.

Step 5: Sequentially, each of the identified causes of the focal problem is selected for examination.

Step 6: Factors that drive and inhibit progress toward a solution to the problem are identified and translated
into a list of potential actions that can be taken by the organisation.

2.2 Design thinking;  Idea testing and Prototyping

What is design thinking?
Design Thinking is an iterative process in which we seek to understand the user, challenge assumptions, and
redefine problems in an attempt to identify alternative strategies and solutions that might not be instantly
apparent with our initial level of understanding. At the same time, Design Thinking provides a solution-
based approach to solving problems. It is a way of thinking and working as well as a collection of hands-on
methods. Design Thinking revolves around a deep interest in developing an understanding of the people for
whom we’re designing the products or services. It helps us observe and develop understanding with the
target user.
Design Thinking also involves ongoing experimentation: sketching, prototyping, testing, and trying out
concepts and ideas.
Design Thinking’s Phases:
There are many variants of the Design Thinking process in use today, and they have
from three to seven phases, stages, or modes. However, all variants of Design Thinking are very similar. All
variants of Design Thinking embody the same principles, which were first described by Nobel Prize laureate
Herbert Simon in The Sciences of the Artificial in 1969.

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 1. Empathise – with your users. The researcher should gain an empathetic understanding of the
problem you’re trying to solve, typically through user research. It involves consulting experts to find
out more about the area of concern through observing, engaging and empathizing with people to
understand their experiences and motivations, as well as immersing yourself in the physical
environment.
2. Define – your users’ needs, their problem, and your- The stage will help the designers in your team
gather great ideas to establish features, functions, and any other elements that will allow them to
solve the problems or, at the very least, allow users to resolve issues themselves with the
minimum of difficult
3. Ideate – by challenging assumptions and creating ideas for innovative solutions-Brainstorming is
particularly useful here. It is important to get as many ideas or problem solutions as possible at the
beginning of the Ideation phase
4. Prototype – to start creating solutions. This is an experimental phase.
The solutions are implemented within the prototypes, and, one by one, they are investigated and

either accepted, improved and re-examined, or rejected on the basis of the users’ experiences.
5. Test – solutions: Evaluators rigorously test the prototypes. Although this is the final phase,
design thinking is iterative: Teams often use the results to redefine one or more further
problems. So, you can return to previous stages to make further iterations, alterations and
refinements – to find or rule out alternative solutions

The five phases of Design Thinking, according to with your users your users’ needs, their problem, and
your insights by challenging assumptions and creating ideas for innovative to start creating solutions
It is important to note that the five phases, stages, or modes are not always sequential.

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Prototype
“People don't know what they want until you show it to them”- Steve Jobs

Conceptual model and conceptual design

A conceptual model is created by the designer as a high-level plan for howthe p roduct/service will
work and fit together.

Conceptual design is an early phase of design.it is the very first stage of the product/service
process, where drawings and other illustrations or models are used. It serves to provide a
description of the proposed product, in terms of set of integrated ideas and concepts about what it
should do, behave, and look like in a way that is understandable for users. It is the design of
interactions, experiences, processes, and strategies and is the point at which people, knowledge,
product, services, processes and profitability meet vision and endless possibilities each acting as a
distinct color on the canvas of the designer. It is grounded in more abstract thinking until a detailed
design is ready to be created. Concept model -the foundation of the interface, different users’
interfaces could be built upon it. Interface design translates the concept models into things people
can see and nietract with.it involves design choices but must stay faithful to the concepts and
terminology of the concept models.
Conceptual design is:
 Designing systems so users can understand them.
 Assisting the user to build useful metal models.
Interface Design is:
 Representing the conceptual model to the user

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The concepts that designers as word-sense are defined in terms of clear, typical, central cases called
prototypes.

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Definition of Prototype:

A prototype is a draft version of a product that allows designers to explore ideas and show the
intention behind a feature or the overall design concept to users before investing time and money
into development.

Representation of Conceptual design for users and designers, and other stakeholders to interact
with. A prototype in Design Thinking is “A simulation or sample version of a final product,
which is used for testing prior to launch.”

