Entrepreneurial Opportunity: Boutique Hotel Business Plan

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Entrepreneurial Opportunity

Contents
Introduction......................................................................................................................................3
Market Attractiveness......................................................................................................................4
Industry Attractiveness....................................................................................................................5
Nature of Competition in the Industry.............................................................................................7
Target Segment benefits and attractiveness.....................................................................................8
Competitive and Economic Sustainability.......................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

Introduction
The following report aim at enhancing the knowledge of entrepreneurship. It is the process of
starting a small business like launching a new product, starting a new small scale company. The
report discusses the importance of entrepreneurship, different forms of activity related to it, key
stages and the behavioural skills needed for the opportunity and help in the assessment. Report
focus on mainly on the following topic: Market Attractiveness, Industry Attractiveness, Target
segment benefits and attractiveness and Competitive and Economic Sustainability. The idea
selected for the startup is Boutique Hotel.
Boutique hotels are the hotel having room size ranging from 10 to 100. The boutique hotels are
generally made on the basis of the theme consisting of luxury style and furniture. Initially, they
are established so that to expand and capitalize the business. They provide great accommodations
and help in providing great hospitality.

Market Attractiveness
Market attractiveness is the strategy which helps in determining the situation of the market. It
helps to decide that a particular business will lead to being feasible or will provide some profit or
not. Market Attractiveness helps to identify the strength of the business and help companies to
make business portfolios for the market. The major factors of the market (Karns, 2016)
attractiveness are listed below.
Market Size – It is the most important factor has the more opportunities will be provided if the
market size is large enough to accommodate the new business.
Growth Rate - It is very important with the market size, markets keep on growing with the new
opportunities and trends.
Pricing trend – It is equally important has it help to increase the revenue in the market.
Competitors – It is the most important factor which helps to determine the potential of the one
business. It is very necessary to understand the potential (Bowtell, 2015) of the competitor.
Expansion of the business – When expanding business overseas or in some other segments it is
necessary to check all the conditions.
The best threat
The Brexit is generally referred to as the short form of “British Exit” where UK decided to opt-
out from the EU (European Union). When voting conducted the British pound fallen
tremendously against the dollar. Various campaigned were conducted in favour of Britain to
remain in the EU. If Britain leaves the EU without the deal then two year period will be
cancelled and no agreement will be made and WTO will come as ruling authority.
PEST analysis
PEST analysis is the analysis conducted in the business covering four main dimensions that are
Political, Economic, Social and Technological. These four factors help to identify the external
macro factors on the business and evaluate the performance and operations of the business.

Industry Attractiveness
It is used by new entrepreneurs to analysis the competition in the market by analyzing the
opportunities, identifying the advantages and applying the (Noe, et.al, 2018) intelligence to
potentially solve the challenges and risk of the business. Porter Five forces are the strategy
which helps to shape the industry and help to identify the strength and weakness of the business.
It is applied for the industry attractiveness and the profitability of the business. Carefully
estimating and applying the five force model will help in generating earnings and utilize the
resources.
Figure 1: Industry Attractiveness
(Source: Rogers, 2018)
Customer’s knowledge – This specifies the bargaining strategies used by customers during the
shopping to lower the price of the product. Industry or business is heavily affected by the
customers. Business gets affected when the client base is (Dolnicar, et.al,2018) powerful as they
will negotiate for the price down.
Power of Supplier – If the cost of supply increases then it will directly affect the profit price and
bring the profit down. If a company demands supplies from a single supplier, then the supplier
has the authority to increase the prices of the product.

Competitors – every business as competitors and increasing in a number of competitors means
decreasing the rate of customer. When a company has a lesser number of competitors then they
can increase the price and set the deal according to them.
New Comers in the market – When a new business is set up regardless of the same field, it
decreases the investment capital of the business. When competitors come in the market in less
time with money, than they can become effective competitors for other business.
Figure 2: Newcomers’ entrance
(Source: Rogers, 2018)
Substitute and Other product - When a new product is released or launched it steal the
customer.

Nature of Competition in the Industry
Every business faces competition in the market. Healthy competition in the market is also
necessary for the growth and expansion of the business. There are basically three (Barbara, et.al,
2017) types of market competition can be seen which are described below:
Monopolistic – The competition here is when the sellers sell different products but have the
same purpose.
Oligopoly – In this type of competition seller sells the product in large amount and proportion.
Starting the oligopoly is very high as it requires a high amount of capital and investment.
Monopoly - In monopoly business, sellers accept the price of the market according to the
requirement and demand of the market. There is two types of monopoly one natural and another
one is a legal monopoly.
The boutique hotel also faces many competitions from other hotels which are presented in the
nearby location. Some of the hotel (Noe, et.al, 2018) offer prices are lower than a boutique hotel
which can attract customer to their premises. New construction of five-star hotel has been started
which will decrease the customer in the future.

