An Analysis of Venture Creation Decision

The provided references are a collection of studies and papers that examine various aspects of venture creation, including the influence of institutions, venture capital contracting, team entrepreneurial passion, informal capital, and resources in entrepreneurship. These sources aim to provide insights into how institutional development affects venture creation decisions, and how new ventures manage relationships with investors.

DEVELOPMENT

Table of Contents
SECTION 1: INTRODUCTION.....................................................................................................3
SECTION 2: Opportunity Formation..............................................................................................3
SECTION 3: Opportunity Development.........................................................................................6
Conclusion and Reflection.............................................................................................................12
REFERENCES..............................................................................................................................14

SECTION 1: INTRODUCTION
Gymnasium is one of the best way of getting fitness to the human body. In this busy world
where human is not getting the time for its personal fitness Gym has become very important.
People are often not interested in the Gym due to the traditional methods. A new business
venture is opened in order to make the customer entertained while having workout which has
named Gymtech. The number of fitness facilities in UK is up from 6728 to 7038 in 2019
(Aragon-Mendoza and et. al., 2016). This statistics shows that people are moving towards their
fitness. The new business venture will provide fitness within entertainment. Apart from that, This
business venture includes virtual reality cycling, running games to keep entertained, virtual
reality row machines etc. These facilities allow the customer to get entertained while having
workout. The biggest benefit of this new venture to the customer is that they get motivated
enough while getting workout in the Gymtech. In this report, description of the entrepreneurial
product, service or organizational process and the explanation of the process in which
entrepreneurial idea are formed. In the end, the ways of developing the product is also discussed
(Huang and Knight, 2017).
SECTION 2: Opportunity Formation
In order to launch a new business venture the opportunities should be grabbed by the
entrepreneur. Formations of opportunity can be done with the help of identified problems from
the surroundings. In case of a person who is willing to join Gymnasium, the biggest problem is
motivation. They listen motivational songs, read books etc. but all of these ideas are traditional.
In order to solve this issue and motivate the employees, a new business venture is developed
known as Gymtech. In this venture technology is implemented at the workout place so as to
attract the customers. There are various products such as virtual reality cycle, running games,
virtual reality row machines etc. which are helpful in entertaining the customer while having
workout. In case of virtual reality cycle, the customer feels free to ride on a virtual cycling track
after wearing Virtual reality box. This motivates the customers to ride while seeing the sights of
virtual roads. Apart from that, running games provide opportunities and threats while having run
on the different virtual areas such as on road and off road. This will increase excitement to the
customer to see different obstacles and run accordingly. In addition to this, virtual reality row

machines allow the customer to run a virtual boat in the water. All of these exercises are full of
adventures and entertainment. Therefore customer will get attracted towards it (Huang and
Knight, 2017).
Organisational Process
Organizational process is the step by step process of performing the activities within a
prescribed business idea. This process includes various steps such as business objectives, idea
formation, monitoring, controlling and implementation (Burchardt and et. al., 2016). In order to
launch the new business idea of Gymtech, this step by step process will help the business to
implement its idea effectively. Following are the steps of organizational process.
Identify business objectives
This step includes objectives of the proposed business venture. In case of Gymtech, the
business objectives includes motivating the customers while having workout, keeping them
engaged and healthy, entertainment and last but not the least is inviting gaming world into
fitness.
Idea formation
This step includes the formation of idea in order to achieve the objectives. In case of
Gymtech, the idea should be virtual reality. In this idea, the business is going to provide virtual
reality cycling, running games, VR row machines etc. All of these idea when implemented will
impose the customers to put forward their step to be healthy. Hence achieving the objective of
new business venture.
Monitoring Opportunities and threats
This step of organizational process includes monitoring of opportunities and threats of the
new business venture. The opportunities of Gymtech is very far. The new business venture can
include the customers who are willing to enter in a healthy world. This gym will provide them
health with entertainment which will bound them to towards the business. The threat to the
business could be harshness to the eyes of customers. Apart from that, it can also impact
negatively on the brain of customers.
Controlling

