AISSMS IOIT TE(E&TC)

Index

6.1 Introduction

6.2 Development Process and organizations

6.3 Product planning

6.4 Identifying customer needs

6.5 Product Significations

6.6 concept generation

6.7 Concept Selection

Unit 6 : Product Development & Entrepreneurship

6.8 Concept Testing

6.9 Design for Manufacturing

6.10 Prototyping

6.11 Robust Design

6.12 Entrepreneurship Concept

6.13 knowledge, and skills requirement

6.14 characteristic of successful entrepreneurs

6.15 entrepreneurship process

6.16 factors impacting emergence of entrepreneurship

6.17 Intellectual property rights

6.18 patents

6.19 trademarks

6.20 copyrights

6.21 trade secrets

6.22 licensing

6.23 franchising

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

6.1 Introduction:

A product is something sold by an enterprise to its customers. Product development is the set
of activities beginning with the perception of a market opportunity and ending in the
production, sale, and delivery of a product. Although much of the material in this book is
useful in the development of any product, we explicitly focus on products that are engineered,
discrete, and physical. Exhibit 1-1 displays several examples of products from this category.
Because we focus on engineered products, the book applies better to the development of
power tools and computer peripherals than to magazines or sweaters. Our focus on discrete
goods makes the book less applicable to the development of products such as gasoline, nylon,
and paper. Because of the focus on physical products, we do not emphasize the specific
issues involved in developing services or software. Even with these restrictions, the methods
presented apply well to a broad range of products, including, for example, consumer
electronics, sports equipment, scientific instruments, machine tools, and medical devices.

Characteristics of Successful Product Development

From the perspective of the investors in a for-profit enterprise, successful product
development results in products that can be produced and sold profitably, yet profitability is
often difficult to assess quickly and directly. Five more specific dimensions, all of which
ultimately relate to profit, are commonly used to assess the performance of a product
development effort:
Product quality: How good is the product resulting from the development effort? Does it
satisfy customer needs? Is it robust and reliable? Product quality is ultimately reflected in
market share and the price that customers are willing to pay.
Product cost: What is the manufacturing cost of the product? This cost includes spending on
capital equipment and tooling as well as the incremental cost of producing each unit of the
product. Product cost determines how much profit accrues to the firm for a particular sales
volume and a particular sales price.
Development time: How quickly did the team complete the product development effort?
Development time determines how responsive the firm can be to competitive forces and to
technological developments, as well as how quickly the firm receives the economic returns
from the team’s efforts.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Development cost: How much did the firm have to spend to develop the product?
Development cost is usually a significant fraction of the investment required to achieve the
profits.
Development capability: Are the team and the firm better able to develop future products
as a result of their experience with a product development project? Development capability is
an asset the firm can use to develop products more effectively and economically in the future.

6.2 Development Process and organizations

A process is a sequence of steps that transforms a set of inputs into a set of outputs. Most
people are familiar with the idea of physical processes, such as those used to bake a cake or
to assemble an automobile. A product development process is the sequence of steps or
activities that an enterprise employs to conceive, design, and commercialize a product. Many
of these steps and activities are intellectual and organizational rather than physical. Some
organizations define and follow a precise and detailed development process, while others
may not even be able to describe their process. Furthermore, every organization employs a
process at least slightly different from that of every other organization. In fact, the same
enterprise may follow different processes for each of several different types of development
projects.
A well-defined development process is useful for the following reasons:
Quality assurance: A development process specifies the phases a development project will
pass through and the checkpoints along the way. When these phases and checkpoints are
chosen wisely, following the development process is one way of assuring the quality of the
resulting product.
Coordination: A clearly articulated development process acts as a master plan that defines
the roles of each of the players on the development team. This plan informs the members of
the team when their contributions will be needed and with whom they will need to exchange
information and materials.
Planning: A development process includes milestones corresponding to the completion of
each phase. The timing of these milestones anchors the schedule of the overall development
project.
Management: A development process is a benchmark for assessing the performance of an
ongoing development effort. By comparing the actual events to the established process, a
manager can identify possible problem areas.
Improvement: The careful documentation and ongoing review of an organization’s
development process and its results may help to identify opportunities for improvement.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

The generic product development process consists of six phases, as illustrated bellow

1. Planning: The planning activity is often referred to as “phase zero” because it precedes the
project approval and launch of the actual product development process. This phase begins
with opportunity identification guided by corporate strategy and includes assessment of
technology developments and market objectives. The output of the planning phase is the
project mission statement, which specifies the target market for the product, business goals,
key assumptions, and constraints.
2. Concept development: In the concept development phase, the needs of the target market
are identified, alternative product concepts are generated and evaluated, and one or more
concepts are selected for further development and testing. A concept is a description of the
form, function, and features of a product and is usually accompanied by a set of
specifications, an analysis of competitive products, and an economic justification of the
project.
3. System-level design: The system-level design phase includes the definition of the product
architecture, decomposition of the product into subsystems and components, preliminary
design of key components, and allocation of detail design responsibility to both internal and
external resources. Initial plans for the production system and final assembly are usually
defined during this phase as well. The output of this phase usually includes a geometric
layout of the product, a functional specification of each of the product’s subsystems, and a
preliminary process flow diagram for the final assembly process.
4. Detail design: The detail design phase includes the complete specification of the
geometry, materials, and tolerances of all of the unique parts in the product and the
identification of all of the standard parts to be purchased from suppliers. A process plan is
established and tooling is designed for each part to be fabricated within the production

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

system. The output of this phase is the control documentation for the product—the drawings
or computer files describing the geometry of each part and its production tooling, the
specifications of the purchased parts, and the process plans for the fabrication and assembly
of the product. Three critical issues that are best considered throughout the product
development process, but are finalized in the detail design phase, are materials selection,
production cost, and robust performance.
5. Testing and refinement: The testing and refinement phase involves the construction and
evaluation of multiple preproduction versions of the product. Early (alpha) prototypes are
usually built with production-intent parts—parts with the same geometry and material
properties as intended for the production version of the product but not necessarily fabricated
with the actual processes to be used in production. Alpha prototypes are tested to determine
whether the product will work as designed and whether the product satisfies the key customer
needs. Later (beta) prototypes are usually built with parts supplied by the intended production
processes but may not be assembled using the intended final assembly process. Beta
prototypes are extensively evaluated internally and are also typically tested by customers in
their own use environment. The goal for the beta prototypes is usually to answer questions
about performance and reliability to identify necessary engineering changes for the final
product.
6. Production ramp-up: In the production ramp-up phase, the product is made using the
intended production system. The purpose of the ramp-up is to train the workforce and to work
out any remaining problems in the production processes. Products produced during
production ramp-up are sometimes supplied to preferred customers and are carefully
evaluated to identify any remaining flaws. The transition from production ramp-up to
ongoing production is usually gradual. At some point in this transition, the product is
launched and becomes available for widespread distribution. A postlaunch project review
may occur shortly after the launch. This review includes an assessment of the project from
both commercial and technical perspectives and is intended to identify ways to improve the
development process for future projects.

6.3 Product Planning

The product planning process takes place before a product development project is formally
approved before substantial resources are applied, and before the larger development team is
formed. Product planning is an activity that considers the portfolio of projects that an

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

organization might pursue and determines what subset of these projects will be pursued over
what time period.

The product plan identifies the portfolio of products to be developed by the organization and
the timing of their introduction to the market. The planning process considers product
development opportunities identified by many sources, including suggestions from
marketing, research, customers, current product development teams, and benchmarking of
competitors. From among these opportunities, a portfolio of projects is chosen, timing of
projects is outlined, and resources are allocated. The product plan is regularly updated to
reflect changes in the competitive environment, changes in technology, and information on
the success of existing products. Product plans are developed with the company’s goals,
capabilities, constraints, and competitive environment in mind. Product planning decisions
generally involve the senior management of the organization and may take place only
annually or a few times each year. Some organizations have a director of planning who
manages this process. Organizations that do not carefully plan the portfolio of development
projects to pursue are often plagued with inefficiencies such as:
• Inadequate coverage of target markets with competitive products.
• Poor timing of market introductions of products.
• Mismatches between aggregate development capacity and the number of projects pursued.
• Poor distribution of resources, with some projects overstaffed and others understaffed.
• Initiation and subsequent cancellation of ill-conceived projects.
• Frequent changes in the directions of projects.
Process:
To develop a product plan and project mission statements, we suggest a five-step process:
1. Identify opportunities.
2. Evaluate and prioritize projects.
3. Allocate resources and plan timing.
4. Complete pre-project planning.
5. Reflect on the results and the process.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Step 1: Identify Opportunities

The planning process begins with the identification of product development opportunities.
Such opportunities may involve any of the four types of projects defined above. This step can
be thought of as the opportunity funnel because it brings together inputs from across the
enterprise. Opportunities may be collected passively, but we also recommend that the firm
explicitly attempt to generate opportunities. When employed actively, the opportunity funnel
collects ideas continuously, and new product opportunities may arise at any time. As a way of
tracking, sorting, and refining these opportunities, we recommend that each promising
opportunity be described in a short, coherent statement and that this information be collected
in a database. Several Web-based idea management systems are available for gathering and
storing information on opportunities, although a simple list in a spreadsheet may be
sufficient.
Step 2: Evaluate and Prioritize Projects
If managed actively, the opportunity funnel can collect hundreds or even thousands of
opportunities during a year. Some of these opportunities do not make sense in the context of
the firm’s other activities, and in most cases, there are simply too many opportunities for the
firm to pursue at once. The second step in the product planning process is therefore to select
the most promising projects to pursue. Four basic perspectives are useful in evaluating and
prioritizing opportunities for new products in existing product categories: competitive
strategy, market segmentation, technological trajectories, and product platforms. After

