Analysis of Entrepreneurial Opportunities and Industry Life-Cycle

The given assignment is a detailed analysis of entrepreneurial opportunities, which includes understanding the constructivist view of entrepreneurial opportunities, the impact of role identities on entrepreneurs' evaluation and selection of opportunities, and the industry life-cycle phase and M&A. The assignment also explores how demographic changes give rise to entrepreneurial opportunities to meet the needs of older people. It further discusses making the most of failure experiences in identifying business opportunities and the relationship between business failure and the identification of business opportunities. The analysis is supported by relevant literature from publications such as Journal of Small Business Management, Strategic Entrepreneurship Journal, and Academy of Management Review. The assignment also provides an overview of Porter's Five Forces Model and Industry Life-Cycle Phase, which are essential tools for industry analysis and M&A.

IDENTIFYING
ENTREPRENEURIAL
OPPORTUNITIES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation..............1
TASK 2............................................................................................................................................5
P2 Explain the rationale and the market gap for a specific entrepreneurial idea........................5
TASK 3............................................................................................................................................9
P3 Present data needed to support gap analysis in evaluation of entrepreneurial idea...............9
P4 Interpret data appropriately to provide evidence of market potential....................................9
TASK 4..........................................................................................................................................10
P5 SWOT framework to collect evidence to support an objective assessment of a specific
entrepreneurial idea...................................................................................................................10
P6 Evaluate competitive and market environments in which the idea will be launched to
assess potential viability............................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Entrepreneurial opportunities are those chances which are an entrepreneur grabs with his
virtue and talents. Identification of these opportunities are a complex procedure that want help of
some analytical tools like gap, competition analysis. Porter's Five forces model is a prominent
tool of analysing competition and schumpeter’s sources of innovation are helpful in studying
sources of innovation (Davidsson, 2015). This report is based upon a new start-up which is
named as UK Law App. This start-up is a new enterprise of mobile application that contains all
new, information and knowledge about all legal changes that are occurring in political place of
country and are affecting business operations in negative manner. These legal obligations were
started after Brexit.
TASK 1
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation
A person a going to start his own business enterprise and for this consent, he has several
ideas like selling of a travel plan on EMI basis and android application related to legal
formalities. For checking feasibility of every idea, individuals conduct macro analysis that
include STEEP factors and Peter F. Drucker's 7 factor of innovation. There are some sources that
inspire a person to develop business idea. These sources basically include some external
environmental factors which are stated as below: Social Factor: In this section, it has been analysed that people are very techno friendly in
today’s era and their financial condition is also good. As a result, it is found that
feasibility of android application is good because after Brexit, there are many changes in
laws and legislations by them population are not aware and persons need to be aware
about these alterations in legislations. Economical Factor: Conditions of country's economy are good and stable. It means per
capita income and GDP growth rate are good that represent overall idea about financial
position of an individual. As per analysis of this factor, it is clear that position of person
is good and they are capable in purchasing any travel and tourism plan but they want
some legal information (Kohlbacher, Herstatt and Levsen, 2015). Technological Factors: Today's world is a technological place. There are several
opportunities in technical sector. While buying a travel plan on EMI, visitor can pay his
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EMI through bank's mobile application or by online payment. Payment that can be made
on online is a wide innovation in sector or technology. It has been been noticed that there
are several changes in legal formalities in the United Kingdom after Brexit. For spreading
knowledge and information about changes in laws, an android application is created for
spreading know-how about all legal formalities. So it is an innovative idea of making ios
and android apps that is related to legal information (Mueller and Shepherd, 2016). Political Factor: On the basis of idea, this segment is analysed and got result which is
that there are various alterations founded in political ground of country. For instance,
when new political party started their ruling, they made some changes in tax policies,
legal rules, some formalities been easy and other became complex. These are some
revulsions that has been noticed.
 Environmental Factor: It has been evaluated that environmental factor is put on least
priority and many corporations do not care about nature. On the other hand, there are
some organisations which hired some experts for taking care of environment and this
kind of action is a reason of increasing opportunities in travel and tourism sector because
if people are coming then the cause behind there arrival is beautiful atmosphere of that
particular place.
