Identifying Entrepreneurial Opportunities

This document discusses the process of identifying entrepreneurial opportunities and evaluating possible sources for new and innovative business ideas. It also explains the choice of a specific entrepreneurial idea for investigation and the market gap that it addresses. Additionally, it explores the use of primary and secondary data to identify market potential. The document is relevant for students studying entrepreneurship or business management.

Identifying Entrepreneurial Opportunities

Table of Contents
Introduction......................................................................................................................................3
Task 1:.............................................................................................................................................3
LO1 Evaluate possible sources for a new and innovative business idea (P1).................................3
LO2 Explain the choice of a specific entrepreneurial idea for investigation and the market gap
that it addresses (P2)........................................................................................................................6
LO3 Use primary and secondary data to identify market potential (P3, P4)...................................8
LO4: Evaluate the entrepreneurial idea in the context of the market and competitors and make an
assessment of potential viability (P5, P6)......................................................................................15
References......................................................................................................................................17

Introduction
The term entrepreneurship means the process of planning, starting and executing a newly formed
business. The business generally starts with a small scale. The creators of these new businesses
are called entrepreneurs. These entrepreneurs have the willingness as well as the ability for
development, organization and management of a new business venture and the risks associated
with it for making profits (Dees, 2017). Although entrepreneurs generally focus on the starting
and success of the business, the business is frequently seen to be closing down after a short time
due to the absence of enough funds, wrong decisions or economic crisis. In this assignment, the
learner is going to study about the identification of entrepreneurial opportunities.
The learner would like to open a beverage shop in Melbourne that will be specializing in chilled
soft drinks make out of milk and added organic flavours of an unusual taste. The company will
not be using any kind of artificial preservatives and the products available will be personalized
and made in front of the customers themselves. The company will be mostly concentrating on
coffee and milkshakes. The flavours that can be added to the choice of drinks are seasonal fruits,
ice cream, chocolates and various other flavours. These will bring about innovation in the
product and newness that the local people have not tasted before. Melbourne being quite a
popular place and one of the tourist destinations of Australia, the company is expected to be
successful, as it will progress.
Task 1:
LO1 Evaluate possible sources for a new and innovative business idea (P1)
A large number of places can actually be potential locations in order to derive innovative ideas.
The companies or organizations that neglect the element of sourcing from their processes of
innovation and visibly decreasing their capabilities of innovation (Sniukas, Lee and Morasky,
2016). A survey carried out recently for the innovative companies have proved that consumers or
clients are a major source for deriving innovative ideas. Sales, marketing, firm leaders,
employees, competitors and suppliers follow the customers or clients in order to get innovation.
Customers

Due to the reason that the final valuation of goods and services are done by customers or clients,
along with running the sales of a company, they are oneof the most important elements that are a
potential source to derive innovative ideas. For the optimum utilization of the powers that the
customers have, leaders of innovation must plan out ways for gathering and collecting the ideas
of the customers (Klenk and Pavolini, 2015). A good place to start with the process on the
internet, being effective mostly for the technology sector or industries. A number of online
outlets are present for the customers or clients of the in order to provide constructive feedback on
the products and services. The companies and organizations present in the service as well as
retail industries also have the probability of investing in an online portal for the website of the
respective company that allow their customers or clients to review the services and products and
submit them along with ideas and complaints. The leaders of innovation must actively
accumulate the information as well as any other reviews received from the clients and customers
from the test groups and the feedback surveys in order to be provided with fresh new ideas for
innovating products along with adding improvements to them.The proper evaluation and
implementation of ideas on the basis of the feedbacks of the customers are probably one of the
most effective ways in which a company can be forward in the competition. The customers of
the new café will be attracted towards the innovation that has been brought in its customization
along with the variety of flavours.
Competitors
Competition with the leaders of the companies along with the organization itself is both not used
properly for sourcing innovation. Being present in the conferences of industries along with their
tradeshows and exhibitions is a good method of being aware of the development and researchers
that the competitions are bringing about. These ideas can often be used by companies and
businesses and modify or append them for creating new products and services. The entrepreneurs
ofbusinesses on a superior level must attemptin order to be connected properly with the other
entrepreneurs in the same industry as of the company. This is because it is another source of
innovation as well for the new café.
Internal departments
The employees present in an organization along with the department of marketing and sales
create in of biggest areas where innovation can be derived from (Johnston and Marshall, 2016).

