Sources of Entrepreneurial Ideas and Innovation for Lovely Cafe

This report discusses different sources of entrepreneurial ideas and innovation for Lovely Cafe, including past work experience, friends and family, travel, and innovation. It also evaluates the market gap and potential for the cafe using McKinsey's 7S model and Drucker's 7 sources of systematic innovation. The report interprets data to provide evidence of market potential and applies a SWOT framework to assess the viability of the entrepreneurial idea. The subject is entrepreneurship and the course code is not mentioned. The college/university is not mentioned.

Identifying
Entrepreneurial

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK ..............................................................................................................................................4
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation providing
specific examples........................................................................................................................4
P2 Explain the rationale and the market gap for a specific entrepreneurial idea using relevant
tools and techniques to support your choice...............................................................................6
M1 Provide a detailed evaluation of Drucker’s 7 sources of systematic innovation providing
specific examples........................................................................................................................7
The Need of Present data to support gap analysis-.....................................................................8
Interpret data appropriately to provide evidence of market potential.........................................9
P5 Apply a SWOT framework to collate evidence to support an objective assessment of a
specific entrepreneurial idea.....................................................................................................11
P6 Evaluate the competitive and market environments in which the idea will be launched to
assess potential viability............................................................................................................12
M4 Critically evaluate a specific entrepreneurial idea in the context of the market place and
competition. ..............................................................................................................................13
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Entrepreneurship is defined as the process of discovering the new ways of combining
resources. When market value is being generated by such combination of certain resources is
greater than the overall market value. When the individual who creates a new business bearing a
most of the risks and enjoying most of the rewards in the business(Ahmed and Ganapathy,
2021). An entrepreneur is able to assess the abilities so that they can maximise the prospective
aspects. Entrepreneurship is being categorized into four main types that are small, scalable, large
and social entrepreneurs. These models cover the fundamentals of starting the new business and
also focuses on the business itself rather than the qualities of the entrepreneur. This respective
report will cover the various sources of entrepreneurial and innovation ideas and scope of
entrepreneurial ventures with the use of variety of examples . This also analyse the SWOT
analysis of this business in which all the factor that can effect the business opportunities will be
discussed further in this report . Furthermore, it will describe the rational and the current market
gap for the cafe business idea with the help of various tools and techniques which will help the
new start-up to run effectively and efficiently. Lastly, it will cover the competitive and market
environment related with the launch idea which is the innovation of flavoured bread by a cafe in
order to maintain the market portion.
TASK
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation
providing specific examples.
Entrepreneurial ideas- It is a idea or imagination made by an individual in order to create
something different which can be turned into a big business. The main aim behind this idea is to
earn profit by offer unique product and services to the customers(Boubker, Arroud and
Ouajdouni, 2021). An entrepreneur should develop a unique, innovative and problem solving
product or services which can help them to build strong position in their market industry by
attracting more and more customers.
The different source of entrepreneurial ideas are as follows:-
Past Work Experience:- If an entrepreneur is working in an organisation from the past few
year, they are obviously doing something right according to their skills. During this working

time, they have attain high knowledge related with their field and been professionally exposed in
various other fields. Thus, by this an individual create various contact with suppliers and buyers
which can help them to start their own organisation.
Friends and Family:- An individual can talk and consult with their friends and family which
which can give them various ideas of business which they are seeing in their various region. An
entrepreneur can select one business option which they thinks will be easy for them to run and
execute. Entrepreneur can also take the advantage of their work experience and interest to
generate more business idea(Callander and Cummings, 2021). An individual can join various
social group of business entrepreneurs which can enhance their knowledge regarding the
business management.
Travel- Various business idea may develop when an individual travel different region of the
country and can see the different process of doing the similar business. Travel makes an
individual aware about multiple alternatives of business. They can also start a unique business
present in the another nation into their home country.
Innovation:- This term can refers as to creating something new, upgrading the existing product,
new ways of doing old things etc. which can enhance the value and objective of that product or
services. Breakthrough innovation, sustaining innovation, basic research and disruptive
innovation are 4 types of innovation.
The different source of Innovations are as follows:-
The Unexpected-New and various innovation can happens suddenly and sometimes occurs
coincidently. Most of the time, an entrepreneur get the unique idea in their mind after seeing
some product or service and they try to modify which can enhance the value of that specific
product and service(Cohen, 2021).
Necessity- Necessity is the most important reason related to an innovation. After some period of
time everyone need some change in the product which they are using for a long period of time.
Thus, the interest level of the customers decrease due to this the entreprenuer can build simillar
product with the new methods or techniques which can satisfy the modern needs and demands of
their customers.

