Identifying Entrepreneurial Opportunities

This document discusses the sources of entrepreneurial ideas and innovation, including Peter Drucker's seven sources of systematic innovation. It also explores the market potential and conducts a SWOT analysis for a specific venture idea. The document provides insights into identifying entrepreneurial opportunities and offers guidance on evaluating market gaps and conducting gap analysis.

IDENTIFYING
ENTREPRENEURIAL
OPPORTUNITIES

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1 Sources of Entrepreneurial ideas and innovation...................................................................1
LO2..................................................................................................................................................2
P2 Rationale and market gap for the specific venture idea with the help of tools and
techniques....................................................................................................................................2
LO3..................................................................................................................................................4
P3 Present data needed to support gap analysis in the evaluation of a specific entrepreneurial
idea...............................................................................................................................................4
P4 Interpret the data to provide the evidence in market potential...............................................8
LO4..................................................................................................................................................8
P5 SWOT analysis of specific venture idea.................................................................................8
P6 Competitive and market environment idea to assess the potential viability...........................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Entrepreneurial opportunity is the situation where the products and services is being sold
by identifying the potential clients and from the past leads. It is basically to target the potential
customers by fulfilling their needs, wants, challenges and frustration from the society for these it
is very important to identify the entrepreneurial opportunities. In this the new business venture is
being started that is cafe by offering the innovative product that is Affogato espresso coffee. This
report contains the seven sources of systematic innovation that is being given by the Peter
Drucker. This report also elaborate the present data that is support by the gap analysis by doing
the evaluation of specific entrepreneurial idea.
LO1
P1 Sources of Entrepreneurial ideas and innovation.
Peter Drucker seven sources of systematic innovation is about the monitoring of seven
sources to have the innovative opportunity at the same in his famous book 'Innovation and
Entrepreneurship' he has discussed about the power and requirement of systematic innovation.
These seven sources of innovation are
The Unexpected
As the business world is full of unexpected surprises as the result may be unexpected
failure or it might be the unexpected success (Arregle and et.al ., 2015). It is difficult to predict
about the product and services that we want to offer is having the anticipated demand or greater
and lesser. For example it is the time when Marriott is restaurant chain and their one of the outlet
in Washington DC is performing outstanding and generating huge revenue and while
investigating they found that passengers will buy the meals to take it in their journey than they
suggested to airlines to give the snacks to the passengers and thus the airline start catering
business (Peter Drucker on the Seven Sources of Systematic Innovation, 2019).
Strength – it is beneficial in success of business
Weakness – most ideas are not successful as nothing is expected.
Incongruities
Several entrepreneurs start their business and develop the product without doing the
appropriate market research that to which customer they want to target as it is the economic
reality of the every business between the what is and what “ought” to be and that leads to the
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downfall of the company (Davidsson, 2015 ). But at the same customer reviews, feedback and
complaints is the best way to identify the incongruity.
Strength- the product developed is new and unique.
Weakness- the product does not fulfil needs of people
Process Need
As per the Drucker innovation is more task focused rather than they have to focused on
situation. So the idea of innovation is being come after analysis of whole process of the venture
and at the same try to identify the weak sports and try to find the ways to overcome. For example
the Elijah Mccoy has done the engineering but he could not find the suitable job and he has to do
the work of doing the oil by hand in the central rail road than he figure out the best way to do the
oil by lubricating cup that is automatic dripped oil and it becomes the hit in the market.
Strength – it led to innovation in process
Weakness- there is change in process constantly
Change in Industry and market structure
From the year's industry and market structure are stable but from the advancement in
technology many industries are being disrupted overnight. Leaders need to have an eye on these
changes and try to adopt the new technology and take it as an opportunity.
Demographics
Many companies are being affected by the change of demographics that is change in
population, age, level of education, income etc. are one of the main reliable predictors for the
future and give the ideas for innovation (Kohlbacher, Herstatt and Levsen, 2015 ).
Changes in perception
During the last few years there is a drastic change in the perception of human. As there
are involvement in new technology that is social networking as these changes are happening at
the faster rate. People have change their perception about the whole market and the way of doing
the business as everyone is expecting the innovation.
New knowledge
New knowledge is equivalent to the innovation because the scientific and technological
are the sources of innovation that is being taken care by every business (Kraus and et.al., 2015 ).
