Krashu Cafe: Analysis of Entrepreneurial Opportunities and Market Gap

This report analyzes the entrepreneurial opportunities for launching a cafe named "Krashu" in the UK. It begins by exploring different sources of entrepreneurial ideas and innovation, including customer surveys, brainstorming, and Drucker's seven sources of systematic innovation. The report then delves into the rationale behind the cafe idea, focusing on market gap analysis using tools like the McKinsey 7S framework to identify areas for improvement and competitive advantage. Data is presented to support the gap analysis, comparing Krashu Cafe with competitors based on factors like pricing, product accessibility, supplier bargaining power, and threats of new entrants. A SWOT analysis is conducted to evaluate the cafe's strengths, weaknesses, opportunities, and threats, and the report assesses the competitive and market environments to determine the potential viability of the "Krashu Cafe" venture. The report concludes by summarizing the key findings and recommendations for the cafe's successful launch and operation.

Identifying Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Different sources of entrepreneurial ideas and innovation...............................................3
TASK 2............................................................................................................................................5
P2. The rationale and market gap for a specific entrepreneurial idea...................................5
TASK 3............................................................................................................................................7
P3. Presentation of Data needed to support gap analysis in the evaluation of a specific
entrepreneurial idea................................................................................................................7
P4. Interpretation of data to provide evidence of market potential......................................11
TASK 4..........................................................................................................................................13
P5. SWOT framework of the launching idea “Krashu Cafe”...............................................13
P6.The competitive and market environments in which the idea will be launched to assess
potential viability..................................................................................................................13
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
An entrepreneur is an individual who can be a innovator, a worker or a challenger. The
one who creates something new, either an initiative, a business or a company. The Entrepreneur
is the beginner or starter of a new venture or business, or a project. They are the only one who
can convert an idea into reality by taking risks. They are responsible for the destiny of their
venture. An Entrepreneurial opportunity is important for the survey and theory of
entrepreneurship. Thus, this is a state where entrepreneurs can take action to make profit
(Aliaga-Isla and Rialp, 2012). Running a cafe takes an aptitude for business as well as a passion
for feeding the people, So the present report is based upon launching a new cafe “Krashu” by an
entrepreneur in UK in which snacks with coffee will provided to the customers. As going
through this cafe, the report undertakes certain discussion on the sources of Entrepreneurial
Opportunities, the market gap for a specific entrepreneurial idea and along with this, the
comparison between the new business and the competitor and the competitive market
environment is evaluated in this report .
TASK 1
P1. Different sources of entrepreneurial ideas and innovation
The sources of entrepreneurial ideas helps to start a prosperous business. Entrepreneurial
ideas are crucial as they determine the potential energy of the entrepreneur at start-up levels to
the time when it begins to flourish while achieving set objectives. Here are the sources of
business ideas and opportunities for entrepreneurship that can lead to a successful business:1. Customer Surveys – The first considering point of any new business should be the
customers, as their needs and requirements are important factors in growth of a business.
The sources of a business idea can be ascertain by carrying out a survey. The owner of
Krashu Cafe can conduct a survey and ask whether formally or informally through
questionnaire or through observation, and can list the various sources which are best for
the cafe. While conducting survey they can ask with their family members and friends
about the customer requirements (Alvarez, Barney and Anderson, 2013) . They can also
talk in a distribution chain including agents and wholesalers. Relationship which, the
owner had created while conducting the survey with the customers can lead to new
source of business as they freely shared their ideas with them.

2. Brainstorming and dreams - Brainstorming is a method of problem-solving and qualifies
as the best source of business ideas since an entrepreneur focuses on offering solutions to
the problems faced by the customers. This process generally begins with a problem or
question. For example ,customer ask a question “what are the services or products
necessary in the home that are hard to get?” In this way, each organisation will result in
one or more ideas and lead to several opportunities for becoming an entrepreneur.
Dreams are also part of the sources of developing business ideas though most people are
in favour to ignore them. People should wake up in the middle of the night and note down
the ideas before they disappear (Audretsch, 2012) . While many people get ideas during
the deep sleep in the form of imagination.
Drucker’s 7 sources of systematic innovation
Peter Drucker listed the 7 sources of innovative opportunity in his book Innovation and
Entrepreneurship. These sources are mentioned below:1. The Unexpected – The world of business is full of surprises, not only the unexpected
failures but also the unexpected success that comes to the organization can be a great
source of idea for innovation. The unexpected success and failures are unnoticed and are
not overlooked as opportunities. The unexpected conditions inspire and motivate the
leaders and entrepreneurs to get another view on the situation no matter it is positive or
negative and they try to take advantage of the opportunities.2. The Incongruity - The best thing to look for incongruity is in the own customers. The
customer reviews, feedback, and complaints are the best way to find out incongruity.
Incongruity is all related between reality as it actually is and the reality as it is assumed or
expected to be.3. Process Need – This source of innovation is about identifying the weak points of a
business and ascertain the ways to improve them, as innovation is based on process need.
Considering an example of Krashu cafe that identifies that customers wait too long for
their entries and so the owner of cafe decides to hire another chef to pace up creation
times (Fisher, 2012) .4. Industry and Market Structure Change – Industry and market structures are stable for
many years, yet with development of the technology. One example is deregulation Watch

