Identifying Entrepreneurial Opportunities

This document discusses the sources of entrepreneurial ideas and innovation, market gap analysis, and data collection methods for examining market potential. It focuses on the case of TESCO introducing a beauty cosmetic segment in the competitive marketplace.

Identifying
Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Define & assess various sources of entrepreneurial ideas & innovation..........................1
M1 Provide detail analysis of Drucker’s 7 sources of systematic innovation........................2
D1 Critical evaluation of advantages and drawbacks of various approaches which leads
towards the examination of entrepreneurial ideas..................................................................3
TASK 2............................................................................................................................................3
P2 Describe the rationale & market gap for particular entrepreneurial idea by using specific
tools and techniques...............................................................................................................3
M2 Justification how specific idea fill market Gap with the help of various techniques......4
D2 Critical evaluation on the basis of interpretation & investigation of competitive
marketplace.............................................................................................................................4
TASK 3............................................................................................................................................4
P3 Present data required to support gap examination in the assessment of particular
entrepreneurial idea................................................................................................................4
M3 Justify sources and methods of data collection and how data related to examine market
potential..................................................................................................................................7
D3 Analysis of methods to justify business objectives and identify market potential...........7
P4 Interpretation of data in an appropriate manner................................................................7
TASK 4..........................................................................................................................................10
P5 Application of SWOT framework...................................................................................10
M4 Critically evaluate specific entrepreneurial ideas in reference to the marketplace and
competition...........................................................................................................................10
D4 Develop valid justification & conclusion on how entrepreneurial ideas can be formulate,
sustain at competitive marketplace.......................................................................................11
P6 Evaluation of competitive as well as market environments where the idea will be going to
launch in order to measure potential viability......................................................................11
CONLUSION................................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Entrepreneurship define as a procedure mainly deals in launching, creating as well as
designing new business venture. It generally defines as the willingness and capability in order to
manage business risk for gaining profitability (Autio, 2014). In the present report, TESCO is
chosen as the base organisation, which is a British multinational groceries & general
merchandise establish in the year 1919. Headquarter of the company is located in Welwyn
Garden City, England, UK. In this report, an innovation is taken place where management team
of TESCO introduce beauty cosmetic segment at the competitive marketplace. In this report
various sections are going to be discussed which includes various sources of entrepreneurial
innovation and ideas. Apart from this, examination of market gap is going to be considered for
identifying appropriate tools. Furthermore, SWOT Analysis of competitive market situation will
have conducted for examining the recognizing potential viability.
TASK 1
P1 Define & assess various sources of entrepreneurial ideas & innovation.
An entrepreneurial idea refers to a business concept which is usually related with offering
new product or service in the market with the objective of achieving financial gain. Many
sources have been identified for generation of an idea. Peter Drucker identified seven such
sources of innovative opportunity which are:
The Unexpected: The business environment for any organisation is full of unexpected
opportunities with huge potential for success (Godley, 2013). These unexpected situations
present a huge opportunity to take competitive advantage as well and shouldn’t be overlooked by
the management. A manager should keep studying the business environment to exploit any
opportunities therein.
The Incongruity: Incongruity refers to the differences between what an organisation is
offering and what the customer actually wants. The assessment of needs of the customers helps a
firm to understand what is and what should be. The management of Tesco plc ltd. found an
opportunity in the beauty and cosmetic sector after considering the demands of potential
customers.
Process need: Process needs refers to the critical evaluation and identification of the weak
spots in an organisation’s processes. Here, the opportunity for innovation comes from within the
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company by redesigning and restructuring of a firm’s processes to eliminate and mitigate any
weak spots.
Industry and Market structure change: Due to the dynamic nature of business and
technology, industry and market structure changes very rapidly these days. Overnight
destructions and success of firms are quite common. A manager of an organisation should keep
looking at the factors responsible for influencing such changes and should not treat them as
threats but an opportunity to diversify and innovate. With supermarkets offering each and every
type of product these days, the management of Tesco ltd. saw an opportunity in beauty and
cosmetic sector.
Demographics: Changes in demographics such as population, income level, age-structures
etcetera affect the type of goods and services which are in demand (Kacperczyk, 2013). Due to a
change in age-demographic in UK markets, the demand for self-care and grooming products has
increased significantly which influenced the decision of the management of Tesco ltd to expand
to cosmetic products.
