Business Idea Generation and Market Gap Analysis for De' Base

This report analyzes entrepreneurial opportunities for De' Base, a retail store dealing in groceries and general merchandise. It explores various sources for generating business ideas, including Drucker's 7 sources of innovation, customer feedback, competitor analysis, and employee insights. The report also discusses methods for identifying market gaps, such as Porter's Five Forces model and gap analysis. The analysis aims to evaluate the feasibility of a new retail store at Chiswell Street in London, considering factors like market demand, competition, and demographic changes. The report emphasizes the importance of continuous market research, consumer demand analysis, and adapting business operations to achieve a competitive advantage. The project underscores the importance of recognizing and capitalizing on market opportunities for business growth and innovation.

Identifying
Entrepreneurial Opportunities

INTRODUCTION
Opportunity refer to good or favourable situation to do something. Opportunity in
business context refers to bring into existence new products, services, raw materials and
organizing techniques that help their finished products to be sold at higher prices than its initial
cost of production. Converting an idea into business concept involve in depth analysis of the
entire process initiating from making a product, deciding its unique distinct features so that it
could be differentiated with its existing goods besides those that are being offered by its rivals,
identifying target audience, choosing channel of distribution and so on. Therefore, it becomes
critical for a business to identify prevailing market opportunities and to grab and nurture them
into an innovate business concept (Alvarez, Barney and Anderson, 2013) .
The project will discuss about De' Base company which is a retail store dealing in
groceries and other general merchandise. The report will brief about various sources that could
be considered for nurturing a business idea and various techniques that can be looked upon for
finding market gaps. Moreover SWOT analysis of the company will also be discussed that will
evaluate core competencies of new business concept and its feasibility in present market
scenario.
TASK 1
P1 Sources of Business Ideas
In this era of immense competition where a business has to deal with frequently changing
business dynamics comprising consumers tastes and preferences, competitors strategies, market
conditions etc. it becomes utmost important for a company to continuously observes for
opportunities that can be converted into a unique business idea. Therefore, a businessman is
subject to carefully evaluate best and most creative idea from among plethora of sources that has
not been worked upon by anyone and can provide a lead in market (Cuervo, Barakat and
Turnbull, 2015) . Mentioned below are some of the sources that can be considered while working
upon a business idea:-
Drucker's 7 Sources of innovative opportunity model- Following are 7 sources suggested by
Peter Drucker for generating innovative ideas-
 The Unexpected- It is of high significance for an business firm to monitor and scan the
prevailing market environment to convert an opportunity into new and improved

products. De'Base could adopt latest techniques for its retail stores to enhance its
customers shopping experience reaping benefits for the company.
 Incongruity- It is been evident that there is always some deviations that could
encountered between what is been planned and how it finally gets applied and emerges
out. Hence for De' Base, it is requite create innovative tools, techniques and processes
that assists in implementing ideas as it was perceived and visualized into a whole new
concept.
 Process Needs- It involve evaluating the strength as well as areas of lacking and to
improve them by redesigning or developing them . This steps provides firm with the
signifiant information as on knowing its current competencies business can innovate new
products , process and ways that could be helpful to improve and increase its position by
generating higher profits and success for the firm
 Industry and Market structure change- Company is greatly affected by changes
occurring in it market scenarios, legislations, frequently emerging technologies and other
micro environmental factors. De ' Base, to attain sustainability and growth in its long
term, has to keep an eye on recent market trends so that it can adopt those changes in its
business process. This will lead firm to enhance its customers experience by assisting
them in shopping experience and by providing them with products and services as per
their needs and aspirations (Dimov, 2011). This could include making changes in its
store layout, introducing latest technology for scanning products etc.
 Demographics- Demographic involves changes that are emerging in income level of
people, human capital, population, age etc. This assist firm to find out their new
requirements, demands and aspiration of this changed demographic conditions which can
be furthered in to new concept or idea by business.
 Changes in perception, meaning and model- Any change in demographic situations
directly reflects in people's perception i.e. the way they feels, thinks and requires.
Company like De' Base can monitor and analyse this behavioural pattern and change in
attitude to fulfil requirements of new potential customers by innovating and introducing
products and services customized as per their desires.
 New Knowledge- In order to be figurehead in its industry, it is utmost important to keep
on introducing new and innovative products, technologies, process so that it apart from

