Identifying Entrepreneurial Opportunities - Assignment

Identifying
Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different sources of entrepreneurial ideas and innovation....................................................1
TASK 2............................................................................................................................................3
P2. Rationale as well as market gap.............................................................................................3
TASK 3............................................................................................................................................6
P3. Gap analysis for the evaluation of a entrepreneurial idea.....................................................6
P4. Interpretation of data..............................................................................................................8
TASK 4..........................................................................................................................................12
P5. SWOT Framework...............................................................................................................12
P6.Competitive and market environments.................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Entrepreneurial need to identify the opportunity through listening potential clients and
previous leaders in their area (Campos, and et. al., 2015..). For this, they have to done research
which helps the individual to identify market trends and customer's demand. They need to
analyse current market trends, competitors, national policies regarding their business and the
factors which can affect the business. The underlying aim of this report is to understand
importance of entrepreneurial opportunities in oder to generate the profits by innovating ideas. In
order to understand entrepreneurial opportunities, Organix Chocolates is launching new home-
made, fresh as well as organic chocolates at Wembley, United Kingdom. This report includes
possible sources for a new as well as innovative business idea, competitor analysis, gap analysis
and market research with the help of relevant tools or technique. It further includes usage of
primary as well as secondary data for identifying market potentiality along with analysis of
entrepreneurial idea in relation with market and competitors.
TASK 1
P1. Different sources of entrepreneurial ideas and innovation.
In the dynamic world, there are various sources that are relevant with entrepreneurial
ideas along with innovation which which encourages to set as well as start up a new business
venture. Successful formation of an innovative business contributes towards economic growth
along with development of any country. A new business provides employment opportunities,
infrastructural development as well as improves standard of living of people.
Organix Chocolate is a new innovation whose entrepreneur is looking forward to launch
such business in the city of Wembley, London. The changing perceptions and demands of market
towards organic chocolates and bakery products inspired him to set up such business. The
potential customers are population of Wembley along with surrounding areas. The targetted
audiences are children and youngsters. The growth area is high as there are few bakers who
provide organic products related with chocolates or desserts in such area. In order to attract more
customers, different ways adopted are providing gifts along with products, providing free
samples and so on (Elenurm, 2012).
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Different sources of entrepreneurial ideas and innovation which motivated entrepreneur
to launch Organix Chocolates are STEEP factors and Drucker's seven sources of innovation.
Brief description is as follows:
STEEP factor: It is a technique used for evaluating external macro factors in order to
take critical decisions. It includes social, technological, economical, environmental and political
factors. Analysis of such factor is very important before planning for new start up.
Social factors: Such factor encompasses lifestyle, demographic influence, attitude,
education, consumer trends, income distribution and so on. Trends in such factor impacts on the
demand of products offered by new or existing business. Changes in customer preferences,
trends as well as attitude are helpful in understanding customer perception towards the new
business product and will help Organix Chocolates to make significant changes in chocolates in
order to satisfy demands or preferences of market segments and retain them for longer period of
time.
Technological factors: these factors encompasses technology investments, new
technologies, new products along with procedures, technology effects, product life cycles,
research, development speed, as well as research expenditures. Distinct technology execution
leads to build numerous opportunities to selected organization (George, and et. al., 2016).
Innovation along with new ideas which are associated with technological advancements impacts
on reaching maximum segment of market.
Economic factors: Such factors includes unemployment, economic growth, business
cycles, interest rates,, taxation, inflation, exchange rates and available resources. Compromising
as well as arranging sources are very essential to carry out operations of business. UK has stable
economic conditions which will help in investing capital as well as executing activities to deliver
chocolates to large segment.
Environmental factors: It includes resources, life cycles, disposal, energy, material,
transport routes, emission regulations, global warming and so on. These sources helps in
providing services to potential customers through innovative ideas. Entrepreneur of Organix
Chocolate must inculcate various environmental factors at each stage while executing business
operations.
Political factors: These are related with government policies, legislations, tax policies,
security requirements, policy frameworks and competition insights. Understanding and following
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each aspect protects from political system and following political rules, regulations results in
successful implementation of new innovative idea of Organix Chocolates.
The sources provided by Peter F. Drucker are creative as well as provides opportunities
for innovative ideas which are managed in context to Organix Chocolates. The description is as
follows:
Incongruity: It is related with production gap between supply of products in relation to
demand by customer. The term is used for developing mechanise along with project according to
necessities. In other terms, fulfilling demands of clients of Organix chocolates in effective and
productive manner (Grégoire and Shepherd, 2012).
Process requirement: The selected enterprise should execute innovative tools as well as
techniques in order to coordinate with other operations of business.