Changes in perception: Over the years, significant changes have been witnessed in the way
an individual perceives a product or life in general. Different products have different value to
different people due to a change in perception. The principle of ‘downageing’ which creates the
desire in an individual to look younger than his age has increased the demand for beauty
products which has stimulated Tesco ltd to expand to this sector.
New knowledge: With the rapid pace of development in technology and innovations, the
production processes and operations of organisations have changed drastically over the years. It
has been a major source of innovation for many firms and organisations.
M1 Provide detail analysis of Drucker’s 7 sources of systematic innovation.
Peter Drucker’s model of 7 sources of innovation has made a huge impact in the business
world and provided a great guidance and direction to the managers of many big firms and
companies in development of new ideas and innovation. It identifies the sources where managers
could look for an opportunity to innovate. However, it needs some changes and adjustments with
respect to the global economy in today’s world.
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D1 Critical evaluation of advantages and drawbacks of various approaches which leads towards
the examination of entrepreneurial ideas.
Various approaches to examination of business ideas have benefits as well as
disadvantages for example a constant examination of business environment and technological
changes enables the manager to find opportunities but this requires a lot of time and money.
Market research programme for finding incongruities are also very costly and require a lot of
human efforts.
TASK 2
P2 Describe the rationale & market gap for particular entrepreneurial idea by using specific tools
and techniques.
To understand the market opportunity and the rationale behind the decision of management
of Tesco Ltd. to expand to cosmetic and beauty products line, a porter’s five force analysis is
being done which is a business tool used to understand the competitive position of an
organisation and identify the profitability and viability of any strategy.
Competitive rivalry: The impact of this force is high for Tesco plc ltd in case of beauty and
cosmetic products due to the existence of many firms which are already offering such products to
and have a proper consumer base.
Bargaining power of supplier: This force has a very low or negligee impact on the new
business idea because there are many suppliers in this industry and switching costs is also
particularly low for the organisation giving them an opportunity to procure materials at best
costs.
Bargaining power of buyers: Due to existence of many companies selling the same
products and low switching costs, buyers have the power to bargain and even the slightest
change in prices could lead to a huge change in the sales (Miao, Newman and Cooper, 2019).
This leads to price wars and discounts that are offered by the different stores to attract new
customers.
Threat of substitution: The threat of substitution is low to moderate for Tesco ltd. in selling
beauty products mostly because the customers of these products are brand loyal and would not
prefer to switch to alternatives or substitutes frequently.
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Threat of new entrants: It is not very easy to establish a store which deals with offering
beauty products due to the huge investments and fixed costs involved however expanding to this
sector is not very difficult for the existing supermarkets. Thus, new entrants pose moderate to
high threat for Tesco plc ltd.
M2 Justification how specific idea fill market Gap with the help of various techniques.
A brief analysis and evaluation of the implications of five forces on the new
entrepreneurial idea shows that Tesco ltd. has many forces which are in favour of the new
strategy along with a few forces posing some threat. Considering the existing operations and
customer base of Tesco ltd., the company can attract new customers for a new range of cosmetic
and beauty products by offering some discounts initially which will also increase the competitive
advantage and position of the company (Clark and Ramachandran, 2019). A large existing
customer base which could be the source of new customers as well is a huge advantage for the
company.
D2 Critical evaluation on the basis of interpretation & investigation of competitive marketplace.
A critical evaluation of the business idea of Tesco Ltd. to expand its range of products to
beauty and cosmetic products shows that there is a huge potential for demand to increase for
these products due to the change in demographics and consumer preferences but the management
should also consider the immense competition which is prevalent in this segment of the industry.
Developing a customer base initially requires a lot of efforts due to brand loyalty inherent in the
consumers. Although, considering the resources and large-scale operations of Tesco, the
company can gain competitive advantage in this sector also and increase the revenue and
profitability.
TASK 3
P3 Present data required to support gap examination in the assessment of particular
entrepreneurial idea.
