Entrepreneurial Opportunities Analysis: Natural Essence Report

This report focuses on identifying entrepreneurial opportunities within the competitive beauty and cosmetic product sector, specifically analyzing the company Natural Essence. It examines various sources of entrepreneurial ideas, market gaps, and the importance of innovation. The report delves into the company's strategies, including product innovation, market segmentation, and the utilization of tools like the Nadler Tushman Congruence Model. It addresses factors like social, economic, and technological influences, alongside the identification of market trends and consumer behavior. The report also incorporates a SWOT analysis and evaluates the competitive landscape, aiming to assess Natural Essence's potential viability within the dynamic market environment. The report also discusses various types of innovation such as product innovation, process innovation, incremental innovation and disruptive innovation.

IDENTIFYING
ENTREPRENEURIAL
OPPORTUNITIES

INTRODUCTION
In today's competitive world, there are various opportunities that exist in the market place
that needs to be identify and exploit by entrepreneur in an effective and efficient manner. Beauty
and cosmetic product is consider as one of the growing and leading sector (Block and Wagner,
2010). This is the main reason why entrepreneur is keenly interested in launching their business
venture in this sector with an aim of earning higher profits and revenues. In the given report,
chosen company is Natural Essence that mainly deals in providing cosmetic and skin care
products. The report covers assessment of various sources of entrepreneurial idea, market gap,
interpretation of collected data, SWOT analysis and evaluation of competitive and market
environment in order to assess firm potential viability.
TASK 1
P1 Determine different source of entrepreneurial innovation and ideas
Entrepreneurs are the one who identifies the opportunities and grab them effectively to
implement their innovative idea for establishing a new venture. They set up their own business
by taking financial risk with the hope of earning high revenues and profits. They are the one who
contribute immensely towards the growth of country by executing innovative and noble ideas. In
today's era, where nothing is constant a new innovation or invention takes place. Similarly
business environment keeps on changing constantly because of innovative technology introduced
by entrepreneurs. Basically they first identify various market opportunities by understanding the
needs and wants of customers and domestic population by implementation of STEEP factor.
Peter's 7 sources of innovation also play key role in executing innovative ideas and establishing a
new business venture. There are some other key elements that needs to be taken into account
before developing a new product in the market.
These are listed below:
Social factor: The factor is mainly related with identifying that people must be able to
understand technology value. It is essential for an entrepreneur to have an adequate amount of
funding that is needed to launch a new business venture. However, due to Brexit there are several
changes that takes place in terms of change in law and regulation from which domestic public is
not fully aware of. Therefore it is primarily important for an entrepreneur to analyse each and
every aspect that is related with establishing new business venture (Ekpe, Mat and Razak, 2010).

Economical factor: These factors are normally related with country's per capita income
and GDP rate that signifies stability in the economy. If entrepreneur wants to invest high capital
in their business venture then the economic condition of respective country must be stable or
good. If there is economic stability found in the respective country then it is the right time for
entrepreneurs to establish and launch their new business venture i.e. Cosmetic product industry
(Dimov, 2011).
Technological factor: In the modern era, there are several new technologies that are
available in market and creates extensive opportunities for companies and people as well. In
order to gain high competitive advantage in overseas market it is essential for an entrepreneur to
produce cosmetic products with the help of innovative and high end technology.
Environmental Factor: Before launching new business venture it is important for an
entrepreneur to consider that their new venture should not harm the environment all factors
related with environment needs to be taken into account by entrepreneurs. After analysing all
such factors protective measures should be taken so as to ensure that and activities of new
business venture does not harm the environment.
7 Sources of Innovation
The framework has been developed by Peter Drunker. It encompasses:
Incongruity: It is mainly concerned with the gap regarding what is produced and what is actually
needed. It is mainly related with the production process of different cosmetic products.
Process needs: It has been believed that in order to perform or carried out different business
operation and activities in an effective manner, it is essential for every business entity to
implement unique and innovative technique that give them high competitive advantage.
Market structure and industry need: Any change in price of the product must be done
according to the needs and wants of the customer and as per the market trend as well. Therefore
company needs to design effective or clever pricing strategies so as to beat market competition.
Demographic: It is important for every form to pay attention towards any changes that has been
continually occurring in population education age or income level of the customer.
Change in meaning perception and mood: The main objective of natural essence is to which
products that changes the mood or perception of the customer. Their management team needs to
understand what the perception of customer towards organic cosmetic products are. It help them