Industry as well as market structure requirement: Existing market and industry
structure also give rise to new innovation or ideas. It helps in scattering information about a new
chosen business and making necessary changes as per the requirements.
Demographics: Demographics is related with lifestyle of population which are great
sources of new innovations. Understandings demands and preferences of population helps in
accomplishing objectives of new business.
Changes in perceptions and mood: changing perception gives birth to innovative ideas.
By focusing towards changes in moods or perceptions helps entrepreneurs to make modifications
in the new business and satisfying demands of customers.
New knowledge: Speed of innovation increases with new knowledge which provides
various opportunities to start a new business in competitive world. New knowledge helps in
finding new ways for performing operations and improving procedures of Organix Chocolates.
Unexpected: Innovations takes place unexpectedly which occurs through chances. The
unexpected risk associated with selected business is more which help managers to formulate
various strategies in advance for future.
TASK 2
P2. Rationale as well as market gap.
Market gap is a method used for analysing differences between demand of the product
and supply of organisational products. It is not necessary that needs or demands of all customers
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are fulfilled or target segment buy the products of specific company. In the changing scenario,
each company wants to achieve growth along with success. So for this they apply effective
strategies and make necessary modifications in their work style. There are various opportunities
available to Organix Chocolates to launch the new business. Various provisions were used while
analysing market conditions and further actions are taken. Entrepreneurs have analysed the
market gap and taken decision to satisfy the demands by supplying chocolates along wioth other
bakery products.
Objective Current
State
Future
State
Gap
Identificati
on
Gap
Description
Factors Remedial
Action
To build
strong
reputation
as well as
increasing
customer
base up.
No sale as
entrepreneur
is planning
to launch a
new
business
(Karimi and
et. al.,
2016).
Entrepreneu
r is
expecting to
increase
chocolate
sales up to
200000.
 Thro
ugh
com
petit
or
anal
ysis
 adva
nce
ment
in
tech
nolo
gy.
People want
organic
chocolates
which are
healthy as
well as safe
for health.
Awareness
related to
health as
well as
flavour
innovation
of organic
chocolate.
 Mar
ketin
g
 Acce
ssibil
ity in
wide
r
locat
ions
Product
features as
well as
functionaliti
es
Product is
not
launched
yet.
Increase in
coming
year.
Yes There are
few
companies
which
deliver
Product just
not
launched
yet.
Conduct
review s on
the basis of
existing
customer &
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organic
chocolates.
making
modification
s in
procedures
to provide
organic
chocolates.
STP approach: the STP approach to analyse specific customer type for targetting are as
follows:
Segmentation: Organix Chocolate segments its market on the basis of demographic as
well as behavioural segmentation.
Demographic segmentation: such company targets population of budget conscious clients of age
group between 15 – 35 years (Kohlbacher, Herstatt and Levsen, 2015).
Behavioural segmentation: Quality service, strong brand loyalty as well as medium usage rate.
Targetting: Organix Chocolate is targeting customers who like chocolates and at the
same time are health conscious. They target people of age group between 15 – 35 years in the
city of Whembley.
Positioning: To make position in market, such business adopts strategies related to public
relation, direct marketing and so on.
Industry life cycle: The chocolate industry includes following stages.
Startup stage: At this stage, new innovations are made where customer demand is
limited of chocolate industry. Complimentary products are not available and distribution system
is not defined due to unfamiliarity of new products in market.
Growth Stage: The chocolate products slowly starts making their image in the market.
Here, development and profitability started to rise.
Shakeout Stage: at this stage, consolidation of chocolate products takes place. Various
businesses at this stage started getting negative cash flows.
Maturity Stage: Various chocolate companies are well established and are making good
profits. Various companies are providing similar products in the market.
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Decline Stage: This is the last stage in chocolate industry life cycle. Minimum
opportunities are available for firms to survive and divest in optimum manner.
TASK 3
P3. Gap analysis for the evaluation of a entrepreneurial idea
Gap analysis: This is the process that is used to identify the customer's needs and find
the way to improve the process in business organisation. This is the method of defining the
differences in performance between a business information systems or software application that
determine whether business requirements are being met and if not, then what step should be
taken in order to met successfully. Such as the manager of Organic chocolates make a budget
and compare with actual performance that help to achieve the targets within organisation. Its
analysis involves two methods that help to collect the information.
Primary data: The primary data means data which is collected from first time by
researching the market. This is collected by the researcher by doing research in market. The
manager of any business organisation get the needs and wants of customers and produce that
products. This is time consuming method that take more time to collect the information. Such as
the manager of Organic chocolate analysis the market and get the taste of customer and planning
to make organic chocolates (Kraus and et. al., 2015). The manager has collected information
through Questionnaire method.