catering changing demands of its customers. It can also develop curiosity among its target
audience about what will the next new product company will launch ?
Apart from the above mentioned sources there are some other prominent sources that can also be
considered while looking for a new business opportunities:-
 Customers:- For a firm to its customers could be the most authentic and valuable sources
for generating a new idea. A firm by making use of various tools and methods like survey
interview, questionnaires etc. can collect information about the actual needs, wants, taste
and preferences of its potential market as well as can also get useful review or feedback
about it lacking or areas of improvement in its present product and product line analysing
which company can innovate new products or services or can make necessary changes in
the existing ones.
 Competitors:- Competitors are often seen as the most neglected sources for innovation
by a firm, which if monitored thoroughly could be most significant source to generate
new ideas and plans (Foss and Klein, 2012). It is thus beneficial for a firm to closely
observes market leaders and business rivals of its industry to have a knowledge about
their marketing strategies, variety and quality of their product and services etc. This could
be done by attending various industrial conferences, exhibitions, trade shows etc. that
could be evaluated by firm further to append and alter for creating an innovative and
improved product or service,.
 Employees- Employees forms the most valuable sources of latest knowledge,
capabilities and creative ideas for any firm as they continuous been exposed within
industry and its related products,employees and market strategies. Hence, their
proficiency and knowledge of the field could be utilize to evaluate and articulate needs
and desires of customers and to implement them into generating a new and profitable
idea.
 Look into past and future:- Past history of a firm could also be serves as a source of
distinctive and innovative ideas. It is because, it might happen that unfeasibility of that
ideas could now be in hands of firm to easy tackle. For instance an idea rejected on
technical grounds could solve the purpose in present because of emergence of latest
technology. In same sense future scenario also holds lots of opportunities for a business
which if identified could lead a company into new heights (Gonzalez-Alvarez and Solis-

Rodriguez, 2011) . Thus De' Base could analyse its past performance by going through its
company's history records. Also it can work with universities and research institutions
company can get advantage of out of the box thinking of budding talent who can serve
as most valuable assets for addressing any problems in most creative manner by giving
viable solutions.
These days, there is change in demand of consumers as per change in geographical
region, occasion, religion, age group, etc. Hence individual use various online sites, etc., which
provides complete information about change in trends. Hence entrepreneurial business idea can
be developed. There is survey which shows that there is requirement of retail store at Chiswell
Street London. According to primary and secondary sources, it is easy to understand demand of
retail store. After analysing results of survey and growth rate in retail sector which helps
individual to plan business idea. This makes ease in performing research regarding legal
requirements to start and conduct business.
There are many competitors in retail sector, but contrary, there is more scope of growth
and development because of variety of products and services. Entrepreneurial idea for launching
retail store is viable in market because there is no retail store at Chiswell Street, so it is easy to
get success. This area is developing hence population growth is possible. Hence this makes
business ideas viable. There is competition in retail sector, but with regular market research and
analysing consumer demand, it is easy to make changes in business operations. This helps to get
good image in industry and achieve competitive advantage in industry.
TASK 2
P2 Explain the rationale and the market gap for a specific entrepreneurial idea using relevant
tools and techniques .
There is quiet a variation in products which are being manufactured by a company in
respect to the prevailing market requirements. Different ways to identify gap are-
Porter five forces of model – This model identifies competition that a business is prone
to through five forces that effects the ability of a firm to serves its consumers and generate
profits. These five forces shape up any industry and help it to identify and analyse its strengths
and weakness so that firm can always be ahead with its business rivals by timely modifying its
strategies and policies according to business dynamics. These forces are-

Illustration 1: Porter's Five Force Model
Source: (Porter's Five Force Model, 2017)
 Threat of New Entrants- One of the biggest threat for a firm is the new entrants in its
industry which directly affects its profitability, market share and its products demands.
Thus, less the investment and time and efforts required by a competitor to join a market
more threat it have for a business to get its market position affected by it.
 Competition in the Industry- Presence of competition is considers as one of the sources
of innovating something new. It is because larger the number of business rivals with
homogeneous products, greater are the chances that its products could be serves as a
substitute for a company's products line thereby providing immense opportunity for
consumers to switch to other brands (Grégoire and Shepherd, 2012). Thus, analysis of
market competitors helps a firm in knowing number of its business rivals, their core
competencies in comparison to its own key weaknesses which can be emerge as future
threat for a company.
 Bargaining Power of Suppliers- Bargaining power could be described as advantage of
business to easy shifts from one supplier to other by evaluating factor like easy