In accordance with the amount of exposure and experience in an industry and its products and
services, these employees are generally loaded with valuable information and provide structured
and detailed idea proposals with the required infrastructure. The department of sales and
marketing generally experience the maximum amount of balance between the internal
communications and customer relations. This fact helps them in articulating and anticipating the
requirements of the customers and clients and transform them into ideas that can be
implemented.
Look to the past
The old ideas must also be taken into consideration by the companies when they are collecting
proposed ideas for their products in order to invent new ones or modify the already existing ones.
It is not always the case of poor evaluation that some ideas are abandoned. It is frequently seen
that the availability of technology at the time the idea was proposed was not allowing the idea to
be a cost-effective process (Sekaran and Bougie, 2016). The existing rights must also be taken
into consideration, the availability of internet is one of the most effective methods, especially due
to its cost-effectiveness, they can be used for collecting ideas. Before, not many facilities were
available for brewing coffee differently than the traditional processes. Thus, the idea had been
subdued then.
Look at the future
Just in the way, the old times had an exceptional scope of ideas for innovation, the future also
holds immense scope for ideas in the form of fresh academic researchers (Noveck, 2015).
Companies have collaboratively working with a number of research institutions and universities
for quite some time now. The students are not much subdued by the traditional ideas and have
the tendency of thinking ‘out of the box’ to bring out new ideas and innovations. They are
relatively less experienced than the employees that can be an asset to a company that is almost
filled up with hired researchers. It is more appropriate for the students to ask questions, have
creative ways of solving problems, and bring up with traits that are relevant to a larger
demographic base for customers.
There are a number of forms of ideas and are likely to be found in almost all the unconventional
places. The responsibility of an entrepreneur of a company is the identification of probable

sources for gathering innovative ideas and assimilate the framework in order to incorporate the
processes in which the ideas can be effectively evaluated and used in the company.

LO2 Explain the choice of a specific entrepreneurial idea for investigation and the market
gap that it addresses (P2)
In order to bring in success in the new business idea that is likely to bring about innovation in the
food and beverage industry, it is extremely important to identify the potential customers and the
business processes must be donein order to suffice the needs and requirements of these identified
customers (Crane and Matten, 2016). For the new beverage company, the main targeted
customers will be the local people and the youth of the localities along with the huge number of
tourist coming to visit Melbourne each day. The reason for targeting the tourists is that the
tourism of the country is extremely efficient and brings about huge profitability to the food and
beverage industry of the country (Sharpley and Telfer, 2015).
The market can be segmented into their behaviour, as beverages are very much liked by the
youth generation nowadays. The tourists can also come to the outlet for being refreshed in the
tour and explore new tastes to their regular drinks. The local people will also have a place to
enjoy their time,as the café will be providing them with healthy drinks according to their choice
of flavours. The café will be catering to all kinds of people irrespective of age or gender as the
products and services offered by the café will be suitable for all of them. However, children
under ten years of age must be avoided from the intake of coffee. As the café will be catering to
the local people and the tourists, the geographical segmentation is not much of an importance to
the entrepreneur.
The tangible aspects of the café will be the products itself and the intangible aspects of the café
will the services of personalization of drinks according to the choices and preferences of the
customers. If the customers have the liberty to choose the flavours of their choice, they will be
much happier to avail the products and services of the café because they will have their freedom
of enjoying their refreshment, as they like.
The beverage industry of Australia is currently having substantial profits. However, the new
entrants will be having a tough competition while establishing themselves in the market. This is
because there are already a number of cafes present in the country that are well established in the
market. In accordance with this fact, the new café must bring in innovation in its products and
services for gaining a place for competing with its rivals.