This step includes the controlling of risks which have been identified within the monitoring
section. In case of Gymtech, the customers can prevent their eyes by wearing the high quality
VR boxes which does not reflect harmful radiations. This will not only protect the eyes of
customers but also prevent from the harmful radiations to the brain (Kuratko and Hornsby,
2017).
Implementation
This step includes the final enforcement of the new business venture. On order to do this, the
management of business could provide free trial to the customers. They should feel the new
experience in order to make their body fit. This implementation will motivate them to work with
lot of adventures.
Before implementing the new business venture to the market, it is quite essential to check
the feasibility of the business in terms of external and internal factors. In order to check the
internal factors, SWOT analysis is done (Cardon, 2017). Apart from that, checking of external
factors include PESTLE analysis. Both these factors will provide the feasibility of new business
venture.
SWOT analysis
It is the process of finding the internal factors which are feasible for the new business
venture. This analysis includes strength, weakness, opportunity and threats to the new business.
Strength
 The biggest strength of the new business includes virtual reality boxes. The customer can
wear those glasses and workout on its physics by getting a lot of adventure.
 This business will be helpful for the customers to motivate them to work harder in Gym.
Opportunity
 The company has the opportunity to grab the customers who are willing to work on their
physics but are lacking because of low motivation.
 Due to the new innovative idea, the customer base will increase and thus the business can
get good profit margin.

Threats
 The biggest threat to the company includes the harmful radiations to the eyes and brain of
customer. The customer who have such issue cannot connect to the new business venture.
Apart from that, customers who are health concern also not get interested towards this
new concept.
PESTLE analysis
This analysis includes the external factors which can affect the business directly or indirectly
(Dutta, 2016). In case of Gymtech, following are the external factors which can influence the
working of new business venture.
Social factor
These are the factors which includes the personal aspects of customers such as perception,
thoughts, concerns, etc. In case of Gymtech, this factor is most important. Since the customers
are moving towards the healthy body therefore this type of business have a feasible area through
which they can easily expand. The customer requirement is increasing towards a more healthy
lifestyle therefore the chances of success to this business gets increased.
Technological factor
This factor is used to check the feasibility of the new business towards technology. In case
of Gymtech, the new business is providing the updated and latest technology to the customer in
the form of health workout. The technology used by the business is virtual reality business. In
this technology, the customer will feel different types of graphical videos while working on the
machines. These videos will be linked with the actions of customers while acting workout.
Therefore, it will give a great adventure to the customers while having workout.
SECTION 3: Opportunity Development
Opportunity development is the step of developing the business venture into existence. In
the step, the real actions and tasks have been performed so as to launch the business effectively.
In case of Gymtech, the business is launching a new services to the customers about working out
in the Gym with VR instruments. They are offering the customers facilities which can help them

to motivate enough to work out in the Gym. There are various features in the services of
Gymtech which are as follows:
 The services provided to the customers by Gymtech are full of technology. They are
offering the customers workout facilities with the help of VR boxes. The actions of
customer while having workout will move the the games in VR box. This will illustrate
the adventure while having workout.
 Another feature of this new business venture include different types of actions which are
virtual reality cycle, running games, virtual reality row machines etc. All of these features
will help the customer to get attracted towards the new business.
Apart from the features there are various actions through which business can be developed.
These actions include attractiveness of the idea within market and industry. Market research is
also done on the problem market research, solution market research, customer segmentation and
value proposition. Following are the illustration of these market steps which are stated as
follows:
There are various industries which are working in such filed of providing health to the
customers. As per the data received total membership received by this industry grew by 2% to
9.9% million (Elston, 2016). Apart from that, the market value also increased by 2.9% to €4.9
billion. In addition to this, development of this industry also increases by opening 275 fitness
facilities in the last 12 months, which are more than from 2017. This data shows that the industry
has grown with a quite rapid speed. The idea proposed with this new venture fitted with the
requirement of market. This idea will help the customers and other market segment to provide
motivation in terms of increasing trend towards health. According to the new business, this
technology will also provide gaming ton turn into health practice. Therefore the future of
children and this business industry will also get secured with such technology.
Problem market Research
Keeping oneself healthy is one of the important concern but in the busy life of human being
it has become quite difficult to keep motivated and join the gym regularly. One of the biggest
issue in consistency of workout is the lack of motivation. The customers feel less motivated
while performing the workout at the gym. Apart from that, keeping customers healthy and fit is