Secondary data: This means a data which is collected from existing resources within
organisation. There is not need to do any research and spent more time and money. Organisation
can manufacture the product by following the person. It is used to compare with other
organisation which is described as:
Comparative analysis
Basis Organic Chocolates Green & Blacks
Size of
organisation
It is planning to set up a medium size
of organisation that will provide
organic chocolates with new taste.
It provides variety of organic
chocolates that attract customers.
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Price It will adopt market penetration
pricing as it is newly established
company.
It uses premium pricing policy
because it is already existing company
that can set prices accordingly.
Location London, UK Reached at global level
Products Dark organic chocolates with
different taste
Chocolates, biscuits, ice cream and
baking chocolates.
Focuses It will focus on customer taste as light
sugar, weight and no cavities.
It focuses on number of customers by
manufacturing chocolates.
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Questionnaire
Name:
Age:
Email Id:
Q1. Do you like chocolates? Frequency
a. Yes 14
b. No 6
Q2. What type of chocolates do you prefer? Frequency
a. Dark Chocolates 3
b. Chocolate Bars 5
c. Milk Based 5
d. Organic Chocolates 7
Q3. Have you heard about Organix Chocolate? Frequency
a. Yes 12
b. No 8
Q4. How regularly you spend on chocolates? Frequency
a. Everyday 6
b. Occasionally 5
c. Once in a week 6
d. Once in a month 3
Q5. Do you think that Organix Chocolates will attain success at Frequency
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Wembley?
a. Yes 12
b. No 8
P4. Interpretation of data.
Q1. Do you like chocolates? Frequency
a. Yes 14
b. No 6
Mean 10
Mode 2
Median 10
14
6
a. Yes
b. No
Interpretation: From the above analysis it has been analysed that 14 out of 20
respondents like chocolates and 6 of them are saying that they do not like chocolates. Mean,
mode and median for their responds are 10, 2, 10 respectively.
Q2. What type of chocolates do you prefer? Frequency
a. Dark Chocolates 3
b. Chocolate Bars 5
c. Milk Based 5
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d. Organic Chocolates 7
Mean 5
Mode 3
Median 5
a. Dark Chocolates
b. Chocolate Bars
c. Milk Based
d. Organic Chocolates
0 1 2 3 4 5 6 7 8
3
5
5
7
Responses
Chocolates
Interpretation: From the above chart it has been observed that 7 out of 20 likes organic
chocolates that is greater than other. As 5 likes milk based and other 5 likes chocolate bars. And
remain 3 likes dark chocolates. So mean, mode and median is 5, 3, 7.
Q3. Have you heard about Organix Chocolate? Frequency
a. Yes 12
b. No 8
Mean 10
Mode 4
Median 10
10

a. Yes b. No
0
5
10
15 12
8
Frequency
Responses
Organix Chocolate
Interpretation: From the above chart it has been observed that 12 out of 20 person have
heard about dark chocolates that can create a interest among customers. And remain 8 did not
heard about dark chocolates. So its mean, mode and median are 10, 4, 10 respectively
(Mitchelmore and Rowley, 2013).
Q4. How regularly you spend on chocolates? Frequency
a. Everyday 6
b. Occasionally 5
c. Once in a week 6
d. Once in a month 3
Mean 5
Mode 0
Median 5.5
6
5
6
3
a. Everyday
b. Occasionally
c. Once in a week
d. Once in a month
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Interpretation: From the above chart it has been observed that 6 respondents spends on
chocolates everyday, 6 spends on weekly, 3 spends in a month and another 5 respondents spends
occasionally.
Q5. Do you think that Organic Chocolates will attain
success at Wembley? Frequency
a. Yes 12
b. No 8
Mean 10
Mode 4
Median 10
a. Yes
b. No
0 2 4 6 8 10 12 14
12
8
Number of Respondents
Responses
Interpretation: From the above chart it has been observed that 12 out of 20 person will
attain success at Wembley for organic chocolate. So its mean, mode and median are 10,4 and 10
respectively. It help to get information about interested person for organic chocolates who will
help to run this organisation successfully.
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TASK 4
P5. SWOT Framework
SWOT analysis is a technique which is used to analyse the objectives, progress and
problems of and organization. SWOT is basically the abbreviation for Strength, Weakness,
Opportunity and Threat (Santos and et. al., 2015). Organizations use this tool for a better
understanding of internal and external factors that may affect the organization's objectives and
goals.
