Analysis of Entrepreneurial Opportunity Identification

The provided document is a compilation of several articles and research papers on entrepreneurial opportunity identification. It includes studies from scholars such as Grégoire and Shepherd, Hansen et al., Karimi et al., Ko, Kohlbacher et al., Mitchelmore and Rowley, Neneh, Rădulescu et al., Renko et al., Sa'ari et al., Siegel and Renko, and Wood and McKelvie. The document also includes a gap analysis section with references to online sources. This compilation provides a comprehensive understanding of entrepreneurial opportunity identification from various perspectives and can be used as a reference for students and researchers in the field.

Identifying Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
1. Evaluation of different sources of entrepreneurial ideas and innovation................................1
2. Introduction about business idea and potential customers or target audience........................3
3. Competitor analysis at competitive market place...................................................................3
4. Gap analysis and present data needed to support gap analysis...............................................4
5. Market research to support viability for business idea and identifying market potential
using sources such as primary and secondary.............................................................................6
6. Viability and feasibility of business idea, Strengths and weakness of the business.............12
7. Risk of competition and potential opportunities for growth and development.....................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
An entrepreneur is a person and an individual who working as an employee, founds and
runs a small business, amusing all the risks and rewards of the venture or business.
Entrepreneurship is the study of how business are created as well as the actual process of treating
a new business. Before starting a new business an entrepreneur saw various opportunities for its
business. These opportunities are usually defined as situations where products and services can
be sold at a price greater than the cost of their production. This report is based on a new business
“Healthy organic coffee shop” that is starting by an entrepreneur. It is an organic coffee shop in
which the entrepreneur run the business of organic coffee and this shop located at Oxford Street,
Marylebone, London. In this report discussed about different sources of entrepreneurial ideas and
innovation, rational and market gap for a specific entrepreneurial ideas, SWOT analysis for
collecting evidence to support and evaluation of competitive and market environments in which
the idea will be launched.
TASK
1. Evaluation of different sources of entrepreneurial ideas and innovation
For starting a new business, there are need to determine and evaluate different sources of
entrepreneurial ideas and innovation. These sources are needed for the business of “ Healthy
organic coffee shop” (Wood and McKelvie, 2015). The 7 sources of innovative opportunity were
listed by Peter Drucker for those entrepreneur who start their new business ad these sources of
inn ovation opportunity are as following:
The Unexpected- It is related to the place where an entrepreneur identify opportunity for
its business such as the market place is the number one area to look for opportunity. The manger
of the company can do research and studying the market for finding out various opportunities for
the business. For example, the owner of Healthy organic coffee shop, studying of market and
launched its venture at Oxford Street, Marylebone, London because its a corporate area and their
high chance of success of the business.
The Incongruity- It is the process of presenting things that are out of place or are absurd
in relation to nits surroundings when things do not match as they are expected to. There is a
discrepancy between what is and what should be (Siegel and Renko, 2012). For example, it can
be related to the consumers that the entrepreneur of organic coffee shop assume about the
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customers that more consumers are attracted by this cafe but in actual it can be possible cause of
competitor.
Process need- It is a process that is related to finding out the weakness of the company
and trying to correct them. In it, innovations are based on the need and demand. For example, in
coffee shop, the owner of the company find out a weakness that people wait too long for their
entrées and so they decided to hire an another chief to speed up creation times (Sa’ari and et. al.,
2013).
Industry and market structure change- It can be related to the innovation in
technologies and structural problem s that occurs time to time and for this reason, there are need
to be change in the technologies and structure that are used by the company. For example, in
organic coffee shop, the company can provide a coffee machine. And use a new technology by
providing this new equipment that will help in the business of the venture to make easy the
process of producing coffee.
Demographics- It is related to the demographic factors such as age, education,
employment etc. these factors affect the business of the business and provide opportunities of
success of the business. For example, this shop is lactated at corporate area where age and
employment are a positive factor for the business of organic coffee. Office people need to take
coffee fro reducing their stress and this shop provide organic coffee that is beneficial for the
health and an opportunity for the business.
Changes in perception, meaning and mood- This innovation opportunity is related to the
change in taste and mood of the consumers. For example, in UK people are health conscious and