in developing cosmetic product as per the needs and wants of customer and thus attaining
profitability ratio (Foo, 2011).
New knowledge: It is mainly concerned with finding out innovative and new ways of doing
similar things but in different manner. For example natural essence is taking the advantage of
high end technology order to attain high competitiveness level in the marketplace.
Unexpected: It is essential for the company to do market analysis went basis as likes and dislikes
of customers are changing rapidly and so do the market opportunities. Therefore it is important
to determine an exploit new opportunities at right time and right place (Heinonen, Hytti and
Stenholm, 2011).
Types of innovation
Organisational growth and success depends upon how they innovate their product that
leads to fulfil customer expectation in an appropriate manner. Discussed below are various types
of innovation:
Product innovation: This innovation is related with how company change or innovate
the product that they are offering to target customer. Basically it means adding additional
features to existing product or launch new product in the market that gives high competitive
advantage. Natural essence is mainly using product innovation for producing their cosmetic
product.
Process Innovation: This innovation is mainly related with implementing either new or
improve production process that result in producing product in cost effective and timely manner.
As a result overall productivity and profitability of the company increases. Natural essence
brings process innovation in the production process.
Incremental innovation: This innovation is related with making small improvement in
existing product or services. For example: Natural essence is changing their existing product by
making small improvement on constant basis.
Disruptive innovation: The help of this innovation business generate new value market
and network and disrupt the present one. In this innovation, technology breaks down the business
model and help them to change themselves as per the requirement of the market.
The theory given by Schumpeter's please an effective role in enhancing business functions and

operation. If the company is having innovative idea and tool then it became much easier for them
to launch their product in the marketplace (Quan, 2012). When innovation takes place in
business cycle it refers as Schumpeter's source of innovation.
TASK 2
P2 State the rationale and market gap for specific entrepreneurial idea
In Modern era, there are various changes that take place in business surrounding. The
main aim of every company is to create innovative product that help in their long term growth
and success and also assist in satisfying diverse needs of customer in an effective and efficient
manner. Situation like Brexit possess negative impact on overall operation and working of
natural essence. This is mainly because with Brexit there are many changes that has been takes
place in UK legislation. There are various opportunities that exist in market and can be exploited
by entrepreneur in an effective manner by doing proper environmental analysis (Renko, Shrader
and Simon, 2012). The innovative idea that has been developed by natural essence is to produce
organic skin care product that is made up of all natural ingredients and does not harm the skin.
Nowadays consumer are becoming more conscious towards their skin. Taking the advantage of
this the company has decided to develop such product that is organic in natures and does not
cause any harm to the skin of the customer which ultimately gives them high competitive
advantage over other rivals.
With the help of this innovative idea it has become much easier for natural essence to
seize the attention of customer and achieve large portion market share. One of the main
advantage of this product is it suitable for all types of skin. Other feature that makes it distinct
from competitors product is that it can be used by person of any age group because the
ingredients used in this product is organic and natural and cannot harm anyone. Therefore no fear
of skin damage or any other skin related problem is associated with this product. All essential
aspects that is related with skin are taken into account during manufacturing stage so that high
quality goods can be produced. Some of the entrepreneurial ideas are discussed below:
Example for all: The most curious thing in the market for both competitor and customer is the
product. If the product is unique and distinct from other competitor's then it can be referred as a
good example for all. For example: Natural essence is much committed their goal. The company
has introduce innovative product in the form of organic skin product.

Creates benefit to all: As the innovative product is unique and hits market it create benefit for
all. It improves the skin of the customers and also assist in providing other benefits in terms of
generating Employment opportunity for domestic population and also contributing in the growth
and development of country's GDP.
Market segmentation: Market segmentation means classifying the market into small subgroups.
It help the organization in analysing their target customer and modifications are done in the
product accordingly (Short and et. al., 2010). Natural essential is classifying their market on the
basis of different types of segmentation which are defined below:
Demographic Segmentation: Under the segmentation population is categorised on the basis of
age, Lifestyle, income, gender etc. Skin care products are sold as per the consciousness of the
customer regarding their health which is mainly different from one person to another.
Behavioural segmentation: Under this, customers are classified on the basis of their behaviour
and perception. For example: If a person is more conscious regarding its skin or health then
definitely they will prefer to use product made up with organic or natural ingredients (Tang,
Kacmar and Busenitz, 2012).
Geographic segmentation: In this population is classified on the basis of geographic region
where they reside.
For carry out Gap Analysis, Natural Essence can utilise a tool known as Nadler Tushman
Congruence Model.
This model was developed in 1980s which is effective for ascertain the main causes of
performance issues at workplace. This model is based on the principle that all employees and
tams working in organisation can succeed when the culture and organisation structure all fit
together. For an example, if an enterprise has a skilled workforce but at the culture in which they
work is not good or does not fit for the way they work this hinder their performance. This model
offers a systematic way to deal with the conflicts arise in organisation. Following given points in
included in this:
Step one consists analysis of each element: In this, it is very essential for manager to
determine the major task which largely affect the company’s performance. Further, manager
examine the organisational structure, people and culture that have a great impact on employee’s
performance at workplace.