P2 Explain the rationale and the market gap for a specific entrepreneurial idea using
relevant tools and techniques to support your choice.
McKinsey's 7S model
McKinsey's theory is a systematic framework which helps an organisation to analyse the
design of their business with the help of seven key internal components related to their
organisation(Dana, 2021). All the components present in this model should be aligned effectively
and properly by the management of business in order to find their competitive advantages. In
context to Lovely Cafe, with the help of this tool they can accomplish their set aims and goals.
These factor are disscused below:
Strategy: This is a business or strategic plan made by the management of the company
according to their business function. By this a company can identifies its competitive
advantages so they can build a different product as compare to rivals present in their market
industry. In context to Lovely cafe, If the management will not have a effective business
strategy then company will have to face various negative issues such as reduction in
customer base and business productivity.
Structure: This factor relates with the positive manner in which the business units and working
sector are organised in order to make the most appropriate products and effective
communication system within their organisation. If Lovely cafe will have inappropriate
business structure then it will bring down the effectiveness of company due to which rivals
companies will gain advantage.
Systems: This is the procedure or method which helps an organisation to complete their day-to-
day work and important decision related to the production of the company. In context to
Lovely cafe, the manager of this company should use appropriate business method for the
running of their business which can help them to examine and evaluate their weak or strong
points. Due to this they can make the proper change requires within their
organisation(Eckhardt and et. al., 2022).
Skills: In this factor all the power, competences and capabilities of employees in Lovely cafe
while performing the specific work in their company. Confident staff of Lovely cafe will
allow them in handling the complex situations in impressive way.
Style: This elements determine the process which has been adopted by the higher authorities and
top level managers of firm in order to properly interact with their workers or team members.

In case of Lovely cafe they have implemented participative style with in their organisation
in which they regard the opinions given by their employees.
Staff: This elements is related with the various types of individual which are included in the
workforce of the Lovely cafe according to their skills and specialization. It involves the
manner in which required employees hired, trained, rewarded and motivated
Shared values: It is one of the most important factor which includes in McKinsey's 7s model in
which all the norms and standards are involves which assist the management of Lovely cafe
to manage their current employees in a proper and effective way. Due to this they can
enhance their working capacity(Etemad, Gurau and Dana, 2022).
M1 Provide a detailed evaluation of Drucker’s 7 sources of systematic innovation providing
specific examples.
This model states that there are 7 types of opportunities which can occur in an individuals life
which can assist them to start a new business or innovate something new product and services
that can make the positive change on the general public living in their region. The 7 elements are
as follow:-
The Unexpected- When some opportunities arises an individual life then it they can take the
advantage from this by building effective product and services which can fulfil the needs and
demands of the customers.
Industry and Market Disparities- This opportunities can rise in the form of regulations,
deregulations, changes in supply chain and many more other elements. An individual should
keep eye on the modern technologies arises in their industry(Fang and et. al., 2022).
Process Vulnerabilities / Process Needs- This factor is related with both external and internal
factor of the business. An individual should always check the up-gradation of equipments which
are present in their market field by which they can produce more effective and efficient products.
Incongruities- An incongruity is arises when there is a gap arises in the between what is need
and what is providing by the company. An individual should always try to meet the customers
demands and standards.
Demographic Shifts- The change in demography can generate more opportunities for the
individual which they can use in order to crate more effective products and services.

The Need of Present data to support gap analysis-
A gap analysis refers to the method which is assessing the performance of an organisation. It is
also referred as a needs of analysis, assessment, gap analysis. It is a process of filling the space
for an organization. In IT gap analysis is a term which is used by managers to improve or
develop the teams and services as the beginning to plan to introduced operational developments.
It can be measured by some multiple sources of business which includes satisfaction of
customers, productivity, services, revenue, supply chain cost etc. for establishing the new
business there are some need of present data to support the gap analysis of a business which can
be conduct by some objectives like specific target, by see the organisation mission statement,
business goals, collecting the relevant data on performance levels(Kania, Anggadwita and
Alamanda, 2021). Gap analysis is not only for business, it is used by different industries.
Lovely's cafe produce healty food and drinks which is the plus point for the customer's health.
There are some major points which play a vital role for introduced new innovation bycafe which
are as follow-
Product Launch: product launch define as the term where the new manufacturing product are
introduced in the market or industry. By using gap analysis for cafe it can be major as the
comparing the product features with product expectation. The innovation by cafe produced to
flavoured bread and drinks, is healthy for customers which can be compare by Lovely's cafe
present products, which is helps cafe to determine the sales forecast.
Sales Strategy: It is the term of forecasting the sales for its goals. Sales gap analysis is define as
the strategy of tracking the sales and measuring against with monthly or yearly goals. It is helps
to measuring the future sales growth by comparing it present sales. The Lovely's cafe should use
this sales strategy for analysis the future sales which can be determine by the present sales
growth of the cafe(Minola and et. al., 2021). By this strategy cafe can measure that the
innovation they introducing will be profitable or not.
Employee Performance: Employee gap analysis define as the reviewing the employee's present
performance for comparing it with future which help to analysis that the employee's performance
is good for future or not. The lovely's cafe should use this gap analysis for comparing the present
employees will sale the cafe new product effectively or not, which help the cafe to analysis that
employees current performance for the future success. Employee play a vital role for any

