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Technological Innovation Management & Entrepreneurship Module-4a
Technological Innovation
Management & Entrepreneurship
B.E., V Semester, Electronics & Communication Engineering
[As per Choice Based Credit System (CBCS) scheme]
[Subject code: 18ES51]
MODULE - 4a
Family Business
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FAMILY BUSINESS
Introduction
A business that is owned or run by members of a single family is called family business
OR
A family business is a commercial organization in which decision-making is influenced by multiple
generations of a family, related by blood or marriage or adoption, who has both the ability to influence the
vision of the business and the willingness to use this ability to pursue distinctive goals.
OR
Family business is the oldest and most common model of economic organization. The vast majority of
businesses throughout the world from corner shops to multinational publicly listed organizations with
hundreds of thousands of employees can be considered family businesses.
Therefore we can define a family business in various ways. However, in general, a family-business is one that satisfies
any one of the following criteria:
 There is management or ownership control by direct descendants of the founders.
 A number of generations of the same family are involved in management or ownership,
 Two or more extended family members influence the business through the exercise of
relationship ties, management roles, and ownership rights, which the owner intends to pass
to a family heir.
 A high percentage of share capital is owned by a family member, either jointly or
individually and family members are employed in the highest decision--making posts.
 There is an expression of intent to maintain family involvement in the future.
Some of the world's largest family-run businesses are Walmart (United States), Samsung Group (Korea)
and Tata Group (India).
8 Successful Indian Family Businesses Running Over A Century
1) Tata group
Name of the founder: Jamsetji Tata
Headquarter: Mumbai
Year of establishment: 1868
2) TVS Groups
Name of the Founder: T V Sundaram Iyengar
Headquarter: Madurai
3) Aditya Birla Group
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Name of the founder: Seth Shiv Narayan Birla
Headquarter: Mumbai
Year of establishment:1857
4) Khoday Group:
Name of the Founder: Khoday Eshwara
Headquarter: Banglore
5) Kirloskar Group:
Name of the Founder: Laxmanrao Kirloskar
Headquarter: Pune
6) Murugappa :
Name of the Founder: A M Murugappa Chettiar
Headquarter: Chennai
7) Godrej :
Name of the Founders: Ardeshir Godrej and Pirojsha Burjorji Godrej
Headquarter: Mumbai
8) Shapoorji Pallonji
Name of the Founder: Pallonji Mistry
Headquarter: Mumbai
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ROLE AND IMPORTANCE OF THE FAMILY BUSINESS
Family-owned businesses are the backbone of the economy as they create wealth, provide jobs, are locally
rooted and connected to communities. They seem to be around for long period of time.Families are vital
and supportive environments for entrepreneurial behaviour.
Some of the world’s largest family-owned firms are
Wal-Mart Stores, Inc.
Ford Motor Company,
Samsung,
The Fait Group,
L'Oreal,
IKEA, the Tata Group,
Havells, and
McCain Foods.
It has been observed that family support and the presence of self-employed parents are irnportant influences in
venture initiation and business ownership.
Families rule the world of business. About a third of all Fortune 500 companies are family
businesses.
Family businesses account for over half of the United states GDP and about 78 percent of all new
job creation there.
In India, around 95 per cent of the registered firms are family businesses.
While over 90 per cent of the registered firms in Pakistan arc estimated to be family
businesses.
Family business groups like the Tata , Birla, and Codrej Groups have dominated the private sector
in India ever since the British regime. As a result, many affiliated firms have been established under
these groups, headed by a family member.
Family businesses from every trade imaginable have been found for centuries, from shoe makers and
confectioners to fanners. Some of the world's oldest firms are family owned,
The world's oldest documented continuing family business is Hoshi Ryokan, a Japanese hotel set
up in 717 AD, spanning 46 generations of family ownership. Some of the world's largest
businesses, such as Wal-Mart Stores, Inc., arc also family owned.
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Family businesses range in size from small to large businesses in terms of employees and turn over
and can be placed in two different categories. The first category comprises businesses having
only family members as its stakeholders, such as Birlas, Kirloskars, Wadias, etc.
The second category comprises businesses in which the family has a majority stake and controls
the company, such as Wal-Mart Stores, Nestle, Ferrari, Fiat, Ford, Hyundai, Nike, the Virgin
Group, the Reliance Group, Wipro, and Havells. Belonging to a single family culture and having
a strong set of values.
Family businesses have certain inherent strengths, such as the ability to withstand economic
shocks, make quick decisions, maintain good business relations, and ensure leaders with time-
proven leadership qualities. Often, long-term strategic thinking resulting in cautious business
decisions enables family businesses to become sustainable.
In an ever-changing business world with constant technological advancements, new business

approaches, new managerial practices, and emerging market trends, family businesses generally
remain flexible, adaptable, and innovative.
In India, family-owned businesses have played and will continue to play a central role in the
growth and development of the country. Indian business firms such as Havells India, the
Aditya Birla Corporation, and Tata Sons are making achievement abroad and expanding their
businesses globally.
Individual associations and relationships can complicate the management and negatively affect
the objectives of the family business. The issue of succession can cause immense strain within a
family business. It is not surprising that, on an average, only three out of ten family businesses
survive to the second generation and only one to the third generation. As more and more family
businesses are handed down from one generation to the next, more and more family legacies are
lost due to lack of planned transitions.
Most commercial enterprises are born as family-owned and family-managed businesses. Many
remain this way, while a smaller number need access to public equity capital and in the process
can no longer remain in the ownership of the family. Still others could remain family-owned but
professionally managed, either due to the family's lack of interest or practical necessity.
Unfortunately, there is no clear distinction in India between a business that is owned and
managed by the family and a business that isn't so. For the sake of simplicity, let us assume that
a firm where members of one or more particular families exert significant influence over the
firm's strategy and its destiny is family-owned and firms where family members—unless
professionally qualified do not hold executive positions are professionally managed.
Family businesses have certain advantages over other businesses. Some of these are listed below:
 The family culture is a source of great pride for family and non-family
employees alike.
 There is a long-term orientation in business objectives as the
continuity of the firm is of great concern to the family.
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 A family firm functions in a less bureaucratic manner and is not

