MGMT20143: THINK BIG Idea Generation and Business Model Report

This report, titled "Idea Generation and Business Model Development," details the process of selecting and evaluating a business idea for smart toys and educational games. It begins with an executive summary and table of contents, followed by an in-depth idea evaluation framework that considers problem identification, target market, differentiation, industry competition, and financial feasibility. The report then explains the idea selection process using the business model canvas, highlighting key partners, activities, resources, and value propositions. It also addresses areas for improvement, such as demonstrating the problem the business solves, the benefits of the products, and sustainability issues. Finally, the report includes cash flow projections for two years, outlining best-case and worst-case scenarios. The report references various academic sources to support its analysis and recommendations.

Running head: THINK BIG 1
Idea Selection and Business Pitch
Name
Institution

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Executive Summary
This report considers an evaluation framework to compare the business idea proposed. It
describes the idea selected as well as providing reasons why the idea was selected. Also, the
report suggests areas of improvement and discusses cash flow projections for two years.

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Table of Contents
Executive Summary.........................................................................................................................2
Idea Evaluation................................................................................................................................2
Idea Selection...................................................................................................................................4
Improvements..................................................................................................................................5
Cash Flow Projections.....................................................................................................................6

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Idea Evaluation
It is common for institutions and individuals to spend months brainstorming for the best
idea that can be implement. It often takes much consideration into various aspects of the business
in order to evaluate whether an idea is practical. In order to realize this objective, research and
analysis is thoroughly conducted on the idea to ascertain its feasibility. In doing this, there are a
number of aspects of the idea that must be satisfied (Eling, Langerak & Griffin, 2015). These
aspects are as follows.
Problem identification
Problem identification is one of the best ways to determine whether an idea is feasible.
For instance, the goal of this business model is to identify and evaluate issues that need to be
solved to incorporate the innovation in the new idea proposed. Based on a study that was
conducted by IBM on Chief Executive Officers across the globe, majority of them responded
that creativity played a crucial role for future success of an institution implying ideas that are
considered creative have significant potential for growth in firms (IBM 2010 Global CEO Study:
Creativity Selected as Most Crucial Factor for Future Success, 2010).
Since creativity is a special factor in growth among firms, this business model seeks to
enhance creativity among children through the idea of designing and selling smart toys and
educational games for children. Therefore, this idea is said to be feasible as a result of satisfying
the first aspect of idea evaluation focusing on whether the idea aims to address an impending
problem in the industry.
Target market

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The target market is another aspect of the idea that need to be considered in qualifying
the business idea. In this regard, the target market refers to the potential consumers who are
likely to purchase the product. This implies that all factors pointing to an ideal customer should
be considered. Among the factors to be considered include age, gender, education level, income
and location (Perry-Smith, & Mannucci, 2017). From the information with respect to problem
identification. It is alluded that the idea intends to target children with smart toys. In essence, the
business will target children of a parents belonging to a specific income and location category in
order to satisfy the target market selected for the business. Another aspect with respect to the
target market is evaluating the size of the market in order to understand how one can be able to
satisfy the demands of the market.
Differentiation
It is significant that the business idea should be different from others in the market in
terms of service encounter derived from a particular service or product. In this regard, the firm
intends to sell smart toys and educational products that are meant to develop creativity. The
differentiation strategy that the business model has employed is the incorporation of smart
technology to ordinary toys that have existed in the market. In so doing, the firm will have
achieved differentiation which will influence the purchase patterns and preferences among the
target consumers.
Industry competition
Competition is a vital factor when it comes to evaluating the feasibility of an idea that
should be implemented. This is because completion will directly influence the business
positively or negatively depending on the competition in the market (Reiter-Palmon, Kennel, de

