Discuss the steps involved in the investigation of ideas.
Answers
Answer:
(i) Product Identification: (a)To select a product or services which is in demand and an entrepreneur can sell easily. ...
(ii)Application and Use: (a)Ideas should be examined for their real life use and application. ...
(iii) Level of Operation: ...
(iv) Cost: ...
(v) Competition: ...
(vii) Annual turnover and profit margi
Answer:
(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.Read more on Sarthaks.com - https://www.sarthaks.com/112423/discuss-the-steps-involved-in-the-investigation-of-ideas