impersonal in dealing employees and customers.
 A family firm shows greater willingness to weather bad times by
ploughing back profits.
 It is structured to impart training to the members of the family from a
young age.
CONTRIBUTIONS OF FAMILY BUSINESSES IN INDIA
India has a rich and glorious history of family-owned enterprises.Some influential families,
such as the Tatas, Birlas, and Godrej, have run their businesses for over a hundred years and
influenced the economic and political situation of the country.
Over time, family businesses have done more than simply pay taxes and employ people.
During the last one hundred years or so, Indian family busi-
nesses have made significant contributions in several areas.
Their first contribution was to the Indian freedom movement. In the early years, firms were
created specifically to pursue goals such as im-
port substitution and economic freedom from the colonists.
The Godrej enterprise was started by Ardeshir Godrej in 1897 with a vision to promote India's
economic freedom.
Their second contribution was to keep the spirit of enterprise alive even through the 40 years
of quasi-socialism, when the government imposed heavy taxation and repeatedly tried to
smoothen the "concentration" of economic power.
Their third contribution of Indian family businesses has been their philanthropic (generous)
efforts, or giving back to the community.
To the average Indian, the names of many large Indian business groups are synonymous
(identical) with philanthropic efforts in education, environment, health, culture, and heritage
conservation. Numerous small and medium family enterprises have also actively supported
foundations engaged in charitable work.
STAGES OF DEVELOPMENT OF A FAMILY BUSINESS
While strategic, operational, and financial transformation is a given for any corporation that hopes to
survive the trauma of competing in the post-liberalization marketplace, India's business houses
have started rewriting the role of the family in business. The typical family business goes through
four stages in its development,
1. Entrepreneurial: In this phase, someone in the family starts a business after having identified a
business opportunity. At this stage, the business is customer-centric. The entrepreneurial vision
develops and a mission is set for the organization.
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2. Functionally specialized: This is the growth phase for the family business. In this phase, the
organization is divided into various functions and priority is given to growth and increasing the scale
of operation. The organization becomes more flexible during this phase and the use of control
measures is limited.
3. Process-driven: In the process-driven phase, a family business is system-oriented and

processes are set. The greatest attention is given to core competencies and to competing with
other businesses in achieving customer satisfaction.
4. Market-driven: During this phase, the family business matures and is completely driven
by market forces. The business enters various markets and crosses geographical boundaries
by strategic alliances.
CHARACTERISTICS OF A FAMILY-OWNED BUSINESS IN INDIA
Characteristics of family - owned businesses in India are:
 Importance of family relationship: Family relationship is the most

important factor in determining the position a person holds in the business.
 Composition of the board of directors: Family members, including those
who are neither contributing nor involved in the business, are on the board of
directors.
 Loyalty: Members of the extended family and relatives have a very strong
sense of loyalty to the family and this, by default, translates into loyalty to the
business.
 Dedication of family members: As the family's fortunes are usually tied to
that of the family business, the owning family shows great dedication and
single-mindedness in ensuring the continued survival and success of the
business.
 Male-dominated: Sons and male members are more likely to hold higher
positions and succeed as the CEO of the company. The role of women is
often that of a facilitator and a mother figure to family members and
employees.
 Dominance of certain trading communities: Some communities have been
very successful in business and are synonymous (identical) with family-
owned businesses in India.
VARIOUS TYPES OF FAMILY BUSINESSES
Family businesses can be of the following types:
 Family-owned business: It is a for-profit enterprise owned by members of a single