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

discussing these four perspectives, we then discuss evaluating opportunities for

fundamentally new products, and how to balance the portfolio of projects.
Step 3: Allocate Resources and Plan Timing
It is likely that the firm cannot afford to invest in every product development opportunity in
its desired balanced portfolio of projects. As timing and resource allocation are determined
for the most promising projects, too many projects will invariably compete for too few
resources. As a result, the attempt to assign resources and plan timing almost always results
in a return to the prior evaluation and prioritization step to prune the set of projects to be
pursued.
Step 4: Complete Pre-Project Planning
Once the project has been approved, but before substantial resources are applied, a pre-
project planning activity takes place. This activity involves a small, cross-functional team of
people, often known as the core team. The Lakes core team consisted of approximately 30
people representing a wide range of technical expertise, marketing, manufacturing, and
service functions. At this point, the earlier opportunity statement may be rewritten as a
product vision statement. The Lakes concept team began with the following product vision
statement: Develop a networked, mid-range, digital platform for imaging, marking, and
finishing.
The objective defined by a product vision statement may be very general. It may not say
which specific new technologies should be used, nor does it necessarily specify the goals and
constraints of functions such as production and service operations. To provide clear guidance
for the product development organization, generally the team formulates a more detailed
definition of the target market and of the assumptions under which the development team will
operate.
Step 5: Reflect on the Results and the Process
In this final step of the planning and strategy process, the team should ask several questions
to assess the quality of both the process and the results. Some suggested questions are:
• Is the opportunity funnel collecting an exciting and diverse set of product opportunities?
• Does the product plan support the competitive strategy of the firm?
• Does the product plan address the most important current opportunities facing the firm?
• Are the total resources allocated to product development sufficient to pursue the firm’s
competitive strategy?
• Have creative ways of leveraging finite resources been considered, such as the use of
product platforms, joint ventures, and partnerships with suppliers?

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

• Does the core team accept the challenges of the resulting mission statement?
• Are the elements of the mission statement consistent?
• Are the assumptions listed in the mission statement really necessary or is the project
Over constrained? Will the development team have the freedom to develop the best possible
product?
• How can the product planning process be improved?
Because the mission statement is the handoff to the development team, a “reality check” must
be performed before proceeding with the development process. This early stage is the time to
remedy known flaws, lest they become more severe and expensive as the development
process progresses.

6.4 Identifying Customer Needs

Identifying customer needs is itself a process, for which we present a five-step method. We
believe that a little structure goes a long way in facilitating effective product development
practices, and we hope and expect that this method will be viewed by those who employ it
not as a rigid process but rather as a starting point for continuous improvement and
refinement. The five steps are:
1. Gather raw data from customers.
2. Interpret the raw data in terms of customer needs.
3. Organize the needs into a hierarchy of primary, secondary, and (if necessary) tertiary
needs.
4. Establish the relative importance of the needs.
5. Reflect on the results and the process.
Step 1: Gather Raw Data from Customers
Consistent with our basic philosophy of creating a high-quality information channel directly
from the customer, gathering data involves contact with customers and experience with the
use environment of the product. Three methods are commonly used:
Interviews: One or more development team members discusses needs with a single customer.
Interviews are usually conducted in the customer’s environment and typically last one to two
hours.
Focus groups: A moderator facilitates a two-hour discussion with a group of 8 to 12
customers. Focus groups are typically conducted in a special room equipped with a
transparent mirror allowing several members of the development team to observe the group.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Observing the product in use: Watching customers use an existing product or perform a task
for which a new product is intended can reveal important details about customer needs.
Step 2: Interpret Raw Data in Terms of Customer Needs
Customer needs are expressed as written statements and are the result of interpreting the need
underlying the raw data gathered from the customers. Each statement or observation (as listed
in the second column of the data template) may be translated into any number of customer
needs. Griffin and Hauser found that multiple analysts may translate the same interview notes
into different needs, so it is useful to have more than one team member conducting the
translation process. Later in this section, we provide five guidelines for writing needs
statements. The first two guidelines are fundamental and are critical to effective translation;
the remaining three guidelines ensure consistency of phrasing and style across all needs
statements.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Step 3: Organize the Needs into a Hierarchy

The result of steps 1 and 2 is generally a list of 50 to 300 needs statements. Such a large
number of detailed needs is awkward to work with and difficult to summarize for use in
subsequent development activities. The goal of step 3 is to organize these needs into a useful
hierarchical list. The list will typically consist of a set of primary needs, each one of which
will be further characterized by a set of secondary needs. In cases of very complex products,
the secondary needs may be broken down into tertiary needs as well. The primary needs are
the most general needs, while the secondary and tertiary needs express needs in more detail.
Exhibit 5-8 shows the resulting hierarchical list of needs for the thermostat example. In this
instance, there are 15 primary needs and 49 secondary needs. The procedure for organizing
the needs into a hierarchical list is intuitive, and many teams can successfully complete the
task without detailed instructions. For completeness, we provide a step-by-step procedure
here. This activity is best performed on a wall or a large table by a small group of team
members.
Print or write each needs statement on a separate card or self-stick note. A print macro
can be easily written to print the needs statements directly from the data template. A nice
feature of this approach is that the need can be printed in a large font in the center of the card
and then the original customer statement and other relevant information can be printed in a
small font at the bottom of the card for easy reference. Four cards can be cut from a standard
printed sheet.
Eliminate redundant statements. Those cards expressing redundant needs statements can
be stapled together and treated as a single card. Be careful to consolidate only those
statements that are identical in meaning.
Group the cards according to the similarity of the needs they express. At this point, the
team should attempt to create groups of roughly three to seven cards that express similar
needs. The logic by which groups are created deserves special attention. Novice development
teams often create groups according to a technological perspective, clustering needs relating
to, for example, materials, packaging, or power. Or they create groups according to assumed
components such as enclosure, display, dial, and software. Both of these approaches are
dangerous. Recall that the goal of the process is to create a description of the needs of the
customer. For this reason, the groupings should be consistent with the way customers think
about their needs and not with the way the development team thinks about the product. The
groups should correspond to needs customers would view as similar. In fact, some
practitioners use a process in which customers actually organize the needs statements.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

For each group, choose a label. The label is itself a statement of need that generalizes all of
the needs in the group. It can be selected from one of the needs in the group, or the team can
write a new needs statement.
Consider creating supergroups consisting of two to five groups. If there are fewer than 20
groups, then a two-level hierarchy is probably sufficient to organize the data. In this case, the
group labels are primary needs and the group members are secondary needs; however, if
there are more than 20 groups, the team may consider creating supergroups, and therefore a
third level in the hierarchy. The process of creating supergroups is
Review and edit the organized needs statements. There is no single correct arrangement of
needs in a hierarchy. At this point, the team may wish to consider alternative groupings or
labels and may engage another team to suggest alternative arrangements.
Step 4: Establish the Relative Importance of the Needs
The hierarchical list alone does not provide any information on the relative importance that
customers place on different needs. Yet the development team will have to make trade-offs
and allocate resources in designing the product. A sense of the relative importance of the
various needs is essential to making these trade-offs correctly. Step 4 in the needs process
establishes the relative importance of the customer needs identified in steps 1 through 3. The
outcome of this step is a numerical importance weighting for a subset of the needs.
There are two basic approaches to the task:
(1) relying on the consensus of the team members based on their experience with customers,
(2) basing the importance assessment on further customer surveys.
The obvious trade-off between the two approaches is cost and speed versus accuracy: the
team can make an educated assessment of the relative importance of the needs in one
meeting, while a customer survey generally takes a week or more. In most cases we believe
the customer survey is important and worth the time required to complete it. Other
development tasks, such as concept generation and analysis of competitive products, can
begin before the relative importance surveys are complete.
Step 5: Reflect on the Results and the Process
The final step in the method is to reflect on the results and the process. While the process of
identifying customer needs can be usefully structured, it is not an exact science. The team
must challenge its results to verify that they are consistent with the knowledge and intuition
the team has developed through many hours of interaction with customers. Some questions to
ask include:
• Have we interacted with all of the important types of customers in our target market?

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

• Are we able to see beyond needs related only to existing products to capture the latent needs
of our target customers?
• Are there areas of inquiry we should pursue in follow-up interviews or surveys?
• Which of the customers we spoke to would be good participants in our ongoing
development efforts?
• What do we know now that we didn’t know when we started? Are we surprised by any of
the needs?
• Did we involve everyone within our own organization who needs to deeply understand
customer needs?
• How might we improve the process in future efforts?
A good way to summarize the results of the process is to list the most important needs and the
latent needs. For instance, the most important needs identified are:
• The thermostat is easy to use.
• The thermostat can adjust temperature during the day according to user preferences.
• The thermostat works with my existing heating and/or cooling system.
• The thermostat reduces energy consumption.
The latent needs are:
• The thermostat can be programmed from a comfortable position.
• The thermostat works pretty well right out of the box with no set up.
• The thermostat automatically responds to occupancy.
• The thermostat exterior surfaces do not fade or discolor over time.
• The thermostat prevents pipes from freezing in cold months.

