Question

The idea and opportunity assessment process involves a number of steps. Explain the next two steps after 'Product identification' that an entrepreneur should consider in this process.

Hint:

To remember the sequence of testing an idea, think of this logical flow: $$\text{Identify the Item } (\text{Product}) \to \text{Explain its Value } (\text{Application}) \to \text{Choose the Size } (\text{Scale})$$ Evaluating real-world application must always happen before choosing your production scale.

Answer 1

Step 1: Identifying the Sequence of Idea Assessment:
When an entrepreneur evaluates a potential business idea to see if it can become a viable commercial opportunity, the concept must pass through a series of analytical filters. The standard progression is:
Product/Service Identification \to {Application and Use \to {Scale of Operation \to Cost and Profitability
The two steps immediately following "Product/Service Identification" are: (1) Application and Use, and (2) Scale of Operation.

Step 2: Explaining Step 1 -- Application and Use:
Once a product or service concept is identified, the entrepreneur must evaluate its actual utility and real-life applications.

• The entrepreneur must ask: *What customer problems does this product solve? Is it already available in the market?*
• If a similar product already exists, the entrepreneur must identify the specific reason for introducing their version, detailing how modifications or new features will deliver superior value.

Step 3: Explaining Step 2 -- Scale of Operation:
In this step, the entrepreneur determines the proposed size and capacity of the business venture.

• The entrepreneur must decide whether the business will launch on a small-scale, medium-scale, or large-scale basis.
• This choice is directly dictated by the size of the target market, projected demand, and the volume of raw materials, human labor, and capital resources available to the founder.