mostly office person, for those the Healthy organic coffee shop manufacture organic coffee
according their taste and preference.
New knowledge- It can be related to the change that occurred by new knowledge about
the technologies. For example, in Organic coffee shop, the venture use new technology of coffee
shop that help the company to provide opportunity for the success of its business (Renko and et.
al., 2015).
Changing in consumer perception motivated the entrepreneur to set up this venture and
run the oraginic coffee business within it. Now these days customers are conscious for health that
motivate the individual personally to operate this business.
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2. Introduction about business idea and potential customers or target audience
Introduction of business idea- The business idea of the entrepreneur is to start a
business of coffee cafe in which individual manufacture organic coffee. This idea generate
within the mind of entrepreneur, when candidate was taking coffee in a restaurant and there the
person can get sugar free or organic coffee. For appreciating the entrepreneur and increasing the
employment level of the country, the UK government decided to provide sourcing of finance to
young graduates entrepreneurs. They have proposed the project value of £150,000, of that
£90,000 will be in the form of a low interest loan that will be payable in 10 years (Rădulescu,
Marian and Moica, 2014). For the remaining £50,000 in the form of a grant and £10,000 need to
be entrepreneur's capital. Then, individual decided to start a business of organic coffee. Now the
entrepreneur going to set up or start a business of “ Healthy organic coffee shop” in which
candidate manufacture and produce organic coffee. This shop lactated at Oxford Street,
Marylebone, London that is a corporate area. Here, the individual can find large number of
consumers and potential customers because in UK people are vary health conscious and prefer
healthy drinks either it can be tea or coffee. Organic coffee is an healthy concept or product for
them.
In the target audience of the company are young age people and office workers because
they are more focus on health rather than other so for them it is an good product. The company
target young people and office people because youths prefer healthy diets either it can be food or
drinks so it can be a healthy drink for them. Office people facing more stress cause of load of
work so removing stress organic coffee is beneficial for them. The entrepreneur set up its shop at
corporate area so it can easily find potential and target customer there.
3. Competitor analysis at competitive market place
Competitive analysis
Competitive analysis is an process of identifying competitors and evaluating their
strategies to determine their strengths and weakness relative to products and services that are
manufactured by them. For using this process organic coffee shop can use Portor's five force
model. It is an competitive analysis model that include five force which determine the
competitive intensity and attractiveness of the market.
Supplier power- It is related to the supplier that provide raw material for the business of
Organic coffee shop. Strong bargaining power allows suppliers to sell the products at higher
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price or low quality raw material that affects the buying firms profits. It create competition for
the business of Healthy organic coffee shop because there are few supplier but many buyers in
the market and cost of switching raw materials is high (Neneh, 2012).
Buyer power- The Health organic coffee shop produce a healthy product that is liked by
its target customers so the buyer power is high and there are low competition for the busin4ss of
this venture. In context of supplier, they can provide raw material for this business so there are
low bargaining power of supplier because it is a different product as compare to other products
and cost to the buyer of switching from one supplier to another.
Competitive rivalry- The main driver of this force is number of competitors in the
market. Organic coffee shop produces a new product so there are not high competition in then
market and it is capable to attract more customers (Mitchelmore and Rowley, 2013).
Threat of substitution- This force is related to the substitute products that create
competition for organic coffee shop. For example, this shop is located in a corporate area and
there are many other coffee cafes that provide coffee and create competition for this new venture.
Threat of new entry- It is related to new entry that also create barrier and competition for
the growth of the company. The new entrants provide their product at low cost to attract
customers and there are not fear of failure and success so they create competition for the business
of existing companies and high risk for them.
The entrepreneur can do different in the product by making innovation in it through
flavours. The individual can manufacture the product in various flavour that present the product
differently from others and this help the company to achieve its growth because it is a different
product and create various opportunities for the venture. Low risk will exist because it is an
unique product and there are no competitor as well in the market place. A little level of risk can
be generated cause of consumers taste but this product available in various flavours so this will
not affect the business growth highly.
4. Gap analysis and present data needed to support gap analysis
Gap analysis
It is an techniques that is used by businesses to determine or comparison of actual
performance with potential and desired performance. It can be a method of assessing or
examining the gap between current state or performance and desired state. There are various
