Analysis of Entrepreneurial Opportunity Recognition

The provided text is a collection of academic articles and resources related to entrepreneurial opportunity recognition. The assignment requires identifying gaps in knowledge and utilizing gap analysis tools to bridge these gaps. Specific topics include social entrepreneurship, strategic partnerships for creativity and entrepreneurship, and the pursuit of entrepreneurial opportunities across national borders.

UNIT 27 – IDENTIFYING ENTREPRENEURIAL
OPPORTUNITIES

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1. Background information about sources ............................................................................1
2. Introduction to Business Idea and information about potential and target customers ......2
3. Competitive analysis of business through use of porter's five forces model .....................2
4) Gap analysis for the business idea.....................................................................................4
5. Market research for Fashion Drivers to identify the market potential ..............................6
6. Viability and feasibility of business Idea and Its strength and weakness ..........................9
7. Ways to overcome risk and potential opportunities and growth for business in Future 12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Entrepreneurs in order to be profitable are required to identify various opportunities
which will helps in setting up their own business. This assignment is based on the business plan
of clothing store which will provide cloths for men, women and kids. This study will include
background information about the sources which motivated to set up an own business. Moreover,
it will provide understanding about the business idea and the target audience for organisation.
Also, this assignment will provide with competitor analysis for business. Furthermore, it will
provide understanding about the objectives of business idea and implementation of gap analysis
to reduce the Gap. It will also contain information regarding opportunities for growth and
development in the future.
MAIN BODY
1. Background information about sources
The reasons which motivated for opening up own business are the industry in which the firm
will operate as enterprise will operate in fashion industry which is most profitable venture and is
growing tremendously. Moreover, the factors which motivated for setting up own company
includes interest and hobbies in fashion industry. Furthermore, starting own organisation provide
more income rather than involved in job. Also, opening up a new business is a dream. Other
factors which motivated for opening up a new business are as follows:
 Brainstorming and dreams : Brainstorming is a method of problem solving and it is
source of motivation which motivated for this business idea as company focus on
offering solutions to the problems facing the customers. Dreams are other reason which
are the source of developing business ideas. This source may be sometime is not adopted
as business idea as many organisations does not develop ideas for solving customer
problems.
 Interest and hobbies: Another motivating factor which supported for opening up own
venture is interest and hobbies associated fashion apparels. Choosing a field which the
individual have more interest is more beneficial for them rather than choosing a field of
non- interest. This a business of in which the person is interested and thus it is the thing
which motivated to start up own venture.
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 Demands of people: The demands of people for the fashion industry is increasing day
by day and thus it is more beneficial business than any other.
 Personal growth : Operating own business helps in increasing knowledge and skills of
person which is also a motivating factor for any person that have a desire to open up its
own business. But on the contrary this source may be not so effective as this business
idea may reduce the moral of entrepreneur while the business is in tough situations.
 Motivated through advertising agency: The advertising agency has provided various
information about the trends exiting in this industry and increasing profitability of fashion
industry which has encouraged to start own business in this industry. By reading
magazine etc. Advertises through which business ideas are emerged.
 Trade fairs and exhibition : It is the another and most effective source of developing
business idea. They are usually advertised on internet, radio etc. and by attending those
events on regular basis help in developing new business ideas.
But the one source which motivate for this business idea is interest and hobbies and the
demand of people which is increasing for this business. Thus, this business ideas of opening a
fashion store will be beneficial for entrepreneurs. With the help of this source the entrepreneur is
bale to develop this idea which will be profitable in the future.
2. Introduction to Business Idea and information about potential and target customers
The business idea is about opening of Apparel store as the fashion industry is growing
tremendously. The name of the business will be “Fashion Drivers”. The store will provide
clothing for women, men and kids. The uniqueness of this clothing store will be that it will also
provide customized clothing to its customers on their demand. The business will be located in the
central area of London, UK. Fashion Drivers will focus more on quality to retain the customers
for long term in business.