From above macro analysis, it is clear that idea of making android application is more
feasible than travel plan on EMI. There are around 7 sources of ideas that are suggested by Peter
F. Drucker. Further, analysis is based on Peter F. Drucker's innovation factors and these are
stated as beneath:
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(Source: Porter's Five Force, 2013)
Incongruity: It is a gap between what this is and what it should be. Every enterprise
wants to make ideal products that should have some specific attributes but when product
manufacturing is done then finished product is to be little or quite different from desired product.
It is a tricky situation for every business concern (Porter's Five Force. 2013).
Process Need: It is a finding of need of innovation in business model or process of
accomplishment of operations. This is a solution of innovation problems. For example, if
application is running down and there is only one developer who can fix these kinds of problems
then entrepreneur can hire another person for making the process faster.
Industry & Market Structure Needs: These two are always show that changes are only
certain part of technological sector and it impacts business operations on very wide manner. As
everyone could not purchase a travel plan as per their financial conditions is low so by
considering this situation it is clear that travel could be sale on EMI basis so that everyone could
make purchase of these packages. This stated example has been shown that EMI pattern is a
current market need (Karimi and et. al., 2016).
Demographics: There are lots of changes in population, income level, capital and age
ranges, etc. By considering these points, an enterprise can launch innovation in their enterprise.
For example, if nation's economy is growing then it will represent growth in per person's income
and this action will further enhance the standard of living of individuals.
Changes in Perception, Meaning and Mood: As the time passes, people and processes
get change. These changes are found in lifestyle, moods, etc. For example, a person usually goes
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Illustration 1: Porter's Five Force

for a holiday at a determined place but in this time, he changed his mind and planned a vacation
on other place and cost of that holiday package is very high in comparison to previous plan. So,
for making that plan real, individual can buy travel plan on EMI basis (Kirzner, 2015)
New Knowledge: It has been noticed that technologies are inventing and innovating
rapidly. It is required from the entrepreneurs that they always consider all factors and analyse
that where they can apply these revulsions in their business operations. For example, how
internet can be used in whole business model.
Unexpected: Sometimes, marketplace is a location which is having number of
opportunities that can be avail by entrepreneurs in order to start a start-up. EMI on travel plan
and mobile application on legal formalities are example of some market opportunities.
As, it is an entrepreneur who have different sort of ideas and good analytical powers to
study all easy and complex situations. Out of all available opportunities, person with
entrepreneurial qualities he founded two ideas one is selling of tourism plan on instalment basis
and other is mobile application for android and is related to legal formalities and knowledge.
Type of Innovation:
There are various kinds of innovation which include the following: Product: It includes some add ons which make an item different from other similar kinds
of products. Process: It is a situation, When innovation is launched in business model and in process
of accomplishing business operations. In short, innovation in business method is called as
process innovation. Place Innovation: It comprises, how a person can place his product or services in
customer's mind. When individual choose some distinct methods for this action then it is
called as place innovation. Incremental vs. Big Bang Innovation: Incremental innovation is a small series of updates
in existing products, services or processes to improve the ultimate quality of product in
marketplace. Big Bang is a better and cheaper product development and this
enhancement is continued since creation of original product (Karimi and et. al., 2016).
Schumpeter’s sources of innovation
This theory states that innovations are major cause of increased investment in business
operations and if financial condition of enterprise is good then it can introduce innovation in its
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operations. In other words. Innovation in business cycle is called as Schumpeter’s source of
innovation.
Difference between Innovation and Invention:
Innovation Invention
This is a concept of adding some points in
existing products in order to make them future
and competition ready. Entrepreneurs are
suppose to start new business with unique
ideas.
It is a brand new idea of manufacturing
something antique product which is not been
launched yet. For example sale of a travel plan
on instalment basis is a unique idea.
Process of innovation involves adequacy of
funds and adequate knowledge related to
innovations along with info about market
trends.
For conducting an invention program them
person must be intelligent and skilled. This
term requires high funds.
Difference between product or business idea:
Product Idea Business Idea
It is a new concept of manufacturing a unique
item that can cater need of customers whom
are present in marketplace.
This is a concept that is relates with money
making. Product idea is a part of this section. It
means, an item can be developed into business
thought as this can be use to make money.
As per above analysis, it is clear that idea of developing an android app related to laws
and legislations are more feasible than selling a holiday package on monthly instalment basis. So
entrepreneur is going to develop mobile application idea into business opportunity (Ramoglou
and Zyglidopoulos, 2015).
