A B U S I N E S S P L A N N I N G G U I D E TO D E V E LO P I N G A S O C I A L E N T E R P R I S E : A S S E S S M E N T
How can you generate ideas?
Replication
It is a common misconception that business ideas are realised in a ‘eureka moment’ or are pondered over for many years. In fact, many businesses grow out of an idea for doing something that is already being done, but doing it in a new or more creative way, e.g. extending the provision of a product or a service to cover a group or market that was not previously well catered for. This is usually called ‘seeing a gap in the market’.
If you think that your organisation might still have some reservations about starting a social enterprise then it might be worth considering replication. This approach will allow you to take advantage of the experience of others by replicating an existing social enterprise or business. You can build upon the knowledge and successes of these organisations, and replicate their business model, albeit adapting it to suit local market conditions.
You may already have a business idea and some plans about what you want to do. There are numerous ways of getting into business. We’ve looked at a variety of different approaches to idea generation so that you can decide which one might be best suited to your organisation or will fit best with your idea.
A Truly Innovative Product A truly innovative product (or business model) has the potential to change the market, and is usually grounded in the development of new technologies or a scientific discovery. Completely new products or services are in fact very rare, so you should be very careful in identifying with this scenario. Usually, the absence of competitors would suggest an absence of a market. The key difference in developing a truly innovative product is that environmental factors have caused some change to occur in the market or created an entirely new market. A particularly good example of this is the internet, which led to the development of a number of new e-business models not previously deliverable. Undoubtedly you would like to offer a service or product with a difference. This is good because it will allow you to identify and exploit a niche within an existing market. However, the likelihood that you will develop an entirely new product is very small.
Advantages of true innovation
Disadvantages of true innovation
There is potential to influence the design and standards associated with the ensuing development of that sector.
A new market is a fast moving one and it’s likely that a number of competitors will emerge in the years that follow. The competing product designs may mean that yours becomes obsolete as one particular version becomes the ‘norm’, (e.g. betamax versus VHS).
When a new gap opens in the market, the first product on the scene has the potential to identify the provider as the natural choice.
Case Study Hotel U Pana Cogito Hotel U Pana Cogito, Krakow, Poland was modelled on Six Mary’s Place, in Edinburgh. The hotel is the first social firm in Poland. It is run by a voluntary association which formally ran occupational training units. Like Six Mary’s Place, it offers training and employment to people recovering from
mental health problems. The replication process includes a study visit, mentoring at the pre and post launch stage, assistance with scoping the local market, developing the marketing strategy, assistance with recruitment, staff training and shadowing and help with systems development. Six Mary’s Place Guesthouse – www.sixmarysplace.co.uk Hotel U Pana Cogito – www.pcogito.pl/eng
Advantages of replication
Disadvantages of replication
Replication uses proven business models.
The unique selling point of the business you are replicating might not apply locally.
You can learn from others’ experience and mistakes and take advantage of their expertise.
There will be some costs associated with buying in the expertise needed to replicate a business.
Replication is characterised by a lower risk of failure because the model used has been informed by good practice.
There is a danger that a stronger competitor might usurp your business by copying your idea.
40
41