Business opportunity identification and idea development
From idea to opportunity
An idea is a thought; an opportunity is a problem that a defined customer will pay to solve, at a price that covers costs and returns a profit. Candidates should know sources of ideas such as customer complaints, observation, hobbies, work experience, surveys, brainstorming, trend scanning and gap analysis. Idea development moves through generating many options, screening, concept testing and feasibility analysis. A value proposition states the benefit a customer receives and why it is better than alternatives. Innovation can be incremental or disruptive, and invention only becomes innovation when it reaches the market.
Traps
Questions often treat any new product as an opportunity. Check market size, ability to reach customers, willingness to pay, competition and the resources needed. Do not confuse invention with innovation, or copying a competitor with having a strategy. Another trap is skipping screening and rushing to a full plan. Feasibility has several dimensions: market, technical, financial, legal and personal capability.
Worked example
A learner compares three ideas using a weighted screening matrix: customer need, start-up cost, competition, skills fit and profit potential, scored 1 to 5. Idea A scores 4,2,4,5,4; Idea B scores 5,4,3,2,5. Weighting need and profit at 30 per cent each, A scores 3.9 and B scores 3.9, so the tie is broken by testing assumptions with ten potential customers. Rule of thumb: an opportunity equals a real problem plus a reachable customer plus willingness to pay plus profitable delivery.