Gap Analysis refers to a technique which is generally used to examine the gap among
targeted & expected outcomes. It ultimately comprises of a comparison among current business
performance as well as standard performance which are established previously. Therefore, a gap
analysis is a basis which considerably measures invested money, efforts, time as well as human
resources which is needed to accomplish the goals and objectives of the company. There are
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ample number of rival companies of TESCO which includes ALDI, TESLA and many more
which affect the whole performance of the organisation in a negative manner. TESCO is going to
launch a new segment which is Beauty Cosmetic at the competitive marketplace. With the help
of market analysis and research, managers of the company can effectively produce high quality
goods and services and satisfy the needs and wants of customers.
This gap can effectively be analysed with the help of using both primary and secondary
data. Both the approaches are going to be discussed as follows:
 Primary Data: Primary method of data collection is defining as a methodology where all
the data and information are collected for the first time and is fresh & raw in nature. It
consumes lot of time, effort and money and is conducted to address specific issue. In the
context of present report, an entrepreneur is going to develop a questionnaire for
examining the reason behind market gap in an effective and efficient manner (Santos,
2015). along with this, it has also been analysed that there are ample number of people
who mainly appreciate the idea of launching beauty cosmetic by TESCO. Below
mentioned is the questionnaire prepared by the management team of the company.
 Secondary Data: Secondary research includes all the data and information which is
already collected or gathered by any other person. It mainly consists of all the material
which is published in the form of research reports. This is the type of data collection
method which is cost as well as time effective.
Questionnaire
Name:
Age:
Address:
Q1 Are you aware with the new Beauty Cosmetic product launch by TESCO?
Agree
Disagree
Q2 Do you familiar with the product of offered by TESCO in their new segment which is
Beauty Cosmetics?
Yes
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No
Q3 Are you satisfying with the products offered by company?
Yes
No
Q4 Do you face any issue which is related with the quality of Beauty Cosmetics launched by
TESCO?
Yes
No
Q5 According to you, does company start selling the products online?
Yes
No
Q1 Are you aware with the new Beauty Cosmetic product launch by TESCO?
Agree
Disagree
6
4
Q2 Do you familiar with the product of offered by TESCO in their new segment
which is Beauty Cosmetics?
Yes
No
8
2
Q3 Are you satisfying with the products offered by company?
Yes
No
9
1
6

Q4 Do you face any issue which is related with the quality of Beauty Cosmetics
launched by TESCO?
Yes
No
8
2
Q5 According to you, does company start selling the products online?
Yes
No
8
2
M3 Justify sources and methods of data collection and how data related to examine market
potential.
Data collection refers to a systematic method use for measuring as well as gathering
information and data on a particular topic from various sources. There are different sources
available which might aid in answering all the questions in an effective manner and produce
positive results. Primary method is one of the most beneficial method where questionnaire is
developed to understand the whole market in an effective manner. On the other hand, secondary
method includes all the online sources, newspaper and many other articles which assist in
gathering secondary information to conduct the whole work in an effective manner.
D3 Analysis of methods to justify business objectives and identify market potential.
With the help of primary and secondary sources of data collection method business
organisation can effectively gather all the information which is required for them. Along with
this, further different sources might be survey, observation, interview and many other methods
which help in identifying market requirements and current trends which assist in satisfying the
needs and wants of customers.
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P4 Interpretation of data in an appropriate manner.
Q1 Are you aware with the new Beauty Cosmetic product launch by TESCO?
Agree
Disagree
6
4
Mean: 5
Median: 5
Mode: 2
Interpretation: From this, it has been observed that 6 respondents are aware with the Beauty
Cosmetic launch by TESCO. This will help the company in maintaining long term sustainability
of the company at the competitive marketplace.
Q2 Do you familiar with the product of offered by TESCO in their new segment
which is Beauty Cosmetics?
Yes
No
8
2
Mean: 6
Median: 6
Mode: 0
Interpretation: It is the point where out of 10 mainly 8 respondents says that they are very well
familiar with the products offered by the company to them (Pollard and Wilson, 2014).
Q3 Are you satisfying with the products offered by company?
Yes 9
8

No 1
Mean: 5.5
Median: 5.5
Mode: 1
Interpretation: Above mentioned questionnaire help in identifying that out of 10
respondents 9 says that they are satisfy with the products and services offered by Beauty
Cosmetics to their customers.
Q4 Do you face any issue which is related with the quality of Beauty Cosmetics
launched by TESCO?