Step two involve analyse the relationship between each element: In this manager examine
the relationship between work and people, structure and people, work and structure.
Step three: In this, manager determine the steps require to be taken to reconfigure every
element in order to deal with incompatibilities identified. In this manger take decision to make
some improvement in organisation structure, culture and other elements so that employees can
perform well and company can easily achieve its set business objectives.
With help of this model Natural Essence can identify the areas which require some
modifications and by do necessary changes in organisational elements enterprise can achieve its
set business objectives.
Further, another model that can be utilise by firm to carry out Gap analysis is Mckinsey's
7S frame work Seven components of this model can be understood by the following points:
 Strategy: This element describe the systematic plan develop by company to get
competitive benefit over various rivals.
 System: It is another component and this indicate the routine activities perform by
workers of company in order to attain set objective.
 Structure: It define the structure adopt by company to perform its various functions.
 Shared values: This component indicates the core values of company which provide
evidence of its work ethics and corporate culture.
 Skills: This is another component and this indicate the skills, knowledge and capabilities
of employees working in company.
 Style: This factor indicate the leadership style adopted by leader to guide and encourage
team members to perform well at workplace.
 Staff: This indicate the workforce and their potential capabilities to perform various job
roles at workplace.
By analyse all these factors, Natural Essence can easily identify the areas in which
company require to do some changes in order to satisfy the needs of customers and to sustain in
market for long run. With some modification, company can improve its performance at
workplace and can attain all set objectives.

TASK 3
P3 Data needed to support gap analysis
Basis Company Competitive firm
Competition in market The company is offering their
product at lower cost as
compared to other entities that
are providing similar benefits
to firm in context of growth.
Their product price is $7000.
Prices of rivalry firms are more by
7% in comparison with Natural
Essence. Due to such increase price
customer may not prefer to buy their
products.
New entrances in industry They are normally selling their
products at economical rates
and the availability of their
outlets at various places makes
it easy for customers to buy it.
Prices of new entrants are fix at
$10000 which is quite high as
compared to natural essence.
Power of supplier The Cost of suppliers for
managing and controlling
product is $ 2000 which is less
in comparison with others
competitors. (Vaghely and
Julien, 2010).
Suppliers charge more commission
that might negatively impact
competitor’s performance.
Power of buyer The company mainly focus on
meeting customer’s
requirement by providing them
such products that creates
value for them.
Competitor firms mainly emphasize
on earning profits instead of
fulfilling customer needs and wants.
Threat of substitute $600 is charging as
subscription fee from the
company which is low as
compared to others.
$1000 are charged by rival
companies from target consumers.
As a result, their customer switch to
some other brand.

Questionnaire is developing to get the views of various individuals about their
satisfaction level after consume the product.
Questionnaire
Name:
Age:
Occupation:
Respondents : 60
Q1) Doe natural essence offer effective and featured products?
 Yes: 40
 No: 20
Q2) Are you satisfy after consume the products of Natural essence?
 Yes: 30
 No: 20
Q3) What is the main feature that attract you towards product of firm?
 Results: 25
 Price: 20
 Suitability: 15
Q4) Does the price charge by firm is high?
 High: 30
 Low: 10
 Moderate: 20
Y e s ; 6 7 %
N o ; 3 3 %
R e s p o n d e n t

Yes
No
C a n 't S a y
01 02 03 04 0
3 0
2 0
1 0
R e s p o n d e n t
O u tc o m e s
C o s tin g
S u ita b lity
2 5
2 0
1 5
R e s p o n d e n t
3 0
1 0
2 0
R e s p o n d e n t
H ig h L ow Mod era te
P4 Interpretation of data
From the above mentioned data following interpretations can be concluded:
1. In skin and beauty care sector there is extensive competition prevailing in the market.
Therefore, the company needs to analyse the needs and wants of customer first and then launch

their product. If the product is able to fulfil customer requirement in an effective manner it help
in attracting them easily. The offer product in natural essence is $7000 which is less as compared
to other competitors firm (Wang, Ellinger and Jim Wu, 2013).
2. The company can offer some discount to their regular customers. This help in retaining them
for longer period of time. In addition to that loyal customers contributes immensely towards
increasing sales of respective product.
3. The company can maintain good relationship with its suppliers so that they can get delivery of
goods on time. And in case of emergency like increase in demand suppliers will give product
within stipulated time frame.
4. The company is giving more importance to customer rather than earning profit which help
them in gaining high competitive advantage over others. This help company in creating their
good brand image in the minds of customer. For example at the time of occasions like Christmas
or Valentine week the company can offer discount to customers.
5. One of the biggest threat of natural essence is such competitors that are also providing similar
product. During such situation, there might be chances that customer may shift to some other
brand which negatively impact the sales of natural essence (Wood and McKinley, 2010).
Q1) Does natural essence offer effective and featured products?
Q2) Are you satisfy after consume the products of Natural essence?
Q3) What is the main feature that attract you towards product of firm?
Q4) Does the price charge by firm is high?
1.
Interpretation: As mean is 30, so it has been concluded that average of respondents said that
Natural Essence offer featured products. As median is 30 so it can be summarised that half of the
population is also in the favour that Natural Essence offer quality products.
2
Mean 30
Median 30
Mode 0
Mean 15
Median 15
Mode 0