The Goal of a prototype is the test products and services then its ideas before spending lots of time
and money into creating the final version of the sellable product. The word “prototype” comes
from the Greek Prototypos, a compound of protos(“first”) and typos (“mold, “pattern”,
“impression”).Prototypes are one of the most important steps in the design process, yet it is very
confusing to create and execute. A prototype can be almost anything from a series of sketches
representingdifferent screens of the final version of pixel-perfect product. Prototypes play a major
role in solving the usability issues before the launchof the product.
Prototyping helps designers to unveil and explore these human needs,opening the door to
insightful interaction and more empathetic designsolutions.
Human Beings are Highly Visual. In fact, 30 percent of human cerebral cortex is
devoted purely to vision.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

  When human being(user) can view the prototype, then it understood all the processes
involved with the product, especially areas of contention for futuretesting, then prototype
comes to life. In this phase, the idea selected at the best is expanded into a design concept.
It must be clarified how the idea can be visualized and in a particular made tangible to test
it and with the customer.
 According to the rules" Be visual and make it to tangible" and" fail early and often", the
idea concepts are to be visualized as quickly as easily as possible are made tangible and
comprehensible to test the effect of the customer and to learn from positive or in a
particular negative feedback.
 Based on Idea concept, it must be clarified which visualization and prototyping techniques
should be best be used. In prototyping stage three things are mainly taken care of
1. Creation of experience
2. Getting Feedback
3. Iteration
 Prototyping involves producing an early, inexpensive, and scaled down version of the
product to reveal any problems with the current design.
 Prototypes are often used in the final, Testing Phase in a design Thinking process to
determine how the users behave with the prototype, to reveal new solutions to problems, or
to find out whether the implemented solutions havebeen successful.

Why prototype:
Communication &discuss ideas with stakeholders, Develop requirements and /or specifications.
Learning and problem solving, Evaluate interface effectiveness for communicating conceptual
models, Further Develop conceptual and physical design and
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 Save time and money

Qualities of Prototyping:The qualities of prototyping are:

Representation This form of the prototype is mainly structured for presentation

and keynote uses. That may be a paper-pen, digital or code
precision The fidelity of the prototype is defined here. It explains the level
of details, realism, and final design. Such as Low-fidelity and high-
fidelity.
Interactivity The functionality opens for the user. i.e fully functional, partially
functional or no interactions at all
Evolution The life cycle of the prototype. some are built to re iterate and re-
iterate until it is precisely done, and some are just designed and thrown it
away after the certain outcome is made.

Difference Between Sketches and prototypes:

Sketch prototype
Suggest Describe
Explore Refine
Question Answer
Evocative Didactic
propose Test
Provoke Resolve
tentative Specific
Non-committal Depiction

Prototypes take many forms:

Paper , Cardboard, Foam, Software, Video, Clay, Website, Sketches, Scripts, index cards

Types of Prototyping: Prototypes are of two types.

(i) Low- Fidelity prototype

(ii) High-Fidelity prototype(iii)

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Low-Fidelity Prototyping: Low-Fidelity prototyping is intended to provide designers with Basic model or
example of the product that requires testing. With a low-Fidelity prototype, it is likely going to be
incomplete or utilize a limited number of its intended features.

 The low-fidelity prototype-Known as low-tech, low-fi or lo-fi prototype, is asemi-finished

prototype that focus on function, structure, process, and provides the simplest framework
and elements of web/app.

 It can even be constructed using materials such as wood, paper, and metal that are not intended to
be used for the finished article.
 Low -Fidelity prototypes are usually simple and in-expensive ways to communicate,
explore and modify ideas in the early stages of developments and their purpose is to
support and provide answer to the question of the designers.
 Low -Fidelity prototyping is used generally show the overall shape of the design idea and
the primary functionalities, which are required to work fully but rather serve as the proof of
concept and to help generate insight about thefinal look.
 They can be inexpensive, quick, and simplified version of what the final product will be.

High-Fidelity Prototyping:
The fidelity of the prototype refers to the level of details and functionality built into a prototype. In
this sense, a high-fidelity (sometimes referred as high-fi or hi-fi) prototype is a computer-based
interactive representation of the product in its closest resemblance to the final design in terms of
details and functionality.
Characteristics of high-fidelity prototypes:
Visual design Realistic and detailed design — all interface elements, spacing, and
graphics look just like the real version of the
product
Content Designers use real or similar-to-real content. The prototype
includes most or all the content that will appear in the finaldesign

Interactivity Prototypes are highly realistic in their interactions

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Testing
"Good judgment comes from experience. Experience comes from bad judgement".

The testing phase allows the designers to gain the feedback and insights that may not be
possible without testing their prototypes. Through these tests, designers will be able to
identify aspects of their prototype that did not work well, or the end user did not find the
functional or pleasing. These failures give the designers the opportunity to fix and
improve the aspects of their prototypes. In the testing phase, Design thinking teams tests
prototyped solution withusers representing the target personas.
“The Customer is not always right but always having a point.” In the testing, users have a bias
towards evaluating a new solution according to its similarity to existing products with which they are
familiar.
When designers asked to comment on the new solution, end users say “The old one was Better. I
don’t Know why, but it was better” Baby-duck
Syndrome

In human psychology, Baby duck syndrome is called the effect when a

person, studying a particular area, considers the first object encountered
from this area to be the best, and the subsequent ones to be the worst.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

Once the prototype is ready, test that with the users and let them go through the prototype. If
it is the prototype of a product then let the users use the prototype. If it is a service
prototype, then show the design of the new service /modification.
Usability is defined as the effort required using any feature of product or service. e.g A

vending machine or coffee machine is to make a cup of coffee.