6.5 Product significations

Customer needs are generally expressed in the “language of the customer.” Product
specifications do not tell the team how to address the customer needs, but they do represent
an unambiguous agreement on what the team will attempt to achieve to satisfy the customer’s
needs. Some firms use the terms “product requirements” or “engineering characteristics” in
this way. Other firms use “specifications” or “technical specifications” to refer to key design
variables of the product such as the oil viscosity or spring constant of the suspension system.
A specification (singular) consists of a metric and a value. For example, “average time to
assemble” is a metric, while “less than 75 seconds” is the value of this metric. Note that the
value may take on several forms, including a particular number, a range, or an inequality.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Values are always labeled with the appropriate units (e.g., seconds, kilograms, joules).
Together, the metric and value form a specification. The product specifications (plural) are
simply the set of the individual specifications.

6.6 Concept generation

A product concept is an approximate description of the technology, working principles, and
form of the product. It is a concise description of how the product will satisfy the customer
needs. A concept is usually expressed as a sketch or as a rough three-dimensional model and
is often accompanied by a brief textual description. The degree to which a product satisfies
customers and can be successfully commercialized depends to a large measure on the quality
of the underlying concept. A good concept is sometimes poorly implemented in subsequent
development phases, but a poor concept can rarely be manipulated to achieve commercial
success. Fortunately, concept generation is relatively inexpensive and can be done relatively
quickly in comparison to the rest of the development process. For example, concept
generation had typically consumed less than 5 percent of the budget and 15 percent of the
development time in previous nailer development efforts. Because the concept generation
activity is not costly, there is no excuse for a lack of diligence and care in executing a sound
concept generation method. The concept generation process begins with a set of customer
needs and target specifications and results in a set of product concepts from which the team
will make a final selection. The relation of concept generation to the other concept
development activities is shown in bellow block diagram In most cases, an effective
development team will generate hundreds of concepts, of which 5 to 20 will merit serious
consideration during the concept selection activity.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Concept generation is an integral part of the concept development phase

Good concept generation leaves the team with confidence that the full space of alternatives
has been explored. A thorough exploration of alternatives early in the development process
greatly reduces the likelihood that the team will stumble upon a superior concept late in the
development process or that a competitor will introduce a product with dramatically better
performance than the product under development.
Five-step concept generation method
The method, outlined bellow breaks a complex problem into simpler subproblems. Solution
concepts are then identified for the subproblems by external and internal search procedures.
Classification trees and concept combination tables are then used to systematically explore
the space of solution concepts and to integrate the subproblem solutions into a total solution.
Finally, the team takes a step back to reflect on the validity and applicability of the results,as
well as on the process used.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Five-step concept generation method

Step 1: Clarify the Problem

Clarifying the problem consists of developing a general understanding and then breaking the
problem down into subproblems if necessary. The mission statement for the project, the

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

customer needs list, and the preliminary product specification are the ideal inputs to the
concept generation process, although often these pieces of information are still being refined
as the concept generation phase begins. Ideally the team has been involved both in the
identification of the customer needs and in the setting of the target product specifications.
Those members of the team who were not involved in these preceding steps should become
familiar with the processes used and their results before concept generation activities begin.
Step 2: Search Externally
External search is aimed at finding existing solutions to both the overall problem and the
subproblems identified during the problem clarification step. While external search is listed
as the second step in the concept generation method, this sequential labelling is deceptive;
external search occurs continually throughout the development process. Implementing an
existing solution is usually quicker and cheaper than developing a new solution. Liberal use
of existing solutions allows the team to focus its creative energy on the critical subproblems
for which there are no satisfactory prior solutions. Furthermore, a conventional solution to
one subproblem can frequently be combined with a novel solution to another subproblem to
yield a superior overall design. For this reason external search includes detailed evaluation
not only of directly competitive poducts but also of technologies used in products with related
subfunctions. The external search for solutions is essentially an information-gathering
process. Available time and resources can be optimized by using an expand-and-focus
strategy: first expand the scope of the search by broadly gathering information that might be
related to the problem and then focus the scope of the search by exploring the promising
directions in more detail. Too much of either approach will make the external search
inefficient. There are at least five good ways to gather information from external sources:
lead user interviews, expert consultation, patent searches, literature searches, and competitive
benchmarking.
Step 3: Search Internally
Internal search is the use of personal and team knowledge and creativity to generate solution
concepts. Often called brainstorming, and based largely on the creativity methods developed
by Osborn in the 1940s, this type of search is internal in that all of the ideas to emerge from
this step are created from knowledge already in the possession of the team. This activity may
be the most open-ended and creative of any task in product development. We find it useful to
think of internal search as a process of retrieving a potentially useful piece of information
from one’s memory and then adapting that information to the problem at hand. This process

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

can be carried out by individuals working in isolation or by a group of people working

together
Step 4: Explore Systematically
As a result of the external and internal search activities, the team will have collected tens or
hundreds of concept fragments—solutions to the subproblems. Systematic exploration is
aimed at navigating the space of possibilities by organizing and synthesizing these solution
fragments. The nailer team focused on the energy storage, conversion, and delivery
subproblems and had generated dozens of concept fragments for each subproblem. One
approach to organizing and synthesizing these fragments would be to consider all of the
possible combinations of the fragments associated with each subproblem; however, a little
arithmetic reveals the impossibility of this approach. Given the three subproblems on which
the team focused and an average of 15 fragments for each subproblem, the team would have
to consider 3,375 combinations of fragments (15 × 15 × 15). This would be a daunting task
for even the most enthusiastic team. Furthermore, the team would quickly discover that many
of the combinations do not even make sense. Fortunately, there are two specific tools for
managing this complexity and organizing the thinking of the team: the concept classification
tree and the concept combination table. The classification tree helps the team divide the
possible solutions into independent categories. The combination table guides the team in
selectively considering combinations of fragments.
Step 5: Reflect on the Solutions and the Process
Although the reflection step is placed here at the end for convenience in presentation,
reflectionshould in fact be performed throughout the whole process. Questions to ask include:
• Is the team developing confidence that the solution space has been fully explored?
• Are there alternative function diagrams?
• Are there alternative ways to decompose the problem?
• Have external sources been thoroughly pursued?
• Have ideas from everyone been accepted and integrated in the process?
The nailer team members discussed whether they had focused too much attention on the
energy storage and conversion issues in the tool while ignoring the user interface and overall
configuration. They decided that the energy issues remained at the core of the problem and
that their decision to focus on these issues first was justified. They also wondered if they had
pursued too many branches of the classification tree. Initially they had pursued electrical,
chemical, and pneumatic concepts before ultimately settling on an electric concept. In
hindsight, the chemical approach had some obvious safety and customer perception

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

shortcomings (they were exploring the use of explosives as an energy source). They decided
that although they liked some aspects of the chemical solution, they should have eliminated it
from consideration earlier in the process, allowing more time to pursue some of the more
promising branches in greater detail. The team explored several of these concepts in more
detail and built working prototypes of nailers incorporating two fundamentally different
directions: (1) a motor winding a spring with energy released in a single blow, and (2) a
motor with a rotating mass that repeatedly hit the nail at a rate of about 10 cycles per second
until the nail was fully driven. Ultimately, the multiblow tool proved to be the most
technically feasible approach and the final product (Exhibit 7-1) was based on this concept.

6.7 Concept Selection

Whether or not the concept selection process is explicit, all teams use some method to choose
among concepts. (Even those teams generating only one concept are using a method:
choosing the first concept they think of.) The methods vary in their effectiveness and include
the following:
• External decision: Concepts are turned over to the customer, client, or some other external
entity for selection.
• Product champion: An influential member of the product development team chooses a
concept based on personal preference.
• Intuition: The concept is chosen by its feel. Explicit criteria or trade-offs are not used. The
concept just seems better.
• Multivoting: Each member of the team votes for several concepts. The concept with the
most votes is selected.
• Web-based survey: Using an online survey tool, each concept is rated by many people to
find the best ones.
• Pros and cons: The team lists the strengths and weaknesses of each concept and makes a
choice based upon group opinion.
• Prototype and test: The organization builds and tests prototypes of each concept, making a
selection based upon test data.
• Decision matrices: The team rates each concept against prespecified selection criteria,
which may be weighted.

6.8 Concept Testing:

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

In a concept test, the development team solicits a response to a description of the product
concept from potential customers in the target market. This type of testing may be used to
select which of two or more concepts should be pursued, to gather information from potential
customers on how to improve a concept, and to estimate the sales potential of the product.
Note that various other types of testing with potential customers may be completed at times
other than during concept development. For example, some kind of customer test, usually
based on only a verbal description of a concept, may be used in identifying the original
product opportunity that forms the basis of the mission statement for the project. A test ay
also be used to refine the demand forecast after the development of a product is nearly
complete, but before a firm commits to full production and launch. shows concept testing
relative to other concept development activities. Concept testing is closely related to concept
selection in that both activities aim to further narrow the set of concepts under consideration;
however, concept testing is distinct in that it is based on data gathered directly from potential
customers and relies to a lesser degree on judgments made by the development team. The
reason that concept testing generally follows concept selection is that a team cannot feasibly
test more than a few concepts directly with potential customers. As a result, the team must
first narrow the set of alternatives under consideration to very few. Concept testing is also
closely related to prototyping, because concept testing invariably involves some kind of
representation of the product concept, often a prototype. One of the end results of a concept
test may be an estimate of how many units of the product the company is likely to sell. A
team may choose not to do any concept testing at all if the time required to test the concept is
large relative to the product life cycles in the product category, or if the cost of testing is large
relative to the cost of actually launching the product. For example, in the Internet software
business, some observers and practitioners argue that just launching a product and iteratively
refining it with subsequent product generations is a better strategy than carefully testing a
concept before developing it fully. While perhaps appropriate for some products, this strategy
would be foolish in the development of, for example, a new commercial airplane, where
development costs and time are huge and failure can be disastrous. Most product categories
fall between these extremes, and in most cases some form of concept testing is warranted.
a seven-step method for testing product concepts:
1. Define the purpose of the concept test.
2. Choose a survey population.
3. Choose a survey format.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

