Identifying Entrepreneurial Opportunities: Drucker's 7 Sources of Innovation and Competitive Analysis

This report discusses Drucker's 7 sources of innovation and how to identify entrepreneurial opportunities. It also presents a business idea for a pet-friendly restaurant with pet daycare services in London, UK. The report concludes with a competitive analysis using Porter's 5 forces model.

IDENTIFYING
ENTREPRENEURIAL
OPPORTUNITIES

Table of Contents
INTRODUCTION...........................................................................................................................3
Peter Drucker’s 7 sources of innovation......................................................................................3
Development of entrepreneurial idea...........................................................................................5
Competitive analysis using Porter's 5 forces model....................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The present report is based on identifying the opportunities related to the entrepreneurs in
the market. The reports include creation of a business idea that can be used to fill market gap.
This involves evaluating and determining different sources from where ideas can be generated.
Under the report, Drucker’s seven sources of systematic innovation will be used in order to
support the business idea that is going to be presented to the Eagle Finance Company.
Peter Drucker’s 7 sources of innovation
As per the theory of Drucker’s 7 sources of systematic innovation, it can be stated that
innovations are a result of conscious effort and purposeful research for innovation opportunities.
The different sources and approaches in order to generate innovative business ideas are
explained below:
Unexpected occurrences
The unexpected occurrences with respect to generating innovative business idea refers to
unexpected business failures and successes. Sometimes, due to the occurrence of unexpected
business failures, it creates an opportunity for other businesses to modify the ideas that were
already in use and introduce them by adding a touch of uniqueness in the same. This is only
possible when after a failure, company decides to dismiss it, disregard it and resent it. The idea
might or might not work for the new business (Brown, 2020). For instance, IBM launched an
accounting machine for banks in the year 1930. However, banks did not want that machine in
that time period. The IBM was saved because of public libraries as public libraries used to have
money during those times.
Incongruities
When the reality does not meet with an individual’s expectations, it can develop new and
innovative ideas to fill that gap. For example, cataract is one of the most common surgical
procedures used worldwide. In the past 300 years, the whole process of cataract was
systematised except the last step of the process in which the doctors had to cut the ligament.
Doctors used to find this step incompatible. Therefore, Bill Connor, the CEO of Alcon
Laboratories found a way and added a preservative to the enzyme for providing it a shelf life and
with this step, he gained monopoly in the market (Gao, Tang, Wang, and Yin, 2018).
Process needs

This resource of innovation lies within the internal scope of an organization. Process
needs can be understood as determining the weak points of an organization and finding ways in
order to fill the gap. For example, a restaurant finds that a long queue of people is always waiting
for the purpose of ordering the food and this is affecting the brand value of the company. For the
same, the company finds a way to hire a new chef in order to speed up the process.
Industry and market changes
Another source of budding innovative business idea includes a change in the market
structure or the industry in which a business operates. A few years back, it hard to believe that
there could be development something such as cloud storage. But with the changing times and
needs of the people and the growing demand of internet connection, companies came up with an
idea of cloud storage.
Demographics
Demographics is the main source of innovation. Demographics consists of the population
size, density, age group and sex ratio. If there is any change in the needs of the population, it is
an opportunity for businesses to capture the gap and come up with innovate business idea and
products to satisfy the needs of the consumers. The Japanese people came up with an idea of
robotics because they predicted the growing levels of education and a gradual decline in the
number of blue collared workers.
Perception
A slightest change in the viewpoint and perception of people can open a wide door of
opportunities for businesses to come up with new and innovative ideas ( Jallow, 2018). However,
it is not so easy to change the perception of the people.
New knowledge
The process of constant learning helps in gaining new knowledge which in turn can be
used to create an opportunity to provide the audience with an innovative business idea. Such kind
of innovations are created with a combination of different knowledgeable fields. For instance,
computer was created by using a combination of binary arithmetic, punch card, symbolic logic
and programming. The innovations which falls under this category are very risky because it is
hard for a business to gain knowledge about something and then converting it into useful
technology.