Target Segment benefits and attractiveness
There are seven domains in the market which can help to analyze the environment of the
business and the success rate of the company. The seven domains are listed below:
 Market attractiveness
 Target segment benefits and attractiveness
 Industry Attractiveness
 Competitive and economic sustainability
 Mission and measure of risk
 Ability to apply Critical Success Factors
 Connecting the factors of the value chain
Hence the target segments benefits and attractiveness of the market are finding that particular
segment where the business can gain major revenues and profit. It is very important to identify
the target segments so that strategies can be developed to understand the situation and necessary
actions could be taken to enhance the operation. Following questions should be considered
while finding the target segment like which sector of business is going to provide benefits to the
customer? How the product is different from the other (Mathooko and Ogutu, 2015) products in
the market. The target segment selected for the Boutique Hotel is tourism. As the hotel will
provide great accommodations for tourists from other countries the management will ensure that
all the facilities are provided to the tourist. The hotel will also organize the private parties with
the celebrity theme for the entertainment purpose of the people staying in the hotel.

Competitive and Economic Sustainability
To maintain the competitive and economic sustainability a new concept of USP (Unique Selling
Proposition) where proposed which is the advertising strategy which helps the product to be
uniquely identified from other products. Example of USP includes extraordinary quality or lower
price. USP is identifying the uniqueness in your business (Henthorne, et.al, 2016) which is not
exhibited by the other business or companies which attract new consumers in the market.
Deciding the USP is very important as it is that highlighting feature which will help customer to
see the benefit in your product. USP has many benefits which are described below:
 It is considered as one of the most important approaches in the field of advertising.
 USP help consumers and customers to differentiate between two products and companies.
 It helps to build a positive attitude of the company and help to improve the product
activity.
 To determine the USP it is very important to analysis the whole market thoroughly and
conducts research of the market trend and competition.
 Customer perception is also very important has it helped to understand the demand and
requirement of the customer and helps to decide USP according to it.
 USP helps to increase the revenue and helps to (Noe, et.al, 2018) fulfil the expectations
of the customer. USP is directly proportional to revenue, more attractive the USP more
revenue it will generate.
 USP helps in selling the product with easy and benefits the company to make a reputation
in the market.
 USP also helps to maintain loyal customers when USP is delivered with benefits and
helps in making the bond between the company and the customer.

Conclusion
Hence the above report has helped in enhancing the different activities of entrepreneurship. To
begin any business various factors and market needs to understand. The plan selected for the
project was Boutique hotels which are luxury hotels having 10 to 100 rooms. To start any
business various aspects of markets are needed which need careful analyzing of the competition
and trends. Porter five force model helps to consider every aspect of the industry. The Boutique
hotel which was decided as the business plan also faces many issues like competition, market
demand, customers, competitors and power of suppliers. Hence this module helps in developing
the entrepreneurship skills and opportunities.

References
Rogers, M. (2018). The Five Forces Model — Evaluating Industry Attractiveness. [online]
Medium. Available at: https://medium.com/@mrogers_65314/the-five-forces-model-evaluating-
industry-attractiveness-657fbf64f27d [Accessed 30 Jul. 2019].
Karns, G.L., 2016. Assessing market attractiveness under the Stewardship Model of
Business. Social Business, 6(2), pp.175-193.
Bowtell, J., 2015. Assessing the value and market attractiveness of the accessible tourism
industry in Europe: a focus on major travel and leisure companies. Journal of Tourism
Futures, 1(3), pp.203-222.
Dolnicar, S., Grün, B. and Leisch, F., 2018. Step 8: Selecting the Target Segment (s). In Market
Segmentation Analysis (pp. 237-243). Springer, Singapore.
Barbara, C., Cortis, D., Perotti, R., Sammut, C. and Vella, A., 2017. The European insurance
industry: A PEST analysis. International Journal of Financial Studies, 5(2), p.14.
Henthorne, T.L., George, B.P. and Miller, M.M., 2016. Unique selling propositions and
destination branding: A longitudinal perspective on the Caribbean tourism in transition. Turizam:
međunarodni znanstveno-stručni časopis, 64(3), pp.261-275.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource management:
Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Mathooko, F.M. and Ogutu, M., 2015. Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management, 29(3), pp.334-354.