4. Communicate the concept.

5. Measure customer response.
6. Interpret the results.
7. Reflect on the results and the process.

6.9 Design for Manufacturing

Design for manufacturing is one of the most integrative practices involved in product
development. DFM utilizes information of several types, including (1) sketches, drawings,
product specifications, and design alternatives; (2) a detailed understanding of production
and assembly processes; and (3) estimates of manufacturing costs, production volumes, and
ramp-up timing. DFM therefore requires the contributions of most members of the
development team as well as outside experts. DFM efforts commonly draw upon expertise
from manufacturing engineers, cost accountants, and production personnel, in addition to
product designers. Many companies use structured, team-based workshops to facilitate the
integration and sharing of views required for DFM.
DFM begins during the concept development phase, when the product’s functions and
specifications are being determined. When choosing a product concept, cost is almost always
one of the criteria on which the decision is made—even though cost estimates at this phase
are highly subjective and approximate. When product specifications are finalized, the team
makes trade-offs between desired performance characteristics. For example, weight reduction
may increase manufacturing costs. At this point, the team may have an approximate bill of
materials (a list of parts) with estimates of costs. During the system-level design phase of
development, the team makes decisions about how to break up the product into individual
components, based in large measure on the expected cost and manufacturing complexity
implications. Accurate cost estimates finally become available during the detail-design phase
of development, when many more decisions are driven by manufacturing concerns.
Design for Manufacturing or Design for Manufacturability (DFM) is the optimisation of a
part, product, or component’s design, to create it cheaper and more easily. DFM involves
efficiently designing or engineering an object, generally during the product design stage,
when it is easier and less expensive to do so, to reduce manufacturing costs. This allows a
manufacturer to identify and prevent mistakes or discrepancies.

Principles of DFM

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

DFM occurs early in product development, before tooling and the assembly process, when
the product is being designed. Doing so will make manufacture less time-consuming, which
will reduce cost and increase ease of manufacturing. The exact process of DFM will depend
on what product is being designed and produced. General principles of DFM include
designing objects for efficient assembly, the standardisation of materials and components,
reducing the number of parts, and minimising the amount of manufacturing operations
required on parts during assembly. Other basics of effective DFM include standardisation of
parts to save on part cost, design simplicity, which may reduce the complication or number of
parts required, and setup time reduction.

What is Meant by Design for Manufacture?

Often, when this phrase is used it is referring to Design for Manufacturing and Assembly
(DFMA), a more holistic term for an engineering methodology that intends to optimise time-
to-market and limit manufacturing process production costs during early design phases.
However, previously, this referred to two distinct practices, DFM and Design for Assembly
(DFA). Design for Assembly prioritises the ease of the process of assembling an object, and
is concerned with reducing the cost of the assembly process, whereas DFM has a wider focus
on concepts such as the parts’ design, and so is able to also reduce the manufacturing cost of
the parts themselves.

Why is Design for Manufacturing Important?

For any business looking to make money and create products that are profitable, DFM is vital
for efficiency, speed, and high rates of production. It is thought that approximately 70% of
the manufacturing costs of a product derive from design decisions made in the early design
stages, such as materials used or method of manufacturing. DFM therefore has great cost-
reduction capabilities. A focus on the design stage, available through DFM, would
significantly reduce the final production cost. It can also enable the identification,
quantification and elimination of waste or inefficiencies at various points throughout the
manufacture and production process. It may additionally be used as a method of
benchmarking and, in doing so, a company can assess the products of competitors.

Advantages/Benefits

• Products made with DFM will have a lower production cost

• Quicker time-to-market

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

• Shortening of the product development process

• Production will be up to speed sooner
• Parts may be combined to reduce assembly steps and quantity of parts
• Catches and removes mistakes or faults
• Higher quality of a product, as design can be refined and enhanced at every stage
• As construction activities can be removed from a site and placed elsewhere, DFM can
create a safer working environment

How Long Does DFM Take?

Naturally, the time taken for any process will depend on the product, parts, manufacturing
process, and the complexity of operations required. However, on average, a DFM process
will take around two weeks to complete. This number may increase to three or even four
weeks for more complex products.

Design for Manufacture Examples

• Components with joints can be manufactured using snap fits, an efficient form of
fastening two parts together that saves time and money in production, reduces
material costs, and improves ease of assembly – with additive manufacturing, the joint
can be 3D printed for additional efficiency during production stages
• DFM can be used in casting, where it can enable the casting process and minimise
casting defects by optimising the shape and geometry of products
• In a recent real-life case, DFM was applied to a design for a gun sight of an American
tank developed by Texas Instruments Inc. which reduced the number of different parts
needed for assembly from 24 to 8, and rapidly decreased the production time

6.10 Prototyping

Prototyping is a method of obtaining early feedback on requirements by providing a model of

the expected product before actually building it. Examples of prototypes are small-scale
products, computer-generated 2D and 3D models, mock-ups, or simulations. Prototypes allow
stakeholders to experiment with a model of the final product rather than being limited to
discussing abstract representations of their requirements. Prototypes support the concept of
progressive elaboration in iterative cycles of mock-up creation, user experimentation,
feedback generation, and prototype revision. When enough feedback cycles have been

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

performed, the requirements obtained from the prototype are sufficiently complete to move to
a design or build phase.
Storyboarding is a prototyping technique showing sequence or navigation through a series of
images or illustrations. Storyboards are used on a variety of projects in a variety of industries,
such as film, advertising, instructional design, and on agile and other software development
projects. In software development, storyboards use mock-ups to show navigation paths
through web pages, screens, or other user interfaces.
Planning for Prototypes
Step 1: Define the Purpose of the Prototype
Recall the four purposes of prototypes: learning, communication, integration, and milestones.
In defining the purpose of a prototype, the team lists its specific learning and communication
needs. Team members also list any integration needs and whether or not the prototype is
intended to be one of the major milestones of the overall product development project.
Step 2: Establish the Level of Approximation of the Prototype
Planning a prototype requires the definition of the degree to which the final product is to be
approximated. The team should consider whether a physical prototype is necessary or
whether an analytical prototype would best meet its needs. In most cases, the best prototype
is the simplest prototype that will serve the purposes established in step 1. In some cases, an
earlier model serves as a testbed and may be modified for the purposes of the prototype. In
other cases, an existing prototype or a prototype being built for another purpose can be
utilized.
Step 3: Outline an Experimental Plan
In most cases, the use of a prototype in product development can be thought of as an
experiment. Good experimental practice helps ensure the extraction of maximum value from
the prototyping effort. The experimental plan includes the identification of the variables of
the experiment (if any), the test protocol, an indication of what measurements will be
performed, and a plan for analyzing the resulting data. When many variables must be
explored, efficient experiment design greatly facilitates this process.

Step 4: Create a Schedule for Procurement

Construction, and Testing Because the building and testing of a prototype can be considered a
subproject within the overall development project, the team benefits from a schedule for the

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

prototyping activity. Three dates are particularly important in defining a prototyping effort.
First, the team defines when the parts will be ready to assemble. (This is sometimes called the
“bucket of parts” date.) Second, the team defines the date when the prototype will first be
tested. (This is sometimes called the “smoke test” date, because it is the date the team will
first apply power and “look for smoke” in products with electrical systems.) Third, the team
defines the date when it expects to have completed testing and produced the final results.

6.11 Robust Design

Robust design is the product development activity of improving the desired performance of
the product while minimizing the effects of noise. In robust design, we use experiments and
data analysis to identify robust setpoints for the design parameters we can control. A robust
setpoint is a combination of design parameter values for which the product performance is as
desired under a range of operating conditions and manufacturing variations. Conceptually,
robust design is simple to understand. For a given performance target (safely restraining rear-
seat passengers, for example), there may be many combinations of parameter values that will
yield the desired result; however, some of these combinations are more sensitive to
uncontrollable variation than others. Because the product will likely operate in the presence
of various noise factors, we would like to choose the combination of parameter values that is
least sensitive to uncontrollable variation. The robust design process uses an experimental
approach to finding these robust setpoints.
Robust Design Process
Step 1: Identify Control Factors, Noise Factors, and Performance Metrics
The robust design procedure begins with identification of three lists: control factors, noise
factors, and performance metrics for the experiment:
• Control factors: These are the design variables to be varied in a controlled manner during
the experiment, in order to explore the product’s performance under the many combinations
of parameter setpoints. Experiments are generally run at two or three discrete levels (setpoint
values) of each factor. These parameters are called control factors because they are among
the variables that can be specified for production and/or operation of the product. For
example, the webbing stiffness and coefficient of friction are control factors of interest for the
experiment.
• Noise factors: Noise factors are variables that cannot be explicitly controlled during the
manufacturing and operation of the product. Noise factors may include manufacturing