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Vreede & de Vreede, 2019). Whenever the competition is high, the feasibility of the idea is low
and vice versa. Therefore, business model such as this one should be keen in evaluating the
competition in the market. In this context, there is low competition in the industry motivated by
different factors such as few players focusing on educational toys and significantly few
incorporating technology with the toys to increase their effectiveness.
Financial feasibility
The cost of producing these smart toys is crucial for evaluating the business idea
(Lewellen, & Lewellen, 2016). Increased production cost will likely impact the feasibility of the
idea. Therefore, in order to have a reliable idea that considers al financial aspects, the business
idea is required to prove that the cost of production will be low and the profit margin should be
reasonable to market the products and attract a huge clientele (Grubenmann, 2018).
Idea Selection
The best idea was selected using the business model canvas. This is was realized because
the model offers the firm a conceptual strategy execution as well as strategies that are likely to be
used in the process. The major partners associated to the business idea often have some form of
influence to the business. In this case, the bookshops, toys shops, customers and developers need
to contribute in the idea which implies that the model considers consultations from various
stakeholders to make the idea to be outstanding. Main activities of the business idea contributed
to the selection of the business idea (Zhu, Ritter, Müller, & Dijksterhuis, 2017).
For instance, parents’ feedback contributes in the design and development process while
it’s marketing strategies relies of current and effective ways of specifically targeting a client
which makes the idea to be more favorable. The firm has major resources that will be required in

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ensuring that products are developed based on the needs of the business. Availability of
resources plays a critical role in supporting the idea selection because it reduces risk of operation
and guaranteeing productivity in developing the smart toys.
Another aspect that supports idea selection is the value proposition that is associated to
the smart toys and educational products. The children are expected to learn positive values from
using the smart toys which can be customized for both school and home settings (Amabile &
Pratt, 2016). The business also intends to use the proceeds generated from sales of the products
to support needy children in accessing the smart toys to increase equality in the education.
Other factors that necessitated to the idea selection is customer relationship management
where the business intends to build a strong relationship with their customers in order to
understand them better for purposes of developing products that have steady demand in the
market. The business model relies on website and application marketing which are effective
methods of reaching the consumer. The market segment selected for the business model indicates
that it would be easier to convince the parents on the value that these educational toys have on
their children, lastly, cost structure and revenue streams contributed to the idea selection
(Sääksjärvi & Hellén, 2018).
Improvements
The improvements that are likely to be made to the business idea in order to make it
important for the investor is demonstrating the gap the business model is solving, benefits of the
products and sustainability issues surrounding the products (Santos et al, 2018).
Problem

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Creativity is one of the ways that senior executive team use to address challenges within
an organization setting. In most cases, managers in executive position lack creativity and depend
on conventional practices of managing operations in the workplace (Osterwalder & Pigneur,
2010). As a result, the new product is aimed at cementing creativity practices though educational
toys. Therefore, enhancing creativity among children will offer them a solid foundation to
embrace creativity and use the skill in addressing common challenges within the organizations.
Benefits of the smart toys and educational products
There are many benefits that are likely to be generated from the idea of developing smart
toys for children (Watt, & Abrams, 2019). For instance, the experience of playing games will be
enhanced, children will be facilitated with knowledge that will assist creative and innovative
ways of solving issues. These educational toys will also contribute in developing fine motor
skills, cognitive and speech among other skills. In essence, these children will gain new insight
with respect to approaching issues.
Sustainability
For this business model to be favorable to investors it must consider sustainability issues.
For instance, the business model has to prove that it can be viable in long-run. Besides, raw
material used must comply with environmental initiatives that guarantee sustainability of
resources. In addition, the manufacturing of the products must rely on green energy in
compliance to standards set to curb negative effects of burnt fuel to the environment.
Cash Flow Projections
Cash flow Best
case
Worst case Best case Worst
case
Net Income Net Income 287,500 162,000

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Additional to Cash 20,000 50,000 Additional to Cash
Depreciation 5,000 15,000 Depreciation
Increase in Accounts
Payable
10,000 12,000 Increase in Accounts
Payable
20,000
Subtractions from
cash
3,000 8,000 Subtractions from
cash
3,000 20,000
Increase in accounts
receivable
20,000 15,000 Increase in accounts
receivable
25,000 15,000
Increase in inventory 30,000 5,000 Increase in inventory 60,000 30,000
Net cash from
operations
80,000 97,000 Net cash from
operations
395,000 227,000
Cash flow from
investing
150,000 30,000 Cash flow from
investing
Purchase of
equipment
35,000 15,000 Purchase of
equipment
Cash flow from
Financing
15,000 10,000 Cash flow from
Financing
Notes Payable 7,500 5,000 Notes Payable 9,500 10,000
Cash flow for year
ended December
31,2019
287,500 162,000 Cash flow for year
ended December
31,2020
404,000 337,000
The assumption made in the above cash flow is that during the first year the business will
incur several cost which will influence the best and worst case scenario. On the other hand, the
figures in the second year will be significantly lower as a result of the business not requiring
initial capital and investment cost for purchasing equipment’s. in this context, the business will
have more money coming in and going out to facilitate various activities to increase growth of
the company.