Knowledge based innovations were never based on the one factor as there are many types of new
knowledge is there.
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Strength- new knowledge is benefit in developing product
Weakness – the knowledge is not based on market research.
LO2
P2 Rationale and market gap for the specific venture idea with the help of tools and techniques.
Industry Life Cycle shows the various stages from where the business starts to operate,
progress, grows and slum within the sector. Life cycle of industry consist of typically five stages
that is start-up, growth, shake-out, maturity and decline. It is just like the life cycle of a person
from the persons birth to its grow, mature, decline and the last death (Kuratko, Morris and
Schindehutte, 2015 ). To plan for the opening of cafe are using many innovative ideas in these
days as everyone wants that their visit will be different from others restaurants and cafe and must
having something innovative and now they are introducing the new expresso cafe that is being
introduced while launching the cafe and the creation and development of large scale events.
Cafes are giving the services that they will give the various flavours of coffee and that are
different from others. First phase is start up in this stage the industry is having the phase of
infancy as they are offering the new service or product in their very beginning. In these firms are
on the introduction stage and have to prove themselves by doing many research and try to
innovate new product and services (Maritz and Donovan, 2015). Second stage is growth in this
the company is in the requirement of fund and their aim is to make differentiate from other
competitors of market. Cafe is at the stage of growth where they are offering the innovative
service in which they are using the eco friendly products that is bio degradable disposals such as
plates, spoons etc. and the waste bins. Next stage is maturity in this company is at the stage of
flatter and having slow growth but the company can increase its growth by expanding. And the
last stage is declining that is inevitable for the company if the company can not compete from its
competitors than they become obsolete.
Gap analysis – the gap is related to using eco friendly products in café. Here, many companies
are not able to maintain sustainability so it has resulted in making rise in gap.
STP means
Segmentation
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Segmentation is identifying the market from the utmost importance to run the business in
successful and smooth manner (Lackéus and Williams Middleton, 2015).
Behaviour
It is very important for the business to find out the loyalty, usage level, marketing factors
reaction. In this the benefits is depends upon how the cafe will provide the service without
harming the environment and resources and with the innovative ideas.
Geographical
The business is segmented in the geographical area that is country wide, region, area or
through the population density and from the climate.
Demographic
It is the combination in which the company will focus according to the combination of
age, gender, income, education, marital status, education etc. in these the most potential
customers are based (McKevitt and Marshall, 2015).
Targeting
In the stage of targeting the company will analysis where is having the highest demand of
its services in these the evaluation is being done and at the same they select the segment where
they have to target. The evaluation of criteria, difference is measured, money, accessible and also
focus on different benefits.
Positioning
In the positioning the business will do the analysis of competitors and also do the internal
analysis. Positioning is one of the latest element in the STP process. In this the business will try
to find out the positioning the place where the business can enhance (McKevitt and Marshall,
2015).
LO3
P3 Present data needed to support gap analysis in the evaluation of a specific entrepreneurial
idea.
A market survey was conducted to identify that how effective is the business idea. This is
because it will be useful to find out perception of customers. Moreover, the data and information
can be collected about how unique business idea is and whether people like it or not. For this
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primary research is been conducted through questionnaire. The questions were asked to 50
people.
Q-1 Do you think offering variety of coffee is enough to visit cafe?
Yes
No
Q-2 Would you like to taste Affogato espresso coffee in our café?
Yes
No
Q- 3 Do you think that opening this type of café in area will be successful?
Yes
No
Q-4 Would you like to spend time in playing games along with coffee and snacks?
Yes
No
Theme 1 Offering variety of coffee is enough to visit cafe
Frequency
Yes 15
No 35
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Interpretation – it can be analysed from above graph that out of 50 people, 35 said that offering
variety of coffee is not enough for them to visit cafe, whereas 15 said they will visit it for coffee.
Thus, this business idea is not as effective to attract people.
Theme 2 taste Affogato espresso coffee in our café
Frequency
Yes 33
No 17
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Interpretation – it can be interpreted from chart that 33 people said that they will visit cafe to
taste Affogato espresso flavour, while 17 said no. Therefore, it is evaluated that adding new
flavour will attract them. There are high chances of building large customer base.
Theme 3 opening this type of café in area is successful
Frequency
Yes 25
No 25
Interpretation – from graph it can be stated that people said that the business idea may not be
successful in market because there are already many cafes exists in that area. Also, there are no
new services or products offers. The concept is not so unique as well.