TASK 2
P2 Explain the rationale and the market gap for a specific entrepreneurial idea
This section includes identification of needs of customer related to phone app. It is clear
that after Brexit, there are many changes has been found in legislation processes and people are
not aware about them and because of this action business activities are being hampered. It is a
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main reason of developing a mobile app which will make population aware about all legal
changes and how these modifications can impact business idea or operational activities.
Comparison between actual market conditions and desired marketplace circumstances can be
evaluated through market gap analysis. This is a tool which is helpful in analysing and providing
knowledge about future opportunities and how it can be grabbed for making profits through
business idea (Hmieleski, Carr and Baron, 2015).
Need to identify specific customer types for target idea:
Each product is not for every person as demand of product depends upon an individual's
personality. As in this context business idea for start-up is developing new mobile application
that should aware people about all legal formalities which are changing due to Brexit. So in this
context, not every person is in need of knowing all legal obligations. Identification of target
market is necessary for knowing who will be potential buyer of customer whom have buying
power to purchase the application. This kind of behaviour is helpful in making judgement upon
idea should be processed or not.
Market Segmentation: This is a distribution of marketplace into desired customers. For
example, mobile application is most useful in UK so that geographically United Kingdom is a
segmented market where entrepreneur can launch his unique idea into action. Below are some
type of market segmentation: Behavioural Segmentation: In this section market is segmented on the basis of
behavioural patterns that customers possess in their personality. For instance, if
consumers are techno-friendly then they could be comprise in target market in context of
mobile application. Demographically Segmentation: It includes that segmentation depends upon lifestyle,
income level, gender etc. According to this segmentation, it is clear that mobile
application does not rely upon income level and lifestyle of customers because it not very
costly which can not keep by middle class person.
 Geographic Segmentation: This kind of distribution of market depends upon geographic
places. For example. Business idea for new start-up is developing an application which
contains all information about laws and legislations. A person can run this app on internet
but if individual is living on that area where network is a major problem then he could
not be a target customer (Foo, Uy and Murnieks, 2015).
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Tangible & Intangible features and benefits of a product or service
Tangible Intangible
It is some visible features that a customer can
see in product or service.
There are invisible features that can be feel but
can not bee seen in good or service.
For example: Some features are added in app
to make its use easy like information update in
the basis of automatic location selection. This
a wide benefit that a person can check legal
rules according to his location because
sometimes these regulations varies upon
location to location.
For instance, automatic updates in application
is intangible feature and it is a benefit also
because users do not need to anywhere for new
laws as these are automatically added in app.
Industry Environment:
This kind of industry analysis is a study of macro environmental factors which is helpful
in gaining knowledge about favourableness and disadvantageousness of new entrant. From above
analysis it is clear that according to external market factors, developing a mobile software is a
feasible and economic idea which could be developed (Ramoglou and Tsang, 2016). Like, there
are several changes that are occurring in political background and which must be considered by
software developer etc.
Porter's Five Forces Model
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(Source: Porter's Five Forces, 2013)
Analysis of Porter's five forces model is a good tool in context of competition analysis.
This study reflects future position of a new product which is going to be launched in
marketplace. As it includes following points:
Supply Power: It includes strengths of suppliers who are providers of raw material and owner of
product distribution system. In context of mobile application, suppliers are not in strong position
as they do not have enough scope for their services (Baggen and et. al., 2015).
Buyer Power: A product is said to be successful in marketplace if people have sufficient
potential to purchase the item. In respect to technologies, people is facing several problems
related to laws and regulations and to sort out these issues they want a permanent solution and
developing a software which contains all knowledge about required area then it is a good
resolution of problem. As per this statement, it is been studied that buyers power are strong and
they can ensure launch of new product or service.
Threat of New Entrants: It includes that is easy to enter in a market or not. This is a analysis of
barriers and supporters of entry of service.
Bargaining Power of Suppliers: If negotiation power of suppliers are high then it will enable
suppliers to sell higher price and on the other hand bargaining power is low then it disable
suppliers to sell low prices in industry of their raw materials.
