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CREATIVITY, INNOVATION
AND NEW VENTURE
CREATION
[Type the document subtitle]
8/13/2019
Student name

CREATIVITY, INNOVATION AND NEW VENTURE CREATION
1
Contents
1.0 Business introduction/background.............................................................................................3
2.0 Market need/opportunity...........................................................................................................4
Customer wants, needs and preferences......................................................................................4
Competition.................................................................................................................................4
Market growth and profitability potential....................................................................................4
3.0 Idea generation...........................................................................................................................5
Idea 1.......................................................................................................................................5
Idea 2.......................................................................................................................................5
4.0 Idea evaluation and selection.....................................................................................................6
Evaluation of creative idea..........................................................................................................6
Idea 1.......................................................................................................................................6
Idea 2.......................................................................................................................................6
Recommended idea......................................................................................................................7
5.0 Market feasibility.......................................................................................................................7
Type of innovation.......................................................................................................................7
Innovation life cycle....................................................................................................................9
Analysis of selected idea.............................................................................................................9
Target market attractiveness and profit potential....................................................................9
Point-of-difference and consumer value addition..................................................................10
Likely consumer adoption.....................................................................................................10
6.0 Organisational feasibility.........................................................................................................11
Swot analysis.............................................................................................................................11
7.0 Financial feasibility.................................................................................................................11

CREATIVITY, INNOVATION AND NEW VENTURE CREATION
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Financial outputs........................................................................................................................11
Projected financial data for Financial assumptions..............................................................11
Detailed P & L...........................................................................................................................13
Summary of P & L.....................................................................................................................18
Cash flow statement...................................................................................................................19
NPV...........................................................................................................................................22
Financial sensitivity analysis.....................................................................................................24
Three venture scenarios.............................................................................................................24
Most likely scenario...................................................................................................................26
8.0 Growth and sustainability potential.........................................................................................27
Venture’s scalability potential...................................................................................................27
Growth strategies.......................................................................................................................27
Funding strategies......................................................................................................................28
Sources of competitive advantage.............................................................................................28
Product...................................................................................................................................28
Resources...............................................................................................................................29
Customer service...................................................................................................................29
9.0 Conclusions/Implications........................................................................................................30
References......................................................................................................................................31

CREATIVITY, INNOVATION AND NEW VENTURE CREATION
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1.0 Business introduction/background
Initiating a business requires large amount of planning and checking for the feasibility before
entering into the market, this will include idea generation, market feasibility analysis, financial
analysis, growth potential for a company and key sources for competitive advantage. Beauty
prime cosmetics is a start-up idea in new Zealand, dealing in customized organic cosmetics
products. The key idea of the business is through one of the major problem identification that is
issue faced by girls regarding the damage to the skin from the makeup products include large
amount of chemicals in it (HPS, 2018). For providing a unique solution to the problem, the
company comes up with products that are natural and created with use of organic ingredients,
and will be made and grouped as per the type of skin of every individual. The cosmetics
industry has identified to have large competition in the market. New Zealand based cosmetics
products are large in number but the major threat in the industry is global brands like Estee
lauder, Mac, and L’Oreal (consultancy.uk, 2018).
The purpose of the report is the assess the market opportunity in new Zealand for the beauty
prime cosmetics brand and create and select the appropriate ideas for the business and look out
for the organizational, market, and financial feasibility for the business idea generated (Bartleet,
2010).

CREATIVITY, INNOVATION AND NEW VENTURE CREATION
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2.0 Market need/opportunity
The market identified to be target for the organic cosmetics products would be new Zealand
market, the reason being the follow of western culture that includes use of makeup and skin care
products regularly to the office, or for some special occasions.
Customer wants, needs and preferences
The customers for the product are women of New Zealand. Other than this the identified target
customer would base on customer lifestyle, which include office going or busy lifestyle women
that must be using cosmetic products to look more presentable in office. Other than this the
customers would also include beauty regime parlours or centre in order to include skincare using
these products as part of service by beauty parlours. Considering the income group, high income
group people would be the suitable customer for the brand due to premium pricing range of the
products.
The customer needs identified are need for best quality makeup range, that would provide
nourishment to the skin and do not harm the skin naturally after regular use. The need states the
cosmetic product range, where some people have oily skin, some have dry skin, some are
suffering from acne, and some have normal skin, but the products available in the market are
same for every skin type, despite of different problem areas. Customer prefers to use cosmetics
product which are as per their skin type and will suits their problem areas in skin (HPS, 2018).
Competition
The direct competition of beauty prime cosmetics would be “The natural co.” that is dealing in
natural or organic beauty products. Other than this some of the direct competition companies that
tae the natural skincare companies from New Zealand include Oh natural, natural nation, Tigs &
Boo, Ethique, and Bee Fresh (ecowarriorprincess, 2018). Other than this, other competition for
the brand would be L’Oreal, and Estee Lauder due to global presence and brand recognition, as
the customer trust these brands when it comes to cosmetic products (consultancy.uk, 2018).
Indirect competition for Beauty Prime cosmetics would be the natural products that could be
used by the customers through application of naturopathy as this may decrease the need of the
offered products by the company.

