Identifying Entrepreneurial Opportunity: Coffee House Business Report

This report delves into the entrepreneurial opportunity presented by a coffee house business, focusing on a startup venture that emphasizes organic coffee to cater to health-conscious consumers in the UK. It begins with an introduction to the concept, outlining the motivations and sources of inspiration, including the application of Peter Drucker's seven sources of innovation. The report then details the business idea, including the target audience, location, and the implementation of the STP framework (segmentation, targeting, and positioning). A thorough competitor analysis is conducted to assess the competitive landscape, along with a gap analysis to identify opportunities for future action. Market research, employing both primary and secondary methods, is presented to validate the business's viability. Finally, the report concludes by assessing the strengths and weaknesses of the business, justifying its viability and workability within the market.

INDENTIFYING
ENTREPRENEURIAL
OPPORTUNITY

Table of Contents
INTRODUCTION ..........................................................................................................................1
1. Background information about those sources and what motivated to start a new business.. .1
2. Introduction to the business idea and the location of potential customer's and target
audience. .....................................................................................................................................3
3. Competitor analysis in the competitive marketplace for knowing the failure and success and
the growth area with low and medium risk.................................................................................4
4. Gap analysis and the situation for the future action plan. .....................................................5
5. Market research to support viability for the business idea. ....................................................6
6. Why business idea is viable and workable and how you qualify this belief and what are the
strength and weakness...............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Entrepreneur is the individual who continuously makes efforts for identifying the
business opportunity with the motive of starting a new business. Innovative ideas for
commencing a new business directly help the organisation in attaining sustainable position in the
market. Entrepreneurial opportunity is concerned with the continuous process of establishing a
new business with the innovative idea. Personal motivation about becoming an entrepreneur is
challenges and risk will be taken for growing and sustaining in the market for longer period of
time. It is very much important to identify the business opportunity, so that competitive position
can be attained in the best possible manner. This report will be based upon introducing a coffee
venture(Acharya, 2017). The products will be made from organic ingredients, so that health of
the customer's can be targeted in the best possible manner. Major topics covered in this report
are information regarding the sources which inspired the idea, introduction about the business,
competitor analysis for attaining a competitive marketplace, strength and weakness of the newly
introduced business and the market research by using primary and secondary methods. With the
help of this better plans and actions can be made regarding the enhancement of the new business.

1. Background information about those sources and what motivated to start a new business.
Entrepreneurial opportunity is considered as the innovative and creative process which
involves thinking out of the box, so that best use of the available opportunities can be done. It
also involves taking various challenges and risk for attaining a desirable position in the market.
For sustaining in the market for longer period of time is very much essential for make
appropriate strategies, so that profit can be maximised. In relation to a brand new venture i.e.
Coffee House will majorly focus on increasing the satisfaction level of its potential customer's.
This will be done by making high quality products and by introducing plans and strategies as per
the customer's needs and wants. In the current scenario each and every individual is facing stress
in their personal and professional life(Carlsen and Andersson, 2011). In order to reduce the
stress customer's generally want to have a healthy cup of coffee, so that their stress level is
decreased. It is the major motive for introducing the new business which is Coffee House. Perter
Drucker's 7 source model can be used for increasing the sale and profitability of Coffee House.
The model is briefly discussed below-

SOURCE- DRUCKER MODEL, 2013
The Unexpected- The current business scenario is full of surprises which can either lead
to success or failure of the business. The unexpected failure or success mainly depend upon the
availability of opportunities in the market. Chances of unexpected situations can be reduced by
making appropriate plans and strategies by the leader or manager of the organisation. With the
help of this model managers of Coffee House will be able to handle the positive and negative
situation in the best possible manner.
Industry and market disparities- Market and industry is dynamic and uncertain in
nature. This means the situations of market and industry keeps on changing rapidly. The changes
can be done for making best use of the opportunities and also for increasing the productivity. It is
essential for Coffee House to have appropriate knowledge regarding the marketplace(Drucker,
2012). It is also concerned with the making best use of opportunities for growing the competitive
market.
Incongruities- It is concerned with conducting research for knowing the target
customer's in the systematic and best possible manner. Appropriate plans for research will help
Coffee House in growing its business in the systematic manner. While inappropriate research
Illustration 1: DRUCKER MODEL