Yes
No
8
2
Mean: 6
Median: 6
Mode: 0
Interpretation: It has been identified with the above mentioned that customers face less amount
of issues and problems regarding beauty cosmetic quality offered by TESCO. According to 8
respondents there is less or no issue faced by them.
Q5 According to you, does company start selling the products online?
Yes
No
8
2
Mean: 6
Median: 6
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Mode: 0
Interpretation: With the aid of above mentioned questionnaire it has been said that out of 10
respondents 8 are in favour of selling products online but remaining 2 denies with this
(Mitchelmore, and Rowley, 2013). Online selling helps them in attracting large number of new
customers towards their organisation.
TASK 4
P5 Application of SWOT framework.
SWOT Analysis
Strength Weakness
 One of the major strength of this
entrepreneurial idea is that it attracts
large number of young people towards
them, as they decide to launch Beauty
Cosmetics at marketplace.
 Along with this, TESCO itself is a
well-known company who have large
number of loyal customers.
 Weakness of this idea is that it is not
having any sort of innovative features
and does not satisfy the needs and
wants of customers.
 On the other hand, another weakness of
this is that the distribution channel is
not so effective and fail to retain
customers for a longer of time.
Opportunities Threat
 Biggest opportunity is that managers
can expand their new venture at new
location.
 Technological advancement can also
provide opportunity to the business in
order to produce high quality products
within low cost.
 Major threat for the idea launch by
company is dynamic needs, preferences
and wants of customers.
 Another threat is availability of large
number of competitors for the company
which might affect whole performance
and sales of the company at the
marketplace.
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M4 Critically evaluate specific entrepreneurial ideas in reference to the marketplace and
competition.
The idea of introducing new market segment which is beauty cosmetic is perfect. With the
help of this, business organisation can effectively increase their profitability as well as market
share at the competitive marketplace and can maintain their presence at international level also.
D4 Develop valid justification & conclusion on how entrepreneurial ideas can be formulate,
sustain at competitive marketplace.
The business organisation TESCO use updated and advanced technologies which will
assist them in targeting their customers more effectively and efficiently (Koryak, 2015).
Company is launching their new beauty cosmetic segment at the marketplace as it gives them
high growth opportunity as well as increases profitability as well as sales of the company.
P6 Evaluation of competitive as well as market environments where the idea will be going to
launch in order to measure potential viability.
Marketing atmosphere refers to both micro as well as macro analysis made by rivals and
is measurable by social offer. PESTLE analysis is going to be conducted by the management
team of the company in order to identify the current market situation before launching the
product at competitive marketplace.
Political: It is the element which has been examined by the government interference in
the segmentation or product launch by company. The impact of political stability on the Beauty
Cosmetics offered by company is that they need to follow all the requirements formulated by the
government.
Economic factors: Beauty Cosmetic product often faces ample number of factors such as
raw material costs, foreign exchange rates and many more which might affect the whole
performance of the company.
Social factors: This is a factor which highly influences the overall functionality as it
includes, cultural trends, population, preferences, demographics and many other elements.
Beauty Cosmetics have high demand at the marketplace which help TESCO in maintaining the
business successful at market.
Technological factors: It is the factor which is based on the technological advancement.
It is very essential for the management team of TESCO that they must update their technologies
on a regular basis so that they can beat the competition.
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Legal: It refers to the factor which need to be followed by the managers of business
organisation in order to provide safe and secure working environment to the employees (Karimi,
2016). in context of TESCO, while introducing their Beauty Cosmetics segment at the
marketplace, managers adopt all the legal policies such as labour laws, health and safety
standards.
Environmental factors: This is the factor which concerned about the environment. It is
required by the management team of TESCO to adopt all the machinery and technologies which
might not harm the external environment. This will aid them in attracting large number of
customers towards the new segment launch by TESCO.
CONLUSION
With the aid of above analysis, it is concluded that it is very essential for to conduct
proper marker research in order to run the business function. With the aid of this, various
opportunities can easily be identified available at the marketplace. Along with this, SWOT as
well as PESTLE analysis assist in maintaining sustainability at the competitive market for a
longer period of time. At last, with the aid of porter's five force model, competitive position of
the organisation can effectively have identified.
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