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

variances, changes in materials properties, multiple user scenarios or operating conditions,

and even deterioration or misuse of the product. If through special techniques the team can
control the noise factors during the experiment (but not in production or operation), then
variance can deliberately be induced during the experiment to assess its impact. Otherwise,
the team simply lets the noise take place during the experiment, analyzes the results in the
presence of typical variation, and seeks to minimize the effects of this variation. For seat belts
to be used with a range of seats, the shape of the seat and the seat fabric must be considered
noise factors. The goal is to design a seat belt system that works well regardless of the values
of these factors.
• Performance metrics: These are the product specifications of interest in the experiment.
Usually the experiment is analyzed with one or two key product specifications as the
performance metrics in order to find control factor setpoints to optimize this performance.
These metrics may be derived directly from key specifications where robustness is of critical
concern. (See Chapter 6, Product Specifications.) For example, how far the passenger’s back
or buttocks move forward during the collision would be possible performance metrics for the
seat belt experiment.
Step 2: Formulate an Objective Function
The experiment’s performance metric(s) must be transformed into an objective function that
relates to the desired robust performance. Several objective functions are useful in robust
design for different types of performance concerns. They can be formulated either as
functions to be maximized or minimized, and they include:
• Maximizing: This type of function is used for performance dimensions where larger values
are better, such as maximum deceleration before belt slippage.
• Minimizing: This type of function is used for performance dimensions where smaller values
are better, such as back angle at peak deceleration.
• Target value: This type of function is used for performance dimensions where values
closest to a desired setpoint or target are best, such as amount of belt slackening before
restraint.
• Signal-to-noise ratio: This type of function is used particularly to measure robustness.
Taguchi formulates this metric as a ratio with the desired response in the numerator and the
variance in the response as the denominator. Generally the mean value of the desired
response, such as the mean back angle at peak, is not difficult to adjust by changing control
factors. In the denominator, we place the variance of this response (the noise response),
which is to be minimized, such as the variance in back angle resulting from noise conditions.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

In practice, reducing variance is more difficult than changing the mean. By computing this
ratio, we can highlight robust factor settings for which the noise response is relatively low as
compared to the signal response.
Step 3: Develop the Experimental Plan
Statisticians have developed many types of efficient experimental plans. These plans layout
how to vary the factor levels (values of the control factors and possibly also some of the noise
factors) in a series of experiments in order to explore the system’s behavior. Some DOE plans
are more efficient for characterizing certain types of systems, while others provide more
complete analysis.
Experimental Designs
A critical concern in designing experiments is the cost of setting up and running the
experimental trials. In situations where this cost is low, running a large number of trials and
using an experimental design with resolution high enough to explore more factors, factor
combinations, and interactions may be feasible. On the other hand, when the cost of
experimentation is high, efficient DOE plans can be used that simultaneously change several
factors at once.
Testing Noise Factors
Several methods are used to explore the effects of noise factors in experiments. If some noise
factors can be controlled for the purpose of the experiment, then it may be possible to directly
assess the effect of these noise factors. If the noise factors cannot be controlled during the
experiment, we allow the noise to vary naturally and simply assess the product’s performance
in the presence of noise.
Step 4: Run the Experiment
To execute the experiment, the product is tested under the various treatment conditions
described by each row in the experimental plan. Randomizing the sequence of the
experimental runs ensures that any systematic trend over the duration of the experiment is not
correlated with the systematic changes to the levels of the factors. For example, if the
experiments of the L8 plan are not randomized, and the test conditions drift over time, this
effect may be incorrectly attributed to factor A because this column changes halfway through
the experiment. For some experiments, changing certain factors may be so difficult that all
trials at each level of that factor are run together and only partial randomization may be
achieved.
Step 5: Conduct the Analysis

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

There are many ways to analyze the experimental data. For all but the most basic analysis, the
team benefits from consulting with a DOE expert or from referring to a good book on
statistical analysis and experimental design.
Step 6: Select and Confirm Factor Setpoints
Analysis of means and the factor effects charts help the team determine which factors have a
strong effect on mean performance and variance, and therefore how to achieve robust
performance. These charts help to identify which factors are best able to reduce the product’s
variance (robustness factors) and which factors can be used to improve the performance
(scaling factors). By choosing setpoints based on these insights, the team should be able to
improve the overall robustness of the product.
Step 7: Reflect and Repeat
One round of experiments may be sufficient to identify appropriately robust setpoints.
Sometimes, however, further optimization of the product’s performance is worthwhile, and
this may require several additional rounds of experimentation.
In subsequent experimentation and testing, the team may choose to:
• Reconsider the setpoints chosen for factors displaying a trade-off of performance versus
robustness.
• Explore interactions among some of the factors in order to further improve the performance.
• Fine-tune the parameter setpoints using values between the levels tested or outside
this range.
• Investigate other noise and/or control factors that were not included in the initial
experiment.
6.12 Entrepreneurship Concept

An entrepreneur is one who creates a new business in the face of risk and uncertainty for the
purpose of achieving profit and growth by identifying significant opportunities and
assembling the necessary resources to capitalize on them. Although many people come up
with great business ideas, most never act on their ideas. Entrepreneurs do.

Entreperneur is a french word meaning, “one who undertakes an endeavour”. A person who
starts his own business or organization is called entrepreneur. If you want to become an
entrepreneur you should organize and manage your venture with considerable initiative and
risk so that you can get profit from your organization. For example, if you are living in a
village and you have started your shop there to facilitate your fellow villagers and for getting

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

some profit then you are an entrepreneur. When you start a business you have some vision for
your business and you establish it according to that vision. The process of starting own
business is called entrepreneurship. This process is characterized by risk management and
innovation and it involves a good amount of investment in terms of time, money,
infrastructure and relationships. Entrepreneurs assemble resources including innovations,
finance and business acumen in an effort to transform innovations into economic goods.
Each era has made entrepreneurs in its age. There are some basics to establish a business.
Basics of entrepreneurship are as followes:
• Calculated Risk-taking
• Management skills
• Effective Communication
• Vision
• Connection with efficient people
• Strategy
• Marketing
Calculated Risk-taking: An entrepreneur must have courage to take risk with vision. You
should have self-confidence about what you are going to do and how you are going to work.
You should also be aware of the fact that success and failures may not come equally.
Resource Management skills: An entrepreneur should be able to manage time, money,
infrastructure and people who are working within the organization. Efficient use of time and
people establishes a successful organization.
Effective Communication: You must communicate in such a way so that customer as well
as employee can understand your objective easily. Communication is not language specific, it
is a way of presentation so that other person can understand your points correctly.
Vision: Lack of planning infrastructure and money leads to failure of business Therefore an
individual must have clear vision of what is to be done and how to execute his plan.
Connect with efficient people: A business always requires efficient resources. Each
employee of an organization should own and take responsibility of work whenever needed.
An entrepreneur must allocate right work to the right person. An entrepreneur must also have
a quality to identify efficient and suitable people for a particular job.
Strategy: You should have a clear master plan for your business. At any point of time if plan
A fails there should also be plan B to fall back to.
Marketing: An entrepreneur studies market needs and takes action according to that. After
analysing market situation you can get some idea for your product and launching of it as per

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

market needs. There are many ways to look for an idea. One should read a lot, talk to people
and consider the questions as: What limitation exists in current market products and services?
What would you like to have that is not available? What are other uses for new technology?
Characteristics of Entrepreneurship
i) Entrepreneurship is an economic activity done to create, develop and maintain a profit-
oriented business.
ii) It begins with identifying an opportunity as a potential to sell and make profit in the
market.
iii) Entrepreneurship is the best utilization of available resources. iv) Entrepreneurship is the
ability of an enterprise and an entrepreneur to take risk.

6.13 Knowledge and Skills Requirements

The importance of entrepreneurship has been a prominent concept discussed throughout

many Youth Employment Conventions. Enterpreneural skills should be integrated in the
education system as it helps the young students to engage themselves in the economic
development of the country. To gain insight into this idea we need to understand why
entrepreneurship is important in the first place. Entrepreneurship is a key driver of our
economy as a high majority of jobs are created by and through what started as a small idea.
By integrating entrepreneurship in the education system, young people can build the
confidence to see value in their own ideas. They can then make enterprising choices that are
transferable into the workplace. Technical skills, managerial skills and entrepreneurial skills
are needed for entrepreneurship.
Let us discuss about these skills in details
(1) Soft skills
Soft Skills include the following:
• Communication
• Interpersonal relations
• Environmental Observation
• Coordination
• Specific operation Technology

Communication
It is a process of exchanging information among people. It needs effective

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

language, presentation skill, environment etc. The figure below explains how
to communicate effectively.

Interpersonal relations
It is a skill to communicate with each other. It is used not only in offices but in our day to day
social life. People with good interpersonal skills are perceived as confident, calm and
charismatic.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Environmental Observation
Environmental observation is one of the technical skills. This skill helps in understanding job
objective and current scenario of the society with respect to the business that one wants to
start.
Coordination
It is a skill that helps in understanding other people and work together to achieve the set goal.
Coordination must exist among the team members in order to achieve best possible results.
Specific operation Technology
Sometimes specific technology is required for achieving specific goal. For example if you
want to develop a software for web designing then you require knowledge of some specific
technology like HTML, CSS, JAVA SCRIPT etc.