for rapid growth of an industry. If an industry grows significantly faster than the
economy, structural problems will occur and changes are certain.5. Demographics - People constantly see changes occur in populations, income levels,
human capital and age ranges. Smart business-man are constantly paying attention to this.
It is required by an entrepreneur to keep an eye on market changes so that opportunities
can be identify and new ideas can be develop.6. Changes in perception – It's the way people perceive the world. Perception changes over
time, and today due to the involvement of technology, these changes happen faster than
always. People can change their perception about certain product, brand or industry
overnight. The changes in perception open a route for businesses to develop new products
and services that match with the new perspective of the customers (Grégoire and
Shepherd, 2012) .
7. New Knowledge – New technology can bring better ways of doing things and improving
processes. The owner of cafe should be aware about the new technology for the
betterment of the cafe.
Strengths and weaknesses of Ducker's 7 source of systematic innovation :-
Strengths Weaknesses
Help leader to get motivated by facing different
conditions.
To provide effective guidance to the employees
so that they can effectively attain their set
objectives in given period of time.
Help organisation in getting knowledge about
the changes required for them.
Help in improving the performance of
organisation by customer's reviews and
feedbacks.
Very tough for a leader to handle very difficult
situations.
Making frequent changes are not very much
easy for any organisation.
It is the drawback of this model that it the
management make change in its plans and
technologies the n employee do not accept
them easily.
It is not possible for any organisation to fulfil
all the requirement of their customers and also
to consider each feedback.

Benefits and Drawbacks of Ducker's 7 source: One of the biggest benefit of using this
model helps the organisation in managing and motivating the staff members in order to face
difficult situations. Along with this, it also helps in enhancing the efficiency of employees
working within the organisation. Using this model assist in developing innovative products and
services which grab large number of attention of customers.
On the other hand, using this model also have some drawbacks which affects the overall
image of the company at the competitive marketplace. Also, managers of the organisation make
policies and plans in advance which is quite difficult for the employees to accept it. Apart from
this, managers of the company use this model which modify the strategies and policies on a
regular basis, which affect the overall efficiency as well as effectiveness of the company.
TASK 2
P2. The rationale and market gap for a specific entrepreneurial idea
The main purpose for launching the cafe idea is passion for feeding the people whereas a
gap in the marketplace can have one or more of attributes. Rationale behind choosing choosing
idea of providing snacks with coffee is to provide comfortable environment to customers where
they can spend time with their friends or family members. It is something new and original, it
modify the existing product and comes with a new one in the market. The gap exist everywhere
in the market, the trick is to find that and take advantage of that. The gap analysis is the one
through which the gap can be find out. Gap analysis helps to identify the gaps between where the
business is standing today and where this would like to be. This analysis helps a business to find
solutions to issues that are bringing an organisation back from growing (Jaskiewicz, Combs and
Rau, 2015) . After the identification of the gaps in the market, the owner should look on why
gaps exist and what can do about them. By this the owner can analyse the level and quality of
product, So to make this process easier several tools are listed below:
 SWOT
 Fish-bone
 McKinsey 7S
 Nadler-Tushman
 Burke-Lit-win Causal Model

The Krashu Cafe owner used McKinsey 7S tool to understand and identify the gap looks
in their business. This tool is explained below -
McKinsey 7s tool
McKinsey 7S tool help in certain purposes-
 To help in identifying the gap appear in their business.
 Helps to identify the area which raise the performance of business-man
 Analyse the outcomes of future changes within the business
McKinsey 7S tool supports two elements named as HARD elements which are tangible
and can be controlled, and the other is SOFT elements which are intangible and cannot be
controlled.
Hard elements includes organizational structure, systems that employees used to do their daily
task, and the strategies which help to gain a competitive advantage (Karimi and et. al., 2016) .
Whereas Soft elements includes the shared values that an organisation upholds, the skills of
employees and the leadership styles.
How this tool apply in a business :
1. Assemble around an effective team
2. Check whether the elements are properly lined up with each other and look for gaps and
weaknesses in the relationship between the elements
3. Define the state where these elements would be completely line up.
4. Come up with an action plan to realign the elements
5. Implement the changes and continuously review the 7s, moving forward
TASK 3
P3. Presentation of Data needed to support gap analysis in the evaluation of a specific
entrepreneurial idea.
To measure the gap analysis the comparison is done between the owner's business and the
competitor's business.
Basis of Comparison Krashu Cafe Competitor Enterprise
Competition in market The owner of Krashu Cafe
provides A-one quality snacks
The competitor company
offers their products at 10%

