UNIT 27– IDENTIFYING ENTREPRENEURIAL OPPORTUNITIES {RGT}

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UNIT 27– IDENTIFYING ENTREPRENEURIAL
OPPORTUNITIES {RGT}
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Executive Summary
This report will shed light on the new business innovation done by an undergraduate who is
planning to start up a business. It will also discuss about the different sources that will be
needed during this start up. Therefore, in the context being an undergraduate, an approach has
been taken to start a new business, which is a coffee shop named Cafe House in the UK.
Henceforth, this report will focus on the choice of taking up this idea and evaluate it through
the Drucker’s 7 sources to be specific. It will also consist of the primary and secondary data
that have been considered by the undergraduate for this assignment. A brief justification
about these data collection will be discussed in this report. A critical evaluation of the market
structure will be discussed in this report. In addition, this report will have the details of
SWOT analysis to provide a basic support while executing this assignment.
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Table of Contents
Introduction................................................................................................................................4
LO1 Illustrate the sources for business innovation....................................................................4
P1 Various sources of innovation and entrepreneurial ideas..................................................4
M1 Explain Drucker’s 7 sources............................................................................................5
D1 Evaluate the advantages and disadvantages of the various approaches...........................6
LO2 Choose an unique idea for investigation............................................................................6
P2 Describe the rationale and market gap..............................................................................6
M2 Justify the techniques used to fill market gap..................................................................7
D2 Interpretation of a particular idea based on market environment.....................................7
LO3 Describe the use of secondary and primary data...............................................................8
P3 Current data that supports gap analysis.............................................................................8
P4 Interpretation of data to provide evidence.......................................................................11
M3 Justification of the sources by using data collection method.........................................12
D3 Assessment of the methods and sources that will justify the business start up..............12
LO4 Evaluation of entrepreneurial idea...................................................................................12
P5 Application of SWOT analysis.......................................................................................12
P6 Evaluation of different market environments..................................................................13
M4 Critical evaluation on entrepreneurial idea....................................................................14
D4 Produce appropriate conclusions on the ideas of entrepreneurial business start up.......14
Conclusion................................................................................................................................14
References................................................................................................................................16
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Introduction
The ideas of an individual that will help them to set up a business from scratch by taking in
financial risks are known as entrepreneurship. Hence, the opportunities that are obtained in
order to take proper actions to the ideas of starting up a new business setup are known as
entrepreneurial opportunities. In this context, being an undergraduate and taking up a
business plan to the market will be discussed. The problems faced and the achievements that
have been gained being an undergraduate have been elaborated in this assignment. Apart
from that, the use of various methods and a brief analysis has been provided in this
assignment.
LO1 Illustrate the sources for business innovation
P1 Various sources of innovation and entrepreneurial ideas
Business ideas are unique and have more innovation in it. According to Wilson and Martin
(2015), being a great entrepreneur requires appropriate sources and ideas to implement them
for having a successful business. Hence, to get a successful business the sources followed
according to entrepreneurial ideas are as follows:
● Hobbies- The main objective of being a successful entrepreneur is to make a hobby or
turn a passion into business ideas.
● Survey of customers- Knowing the customers and their needs are very important
because they will help to attract more customers.
● Brainstorming- It is used as the method of solving problems that are faced before,
after and ongoing business. It therefore, tends to offer solutions regarding the business
problems.
● Mass media- It plays a major role because people get more influenced through social
media presentation of a new business in the UK.
● Personal talent- As a growing entrepreneur, having enough of outer and inner
knowledge related to business is necessary. Uygur (2017) stated that a person working
in a firm for a longer time acquires the ideas of business and therefore, after
retirement that individual can open up their own business related to the same idea.
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● Exhibitions and fairs- Visiting exhibitions and gaining knowledge before starting up a
business with appropriate ideas turns out to be quite helpful.
● Market gaps- Getting to visualise the gap that is present in the market is another sign
of being a great entrepreneur.
● Strengths- According to Todeschini et al. (2017), strength of an individual acts as a
source that can help in executing the unique idea of the budding entrepreneur.
