Entrepreneurial Opportunity Recognition and Analysis

This assignment requires students to analyze the concept of entrepreneurial opportunity recognition, including the role of creativity, innovation, and social networks. It also involves exploring the seven sources of innovative opportunity and understanding the entrepreneurial mindset. Students are expected to provide a detailed analysis of the research papers and publications related to entrepreneurship, opportunity recognition, and innovation. The assignment aims to help students develop a deeper understanding of the entrepreneurial ecosystem and the factors that influence opportunity recognition.

Identifying Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation.........1
TASK 2............................................................................................................................................5
P2 Explain the rationale and the market gap for a specific entrepreneurial idea using relevant
tools and techniques to support your choice...........................................................................5
TASK 3............................................................................................................................................7
P3 Present data needed to support gap analysis in the evaluation of a specific entrepreneurial
idea.........................................................................................................................................7
P4 Interpret data appropriately to provide evidence of market potential...............................8
..........................................................................................................................................................9
TASK 4..........................................................................................................................................11
P5 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.......................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Identification of business opportunities is an essential aspect in today's competitive
environment as it assists entrepreneur to set up a new venture with innovative and creative idea.
Entrepreneurial opportunities appears at nexus of person's aspirations with social and economic
conditions perceived as favourable in order to develop new good or service, either in new market
or an existing one (Aliaga-Isla and Rialp, 2012). In the present assignment, chosen organisation
is Mountain View Restaurant which deals in hospitality sector and offers organic food to
customers of United Kingdom. The main reason behind selecting this idea is health aspect of
people and provide more healthy food services. This assignment covers evaluation of possible
sources for innovative and new business idea and the selection of particular entrepreneurial idea
for market gap analysis. Apart from this, primary and secondary data is used to determine
potential of market. At last, evaluation of entrepreneurial idea in terms of competitors and market
is defined and an assessment of its potential viability is made in this project.
TASK 1
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation
Entrepreneurial ideas and innovation are determined and evaluated through different
sources. These sources may be external factors of change develop opportunities for
entrepreneurs. These sources can be evaluated by:
Drucker’s 7 sources of innovation:
The seven sources of innovation are propounded by Peter Drucker that provides an
entrepreneur the purposeful means to search for opportunities and mitigate risks (Peter Druker's
Seven Sources of Innovation, 2017). These sources are defined below: The Unexpected: The business world is filled with various surprises that involves
unexpected failures as well as unexpected successes which can be a good source or factor
of inspiration for innovation. These are overlooked by entrepreneurs as opportunities for
change. Unforeseen situation in business inspire innovators and leaders of Mountain
View Restaurant to get other perspective on situation and take advantage of emerging
opportunities. The company is expected to come up with innovative healthy product that
satisfy needs of customers.
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 Incongruities: Many firms do not conduct market research to identify what the target
audience really wants and face the failure while developing product. The dissonance
between what it is supposed to be and what is can lead the firm to downfall but is a great
source for innovation. The best way for leader of Mountain View Restaurant to identify
incongruity is to take customer feedbacks, reviews and complaints (Autio and et. al.,
2014). Process need: The innovation source is more task focused instead of situation focused.
After close assessment of firm's processes, determining weaknesses and improvement
ways, the source of innovation comes. Deep evaluation of capabilities of company will
enable leaders of Mountain View Restaurant to more innovative and effective solutions. Market and Industry structure change: It can be stable for many years, however, with
technological development, various industries are almost disrupted overnight. Thus, the
innovators or leaders of Mountain View Restaurant requires to keep an eye on such
changes and treat these as opportunities instead of threats. Demographics: By any change in demography, the functioning of firms are affected.
These changes influence market as they identify product demand. Changes in education,
employment, age etc. impacts the directions of firm and can open up new horizons to
Mountain View Restaurant if it manages to properly identify the opportunities. Changes in perception: In past few years, there are many changes takes place in the way
an individual perceive the world. Now-a-Days, due to technological involvement and
power of social network, changes happen very fast (Block and Wagner, 2010). Perception
of people changes overnight regarding industry, brand or particular product. These
perception change provides an opportunity to Mountain View Restaurant for innovation
and development of new product that align with customer's perspective.
 New Knowledge: Scientific and technological breakthroughs are the main sources of
innovation that can not be overlooked by firm. Those companies who refuse to adopt
changes would not be able to survive for longer period. Thus, it is very essential for
leader of Mountain View Restaurant to apply new knowledge in every aspect by learning
more about customers and improving supply chain to hire best manpower.
STEEP factors
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STEEP Analysis is a tool that helps managers to gauge how macro environment will
influence strategic plan of firm to remain competitive. It involves five factors that helps manager
of Mountain View Restaurant to analyse company's external environment. These factors are
defined below: Social: It involves the aspect that defines the society as whole. Any change in
demography, age distribution, lifestyle, religion, education etc. directly impact on firm
and its strategic plans. Thus, manager of Mountain View Restaurant needs to be careful
when monitoring society trends to arrive at appropriate conclusion (STEEP Analysis,
2018). Technological: Industries that depend on technological advancements for developing
new products are prone to be impacted by rapid alterations in environment. It is essential
for innovator of Mountain View Restaurant to measure and monitor the impact of change
in technological surroundings on their product development strategies. Economic: It involves the aspect that deals with capacity of individual to obtain goods
and services conferred the set economic conditions. It is necessary for innovator of
Mountain View Restaurant to properly evaluate customer's reaction when any change
takes place within environment and how company must adjust their strategy to stay
competitive in any circumstance. Environmental: It involves the situation of biological and physical environment that firm
can face. Manager of Mountain View Restaurant requires to consider all the legislations
related to environment protection, waste management, energy saving technologies etc. in
order to run their operations smoothly.
 Political: Understanding of legal and political environment of respective country where
firm operates is needs to be analysed by manager of Mountain View Restaurant.
Consideration of these factors will provides an opportunity to company in market
(Dimov, 2011).
Role of entrepreneur:
An entrepreneur is defined as an individual who has innovative idea and willing to take
risk of executing idea. They highly contributes in growth of economy by converting opportunity
into business idea. Entrepreneurs analyse the market and identify opportunities to exploit them.
They are the ones who convert concept into innovative product and offer it to customers for
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satisfying their need. Today, people are more conscious towards their health which provides an
opportunity to entrepreneurs. The owner of Mountain View Restaurant grab this opportunity and
thinks to start a restaurant that serves organic food to customers with quick services.
Types of innovation:
Innovation refers to the new idea or method. It includes deliberate application of
imagination, information and initiative in deriving different or greater values of resources and
involves all processes through which new ideas are generated and converted into useful products
(Ekpe, Mat and Razak, 2010). There are different types of innovation which are defined below:
Product and process innovation:
Product innovation is defined as the introduction of product or service that is significantly
improved or new with respect to its intended users or characteristics. It includes improvements in
materials, technical specifications, incorporated software etc. On the other hand, process
innovation is defined as the execution of significantly improved or new production or delivery
method. It involves changes in equipment, techniques etc.
Incremental v/s big bang disruption:
Incremental innovation seeks to enhance the system that exists already by making them
faster, better and cheaper. It use existing technology and maximizes customer value in existing
market. Whereas, big bang disruption is a fast paced innovation which can disrupt stable
business rapidly (Foo, 2011).
Difference between invention and innovation:
Basis Invention Innovation
Meaning It is defined as the generation of idea for
product or service that never has been
made before.
It implies the execution of idea for
good or service for the first time.
Occurs when Invention occurs when any new idea will
strike in mind of scientist.
Innovation occurs when a need is felt
for improvements in existing service
or product.
Role of creativity:
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In entrepreneurship, creativity plays an important role. It helps the owner of Mountain
View Restaurant to think of new ways to create product and improve business. It assists in
developing the new ways of optimizing business and improving existing product or service.
Difference between product or service idea and business idea:
Product or service idea Business idea
Product or service idea refers to the process
that is utilized to assess innovative product
ideas, marketing trends and strategies.
A business idea refers to the concept that can
be utilized for financial gain. It is centred on
goods or service which is offered for money.
TASK 2
P2 Explain the rationale and the market gap for a specific entrepreneurial idea using relevant
tools and techniques to support your choice
For an entrepreneur, it is very essential to identify their target customers before offering
product into market (Heinonen, Hytti and Stenholm, 2011). For this, it is very essential for
manager of Mountain View Restaurant to analyse he gap in market i.e. the gap between unmet
needs of customer and group of customers who are not using goods or service of firm. It depicts
the opportunities for firm to expand its consumer base by creating targeted offers and increasing
awareness to reach the untapped market.
Segmentation
Market segmentation refers to the procedure of dividing market of potential clients into
homogeneous subgroups. It can be used by manager of Mountain View Restaurant for dividing
its target market on the basis of types of segmentation. These are defined below: Behavioural: In this segmentation, the basis of market division is behaviour, choices,
preferences, usage and decision making of people. Manager of Mountain View
Restaurant divides market on the basis of product knowledge and usage. Demographic: In this, there are some demographic variables on the basis of which
market is divided by leader of Mountain View Restaurant. These includes gender,
income, age, occupation, religion etc. The segmentation is done on the premise that
buying behaviour of people is highly affected by their demographics (Kraus, Richter and
Durst, 2015).
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 Geographic: In this, geography is the main basis on which market is divided. This
segmentation is done to fulfil the requirements of people who are belong to different
regions and have distinct requirement.
From the above mentioned segments, demographic segmentation is used by Mountain
View Restaurant to serve their organic food. They segment market on the basis of age. Their
main target customers are people with age between 25 to 60.
Tangible and intangible benefits of product or service:
Tangible products or services: It refers to the physical object or thing that can be
perceived by touch. The tangible product of Mountain View Restaurant includes food, interiors
etc. Benefits of the product includes the value that it provides to customers in turn of buying
product.
Intangible product: These are the goods that doesn't have a physical nature. The
intangible product of Mountain View Restaurant is the services that it provides. The restaurant
provides quick services to customers which adds value to it (Mitchelmore and Rowley, 2013).
PORTER'S FIVE FORCE ANALYSIS
This model was developed by Michael Porter in year 1979. Application of this tool helps
manager of Mountain View Restaurant in determining competition level of industry. It includes
five forces which are defined below: Power of suppliers: Strong power of suppliers allows them to sell raw materials of low
quality at higher prices. The restaurants gets their food products form external sources
like farmers, butchers etc. As various suppliers are available in market for producing raw
material, bargaining power of suppliers is weak which is beneficial for Mountain View
Restaurant. Power of Buyers: If bargaining power of customers is strong, the tendency to bargain
would increase. Consumers have the power to demand high quality products at lower
prices. For Mountain View Restaurant, bargaining power of buyers is high which tends to
decline profits of firm. Competitive rivalry: In market, various competitors exists that deals in same sector and
offer products. In food and restaurant sector, relatively high competition exists in market.
For Mountain View Restaurant, competitor rivalry is high thus firm requires to use
different strategies such as charging low prices than rivals, use of creative distribution
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channels, differentiating product or brings improvements in existing one for maintaining
its sustainability in market (Neneh, 2012). Threat of substitution: Threat of substitute product is low for Mountain View Restaurant
as there are very few firms in market which offers organic food to customers. For
maintaining its sustainability in market, firm requires to charge minimum prices to its
customers and use various strategies to attract them more towards restaurant.
 Threat of new entry: As Mountain View Restaurant deals in offering organic food, the
threat of new entrant is moderate for it. Its main reasons is few entry barriers and it is
cheaper to start a restaurant instead of other business (Quan, 2012).
TASK 3
P3 Present data needed to support gap analysis in the evaluation of a specific entrepreneurial idea
Primary research: It is the research that is conducted for the first time and is carried out
to find the answer of particular question or issue. It involves interviews, surveys or
questionnaires with small groups or individuals. Primary research is carried out by manager of
Mountain View Restaurant in order to know the viability of idea.
Secondary research: This research makes use of previously researched information that
is publicly available. In this, data is collected through various sources such as government
records, published journals, articles, newspapers etc. It is the second hand data that is already
collected by someone through research. Researcher collects secondary data for getting
information about other variables (Renko, Shrader and Simon, 2012).
For checking the viability of idea, manager of Mountain View Restaurant will
accumulate primary information through using questionnaire. The selected sample size is 30
respondents for filling these questionnaires from their consumer.
Questionnaire
Name:
Age:
Occupation:
Contact no.:
Number of respondents: 30
Q-1) How often do you visit a restaurant?
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a) 7 days
b) 15 days
c) 20 days
d) 1 month
Q-2) What will you require in a restaurant that encourage you to visit it again and again?
a) Cleanliness
b) Hygienic and healthy food
c) Attractive interiors
d) Low prices with high quality food
Q-3) Which kind of food will you prefer the most to have?
a) Spicy
b) Organic and healthy
c) Less spicy
d) Other
Q-4) What do you like the most about food and services?
a) Tasty and healthy food
b) Quick services
c) Self serving option
d) Other
Q-5) Any recommendations for Mountain View Restaurant in terms of improving its products
and services
- - - - - - - - - - - - - - - - - - - - - - - -
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GRAPHICAL PRESENTATION
1.
2.
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3.
4.
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P4 Interpret data appropriately to provide evidence of market potential
Data Interpretation:
Q1)
Q-1) How often do you visit a restaurant? FREQUENCY
7 days 8
15 days 7
20 days 9
1 month 6
Interpretation: As per the above mentioned graph, it is interpreted that nine out of 30
respondents visit the restaurant in 20 days and others visit in 7 and 15 days.
Q2)
Q-2) What will you require in a restaurant
that encourage you to visit it again and again?
FREQUENCY
Cleanliness 6
Hygienic and healthy food 9
Attractive interiors 7
Low prices with high quality food 8
Interpretation: As per the above mentioned graph, it is interpreted that nine out of 30
respondents like hygienic and healthy food that encourage them to visit the restaurant again and
remaining respond to other factors.
Q-3) Which kind of food will you prefer the
most to have?
FREQUENCY
Spicy 7
Organic and healthy 7
Less spicy 7
Other 9
Interpretation: As per the above mentioned graph, it is interpreted that 7 out of 30
respondents prefer to eat spicy food, 7 prefer to eat organic and 7 like less spicy food.
Q-4) What do you like the most about food
and services?
FREQUENCY
Tasty and healthy food 9
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Quick services 7
Self-serving option 7
Other 7
Interpretation: As per the above mentioned graph, it is interpreted that nine out of 30
respondents like tasty and healthy food services the most others like quick services and self
serving options.
TASK 4
P5 SWOT framework to collate evidence to support an objective assessment of a specific
entrepreneurial idea
SWOT analysis is a framework that assists manager of Mountain View Restaurant in
determining strengths, weaknesses, opportunities and threats for business (Short and et. al.,
2010). It helps them in evaluating competitive position of firm in market. SWOT analysis of
Mountain View Restaurant is defined below:
Strengths Weaknesses
 Offering organic food is one of the
main strength of company as today,
people are more conscious towards
their health and the demand of
customers for healthy food is increases
day by day.
 Providing quick food services is the
another strength of Mountain View
Restaurant that helps it in attracting and
retaining more customers.
 Effective pricing strategy is also the
strength of firm. Mountain View
Restaurant offers food to customers at
reasonable prices which helps it in
gaining attention of large group of
 The menu of firm is based on healthy,
quick and easy food options that do not
includes any hot items or food in menu.
So, the customers who are looking for
meal options can not be include. It is
one of the weakness of Mountain View
Restaurant.
 Whether patterns may affects the
business in negative manner as it will
hinder the availability and prices of
producing food items (Siegel and
Renko, 2012).
 Only seasonal food is served by
Mountain View Restaurant to its
customers which is a weakness for
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customers. firm.
Opportunities Threats
 Increasing demand of healthy and
organic food provides a great
opportunity to firm in market.
 Rise in local produce suppliers is an
opportunity for Mountain View
Restaurant as having distinct
restaurants in market enables business
to suppliers and local produce who are
supplying organic foods.
 Link with other business for joint
ventures which are non direct, creates
an opportunity for firm in terms of local
expansions and redevelopment that will
assists it in bringing new customers
within the restaurant.
 Fierce competition is exist in market as
the demand of healthy food is
increasing day by day.
 Change in taste and preferences of
customers poses a threat in front of
company as their needs and preferences
changing continuously.
 Change in food inspection regulations
is also a threat for Mountain View
Restaurant as if any change takes place
in food regulations, it will directly
impacts on business of firm (Tang,
Kacmar and Busenitz, 2012).
P6 Evaluate the competitive and market environments in which the idea will be launched to
assess potential viability
Before introducing or launching the idea into market, it is very essential for manager of
Mountain View Restaurant to assess its potential viability. This can be identified by evaluating
competitive market environment for business (Vaghely and Julien, 2010).
Competitive market:
Competitive market consist of many producers who are competing to provide needed
goods and services to customers. In this market, large number of producers are available who are
competing with each other in order to satisfy needs of customers. Competitive market for
Mountain View Restaurant is analysed by below mentioned factors:
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Substitute products: Substitute products for organic food is less in market as there are
very few firms that provides organic food to customers. Thus, the idea is viable for Mountain
View Restaurant to be introduced in market.
Target audience: Target customers for Mountain View Restaurant includes all those
individuals who are concerned about their health and wants to have healthy and organic food.
The target customers of restaurant is people aged between 25 to 60 years.
Demand: Today, people are more conscious regarding their health which increase the
demand of healthy and organic food (Wang, Ellinger and Jim Wu, 2013). This provides an
opportunity to firm for its high growth and success.
Market environment:
It refers to the surroundings in which firm operates and run its operations. It involves
macro and micro environment. These are defined below:
Macro environment: It is the general environment that may affect working of business. It
includes economic, social, political, technological and legal environment of firm that impacts on
operations of Mountain View Restaurant.
Micro environment: It refers to the environment in which firm operates. It involves all
the employees, customers, suppliers etc. of Mountain View Restaurant. Micro factors of business
influence working of firm directly and on constant basis (Wood and McKinley, 2010).
CONCLUSION
As per the above mentioned report it has been concluded that identifying opportunities
from market is very essential for an entrepreneur as it enables them to bring new and innovative
products in market for satisfying needs of customers. An entrepreneur requires to identify and
evaluate different sources of innovations and ideas as it assists them in selecting the most viable
and feasible one. Market and competitors analysis is also important to be done by managers
before entering into market. It assist in understanding the market competition and availability of
consumer in market.
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REFERENCES
Books and Journals
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discovery of entrepreneurial opportunities? The case of Latin-American immigrants in
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Block, J. H. and Wagner, M., 2010. Necessity and opportunity entrepreneurs in Germany:
Characteristics and earnings differentials.
Dimov, D., 2011. Grappling with the unbearable elusiveness of entrepreneurial opportunities.
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Ekpe, I., Mat, N. B. and Razak, R. C., 2010. The Effect of Microfinance Factors on Women
Entrepreneurs' Performance in Nigeria: A Conceptual Framework. International
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Wang, Y. L., Ellinger, A. D. and Jim Wu, Y. C., 2013. Entrepreneurial opportunity recognition:
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Wood, M. S. and McKinley, W., 2010. The production of entrepreneurial opportunity: a
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