This business will be involved in the fashion industry and the reason behind opening this
business is that this industry is capable of providing higher profits which will be beneficial for
the entrepreneur. The size of the business will be small as it is the initial stage and due to risk
possibility for business. The store will mainly focus on the people of London and will provide
them with the best quality and design of clothes which are not present in the market. Moreover,
the focus of the store will to attract more customers towards the store by using various marketing
strategies.
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Fashion Drivers will hire few by specialist employees like millennial fashion designers
who will assist the firm in making optimum utilisation of resources and managing innovation.
The target audience for business will be mainly women as mostly women buy more clothes than
men. Fashion Drivers will focus on providing its products to medium to high income group
people as it will provide high quality products. The material of the clothes will be of high-quality
with preference to the customer's requirement. The target group of Fashion Driver will be young
women due to high demand and changing fashion trends of females. The adult female from
middle income group because the individuals have potential to buy customized clothing.
3. Competitive analysis of business through use of porter's five forces model
The Fashion industry is growing at the fastest rate and in order to identify the market it is
required to make a competitive analysis. The porter five forces model consist of five factors
which are required to be identified to have knowledge about the industry and competition. It
consists of following: Threat of new entrants: The fashion industry is the most profitable business due to this
there is a high threat of new entrants in the market which will affect the business of
Fashion Drivers (Noyes and Linder, 2015). Moreover, there are many people which are
attracted towards the innovation of industry want to open up their own business due to
increasing demand of the fashion apparel. The industry will be successful as this factor
does not impact on the growth and success of this industry due to increasing demand of
fashion industry in market. Threat of exiting rivalry: Fashion retail industry is highly competitive because of leading
firms like Zara, Mango, etc. which are having strong brand image in the market due to
which the business will have to face the risk of exiting competitors. Due to this Fashion
Drivers will have to focus on attracting more customers towards the firm which will helps
in reducing the threat of exiting competitors. It will make use of its uniqueness which is
providing customized clothing that will attract more customers towards organisation. The
industry can face failure due to reduction in profitability of various firms operating in this
industry. Bargaining power of suppliers: The fashion retail industry has high bargaining power of
suppliers due to which firm will make strong relationship with the suppliers in order to
retain them in business (Fink, Lang and Richter, 2017). The bargaining power of
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suppliers is high as there are many suppliers of cloths and raw material who are focused
on quality production of companies. The industry has many suppliers of inputs which
make the industry more strong than any other industry and thus this industry will be more
successful in the future. Bargaining power of Buyers: There are many fashion retail organisations which are
providing clothing for men, women and kids due to that there is high power of buyers in
this industry (Five Forces Analysis of the Fashion Retail Industry, 2016). The bargaining
power of buyers is high due to competitive market and top reduce this threat fashion
Driver will provide high quality products to customers and at reasonable prices. The
industry will suffer if the bargaining power of buyers is high ass it will reduce the
profitability of industry and will affect the success of fashion industry.
 Threat of Substitute product: The threat of substitute product is low in this industry as
there is no sub substitute of clothing which is beneficial for Fashion Drivers in opening
up a business in the fashion retail industry (Shang, 2018). The business is having low risk
of substitute product for Fashion Drivers because the firm will be majorly focused on
providing customised apparels to customers. There is no substitute of products proffered
by this industry due ton which are more chances of success of this industry in market.
From the competitive analysis it is identified that there is high risk in opening this
business but as there is no substitute of fashion apparel therefore the firm has higher chances of
success. Moreover, it is identified that there are various brands which are involved in this
industry and are having more profitable business. Moreover, the fashion apparel industry is
growing due to this business will be successful due to uniqueness of the business idea
(Grabowska and et.al., 2015). The organisation will provide customized products to its customers
which will increase their customers base and thus the business will be successful in the future.
This industry is a growth area with low and medium risk as the business will be successful in the
future but it will face difficulty in initial stages but with the help of innovative ideas the business
will be successful.
4) Gap analysis for the business idea
Gap analysis is related to examination of current performance in order to identify
difference between current status with reference to future (Karimi and et.al., 2016). It helps in
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improving business efficiency. For example, Zara is the fashion brand which is most popular and
profitable business and to reach that position the organisation have to close the gap through use
of effective strategies like increasing customers base by incorporating marketing strategies.