Development of entrepreneurial idea
The business idea is to open a restaurant which is pet friendly and also provides pet day-
care services in London, United Kingdom and will be named as 'Fondle'. It will be open for pets
24*7. In the restaurant, people can come and visit whenever they and order what they want to
eat. At the same, the restaurant will allow pets from the visitors as well as provide a space for
those pets whose owner want them to play with other dogs. There will be two different sections
in the restaurant, one portion will be specifically used for the purpose of a restaurant and the
other section will provide pet day care services (Kulakova, and Kochetov, 2020). Here the dog
owners can send their pets to chill and make their friends and enjoy their time with other pets.
The rationale behind the idea is to provide enhanced services to the customers with
respect to their pets. This idea will be useful for those pet owners who are working and who do
not want to leave their pets alone at home as it develops destructive behaviour within them.
Similarly, it can be useful for the pet owners when they have to go somewhere out of city, and
they are unable to take their pets with them. At that point of time, they can leave their pets at
Fondle for a few days, and the team of Fondle will make sure that their pets are comfortable and
happy. Sending the pets to Fondle will be beneficial for the pets too as when different pets will
play together, they will feel happy and it will reduce the possibility of destructive behaviours
within the pets. When pets will regularly visit Fondle, they will get attention from the team of
Fondle as well as the other pets visiting the place. Fondle will provide services such as pet
grooming, pet walking, and will also take care of their nutrition. Fondle will also provide training
services for the baby pets.
Competitive analysis using Porter's 5 forces model
There are five forces which are identified by the porter for the purpose of measuring the
intensity of competition, attractiveness and the profitability within an industry. They are:
Competition in the industry
The competition within the industry is low. Though there are restaurants in London
which are pet friendly, one of such example is Pizarro. It is a pet friendly restaurant which
situated in South east London. However, it does not provide pet day care services to its
customers. On the other hand, Fondle will serve its customers with pet day care services which
makes it unique.
Threat of substitutes

The threat of substitutes within the industry is high with respect to Fondle as after
introducing Fondle within the industry, the restaurants will also try to copy the business idea of
Fondle (Serova, Vorobyev, and Fainstein, 2019.). Therefore, Fondle will try to constantly come
up with new features within the market in order to beat other restaurants.
Threat of new entrants
The threat of new entrants in the industry is low because of the because of the capital
requirement in order to open a restaurant which provides exclusively similar features within the
market.
Bargaining power of the customers
The bargaining power of customers will be low within the industry. This is so because the
restaurant will charge fixed prices and follow a price skimming policy with exclusive services.
This will disable the customers to influence Fondle to lower the prices.
Bargaining power of the suppliers
The bargaining power of suppliers within the industry is low. Fondle will buy all the
products required to run the day care services as well as the inventory required to run the day to
day operations of the restaurant from United Kingdom only (Yemchuk, 2020). This will help the
company in reducing their cost of acquiring inventory as less transportation cost will be incurred.
P3,P4, P5 & P6 enclosed in PPT
CONCLUSION
From the above report, it can be concluded that the idea to open a restaurant which is pet
friendly as well as provides its customers with pet day care services can be found useful for a
number of people. It is extremely useful those people who are working and unable spend time
with their pets and also for those pet owners who wants to go out of the city for some reason and
need a place for their stay where he can be get good care. This place will promote happy
environment and help the pets in becoming active and promote playful environment. The place
can be used for grooming and developmental growth of pets.

REFERENCES
(Books and Journal)
Brown, J.R., 2020. The competitive structure of restaurant retailing: the impact of hedonic-
utilitarian patronage motives. Journal of Business Research, 107, pp.233-244.
Gao, S., Tang, O., Wang, H. and Yin, P., 2018. Identifying competitors through comparative
relation mining of online reviews in the restaurant industry. International Journal of
Hospitality Management, 71, pp.19-32.
Jallow, S., 2018. A feasibility study into the establishment of a Gambian restaurant in
Accra (Doctoral dissertation).
Kulakova, E.S. and Kochetov, K.V., 2020. SWOT-RESTAURANT-ANALYSE DES
CATERING-UNTERNEHMENS. Проблемы научной мысли, 11(1), pp.19-21.
Serova, E.G., Vorobyev, P.F. and Fainstein, E.M., 2019. Quantitative SWOT analysis and its
application to strategic management: The case of chain restaurant business.
Yemchuk, T., 2020. Competitive positions in restaurant business in present-day conditions based
on the example of Chernivtsi (Ukraine).