Identifying Entrepreneurial Opportunities

This project examines the entrepreneurial idea of 'Rent Your Home', a business focused on connecting homeowners with renters. It explores various sources of innovation, identifies market gaps, and utilizes SWOT analysis to assess the idea's viability. The project also examines the competitive and market environments in the UK rental market. Desklib provides past papers and solved assignments for students.

Identifying Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1 Determining and evaluation of various sources of entrepreneurial ideas and innovation.....1
LO2..................................................................................................................................................3
P2 Explaining of market gap for specific entrepreneurial idea...................................................3
LO3..................................................................................................................................................4
P3 Presentation of data for evaluating gap analyses of the entrepreneurial idea........................4
P4 Interpretation of data for providing evidence of market potential.........................................6
LO4..................................................................................................................................................7
P5 Application of SWOT framework to collate evidence to support an objective assessment
of idea .........................................................................................................................................7
P6 Evaluation the competitive and market environments where idea will be launched.............9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
.......................................................................................................................................................10

INTRODUCTION
Business sector is growing with a high speed because it entrepreneurs are making
developing new business ideas in order to develop a successful enterprise and reach their aim.
''Rent Your Home'' is a small business organisation who want to start a business of allowing
people to rent their home and earn money against it (Grégoire and Shepherd, 2012). This
organisation understand that growth potential of this business is high so they are working on
getting proper funding and start their business without face big financial hurdles. This
assessment is based on ''Rent Your Home'', it will discuss about different sources of innovation
along with entrepreneurial ideas. Market gap between selected idea and present condition of
industry will also become part of this file. Few graphs and data will be presented and analysed in
this report. SWOT framework will be used for ascertaining the effectiveness of idea. The market
will idea will be come on ground will also be analysed at the end of this project.
LO1
P1 Determining and evaluation of various sources of entrepreneurial ideas and innovation
Entrepreneurs are known for introducing new ideas but it is important to understand the
source of their ideas in order to develop a successful business. Peter Drucker gave following 7
sources of innovative opportunities:
The Unexpected – Marketplace is changing rapidly and with it, various kind of
opportunities are getting converted into reality and helping entrepreneurs in attaining success.
''The Unexpected'' chances of new business idea, it means unanticipated demand of a product or
service in market which develop an idea in the mind of entrepreneur and motivate him/her for
grabbing a lucrative opportunity.
The Incongruity – Their are many companies who are selling their products in market
without actually researching that what should be sold in market. Their are few entrepreneurs who
believe that people what something different and they take a chance in their business by trying
new things. This sometime lead to great success but it can also go otherwise. Incongruity is one
of the most popular source of innovation (Siegel and Renko, 2012).
Process need – This is a origin of business idea which does not focus on situation, it
mainly concentrate on a task. Whether is an entrepreneur is a product developing or service
providing business, they have to go through a process in order to fulfil demand of customers.
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When they try to remove or make change in weak link then they the need of innovative ideas
arise and it ultimately lead to innovation.
Change in market structure and industry – Sometime industry or structure of market go
through major changes and it motivate companies to generate business ideas in order to survive
in market or become market leader. This source of innovation is getting very popular in this era
because technology is changing overnight.
Demographics – Demographic condition of in various countries is changing swiftly. This
is generating a chance for entrepreneurs to develop new business ideas and shape their business
according to the demographic condition of business environment.
Change of perception, meaning and mood – Things of new generation is always different
from the old one and their perception is also changing rapidly. This alteration in perception is
motivating entrepreneur to develop fresh business ideas and new products & services according
to the demand of customers (Kohlbacher, Herstatt and Levsen, 2015).
New knowledge – In the field of science and management, new knowledge urges the
demand of new business idea. It give a chance to entrepreneurs for developing a new idea and
bring it to the ground. If an organisation ignore new knowledge then it their business starts
getting serious trouble.
Schumpeter’s sources of innovation
Product – This is a type of innovation which results in development of new product. An
entrepreneur can attain success in his/her business by developing and selling a completely new
and modified product in market.
Process – By generating or modifying a new procedure of production or providing
service to customers, entrepreneur can use this source of innovation.
New market – It can be known as the development of completely new market which is
developed for selling a product or service. The type of innovation is growing with a high pace in
present business world.