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Theme 4 Spend time in playing games along with coffee and snacks
Frequency
Yes 30
No 20
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Interpretaion – the chart shows that out of 50, 30 people said they will visit café and spend their
time in it. But 20 said they will not as there is nothing new. Hence, including some games in
café attract people to visit it.
As per there is people likes to spend time in playing games. They enjoy that with some
snacks. However, they like to visit café and drink coffee. There are various types of coffee
provided by café. It helps in attracting people. With this customer know what type of coffee is
offered. Moreover, there is need to include some variety of snacks as well to increase sales and
attract people.
P4 Interpret the data to provide the evidence in market potential.
As the per the view of Kohlbacher, Herstatt and Levsen, (2015), there are already many
competitors that are existed in the market and due to this it is very difficult for the start-ups to
enter into this sector but still they can attract the consumers by offering the new and innovative
flavours of coffee in the market. For the cafe it is very important that they will reach to the
customers and at the same consumers can also having the reason to go in different cafe.
As per the opinion of Kuratko, Morris and Schindehutte, (2015), now the consumers are
very delighted for the innovative Affogato espresso coffee that is an Italian coffee which is based
on the dessert. Consumers will like the new flavour of coffee that is being offered by the cafe
and also people like the taste of this innovative coffee and that brings more customers to the cafe
that leads to generate the huge profits. At the same cafe also need to survey the market that
people have heard about the new product or not as it is very important that people must know
about the product that the cafe has been introduced. It is the first that introduce this espresso
coffee in this industry that is served with the scoop of ice cream so definitely it will attract the
consumers and at the same area also plays an important role, the area should be reachable to
every one. It also provides the entertainment to the children and free Wi-Fi that is the another
reason for the success of this venture. Now the consumers are very lengthened for the different
flavours of coffee as they completely change the concept of espresso coffee no one can even
imagine before some years.
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LO4
P5 SWOT analysis of specific venture idea.
SWOT analysis of the new business venture :
Strength
 As the UK is having the great demand for different varieties of coffee and the demand is
robust and growing (Miles and et.al., 2015).
 Cost reduction, restructuring and the development in new technologies greatly reduces
the cost of overheads.
 In the cafe sector the location and area will scout the heavy traffic and that leads to
increase the sale.
 Cafe must have given the varieties of coffee with the flavors and in addition to the hot
coffee that increase the more customers on the door (Davidsson, 2015 ).
Weaknesses
 For the new outlet of cafe for the coffee it is important that potential customers and
consumers have not heard about the delicious various delicious flavors of coffee, types of
coffee beans, flavors in espresso so they need to do the proper marketing to target the
particular segment and it is essential to understand the products.
 Finance also plays the important role like funding, do the investment limit in the
opportunities and that shortage of finance impact in the market (Miles and et.al., 2015).
Opportunity
 As there is no better time to start the business if the interest rate is low in the business
loan and also there is an affordable rent in commercial place.
 New flavors were always been introduced in the market as it leads to increase in demand
with the rise in the market share and increase the demand for coffee.
 There must be a proper usage of internet is there such as marketing on social media will
make the cafe marketable and attract the great number of potential customers.
 Multinational companies, government companies and other large business requires the
cafe and bakery that may become the additional source of income to the cafe.
 By selling the raw beans of coffee, branded coffee makers and the other products that is
related to the coffee will give the higher margins to cafe.
Threats
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 New strategies in the market and tactics used by the established cafes and restaurants
decrease the sale and market share.
 If the food and drug administration higher the cost to maintain the regulation leads to
increase the unpredicted expenses and liability to the company.
 Rise in the price of fuel leads to lower the margin in profits and at the same it leads to
increase the cost of logistics that leads to higher the price of coffee and decrease the
sales.
P6 Competitive and market environment idea to assess the potential viability.
Evaluation of the market environment through the Porters five forces analysis as it is a
strategic management tool to do the analysis of industry. It is being used by the entrepreneurs to
enhance the profitability and develop the strategy to increase the branding.
Porter five force model
Threat of new entrants
New entrants in this industry bring the innovation, new ways in doing the things brings
the pressure to the existing cafe through the various strategies that is lowering the price,
reduction in cost, give the new value preposition to their customers. For these before starting the
cafe has to take all the challenges in these competitive market. By the innovation in the espresso
coffee give the ability to tackle the threats of new entrants.