In order to analyse the perspective of a new café, the Porter’s Five Forces Model can be
explored. The existing companies will be providing a tough competition for the new café but
they will have an advantage due to their innovation in products and services. The degree of
competition is going to be moderate for the new café. The new café has less of substitutes as
none of the cafes has the facility of customizing their product along with having a variety of
flavours. The bargaining power of the buyers is very much prevalent in the industry as a number
of cafes are present in Australia. However, the bargaining power of suppliers are less in the
industry die to the availability of coffee suppliers in the industry.
In order to compete with the rivals in the market for the new café, the innovations brought about
must be highly maintained and abided by so as to gain a customer base and maintain its
sustenance in the industry. If the innovations are not maintained then the café will be similar to
that of any other café in the market and that would bring about tough competition. The prices
should also be within the range of affordability of the target customers.
The new business will require quite some time from the time of its introduction in order to grow,
develop and mature its presence in the market. The decline is not expected to be faced by the
café unless it fails to compete with its competitors and lose the customer base.

LO3 Use primary and secondary data to identify market potential (P3, P4)
1. What is your gender?
Options Number of responses Percentage of
responses
Total responses
Male 46 46 100
Female 54 54 100
Table 1: Gender statistics
Source: Created by author
The number of females is more compared to the number of males who participated in the
research. 54 and 46 are the numbers respectively for females and males.
46
54
Number of responses
Male
Female
Figure 1: Gender statistics
Source: Created by author
2. What is your age?

Options Number of responses Percentage of
responses
Total responses
8-18 years 12 9 100
19 to 25 years 41 44 100
25 to 40 years 27 27 100
More than 40 years 20 20 100
Table 2: Age statistics
Source: Created by author
8-18 years 19 to 25
years 25 to 40
years More than
40 years
0
5
10
15
20
25
30
35
40
45
12
41
27
20
Number of responses
Number of responses
Figure 2: Age statistics
Source: Created by author
On the basis of 100 research participants of the primary data analysis, the people within the
range of 8-18 years was 9%, within 19-25 years was 44%, with 25-40 years was 27% and the
people more than 40 years of age was 20%. Thus, it can be derived that people within the age
group of 19 to 25 years will the potential customers for the café.
3. Do you prefer coffee to be your favourite beverage?

Options Number of responses Percentage of
responses
Total responses
Yes 53 53 100
No 47 47 100
Table 3: Preference of coffee
Source: Created by author
Yes No
44
45
46
47
48
49
50
51
52
53
53
47
Number of responses
Number of responses
Figure 3: Preference of coffee
Source: Created by author
From the above table, it can be derived that a majority of people prefer coffee as their favourite
beverage, the percentage being 53%.
4. How often do you go to a coffee shop in a week?
Options Number of responses Percentage of
responses
Total responses
Regular 41 41 100
Often 27 27 100

Sometimes 20 20 100
Seldom 12 12 100
Table 4: Preference of coffee
Source: Created by author
Regular Often Sometimes Seldom
0
5
10
15
20
25
30
35
40
45
41
27
20
12
Number of responses
Number of responses
Figure 4: Preference of coffee
Source: Created by author
According to the above table and chart, 41% of the people are regular customers of café,
followed by 27% of people visiting café often.
5. Would you like to have innovation in your coffee?
Options Number of responses Percentage of
responses
Total responses
Yes 69 69 100
No 31 31 100

Table 5: Preference of innovation in coffee
Source: Created by author
69
31
Number of responses
Yes
No
Figure 5: Preference of innovation in coffee
Source: Created by author
From the above chart and graph, majority (69%) of the people support the concept of bringing in
innovation in their coffee.
6. If there is any innovation in your coffee would you like to have it more?
Options Number of responses Percentage of
responses
Total responses
Yes 49 49 100
No 31 31 100
May be 20 20 100
Table 6: Innovation preference in coffee
Source: Created by author