also an important issue in UK. The gym instructor found it difficult to provide consistency to the
customers while having gym because of lacking in any innovative idea. This new business
venture will provide effective solution to the customers of their problems.
Solution market research
As per the problem discussed , the customers are feeling less motivated and due to this the
health issue also increasing within them. In order to increase the motivation, the solution has
been researched by the new business venture Gymtech. This venture has released the new and
advanced technology of providing solution to the health concerns. The new technology will
provide motivation to the customers by allowing them using the virtual reality technique
(Frumkin, 2017). In this technique, the customer will feel adventure at the time of workout and
thus gets motivated to do more work-out for its health. With the help of this technology, the
health issue of customers also gets eliminated. Therefore solutions have been provided to the
customers about the identified market problems (Mason and Harrison, 2017).
Customer Segmentation
Every product or services within market comes for particular group of segment among the
customers. In case of Gymtech, segmentation is also done on the basis of the needs, wants and
preferences of customers. To divide the customers for the new business STP model is going to be
used. STP stands for segmentation, targetting and positioning. Following is the process of STP
model stated as below:
Segmentation
Customer segmentation is the process of segmenting the customers on the basis of their
demographics and psycho-graphics.
Demographics
It is the process through which combination of customer's age, gender, income, education,
ethnicity, marital status etc. are considered. Such type of factors are necessary to differentiate
between customers. In case of Gymtech, the customers having the age group between 24-45 are
considered as the primary customers. Apart from that, gender, marital status etc. are not the part
which can be considered in order to customize the customers. The business ca also be considered

for the income group of middle to high within UK. Since the lowest price of fitness club is £80
and the highest price is £200. The pricing of Gymtech is only £100, therefore it can be said that
this business is applicable for the middle to high range customers.
Psycho-graphics
This type of customers feels about their choice, attitude, lifestyle, hobby etc. (Hallen, 2017).
In case of Gymtech, the customers who are game lover can be the target customers of new
business venture. These type of customers can perform workout while having gaming updates.
Targetting
In case of targetting the customers, there are various fields such as criteria size, difference,
accessibility etc. In order to target the customers, the criteria size of market must be larger
enough to justify the segments of customers. In the same market, the segmented customers must
be differentiated so that proper strategies can be formulated for them. Accessibility denotes that
the segmented customers must be accessible to the strategies and policies framed by the new
business venture. These strategies will provide effective solution to the issues of such customers
(Stenholm and Renko, 2016).
Positioning
This section of the STP models suggests the position of the product or services within the
mind of customers. In case of Gymtech, the positioning of services of new venture will be better
in the minds of customers. The business has targetted the customers which will help them to
position the services according to their needs. This has resulted a good position in the minds of
customers.
Value proposition
This is the process of providing value of the product or services within the mind of
customers (Huang, 2017). This suggests the customers to buy the product and services by
offering the special features of the same. This will help the customers to think that why they
should purchase the same. In case of Gymtech, the value proposition will allow the new business
venture to develop a positive image in the minds of customers. In order to find the value
proposition Business Canvas model is used.

Business Model Canvas
This is the model which is used by the organizations to provide necessary information of the
new product launched (Kiss, 2017). In case of Gymtech, the new product launched
Key partners
The key partners of
the business includes:
 Small giant
which is an IT
company in
London which
is used for
maintaining
and developing
the games.
 Another key
partner is
matrix which
is a trusted
supplier and
recognized
brand in the
industry. They
provide most
robust
products with
integrated
technology
solutions to
attain the
Key
activities
The key
activities of
the new
business
venture
Gymtech is
to provide
health
facilities to
the
customers
with the help
of VR
technology
so as to
motivate the
customers
towards
health.
Value
propositions
The value
proposition to the
customer includes
solving
motivational
problem, keeping
customers
engaged and
healthy,
entertainment and
inviting the
gaming world
into fitness.
Customer
relationship
Customer
relationship will
be maintained by
the new venture
through social
media, fliers, free
trials, promotion,
positive ad-
vocation. Apart
from that they
will be kept by
loyalty cards and
membership.
Customer
segments
The customers are
segmented on the
basis of socio-
characteristics
such as
professionals,
urban customers,
gamer friendly,
professional male
and female and
medium to high
income group.