M1 Explain Drucker’s 7 sources
Peter F. Drucker has invented seven sources towards entrepreneurship. In this context, the 7
sources of Drucker will be followed. According to Snihur et al. (2018), these sources help an
individual to gain inspiration from other entrepreneurs and business leaders. The sources are
as follows:
● The unexpected- Reuber et al. (2018) stated, success and failures both are unexpected
in every business. Therefore, changing these unexpected situations into a powerful
business setup is a major job for an individual.
● The incongruity- Companies who fail knowing the customer requirements and work
accordingly faces incongruity. Hence, customer feedback, customer reviews and their
complaints need to be kept into account after business execution.
● Process need- Drucker believed in following the task of business rather than its
situation. This helped in having a clear idea of every weak spots that are faced in
business.
● Industry and market structure change- The main criteria among these seven sources is
the market structure environment. According to Ramoglou and Zyglidopoulos (2015),
one needs to know about the variants, which are present in the market. Apart from
that, the entrepreneur must know the negatives and the positives aspects.
● Demographics- Change in demographics affects every company intensely. Therefore,
it is essential to know about the product or service that is being implemented in the
market along with their price and requirements of the customers.
● Changes in perception- Nowadays, people visualises things on a different perspective.
Hence, an entrepreneur must know every alternative so that they can apply the
changes immediately and effectively (Rae and Wang, 2015). For instance-People are
found to change their preferences overnight, thus an entrepreneur needs to be quick in
applying the changes on immediate basis.
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● New knowledge- Innovation can be said to have new knowledge both scientifically
and technically. Thus, to be an entrepreneur adaptation of new ideas and working
according to them is very essential. This helps in standing out in business discoveries.
Figure 1: Drucker’s 7 sources of entrepreneurship
(Source: Created by learner)
D1 Evaluate the advantages and disadvantages of the various approaches
According to Link and Sarala (2019), the first four stages of Drucker’s 7 sources are found to
emphasis on the industry or business of an entrepreneur. They are determined, as the basic
symptoms that need to be changed within the industry and this change will require minimum
effort. Eventually, along with every positive approach comes a negative one. Here, in this
context the negative is found outside the business environment (Krueger, 2017). In this case,
as the first set was within the industry, the second one is outside the industry. It involves the
opportunities that have enough of innovation in order to obtain success in the business.
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DRUCKER'S7SOURCESTHEUNEXPECTEDTHEINCONGRUITYPROCESSNEEDINDUSTRYANDMARKETSTRUCTURECHANGEDEMOGRAPHICSCHANGESINPERCEPTIONNEWKNOWLEDGE

LO2 Choose an unique idea for investigation
P2 Describe the rationale and market gap
Rationale can be defined as a brief explanation of principles that are found during the
estimation or taking up a specific decision is to be taken. According to Kraus et al. (2015),
rationale of this assignment is to start up a new business in the UK market. This business set
up is related to a coffee shop Cafe House that will be executed. This setup needs to have
proper stakeholders in order to avoid financial crisis. Hence, the choice of this idea needs to
be effective and unique to attract the stakeholders who can invest in this business.
Additionally, proper information regarding the market needs to be known by the budding
entrepreneur. Hence, an individual needs to know the market gaps that can affect the business
and they must not be afraid of failure before business execution.
According to Kohlbacher et al. (2015), market gap is regarded an aspect that can affect a
business in both positive and negative way. It can help in improving the coffee shop business
or it can take down the business without any knowledge to the entrepreneur. In this context,
the rising entrepreneur needs to identify the market gaps in order to avoid any adverse effects
to the business. Thus, the positive market gap needs to be identified first that can help with
various resources and skills. For instance- Technology is a positive market gap and can be
used to influence customers to get served by the new business start up. In this scenario,
market gaps can be found in the opportunities that arise from the industry itself.
Cafe House needs to be local enough to attract customers towards it. Nevertheless, it has to
technological fit so that once people starting coming they must have something more than
just only coffee. Combining games and coffee will turn into a great creative combination that
will help in attracting customers. Thus, for running a coffee house business the target
audience has to be the youngsters and the situation of the coffee house needs to be present
beside colleges or offices.