Yes No May be
0
5
10
15
20
25
30
35
40
45
50
49
31
20
Number of responses
Number of responses
Figure 6: Innovation preference in coffee
Source: Created by author
It can be derived from the above chart and graph that 49% of the people will be having coffee
more if they are provided with the aspect of innovation to their regular coffee.
Secondary data analysis has been carried out in order to understand the viability of bringing in
innovation in an industry so having a competitive edge. The secondary data and information
have been collected from online sources, books and journals. It has been derived that consumers
or clients are a major source for deriving innovative ideas. Sales, marketing, firm leaders,
employees, competitors and suppliers follow the customers or clients in order to get innovation.
A number of online outlets are present for the customers or clients of the in order to provide
constructive feedback on the products and services. The companies and organizations present in
the service as well as retail industries also have the probability of investing in an online portal for
the website of the respective company that allow their customers or clients to review the services
and products and submit them along with ideas and complaints.
There is not much gap between the agenda of the new café as it is evident from the research that
the potential customers are the majority in the preference of coffee than other beverages and they
would also like innovation to be brought about in their regular coffee. It has also been surveyed
that they will be visiting café more often of innovation is brought about. Thus, this fulfils the

idea of the new café to bring about innovation its products and services in order to get a proper
share of the market and increase its profitability.

LO4: Evaluate the entrepreneurial idea in the context of the market and competitors and
make an assessment of potential viability (P5, P6)
STRENGTH WEAKNESS OPPORTUNITY THREAT
The agricultural sector
of Australia is highly
productive, especially
its dairy products
(Grundy, et al., 2016).
Thus, there is an
abundant supply of
milk for the beverage
industry, café to be
specific as one of its
core ingredient is milk.
The availability of
coffee suppliers is also
quite easy in Australia.
Due to the fact that
agriculture is rich in the
country, the flavours of
organic seasonal fruits
will have a huge variety
and the customers will
have the liberty of
choosing from a range
of options, increasing
the customer
satisfaction.
The research and
development of the
private sector
companies in the
industry is quite low.
The availability of area
is also quite less, along
with steep prices of
land to buy or to lease.
The cost-effectiveness
is also relatively less
than that of other
industries in Australia.
The concept of lean
supply chain
management is still yet
to be implemented in
the beverage industry.
The beverage industry
has the opportunity of
growing as the
population that prefer
coffee as their favourite
beverage is increasing.
The population of
youth is also growing
in the recent years who
are the majority of the
population that
consume coffee
(Mitchell, et al., 2014).
The improvements in
the dairy sector also
provide an opportunity
for the beverage
industry to grow, along
with the growth of
agricultural industries.
As a number of
companies are newly
entering the beverage
industry, the level of
competition has
increased and the
companies are having
the difficult time in
maintaining their
profitability and
customer base in the
market. The cost-
effectiveness of the
companies is also
decreasing. The
companies that are
already established in
the industry are posing
the potential threat to
the new entrants.
Swot Analysis of Beverage Industry
(Source: Created by author)

Conclusion
The new business venture is quite a viable and rational business proposal that has the ability to
thrive in the beverage industry if it is able to maintain its organizational innovation and meet the
needs and requirements of the customers. The learner would like to open a beverage shop in
Melbourne that will be specializing in chilled soft drinks make out of milk and added organic
flavours of an unusual taste. The company will not be using any kind of artificial preservatives
and the products available will be personalized and made in front of the customers themselves.
The company will be mostly concentrating on coffee and milkshakes. The flavours that can be
added to the choice of drinks are seasonal fruits, ice cream, chocolates and various other
flavours. These will bring about innovation in the product and newness that the local people have
not tasted before.

References
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Keating, B.A., 2016. Scenarios for Australian agricultural production and land use to
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Sniukas, M., Lee, P. and Morasky, M., 2016. The Art of Opportunity: How to Build Growth and
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