Feedback from this stage would be fed back to the define the stage to redefine the
problem. The test report is especially important as this gives the input for corrections.
The test report should have the following fields.
Feature code
Test data
Test case number
The proficiency level of the user
Result test case wise
When selecting the appropriate prototype test methods for the hypotheses, designers should
always ask which the simplest test is to perform to arrive ata certain conclusion.
Tips for prototype testing:
 Offer multiple prototypes for comparsion.in addition to the very promising ideas,
designer can also deliberately create prototype for an idea that would exclude
inefficiency.

 Ask for feedback without comment. Each evaluation on designer part can influence
the assessment of the customer.
 Ask the customer to suggest or implement changes to the prototype.

Testing with End users:

When designers test with end users, it is another chance for them to empathize and learn
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something new that could be used to refine their prototypes. Testing brings the focus back to
end users to reveal hidden insights that the designers would have never foreseen without the
end users experiencing theirprototype.
One of the methods the designers captured their observational findings and user feedback
through a simple tool called FEEDBACK CAPTURE GRID.
This grid consists of four quadrants.
In the first quadrant, designers wrote down their users’ feedback on what they liked
about the prototype.
The second quadrant contains the user’s constructive feedback.
The third quadrant contained the questions that arose during the testing.
The fourth quadrant contained new ideas or improvements that emerged from the
tests.

• likes • constructive
feedback

first second

fourth third
• new ideas and • questions
improvemenst

This feedback tool helped designers be more intentional in what they were
observing and the information they were looking to record.
Using what complied in feedback capture grid, designers proceed back to the
prototype phase to refine and improve their prototypes.

Classical Test Methods are:

1. Contextual Interview/ inquiry of Customer

2. User Observation techniques

3. Interviews on neutral location

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

 4. Phone interviews
5. Video charts
6. Instant messaging
7. E-mails
8. Online survey
9. Focus groups/ customer Clinics/Usability-Test/Live testing‘
10. Eye-Tracking systems

Observation Techniques:
1. Drawings and design of models
2. Storyboarding
3. Storytelling/comics/Lego serious games
4. Body storming
5. Wireframes/Mockups
6. Website/Landing Page
7. Videos
8. Concierge MVP (Minimum Viable Product)
9. Wizard-of-Oz MVP
10. Open-source prototypes
11. 3D-Rapid prototyping
12. Crowd Funding

2.2 IPR importance; process and Entrepreneurship in Action- Creativity and

Innovation. Identification of Business Opportunities; Evaluation of Business
Opportunities

Intellectual property rights are the legal rights provided to the authors for the protection of their
original work, it is a protection provided to the creators for their contribution in invention, or
protection given to the products for their appearance so as to distinguish it in market, and protection
given for scientific developments, artistic works, and so on

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

What are the types of intellectual property rights? The five major kinds of IP rights are:

What is known as a patent?

A patent is an exclusive right granted to an inventor for his/her invention, which may be a product
or a process that provides a new way of doing something, or offers a new technical solution to a
problem. A few of the benefits of filing a patent are that a patent holder has a monopoly right over his
patent, it helps in refraining others from making, selling or using the patented invention for a specific
period and helps keep competitors at bay

What is copyright?

Copyright is also known as the author’s right. It is a legal term used to describe the rights that creators
have over their own literary and artistic works. Works like books, music, paintings, sculptures,
films, computer programs, databases, advertisements, maps and technical drawings are all
covered under copyright. When an artist intentionally uses a copyrighted work of another artist and
creates something new and unique by changing, building, or modifying it, it is known as appropriation
art.

What is a trademark?

A trademark is a sign, symbol, word, or words that are legally registered or established by use as
representing a company or product that is capable of distinguishing the goods or services of one
enterprise from those of other enterprises. The benefits of registering a trademark include the owner
being the sole and exclusive owner of the trademark builds goodwill for the enterprise and trust among
customers, helps customers to differentiate and recognize the quality of the product. The brand name
“McDonald’s” and its slogan “I’m lovin’ it” are excellent examples of a trademark.
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
Industrial design

A design simply means the features of shape, pattern, ornament, configuration, the composition of
lines or colours applied to a particular article whether it is in a two-dimensional or three-
dimensional form or both, by any industrial process or means, whether it may be mechanical, chemical,
manual, separate or combined, which in its finished article appeal to and are judged only by the e