extended family.
 A family-owned and managed business: It is a for-profit enterprise
owned by members of a single extended family. The business also has the
active participation of at least one family member in the top management of
the company. This enables family members to set policies and objectives and
implement them.
 A family-owned and led business: It is a for-profit enterprise owned by
members of a single extended family. The business has the active participation
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of at least one Family member in the top management as well as on the board of
directors of the company. This enables family members to set the company's
direction, culture, and strategies.
………………………………………
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Technological Innovation Management & Entrepreneurship Module-4b
Technological Innovation
Management & Entrepreneurship
B.E., V Semester, Electronics & Communication Engineering
[As per Choice Based Credit System (CBCS) scheme]
[Subject code: 18ES51]
MODULE – 4b
Idea Generation & Feasibility Analysis
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Idea Generation
The feasibility study begins with the formulation of business idea, which you can obtain
through market research, family, friends, suggestion boxes or brainstorming. At this phase, you
can downsize the number of ideas and retain the most realistic one.
Depending on your business culture, you can discard the extra ones or preserve them for future
references when you need to. You have to conceptualize and visualize your business’s final
product, a process that entails analyzing the product’s target market, size, quality, color and
weight.
Establishing yourself as a successful entrepreneur depends upon choosing a good idea. That idea
must not only be good for the market, but good for the project and good for the entrepreneurs. It
should also be manageable by you without much dependence on others. Importantly, the idea
should give satisfaction results to you.
Ideas are the key to innovation. Without them, there isn't much to execute and because execution
is the key to learning, new ideas are necessary for making any kind of improvement. It is obvious
that ideas alone won't make innovation happen, as you need to be able to build a
systematic process for managing those ideas. The point of ideation isn't just about generating a
lot of them but about paying attention to the quality of those as well.
Idea generation is described as the process of creating, developing and communicating abstract,
concrete or visual ideas.
The front end part of the idea management funnel focuses on coming up with possible solutions
to be perceived or actual problems and opportunities ,the fig below shows the idea management
idea management funnel
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As mentioned, ideas are the first step towards making improvement. Making progress as
individual human beings depends on new ideas. From the perspective of an individual, new
ideas can help you to move forward if you feel stuck with a task or are unable to solve a certain
problem.
Maybe you need new ideas so that you can fully explore a new opportunity
The ability to create and develop new ideas allows you to:
• Stay relevant
• Make positive change happen
“Creative thinking inspires ideas. Ideas inspire change” – Barbara Januszkiewicz
Regardless of your goals or the types of ideas you're looking for, the purpose of new ideas is
to improve the way you operate.
So, although innovation isn’t about ideas alone, they are an important part of the equation as
there wouldn’t be one without the other.
Brainstorming not only takes more time and leads to less ideas, but also worse ideas .
There are several other reasons why brainstorming may not be the best way to come up with
ideas. Scheduling, organizing and documenting the session in a usable format will all take up
even more time.
Favorite tips, tools and techniques that can be used to generate new ideas more systematically.
✓ Idea Challenge
✓ SCAMPER Technique
✓ Opposite Thinking
✓ Brainstorm Cards
✓ Analogy Thinking
Idea Challenge
Is a focused form of innovation where you raise a problem or opportunity with the hopes of
coming up with creative solutions.
The point of idea challenge is to participate in ideation and generate ideas around a pre-defined
theme for a limited period of time.
It allows you to form a specific question and direct that question at a specific audience to receive
new ideas and unique insights.
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The SCAMPER technique
Is a method used for problem-solving and creative thinking. It’s a holistic way of applying
critical thinking to modify ideas, concepts or processes that already exist.
The purpose of the SCAMPER is to make adjustments to some parts of the existing idea or
process to reach the best solution.
Opposite/reverse thinking
Is a technique that can help you question long-held assumptions related to your business. It’s a
useful tool to consider if you feel your team is stuck with the conventional mindset and coming
up with those “out-of-the-box ideas” seems to be difficult.
Often, finding the best solutions aren’t found through a linear thought process. Although our brains are
wired that way, opposite thinking can help us question the rule
With this type of thinking, you consider the exact opposite of what’s normal. You can even think
backwards to find unconventional solutions.
Brainstorm Cards
Brainstorm cards are a useful tool created by the Board of Innovation for coming up with
dozens of new
ideas related to whatever challenge or problem you are currently working with.
Brainstorm cards help you consider external factors such as: societal trends, new technologies,
and regulation in the context of your business.
Brainstorm cards are a useful tool created by the Board of Innovation for coming up with
dozens of new ideas related to whatever challenge or problem you are currently working with.
Brainstorm cards help you consider external factors such as: societal trends, new technologies,
and regulation in the context of your business.
Analogy thinking
Is a technique for using information from one source to solve a problem in another context.
Often one solution to a problem or opportunity can be used to solve another problem.
Analogy thinking can, for example, be used for analyzing a successful business, identifying what
makes it great, and then applying those same principles for your business. This is an effortless
method for coming up with new ideas that are pre-validated.
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The purpose of generating new ideas is about improving what already exists as well as coming
up with something new.
Coming up with completely new ideas can help you approach your problem or opportunity from
a new perspective. It enables you to expand the range of ideas beyond your current way of
thinking which eventually leads to more ideas.
Creativity and innovation
Creativity is thinking new things, the ability to develop new ideas and to discover new ways of
looking at problems and opportunities.
Innovation is doing new things, the ability to apply creative solutions to those problems and
opportunities in order to enhance people’s lives or to enrich society.
Creativity and innovation are two related but separate notions, and each is required for
workplace success
Innovation is the process of turning a new concept into commercial success or widespread
use. Invention is the creation of a new idea or concept. Creativity is the act of turning new
and imaginative ideas into reality.
Creativity
Creativity is the act of turning new and imaginative ideas into reality. Creativity is characterized
by the ability to perceive the world in new ways, to find hidden patterns, to make connections
between seemingly unrelated phenomena, and to generate solutions. Creativity involves two
processes: thinking, then producing.
If you have ideas but don’t act on them, you are imaginative but not creative.
“Creativity is a combinatorial force: it’s our ability to tap into our ‘inner’ pool of resources –
knowledge, insight, information, inspiration and all the fragments occupy our minds – that we’ve
accumulated over the years just by being present and alive and awake to the world and to
combine them in extraordinary new ways.” — Maria Popova, Brainpickings
“Creativity is the process of bringing something new into being. Creativity requires passion and
commitment. It brings to our awareness what was previously hidden and points to new life. The
experience is one of heightened consciousness: delight.” – Rollo May, The Courage to Create
This possible in business, I believe so, but you have to be willing to take risks and progress
through discomfort to get to the finish line.
“A product is creative when it is (a) novel and (b) appropriate. A novel product is original not
predictable. The bigger the concept and the more the product stimulate further work and ideas,
the more the product is creative.”
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Innovation
Is the implementation of a new or significantly improved product, service or process that
creates value for business, government or society.
Some people say creativity has nothing to do with innovation— that innovation is a discipline,
implying that creativity is not. Well, I disagree. Creativity is also a discipline and a crucial part
of the innovation equation. There is no innovation without creativity. The key metric in both
creativity and innovation is value creation.
Innovation is important because it’s the only way that you can differentiate your products and
services from those of your competitors. For customers and clients to choose your business, your
offer needs to be distinctive and valuable, and the only way to achieve this is through innovation.
The main difference between creativity and innovation is the focus. Creativity is about
unleashing the potential of the mind to conceive new ideas. ... Innovation is about introducing
change into relatively stable systems. It's also concerned with the work required to make an idea
viable.
"Creativity" and "innovation" are two words that are constantly thrown around in brainstorming
sessions, corporate meetings and company mission statements.
Business opportunity
In general sense, the term opportunity implies a good chance or a favourable situation to do
something offered by circumstances. In the same vein, business opportunity means a good or
favourable change available to run a specific business in a given environment at a given point of
time.
Business opportunity may be defined as a set of favorable circumstances in which an entrepre-

neur can exploit a new business idea that has the potential to generate profits. Business
opportunities have the following four fundamental features:
➢ They create or add significant value to the customer.