availability, switching cost, quality of raw materials being provided etc. It is essential to
consider these factors because lesser the number of supplier more bargaining power they
have over De' Base that will directly affects its profit margins.
 Bargaining power of customers- It can be described as an advantage possessed by
consumers to exert pressure on firm by influencing its price levels. Buyer are likely to
gain this power when they are having many other substitute available in market that are
offering low cost for switching over them Karlesky, 2015). In such cases, De' Base can
reduce this influence by designing and executing various loyalty programs, offers,
discounts and other similar strategies that could bind, capture and prevent buyers to opt
for purchasing from other competitors.
 Threat of Substitutes- Presence of large number of substitutes available at competitive
prices are likeable to be a major threat to De' Base. It is due to the fact that if a customer
feels that goods and services provided by a company can be easily substituted with other
competitors products at low prices, they will switch to them thereby greatly affecting De'
Base's productivity and sales volumes.
 Gap Analysis – Gap analysis is done by making a comparison of present business
performance in relation to that with the desired performance on the basis of pre
ascertained standards. This helps in finding out the deviations and gaps that could be
measured and eliminated or reduced by undertaking corrective actions so that they wont
hamper he performance of De' Base in achieving its goals within specific time period
generating higher returns and profits. Gap analysis also includes closely and regularly
keeping a check on business activities and operations so that any deviation from the
actual guideline could be detected at early stage without those gaps being given chances
of widen up.
Market Segmentation
It refers to the procedure of dividing entire market population into various meaningful
segments on basis of variables like demographics, psycho graphics, geographic and behavioural.
It helps firm to reduce down target audience into more addressable audience rather than giving
random group of people. For De'Base market segmentation aids in enhancing its focus in
context to strategies related to product differentiation, marketing, pricing etc. In addition to it, it

further enables firm to mitigate risks, reduce down its expenses, generating more profits etc.
Mentioned below is the target segmentation of De'Base: Demographic Segmentation: It refers to segregating market on the factors like age,
gender,education,income etc. In context to De'Base company targets both male and
female customers of all ages belonging to low and middle income category comprising
students, employees etc. Psycho graphic Segmentation: This segmentation is taken into account the personality of
a person, their lifestyles, characteristics, social status etc. For De' Base all customers
belonging to traditionalists and contended conformers lifestyle and ones who are easy
going and determined to buy quality products at reasonable price levels forms the target
segment. Geographic Segmentation: It involves distribution of market population on basis of
location or geographies such as nation, city, state etc. For De'Base its geographies
segment involves targeting customers belonging to both rural and urban regions with UK.
 Behavioural Segmentation: This segmentation is based on customers behaviour , taste,
preference, choices and decision making. De'Base targets those audience who seeks to
purchase value products of premium quality at affordable prices. Generally it targets
consumers that are regular purchases and demands variety of daily life general products.
TASK 3
P3 Data which supports gap analysis in evaluation of idea
De' Base in order to analyse its level of performance and position in the market conducts
gap analysis of its business performance with that of its other market rivals on various
competitive factors. Mentioned below is the data that could be taken into account for gap
analysis.
Basis De' Base Competitive firm
Competition in
market
De' Base being a new player in the
market requires to get hold on market
share for which adopts competitive
pricing strategy, market penetration and
Other leading retail brands are
giving tough competition to
De' Base by providing goods,
thereby providing customers

psychological pricing strategy where in
its products are affordable enough to
suits its consumers pocket along with
high quality.
with number of substitutes
from which they choose the
best one.
New entrants in
industry
Opening a store requires large
establishments,huge capital investments,
establishing brand, attaining economies
of scales. Therefore De'Base with its low
cost local retail strategy and direct tie up
with local farmers will help firm to give
competition to established brands. Also
to remain in market and builds its
position De' Base provides 10%
discount to its customers on there
consecutive two sales to attract and
induce them to purchase. Therefore,
threat for new entrance is medium for
De' Base.
Leading retail brands also face
intense competition among
themselves competing over
product, price , promotion
intermittently.
Power of supplier De' Base has taken considerable efforts
and time in selecting its suppliers. It
charges £5000 approximative that is
considerably quiet low as compared to
its competitors.
The competitive firms charges
almost £4000 from its
suppliers which adversely
affects their business
operations.
Threat of substitute De'Base is already applying various
efforts like competitive pricing strategy,
various discount offers and other tactics
to capture its potential consumers.
Having a dedicated and loyal base has
The competitive brands are
giving tough competition to
De' Base by providing quality
goods and services at
competitive price levels.

reduced its chances to get switched over
by consumers for other available
substitutes .
(Source: Top 4 Shop Industries, 2018)
According to above shown figure it is clear that there are four segments which are
growing i.e. fashion and apparel, health and beauty, home and furniture and food and drink. One
the fastest growing organisation is fashion and apparel. So business idea of De'Base is good
because they are opening business at Chiswell Street.
Illustration 2: Top 4 Shop Industries