Geographical indication

It is a name or sign used on certain products which correspond to the geographic location or origin of
the product. The use of geographical location may act as a certification that the product possesses
certain qualities as per the traditional method. Geographical indications could help rural producers in
developing countries to enter national markets on a larger scale and also enter international markets via
export thereby increasing their income, local jobs along with preserving the diversity and contributing
to rural development. Darjeeling tea and Agra Petha are common examples of geographical
indications

What benefits does Intellectual Property Rights have in this modern era? benefits of intellectual
property rights are as given below:

 Innovative idea to earn profit –IP has a great potential to turn an innovation into services and
products which can be commercially profitable and viable..
 Export Business Opportunities – Intellectual property improves the productivity of a
company in the export market.
 The ideas are encouraged by securing them – With the increasing competition in the market,
there are people who are always willing to copy the concept of others for availing the monetary
benefit and development in their business.

 Business Growth – It is important to get your intellectual property rights registered as giving
protection to your exclusive goods or services is necessary for preventing the rivals to use the
same. The protection shall ensure development in the market share which shall result in steady
profit and growth.

What are the advantages of intellectual property rights?

1. There are no extra fees connected with IP
There are no fees required whenever you wish to change or enhance your business and hence it can be
done free of cost.
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
2. Competitive edge over other alike businesses
IP protection inevitably gives an ability to have a competitive edge over other similar businesses in the
market.
3. IP helps in enhancing the company’s value
Intellectual property helps in generating more income for the business through the sale or licensing
agreements of the invention.
4. IP aids in marketing the company’s products and services
It can help in differentiating one business over the other in order to attract more potential customers.
Thus, it boosts the marketing of the registered products.
5. Obtaining finance becomes easy
It becomes easy to obtain finance from financial institutions and lenders since it enhances the
credibility with the IP protection.
6. Greater export opportunities
It increases competitive edge in the export markets and to deal with the products and services
internationally.
What are the Disadvantages of intellectual property rights?
1. Additional costs
For getting the protection for the first time, it could be bit expensive particularly if the product is
complex and involves methods, designs, and processes.
2. Pirating
Even after getting the IP protection, it sometimes becomes difficult to stop someone who is copying
the inventory work.
3. Reduced quality
With the passage of time, as the rights of intellectual property reduces so does the quality of the IP
decreases.

Creativity

“Creativity is a journey, not a magic event".

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
 “Inspiration exists, but it has to find us working”

The creative process and creative principles:

Creativity means thinking something new, whereas innovation means implementing

something new. In this respect creativity is an integral part of every innovation project,
regardless of whether it is aimed at it a new product, service, process, social/ organizational
change, or business model. Creativity is not an event but can rather be understood
as a Process. The design thinking approach takes up this creative process. Creativity is
the ability to come up with ideas that are new, surprising, and valuable. To get such ideas, we
need a way of looking at problems or situations from a fresh perspective that suggests
unorthodox solutions (which may look unsettling at first) which is called Creative Thinking.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

 The creative process source: according to Walla’s (1926)

preparation incubation illumination/ verfication

idaetion

 Identify, analyze and Dealing with the

understand the problem/situation again.
problem  Develop an idea
spontaneously(flash of the
 Explore the state of art
inspiration/illumination)
 Develop partial
Or systematically (ideation)
solutions

Reflecting on ideas and

 Consciously moving
developing them further
away from the
 Evaluate ideas
problem/ opportunity
 Describing ,visualizing
 Relax
and communicating
 Defamiliarize
ideas
problem/situation
 Overcome barriers

Creative principles:

1. Principle of decomposition:
The problem, the task, the process steps, or the product/service to be redesigned is broken
down into its components and then these compounds arevaried/ combined a new
2. Principle of association:
By Association one understands the linking of ideas, information, perceptions, and
emotions. In the sense of a free Association, brainstorming or brain writing are to be
mentioned. The Walt Disney method and 6- thinking hats - technique can be understood
as structured associations.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

 3. Principle of analogy and confrontation:
Technology and confrontation are targeted changes of perspective and arebased on the
confirmation with the different areas.
4. Principle of abstraction and imagination:
The basic principle of abstraction and imagination, the problem is solved ona higher or
illusionary level.
5. Challenge common wisdom and industry conventions:
Nothing is to be accepted as given ask questions why this is so, why this is not so, why
this should be so not to be so and why this can also be different.
6. Do mental exercise:
Demand a new number of new ideas from yourself. Under pressure and tryto develop
new ideas from one or more problems per day
7. Change your habits:
Do something completely different: Changing habits and conventions is asuccess factor
specially for radical innovation.
8. Do experiment:
The trial under the approach is already given rise to countless innovationideas.
9. Do networking:
Search or promote Exchange with others example people from otherdisciplines, cultures,
business areas, departments are extra partners.
10. Overcome the barriers to creativity:
One of the essential success factors the creative process is overcoming thenumerous and
where did creative blockades.
Examples of create to blockades are the following.