➢ They solve a significant problem by removing pain points or meeting a
significant want or need fOr which someone is willing to pay a premium.
➢ They have a robust market, margin, and money making characteristics that will
allow the entrepreneur to estimate and communicate sustainable value to
potential stakeholders.
➢ They are a good fit with the founder(s) and management teams at the time and
marketplace along with an attractive risk—reward balance.
Good Business opportunity
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An idea is a thought or a concept that comes into existence in the mind as product of mental
activity. A business idea is an idea that can be used for commercial purposes. There can be
many sources of business ideas, including the following':
➢ A resolved problem faced by an actual or potential entrepreneur.

➢ An unmet customer need discovered by an actual or potential entrepreneurat
a place of employment.
➢ Changes in the business environment.
Not all business ideas are found to be good business opportunities. This simple five-step
framework helps screen ideas and find out whether a business idea truly represents a good
business opportunity. An opportunity is characterized by the following:
• Urgency of the market need:

The business idea should envision a product or service that satisfies a market need or a
need of the customer. The market need has to be carefully assessed by consulting
industry experts as well as potential customer. It is important to focus on the "need" of
the customer rather than on the attributes of the offering and to evaluate the urgency of
that need in order to gain the assurance that there are customers ready to purchase that
product/ service once it hits the market. The greater the market need, the greater the
opportunity for profitable business.
• Adequate market size:

A business usually targets a particular market segment after assessing their
demographic, geographical, and lifestyle factors. In order to make the business viable, a
large number of potential customers should exist. There is a need to find out the
potential market size for the product or service.
• Sound business model:

In simple terms, a business model is a broad range of descriptions of various aspects of
business, such as purpose, strategies, infrastructure, organizational structures, marketing
programmes, and operational processes and policies. In other words, a business model
clearly gives the outline or the rationale of how the potential entrepreneur intends to
satisfy a customer need and create value. A business model that presents a plan to
generate profits within three to five years is considered to be relatively good.
• Potential brand value:

The product/service being offered must bc differentiated from those being
offered by competitors to maintain a competitive advantage in the market. It is
necessary to assess the potential brand value of the product or service
envisioned in order to ensure a fair chance of survival against competition by
existing as well as future products.
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• An able management team:

The ability and passion of team members to use a business opportunity is
important to success. The team should have contacts among suppliers,
competitors, and customers. The number and quality of contacts up and down the
value chain is an important determinant of eventual business success. On the
whole, the business should
be big enough to make it worthwhile and the team should be looking forward to being
involved with it for long time.
Generation Business Ideas
A business opportunity is a set of favorable circumstances that creates a need for a new
product or service. A business idea becomes a good business opportunity when it has
the following four essential qualities':
✓ Attractiveness.
✓ Timeliness.
✓ Durability.
✓ The quality of being anchored in a product or service that creates or adds value
for its buyer or end user
Having business ideas is central to the task of identifying business opportunities.
Ways to generate business ideas are:
❖ Brainstorming
Brainstorming is a technique used to quickly generate a large number of ideas
and solutions to problems. The brainstorming session is conducted to generate
ideas that might represent business opportunities. Brainstorming works well
individually as well as with a varied group of people. A group brainstorming
session requires a facilitator, white board, and space to accommodate the
participating people. Brainstorming works well with 8-12 people and should be
performed in a relaxed environment. Participants are encouraged to share every
idea that enters their mind with the assurance that there is no right or wrong
answer. The brainstorming session usually starts with the facilitator broadly
stating the problem and setting the time limit (such as, say, 30 minutes) for the
session. The facilitator clearly sets down the rules. discouraging criticism of
any kind and encouraging a freewheeling approach, the voicing of as many
ideas as possible, and a collective and constructive effort towards the
improvement of ideas. Once the session starts, participants can informally
present their ideas for possible solutions. The facilitator writes each idea
down for everyone to see. Once time is up, the best ideas are selected, based
on a few criteria decided upon in advance (such as, say. cost-
effectectiveness). The selection must be made on the basis of a consensus
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from everyone in the group. Next, it score (say, zero to ten points) is given to
each idea depending on how well it meets the criteria. The idea with the
highest score may be used to solve the problem. However, it is advisable for
the facilitator to keep a record of the best ideas in case the chosen best idea
does not work. The facilitator should make the session fun for everybody,
with no one dominating or inhibiting the discussion
with no one dominating or inhibiting the discussion.
❖ Survey Method
The survey method is used to collect information by direct observation of a
phenomenon or systematic gathering of data from a set of people. The
survey method involves gathering information from a representative sample
population, that is, a fraction of the whole population under study that
presents an accurate proportional representation of that population. Surveys
generate new products, services. and business ideas because they ask specific
questions and get specific answers.
❖ Reverse Brainstorming
This is a method that is similar to brain storming, with the exception that
criticism is allowed. It is, therefore, also called "negative brainstorming." In
this technique, the focus is on the negative aspects of every idea that has been
generated through brainstorming. Also called the "sifting" process, this process
most often involves the identification of everything that is wrong with an idea,
followed by a discussion of ways to overcome these problems.
❖ The Gordon Method-