(2) Managerial skills

Managerial Skills include the following:
• Planning
• Motivation
• Marketing
• Accounting
• Negotiating
Planning

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

It is a basic management method involving formulation of one or more detailed plan to

achieve the best result. The planning process is to identify goal, formulate strategy and decide
the process to be followed to achieve the goal on the same strategy.
Motivation
Motivation is defined as goal oriented behaviour. It is frequently used to describe why a
person is interested in doing a particular work. Following points help us to stay motivated:
Surround yourself with positivity
Create a vision board
Make smart goals
• Reward yourself
• Believe in yourself
• Acknowledge your positive attributes
• Recognize your progress
• Visualize accomplishing your goals
• Be kind to yourself
• Don’t compare yourself to others
Marketing
It is an ability through which you sell something or create awareness about something e.g.
any product. For example T.V. commercials are a part of marketing. It tries to satisfy needs
of clients. It includes the coordination of product, price, place and promotional strategy.
These are known as 4 P’s of marketing. You have to follow the points mentioned below to
ensure maximum
sale of your product/service:
• Identify the product
• Determine its price
• Reach the customer
• Implement the of promotional strategy
Accounting
It is a process of keeping financial record or preparing financial record. It includes analysis,
verification and reporting of records.
Negotiating
It is a process through which people settle all the problems which occur between two or more
parties. Parties try to reach at mutual beneficial outcome through negotiation. Process of
negotiation includes following stages:

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

• Preparation
• Discussion
• Goal clarification
• Arriving at mutual beneficial points
• Agreement
• Implementation of strategy
(3) Entrepreneurial skills
It includes the following:
• Innovation
• Persistency
• Visionary
• Flexibility

Innovation and Risk Taking Ability

It is a process of translating new ideas into services that create value. An idea must be
replicable at economical cost and satisfy customer’s need. Innovation is synonymous with
risk taking. An organization that creates new idea, takes great risk of implementing a new
market.
Persistency
In this skill, you continue to do something even though it is difficult or even if other people
are against it. This skill requires lot of patience and determination.
Visionary
Someone who can visualize the future and take action according to that is visionary. A
visionary has clear ideas about what should happen and what strategy can be formed to
achieve best possible results.
Flexibility
Flexibility is willingness to change as per the changing environment, for betterment. One
should not be stringent about his/her way of working; rather should be able to adapt new
ways easily.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

6. 14 characteristic of successful entrepreneurs

1. Curiosity
Successful entrepreneurs have a sense of curiosity that allows them to continuously seek new
opportunities. Rather than settling for what they think they know, curious entrepreneurs ask
challenging questions and explore different avenues.
In Entrepreneurship Essentials, entrepreneurship is described as a “process of discovery.”
Without the drive to continuously ask questions and challenge the status quo, valuable
discoveries can easily be overlooked.
2. Structured Experimentation
Along with curiosity comes the need for structured experimentation. With each new
opportunity that arises, an entrepreneur must run tests to determine if it’s worthwhile to
pursue. For example, if you have an idea for a new product or service that fulfills an
underserved demand, you’ll have to ensure customers are willing to pay for it. To do so,
you’ll need to conduct thorough market research and run meaningful tests to validate your
idea and determine whether it has potential.
3. Adaptability
The nature of business is ever-changing. Entrepreneurship is an iterative process, and new
challenges and opportunities present themselves at every turn. It’s nearly impossible to be
prepared for every scenario. Entrepreneurs need to evaluate situations and adapt so their
business can keep moving forward when unexpected changes occur.
4. Decisiveness
To be successful, an entrepreneur has to make difficult decisions and stand by them. As a
leader, they’re responsible for guiding the trajectory of their business, including every aspect
from funding and strategy to resource allocation.
Being decisive doesn’t always mean having all the answers. If you want to be an
entrepreneur, it means having the confidence to make challenging decisions and see them
through. If the outcome turns out to be less than favorable, the decision to take corrective
action is just as important.
5. Team Building
A great entrepreneur is aware of their strengths and weaknesses. Rather than letting
shortcomings hold them back, they build well-rounded teams that complement their abilities.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

In many cases, it’s the entrepreneurial team, rather than an individual, that drives a venture
toward success. When starting your own business, it’s critical to surround yourself with
teammates who have complementary talents and contribute to a common goal.
6. Risk Tolerance
Entrepreneurship is often associated with risk. While it’s true that launching a venture
requires an entrepreneur to take risks, they also need to take steps to minimize it.
While many things can go wrong when launching a new venture, many things can go right.
The key, according to Entrepreneurship Essentials, is for entrepreneurs to actively manage
the relationship between risk and reward, and position their companies to “benefit from the
upside.”
Successful entrepreneurs are comfortable with encountering some level of risk to reap the
rewards of their efforts; however, their risk tolerance is tightly related to their efforts to
mitigate it.
7. Comfortable with Failure
In addition to managing risk and making calculated decisions, entrepreneurship requires a
certain level of comfort with failure.
It’s estimated that nearly 75 percent of new startups fail. The reasons for failure are vast and
encompass everything from a flawed business model to a lack of focus or motivation. While
many of these risks can be avoided, some are inevitable.
Successful entrepreneurs prepare themselves for, and are comfortable with, failure. Rather
than let fear hold them back, the possibility of success propels them forward.
8. Persistence
While many successful entrepreneurs are comfortable with the possibility of failing, it
doesn’t mean they give up easily. Rather, they see failures as opportunities to learn and grow.
Throughout the entrepreneurial process, many hypotheses turn out to be wrong, and some
ventures fail altogether. Part of what makes an entrepreneur successful is their willingness to
learn from mistakes, continue to ask questions, and persist until they reach their goal.
9. Innovation
Many ascribe to the idea that innovation goes hand-in-hand with entrepreneurship. This is
often true—some of the most successful startups have taken existing products or services and
drastically improved them to meet the changing needs of the market.
Innovation is a characteristic some, but not all, entrepreneurs possess. Fortunately, it’s a type
of strategic mindset that can be cultivated. By developing your strategic thinking skills, you
can be well-equipped to spot innovative opportunities and position your venture for success.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

10. Long-Term Focus

Finally, most people think of entrepreneurship as the process of starting a business. While the
early stages of launching a venture are critical to its success, the process doesn’t end once the
business is operational.

6.15 Entrepreneurship Process

The entrepreneurship is a continuous process that needs to be followed by an entrepreneur to

plan and launch the new ventures more efficiently.

Discovery: An entrepreneurial process begins with the idea generation, wherein the
entrepreneur identifies and evaluates the business opportunities. The identification and the
evaluation of opportunities is a difficult task; an entrepreneur seeks inputs from all the
persons including employees, consumers, channel partners, technical people, etc. to reach to
an optimum business opportunity. Once the opportunity has been decided upon, the next step
is to evaluate it.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

An entrepreneur can evaluate the efficiency of an opportunity by continuously asking certain

questions to himself, such as, whether the opportunity is worth investing in, is it sufficiently
attractive, are the proposed solutions feasible, is there any competitive advantage, what are
the risk associated with it. Above all, an entrepreneur must analyze his personal skills and
hobbies, whether these coincides with the entrepreneurial goals or not.

Developing a Business Plan: Once the opportunity is identified, an entrepreneur needs to

create a comprehensive business plan. A business plan is critical to the success of any new
venture since it acts as a benchmark and the evaluation criteria to see if the organization is
moving towards its set goals.

An entrepreneur must dedicate his sufficient time towards its creation, the major components
of a business plan are mission and vision statement, goals and objectives, capital requirement,
a description of products and services, etc.

Resourcing: The third step in the entrepreneurial process is resourcing, wherein the
entrepreneur identifies the sources from where the finance and the human resource can be
arranged. Here, the entrepreneur finds the investors for its new venture and the personnel to
carry out the business activities.

Managing the company: Once the funds are raised and the employees are hired, the next
step is to initiate the business operations to achieve the set goals. First of all, an entrepreneur
must decide the management structure or the hierarchy that is required to solve the
operational problems when they arise.

Harvesting: The final step in the entrepreneurial process is harvesting wherein, an

entrepreneur decides on the future prospects of the business, i.e. its growth and development.
Here, the actual growth is compared against the planned growth and then the decision
regarding the stability or the expansion of business operations is undertaken accordingly, by
an entrepreneur.

6.16 Factors Impacting Emergence Of Entrepreneurship

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Entrepreneurship is a complex phenomenon influenced by the interplay of a wide variety of

factors. The entrepreneurial activity at any time is dependent upon a complex and varying
combination of economic, social, political, psychological and other factors. These factors
may have been both positive and negative effluences on the emergence of entrepreneurship.
Positive influences constitute facilitative and conductive conclusive for the emergence of
entrepreneurship whereas negative influences create inhibiting milieu to the emergence of
entrepreneurship. Following factors contribute to the success of entrepreneurship:

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

1. Personality Factors
Personality traits such as inner desire for control of their activities, tolerance for risk, high
level of tolerance to function in adverse situations and background experiences such as the
family environment, level of education, age and work history tolerance for ambiguity are
important personal characteristics that affect entrepreneurship. Individuals who are desirous
of working independently; willing to work for long hours and assume risk; are self-confident
and hard-working are likely to be more successful as entrepreneurs than those who do not
posses these qualities
Personal factors, becoming core competencies of entrepreneurs, include:
(a) Initiative (does things before being asked for)
(b) Proactive (identification and utilization of opportunities)
(c) Perseverance (working against all odds to overcome obstacles and never complacent with
success)
(d) Problem-solver (conceives new ideas and achieves innovative solutions)
(e) Persuasion (to customers and financiers for patronization of his business and develops &
maintains relationships)
(f) Self-confidence (takes and sticks to his decisions)
(g) Self-critical (learning from his mistakes and experiences of others)
(h) A Planner (collects information, prepares a plan, and monitors performance)
(i) Risk-taker (the basic quality).
Environmental factors
These factors relate to the conditions in which an entrepreneur has to work. If the
environment that a individual is working in is unsatisfactory, that is, not conducive to his
growth needs, it is likely that the individual will quit his job and start his own business as an
entrepreneur. Unsatisfied personal needs for growth and achievement in employment
conditions results in successful entrepreneurship.
Political
Some researchers felt that the growth of entrepreneurship cannot be explained fully unless
the political set-up of a country is taken into consideration. Political stability in a country is
absolutely essential for smooth economic activity. Frequent political protests, strikes, etc.
hinder economic activity and entrepreneurship. Unfair trade practices, irrational monetary
and fiscal policies, etc. are a roadblock to the growth of entrepreneurship
Socio-Economic Factors