and coffee to its customers at
cheap rates from their
competitors. Their Cafe prices
of products is $4000.
more prices than Krashu Cafe.
By this, buyer prefers less to
buy products as prices are high
in comparison from other
firms.
Threats of New entrances The products of Krashu Cafe is
easily approachable by their
customers. The customers of
this cafe does not need to face
any barriers (Neneh, 2012) .
The prices of competitors
enterprise are high as
compared to this cafe and the
products are also not available
easily to customers..
Bargaining Power of supplier The suppliers provides products
to the owner at low costs that is
approximately $1500 as
comparison with competitor of
Krashu Cafe.
The suppliers of other
enterprises charge high rates in
comparison to this cafe.
Threat of substitutes In order to overcome with such
threats, owner should provide
customized products according
to their requirement. By this,
more buyers attracts towards
cafe and retain for longer period
of time. The company also
charge less subscription fee as
compared to their competitor.
The rivalry firm charges higher
subscription fee from Krashu
cafe which affects buyers. Due
to this more buyer are
changing their brands or
companies.
Bargaining Power of buyer The Krashu cafe Owner satisfy
the need of buyers by providing
The main aim of the
competitor enterprise is to gain

healthy products and best coffee
at cheap rates.
and increase the growth of
company. So, they do not give
much preference to customers
demand (Renko and et. al.,
2015) .
Evaluation of entrepreneurial idea: As per the above mentioned it has been analysed
that the competition available at the marketplace is quite low as they offered high quality
services within affordable price. Also they provide unique quality food products to their
customers which reduces the overall competition among the marketplace. This will helps them in
order to attract ample number of customers towards their cafe. Therefore, it has been evaluated
that the idea of entrepreneur is good effective and will be able to get various advantages at the
competitive market area. Along with this, it will assist in developing strategies according to the
requirements of customers in order to make the cafe successful at the marketplace.
To get feedback from the customers, the owner of Cafe should consider Questionnaire.
By this they can get reviews by customers about their satisfaction level after consumption of
products. This will help entrepreneur in analysis that gap that exist in market place.
Q1. Does this Cafe have a sufficient options of healthy choices?
Yes - 20
No - 10
Q2. Does the prices of the Cafe are high ?
Agree - 25
Disagree - 5
Q3. Are you satisfied after having Krashu Cafes products?
Yes - 20
No - 10

Q4. Which product of our cafe you preferred more?
Pizza - 5
Coffee - 10
Burger - 8
Ice tea - 7
Theme 1: Cafe have a sufficient options of healthy choices
Q1. Does this Cafe have a sufficient options of healthy choices?
Yes - 20
No - 10

Interpretation : From the above outlined graph, it has been interpreted that 20
respondents are agree with the statement that the cafe is providing many options for healthy
choices, as because food is important so it is helpful to remember that with fast food of cafe,
moderation is necessary. On the other hand, 10 respondents are disagree with the statements that
Krashu cafe doesn't have much options for healthy choices.
Theme 2 : Prices of the Cafe are high
Q2. Does the prices of the Cafe are high ?
Agree - 25
Disagree - 5
Agree Disagree
0
5
10
15
20
25
25
5
Column D
Yes No
0
2
4
6
8
10
12
14
16
18
20
20
10
Column C

Interpretation : From the above graph, it is interpreted that from the 30 respondents, 25
responders respond that the cost of Krashu cafe are too high to afford by all citizens, on the other
hand 5 respondents are disagree with the statements that the prices of the cafe are high, as they
area able to afford them so they don't think so that the cost is too high.
Theme 3 : Krashu Cafes products are satisfactory
Q3. Are you satisfied after having Krashu Cafes products?
Yes - 20
No - 10
Interpretation : From the above graph, it has been interpreted that from the 30
customers, 20 are most satisfied after having the food of Krashu cafe, as the products provided
by the cafe are delicious and healthy. Apart from this, 10% of the customers are not satisfied
with the products of the Krashu cafe.
Theme 4 : In context which product customer preferred more.
Q4. Which product of our cafe you preferred more?
Pizza - 5
Coffee - 10
Burger - 8
Ice tea - 7
\
yes No
0
2
4
6
8
10
12
14
16
18
20
20
10
Column B