Organics is a newly started restaurant that have a thought process of providing healthy,
hygienic and organic chocolates and chocolate products to its customers. A presentation of
SWOT analysis for the organization is as under:
Strengths Weaknesses
 Such venture is providing utmost
healthy and nutritional products to its
customers.
 Organization has a huge demand of
product and large follower base on
social media.
 Organix is following all the health care
laws and adapting new technologies.
 Its products does not contain any
chemicals or pesticides or harmful
preservatives
 Prices of the products are too high
because of the cost of producing
organic chocolates are too much.
 Organix has to pay a huge
transportation cost in order to make a
strong customer base.
 Organization hasn't global appearance.
It is being operated locally (Schmidt
and Keil, 2013).
 Organization has to go through a
complex and costly process of organic
certification.
Opportunities Threats
 Organic chocolates business idea is a
new fully innovated and have high
growth potential.
 Organization can increase the demand
and create new buyer by adapting
marketing and advertisement strategies.
 Changing in regulation or governance
can affect the business.
 Many other small competitors are
providing the same products to the
customers.
 Demand of the organic chocolate will
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 It can improve its market by affiliating
relations with suppliers.
 Organix Chocolate have an opportunity
to expend the business globally with
the help og digital marketing.
not increase because only high potential
customers prefer and afford the organic
chocolates due to high cost.
 The company has lack of funds and
expert employees.
P6.Competitive and market environments
Porter's five force model
Porter's five force model is theory for analysing an organisation competitive environment
and determine the business strength with its profitability. Five force model of a start up business
help to industry rivalry in the competitive era of market. This model was created by M porter to
understand the competitive environment forces that affect to an organisation. The factor of
porter five force model are threat of entry ,threat of substitute ,bargaining power of supplier and
bargaining power of substitute (Siegel and Renko, 2012).
Organix chocolates introduced in the FMCG sector with different product to cover the market
share of other organisation. Organix chocolates produces a huge variety of the chocolates in
different price range. It introduces in the market to show the qualitative range of product to its
customer. It targeted to cover up the huge market share and brand recognition. The detailed
analysis of Porter five forces for a newly start up “ Organix chocolates”.
is as under:
Threat of new entrants: This force determines that It is easy to enter in less competitive
era of market as there are few market contender in industry. When more organizations compete
for the same market share, profits start to slip. Organix chocolates enter in market with high
competition in the market like Dairy Milk, 5 star, perk, yum earth, Amul products.
So organix chocolates requires : High capital to introduce in market, Quality of the product ,
different variants of item, unique taste, Pure and hygiene, low MRP of the product.
Bargaining power of buyers: Buyer expectation is always higher form product that they
purchase it from market. Buyers have the power to pay lower price or demand higher product
quality from industry producers. If Organix chocolates starts sells with strong price policy or non
bargaining policy or fix price of the product then it threatened to competitor (Suddaby, Bruton
and Si, 2015).
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Threat of the substitutes: This force is threatening when buyers can easily find
substitute products with better quality then buyer moves to other product or services which have
low MRP. For organix chocolates business, there are a lot of substitutes available in market for
example Cacao,Chocolate Milk, Carob , flavoured candy.
Rivalry among existing competitors: This force is the major determinant factor . In
competitive industry, every organisation have to compete aggressively for capture market share,
which direct effect to its brand recognition among the customer. Rivalry among competitors is
high when:
 There are numerous competitors;
 Exit barriers are high;
 Industry growth is slow
 Products are easily substituted
 Low customer loyalty.
Organix chocolates is the FMCG based industry. They may find huge market competitors in this
industry. But the qualitative range , hygiene product ,distinctive taste are the only factor that
makes the difference between two brand. It introduced with high quality product and its rivalry
among existing competitors are high. Organix chocolates compete with these brand like Dairy
Milk, 5 star, yum earth, Amul chocolates, godiva chocolates, Hershey 's and other local
products.
Porter basically introduced five forces model of an industry, but other scholars have
suggested the sixth force - complements. Complements can increase the demand of the primary
product of a organisation which are introduced by an organisation at first. It may increases the
profitability of an organisation at certain level.
CONCLUSION
From the above report it has been concluded that entrepreneur analysis the market and get
the needs and wants of clients in order to meet with goals and objectives within organisation. It is
good for new ventures to meet with customer and shares ideas with them for knowing about
launching new products and services. A person should have new ideas or thoughts that to
introduce new products that can generate profits. Gap analysis is used to know the variance
between budgeted and actual performance by setting the standards. This report has covered
different topics like different sources of entrepreneurial idea, rationale and market gap,
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interpretation of data, SWOT analysis and porter's competitive analysis that help to assess the
viability of business idea.
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