M2 Justify the techniques used to fill market gap
Market gap helps in identifying the requirements that are needed by the customers and let the
business improve globally. In addition, it helps in creating awareness among customers and
they tend to target their requirements in a positive way. The market penetration gets increased
along with the identifications of the market gaps by an individual. Thus, to obtain a positive
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business in the UK market, the following techniques need to be followed to help in filling the
market gap. They are as follows:
1. Knowing the market - This technique will help the entrepreneur to know about the
market through optimisation and monitoring.
2. Holding meetings - Welcoming sales into marketing strategies is a good option to
invite leadership strategies. Therefore, this can be done by taking on meetings
regarding to the business start up.
3. Building a council- Another gap that is found in the market is creating a team. The
marketers who are related to the business start up provide the entrepreneur need sales
for business and these sales.
4. Visiting a customer - Customer feedback and customer satisfaction are the two major
elements in every business. Thus, an entrepreneur needs to know their customer and
their problems.
5. Scaling the approach - This market gap has to be positive in order to provide
successful business in opening up the coffee shop Cafe House.
D2 Interpretation of a particular idea based on market environment
In this context, the interpretation of the business is being done by Porter’s five forces model.
This model acts as an analysing tool that takes up all the five industry forces that helps in
determining the intense market competition respective of an industry and its profit level.
According to Karimi et al. (2016), Porter’s five forces model helps to demonstrate the five
forces, which are as follows:
● Threat of new entries
● Power of a buyer
● Power of a supplier
● Substitutes threat
● Competitive Rivalry
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Figure 2: Porter’s Five Forces Model
(Source: Created by learner)
Hence, from the whole discussion it can be said that to open a coffee shop in the UK market,
Cafe House the entrepreneur needs to know about the market and its gap that can affect the
business.
LO3 Describe the use of secondary and primary data
P3 Current data that supports gap analysis
In this scenario, the entrepreneur carried out a particular survey that helped in knowing the
market even better and clearer. The survey has been performed on 20 customers who are
willing to enjoy service provided by Cafe House (Anderson et al. 2015). The survey was
done by asking the customers few questions related to the coffee shop. They were as follows:
1. Is opening a coffee shop in the UK market a good idea?
Response No. of respondents Percentage of
respondents
Total no. of
respondents
Strongly agree 8 80% 20
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PORTER'SFIVEFORCESMODEL

Agree 4 40%
Do not know 2 20%
Disagree 2 20%
Strongly disagree 4 40%
Table 1: Opinion of customers regarding start up business
(Source: Created by learner)
Figure 3: Opinion of customers regarding start up business
(Source: Created by learner)
2. Do you want any other option apart from coffee like books or games?
Response No. of respondents Percentage of
respondents
Total no. of
respondents
Games 8 80% 20
Books 4 40%
Music 5 50%
Only coffee 2 20%
None of the above 1 10%
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Table 2: Opinion of customers to include add ups in the coffee shop
(Source: Created by learner)
Figure 4: Opinion of customers to include add ups in the coffee shop
(Source: Created by learner)
3. How long do you want to have this coffee house opened?
Response No. of respondents Percentage of
respondents
Total no. of
respondents
24 hours 8 80% 20
12 hours 4 40%
10 hours 2 20%
8 hours 4 40%
4 hours 2 20%
Table 3: Time requirement of customers
(Source: Created by learner)
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Figure 5: Time requirement of customers
(Source: Created by learner)
P4 Interpretation of data to provide evidence
From the above survey, which did the entrepreneur to know their customer better has been
very useful do. Thus, from the above survey it has been found that most of the customers are
happy to know about the opening of a new coffee shop in their locality. Few of them are not
agreeing to this fact because UK market is considered as a competitive market and hence, a
start up like coffee shop cannot grow business (Costa et al. 2018). Here, it has been found
that 80% if the customers are happy to enjoy services from Cafe House. On the contrary, the
customers were asked about including extracurricular activities like gaming, books or music.
In this case, maximum of the people responded positive because they believe that having an
extracurricular activity present in a coffee shop can tend to increase business as well as attract
an enormous crowd of youngsters. Lastly, the customers were approached with the question
that suggests the open and close time of the cafe (Blanco-Mesa et al. 2016). Even here,
people had a positive response and suggested to keep the shop open for 24 hours. This will
lead to grow business and people will get to know more about the shop. Thus, the survey
turned out to be a success for the entrepreneur and now the start up can be executed on a
positive note.
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