 Creativity disturbing environment

 Stress
 Lack of recognition/ no reward for creative work
 Two rigid or strict institutional controls
 Fear of change, risk aversion

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

Barriers to creative thinking (mental block):
J.L. ADAM’s Mental Blocks:

1 Perpetual  Stereotyping
Block  Information overload
 Limiting problem
unnecessarily
 Fixation
 Provision of cues

2 Emotional  Fear of risk taking.

Block  Unease with chaos
 Unwilling to incubate
 motivation

3 Cultural  Setting too formal

Block  Often strong resistanceto
change.
 Overlay analytical
thinking

4 Intellectual  Poor choice of problem-

Block solving language
 Memory block
 Insufficient knowledge

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 5 Environment  Physical environment
Block  Criticism

Creativity Techniques:

Institutive creative techniques Systematic -analytical techniques

 Brainstorming  Osborn Checklist (SCAMPER)

 Brain Writing  Mind Mapping
 Random Word Techniques  Synectic
 Semantic intuition/ the perfect prefix  Bionics

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  Forced Relationship  Morphological box/sequential
morphology’s/Attribute Listing

 Provocation Technique  HIT

 Walt-Disney Method  Lotus Blossom
 Six Thinking Hats  TRIZ
 Delphi Method  SIT

Identification of Business Opportunities; Evaluation of Business Opportunities

What is A Business Opportunity?

A business opportunity is the chance to take advantage of an occurrence in the market to begin a
business. It involves some kind of favourable condition which exists in the market. A business
opportunity is what makes some businesses succeed while others fail. Leaders are successful because
they see opportunities before other people spot them, make plans then build business models to
capitalise on that opportunities.

A good example of a business opportunity in the market today is e-books. Amazon was one of the
first companies in the online bookselling business who initiated an e-book reader that made it
possible to read books by means of a digital device that looks more or less like a tablet pc.

Importance of A Business Opportunity

The main purpose of an opportunity is to serve as the basis for any action those results in profit and
business growth. Opportunities allow businesses to create and implement ideas and innovations and
improve their performance.

 The chance to build a business: A business opportunity can be an existing unsolved problem
in the market or a new problem arising from current trends, which is the chance to build a
business.
 The chance to avoid failure: A business is likely to fail without opportunities.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

  The chance to grow: Opportunities allow businesses to create and implement ideas and
innovations.
 The chance to maximise profits: A business opportunity involves favourable conditions that
can be used to increase profits.
Characteristics Of A Good Business Opportunity: Here are some characteristics of a good
opportunity:

 Clarity: Good opportunities are clear, well defined, and straightforward. They allow
businesses to accurately and completely identify problems and create solutions that can
maximise their potential.
 Relevance: Good opportunities are relevant to the scenario in which they exist. They provide
added value to customers, markets, and industries. This means they do not only represent
potential but also relevance for solving existing problems or creating added value for others.
 Feasibility: Good opportunities are realistic and feasible. They help businesses achieve their
goals while making them more efficient, productive, and profitable.
 Profitable: A good opportunity is capable of providing returns on investment. It is able to
achieve its objectives while capitalising on the available resources, strategies, and assets more
efficiently.
 Scalable: A good opportunity is scalable. This means it can be expanded to a big or a wide
scale. It can extend to various markets and industries while maximising the results of
investments in terms of time, human resources, and money.
Types of Business Opportunities

1. New market opportunity: A new market opportunity involves an untapped market, which
gives businesses the chance to create and implement ideas and innovations without facing
much competition.
2. Untapped resource opportunity: An untapped resource opportunity is a type of business
opportunity that involves under utilised or unexploited resources that can be used to create
added value.
3. Repressed demand opportunity: A repressed demand opportunity capitalizes on existing
demands that the current offerings don’t cater to. For example, Uber capitalised on a repressed
demand for an on-demand cab system in the existing cab industry.

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

 4. Technology opportunity: A technology opportunity is a type of business opportunity that
allows businesses to introduce new technologies that can be used in existing markets.
5. Competitive opportunity: A competitive opportunity allows businesses to introduce new
products or services that can provide more value than their competitors while solving the
problems of the target market better.
6. Strategic partnership opportunity: A strategic partnership opportunity involves the chance
to collaborate with businesses from complementary industries, allowing them to access new
resources, strengthen their product offerings, and increase their competitive advantage.
How to Identify a Business Opportunity? Opportunity identification is an important part of
business development and growth. Here’s the business opportunity identification process:

The Customer Research Stage: The first step is to research customers and their problems by asking
questions related to the customer’s needs, goals, and expectations. This involves collecting,
organising, and analysing information about customers’ behaviour as well as their needs.