will lead to failure for the new venture. Coffee House needs to make plans for gathering
information from the customer's. The information will include their views and ideas regarding
the products and it will also include complaints, so that service quality can be improved.
Process Vulnerabilities- It is related with various task and operations of the new
business. With the help of this Coffee House will be able to analyse its potentiality for sustaining
in the market. Strength and weakness can be also be identified by Coffee House , so that
innovative plans can be implemented.
Demographic shifts- Working of Coffee House can be affected by the demographic of
the particular area. Any change in the demographic will directly lead to change in demand and
need of the product. Change in the preferences or demographic can directly lead to negative or
positive impact on the business of Coffee House. It is related with age, employment and
education which can help in attaining highest proficiency(Drucker, Hesselbein and Kuhl, 2011).
Change in perception- Such changes generally take place after a period of time. This
can be due to change in technology or change in social network of the individuals. The business
of Coffee House largely depends upon the change of perception of its potential customer's.
New knowledge- It is concerned with making best use of the innovative ideas and
strategies. Coffee House needs to gather appropriate knowledge,so that creative ideas and plans
can be implemented to increase the profit.
With the help of these source Coffee House will be able to expand its business in the
effective and efficient manner.
Factors of Drucker model lead to generation of business idea-
New knowledge factor has helped the manager of Coffee House in generating idea for the new
business. As with the help of this factor management was able to make use of the innovative
ideas in the best possible manner. New and creative plans were used for increasing the sale and
profitability of the organisation in the systematic and desirable manner. Incongruities factor also
helped the manager of Coffee House in collecting vital information related to the target
customers. With the help of this Coffee House was able to serve best products to its targeted
customer's. With the help of these factor Coffee House can easily satisfy the needs and demands
of the customer's in the systematic and desirable manner.
Advantage and disadvantage of model

The main advantage of using the Peter Drucker's seven sources innovation is that it allow
an organisation to achieve the economies of scale and cost advantage by providing innovative
way of reducing the internal cost while providing high quality of services. On the other hand, it
also allow the Coffee house to gather as well as keep the scare resources secure before any sort
of crowding. Another major benefit that the Coffee house will get is that it help in imposing the
switching cost over the buyers.
But on the other side the major drawback of adopting Peter Ducker 7 source of
innovation are it make difficult to abandon the tactics that remains no longer effective to the
organisation. In addition it also require high investment by the Coffee house in order to resolve
the issue and help in achieving sustainability with in the market place by performing better.
2. Introduction to the business idea and the location of potential customer's and target audience.
Entrepreneurial opportunity can directly lead to expanding the business and enhancing
the economic growth in the best possible manner. For attaining efficiency in the business new
ideas can be used in the systematic manner. Entrepreneurial opportunities can lead to achieving
the organisational goals and objectives in the effective and efficient manner(Gaglio, 2018). The
innovative ideas and strategies can be implemented after knowing the needs and preferences of
the customer's. As with the help of this Coffee House will be able to survive in the market for
longer period of time. It will also help Coffee House in knowing its capabilities and potentiality
for attracting more and more customer's. Business plan of Coffee House is briefly discussed
below-
Coffee House profile
After analysing the opportunities available in the business market innovative techniques
can be used to satisfy the demand of customer's. The population of UK is concerted about their
health,so it is the good opportunity for Coffee House to attract more and more customer's. With
the help of this organisation will be able to make better relationship with its potential customer's.
As their needs and preferences will be taken into consideration. The internal environment of
Coffee House will help the its customer's in socialising with each other. As the environment will
be relaxing and soothing(Hulbert, Gilmore and Carson, 2015). The motive will be emphasised
on reducing the stress level of its customer's, so the ambiance and location of store will be
according to the availability of customer's. Coffee House will also aim at providing better
customer services in order to increase its productivity.

What it is
Coffee House will manufacture organic coffee for maintaining and improving the health
of their customer's. Since the coffee will be made from organic and healthy materials so the
chances of negative impact on the health of customer's will be reduced(Kuula and Haapasalo,
2017). Its Coffee will help in boosting the immune system of its customer's. As the product will
contain adequate amount of vitamins and minerals. The amount of caffeine in the coffee will
also be moderate so that customer's can stay fit and healthy.
Who
The products of Coffee House will be majorly for health conscious customer's. Products
will help in preventing the customer's from harmful diseases. It will directly lead to increase the
satisfaction level.
Where
Coffee House will be located in the commercial area so that it will be convenient for
customer's to enjoy their coffee. The place will be free from any kind of disturbance for reducing
the stress level of customer's. Proper location will lead to increase the satisfaction level in the
best possible manner(Langston and Ghanbaripour, 2016).
STP: It stand of segmentation, targeting and positioning of an organisation. It is a broad
framework that simplifies and summarizes the process of market segmentation. Along with this,
market segmentation introduces as an effective process in which different number of purchasers
within a marketplace are classified and profiled as per the range of variables, which analyse the
market tendencies and characteristics.
 Segmentation comprises distinguishing the marketplace to be segmented; identification,
choice, and utilization of bases to be applied in that market segmentation; and
improvement of profiles.
 Targeting introduces as an effective process of distinguishing the most attractive sections
from the segmentation phase, normally the ones most profitable for organisation.
 Positioning refers as a final procedure, and is the business-orientated phase, where the
company should assess its competitive benefit and place itself in the mind of customers to
be the attractive option in these class.
STP is more essential and important framework which helps Coffee House to target customers
and maintain strong position in marketplace.