business or organisation so, it is important that employee should the better performance for run
the business successfully.
Service Quality: Service quality gap analysis is a term where the organisation's services are
measured by the customers. Customers also the important part for an business. All success, goals
and achievement only depends on customer experience. The lovely's cafe need to understand that
their product and services which they provide should be on time, healthy and hygiene for the
health of customers(Oputeb and et. al., 2021) . The cafe should fulfilled their customers needs
and wants by providing goods services quality and product.
Interpret data appropriately to provide evidence of market potential.
Market potential define as the size of market, which represents the upper and core values of the
market for product at a particular time. The interpret data of Lovely's cafe should be determine
by the customers attraction or experience. For better growth, cafe should produce healthy food
and drinks where they can attract the customers. The Lovely's cafe graph shows that customers
are attracting by the new innovation of healthy foods and drinks which is very often by 40% and
sometimes customers balanced their diet by 36%.

interpret data of cafe also show that customers are attracting towards eat healthy and balanced
their diet plan. The plan of Lovely's cafe to introduced the healthy flavoured breads and drinks is
to help in attracting more customers, increasing sales. And also helps in customers to balanced
their diet by eat healthy. The data analysis helps to determine the future values of the cafe and its
product growth. For better Market growth cafe should understand the customer needs and wants
by providing them goods services and satisfied them. Interpret data also shows the growth of the
cafe where it is clear that customers are attracting towards healthy diet, which is the advantage
for the cafe because the cafe also produce healthy food and drinks for customers which helps to
increase customers interest. By providing healthy food Customer will come to the cafe and enjoy
their healthy & happy meals and also share the information about the cafe to other peoples,
which can helps to attract more customers(Piñeiro-Chousa and et. al., 2021). For interpret more
data there should be descriptive research of the product and services which analysis the
description of the things for product.
The above graph shows the value of healthy food and drinks where the ratio of fruit &
vegetables by 24%, bread,rice by 19%.

P5 Apply a SWOT framework to collate evidence to support an objective assessment of a
specific entrepreneurial idea.
SWOT analysis: -
SWOT analysis may be defined as the most important strategic tool which can be used by
the management of the organisation in order to analyse that what company does right now and
develop the strategies in order to become successful in the future. Along with this, this tool also
assist in decision making and planning ahead. In context to the Lovely cafe the SWOT analysis
has been discussed below: -
Strengths: -
 High service culture: - high quality of services like clean place, washed cups, good
sitting arrangements, nice seats, and clean waiters and staff are provided by the Lovely
cafe (Rayamajhee Storr, and Bohara, 2022). All these things gives a impression of
healthy environment in the minds of customers which assist them in launching the new
flavoured bread and juices in their cafe. The clean environment attract the consumers
towards the cafe and its products which leads to increase the sales.
 Quick and Motivated staff: -the work routine of the Lovely cafe is so simple and each
and every staff member of the restaurant knows very well about the steps which they
have to perform again and again. These little things motivate the staff members which
result in quick to serve to the visitors in proper manner.
Weaknesses: -
 Less market data: - it is very important to check the statistics of the new market if
organisation wants to launch the new product in the market. Its become very difficult for
the management of the company to collect the data from the niche market. This not only
affect the sales of the Lovely cafe but also affect its sustainability.
 Difficult to estimate the capital and profits: - this is being considered as the one of the
most important which can be faced by the management of the Lovely cafe. As in the
business of restaurant, profits came in the form of bits and pieces(Romanenko and et. al.,
2021). So it is very important for the company to be very vigilant in accounting. This is
the only way to keep their accounting book in proper manner.
Opportunities: -

 Developing direct relationship with the customers: - this is being considered as one of
the most important opportunity which can be grab by the management of the Lovely
Restaurant. As the good thing about the restaurant is that this assist in developing an
effective as well as direct relationship with the consumer which ultimately assist the
management in present the flavoured juices and bread in front of the consumer easily.
This result in increasing the company sales.
 Mobile application and home delivery service: - as the business of the Lovely
restaurant is running well, so they can launch the mobile application in order to give
additional services to their customers. With the help of this application the firm can also
provide the home delivery services which result in increasing the sales of the company.
Threats: -
 Price sensitive market: - as the products in which the company is dealing is very price
sensitive in nature. If the prices of the respective product are raised by the company
management then the consumer would stop visiting the restaurant which act very
expensive for them. This also affect the sustainability of the company.
 Competition: - as the industry in which the lovely restaurant is doing the business is very
competitive in nature. The products like flavoured bread and the juices which are
innovate by the respective company can be copied by other which may result in affecting
the sales of the company. The entry of the competitor in the industry result in sharing the
target market and profits.
P6 Evaluate the competitive and market environments in which the idea will be launched
to assess potential viability.
Porter's five forces model: -
Porter's five forces model is basically a tool which can be used by the management of the
company in order to analyse the competitive environment. With the help of this tool the
organisation is able to draw the operating environment which assist them in determining the
competitive intensity of the industry (Secinaro and et. al., 2021). In relation to the Lovely
restaurant, this Porters five forces framework has been discussed below: -
 Competitiveness: - this threat is related to the availability of competition in the industry.
In relation to the Lovely restaurant, high amount of threat has been faced by the
management of the company from this force. The industry of food and drinks is very

competitive in nature because of the strong rivals like Unilever, Kraft foods and Group
DANONE. So company have to make so many efforts to make familiar customers with
the new products.
 Threat of new entrant: -this threat sates about the how easily a new entrant enter into
the industry. In relation to the Lovely restaurant, low amount of threat has been faced by
the company form this risk because new entrant need to understand the needs of the
consumer which require time and in the mean time rival take a progressed with the
customer commitment.
 Bargaining power of suppliers: - this factor is related to the amount of power possessed
by the supplier in order to drive up the prices of the raw material. In relation to the
Lovely restaurant, low threat is going to be faced by the company because of the
availability of the immense number of supplier(Zucchella, 2021).
 Bargaining power of buyers: - in relation to the Lovely restaurant, high bargaining
power of the buyer is faced by the company. This is only because of the availability of
the immense competition. Switching expenses is quite low for the consumer.
 Threat of substitute: - in relation to the Lovely restaurant, moderate amount of threat
has been faced by the company because the innovation of the flavoured juices as well as
the bread is very unique and in the recent time no substitute is available in the
marketplace.
M4 Critically evaluate a specific entrepreneurial idea in the context of the market place
and competition.
The idea of the flavoured bread and juices act as a very successful idea because lots of
people love to eat and drink the healthy food and juices. As the mind set of the consumer in order
to remain fit assist this idea to become successful in the market of UK. On the other hand, the
culture of eating the junk food or ready to eat food by the young generation may act as a threat in
way of the success of this idea. Along with this the immense amount of competition in the
market of UK in this industry also may affect the success of this idea as their rivals has well
known image in the marketplace.

CONCLUSION
From the above report it has been studied that, entrepreneurs are the one who takes the
step to start something new business enterprise in order to make the lifestyles of people better
present in their country. An individual also transform old product or services by making effective
changes that can enlarge the core value of that good. Various examples such as transformation of
diesel cars into electric vehicle that can protect the nature by reducing the pollution are some
kind of most effective innovation which has been done by various of individuals present across
the globe. Furthermore, the Lovely cafe is been chosen in this report which has added flavoured
bread and juice in their menu. After the pandemic, people across the globe became more health
conscious in order to this they take the initiative to offer healthy juice for their customer which
can increase their brand image and sale. The various sources such as travel, family and friends
etc. which helps an individual to start a new business or make a change in existing product and
services are been discussed in this report. Later on, the Mckinsey's 7's model related to the
Lovely cafe has been discussed in this report which can help them to identifies the market gap
present in their specific industry. The data which can help an entrepreneur to identifies their
support gap regarding their evaluation is been concluded in this report. After this, the appropriate
data that can help Lovely cafe to maintain the market position is been summarised in this report.
Later on, complete SWOT analysis of business is been a part of this report which can assist the
Lovely cafe to examine their internal and external factor that can affect their business. At last,
the competitive and market environment in which the business idea of the company will
launched to assess potential liability is been included in this report.

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