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

The entrepreneurial activity at any time and place is governed by varying combination of
socio-economic factors. The empirical studies have identified the following socioeconomic
factors:
Cast/religion
Family background
Level of Education
Level of perception
Legitimacy of Entrepreneurship
Migratory character
Social Mobility
Social Security
Investment capacity
Ambition/motivation
Economic Factor
Factors such as availability of finance, labor, land, accessibility of customers, suppliers are
the factors that stimulate entrepreneurship. Capital is one of the most important prerequisites
to establish an enterprise. Availability of sufficient capital affects the introduction, survival
and growth of a business enterprise. Capital is regarded as lubricant to the process of
production. If we increase in capital investment, capital output ratio also tends to increases.
This results in increase in profit, which ultimately goes to capital formation. Due to this
capital supply increase, entrepreneurship also increases.
Other Factors
Entrepreneurial Education
More and more people with high academic attainments started joining the ranks of
industrialists, especially the professionals holding qualifications in engineering, law,
medicine, cost and chartered accounting. The newer entrepreneurs have a larger proportion of
their floatation in the traditional sector, but these professionals have by and large preferred to
make their investments in modern sector. The technicians in particular among both old and
new entrepreneurs have entered industries in the modern sector having a bearing of their
academic qualifications. Many universities and institutes are nowadays offering
entrepreneurship education. A number of institutes have set up successful entrepreneurship
centers, which provide help to budding entrepreneurs by conducting formal training and
structured mentoring programs.
Impact of Services Sector

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Increase in per capita income leads to a greater share of the services sector in the national
economy. The average size of firms’ m many sections of the services sector are relatively
small. This in turn promotes entrepreneurial activity across a number of service sector
industries. Even for some developing countries such as India, services account for over half
of the total GDP. Growing importance of services in the overall economy has paved the way
for entrepreneurial activity. New industries such as software and business process
outsourcing have emerged and these have a large number of entrepreneurial firms.
Increasing Demand for Variety
Increased wealth has led to increase in the demand for variety (Jackson 1984). The
increasing demand for new products is of advantage to smaller firms. A number of studies
have shown the comparative advantage of smaller firms in being innovative and coming up
with new products . If the products has unmet demand, it will create a market for itself. The
success of entrepreneurship is, therefore, dependent upon the extent to which the product is in
demand. Changes in consumer tastes are a major reason for growth of entrepreneurship.
People are, inclined to products that are specifically designed to meet their special needs.
Mass produced homogenous goods do not enjoy as wide an appeal anymore.
Impact of Ethical Value System
Max Weber was first to point out that the entrepreneurial growth was governed by the ethical
value system of the society concerned. He said that the spirit of rapid industrial growth
depends upon a rationalized technology, acquisition of money and its rational use for
productivity and multiplication of money. These elements depend upon a specific value
orientation of individuals. Entrepreneurship develops rapidly in those societies where ethical
values provided independent capacity of decision-making.
Internal Control System
Entrepreneurship largely depends upon the control system designed for controlling the
business activities. If the control system is effective they will result in optimal inventory,
good quality products and high profit margins. This will have a positive effect on the success
of entrepreneurship.

6.17 Intellectual property rights

Intellectual property is the creations of the minds of an individual which has commercial and
moral value. Intellectual property rights (IPR) grants exclusive rights to an author for
utilizing and benefiting from their creation. However, IPR is limited in terms of duration,
scope and geographical extent.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

IPR encourages creativity and permits the creator to benefit from the advantage arising out of
their creation. These laws allow investors a fair return on their investments in the research
and development fields.

Categories Of Intellectual Property Rights

Intellectual property rights are divided into two broad categories:
Industrial Property
Trademarks, inventions, geographical indications, industrial design property.
Copyright
Music, films, architectural design, literary works (poems, plays and novels) and artistic works
(sculptures, photographs, paintings and drawings)
Types Of Intellectual Property Rights
IPR is a form of protection provided to inventors to help them reap benefits from their
creative efforts. Owners holding IPR can prevent the use of their intellectual property. They
hold the right to either license, sell or retain their property.
Following are the types of IPRs:
Patent
A patent is issued to protect an invention. It gives the holder the right to prevent anyone from
making, using or selling the patented invention for a fixed time period (usually 20 years from
the filing date).
Copyright
A copyright protects artistic and literary work. The holder has complete rights and control
over the adaptation or reproduction of the work. Copyrights last for up to 70 years after the
innovator’s death.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Trademark
Trademarks are distinctive phrases, words, symbols, or signs. They distinguish the services or
products of one company from the others. Brands usually associate with distinctive
trademarks.
Design
A design protects the outward appearance or the visual style of an object. It does not protect
unseen design elements of the product.
Database
Database right is similar to copyright. It prevents the copying of significant sections of a
database. The database right protects the information itself and not the form of information.
Trade Secret
A trade secret is a practice, design, formula, process, or compilation of information. This
information is utilized by a company to gain a competitive advantage over the others. Trade
secrets are not disclosed to the world. An example of intellectual property rights is the trade
secrets obtained by Coca-Cola for its formula.
6.18 Patents

A patent describes how things work, what they do, how they do it, what they're made of and
how they're manufactured to protect new inventions. The owner of a patent has the legal right
to prevent anyone from creating, using, importing, or selling the innovation without their
permission.
A patent is a property right granted to an inventor by a sovereign body. . Patents encourage
businesses and people to keep developing innovative products and services without fear of
infringement. For example, large pharmaceutical corporations can invest billions of dollars in
research and development. Their medications and medicines may be copied and sold by
corporations who did not conduct research or devote the necessary cash in R&D if they did
not have patents
Patents, on the other hand, can be used to demonstrate a company's innovativeness as well as
to protect its intellectual property. In other words, patents help businesses safeguard their
intellectual property and increase their profits and they are also more cost-effective.
be patentable an invention must be :
• -New
• Innovative
• Better or cheaper or different to anything that has been done before.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Patents are divided into three categories:

Design patents
О A design patent can be applied by anyone who creates a novel design for a product.
Beverage bottles (consider the form of a Coca-Cola container) and furnishings (such as the
kneeling chair) are two examples.
Plant patents
Plant patents are available to botanists who are involved in grafting and developing new
hybrid plant types. The smooth angel rose and drought tolerant com are two examples.
Utility patents
a utility patent can be applied for by anybody who invents or discovers "any useful new
process, machine, article of manufacture, or composite of matter, or any new and useful
improvement thereof." The little green drink stopper that starbucks gives out with its cups, or
the hoverboard kind of skateboard, are two examples.
Procedure for Patent :

Conceptualization:

When generating an idea, most innovation teams attempt to solve a common problem faced
by their company, industry, or the world at large. They will put up plans and acquire the
resources needed to make their solution or vision a reality once they've come up with one. To
provide a more exact description of the final product or process, prototypes or drawings can
be made.

Disclosure of an Invention:

Every invention is subjected to an internal review process. Internal lawyers. and an invention
review panel from various disciplines make up the innovation team. The reviewers rate, rank,
score and point out apparent problems in the invention's supporting documents and
descriptions, which the inventor thereafter addresses. For a single idea, these assessments can
frequently occur several times.

Application for a Patent:

Some organizations create their own provisional or nonprovisional patent applications which
are then submitted to the proper patent office. The prosecution step is the back and forth with
the government patent office and involves constilting with a professional patent lawyer for
advice on how best to proceed.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Maintenance :
You might not want to renew a technology or other patented asset that is accumulating dust,
so we might instead try to sell, license, or donate it. A patent has a limited lifespan after it is
granted, so consider innovating ahead to keep up with the competition.
Costs:
Costs will vary depending on the nation or countries we file an application in and can range
from tens of thousands of dollars to tens of thousands of dollars, plus legal expenses,
depending on the intricacy of the invention.
Maintenance fees can add up to thousands of dollars per patent, per nation where patent rights
have been awarded, over the course of the patent's existence.

The following cannot be patented:

• Theory, method, or scientific or mathematical discovery
• Work in the literary, theatrical, musical, or artistic fields • A technique for carrying
out a mental act, playing a game, or conducting business
• The way information is presented, or some computer programmes
• A type of animal or plant.
• Medical treatment or diagnosis methods
• Anything that is not in accordance with public policy or morality.

6.19Trademarks

Trademarks are essentially business identifiers and are commonly referred to as brand names,
logos, or trade names. A trade mark is connected to the goods or services as a business
identity, or they are sold in the market under the indicated trade mark. For example, Xerox is
a brand name for photocopiers and Apple is a company name for computers.
Trademarks may include names of persons owning the business, numerals, invented words
and shapes, horizontal or vertical lines in any color. Trademarks indicate source of origin and
help in building a brand name and brand value to which the ordinary consumer associates
with.
Name of company owners, numerals, invented words, shapes, horizontal or vertical lines in
any color, are all examples of trademarks. Trademarks serve to identify the origins of a

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

product and aid in the development of a brand name and brand value that the average
customer can recognize.
In India, registration of a trade mark is required for the enforcement of trade mark rights.
There is a Madrid Protocol of international registration, but India is not at party to it as of yet.
A Bill has been proposed in Parliament in this regard and India may adopt this system in the
future.
Markets are made up of words and symbols that can be represented graphically The
Trademark Act stipulates that trademarks must have certain additional qualities. Any person
who intends to register a mark as a trade mark in India can do so.
This mark is required to fulfill the following mentioned criteria as prescribed by act to be
categorized as a trade mark The mark is required to be:
• The mark must be distinctive and unique in character in order to be recognized.
• Indicates no quality or describes the goods for which the mark is used.
• It doesn't contain any words that are regularly used in everyday conversation.
• It does not resemble a well-known trademark.
• Doesn't resemble a recognized trademark Not confusing and deceiving regular
consumers about the source of origin.
• To include any sign or phrase forbidden by the Emblem and Names (Prevention of
Improper Use) Act 1950.
• The mark should not include a shape of products, a form that is inherent in goods, a
shape that is required to achieve a technical result, or a shape that adds substantial
value to goods.

