This document discusses the process of idea generation and screening for potential projects. It defines idea generation as systematically searching for new solutions and generating new ideas, especially in the early creative process. It then outlines several steps for idea generation and screening potential projects, including monitoring the environment, conducting a corporate appraisal, using tools like Porter's model and the experience curve to identify opportunities, scouting for project ideas, preliminary screening, using a project rating index, and sources of positive net present value like entry barriers.

1. What is idea generation?
Idea generation refers to the process of systematically searching for new approaches to solutions
as well as generating new, previously non-existent ideas. Idea generation refers primarily to the
early phase of the creative process. The term idea development, on the other hand, has a broader
meaning: it also includes the systematic enhancement of ideas into concepts.
Ideationisthe creative processof generating,developing,andcommunicatingnew ideas,where anidea
isunderstoodasa basicelementof thoughtthatcanbe eithervisual,concrete,orabstract.Ideation
comprisesall stagesof a thoughtcycle,frominnovation,todevelopment,toactualization.
IDEA GENERATION AND SCREENING OF PROJECT:
1 Generation of ideas :
Generation of ideas It is always seen that the ideas are based on existing field of technology to
offer various present product or services. but sometimes the specialized technology and
marketing expertise or some other competence feels that he can produce a product which carter
to a presently unmeet need or serve a market where demand exceeds supply or effectively
compete with similar product. then the idea supported by the associate and approved by financial
institutions bank assist the project .it is the SWOT analysis which is used to stimulate the project
idea.
Examples :
Examples Two successful companies which have been exceptionally in tapping the creativity of
employees are Bell telephone laboratory and 3m telephone Hindustan uniliver in India is one of
the company which follows the pattern

2. 2 Monitoring the environment:
Monitoring the environment Competitive abilities of a firm depend on its environment it is one
of instrument to access the ability of the firm. So a corporate appraisal is needed for monitoring
the environment for monitoring the environment business sector divided Into six parts
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Economic sector State of economics Overall rate of growth Growth rate of different sector
Linkage with world economy Balance of payment 2 Governmental Sector Industrial policy
Government programmes and projects Tax framework Import and export policy Financing
norms
3. Corporate appraisal:
corporate appraisal For identifying better investment opportunity appraisal of strength and
weakness is necessary. Broad areas of corporate appraisals are Marketing and distribution
Market image Product line Market share Customer loyalty cont
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Production and operation Condition and capacity of plant and machinery Availability of raw
material Degree of vertical integration Cost structure Research and development Research
capability of the firm Track record of new product Laboratories and testing facilities
4. Tools for identifying investment opportunity:
Tools for identifying investment opportunity There are various framework for identifying
various promising investment opportunity These are life model cycle approach and experience
curve Porters model; profit potential of industries
Porters model; profit potential of industries:
Porters model ; profit potential of industries Michel porters has argued that profit potential of
industry depends on the combined strength of the following five competitive forces Threats of
new entrants Rivalry among existing firm Pressure from substitute product Bargaining power of
buyer Bargaining Power of seller

3. life cycle approach:
life cycle approach There are mainly four stages of life of a product 1 pioneering stage ; in this
stage the product and the technology are introduced and lured by promising entrepreneurs as a
result competition arises and only new entrants are survives .
The experience curve:
The experience curve For long term survival of the firm optimum utilization of resources and
minimization of cost is necessary .The experience curve is a useful tool for planning such
investments. The experience curve shows how the cost per unit behaves with respect to the
accumulated volume of product. The accumulated production means the total number of unit
produced cumulatively from very beginning
5 scouting for project idea:
scouting for project idea It is hard to difficult to get a good project idea because it is illusive in
nature Analyze the performance of existing industry ; A study of existing industries in terms of
profitability ,capacity ,utilization can indicate Promising investment opportunity investment
.knowledge of capacity utilization provide potentiality for further investment. cont
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Examine the input and output of various industry Review import and export; Study plan outlays
and government guidelines Look at the financial decision of financial institutions and
developmental agencies Analyze economic and social trends Study of new technological
development Attained trade fairs
6 .Preliminary screening:
Preliminary screening When feedback phase is over a preliminary screening is required to
eliminate the ideas which are not promising in nature. Following aspects are taken care for
screening. Comparability with the promoter Consistency with government priorities Availability
of inputs Adequacy of market Reasonableness of cost Acceptance of risk factor
7 project rating index:
project rating index For screening the proposal project rating is known as one of the best method
and so many steps are involve in it. Identify factors relevant for project rating Assign weight to

4. the factor Use suitable rating scale or and rate various factors Multiply factor rating with factor
weight Add all to get proper rating
8 sources of positive net present value:
sources of positive net present value The imperfection in entry barriers cause positive NPVs
.there are six main entry barriers Economics of scale Cost advantages Marketing research
Technological change Government policy