There are various stages in gap analysis which consist of following:
 Step 1 Specific problem area: Fashion Drivers will focus on marketing through use of
social media as it is the way through which business can increase its customers base (5
Gap Analysis Tools to Identify and Close the Gaps in Your Business,2018). The business
will focus on this area as it is a new business and to increase its customer effective
marketing is required.
 Step 2 Improvement areas: Fashion Drivers in order to solve the problem of marketing
have determined their goals and target for business. The business will focus of attracting
customers through use of effective marketing strategies which be beneficial for business
in the future. The future goal of Fashion Driver is to increase their social media presence
to achieve higher profitability by increasing the customer base.
 Step 3 Current state of business: Fashion Drivers is not having any social media
presence as it is a new business and the firm does not have strong customer base.
 Step 4 Future state of enterprise: The future of Fashion Drivers is strong customer base
through use of social media marketing. Moreover, Business is having high profitability
(Boling, Pieper and Covin, 2016). Also, the goal of the business is to be leading
organisation in the customized clothing fashion.
 Step 5Action steps: It is identified that the gaps which is affecting performance of
Fashion Drivers lack of social media presence due to which there are fewer customers
which are attracted. Fashion Drivers in order to reduce the gaps will use. Fashion Driver
will use social media marketing for its products and services promotion through use of
Facebook, Instagram, etc. Moreover, it will make use of Online survey through which it
can attract more customers.
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Figure 1: Gap Analysis
(Source: Hansen, Monllor and Shrader, 2016)
Fashion Drivers in order to close the gap is required to increase its social media presence
through use of various website such as Instagram, Facebook etc. which will help in providing
details to customers about the store and the products the enterprise is offering which will helps in
increasing the customer base which in turn will increase profitability of firm. The objectives of
the new business are to have high market share in the industry to be a leading market player in
the fashion industry.
The Objectives of Fashion Driver are as follows:
 To increase sales by 10% within 2 quarter.
 To increase profitability by 10 % within 2 months.
 To increase its customer base through use of social media.
These objectives can be achieved by fashion Drives through use of strong social media
presence as it will help in increasing consumer response which is directly related with increased
sales and acceptance of business among customers.
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5. Market research for Fashion Drivers to identify the market potential
Market research assist in providing information about consumer behaviour, their demand,
buying criteria etc. The business in order to get understanding about the market will undertake a
market research which will consist of primary and secondary. Fashion Drivers in order to
conduct primary research will use survey for people to understand their demand and taste and
preferences regarding the products offered by the business (Wood and McKelvie, 2015). Primary
research involves use of questionnaire in which few questions are asked to consumer about the
products and services the business will provide in market. It will assist in identifying the
effectiveness of business idea and the profitability a business will earn by implementing the
business idea. Primary research includes interviews such as telephone or face to face interviews,
surveys through online or mail, or through use of Questionnaires.
The questionnaire sample used by business for market research:
1. How often do you buy new clothes?
 Every week ()
 Every two week ()
 Every three weeks ()
 Every Month ()
2. What do you look for when buying clothes?
 Quality ()
 Price ()
 style ()
 Discount ()
 Service ()
3. Do you think it is important to have online shopping facilities for small retailers?
 Agree ()
 Disagree ()
 Neutral ()
4. How much would you spend on clothing?
 £0 ()
 £0 - £50 ()
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 £50- £100 ()
 £100- £250 ()
 £250- £500 ()
 £500 or more ()
5. The period of year in which you will spend the most on clothing?
 Spring ()
 Summer ()
 Autumn ()
 Winter ()
 I don't know ()
1. How often do you buy new clothes? Respondents ( 20)
Every week 2
Every two week 3
Every three weeks 2
Every Month 11
2. What do you look for when buying clothes? Respondents (20)
Quality 10
Price 3
Style 3
Discount 3
Service 1
3. Do you think it is important to have online shopping facilities for Respondents (20)
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small retailers?