tools and techniques such as SWOT analysis, McKinsey 7S framework and Nadler-Tushman
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model etc. that can be used by the company to analyse the gap (Kohlbacher, Herstatt and Levsen,
2015).
Nadler-Tushman model- The venture cause Nadler-Tushman model for analysing the gap. This
model examines how each business process and business factor affects another and identifies
which gaps affect efficiency. This model cr5aete a holistic view of organisation's operational
process from beginning to end (Ko, 2012). There are three levels by which this model analyse
gap, they are as following:
Input- In this, doing analysis of entire company, culture and workforce or about all
resources that are used by the company.
Transformation- In it, do analysis of the systems, teams and processes which are used by
the company that take the input and turn them into output.
Output- It is related to the analysis of the final product.
By identifying gap through gap analysis the individual can fill the gap by using correct
step to close the loop holes. In Organic coffee shop, the owner find gap of health conscious
products and filling this gap by manufacturing organic coffee. In current situation the venture
provide organic coffee but in future it plan to manufacture various flavours of this products so
that it can spread the area of its target consumers (Karimi and et. al., 2016).
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Business objectives
There are various objectives of business that is launched by Healthy organic coffee shop,
they are as following:
Providing healthy products to the customers- The main objective of the company is
provide healthy products to the customers because in UK there are most of the people are
working and not focus on their health and face various health related problems. So this organic
coffee shop decide to provide healthy products to them. This shop is located in a corporate area
where it provide its organic products and help the working people to reduce their stress. The
company will achieve this objective by providing healthy products to its target and potential
customers (Hansen, Monllor and Shrader, 2016).
To provide quality products- The second object of the company is providing good quality
product to the customers according their needs and demands. Now these days, companies are not
providing good quality products so Healthy organic coffee coffee plan to provide good quality
products in which pure raw material and ingredients will be used and that are favourable for the
consumers health. The new venture will achieve this objective by using good and pure quality
raw material in its coffee products.
Generate 20% revenue within 1 year- This is next objective of the company that it will
generate 20% revenue through its healthy and good quality products and contributing in the
growth of the economy of the company as well country also. This objective will be achieved by
the company to show fairness in its business and providing healthy and good products according
the consumers needs.
5. Market research to support viability for business idea and identifying market potential using
sources such as primary and secondary
Market research
Market research is a process of systematic gathering, collecting, recording and analysis of
qualitative an d quantitative data that relating to marketing products and services. It can be a
process or set of processes that can be used by the companies to identify and define marketing
opportunities and problems that affect the business of the company. There are various method of
marketing research such as :
Primary market research- This market research is organised by the company to collect
or gather first hand information and data for the current problems (Grégoire and Shepherd,
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2012). This research is designed by the company to meet unique and specific needs of the
company and it is bit of difficult to conduct this research because it requires a lot of time, money,
resources etc. This research can include focus groups, surveys, interviews, questionnaires and
observation.
Secondary market research- this research is based on previous research, analysis,
interpretation and summarization. In this research there care no pure data and obtained from
readily available sources. The data assembled through government agencies, associations,
magazines, newspapers, journals, reports and others (Anis and Mohamed, 2012).
To do market research for the business of Healthy organic coffee shop, the company use
primary market research and in it, the researcher use questionnaire and collect data or
information by 30 respondents which is as following:
QUESTIONNAIRE
Name:
Age:
Address:
Contact Number:
Q1. Are aware with “ Healthy organic coffee shop”?
A. Yes
B. NO
Q2. Are you a coffee lover?
A. Yes
B. No
Q3. For what reasons would you drink coffee?
A. Release Stress
B. Refreshing
C. Drinking habit
Q4.The reasons why you like the coffee of Healthy organic coffee shop?
A. Health conscious
B. Good and sweetener
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C. Balanced acidity
Q5. Which qualities are important for you in a coffee shop?
A. Quality of the products
B. Price
C. Atmosphere
Q1. Are aware with “ Healthy organic coffee
shop”?
Frequency
A. Yes 16
B. NO 14
Total 30
Mean 15
Median 15
Mode 2
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Interpretation- From the above graph, it has been analysed that in the group of 30 respondent
16 are aware with “ Healthy organic coffee shop” and other remaining 14 are not aware with it.
Mean of this information is 15, median is 15 and mod is 2.
Q2. Are you a coffee lover? Frequency
A. Yes 17
B. No 13
Total 30
Mean 15
Median 15
Mode 4
9
A. Yes B. NO
13
13.5
14
14.5
15
15.5
16
16
14
Frequency