New sources of inputs – When an entrepreneur or organisation find new supplier then
they it lead to a different kind of innovation. New source can be already existing or a newly
created one.
New organisation – This source of innovation is getting very popular in present era.
Companies are using their innovative mind in order to get monopoly in the market. They are
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doing mergers and acquisitions in an innovative way to attain the position of market leader
(Suddaby, Bruton and Si, 2015).
LO2
P2 Explaining of market gap for specific entrepreneurial idea
The idea of renting own house is getting popular with time and this is the prime reason
that ''Rent Your Home'' is going to start their business in this market. Below are few factors
which they have to consider for evaluation of market gap:
Identification of customers
Targeting – ''Rent Your Home'' will basically target young generation who need income
and, at the same time, a space for living. They are going to motivate them to choose right option
i.e. instead of buying home, rent a place. This company will basically focus on two areas, first is
renting your house, in order to earn money, and second is rent a home instead of buying it.
Below are few segment which where company will focus for attaining desired result:
Behavioural – Behaviour of young generation is completely different from older one.
They do not like to save money and or spend them on those things which are not needed
according to them. In UK, youth is preferring to live on rent i.e. lease because they understand
that spending huge amount of money on buying a home is wastage of money. They want to place
to live, they do not care about ownership. Similarity, their mindset has also changed in regards to
earning money. They understand that they need more than one source of income and rent their
unused home is help then in attaining this work. ''Rent Your Home'' understand their they have to
focus on aggressive marketing and growth because this market is developing with a high pace
and new companies are also entering in same business (Fisher, 2012).
Demographic – People are shifting from village areas to developed cities. They need job
and better infrastructure which they can only find in major cities. ''Rent Your Home'' is going to
start their business by focusing on prime cities like London because these will help them in
coming close to the market leaders. One they company start getting fine business from key cities
then they will expand it to tier 2 cities and villages.
Geographic – Many people who are working in London and other major city of UK
understand that pollution, change in weather are few key areas which is going to impact them.
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They like to rent a place in these cities instead of buying them because they feel that after
sometime, these cities will face big problem related to pollution and availability of water.
Understand industry environment
Porter's five force model
Buyers power – Competition in this industry is high which means that power in the hands
of buyers is also high. Their are various mobile application and website which provide details
about vacant flats that are available on rent (Aliaga-Isla and Rialp, 2012).
Suppliers power – Suppliers do not have power because ''Rent Your Home'' can easily get
high number of advertisements on their mobile application by focusing on aggressive marketing.
Threat of new entry – It is high. This industry is growing with an impressive rate which
means that they are number of new entrants will also go in upcoming time.
Threat of substitution – Business of renting home has shining future and this threat is
low. This business do not have substitute until people start getting homes at very cheap rate.
Competitive rivalry – Airbnb, rightmove, Gmtree, Zoopla are few market leader in of this
industry in UK. Airbnb is present in many countries while other countries hold strong position in
domestic market. These organisations hold majority of market share and they have potential to
become serious threat in rapid growth of the ''Rent Your Home''.
LO3
P3 Presentation of data for evaluating gap analyses of the entrepreneurial idea
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(Source: Private Rental Market Summary Statistics – April 2016 to March 2017, 2018)
Renting own property and living in a rented house are two trends which are continuously
growing in this business environment (Private Rental Market Summary Statistics – April 2016 to
March 2017, 2018). Their are many companies who are entering in this business but most of
them are for the purpose of tourism like Airbnb. ''Rent Your Home'' is not focusing on short term
stay business on initial stage, their main aim is to provide restrict to students and other working
people who do not belong to UK. The above graph shows the amount of rent which people are
ready to pay for living in different part of UK. ''Rent Your Home'' is going to earn money from
their mobile application advertisements as well as they will change commission for the service
which they are proving top their customer i.e. allow them to rent their home and assist them in
finding suitable house on rent (Walsh, 2012).
Gap analysis
For every company, it is important to find the place where they are standing and at the
same time understand the position of market so they can evaluate the gap between own business
model and real system. Below is gap analysis of this business idea:
Gap between model and requirement – The current business model of ''Rent Your Home''
is that they will start a mobile application where people allow to post advertisement of their
vacant home. Those people who are interested in renting a home, which was posted on
application, have to pay some amount of the total rent in order to get complete detail about home
which they want on rent. For this, company will require to people who have ground knowledge
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Illustration 1: Private Rental Market Summary Statistics – April 2016 to March 2017

about real state market. They also need sound technical wing so they can develop an impressive
mobile application. Company also need financial resource so they can advertise their mobile
application and motivate people to use download and use it.