Agree 8
Disagree 5
Neutral 7
4. How much would you spend on clothing? Respondents (20)
£0 1
£0 - £50 2
£50- £100 3
£100- £250 4
£250- £500 5
£500 or more 4
5. The period of year in which you will spend the most on clothing? Respondents (20)
Spring 4
Summer 6
Autumn 4
Winter 5
I don't know 1
Interpretation : From the above questionnaire it can be interpreted that there are many
respondents which provided there views and helped in completing the market research. It is
found that many people responded towards quality of clothes on the basis of that it is suggested
to FashionDriver to focus on quality to attract more customers. Moreover, The period in which
the people spend more on clothing has provided more respondents for summer which means
large number of people but clothes in summer. Also, most of the customers responded that they
prefer to spend £250- £500 on clothes. Furthermore, It can be interpreted that most of the
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respondents agreed to have online facilities to provide convenience services. Most of the
customers also responded that they but clothes every month. It is suggested to fashion Driver to
focus on this response and provide the products and services as per the response provided
through questionnaire.
Secondary research conducted by Fashion Drivers will include use of books, journals,
articles etc. through which they will be able to understand about behaviour of their target and
potential consumers which will helps in providing the services or products according to their
demands that will assist in attracting more customers towards the store which will be beneficial
for firm. The secondary research conducted by FashionDriver for identifying information about
customers demand regarding product and services which will be offered by this company
includes use of books and journals and internet sources. FashionDriver has used online survey
through use of Facebook, Instagram etc. to identify about customers demands regarding the
products and services which will be offered by fashionDriver.
6. Viability and feasibility of business Idea and Its strength and weakness
The business idea is Viable as fashion industry is growing at a rapid rate which will be
beneficial for firm as more customers will be attracted towards organisation (Santos and et.al.,
2015). The business idea of opening a new clothing store will be profitable which is analysed
from primary and secondary researches from which it is outlined that demand of customers about
different clothing styles increases continuously. The business will be successful if this business
idea is implemented. Moreover, the market research can be more effective by using other
methods of survey such as face to face interviews etc.
Feasibility of business idea is shown by cash flow statement:
Estimated cash flow statement
particulars
initial
investme
nt
Janua
ry
Februar
y
Ma
rch
Ap
ril
ma
y
Jun
e July
Aug
ust
Septe
mber
Oct
ober
Nov
emb
er
Dec
emb
er
Sales from
Men
clothing
Number of
customers 30000 33000
363
00
399
30
439
23
483
15
5314
7
5846
2
6430
8
7073
8
7781
2
8559
4
10

average cost 30 30 30 30 30 30 30 30 30 30 30 30
Total
revenue
from
clothing
90000
0 990000
108
900
0
119
790
0
131
769
0
144
945
9
1594
405
1753
845
1929
230
2122
153
2334
368
2567
805
Sale From
women
clothing
Number of
costumers 35000 40000
420
00
441
00
463
05
486
20.2
5
5105
1.26
25
5360
3.82
5625
5628
4.016
9062
5
5909
8.21
7751
5625
6205
3.12
8639
1406
6515
5.78
5071
0977
average cost 40 40 40 40 40 40 40 40 40 40 40 40
total
revenue
from
women
clothing
14000
00 1600000
168
000
0
176
400
0
185
220
0
194
481
0
2042
051
2144
153
2251
361
2363
929
2482
125
2606
231
Total
revenue
(cash
inflow)
23000
00 2590000
276
900
0
296
190
0
316
989
0
339
426
9
3636
455
3897
998
4180
591
4486
082
4816
493
5174
036
Expenses
accommodat
ion 20000 0 0 0
100
0 0 0 0 200 0 0 700 0
system
installation
charges 700 0 500 0 0 900 0 700 0 600 0 250 0
cleaning 600 400 250 200 350 400 100 200 150 750 500 400 300
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supplies &
maintenance
salaries to
staff 2000 2000
200
0
200
0
200
0
200
0 2000 2000 2000 2000 2000 2000
supplier
commission 3000 2500
220
0
450
0
400
0
300
0 2500 2600 3200 3500 4000 4200
advertiseme
nt 400 400 400 400 400 400 400 400 400 400 400 400
Other
expenses 1200 1400
140
0
100
0 800 700 1200 1300 1400 600 700 800
Total
expenses
(cash
outflow) 21300 7000 7050
620
0
925
0
850
0
620
0 7000 6650 8350 7000 8450 7700
Net cash
flow 21300
22930
00 2582950
276
280
0
295
265
0
316
139
0
338
806
9
3629
455
3891
348
4172
241
4479
082
4808
043
5166
336
Low interest
Loan 90000
Grant 50000
Entrepreneur
capital 10000
Opening
balance of
cash 150000
17130
0 2464300
504
725
0
781
005
0
107
627
00
139
240
90
1731
2159
2094
1614
2483
2963
2900
5203
3348
4285
3829
2328
Closing
balance of
cash 171300
24643
00 5047250
781
005
0
107
627
00
139
240
90
173
121
59
2094
1614
2483
2963
2900
5203
3348
4285
3829
2328
4345
8665
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Interpretation: From the feasibility statement it can be interpreted that the business will be
qualify and grow in future as shown above there is increase in cash balance in every month
which shows this business is profitable and it will be beneficial for entrepreneur to open up this
business.