This is a creative technique to develop new ideas. This method is similar to
brainstorming. Collective discussion addresses every aspect of the planned
product in an uninhibited solution-oriented way.
Creation of Opportunities
Entrepreneurial opportunities varies because of certain external changes, such as
➢ Technological change,
➢ Regulatory and political change,
➢ Social and demographic change, and
➢ Economic change.
Technological Changes:
Technological changes lead to entrepreneurial opportunities because they make it possible for
people to do things in new and more productive ways. Technological changes can take the
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form of five forms of business opportunity—new products and services, new methods of
production, new markets, new ways of organizing, and new raw material.
Political and Regulatory Changes:
Political and regulatory changes lead to business opportunity by paving the way for new,
more productive use of resources or a redistribution of wealth from one person to another.
Statutory and regulatory requirements create opportunities for entrepreneurs to Start firms that
help other firms and the community to comply with the requirements.
Social and Demographic Changes :
Social and demographic changes, such as changes in family and work Patterns, the
ageing of the population, increasing diversity at the workplace, increasing focus on
health and fitness, the increase in the number of cell phone and Internet users, and new
forms of entertainment, lead to the creation of business opportunities because they alter
people's preferences or demand for products and services, and consequently make it
possible to generate new ideas to meet new demands.
Economic Changes:
Economic forces affect business opportunities by determining who has money to spend.An
increase in the number of women in the workforce over the last few decades and their related
increase in disposable income is largely responsible for the number of boutique clothing stores
targeting professional women that have opened in the past few years.
Identification of Business Opportunity
Several studies have shown that previous experience in an industry helps entrepreneurs to
recognize business opportunities. In addition, the extent and depth of an individual's social
network also affects the identification of opportunity. People who build a substantial network of
social and professional contacts will be exposed to more opportunities and ideas than people
with sparse networks. Studies have demonstrated that the identification of a business
opportunity may
also be a cognitive process or an innate skill. Some people believe that entrepreneurs have an
intuition or a -sixth sense, that allows them to see opportunities that others miss. Creativity is
the process of generating a novel or useful idea. Opportunity recognition may be, at least in
part, a creative process as well.
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It is important for entrepreneurs to grab a business opportunity before the market becomes satu-
rated with competitors and the window of opportunity is closed to them. There are three general
approaches entrepreneurs use to identify an opportunity. They are:
I. observing trends:
Entrepreneurs can identify business opportunities by carefidli observing trends. The most
important trends to follow are economic, social, technological, and political trends.
2. Solving a problem:
Another approach to identifying business opportunities is to recognize and solve a pressing

problem that customers are facing today. From an entrepreneur's point of view, every problem
is a disguised opportunity.
3. Finding gaps in the marketplace:

A third approach to identifying business opportunities is to find a gap between what is
needed by the customer and what is actually provided to the customer. Finding such gaps
can help entrepreneurs develop new products and improve existing ones.
Business Opportunities in India
Being the seventh-largest country in the world by area and the second largest by
population. India has a growing market and is a land of opportunities. The
opportunities for importing, exporting, trading, investing, and franchising are
immense. A potential entrepreneur needs to take into account the economy, the
consumer, and business trends. One should also understand that what may be a
good business opportunity for one entrepreneur may not be a good opportunity for another. It is
essential for entrepreneurs to pick opportunities that they are passionate about.
There are several factors that create favourable business opportunities in India:
➢ India is a well-established democratic country with free and fair judicial system.
➢ The country also has a well-established banking system consisting of public and private
banks and other financial institutions.
➢ The country has a huge middle-class with enhanced purchasing power. Coupled with high
growth economy, this creates the potential for huge growth in manufacturing, services, and
the retail sector.
➢ India has vibrant trade links with the South Asian Association for Regional Cooperation
(SAARC) nations such as Sri Lanka, Pakistan, Nepal, Bhutan, Bangladesh, and the Mal-
dives.
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➢ India has a competitive advantage in the global market with the availability of a huge pool
of cheaper labour and knowledgeable workers to enhance industrial productivity.
➢ Economic reforms and policy changes have created an investment- friendly environment.
➢ The capital markets in India are one of the fastest-growing markets in the world, attracting
huge foreign investments. A lot of international companies have started outsourcing and
setting up international operations in the country.
➢ The country is self-sufficient in agriculture and rich in natural resources.
➢ India is it part of the BRICS group of nations comprising Brazil, Russia, China, and South
Africa.
➢ India has developed vibrant trade links with these nations.
Market entry strategy in India