CREATIVITY, INNOVATION AND NEW VENTURE CREATION
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Market growth and profitability potential
The statistics reflect that the growth in premium beauty market was 1.2% growth in volume, and
as per the statistics the market gained popularity of natural, organic and DIY beauty products,
which reflect growth opportunity of the company (premiumbeautynews, 2018). According to the
statistics, the past trends of cosmetics industry in new Zealand states that in 2015, the exports of
totals lay under ten million dollars. The major exporting nation for New Zealand’s cosmetic
industry is china, Hong Kong, United States and Australia (Kelsey, 2015). This reflect that the
profit potential for the company which could be higher.
3.0 Idea generation
Idea 1
Product innovation idea
One of the ideas after analysing the need of the customer would be the natural products that will
keep their skin originally good, instead of using makeup every day. This would include products
that will take time but will cure the skin in some time. The idea could be effective as the increase
in naturopathy has been identified, which led to such products like using lemon as a source of
vitamin c in the serums. The ingredients would be described along with their benefits in general,
so that in case any customer is allergic to that ingredient they may avoid.
Service innovation idea
The service idea would include providing online services to the customers that is reaching out to
the customer through social media and online stores.
Concept innovation idea
The pricing strategy for this product development idea would be competitive pricing strategy
instead of premium pricing (Choi, 2015).

CREATIVITY, INNOVATION AND NEW VENTURE CREATION
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Idea 2
Product innovation idea
Another alternative idea would be producing organic makeup products that will not include
chemicals. For instance, using alternative option for herbicides, genetically modified organism
and synthetic fertilizers, in the form of some natural products so that to reduce the harmful effect
of these makeup products. Paraben and sulphates are found most harmful ingredient in cosmetic
product range that will be avoided.
Service innovation idea
Moreover, the service will include customization that is providing a combination of products
according to individual’s traits of skin and hair and suitability. The online service would be
provided to the customers that will include filling up of form by the customers, where they can
answer to the questions like skin type, problem areas, and past skin surgery. After the form will
be filled, the relevant and most suitable products will be suggested to the customer.
Concept/ process innovation
Moreover, the combos like full skin care combo including face wash, face serum, face scrub,
facemask, and face cream will be offered. Other than this personal assistance would be part of
the creative service where the customer can chat to the company representative through chat or
call (as per preferred by the customer) (Finne, 2017).
4.0 Idea evaluation and selection
Evaluation of creative idea
Idea 1
From 1st idea it can be said that it is the integration of product, service, and concept innovation.
This includes the beauty products to cure the damage from chemical cosmetic products. This
product innovation would be integrated with the service offered to the customer. The idea has
some pros and cons, which reflect the value creation of the product and service for the
customers. It can be said that through this idea the key advantages would be solution to the

CREATIVITY, INNOVATION AND NEW VENTURE CREATION
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problem identification that is damage to the skin, that can be recover through the natural
products, as it may be an alternative for makeup and permanently reduce the use of makeup
when an individual is going out. The will be helpful for the customers in improving their actual
health and beauty. Other than this the price that would be worth to the customer would also
reflect value creation for the customers. Thus these reflect the pros for this idea.
However, from evaluating this idea, the key cons include the competition in the cosmetics
industry. This included that the customer is habitual of using makeup products in their everyday
schedule, which reflect that inducing customers to use natural products, which could lack the
effectiveness of the makeup products like long lasting and smudge free. Thus, it could act as
competitive disadvantage for the company (consultancy.uk, 2018) (Gabriel, 2016).
Idea 2
The second idea presented in previous section that is of customized organic products in beauty
range. The key factor to evaluate this idea that is value creation for the customer includes various
opportunities and threats for the product and services offered. First key advantage that is
providing solution to the problem identified and another reason over first idea is that the
customer can enjoy makeup product without damaging the skin reflect the opportunity for value
creation.
Considering service innovation idea, the customers because of customisation service will also
feel important and since their skin type and problem area would be identified before offering the
product, the product they receive will provide perfect blend with the skin which will eventually
increase the customer satisfaction. One of the cons that is identified from this idea is the
investment in this idea would be used because of research into products and ingredients that will
not harmful to the skin and providing personalisation and assistance to the customer would
increase the investment in human resource as well (Gong & Yi, 2018).
Other than the pros to the product innovation, service innovation from this idea included adding
value through customer service that is offering personal assistance to the customers, in case of
any complaint or issue, the team would be available which act as the value creation opportunity
for the company. Other than this, the idea reflects the unique product availability based on
unique skin of every individual, which will reflect the competitive advantage for the company.