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References
Amabile, T. M., & Pratt, M. G. (2016). The dynamic componential model of creativity and
innovation in organizations: Making progress, making meaning. Research in
Organizational Behavior, 36, 157-183.
Eling, K., Langerak, F., & Griffin, A. (2015). The performance effects of combining rationality
and intuition in making early new product idea evaluation decisions. Creativity and
Innovation Management, 24(3), 464-477.
Grubenmann, T. (2018, April). Monetization Strategies for the Web of Data. In Companion of
the The Web Conference 2018 on The Web Conference 2018 (pp. 813-817). International
World Wide Web Conferences Steering Committee.
IBM 2010 Global CEO Study: Creativity Selected as Most Crucial Factor for Future Success.
(2010). Retrieved from https://www-03.ibm.com/press/us/en/pressrelease/31670.wss
Lewellen, J., & Lewellen, K. (2016). Investment and cash flow: New evidence. Journal of
Financial and Quantitative Analysis, 51(4), 1135-1164.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Perry-Smith, J. E., & Mannucci, P. V. (2017). From creativity to innovation: The social network
drivers of the four phases of the idea journey. Academy of Management Review, 42(1),
53-79.
Reiter-Palmon, R., Kennel, V., de Vreede, T., & de Vreede, G. J. (2019). The Role of Structure
and Instruction on Creative Idea Evaluation and Selection. In The Palgrave Handbook of
Social Creativity Research (pp. 209-224). Palgrave Macmillan, Cham.

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Sääksjärvi, M., & Hellén, K. (2018). Idea selection using innovators and early
adopters. European Journal of Innovation Management.
Santos, G., Afonseca, J., Lopes, N., Félix, M. J., & Murmura, F. (2018). Critical success factors
in the management of ideas as an essential component of innovation and business
excellence. International Journal of Quality and Service Sciences, 10(3), 214-232.
Watt, G., & Abrams, H. (2019). Lean entrepreneurship: Innovation in the modern
enterprise.New York: Apress.
Zhu, Y., Ritter, S. M., Müller, B. C., & Dijksterhuis, A. (2017). Creativity: Intuitive processing
outperforms deliberative processing in creative idea selection. Journal of Experimental
Social Psychology, 73, 180-188.

Running head: THINK BIG 12
Appendix
Key Partners
 Bookshops stores
 Local stores
 Toy shops
 Customers with toy
developers -those who
can good make characters
using animator creators.
Key Activities
 MVP process: iterating through
the smart toy ideas to achieve
"high value"
 Market segmentation and
designing educational toys or
role models characters for easy
marketing
 Designing market growth
internet toys through parents’
feedback
 Stimulating market growth
through kickstarter to raise
funds for the website.
 Marketing and sales:performed
through the website
Value Proposition
 The business management
focuses on providing
quality products to
children; children can
play creative educational
games and play with the
smart toys that teach
positive values.
 Toys can be customized
at home, enabling
children to play in
different ways.
 Parents can control the
characters that the child
play with by customizing
the toys to different
options.
 Proceeds from the
business will be used to
give back to the less
fortunate children.
Less fortunate children will be
given toys to play with so that
they can improve their levels
of creativity.
Customer Relationships
 The business will seek to
establish and maintain a
direct relationship with
the customers by offering
products tailored to their
needs.
 There will be a proper
feedback system to listen
to customers complaints
and address their issues.
 Creating a deep
connection to toys will
also develop a profound
connection with
customers who can give
positive feedback of the
business.
Customer Segments
 The target customers are children
below the age of 15.
 Targeting these children means
targeting their parents and
explaining to them the importance
of smart toys and educational toys.
 Teachers are also targeted
Key Resources
 Toy character development expert
 Website and app development
personnel
 Supply chain or toy store
 A manufacturing or production
store
 Design/3D printing machines.
Channels
 The business will rely on the
website and app created for players
 Local manufacturing and toy stores,
from where the business can reach
out to customers.