A market entry strategy is the planned method of delivering goods or services to a new target
market
India is the second-most populous market in the world, but also among the most complex to
enter as a company without any previous experience in the region.
5tips for better Indian market entry strategy
1. Find the right partner
India is the world’s seventh largest economy in terms of GDP, and has a population of 1.3
billion people. It is a complex market for the best Indian companies, and even more so for
companies from abroad. Businesses with a pre-determined mindset and less exposure to
international markets might find the commerce culture in India too intimidating.
Identifying the right partner goes a long way in successfully navigating the complexities of the
local business environment for a new entrant into the Indian market. A local partner can provide
much-needed assistance in understanding the Indian market. This partner can give you valuable
market insights on competition, regulation and other important issues. They can also introduce
you to the network with the reach to target prospective clients without much investment on the
groun
2. Localize your products to meet consumer needs and preferences
India is a vast and diverse country encompassing many different identities, languages, cultures
and religions. It is important to avoid making generalizations or assumptions, as local practices
and consumer behavior may vary substantially from region to region.
Since India has such a pluralistic, multilingual society, more often than not, a one solution fits
all approach doesn’t work. Even a global bigwig like McDonald’s had to localize its product
CBIT-KOLAR Page 12
offerings based on the fact that half of Indians are vegetarian. They also have to leave their most
popular item, beef burgers, off the shelf given the religious sensibilities of the Indian population.
3. Remember the high level of price sensitivity
It is extremely important for a new entrant into the Indian market to get its price strategy right,
particularly if it’s targeted towards the low and middle income populations. Even with a growing
economy and a growing middle class, there’s no denying the fact that India is still a low middle
income economy, with a per capita income of around $2,000 and a huge population still living
below the poverty line. Since the government cannot afford to provide for education and
healthcare coverage, the majority of the population has to pay for these necessities from their
own income. With little disposable income left after covering basic amenities, there’s not much
money left in the hands of a significant portion of the population. This makes the market price
sensitive as many people need to spend judiciously.
4. Enter the Indian market for long-term growth, not to make a quick buck
India is certainly not a place for businesses to make quick gains – you need to be invested for
the long haul. Although it’s a huge market with a population of 1.3 billion people, including 400
million middle class consumers, it has its share of challenges when it comes to market entry.
Because India is such a huge and attractive opportunity, there is no dearth of competition. More
often than not, you have companies looking for market share and compromising on potential
short-term profitability in order to establish themselves more firmly there. Given the complexity
of the market, it takes time for the companies to understand the environment and develop the
right strategy.
5. Prepare to navigate a much different legal and regulatory landscape
The Indian judicial system follows “common law”, and the constitution has provided for a single
integrated system of courts to administer both union and state laws. Due attention should be paid,
including seeking professional advice, before entering into a formal agreement. Court judgments
are often delayed because of the huge backlog of cases, so any agreement should provide the
scope for alternate dispute resolution mechanisms.
Feasibility Analysis or Project Analysis
Feasibility (possibility) analysis is used to determine the viability of an idea, such as ensuring
a project is legally and technically feasible as well as economically justifiable. It tells us whether
a project is worth the investment
It ultimately tests the viability of an idea, a project, or a new business.
CBIT-KOLAR Page 13
A feasibility study may become the basis for the business plan, which outlines the action steps
necessary to take a proposal from ideation to realization. A feasibility study allows a business to
address where and how it will operate, its competition, possible hurdles, and the funding needed
to begin. The business plan then provides a framework that sets out a map for following through
and executing on the entrepreneurial vision.
A well-designed study should offer a historical background of the business or project, such as a
description of the product or service, accounting statements, details of operations and
management, marketing research and policies, financial data, legal requirements, and tax
obligations. Generally, such studies lead technical development and project implementation
This is also known as project feasibility study. Once a project proposal is identified and if the
project seems worthwhile, detailed analysis of the marketing, technical, economical, and
ecological aspects are under taken.
Based on the information developed in the analysis, the stream of costs and benefits associated
with the project can be defined. The important aspect of project analysis is market analysis,
technical analysis, financial analysis, economical analysis, and ecological analysis. A
schematic diagram of the project feasibility study is shown in figure.
Project Feasibility study Schematic Diagram
Types of Feasibility Analysis:

This feasibility can be ascertained on following parameters:
1) Marketing feasibility
2) Financial Feasibility
3) Political feasibility
4) Economic Feasibility
5) Social Feasibility
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6) Legal feasibility
7) Technical Feasibility
8) Managerial feasibility
9) Location and other feasibility
1)Marketing feasibility
This mainly deals with determining the potential market and the market share for the proposed
project. Market analysis is concerned with forecasting the demand for the product/service under
consideration. It requires finding a variety of information on consumption trends, cost structures,
structures of the competition, the elasticity of demand, consumer behaviour, and exports and
imports.
In simple words it determines whether a product or service can sustain in a specific market or not
as well as whether it is capable of generating financial surplus for the firm or not.
Most market feasibility studies include:-
• Description of the industry

• Current Market Analysis
• Competition or presence of competing products.
• Anticipated future market potential.
• Potential buyers and sources of revenues.
• Sales projections.
Market feasibility tests can be carried out not only on products but on ideas, campaigns,
processes and entire businesses too.
2)Financial Feasibility
This mainly deals with determining the risk and return for the proposed project. Financial analy-
sis seeks to ascertain whether the proposed project will be financially viable. It requires finding
a variety of inhumation on the cost of the project and the means of finance; the cost of capital,
the projected liability; cash flows of the project, the break-even point, the level of risk, the
investment outlay and worthiness, and projected financial position.
In order to ascertain financial viability, financial projections are made and on the basis of such
projections which need to be objective and realistic, the followings broad parameters are
evaluated for determining the feasibility of the project-
a. Return on Investment
b. Payback period of the outlay
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c. Internal rate of return