Problem Hypothesis Stage: In this stage, businesses search for problems by identifying issues and
concerns from customer feedback and other sources of market research. The first step is to define the
problem. Once that has been done, businesses need to search for the root cause of the problem and
explore possible solutions.

Product Hypothesis Stage: Businesses should determine what kind of product or service will solve
customers’ problems or address their needs. The product or service should target specific customers
based on the information gathered during the customer research stage.

Market Hypothesis Stage: The market hypothesis stage involves testing certain key assumptions
about the business opportunity with customers to determine the demand for a particular product or
service in the real world, and how it solves problems in the specified market.

Product Development Stage: Once a business opportunity is confirmed, the next step is to develop a
product or service that will solve the problem. The product or service should be designed and tested
using various methods to ensure its viability and effectiveness. Examples:

Prof. Anitha BM Dsilva ( This material is for reference in the Institute)

  Airbnb: Airbnb introduced the concept of sharing economy by allowing people to rent out
their homes as an alternative to hotels or motels. This is a perfect example of a new market
opportunity because hotels were the only service providers for this kind of accommodation
before Airbnb came along.
 TikTok: TikTok saw an opportunity in the music and video streaming market by introducing
a unique take that allows users to create 15-second videos set to music. It found a repressed
demand of getting recognised and untapped technology of user-generated video content.

2.4 Mullins 7 Domain Framework.

Description of Mullin’s Seven Domains Model

Mullin’s Seven Domains Model divides the proposed new product or venture into seven “domains”,
four that look at the small (micro) and large (macro) aspects of the market and industry, as well as
three that focus on internal issues within a company. The seven domains are described in detail
below:
1. Market Domain/Macro Level: Market Attractiveness: This first domain analyzes the market
attractiveness from a macro level. It looks at the size in terms of the number of customers, the
sales value and the quantity of units sold. It also looks at recent growth and whether previous
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
 growth is likely to continue. Basically, this analysis looks at whether the market is healthy enough
to welcome new products or if it is declining in growth.
2. Market Domain/Micro Level: Sector Market Benefits and Attractiveness: This domain looks
at the market segment on a micro level and asks questions such as which segment is most likely to
benefit from the new product, how is the product being considered different and better than the
ones currently being offered, and is this segment currently growing? It is important to get different
types of data when answering these questions, such as specific sales data and prospective
customer insights.
3. Industry Domain/Macro Level: Industry Attractiveness: This domain looks at the
attractiveness of entering the industry on a macro level. Questions to ask revolve around how
difficult is it to enter the industry and how inundated it is with competition. Also, look at how
fierce the competition is currently and whether there is theft of ideas and strategies among the
participants. Lastly, investigate the power of buyers and suppliers within the industry and their
ability to set their own terms, and how this might affect the new product or service being
considered.
4. Industry Domain/Micro Level: Sustainable Advantage: The last industry domain to consider
on a micro level regards Sustainable Advantage. Asking how easily the competition will be able to
duplicate the product or service you are considering and how you can minimize this possibility are
important questions. Look at possible advantages on either side, such as patents, technological
processes, and financial backing.
5. Team Domain: Mission, Aspirations, Propensity for Risk: At this point in the process the
analysis turns inward, toward the team in place to start the venture. It is important to look at the
level of commitment that both leadership and individuals have to the idea being considered.
Whether the team is willing to work hard in order to see the idea succeed and is willing to live
with the level of risk involved are also factors that need to be considered.
6. Team Domain: Ability to Execute on Critical Success Factors: This domain considers the
Critical Success Factors for the new product or service, and whether the internal team in place is
able to deliver on them. The questions to ask about the internal team at this point center around
which decisions can be made that have the potential to significantly harm or help the business
succeed, and who is responsible for making these decisions. If there are gaps in talent or decision-
making ability, think about what positions can be filled to minimize those gaps.

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7. Team Domain: Connectedness Up, Down, Across Value Chain: This last domain looks at
relationships up and down the Value Chain, including suppliers, investors, customers, distributors,
and the competition. Analyzing these connections and how they can potentially help or hurt the
business being considered will help to head-off or prepare for potential conflicts in the future.

2.5 Feasibility Analysis- Marketing Feasibility; Financial Feasibilities; Political

Feasibilities; Economic Feasibility; Social and Legal Feasibilities; Technical
Feasibilities; Managerial Feasibility, Location and Other Utilities Feasibilities.

What is a Feasibility Study?

