Explore topic-wise InterviewSolutions in .

(i) Read trends: (a)Entrepreneurs regularly read the leading publications and websites affecting their business. (b)Publications include industry publications, trade association sites, major newspapers, key business magazines, thought leaders and influential bloggers. (c)They scan information from a wide variety of sources – from international news on down to niche bloggers focused on specific aspects of their industry. Obviously, there is a sunami of information available. They use tech-tools like RSS feeds, e-mail newsletters or websites and forums to keep on top out of all and get the information they want. They understand quickly which sources are valuable and which should be avoided. 

(ii)Talk trends: (a)Talking to people is an equally important trend-spotting tactic. They get involved in specific industry’s trade association and attending events both online and offline. (b)From social networking tools like social network websites and forums. (c )They even start or join groups on the networks and see what people are buzzing about the latest trends to customers regarding what customers thinking, buying, doing, etc. what customers are saying about the business, but what they’re saying about the competitor’s business. 

(iii)Watch trends: (a)Watching and observing the customers in the market place. (b)If the customers are teenagers, in the local mall. (c)If they are business class people, it might be restaurant or office park restaurant center. (d)The entrepreneur spends some time simply watching and observing, what people are eating, doing, wearing, using. 

(iv)Think trends: (a)As an entrepreneur begins gathering all these information regularly, they will start to develop a “trend-spotter mind.” (b)They collect from what they read, heard and observed, and they start to making connections and observations that will lead to business-boosting insights.

Illumination starts when an entrepreneur re-surfaces the idea in realistic way and entrepreneur comes out with viable plan to give practical shape and implement an idea.

Trends can be visible e.g. change in the gender roles; Trends can be visible, e.g. Gadgets

Scanning of environment refers to a close examination of the environment so that it can develop an understanding between all the environmental factors like sociocultural, economic, political and other developmental factors in order to ensure that the perceived entrepreneurial opportunity is compatible with them.

Improvisation or change in the existing product can:

(i)Make a substantial difference in the success of the company,

(ii)Take a firm/company as a whole new direction by increasing sales.

Creativity is important to entrepreneurs because it is the first stage in the process of innovation, providing the stimulus for opportunity discovery and new venture creation.

As creativity is a continuous activity for the entrepreneurs they keep on disturbing markets and keeps on challenging large established businesses. Entrepreneurs always see new ways of doing things with little concern. Creativity in the entrepreneur is a mixture of ability to innovate, to take the idea and make it work in practice. Once the project is accomplished, the entrepreneur look for new venture.

When an entrepreneur looks outside for business idea he often sees that business opportunities exist in the environment. First Stage: Spotting an opportunity by analyzing the needs and problems that exist in the environment.

(i)Busy life work schedules, frequent corporate travelling created the need for fast banking services and hence the ATM, credit card, debit card and telephone banking came in popularity. 

(ii)With the increase in number of murders and other crimes taking place in big cities entrepreneurs can tap the niche of households for installing security systems like alarms, CCTVs, cameras and other safety gadgets, etc. 

Second Stage: Evaluating the ideas received from different sources to find a creative solution. 

Third Stage: After evaluating each ideas received, selecting the best ideas to start a business venture. 

Fourth Stage: Setting up a project and nurturing success.

It is a thought or collection of thoughts that generate in the mind of an individual.

It covers all such areas such as taxation, employment, law monopoly, legislation and environmental protection laws.

Selling of flowers during festive season. Here, festival is a social factor whereas demand for flowers is a economic factor.

Creativity is important to entrepreneurs because it is the first stage in the process of innovation, providing the stimulus for opportunity discovery and new venture creation.

Problem Identification: A problem is a roadblock in a situation, something that sets up a conflict and forces you to find a solution. Objectives of Problem Identification are: 

(i)It should clearly state the problem. 

(ii)Identify target group facing the problem. 

(iii) Identify the market acceptability of solution to the problem. Example of Problem Identification: Ready to eat foods for the younger career oriented generation.

Objectives of problem identification:

(i)State the problem

(ii)The target group who is facing the problem

(iii)Market acceptability of the solution for the problem.

(i) Product Identification: 

(a)To select a product or services which is in demand and an entrepreneur can sell easily.

 (b)To check with the product whether it is available in the market or not. 

(c)If it is, then he should identify the reason for introducing the same product or service in the market. 

(d) Take further step to further improvisation of the product. For example, entrepreneur selected pen drive but it is already available in the market but he improvised V the same by innovating a new pen drive especially for teachers which will have a built in anti-virus and which can be worn like a watch so it minimises the problem of losing the pen drive. 

(ii)Application and Use: 

(a)Ideas should be examined for their real life use and application. 

(b)If it already exists in the market then finding out its present use, improvisation of the product, modifying it for better use. 