Threat of Substitute: When entrepreneur knows that there are various other options available in
market which can easily replace his product then entrepreneurs could not go through their idea
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Illustration 2: Porter's Five Forces Model

and analyses other profitable options. In case of UK Law App. it has been analysed that there no
strong competitors available in industry that is why it is a profitable alternate for business owner.
Rivalry among Existing Customers: This is factor that shows profitability of competition. In
context of UK Law App., it is examined that there is no strong rivalry present in market (Hatak,
And et. al., 2015).
Approaches to Competitor Analysis:
In this model a six step model is defined which is elaborated as beneath:
 Identification of current and potential competition.
 Determination of five areas in which you are competitive than rivals. These key areas are
product quality, media, customer service and price.
 Creation of competition matrix.
 Separate matrix should be created for selective areas.
 Matrix review to recognise which areas are most vulnerable.
 Determine which area are not as much strong as they should be.
Above steps are showing that competition could be analysed in best way by following
above stages in best possible manner (Mathias, and Williams, 2017).
Industry Life-Cycle:
(Source: Industry Life-Cycle Phase and M&A)
This life cycle includes some phases which are described below:
 First phase is Pioneering phase.
 Accelerate Growth Phase.
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Illustration 3: Industry Life-Cycle

 Mature Growth Phase.
 Industry Maturity Phase.
 Decline Phase (Industry analysis phase and M&A. 2017).
TASK 3
P3 Present data needed to support gap analysis in evaluation of entrepreneurial idea
For assessing current and future market opportunities entrepreneur hired an researcher
who will all investigation on behalf of enterprise along with gap analysis. Investigator suggested
primary research because product is new in market. For the research, he conducted deep analysis
of behavioural, demographical and geographical segments of target customers. Researcher
conducted a survey by taking help of interview of business owners (Renko and et. al., 2015).
Investigator and his assistance interviewed some 100 persons and get results on the basis of
answers of interview questions. As per analysis it is clear that out of 100 interviewees,
approximately 20 respondents said that they are not having any kind of problem related to legal
formalities. Approx. 30 interviewee are saying that they are neutral on this topic or may be they
should face these kind of issues in future. This is 50 respondents who are facing problems related
to changing laws and legislation. So as per this analysis it is clear that UK Law App could be
started in market and it will be more profitable if it start early.
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From the above graph that, growth of new venture in UK is very fast and it is growing
with the time. As people there love to start their own enterprise rather then working some where.
Also, the share of the adult population in growth of UK is about 6, which is very healthy number.
As people in UK largely prefer to become entrepreneur rather then job holder person.
From the above table, it is interpreted that new venture was very much common in
environment of UK, where 6 year old person can start their new start up, and 10 year old can
start their own scale-up and unicorn. Where as, start up use to spend 15% of their profits on
R&D, where as capital funding of a venture is about £ 1 million, while on other hand capital
valuation in unicorns is more than £ 1 billions.
Gap Analysis: It is a comparison of actual performance with potential or expected
functionality. When a firm does not produce required number of products then it conducts gap
analysis which shows where are the key areas that is showing differences and how it can be
overcome.
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UK Law App is currently just a start up, but the goal there they want to go is setted by
entrepreneur. According to them they want to make this application as the leading law app in
UK. This is the gap between performance and potential of UK Law App, which they have to fill
by performing their best.
It has been examined by primary research that idea of developing a software is quite
profitable in market because there are various business house which are facing this kind of
problems and they want an easy solution of this issue and apart from mobile app, nothing can be
a simple resolution of this problem.
P4 Interpret data appropriately to provide evidence of market potential
Legal obligations do not impact day to day life of person but it has vital impact on
business operations because all activities come in frame of legal obligations. So, as per analysis
it is clear that business owners are target customer of new start-up named as UK Law App. So
above research is conducted on business owners and it is realised that large organisations are not
in need of mobile applications as they are having charted accountants who do care about all legal
formalities that is why these kind of firms could not be framed in range of target market. On the
other hand small and moderate sized associations are not having proper financial resources to
appoint expert who should analyse all these legal things for them. Number of these small and
medium enterprises are very high in country and they do not want to be trapped in any illegal
circumstances and to remove these legislative complications and that is why business owners
want a easy and economic solution. For this context, UK Law App is a prominent solution and
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anywhere it can be used. Out of 100 respondents, there are 50 small size business owners who
require this mobile app (Suddaby, Bruton and Si, 2015). Where as, 30 were job holders which do
not need the UK Law App, as it is not useful for them, while on other hand, out of remaining 20
5 are rich business men which already have their personal lawyers and other 15 do not have any
work to do.