Gap between requirements and real system – Although company require various
resources which are mentioned above but the real system is different from it. They have to spend
huge amount of financial resource in order to get decent amount of popularity on television and
internet. Along with this, they have to spend large amount, in initial period, on giving discount
and free vouchers to the customers so company can earn some competitive advantages on their
rivals. ''Rent Your Home'' does not only need technical staff and market experts, they also need
quality marketing team who can promote their brand as the best in UK. The importance of sales
promotion and internet advertising has grown in past few years.
Gap between model and real system – Their is no doubt that there is a gap between
current model of company and real condition of market. ''Rent Your Home'' has limited financial
resource and they can either invest them on developing quality workforce of they can invest this
amount on promotion of their service (Wilson and Martin, 2015). This company is going to
charge some amount for the service which they are providing to their customer but most of their
rivals in the market are not charging single pound for the services which they are giving to their
customers.
P4 Interpretation of data for providing evidence of market potential
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Illustration 2: Median and interquartile range of monthly rents by bedroom category.

(Source: Median and interquartile range of monthly rents by bedroom category. 2018)
Above graph shows the amount amount of rent which people are ready to pay for
different types of rooms. This graph show people can pay more amount if they are get an
apartment of house according to their needs (Median and interquartile range of monthly rents by
bedroom category, 2018). Their is no doubt that the rent of more areas will be high but this does
not that number of customer who are seeking four bedroom and more are less. ''Rent Your
Home'' need to focus on getting all types of advertisement from initial stage because if they will
focus on particular size of house then they will fail to earn desired amount. Another graph which
was related to the location in UK of renting property shows that most of the people want to rent a
property in inner London. ''Rent Your Home'' have to give some special attention to the people
who want to find a home in London because company can earn more revenue from them. East
and south east is another region where renting property is expensive (Perry, Chandler and
Markova, 2012). 2200 pounds per months is a big amount for renting house and if company will
even get 1% of this amount from single customer then they can ultimately earn huge profit in
short period of time.
LO4
P5 Application of SWOT framework to collate evidence to support an objective assessment of
idea
SWOT framework is used for analysing the strengths, weaknesses, opportunities and
threats of entrepreneurial idea. ''Rent Your Home'' may not be a very unique idea but it is a
sustainable one which can help entrepreneurs in earning huge amount of money and success in
short period of time. Below is SWOT analysis of this entrepreneurial idea:
Strengths
 One of the key strength which this idea is that it is not a bubble. It is will sustain for a
long period of time and market trends also says that demand of property on rent will grow
rapidly in upcoming time. Competition in market in industry can be high but the
companies who are operating in this industry are not too strong. Increasing prices of buying home in most of the part of world is another point which will
play crucial role in development and assured success of this business idea. Nowadays,
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people understand that there is no sense in paying huge amount for a home if they can
easily rent a place for living. They only need a place where they can live for desired
period of time. Buying capacity of people is increasing in this UK but with a very low
rate. This company only need decent economic growth which UK can provide them.
Weaknesses
 Unstable political condition and Brexit is going to make negative impact growth of this
entrepreneurial idea because high fluctuation in the policies which are made by
government restrict company from making effective policies. Complicated legal procedure for renting a home in UK will negatively impact success of
the idea. ''Rent Your Home'' is only providing services of helping people in finding house
on rent. They are working as a mediator between seller and buyer which means that they
can not resolve crucial problems which are related to legal restrictions. This reduces
importance of this complete idea. It means that company is operating in a business where
legal troubles will also be high (Zahra and Nambisan, 2012).
Opportunities
 Technology is swiftly changing and this ''Rent Your Home'' can use latest technology in
order to get some extra edge on their competitors. This idea is completely depended on
new technology and improved developing an updated application will allow this idea and
company to sustain for more time. ''Rent Your Home'' is initially going to work on idea of proving houses on rent to their
service users but this their business is not limited to this because they can easily enter in a
completely new market i.e. renting areas for commercial purpose. This is market which
has potential to give high return and this organisation can grab this opportunity for
assuring high growth in long run.