Interpretation- From the above graph, it is analysed that in the group of 30 respondents, 17 are
liked coffee and remaining 13 do not like it. Mean of this information is 15, median is 15 and
mod is 4.
Q3. For what reasons would you drink
coffee?
Frequency
A. Release Stress 14
B. Refreshing 9
C. Drinking habit 7
Total 30
Mean 10
Median 9
Mode 0
10
A. Yes B. No
0
2
4
6
8
10
12
14
16
18 17
13
Frequency

Interpretation- From the above graph, it is analysed that in the group of 30 respondents, 14
respondents drink coffee for releasing stress, 9 for refreshing and remaining 7 are drink coffee
cause of habit. The mean of this information is 10, median is 9 and mod is 0.
Q4.The reasons why you like the coffee of
Healthy organic coffee shop?
Frequency
A. Health conscious 13
B. Good and sweetener 8
C. Balanced acidity 9
Total 30
Mean 10
Median 9
Mode 4
11
A. Release Stress B. Refreshing C. Drinking habit
0
2
4
6
8
10
12
14
14
9
7
Frequency

Interpretation- From the above graph, it is analysed that in the group of 30 respondents, 13
respondents drink coffee of Healthy organic coffee shop because it is a healthy product and they
are health conscious. Other 8 for good and sweetener and remaining 9 for balanced acidity and
the mean of this information is 10, median is 9 and mod is 4.
Q5. Which qualities are important for you
in a coffee shop?
Frequency
A. Quality of the products 12
B. Price 11
C. Atmosphere 7
Total 30
Mean 10
Median 11
Mode 5
12
A. Health conscious B. Good and sweetener C. Balanced acidity
0
2
4
6
8
10
12
14 13
8
9
Frequency

Interpretation- From the above graph, it is analysed that in the group of 30 respondents, 12 are
agree that quality of the product is important in a coffee shop. Other remaining 11 are agree with
price and 7 agree with atmosphere. The mean of this information is 10, median is 11 and mod is
5.
6. Viability and feasibility of business idea, Strengths and weakness of the business
The business idea of the entrepreneur is to manufacture organic coffee for the consumer.
This idea is viable and feasible for the business of the company because it is a healthy product
and in the UK people are more conscious about their health especially working people (Anderson
and et. at., 2015). In the market, there are less competition for this product because it is a unique
product and the chance for growth of this business are high in future so it is a beneficial idea for
the business. The strength and weakness of it is as following:
Strengths Weaknesses
 Organic coffee is a healthy product that
attract large number of customers.
 Unique concept and the shop is located
in a corporate area that help in the
growth of the company.
 It is new business and new products so
customer's trust is a weakness of the
product.
 Limited time of opening and closing of
the shop but the people are working in
also night shift.
Opportunities Threats
13
A. Quality of the products B. Price C. Atmosphere
0
2
4
6
8
10
12
12
11
7
Frequency

 Ability to attract customer by providing
organic products and by manufacturing
this product in various flavours.
 The ability to appeal to a different
target market than other cafes.
 Various other cafes in that area such as
coffee clubs, demo and others.
 Changes in consumers tastes and
preferences (Anderson and et. at.,
2015).
7. Risk of competition and potential opportunities for growth and development
Risk is an complementary factor with every businesses and it is the possibility or chance
of loss, danger or injury. It is important to manage risk related to various issues that affect the
business of coffee shop. Risks of competition is an biggest risk for the small and medium scale
organisation and enterprises. Healthy organic coffee shop is a small coffee venture and there are
high risk of competition but this enterprise manage the risk by providing healthy and good
quality product. To overcome the potential opportunities, the enterprise can make change in the
interior of the shop, manufacture organic coffee in various flavours etc. that help the company
for growth and development in the future.
For reducing the risk of competition and grape the potential opportunities for growth and
development in the future,the coffee shop can produce good quality products so that it can
remove the risk of competition because in UK people are more health conscious and they are
ready to pay for good quality products. If company provide different flavours for this product
than it can attract more consumers such as children, young & old age people etc. rather than
target audience (Anis and Mohamed, 2012).
CONCLUSION
In this report it has been concluded about Drucker's 7 sources of systematic innovation
and entrepreneurial ideas. Business idea, potential customers & target audience and competitor
analysis is done by using Portor's five force analysis. Gap analysis, the objective of business idea
and how they will be achieve all are described in the report. Market research analysis, methods
of market analysis such as primary and secondary are defined or the research are also conducted
with the help of questionnaire. Feasibility of business idea, SWOT analysis and the justification
of recommendation to overcome the risks of competition and potential opportunities are
explained.
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