A feasibility study, as the name suggests, is designed to reveal whether a project/plan is feasible. It is
an assessment of the practicality of a proposed project/plan. A feasibility study is part of the initial
design stage of any project/plan. It is conducted in order to objectively uncover the strengths and
weaknesses of a proposed project or an existing business.
Steps in a Feasibility Study: Conducting a feasibility study involves the following steps:
1. Conduct preliminary analyses.
2. Prepare a projected income statement. What are the possible revenues that the project can
generate?
3. Conduct a market survey. Does the project create a good or service that is in demand in the
market? What price are consumers willing to pay for the good or service?
4. Plan the organizational structure of the new project. What are the staffing requirements? How
many workers are needed? What other resources are needed?
5. Prepare an opening day balance of projected expenses and revenue
6. Review and analyze the points of vulnerability that are internal to the project and that can be
controlled or eliminated.
7. Decide whether to go on with the plan/project.

Contents of a Feasibility Report: A feasibility report should include the following sections:
1. Executive Summary
2. Description of the Product/Service
3. Technology Considerations
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
 4. Product/ Service Marketplace
5. Identification of the Specific Market
6. Marketing Strategy
7. Organizational Structure
8. Schedule
9. Financial Projections
Types of Feasibility Study
1. Technical feasibility
 Technical: Hardware and software
 Existing or new technology
 Manpower
 Site analysis
 Transportation
By doing so productivity gain (or loss) and other implications are understood due to the differences in
fuel availability, geography, topography, infrastructure support, and other problems.

2. Financial feasibility
 Initial investment
 Resources to procure capital: Banks, investors, venture capitalists
 Return on investment
3. Market feasibility
 Type of industry
 Prevailing market
 Future market growth
 Competitors and potential customers
 Projection of sales
4. Organizational feasibility
 The organizational structure of the business
 Legal structure of the business or the specific project
 Management team’s competency, professional skills, and experience
5. Economic Feasibility: This assessment typically involves a cost/ benefits analysis of the project,
helping organizations determine the viability, cost, and benefits associated with a project before
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
financial resources are allocated.
6. Legal Feasibility: This assessment investigates whether any aspect of the proposed project
conflicts with legal requirements like local laws, Industry laws, Factory laws, data protection acts or
social media laws.
7.Operational Feasibility: This assessment involves undertaking a study to analyze and determine
whether—and how well—the organization’s needs can be met by completing the project. Operational
feasibility studies also examine how a project plan satisfies the requirements identified in the
requirements analysis phase of system development.
8.Cultural Feasibility Study: The compatibility of the proposed project with the cultural environment
of the project is included in the cultural feasibility. Planned operations should be integrated with the
local cultural beliefs and practices in labor-intensive projects.
9.Social Feasibility Study: The effect that a proposed project may have on the social system in the
project environment is addressed in the social feasibility. It may happen that a particular category of
employees may be short or not available as a result of ambient social structure
10.Safety Feasibility Study: Another important aspect that must be considered in project planning is
safety feasibility. Safety feasibility involves the analysis of the project in order to ascertain its
capacity to implement & operate safely with the least unfavorable effects on the environment.
11.Political Feasibility Study: The directions for the proposed project are mostly dictated by
political considerations. This is certainly correct for large projects with potential visibility that may
have important political implications and government inputs.
12.Environmental Feasibility Study: The environmental aspect is very crucial in making any
potential project successful or failed. In the very early stages of the project, this aspect should be
considered. All the environmental concerns raised or forecasted should be addressed in
environmental feasibility so that proper actions can be taken to cover relevant issues of the
environment.
Whether companies design or copy certain business models, it is necessary to conduct a feasibility
study, using models, to reduce the risk of failure. A feasibility study of the business model should be
centered on the organization’s value creation processes.

2.6 Market Entry Strategies

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Market entry strategies are methods companies use to plan, distribute and deliver goods to domestic
and international markets. The cost and level of a company's control over distribution can vary
depending on the strategy it chooses.

I. Home market production: Direct export and indirect export

Direct export denotes– firm is involved in the manufacturing, risk taking, and exporting goods to
overseas market. Firm can go with direct exports through
 Agents or Distributors,
 The government
 Overseas subsidiaries
Agents- exports can be achieved through agents located at domestic country or foreign country
• Agents take their predetermined profits share.
• Also bear in the risk of trade as per agreement.
Government: A firm can also go for a direct export through a government Agency
Subsidiary located abroad
Indire export:
Trading company: companies can set up trading company in home or abroad. Trading company
bears all the risk of selling the product in the overseas market.
Export Management Company: companies which don not expertise or knowledge of export
formalities and overseas market prefer
Counter trade: Two separate contracts for exports and imports are made. The performance may or
may not have relevance on the other
• Barter
• Counter purchase – is a mutual buying agreement which involves one party agreeing to buy a
pre-specified amount of goods or services from a nation to which a sale is made.
• Offset- it is situation when the go Pepsi selling beverage to Russia and buying Vodka
• Switch trading- sell of counter purchase goods to a third party
• Buyback- putting up technological support to produce goods and then buying back the
finished goods made from same plant.