customers.
Key
resources
The key
resources
used within
the new
business
venture
includes
human
resources,
technological
ly updated
machineries,
air
conditioners
etc.
Channels
There are various
channels through
which
advertisement can
be done such as
word of mouth.
Apart from that a
physical channel
supposed to be on
a 2 storey leased
space in central
area of Canary
Wharf.
Cost structure
The cost of most
expensive
membership is £200
and the cost of least
expensive is £80. The
cost of this business
venture for each
customer is £100. The
estimated users are

4000 users per month.
Therefore, total
revenue becomes
4000*100= £400000
per month.
Initiation Cost
It is the cost of starting a new business with the resources. In case of Gymetch, the initial
cost is:
Particular Cost in GBP
Investment 25000
Land & Building Rent 6500
Promotion 1850
Salary to employees 16550
Cost on research and development 8250
Miscellaneous 1250
Total 59400
Conclusion and Reflection
In this report, it can be concluded that there are various factors which should be included
while launching a new business venture. These factors are feasibility of the market to pursue the
product or services, market research with problem and solution, customer segmentation, business
canvas model etc. All of these factors are necessary in the formation of a new business venture.

While having the journey in this group project, there were many things that I have learned.
The learning included carrying out market research so as to gain knowledge of the latest trends
and techniques prevailing within market. Further, overall this project assisted me in developing
analytical skills so as to evaluate the macro environmental factors and ascertain the ones that
affect the proposed entrepreneurial idea. Further, this project assisted me in developing a sense
of coordination and cooperation among team members so as to feasibly execute it within the
timely manner.

REFERENCES
Books and Journals
Aragon-Mendoza and et. al., 2016. The influence of institutions development in venture creation
decision: A cognitive view. Journal of Business Research. 69(11). pp.4941-4946.
Burchardt and et. al., 2016. Venture capital contracting in theory and practice: implications for
entrepreneurship research. Entrepreneurship Theory and Practice. 40(1). pp.25-48.
Cardon, M. S., Post, C. and Forster, W. R., 2017. Team entrepreneurial passion: Its emergence
and influence in new venture teams. Academy of Management Review. 42(2). pp.283-
305.
Dutta, S. and Folta, T. B., 2016. A comparison of the effect of angels and venture capitalists on
innovation and value creation. Journal of business venturing. 31(1). pp.39-54.
Elston, J. A., Chen, S. and Weidinger, A., 2016. The role of informal capital on new venture
formation and growth in China. Small Business Economics. 46(1). pp.79-91.
Frumkin, P., 2017. Inside venture philanthropy. In In search of the nonprofit sector (pp. 113-
128). Routledge.
Hallen, B. L., Cohen, S. and Bingham, C., 2017. Do accelerators accelerate? If so, how? The
impact of intensive learning from others on new venture development. If So, How.
Huang, L. and Knight, A. P., 2017. Resources and relationships in entrepreneurship: an exchange
theory of the development and effects of the entrepreneur-investor
relationship. Academy of Management Review. 42(1). pp.80-102.
Kiss, A. N. and Barr, P. S., 2017. New product development strategy implementation duration
and new venture performance: A contingency-based perspective. Journal of
Management. 43(4). pp.1185-1210.
Kuratko, D. F. and Hornsby, J. S., 2017. New venture management: The entrepreneur’s
roadmap.
Lamine and et. al., 2018. Technology business incubation mechanisms and sustainable regional
development. The Journal of Technology Transfer. 43(5). pp.1121-1141.
Mason, C. and Harrison, R., 2017. Informal venture capital and the financing of emerging growth
businesses. The Blackwell handbook of entrepreneurship, pp.221-239.
Routledge and et. al., 2017. Decision making for business model development: a process study of
effectuation and causation in new technology‐based ventures. R&D Management.
47(4). pp.595-606.
Stenholm, P. and Renko, M., 2016. Passionate bricoleurs and new venture survival. Journal of
Business Venturing. 31(5). pp.595-611.