d. Profitability index.
In case of a new project, financial viability can be judged on the following parameters:
a. Total estimated cost of the project
b. Financing of the project in terms of its capital structure, debt to equity ratio and promoter’s
share of total cost
c. Existing investment by the promoter in any other business
d. Projected cash flow and profitability
The financial viability of a project should provide the following information:
a. Full details of the assets to be financed and how liquid those assets are
b. Rate of conversion to cash-liquidity
c. Project’s funding potential and repayment terms
d. Sensitivity in the repayments capability to the following factors
e. Mild slowing of sales
f. Acute reduction/slowing of sales
g. Small increase in cost
h. Large increase in cost
i. Adverse economic conditions.
If, on the above mentioned parameters, the project is found suitable, then only further feasibility
tests are carried out.
3)Political feasibility
Political feasibility is a measure of how well a solution to a policy problem, will be accepted by a
set of decision makers and the general public. For a policy to be enacted and implemented, it
must be politically acceptable, or feasible.
Political feasibility analysis is used to predict the probable outcome of a proposed solution to a
policy problem through examining the performer, events and environment involved in all stages
of the policy-
making process. It is a frequently used component of a policy analysis and can serve as an
evaluative criterion in choosing between policy alternatives.
Feasible policies must be politically acceptable or at least not unacceptable. Political
unacceptability is a combination of two conditions too much opposition or too little support. One
common mistake is widespread in practice that feasibility becomes a dominant criterion of
preferable alternative. Feasibility is “the state or degree of being easily or conveniently done
Political feasibility is a measure of how well a solution to a policy problem, will be accepted by a
set of decision makers and the general public. For a policy to be enacted and implemented, it
must be politically acceptable, or feasible.
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Alternatively, a politically feasible alternative is one that has the greatest probability of
"receiving sufficient political push and support to be implemented" given any specific
constraints.
When policy analysis generates policy alternatives, the political risks and costs associated with
each can be important criteria for deciding between alternatives. A good policy alternative
requires a certain amount of political feasibility, or implementation of the policy will be
impossible. It is important to keep in mind, however, that feasibility alone does not make a
policy "good." Examining all criteria is necessary for the implementation of socially responsible
policy.
Politics are difficult to predict but it has been said that "no decision is ever made in complex
systems without political feasibility having played some role.
4) Economic Feasibility
This is also called social-cost benefit analysis and is mainly concerned with judging a project
from the social point of view. The focus is on the social costs and benefits of the proposed
project. It deals with determining benefits and costs in terms of shadow prices and other social
impacts. Economic analysis requires finding a variety of information on economic costs and
benefits measured in terms of the efficiency (shadow) prices, employment to be generated by
the project, impact of the project on the distribution of income in society; and the impact of the
project on the level of savings and investment in society.
The purpose of an economic feasibility study (EFS) is to demonstrate the net benefit of a
proposed project for accepting or disbursing electronic funds/benefits, taking into consideration
the benefits and costs to the agency, other state agencies, and the general public as a whole.
In sync with the phrase “Parity between haves and have not’s”, a social cost-benefit analysis
(SCBA) of the project should be carried out. This ensures that the organization is contributing to
the GDP of the economy and is also discharging its social obligations, by providing employment
opportunities and bringing in improvement in quality of life.
The purpose of business in a capitalist society is to turn a profit, or to earn positive income.
While some ideas seem excellent when they are first presented, they are not always economically
feasible. That is, that they are not always profitable or even possible within a company’s budget.
Since companies often determine their budget’s several months in advance, it is necessary to
know how much of the budget needs to be set aside for future projects.
Economic feasibility helps companies determine what that amount is before a project is
ultimately approved. This allows companies to carefully manage their money to insure the most
profitable projects are undertaken. Economic feasibility also helps companies determine whether
or not revisions to a project that at first seems unfeasible will make it feasible.
CBIT-KOLAR Page 17
5) Social Feasibility:
Social feasibility is a detailed study on how one interacts with others within a system or an
organization. Social impact analysis is an exercise aimed at identifying and analyzing such
impacts in order to understand the scale and reach of the project’s social impacts.
At a minimum, all projects demand a review of project data at the Appraisal Phase, so as to
identify if material social impacts exist. Social impact analysis greatly reduces the overall risks
of the project, as it helps to reduce resistance, strengthens general support, and allows for a more
comprehensive understanding of the costs and benefits of the project.
However, social impact analysis can be expensive and time consuming, so the full analysis
process cannot be justified for all projects. At a minimum, all projects demand a review of
project data at the Appraisal Phase, so as to identify if material social impacts exist. If they do, a
full social impact analysis should be conducted.
6)Legal Feasibility:
It should first be determined whether the proposed project conflicts with legal requirements, and
if the proposed venture is acceptable in accordance to the laws of the land. The project team has
to make a thorough analysis of the legal issues surrounding the project, across several
dimensions.
A detailed legal due diligence should be done to ensure that all foreseeable legal requirements,
which have not or will not be dealt with, in other appraisal exercises, are met for the
development of the project.
The main objectives of the legal feasibility analysis are as follows:
a. To ensure that the project is legally doable;
b. To facilitate risk management, indicating the risks and obstacles that need to be addressed
within the technical analyses, the financial model and/or the Value for Money analysis; and
c. To avoid, to the extent possible, major problems in the project’s development and
implementation, specifying the requirements that need to be considered at subsequent stages of
the PPP process, [public private partnership
7) Technical Feasibility
This principally deals with determining the technical viability for successful commissioning of
the proposed project and for ascertaining whether sensible choices have been made with respect
to location, size, process, etc. Technical analysis requires finding a variety of information on the
CBIT-KOLAR Page 18
availability of raw material and various other inputs, the type of technology to be adopted,
choosing a suitable layout for the site, building and plant, and choosing the appropriate plant,
machinery, and process.
This assessment is based on an outline design of system requirements, to determine whether the
company has the technical expertise to handle completion of the project. When writing a
feasibility report, the following should be taken to consideration.
The technical feasibility assessment is focused on gaining an understanding of the present
technical resources of the organization and their applicability to the expected needs of the
proposed system. It is an evaluation of the hardware and software and how it meets the need of
the proposed system.
An in depth and critical study of following parameters is done:
a. Plant location
b. Layout
c. Plant & machinery and equipment
d. Manufacturing process
e. Infrastructure
f. Technology
g. Efficient waste disposal.
The technical feasibility assessment is focused on gaining an understanding of the present
technical resources of the organization and their applicability to the expected needs of the
proposed system. It is an evaluation of the hardware and software and how it meets the need of
the proposed system.
8) Managerial feasibility
Managerial feasibility analysis is a form of project analysis that look at every aspect of a
proposal to determine its likelihood of success before commencing. These types of studies take
an objective look at the strengths and weaknesses of the proposed project to see how viable the
idea is in terms of generating profit and meeting objectives.
Managerial Feasibility analysis objectively and rationally uncover the strengths and weaknesses
of an existing business or proposed venture, opportunities and threats which are presented by the
environment, the resources required to carry through, and ultimately the prospects for success. In
its simplest terms, the two criteria to judge feasibility are cost required and value to be attained.
Managerial feasibility study is an analysis of the viability of an idea. The Managerial feasibility
study focuses on helping answer the essential question of “should we proceed with the proposed
project idea?”
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9) Location and other feasibility
Location feasibility
There is a saying that the three most important considerations in business are location, location,
location. If you’re starting a new business that operates primarily offline, location is critical.
Your business location analysis should take into account demographics, psychographics, census
and other data, location analysis is to maximize chances of success in business.
The location of a retail outlet is the most influencing factor for the success of the business.
Therefore selecting a location for a retail store or an outlet is a challenging process. The purpose
of this study is to define a method and develop a system to analyze the feasibility of a selected
location for a retail store.
Consumer surveys were conducted in selected areas to get information about consumers'
shopping patterns and selections. From the web service, identify transport modes, locations of
competing stores and shopping areas.
The retail industry is a fast growing and a highly revenue generating industry. The location of a
retail outlet is the most influencing factor for the success of the business. Therefore selecting a
location for a retail store or an outlet is a challenging process. The purpose of this study is to
define a method and develop a system to analyze the feasibility of a selected location for a retail
store.
Many hospitality and restaurant businesses fail due to inappropriate location or market entries.
Location feasibility and market studies are an essential part of the building or growing a
business.
Other Feasibilities-
Schedule Feasibility:
A project will fail if it takes too long to be completed before it is useful. Typically this means
estimating how long the system will take to develop, and if it can be completed in a given time
period using some methods like payback period. Schedule feasibility is a measure of how
reasonable the project timetable is.
Some projects are initiated with specific deadlines. It is necessary to determine whether the
deadlines are mandatory or desirable. To do proper scheduling, the versatile techniques like
PERT & CPM are adopted.
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Resource Feasibility:
This involves questions such as how much time is available to build the new system, when it can
be built, whether it interferes with normal business operations, type and amount of resources
required, dependencies, and developmental procedures with company revenue prospects.
There are resources necessary to complete any project. All the important resources like human
resource, artificial resources, financial resource etc. are taken care of by indulging in complete
research on feasibility of the resources needed to complete the project.
Operational Feasibility:
Operational feasibility is the measure of how well a proposed system solves the problems, and
takes advantage of the opportunities identified during scope definition and how it satisfies the
requirements identified in the requirements analysis phase of system development.
The operational feasibility assessment focuses on the degree to which the proposed development
projects fits in with the existing business environment and objectives with regard to development
schedule, delivery date, corporate culture and existing business processes.
To ensure success, desired operational outcomes must be imparted during design and
development. These include such design-dependent parameters as reliability, maintainability,
supportability, usability, producibility, disposability, sustainability, affordability and others.
These parameters are required to be considered at the early stages of design if desired operational
behaviours are to be realised.
Commercial Feasibility:
Commercial Feasibility is ascertained by finding out the following:
a. Current and Potential competition
b. Profit margin
c. Size of the market.
d. Degree of demand for the product
e. Future growth of market
Environmental Feasibility:
The environmental feasibility study considers both human and environmental health factors. The
EF is a comparative process that looks at all potential solutions, and then evaluates them against
specific criteria to ultimately find the best choice. It is a fact that external environment exerts
considerable influence on the organizations. In fact the climatic conditions in a particular
area/region have a significant impact on the existence of an enterprise. Therefore, it is necessary
to ascertain the environment viability as well.
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The parameters considered are:

a. Overall protection of public and environmental health
b. Effective reduction of hazardous waste toxicity, mobility and volume.
c. Long-term and short-term effectiveness of environmental policies of the company
d. Potential consequences of the remedial measures taken for protecting environment
Ecological Feasibility
This mainly deals with determining the quantum of damage likely to be caused by the
proposed project to the environment, and the cost of restoration measures required to be
undertaken to ensure that the damage to the environment is within acceptable limits.
………………………
CBIT-KOLAR Page 22

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Technological Innovation Management & Entrepreneurship Module-4a

[Subject code: 18ES51]

Name of the founder: Jamsetji Tata

Year of establishment: 1868

Name of the Founder: T V Sundaram Iyengar

Year of establishment: 1911

3) Aditya Birla Group

Name of the founder: Seth Shiv Narayan Birla

Name of the Founder: Khoday Eshwara

Year of establishment: 1906

Name of the Founder: Laxmanrao Kirloskar

Year of establishment: 1911

Name of the Founder: A M Murugappa Chettiar

Year of establishment: 1900

Name of the Founders: Ardeshir Godrej and Pirojsha Burjorji Godrej

Year of establishment: 1897

Name of the Founder: Pallonji Mistry

Year of establishment: 1865

ROLE AND IMPORTANCE OF THE FAMILY BUSINESS

Some of the world’s largest family-owned firms are

Wal-Mart Stores, Inc.

Ford Motor Company,

The Fait Group,

IKEA, the Tata Group,

In an ever-changing business world with constant technological advancements, new business

 A family firm functions in a less bureaucratic manner and is not

CONTRIBUTIONS OF FAMILY BUSINESSES IN INDIA

STAGES OF DEVELOPMENT OF A FAMILY BUSINESS

3. Process-driven: In the process-driven phase, a family business is system-oriented and

CHARACTERISTICS OF A FAMILY-OWNED BUSINESS IN INDIA

Characteristics of family - owned businesses in India are:

 Importance of family relationship: Family relationship is the most

VARIOUS TYPES OF FAMILY BUSINESSES

Family businesses can be of the following types:

 Family-owned business: It is a for-profit enterprise owned by members of a single

Management & Entrepreneurship

B.E., V Semester, Electronics & Communication Engineering

[As per Choice Based Credit System (CBCS) scheme]

[Subject code: 18ES51]

Idea Generation & Feasibility Analysis

idea management funnel

“Creative thinking inspires ideas. Ideas inspire change” – Barbara Januszkiewicz

The SCAMPER technique

Creativity and innovation

Business opportunity may be defined as a set of favorable circumstances in which an entrepre-

➢ They create or add significant value to the customer.

➢ A resolved problem faced by an actual or potential entrepreneur.

• Urgency of the market need:

• Adequate market size:

• Sound business model:

• Potential brand value:

• An able management team:

Ways to generate business ideas are:

❖ The Gordon Method-

Political and Regulatory Changes:

Social and Demographic Changes :

Identification of Business Opportunity

Another approach to identifying business opportunities is to recognize and solve a pressing

3. Finding gaps in the marketplace: