Identifying Entrepreneurial Opportunities

This report evaluates sources of entrepreneurial ideas and innovation, explains rationale and market gap using relevant tools and techniques, and evaluates gap analysis with specific entrepreneurial idea.

Identifying Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Evaluate sources of entrepreneurial ideas and innovation................................................3
TASK 2............................................................................................................................................5
P2 Explain rationale and market gap by using relevant tools and techniques........................5
TASK 3............................................................................................................................................9
P3 Evaluate gap analysis with specific entrepreneurial idea..................................................9
P4 Interpret data appropriately to provide evidence of market potentials............................13
TASK 4..........................................................................................................................................15
P5 Apply a SWOT framework to support an objective assessment of entrepreneurial idea15
P6 Evaluate the competitive and market environments.......................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Entrepreneurs are the persons who operate their business and bear risks thereon. This is
termed as an initiative exercise which is having immense opportunities to start own business and
run with the actual procedure. When own business is established then high opportunities can be
seen by an entrepreneur in order to take advantage of those opportunities and expand the
business. An entrepreneur is involved in lead situations and involves them within new goods and
services and methods to organise them. This report is made on Beauty Cosmetic which a
company dealing in cosmetic products such as highlighter, moisturisers, make up remover,
brows enhancer, foundations and many more. The major purpose of formulating this report is to
examine ideas for innovation within rationale market gap along with required tools and
techniques. Along with this data is gathered with the help of gap analysis in potential markets
and with evidences. At the last part of the report SWOT analysis and evaluation of market
environment is performed along with potential viabilities and feasibility (George and et. al.,
2016).
TASK 1
P1 Evaluate sources of entrepreneurial ideas and innovation
With the help of current trends new and innovative business ideas are stimulated and are
encouraged by market and are summarised on the basis of current market trends and
examination. With the help of proper research and study customer needs and wants can be
understood and that can be treated as sources of idea. By taking help of skills and knowledge
thoughts can be implemented in ideas and that can be converted into passion. Changes are
exhibited within extrinsic environment where high opportunities are taken and their sources are
described below:
Macro environment: Beauty cosmetics is based on circumstances which are there in the
economy or in some sector of region. So innovation within this product is having some
challenges within economy and that are explained as under:
Social factors: The customer gets attracted towards emerging taste and habits along with
market changes. People are highly focused on green customers who are highly active in using

those good and services and diminish environmental negative impacts. This is helpful for the
entrepreneur to encourage so as introducing innovation in product.
Technological factors: This source is dependent on enhancing new technologies which
is going to be helpful for the business and their venture as they are providing best possible
solution in the market. Beauty cosmetics is having leading technologies in their production and
they are highly obeying rules which are imposed by government. This is giving them immense
opportunities to the entrepreneur with their personal capabilities that is associated with the
business (Jarvis, 2016).
Drucker’s sources of innovation:
This source of innovation helps entrepreneur as they are leading within opportunities and
enhance further improvements in existing product and services. Beauty cosmetics entrepreneur is
having improvements in their business in order to meet market demand. They have come up with
new business idea in which several innovation sources are elaborated by Peter F Drucker they
are as under:
Unexpected: This innovation is taking place undoubtedly which has happened by chance
and came up with an emerging innovation. Beauty Cosmetics is considering a predictable
innovation which occurs accidently. In this, their gathered new ideas which is required to be
implemented and they come up to them accidently (Nieto and González-Álvarez, 2016).
Incongruities: An entrepreneur solves incongruities which have risen in the business
organisation along with the source of new innovation. This is known as human nature that to
solve incongruities which are there in the business. This source of innovation helps the
entrepreneur to stay motivated and search for new opportunities in order to introduce new
product range in beauty cosmetics. With the help of solving these incongruities a business may
have high recognition to ideas and market opportunities.
Market Structure: This source is giving high chances to see market innovation by
which entrepreneur may have their business growth. Within this parameter beauty cosmetic the
entrepreneur is using World Wide Web to search out various information by taking help of
Google browser. This is helping them to cater market and grab those market opportunities which
may be helpful for the company to flourish.

Necessity: This source is helping the business to set their thinking in deep manner. This
is focusing on taking those opportunities which are having high success in marketplace. Beauty
cosmetics is working to fulfil needs of their customer in new ways. Ideas are gathered with the
help of researches and market study by entrepreneur and by this need of cosmetic in the market
enumerated.
Demographics: This source of innovations dependent on customer’s lifestyle and needs.
Beauty cosmetics is working to meet up needs of their customer by finding new opportunities in
their needs. This is proven to be the best source which helps an entrepreneur to stay motivated
and find out new opportunities to grow their business and satisfy needs of their ultimate
consumers. (Nijssen, 2017)
Changing perception: This is dependent on customer perception about the success of the
business organisation and this factor can be the major reason of success of beauty cosmetics. The
changed perception of customer helps the entrepreneur to stay motivated and make healthy
relationship with clients and market.
New knowledge: This is used by those businesses which are willing to introduce
innovation in their business by having continuous progress. This is on-going human skills which
are discovering emerging ideas that are based on newer areas and dimensions. Entrepreneur of
beauty cosmetics is putting their new skills and knowledge within the business and that are
giving them high end over opportunities like bio and nanotechnology. Their acquired knowledge
is helping them out to get new and emerging ideal to bring innovation in their business (Cruz‐
Ros, Garzon and Mas‐Tur, 2017).
TASK 2
P2 Explain rationale and market gap by using relevant tools and techniques
Ideas of an entrepreneur are defined by approaching customer and recognising their market
gap in which various tool and techniques can be used. In this entrepreneur of beauty cosmetics
are recognising needs and demands of their customer in the manner that they can be fulfilled by
company offerings.

Identifying customers
In order to recognise needs and demands entrepreneurs are coming up with new ideas
which may help them to define their product or services in marketplace. So entrepreneur tries to
highlight those ideas which are able to add value to a company’s offerings in the minds of
customers. By using existing data demand of customers can be determined and these data are
obtained with the help of surveys and extensive research methodology. Beauty cosmetic
manufactures their products in order to attract more and more customers and enhance their
market opportunities to grow in the business. By using detailed picture as base customers need
can be understood and this can be highlighted by knowing age, occupation and so many other
constraints of customer.
Market segmentation
Under this concept market is divided into several segments on the basis of several
concepts and characteristics. In the summation of sub-groups customer are distributed within
market and according to their distribution marketing strategies are applied by a company so that
to attract customers (Guo, Su and Ahlstrom, 2016). Market segmentations is helpful for the
business as according to customer interest and needs marketing strategies are modified and
implemented within marketplace in order to meet final business objective. Segmentation is of
various types which is defined as below:
Behavioural Segmentation: This market segmentation is on the basis of buying
behaviour of customers. Some pattern are used by business organisation such as frequency,
brand loyalty etc. these factors are used by business to decide their market and market share.
These factors are helpful for beauty cosmetics in order to attract their customer and influence
their buying decisions. In the context of cosmetic products these are targeted to the customer by
analysing their buying behaviour and recognising their needs. Behavioural aspects are defined as
loyalty, nature, attitude and usage.
Demographic segmentation: Under this market segmentation market is divided on the
basis of demographic region that mean on the basis of religion, income and gender. Within this
aspect beauty cosmetics divided their potential market on the basis of gender, income or religion
and then marketing strategies are applied to that region. This is the most used method in

segmentation as people have different characteristic when they have various demographic traits.
By this segmentation the company may divide their customers in most suitable way (Audretsch
and Belitski, 2017).
Geographic segmentation: Within this market segmentation, market is divided on the
basis of regional territory. This tool is used by those businesses which are willing to expand their
business within new market territory. In the context of beauty cosmetics they are highly focused
on earning profit and get market sustainability for long term so this segmentation can be used by
them to bifurcate the market on the basis of territories and regions. In this location, demography
and areas are defined as major concerns.
Product and services
Tangible products: These are the physical product offered by a business which are
having physical existence and can be touched by anyone. These are those things which are
offered to the customer in order to sale them and earn high profit and market image as well. For
beauty cosmetics their tangible products are foundation, cream, highlighter and all those products
which are manufactured by them foe sell purpose.
Intangible products: These are the things which are hold by a business in indirect
manner and can be transformed in any other form. This includes price, promotional activities,
advertising campaign, goodwill etc. In the context of beauty cosmetics these factors are helpful
for them in order to have brand expansion and market collaboration as well (Kuntze and
Matulich, 2016).
Industry Environment:
This factor is influenced by economic, social and political market conditions. Products of
beauty cosmetics are based on innovation and market research which are results of
entrepreneurial ideas and skills or those views which are having high impact on business cycles.
Porter's five forces model: This model is helpful in analysing potential and forces hold by a
business within their industry. This is requisite by an entrepreneur to look over market condition
and then analysing strength of their business so as to take advantages of those factors.

Competitive Rivalry: This force is defined as existence of rivalry inside the market
which may result into higher competition within industry. Customer gets attracted to rivalry
pressure which is stimulated by prices and profits. Within this context beauty cosmetic are
having those product which are having similarities to other competitors and this is giving them
intense competition within marketplace. They are having high range of responses that are driven
by offensive and defensive measures in order to understand market competitors. Within this
context market is having high entry and exit barrier as already settled companies are there within
industry. Risks are associated with this model as there are so many constraints which are having
additional framework within industry (Krueger, 2017).
Threats of new entrants: Industry is consists of specialised technology and
infrastructure so in order to earn profit these constraints are to be maintained. In the context of
beauty cosmetics they are having free market entry within their industry as no as much
investment is required and customer are prone to use new and emerging trends and tastes. They
are having high risk of failure within this business due to least entry barrier. The new market
entrants are enhancing inner competition within industry.
Threats of substitutes: The cosmetic market is having high number of market substitute
as there are so many established brands which are existed in the market in order to satisfy needs
of consumers. This industry provides no switching costs to their customer as presence of
renowned brands are high. So in the context of beauty cosmetics they possess high market risk as
market is demanding high tech machineries which involve high capital investments.
Bargaining power of buyers: This force is affects customer when organisation keeps on
fluctuating prices of their offerings. In current market customer holds high bargaining power as
they have so many substitute in the market which can be switched by them with no switching
cost. This force is intensified in case of cosmetic industry as industry contains huge number of
renowned and established brands. In the context of beauty cosmetics they are having prominent
market capture and goodwill within their industry and this enhances their overall competition
with their rivals and give them power to meet needs of their customer. They are rendering high
bargaining power to their customer as they are driven by their customer (Douglas, 2017).

Bargaining power of Supplier: This force entails about power hold by suppliers of the
business. An organisation is always concerned about meeting expectation of their stakeholders,
so in respect of suppliers they are having special position in the business and they are the person
who supplies raw material to the business. So in context of beauty cosmetics they do not give
high power to their suppliers as they have portfolio of huge suppliers and they order raw material
in bulk so it is very easy for them to change their supplier without applying any further switching
cost.
TASK 3
P3 Evaluate gap analysis with specific entrepreneurial idea
In order to understand group of people marketing research is performed which give
syntactical view. Entrepreneurs get help with market research and can identify market trend and
competitors with this. Research is of two type primary and secondary, so in the context of beauty
cosmetics they have conducted a research in order to test viability of their product in marketplace
(Uygur, 2019).
Primary research: Primary research is defined as performing research via direct survey
and questionnaire. This is dependent on those data which has been taken out without any
fabrication and on raw basis. This helps the business in getting new business ideas as direct
interaction with customer is the major part of primary research,
Secondary research: This research is done for the purpose of getting in depth
knowledge about a particular topic. This research includes study from publications and other
article that means this does not include direct interaction with customer and communication with
them. Past data can be analysed and then deep analysis can be performed in secondary research.
Questionnaire
Name:
Age:
Address:
Q1 Is Beauty Cosmetic product is known to you?
Yes

No
Q2 Are you familiar about products of beauty cosmetic?
Yes
No
Q3 Are you satisfied with those products?
Yes
No
Q4 Did you face any sort of issue while using those products?
Yes
No
Q5 Are you interested in online marketing of these products?
Yes
No
Q1 Is Beauty Cosmetic product known to you?
Yes
No
5
5
Q1 Is Beauty Cosmetic
product known to
you?
Yes No
0
1
2
3
4
5
6
Series1

Q2 Are you familiar about products of beauty cosmetic?
Yes
No
8
2
Q2 Are you familiar
about products of
beauty cosmetic?
Yes No
0
1
2
3
4
5
6
7
8
9
Series1
Q3 Are you satisfied with those products?
Yes
No
8
2

Q3 Are you satisfied
with those products? Yes No
0
1
2
3
4
5
6
7
8
9
Series1
Q4 Did you face any sort of issue while using those products?
Yes
No
6
4
Q4 Did you face any
sort of issue while
using those products?
Yes No
0
1
2
3
4
5
6
7
Series1

Q5 Are you interested in online marketing of these products?
Yes
No
7
3
Q5 Are you interested
in online marketing of
these products?
Yes No
0
1
2
3
4
5
6
7
8
Series1
P4 Interpret data appropriately to provide evidence of market potentials
Q1 Is Beauty Cosmetic product is known to you?
Yes
No
5
5
Interpretation: From the above research it is shown that out of 10 respondents 5 know beauty
cosmetic and rest 5 are unaware about the brand.
Q2 Are you familiar about products of beauty cosmetic?
Yes
No
8
2
Interpretation: From the above research it can be concluded that out of 10 respondents 8 are
familiar about the brand and rest 2 are not very much familiar.

Q3 Are you satisfied with those products?
Yes
No
8
2
Interpretation: From the above research it can be concluded that out of 10 respondents majority
of 8 people are satisfied with the product of beauty cosmetic which is due to quality and product
prices and on the other side 2 respondents are not satisfies.
Q4 Did you face any sort of issue while using those products?
Yes
No
6
4
Interpretation: From the above observation it can be concluded that out of 10 respondents 6
respondents did not face any kind of issue while using products of beauty cosmetics while rest of
4 respondents faced issue in the same.
Q5 Are you interested in online marketing of these products?
Yes
No
7
3
Interpretation: The abovementioned analysis clearly states that majority of 7 candidates out of
10 are having positive sight towards online marketing but rest 3 are not comfortable with the
same.
Gap analysis
This is a strategic tool which is used to determine gap between planned and actual results.
This gap is analysed in order to determine variation from standard and actual performance.
Entrepreneur of beauty cosmetic is using this analytical tool and taking help of SWOT analysis
so as to get to know about their strengths so as to use their market opportunities. This is going to
help them in managing their performance throughout the tenure of operations.

TASK 4
P5 Apply a SWOT framework to support an objective assessment of entrepreneurial idea
Every entrepreneurial idea is evaluated and identified by a method or theory addressing
both Risks and safety factors. SWOT framework is helpful in in context of developing the plans
and after complete end to end analysis. SWOT approach consists of Strength, Weakness,
Opportunity and Threats. This analysis helps in analysing all the above given factors specific to
organization and to make decisions accordingly (Wang, Thornhill and De Castro, 2017).
Strength: - Strength factors represent positive attributes and capabilities of specific to
organization. Beauty and cosmetic related organization are assessing favourably as per their
distribution system. Their marketing operations are directly linked with cost advantage. Strong
market reputation is built and formed by various forms of strengths such as wide range of
products.
Weakness: - One of the noticeable weaknesses in Beauty Cosmetics is lack of protection
of their resources. Due to lack of advancement in distribution channels and spoiling of brand
name or poor brand name due to few customers it has to suffer from loss of sale of its products.
Opportunities: - Opportunities are events that can make organization grow and increase
their profits by fulfilling customer needs to their expectations. There are number of opportunities
knocking door of Beauty cosmetics with growing technology and generation. As the
entrepreneur is losing regulations applicable new opportunities to grow are being revealed that
can be captured by beauty cosmetic to increase their market share and profits.
Threats: - Events that might lead to loss to organization are termed as Threats. For
example, threats are increases day to day with increasing new regulations, increasing barriers in
trade, change in preference of customers, increasing competition etc. So, it is threat that
customers of beauty cosmetics are considering changes in external environment while doing
product evaluation (Matricano, 2020).
P6 Evaluate the competitive and market environments
Market environment can be evaluated and analysed by analysis of Micro and Macro
factors which are formed and generated by or due to competitors and it is assessable through

social preposition. Major basis to analyse it is competition existing in marketplace. Therefore,
external environment has made its impact on potential viability. PESTEL analysis might help in
analysing this Micro and Macro factors.
Political Factors: - This includes all the factors formed and related to government policy
or government intervention in product. This includes various fiscal, taxation or budget policies
released and regulated by government from time to time basis. It impacts Beauty cosmetic
products where entrepreneur is led by numerous legal policies formed by government related to
these products.
Economic Factors: - Beauty Cosmetic Company is concerned with all factors directly
affecting their profits, margins and financial performance. Beauty Company faces economic
challenges like fluctuation or changing interest rates, raw material costs, Foreign currency
exchange rates and various other finance or monetary factors fluctuation. Analysis of additional
factors such as Inflation rates, FDI and economic growth too comes into picture in case it is
multinational organization.
Social Factors: - Every business organization carries on their business operations within
society, therefore there are various social factors that need to be analysed by them to make their
product a success such as Demographics, Population analytics, cultural trends etc. Since beauty
products are choice of people so it might vary from are to area which needs to be analysed as per
specific region or customer range.
Technological Factors: - Technology is important aspect in today’s generation since
dependence on technology has been increased in every business operation. A technology can be
favourable as well as unfavourable, what might be relevant yesterday might not be relevant today
which is based on research and development of existing or new better technologies. So Beauty
cosmetic have to focus and analyse technological factors to see if logistic system, distribution
system, production or any other system can be improvised.
Environmental Factors: - This includes factors relates to surrounding environment
determined by industries. Beauty Cosmetic leads on global change in climate and environment
offsets. They are influenced by products being supplied to similar location (Venugopal and
Shukla, 2019).

Legal Factors: - Legal factors are one of the costliest factors that need to be taken care
properly to carry on business operations legally and smoothly; this might be either internal or
external. Each country in which Beauty cosmetics exists might have different legislations and
laws to be followed so they should be analysed properly to avoid any unexpected damage or loss.
CONCLUSION
From the above mention two approaches it can be concluded that Beauty Cosmetics are
leading their way through behavioural segmentation which helps in observing and foreseeing
customer demands. This conclusion is with reference to SWOT analysis suggesting that beauty
cosmetics have opportunities and capabilities to lead and grow in economy. Further analysis
through PESTEL approach suggests beauty cosmetics to be cautious and look after legal aspects
for their products and business.

REFERENCES
Books and journals
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exploitation of entrepreneurial opportunities. International Entrepreneurship and
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Nijssen, E.J., 2017. Entrepreneurial marketing: an effectual approach. Taylor & Francis.
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