Procedure for Trademarks:

• Trademarks do not always require government approval to be effective; they might be

effective simply by being used often in interstate trade. However, trademark
registration provides significantly superior protection and is obtained by filing an
application with the appropriate government entity.

• A trademark application involves a detailed description and representation of the

mark and its usage in association with related products or services from the firm or
user.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

• It's a good idea to work with outside counsel who specializes in trademark
applications and/or search services, just as it is with patents, to ensure that our desired
mark has a clear path.

Costs :
The cost of obtaining a trademark is usually relatively low, but can vary from company to
company depending on who owns the rights to the name and also vary with trademark
registration authority.
6.20 Copyrights

Copyrights protect the way ideas are expressed (original works of authorship"), including
written works, art, music, architectural plans and even software programming code (most
evident nowadays in video game entertainment). Copyrights provide the owner of the
protected materials authority over reproduction, performance, new versions or adaptations,
public performance and distribution of the works, with some limitations.
Copyright provides the owner of copyright with the exclusive right to,

• Make copies or multiple copies of the work.

• Construct other works based on the original work.
• Make copies or multiple copies of the work available to the public through a sale or
other transfer of ownership, as well as through rental, lease, or loan.
• If the work is a literary, musical, dramatic, or artistic production, a play or a motion
picture or other multimedia work, perform it in front of an audience.
• If the work is a sound recording, make it public by using a digital audio transmission.

When two or more writers collaborate on a single work, they are referred to as joir authors
and have an indivisible interest in the finished product. When numerou writers contribute to a
collective work, each author's individual contribution separate and distinct from the collective
work's copyright ownership.
Publication, according to copyright law, is the sale or other transfer of ownership copies or
multiple copies of a work to the public, as well as the rental, lease, lending of such copies or
multiple copies. Publication also includes offering to gi copies or multiple copies to a group
of individuals for the purpose of furt distribution, public performance, or public display.
Procedure for Copyright

The Copyright Office invites people to apply online for copyright registration - process of
applying for a work to be protected by law. Copies of books, mov music and other works of
art should be registered with the government for the E protection against copyright
infringement.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

Costs
Depending on the type of work being protected, currently fees vary between $25. $100. The
most frequent copyright registration sought is for one work by one author and costs about
$35.

Under copyright law, the publication of the distribution of copies or work records. to publicly
by sale or by other transfer of ownership or by lease, lease, or loan. Provides distribution
copies or multiple copies of a group of people for the purpose of further distribution,
community service, or public distribution.

6.21 Trade Secrets

• Trade secrets are proprietary processes, programs, resources, formulas, strategies or

other confidential and special information for the company that uses them. They serve
as a competitive advantage for the business.
• Confidential information about the process, method or design a manufacturer or
retailer uses to design, market, or develop a product.
• Trade secrets are secret practices and processes that give a company a competitive
advantage over its competitors.
• Trade secrets may differ across jurisdictions but have three common traits : not being
public, offering some economic benefit and being actively protected.
• Trade secrets may take a variety of forms, such as a proprietary process, instrument,
pattern, design, formula, recipe, method, or practice that is not evident to others and
may be used as a means to create an enterprise that offers an advantage over
competitors or provides value to customers.
• When people who may benefit from the knowledge gain access to it, it loses its value
to the original owner. When such parties obtain access to information in an unlawful
and unjust manner, our first instinct is to stop them from benefiting from the concept.
The value of a trade secret is determined by its confidentiality.
The following documents must be signed in order to protect trade secrets:

1. Agreement on non-competition and employee secrecy

2. Application of a post-employment contract
3. Agreement of non-disclosure
4. Authorized disclosure by the company's board of directors

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

5. Agreement and declaration termination.

6. Agreement on invention assignment and its application
7. Agreement for injuctive relief.
Trade secrets, on the other hand, must be protected in India under the country's Intellectual
Property laws. Trade secrets are protected by Indian courts under contract law. There are a
few papers that are linked with trade secret protection We should keep these contracts in tact
and follow the law.

6.22 Licensing

• Licensing is a strong and adaptable tool for establishing collaborations and bringing
invention out of the darkness of an inventor's workspace and into the light of the
marketplace.
• Simply described, a license is similar to a lease arrangement between an (licensor)
and a lessee (licensee), in which the owner (wo) grants rights property in return for a
fee.
• Licenses apply to intellectual capital (e, IP), which are mental creations such an
formulae, drawings, procedures, software, or literary and creative works that are
protected by patents, trademarks copyrights, know-how, or trade secrets, rather than
leasing something "physical" like a vehicle or a home
• IP, unlike real asset can be licensed to numerous users in various locations at the same
time. The lease/license, on the other hand, is only valid for a limited time and is
subject to the terms and conditions of a mutually agreed-upon lioming agreement.
• These agreements also include restrictions on how I may be used, muring that
licensees only pay for the value of their usage and that licensors move their i share for
each use. Inventors are able to fund and perform more research and development
(R&D) as a result of this compensation and the innovation de s sustained.

The followings things can be licensed:

• Almost everything may be licensed as long as it has a property right that can be
protected. Patents, trademarks, copyrights, know-how, and trade sects can all be used
to legally protect IP rights Licensing permits a person to utile another's legally
protected intellectual property within the terms and conditions of a sing agreemerit.

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

• There are several different forms of IP rights that may be loensed Technology is
usually associated with products, materials, machinery, processes, or prostiones New
technology can be legally protected by a government issued patent. It is als possible to
license technology in the form of a trade secret

Only the parties involved aware of conditions of license majority of agreements include
following:

1. A clear statement licensed subject matter and scope being licensee by the owner/licensor,

2. Specific and conditions regarding scope exclusive non-exclusive), field which the licensed
activities may be conducted, duration of the agreement;

3. A description the license's compensation for the use of the licensor's property rights;

4. Other terms and conditions, such when and how payments are to be made.

Thus licensing is a common, flexible, and quick method of commercializing intellectual

property. It's strong to create profitable, win-win between parties with distinct skills.

6.23 Franchising

A franchise is an agreement or license between two legally separate persons that grants them
the right to operate business as follows

1.An individual or group of individuals (franchisee) who promote a product using the
trademark brand name another business (franchisor)

2.The franchisee used to promote a product or service using the operating methods of the
franchisor

3.The franchisee need pay the franchisor fees for these rights

4.The franchisorhas to provide rights and support to franchisee.

Types of Franchises

A) Product distribution franchises

B) Business format franchises.

A) Product distribution franchises

Product distribution franchises are supplier-dealer arrangements that merely sell the
franchisor's product.The franchisor often licenses its brand and logoto franchese but does
not supply them with comprehensive system for running their firm in product distribution

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

franchising. Beverage distributors, vehicle dealers. and petrol stations are among industries
where this sort of franchising is most common.

Some well-known product distribution franchises are Chrysler, Texaco, John Deere,
Goodyear Tires, Ford, Exxon, other automobile producers etc.

Despite the fact that product distribution franchises account for the majority of total retail
sales, the majority of franchises available today are business type possibilities.

B) Business format franchises

Business format franchises, on the other hand, employ not just the franchisor's product,
service and trademark, but also the whole business model, including marketing plans and
operations manuals. The most frequent sort of franchise is a business format franchise.

Some well-known Business Format Franchise are KFC, McDonalds, Starbucks Coffee,
Dunkin' Donuts, Famous Amos, etc.

Legal Issues of Franchising

• Franchising establishes a long-term business engagement and understanding the

franchise programme is essential. A potential franchisee should seek the advice of an
experienced franchise attorney to help them understand the legal issues. The success
of both the franchisor and the franchisee is dependent on a healthy relationship
between them.
• Federal and state regulations control franchising, requiring franchisors to give
prospective franchisees with information about the franchisor-franchisee relationship.
• The two main franchising legal documents are as follows:

• 1.The Disclosure Document, which might be in the UFOC format - The UFOC is to
provide information to prospective franchisees about the franchisor, the system and
the agreements they will be required to sign.

• 2. Franchise agreement

The Franchise Agreement

The terms of the connection between the franchisor and franchisee are more precise in the
franchise agreement than in the UFOC. A typical franchise agreement can include
information on

Project Management Milind P Gajare

AISSMS IOIT TE(E&TC)

1. The franchise system, which includes things like trademarks and products
2. Geographical area
3. Partie's rights and obligations: Standards, processes, training, help, advertising and so
forth.
4. The franchise's term (duration)
5. The franchisee's payments to the franchisor

6. The right to terminate and/or transfer the franchise.

The franchise agreement is a legal, written contract that controls the connection and details
the franchise acquisition conditions. Before signing, prospective franchisees are entitled to
have the completed franchise agreement for at least five business days. This allows them to
evaluate and analyze the terms and conditions of the agreement.

Project Management Milind P Gajare