A business concept encompasses every business activity undertaken by an enterprise in creating value for customers, suppliers and other stakeholders. Therefore, business concept extend its arch from manufacturing a product to marketing it successfully in order to amass revenue; in similar vein business concept drives every functional area in a business to co-ordinate activities so that goals and objectives are achieved in an optimal fashion. Creating a business concept is an easy task if you adopt a step-by-step approach explained below:
1. Concept Initiation: Firstly, prepare the groundwork by stipulating your purpose and objectives in setting up a concept. Review both internal and external environment and look for clues as to how you can make progress, fix a problem and enhance your value chain. Assume you wish to maximize revenue by introducing a new product. Just check out whether it is an original one, a substitute for an existing product, improvement over what you already have in line or adaptation of a competitor’s product or just a re-make of a common item
2. Concept Generation: Get contribution from your staff, colleagues as regards to the findings or fine-tuning of concepts. Teamwork is better; you can invite participants to put it in writing or just allow them to think out loud. A brainstorm is a better way of garnering new concepts or new twists to a concept that is already known. Yet there is a caveat: never interrupt, rush to criticise neither scurry to cut it down. Generation of ideas could take place in two forms: in-box solutions that have had previous history of successful implementations or out-of-box solutions that originate with parameters un-known or not tested before. More is merrier when it comes to concept generation, as you have a wide selection to choose from
3. Concept Evaluation: The maxim is that every subjective or objective matter can be evaluated by setting norms and specifications. Therefore, concept evaluation cannot be an exception. In evaluating concepts, you go in quick steps through screening, scoring and testing processes. As you begin to screen, most, if not all, concepts would fall on the way side. If there is no viable option you have to brainstorm once again or chose an external adviser. If you have concepts worthy of further analysis you have to apply a scoring system in consultation with your team members. One such scoring system that is widely used is Pugh Matrix. It is an evaluation tool, where you presume a base case with score of 5 and rank the new concepts introduced by your team on the scale 1-5-9. Any concept that is worse than the base case is ticked 1, concepts equal to base case is marked 5 and the ones that are better than base case are scored 9. Thereafter, concepts with the score of 9 are zeroed in for preliminary testing. Once again, using objective standards, a dry test must be carried out so that you cherry pick about two to three concepts
4. Concept Selection: Hard thinking, minute analysis along with “what – if “scenario casts are made so that the chosen concepts could be put through baptism of fire. At this moment, you have to make a trade-off between internal capability and external opportunity, objective standards and subjective demands, theory and practice so that you strike a via-media. The concept that has the best line of fit is generally selected for further development
5. Concept Development: A task force is named and nominated to develop the selected concept. The members of the task force would be briefed in all areas of development including technical, technological, human side, operations, marketing and last but not least financial considerations. On the up-stream, concept development takes into account objectives, purposes and specifications; on the downstream it must address the needs of the ultimate users who seek value for money
6. Concept Validation: After developing a concept in full stream it must be subjected to internal and external validation. Internally it must conform to corporate belief system, shared culture and the obvious necessity to conform to internal standards covering sustainable profit for the business. External validation is via industry standards, B2B ethics, customer perception of quality and durability and overall market acceptance. A product concept might have made waves on the drawing board. Nonetheless it could prove to be a laggard in the market. Recent initial public issue of the Facebook suffered this fate. Even though the market is willing to absorb there is no internal validation of sound financial proof available. Technology guys have a red book on separating chaff from the grain: proof of concept
7. Concept Institution: By this time the business concept is created; it is understood and ready for installation. Lovingly it is named may be after the boss who started the ball rolling; finally it is institutionalized. In this context, the definition of concept stated by American philosopher and psychologist John Dewey may not be out of place. Just check this: “A concept is meaning sufficiently individualized to be directly grasped and readily used, and thus fixed by a word”.
Muthu Ashraff
Business Adviser
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E-mail : cosmicgems@gmail.com
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