This is “Identifying Business Opportunities”, section 10.3 from the book An Introduction to Business (v. 1.0).
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An idea turns into a business opportunity when it has commercial potential—when you can make money by selling the product. But needless to say, not all ideas generate business opportunities. Consider these products that made the list of the “Top 25 Biggest Product Flops of All Time”:WalletPop, “Top 25 Biggest Product Flops of All Time,” http://www.walletpop.com/specials/top-25-biggest-product-flops-of-all-time (accessed November 16, 2008).
There might be many creative ways for Bic to extend its product lines, aside from the disposable underwear idea. Can you think of a product idea that might be more successful for Bic?
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Remember: being in business is not about you—it’s about the customer. Successful businesspeople don’t ask themselves “What do I want to sell?” but rather “What does the customer want to buy?” Customers buy products to fill unmet needs and because they expect to derive some value or utility from them. People don’t buy Alka-Seltzer because they like the taste or even because the price is right: they buy it because it makes their indigestion go away. They don’t shop at Amazon.com because the Web site is entertaining: they shop there because they want their purchases delivered quickly. The realization that this kind of service would meet customer needs made Amazon.com a genuine business opportunity.
Products provide customers with four types of utility or benefit:
How can you decide whether an idea provides utility and has the potential to become a business opportunity? You should start by asking yourself the questions in Figure 10.5 "When Is an Idea a Business Opportunity?": if you can’t come up with good answers to these questions, you probably don’t have a highly promising product. On the other hand, if you conclude that you have a potential product for which people would pay money, you’re ready to take the next step: analyze the market to see whether you should go forward with the development of the product.
Figure 10.5 When Is an Idea a Business Opportunity?
Provide two examples of each of the four types of utility: time, place, ownership, and form. Don’t use the examples given in the book.