All ideas generated by brain-storming cannot be actually implemented due to various constraints. The company needs to cut down to one or two feasible new product ideas from the pool of all new product suggestions. Exactly which ideas are to be selected, are determined by considering the following:
- SWOT analysis
- Is there a genuine need for the new product/service?
- Is the need substantial enough to support a profitable business?
- Do competitors currently offer similar products/services? If “yes”, do the new ideas offer distinctive advantages and customer benefits that competitors don’t?
- Is the product/service feasible to produce?
- Is the product/service legal?
- Is it safe?
- If the product/service is a durable good, can it be easily serviced? (Who will service it?)
- Are the investment costs required to develop, produce, and market the product reasonably, within the company’s financial realities?
- Is the “pay-back period” fast enough to allow you to stay in business?
- Can the product be expanded into a line of similar or compatible items later, if the original product was successful?
- Can the product be protected with a patent or copyright?
- Does the product infringe upon anyone else’s patents or copyrights?
- Are all the needed raw materials and supplies readily available?
These are but some of the facts that need to be considered while short listing new product ideas. When the proposed ideas fail to answer the above questionnaire satisfactorily, those ideas have to be rejected or modified.
Out of 100 ideas or more, there may be only one or two real opportunities. Superior business ideas that have the potential to become opportunities have 4 anchors:
- They create or add significant value to a customer or end user.
- They do so by solving a significant problem, or meeting a significant want or need, for which someone is willing to pay a premium.
- They therefore have a robust market, profit margin, and moneymaking characteristics.
- They are a good fit with the founder(s) and management team at the time and in the marketplace with a risk/reward balance.
It is not feasible to actually test the performance of all the ideas in the market. These checkpoints actually cut down the number of options to the best ones, which can then be tested for feasibility through market research.