TASK 4
P5 SWOT framework to collect evidence to support an objective assessment of a specific
entrepreneurial idea
SWOT Analysis of Mobile Software Idea
Strengths Weaknesses
 Unique Idea that includes political
variations in laws and acts.
 Useful for small and moderate
enterprises.
 Sometimes updates could not happen
on record time. That makes use of
application complex.
 Users are not aware about how to use
mobile software.
Opportunities Threats
 Record changes in laws after Brexit.
 Impact of laws in business operations.
 Needs are very high so that anytime a
rival could be born in industry.
 Delay in launching program could be a
failure of new entrant.
As per above analysis, it is clear that opportunities are available in market but as soon as
it will be availed only then it will be profitable for enterprise. There is a threat of new rivals and
for keeping ourselves safe from rivals as soon as possible app should be launched.
P6 Evaluate competitive and market environments in which the idea will be launched to assess
potential viability
It is clear that owner of start-up has skills to analyse a situation properly and get a
profitable unique idea that is able in grabbing competitive advantages in market but these
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advantages can be attained only when application is launched on time otherwise anybody can
copy this idea because on large scale problem of legal obligations are facing by business houses.
Main weaknesses of start-up is that enterprise is not having many developer who can introduce
all updates on time and it application is not up-graded as per time passes then it will be out from
market. At last, to avail all market opportunities it is required from entrepreneur that they should
overcome their weaknesses and remove all threats from their unique idea by using their strengths
(Gielnik and et. al., 2015). To evaluate competitive and market analysis Porter's Five Forces
Model is an important tool that makes study more useful by paying attention on five aspects that
are present in marketplace. This model has five elements which are stated as beneath:
PORTER'S FIVE FORCES MODEL
Competitive Rivalry: This section analyse that how many competitors are present in
marketplace and among them how many are strong. When an entrepreneur who wants to start
own business should undertake this point into consideration so that future strategies could be
formulate and could be implement in most appropriate manner.
Supplier Power:- In context of desired business, it should be studied that what kind of
raw material is required and if required stock is not unique then bargaining power of supplier is
low and on the other hand if raw material and inventory is unique and for supply that only few
suppliers are present in market then in this oligopoly situation, bargaining power of suppliers are
high. So all these aspects should be considered by enterprise while analysing entrepreneurial
opportunities.
Buyers Power:- When a product has prominent demand and supply is low then this kind
of situation is strong for sellers point of view. On the other side, if manufactured unit of products
are high and demand is low then bargain power of buyers are strong. So before starting a
venture, it should be assessed that what would be the demand in future of that products or
services.
Threat of Substitute:- In market analysis, study of presence of substitute should be add
so that market handling could become easy. It is essential for entrepreneur that he/she should
identify that how many substitutes are present of that item which entrepreneur wants to
manufacture and if number of substitutions are high then price of that item would be
competitively low and if no. of substitutions are less then rate of product would be high. So in
respect to this fact, presence of substitute should be analysed.
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Threat of new Entrant:- Before taking entry into new marketplace, procedure of entry
should be find out and then all risk factor and uncertainty be assessed so that an effective and
strong entry could be made otherwise venture would not be start.
CONCLUSION
Above report is concluded as entrepreneurial opportunities are some chances that an
entrepreneur can grab with his unique skills and talents. This project is summarised as
Identification of these entrepreneurial opportunities can be done by taking help of some analysis
like competition analysis, gap analysis, study of Porter's Five Forces model, Schumpeter’s
sources for innovation, SWOT analysis, industry life-cycle, macro analysis etc. as per above
assignment, when a product idea is converted into money making idea then it can be said as a
business idea that can hit opportunities. This report also included difference between innovation
and invention.
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REFERENCES
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Online
Industry analysis phase and M&A. 2017. [Online]. Available through:
<https://financetrain.com/industry-lifecycle-phase-and-ma/>.
Porter's Five Force. 2013. [Online]. Available through:
<https://www.strategicmanagementinsight.com/tools/porters-five-forces.html>.
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