(c)For example, the new pen drive especially for teachers which will have a built in antivirus and which can be worn like a watch. This example of pen drive and watch is an already existing product produced by many companies but according to new trend an entrepreneur has innovated a new type of pen drive especially for teachers which will have a inbuilt antivirus which shows improvisation and modifying a product for a better use.

 (iii) Level of Operation: 

(a)This is a crucial test for product/ service identification. 

(b)Depending on the nature of the enterprise, the production is undertaken, the enterprise can be cottage industry, small scale, medium scale or large scale industry. 

(c)Quantity of production is considered. 

(d)Requirement of labour, technical experts, skilled labour, etc. all are to be considered. 

(iv) Cost: 

(а)An entrepreneur first finds out the cost price of the product and then ultimately decides the sale price. 

(b)Every entrepreneur must answer the following questions before deciding the selling price of the product:

 •What is the per unit cost of the product at particular level of operation? 

•Whether this cost is comparable with that of other competitive products? For example, a large manufacturing unit would be expected to have a lower cost per unit of output than a smaller unit, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer. 

(v) Competition: 

(а)The extent, intensity and trends in competition are to be analysed. This has direct impact on production capacity and supply. 

(b)Any product or service will face market competition at some stage. 

(c) An entrepreneur should be assessed through a study of the trends in demand and supply. 

(vi) Technical Complexity: What type of technology is required to produce the product? Whether training and application of such technology will be locally available or will it have to be supported from other places? What would be the position of supply of plant and machinery for such a technology? These are important issues that have to be resolved. 

(vii) Annual turnover and profit margin: 

(a)An entrepreneur has to examine the basis of expected annual turnover. It refers the total sales of the year. 

(b)This will also indicate the market share or profit margin of the product or service. 

(c)Once the entrepreneur has assessed the opportunities on these basis he should go ahead and assess the market also.

The process is idea and opportunity assessment. 

(i)Product identification: An idea should lead the entrepreneur to a definite product/service which he can sell. So the first step is to obtain a concept of the product or service suggested by one idea. We should also see whether this product is already available in the market or not. If it is, then we should identify the reason for introducing the same product or service in the market. For example, innovating a new pen drive especially for teachers which will have a built in antivirus and which can be worn like a watch so it minimises the problem of losing the pen drive. 

(ii)Application and use: Ideas should be examined for their real life use and application. If it already exists in the market we will have to find out its present use, then we may think of modifying it for better use. In the above mentioned example, we can clearly see that even though there are lot of companies manufacturing pen drives, the latest will be in consonance with the upcoming trends.

(iii)Level of operation: This is a crucial test for product/service identification. Depending on the use of the product/ service the entrepreneur will produce it in a cottage industry or a small scale industry or a large scale industry. 

(iv)Cost: What is the per unit cost of the product at particular level of operation? Whether this cost is comparable with that of other competitive products? These are some of the questions that have to be answered. This will ultimately decide the sale price. 

(v)Competition: Any product or service will face market competition at some stage. So market competition should be assessed through a study of the trends in demand and supply. 

(vi)Technical complexity: What type of technology is required to produce the product? Whether training and application of such technology will be locally available or will it have to be supported from other places? What would be the position of supply of plant and machinery for such a technology? These are important issues that have to be resolved. 

(vii)Annual turnover and profit margin: Ideas should also have to be examined on the basis of expected annual turnover. This will also indicate the market share of the product or service. Once the entrepreneur has assessed the opportunities on these basis he should go ahead and assess the market also.

(i) Problem was over tightening of screwdriver and the solution came in the form of a self-adjusting screwdriver which prevented over tightening. 

(ii)Problem was when doctors found monitoring of dosage of medicine to be administered to patients on a regular basis through traditional methods using a syringe cumbersome and a solution was a pharmaceutical firm developed a new process of implanting the required medicine in the patient for constant discharge of regulated and required dosage in to the blood stream.

Environment analysis is the process of monitoring the economic and non-economic environment to determine the opportunities and threats to an organisation.

In rapidly changing environments, one rule of thumb applies: If you don’t adapt, you don’t endure. That’s the core idea behind environmental scanning. Definitions of the term abound, but in essence it refers to the means by which organizations gather information on changing conditions and incorporate those observations into a process where necessary changes are made. The right information, combined with the right adaptations, can determine an organization’s future viability. If an entrepreneur is not aware of what the environment surrounding his business he is sure to fail. E.g., HMT watches lost its market to Titan.

The word ‘scan’ – means to examine closely especially in search of something.

The process of creating, developing, and communicating ideas which are in an abstract, concrete, or visual form. It includes the process of constructing through the idea, innovating the concept, developing the process, and bringing the concept to reality.

The main purpose of environmental scanning is to know the rapid changes occurring in the environment by which organizations gather information on changing conditions and incorporate those observations into a process where necessary changes can be made.

The most important factors involved in the process are: 

(i)Ability to perceive and preserve basic ideas which could be used commercially, 

(ii)Ability to harness different sources of information, 

(iii)Vision and creativity.