SEGEMTATION- It is related with dividing and sub dividing the customer's into various
segments. It is concerned with finding the customer's which have different set of needs and
requirements. It is essential for Coffee House to properly divide its customer's, so that growth of
the organisation is increased. This is because the market of UK is very large, so with the help of
this organisation will be able to focus on a particular segment. The segment for Coffee House
will be professionals who are working in corporate offices. Management of Coffee House will
mainly focus on this segment because of current need and demand of coffee in the offices.
SOURCE- STP ANALYSIS, 2019
TARGETING- It is related with making plans for targeting and aiming particular set of
customer's. The target customer's for Coffee House will be young customer's who are dealing
with complicated situations or having some kind of stress in their personal and professional life.
Manager of coffee house will target these customer's with the motive of decreasing their stress
level and also for increasing their satisfaction level. This means major target for Coffee House
will be young individuals and professionals.
POSITIONING- It is generally used to create a perception of the products in the mind of
customer's. It is also related with making best use of the USP of Coffee House which is company
aims at providing organic products to its potential customer's. The product of coffee House will
be available at the store and canteens of corporate offices. Coffee house aims at providing
healthy products to the customer's at the store of Coffee House.
Illustration 2: STP ANALYSIS

3. Competitor analysis in the competitive marketplace for knowing the failure and success and
the growth area with low and medium risk.
Competitive analysis is very much essential for each and every organisation as with the
help of this current situation of the business and market can be improved. Competitive analysis
allows various organisations to increase its brand image in the market. As with the help of this
appropriate plans are made for targeting the potential customer's. The major motive of
competitive analysis is to attract more and more customer's, so that sale and profitability
increased and better competition is given to the competitors. It can also guide Coffee House in
knowing its strength and weakness in the systematic manner. As with the help of this
organisation will know what measures can be taken to enhance the business in the systematic
manner. In the current situation of UK each and every individual has the tendency to drink coffee
which is one of the best opportunity for various organisations to expand its business. There also a
trend of opening a coffee shop in every office. This because people of UK believes that coffee
shop is the only place for socialising with people in the informal manner(Machmud and Sidharta,
2014). So it is good opportunity for Coffee house and other organisations to increase and expand
their business. As if the needs and preferences of the customer's are taken into consideration than
profitability will be directly increased. If Coffee House is able to deliver organic and healthy
products than appropriate position can be easily attained by the organisation. There is high level
of competition in the market of UK, so it will be difficult for Coffee House to establish its
business in the initial stage. The chances of shift in customer's from one organisation to another
in very high as they have wide range of options to satisfy their needs and wants. The competitors
of Coffee House will try to make necessary steps for sustaining in the market for longer period of
time. Some of the major competitor of Coffee House Caffe Nero, Coffee Republic, etc. these
competitors can give tough competition to the new venture(Is the UK reaching coffee shop
saturation point?, 2017). Customer's of UK are also becoming more aware about their health, so
to cater such needs of customer's Coffee House will focus on providing organic products to the
customer's(Omri and Boujelbene, 2015). New and innovative techniques can be used by Coffee
House to decrease the competition level in the market. If the Coffee House is successful in
satisfying the needs of customer's than new business venture will be able to sustain the market in
the best possible manner.

4. Gap analysis and the situation for the future action plan.
Gap analysis is the method for analysing the difference of performance among the
information system of business. Gap analysis is generally used analyse that whether
requirements are met the organisation or not. It also guides organisations in taking appropriate
steps for making necessary changes, so that gap between the need and current position can be
decreased. Coffee House is the new venture in the market whose major motive is to increase and
maintain the health of its customer's. With the help of gap analysis Coffee House will be able to
know their current standard in the market. Management of Coffee House will can know that they
have met the targeted state or not. The gap can also be reduced by using McKinsey 7S model for
improving the current and future position. This model is briefly discussed below-
Strategy- It is the plan which is used by the organisation for getting a sustainable
competitive position in the market. It is essential for Coffee House to make better strategies, so
that their goals and targets are achieved properly(Salim Saji and Ellingstad, 2016).
Structure- It is concerned with organising the units and vital information in the
systematic manner. With the help of this method Coffee House will be able to reduce the
conflicts and disputes between the employees in the best possible manner.
System- It is concerned with the systematic procedure of the organisation which helps in
competing the day to day activities in the coordinated manner. Focus can be emphasised on
changing the organisational culture for increasing the potentiality of employees(Song and et. al.,
2017).

SOURCE- MCKINSEY 7S MODEL, 2013
Shared value- It is related with the norms and rules which directly helps in controlling
the internal environment of the organisation. Coffee House needs to make proper rules and
unbiased principles for its employees.
Staff- It is related with the employees and workforce of the organisation. Coffee House
needs to make appropriate plans for training and hiring best employees. As they will directly
help in achieving the goals and objectives(Stokes, Wilson and Wilson, 2010).
Skills- These are the abilities and capabilities of the employees to compete the assigned
within limited period of time. By using this current skills of the employees can be increased as
Coffee House will focus on providing training programmes for the improvement of skills.
Style- It is generally managed by the high authority of the organisation. Coffee House
can adapt democratic style by involving the employees in the decision making process.
With the help of this analysis Coffee House will be able to decrease the gap between current
situation and targeted situation. As better plans and strategies will be made to overcome the
problems in the systematic and desirable manner. The current situation of the organisation is
Coffee House aims at maintaining the health of its customer's by providing them organic coffee.
Illustration 3: MCKINSEY 7S MODEL