Threats
 Their are many organisation who are raising issues against allowing foreigners to live in
their country. They feel that people from other nation made a huge negative impact on
growth of their business and this is why they do not want them to live in their country. If
they attain success in their mission then demand of renting home will go down and it will
create serious issue for company.
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 Increasing competition and entry of new player is serious threat which will create sever
problem for company in long run.
P6 Evaluation the competitive and market environments where idea will be launched
Every entrepreneur want to know that his/her business idea is viable or not, whether it
will survive in the market or not. ''Rent Your Home'' has to analyse the market and the
competition which is present in the market in order to evaluate feasibility of idea. It can be done
by focusing on following points:
Company – An organisation consist of various department and if they do not work
according to the demand of market then it create problem for company. Company will face
issues in getting funding for this idea and they also have to struggle for getting quality
workforce. The companies who are working in this industry require properly synchronisation
among all activities and if ''Rent Your Home''do that then they can become market leader in short
period of time.
Customer – People who are interested in renting home understand that they there are
various mobile application which can offer them different options so ''Rent Your Home'' has to
find a way for influencing customers. This is not an easy task but allowing heavy discount and
quality service can make it easy (Stenholm, Acs and Wuebker, 2013).
Competitor – Number of competition in industry is high but this company has one
advantage that none of them strong and undisputed kind of this market. ''Rent Your Home'' has to
give something new and impressive to the customer if they want to ensure strong presence in this
emerging market.
Collaborators – Making new connection is essential in this industry because it is
completely dependent on the more number of advertisements on the mobile application which
company provide to customers.
CONCLUSION
From the above report, it can be concluded that developing a unique idea is very
important in this era. Entrepreneurs have different sources of innovation and they can use various
marketing tool for analysing significance and effectiveness of their idea.
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REFERENCES
Books and Journals
Aliaga-Isla, R. and Rialp, A., 2012. How do information and experience play a role in the
discovery of entrepreneurial opportunities? The case of Latin-American immigrants in
Barcelona. Latin American Business Review, 13(1), pp.59-80.
Fisher, G., 2012. Effectuation, causation, and bricolage: A behavioral comparison of emerging
theories in entrepreneurship research. Entrepreneurship theory and practice, 36(5),
pp.1019-1051.
Grégoire, D.A. and Shepherd, D.A., 2012. Technology-market combinations and the
identification of entrepreneurial opportunities: An investigation of the opportunity-
individual nexus. Academy of Management Journal, 55(4), pp.753-785.
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.
Perry, J.T., Chandler, G.N. and Markova, G., 2012. Entrepreneurial effectuation: a review and
suggestions for future research. Entrepreneurship Theory and Practice, 36(4), pp.837-
861.
Siegel, D.S. and Renko, M., 2012. The role of market and technological knowledge in
recognizing entrepreneurial opportunities. Management Decision, 50(5), pp.797-816.
Stenholm, P., Acs, Z.J. and Wuebker, R., 2013. Exploring country-level institutional
arrangements on the rate and type of entrepreneurial activity. Journal of Business
Venturing, 28(1), pp.176-193.
Suddaby, R., Bruton, G.D. and Si, S.X., 2015. Entrepreneurship through a qualitative lens:
Insights on the construction and/or discovery of entrepreneurial opportunity. Journal of
Business venturing, 30(1), pp.1-10.
Walsh, P.R., 2012. Innovation nirvana or innovation wasteland? Identifying commercialization
strategies for small and medium renewable energy enterprises. Technovation, 32(1),
pp.32-42.
Wilson, N. and Martin, L., 2015. Entrepreneurial opportunities for all? Entrepreneurial capability
and the Capabilities Approach. The International Journal of Entrepreneurship and
Innovation, 16(3), pp.159-169.
Zahra, S.A. and Nambisan, S., 2012. Entrepreneurship and strategic thinking in business
ecosystems. Business horizons, 55(3), pp.219-229.
Online
Private Rental Market Summary Statistics – April 2016 to March 2017. 2018. [Online].
Available Through:
<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/
attachment_data/file/620661/PRMS_Statistical_Release_22062017.pdf>.
Median and interquartile range of monthly rents by bedroom category. 2018. [Online].
Available Through:
<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/
attachment_data/file/620661/PRMS_Statistical_Release_22062017.pdf>.
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