II Other places/ Foreign production :Other way of exporting the goods is by setting the
manufacturing base in foreign countries. Some of the ways in which the production can be carried
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out are:
1. Franchising:
 Franchiser gives licence of trade marks to others to produce/distribute goods
 Franchisee produces on licence in another country usually the same product
 Contractual provision and based on territory wise.
(Nature, contents, appearance of the product has to be original. Variations can be with permission)
EX: MC Donalds, Maruthi Udyog ltd, Dominos pizza
2. Contract manufacturing (outsourcing and in sourcing)
Under contract manufacturing a company doing international marketing contracts with firms in
foreign countries to manufacture or assemble the products while retaining the responsibility of
marketing the product. Ex: park Davis, Hindustan Lever and ponds adopt this strategy.
The benefits of contract manufacturing are as follows:
• The company does not have to commit resource for setting up the production facilities.
• It frees the company from the risks of investing in foreign countries.
• In many cases the cost of product obtained by contract manufacturing is lower than if it were
manufactured by the international firm.
• It is also less risky venture to start with.
However Contract manufacturing suffers from certain disadvantages like:
• Loss of potential profits
• Less control over manufacturing process
The basic working model used by contract manufacturers translates well into many different
industries. Like pharmaceutical contract manufacturing, food manufacturing, Creation of
computer components and other forms of electronic contract manufacturing, Industries like
personal care and hygiene products, automotive parts, Medical supplies are often created under
the terms of a contract manufacture agreement.
3.Turnkey projects
It is a contract under which a firm agrees to fully design, construct and equip a manufacturing/
business/ service facility and turn the project over to the purchaser when it is ready for operation
for remuneration. They are common in international business in the supply, errection and
commissioning of plants, as in case of oil refineries, steel mills, cement and fertilizers etc. GE and
Johnson and Johnson has its plants in China. India has constructed hospitals in Mauritius and
Afghanistan
Prof. Anitha BM Dsilva ( This material is for reference in the Institute)
4.Licensing
Licensor gives licence to the licensee to use manufacturing, processing, trade mark, technical
know how, using same or similar brand. Hindusthan Lever, Maruthi Suzuki, Hero Honda. Arvind
Brands represent Wrangler, Arrow.
• Licensor grants license for which the company will receive the royalty on granting rights.
• Patents, copyrights, technology, technical knowhow, Intellectual property rights etc. are
promoted though this system.
• Generally durable technology command a high price for the licensor.
• High duration patents means higher price to the licensor. Exclusive licence will command a
higher.
5.Joint venture:
Arrangement where in two or more companies share the ownership and control over the property
rights and operations. The companies have access to technology, core competencies and
management skills. Access to distribution channels and manufacturing and R& D. Joint venture
should be profitable to both the parties.
Ex: Middle east no foreigner can start a Venture except a Joint venture even if the native does’nt
invest except land resources.

6.Entering New Markets through Wholly Owned Subsidiaries

Greenfield Operations: It refers to starting of the operations of a company from scratch in a
foreign market, conducting survey, location facilities, erecting machinery, R&D, suppliers,
logistics, plant layout, and manufacturing technology.
7.Acquisition and Mergers
Generally mergers take place between developed and developing countries. Partial acquisition can
be done through FDI
Green field mergers– sunrise firms. Here acquisition is carried out with the growth oriented
companies.
Grey mergers and acquisition - taking over weak/ sunset firms by the parent company.
Reverse mergers – merger takes place where in a big firm merges into a small firm
Hostile mergers- take over competitor though indirect means
Partial acquisition the company doesn’t take the full stake in the company affairs.
Complete acquisition is generally taken as merger
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Horizontal merger same lines of production ( car companies- TATA has taken Jaguar)
Vertical acquisition is a situation where in the companies merge vertically –Apple Beverages
manufacturer can take over companies involved in manufacture of apple jam, pickles etc
Conglomerate acquisition – taking over firms in different lines of production

8. Creating Strategic Alliances: A firm enter a foreign market by forming an alliance with a firm in

the foreign market for marketing or distribution. A US pharmaceutical firm may use the sales
promotion and distribution infrastructure of a Japanese pharmaceutical company to sell its
products in Japan.
 Cross-Border Alliances that Succeed:
◦ Alliances between strong and weak partners seldom work.
◦ Autonomy and flexibility
◦ Equal ownership
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Prof. Anitha BM Dsilva ( This material is for reference in the Institute)