Strength
 The business will be providing high quality products with customised clothing option to
customers.
 The strength of business is that it will provide customized fashion apparels for all age
group. The business will be profitable as shown in feasibility statement where there is increase
in cash inflow in every month.
Weakness
 The feasibility statement shows that there is high cost involved in providing the product
which as weakness for fashion Driver.
 Lack of more advanced technology.
 Lack of social media presence and customer base.
7. Ways to overcome risk and potential opportunities and growth for business in Future
Fashion Driver have to face the risk of competition in the market as there are many
organisations operating in this industry and to reduce the chances of threat company must
focused on its quality and provide customers with high quality products (George and et.al.,
2016). Also, Fashion Drivers will provide Customised products which will provide support in
attracting more customers towards store that will reduce threat of competition for enterprise.
Moreover, the company in order to reduce threat of competition from lack of social presence will
make use effective marketing techniques that will be beneficial for firm in attracting more
customers towards store.
Moreover, in order to gain competitive advantage business will use market penetration
strategy in which it will provide high quality products at low prices to gain customers at initial
stage of business. There are various opportunities for business to grow its market for success of
firm in the future.
Also, the business is having opportunity to increase its social media presence for
attracting more customers towards organisation. Furthermore, the business can use new
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technologies for improving its product style (Reuber and et.al., 2018). There are various
opportunities lying ahead for Fashion Drivers such as entering into global market in future for
attracting more customers and increasing the brand image which will lead to future development.
Recommendation:
There is various recommendation provided to Fashion Drivers to develop its business in
Future such as it should provide their customers with high quality products according to their
taste and preferences Because it will assist in gaining trust and loyalty of customers for products
provided by Fashion Drivers. It is required to provide high quality product as customers demand
only those products which are of high quality. The use marketing techniques reduces threat of
competitors which includes use of social media marketing such as Instagram, Facebook etc.
Using various marketing techniques will help FashionDriver in increasing their sales.
Justification :
The above recommendations are required for FashionDrivers in order to focus more on
on Quality which will increase its customer base. FashionDriver by improving the quality will be
able to attract more customers. Moreover, The organisation by using various marketing
techniques will be able to gain more customers for products and services. The research
conducted in this study should have also used other methods which has provided more clear
understanding of customers demands and their taste and preferences.
CONCLUSION
The above study concluded about business idea that is Fashion Drivers opening up a
clothing store which has located in London. The target audience will be people of all age group
and will provide clothing for men, women and kids. Moreover, it outlined competitors’ analysis
to identify about various factors which will lead to success and failure of Fashion Drivers
through use of Porter fiver forces model. Furthermore, the study outlined market research
conducted by business which consisted of primary and secondary research to identify about
customer behaviour.
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Santos, S. C. and et.al., 2015. Prototype models of opportunity recognition and the decision to
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5 Gap Analysis Tools to Identify and Close the Gaps in Your Business. 2018. [Online]. Available
through :<https://creately.com/blog/diagrams/gap-analysis-tools/>
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