Bargaining power of suppliers
As all the cafe in this industry gives the opportunity to buy the raw material from
different suppliers as they are also in the position of dominance that decrease the margin for
them. Overall high supplier of raw material will impact the overall profitability of the
restaurants. It can be heel by having the efficient supply chains with the several suppliers. Do the
experiments with the alternative products so the prices go up of particular raw material one can
shift to other product.
Bargaining power of buyers
Buyers generally demands a lot their desire is always like to get the best offerings with the
payment of minimum price as possible. This will definitely put the pressure to the cafes that they
have to maintain the minimum price even they are launching the innovative products and it will
impact the overall profitability of business. For these the cafe need to focus on large base of
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customers so it will in reducing the bargain power of buyers at the same it gives an opportunity
for the cafe to streamline their production and sales process (Arregle and et.al ., 2015). By
coming with the innovative products they can decrease the bargaining power of buyers.
Threat from substitute products or services
If the new product or services come into the market and meet the similar needs in other
alternative way than the cafe has to suffer the loss. For handle this situation it is necessary for the
cafe to be a service oriented rather to focus on products and understand the needs of the
customers.
Rivalry among the existing players
As in the cafe sector there are many existing players is available in this industry so this
will lead to decrease the prices and at the same it also decreases the overall profitability of
industry. This can be heal by maintaining the sustainable differentiation and from these they will
have the better competition. The cafe can also increase the market size by competing the small
market (Davidsson, 2015 ).
CONCLUSION
From the above report it has been summarized about the evaluation of Drucker's seven
sources of entrepreneurial ideas of innovation. This report also explains the life cycle of industry
and it phases that is from introductory to declining stage of the venture and elaborates the
segmentation, targeting and positioning of the product. This report explains the SWOT analysis
of the industry and shows the strength, weaknesses, opportunity and threats that are related to the
industry. This report also having the primary market survey to make the business idea more
effective and also helps in finding out the preferences of the customers and make the business
strong and powerful.
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REFERENCES
Books and Journals
Arregle, J.L and et.al ., 2015. Family ties in entrepreneurs’ social networks and new venture
growth. Entrepreneurship Theory and Practice. 39(2). pp.313-344.
Davidsson, P., 2015. Entrepreneurial opportunities and the entrepreneurship nexus: A re-
conceptualization. Journal of Business Venturing.30(5). pp.674-695.
Kohlbacher, F., Herstatt, C. and Levsen, N., 2015. Golden opportunities for silver innovation:
how demographic changes give rise to entrepreneurial opportunities to meet the needs of older
people. Technovation. 39, pp.73-82.
Kraus, S., Richter, C., Papagiannidis, S. and Durst, S., 2015. Innovating and exploiting
entrepreneurial opportunities in smart cities: evidence from Germany. Creativity and Innovation
Management. 24(4). pp.601-616.
Kuratko, D.F., Morris, M.H. and Schindehutte, M., 2015. Understanding the dynamics of
entrepreneurship through framework approaches. Small Business Economics. 45(1). pp.1-13.
Lackéus, M. and Williams Middleton, K., 2015. Venture creation programs: bridging
entrepreneurship education and technology transfer. Education+ training. 57(1). pp.48-73.
Maritz, A. and Donovan, J., 2015. Entrepreneurship and innovation: Setting an agenda for
greater discipline contextualisation. Education+ Training. 57(1). pp.74-87.
McKevitt, D. and Marshall, D., 2015. The legitimacy of entrepreneurial mentoring. International
Journal of Entrepreneurial Behavior & Research. 21(2). pp.263-280.
Miles, M and et.al.,2015. Exploring entrepreneurial marketing. Journal of Strategic
Marketing. 23(2). pp.94-111.
Terjesen, S.A. and Lloyd, A., 2015. The 2015 female entrepreneurship index. Kelley School of
Business Research Paper, (15-51).
Theriou, G. and Chatzoudes, D., 2015. Exploring the entrepreneurship-performance relationship:
evidence from Greek SMEs. Journal of Small Business and Enterprise Development. 22(2).
pp.352-375.
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Online
Peter Drucker on the Seven Sources of Systematic Innovation. 2019. [online]. Available through
<https://teten.com/blog/2010/01/13/peter-drucker-on-the-seven-sources-of-systematic-
innovation-2/>
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