Detailed Report: Identifying Entrepreneurial Opportunities - Unit 27

This report focuses on identifying entrepreneurial opportunities, specifically within the context of establishing an accommodation provider business named Cloud 9, mirroring Airbnb's model. The report commences by exploring various sources of entrepreneurial ideas and innovation, drawing upon Drucker's model of innovation. It then delves into the specifics of the Cloud 9 business idea, outlining its value proposition and identifying the market gap it aims to fill. The report employs Porter's Five Forces analysis to assess the external environment and competitive landscape. Furthermore, it conducts a gap analysis, evaluating the entrepreneurial idea through primary and secondary research, followed by data interpretation to gauge market potential. Strategic tools such as SWOT and PESTLE analyses are also included. The report concludes with a critical evaluation of the business idea in relation to its competition, providing a comprehensive overview of the entrepreneurial opportunity.

IDENTIFYING
ENTREPRENEURIL
OPPORTUNITIES
Unit 27

Table of Contents
INTRODUCTION.......................................................................................................................3
LO 1.............................................................................................................................................4
P 1 Different sources of entrepreneurial ideas and innovation...........................................4
M 1 Evaluation of sources of innovation..........................................................................5
LO 2.............................................................................................................................................5
P 2 Entrepreneurial idea and the market gap by using relevant tools and technique.........5
M 2 Justification of entrepreneurial idea which helps to fill the gap of the market...........6
LO 3.............................................................................................................................................6
P3 Gap analysis in evaluation of entrepreneurial idea-......................................................6
P 4 Data Interpretation for the potential of market.............................................................7
M3 Justifying method of data collection-.........................................................................11
LO 4...........................................................................................................................................11
P 5 SWOT Analysis..........................................................................................................11
P 6 PESTLE Analysis.......................................................................................................12
M4 Critical evaluation business idea as per the competition-..........................................14
CONCLUSION..........................................................................................................................14
REFERENCES..........................................................................................................................15

INTRODUCTION
Entrepreneurial opportunities are usually defined as situations where products and
services can be sold at a price greater than the cost of their production. An entrepreneurial
opportunity, thus, is a situation where entrepreneurs can take action to make a profit.Being a
budding entrepreneur it is essential for me to known about business practices that needs to be
followed by new business to gain success in market. This report covers issues such as sources
from where ideas and innovation can be obtained. Idea and the gap of it in the market. Primary
and secondary research. Interpreting the data and the last section was covered by SWOT and
Pestle analysis of the company.
LO 1
P 1 Different sources of entrepreneurial ideas and innovation
This model is used to analyses opportunity of specific innovation to business unit. By
this way success or failure of specific innovative idea
There are 7 sources of innovation which is described by the model of Drucker.
The Unexpected-
The place of market is the area where many of the entrepreneurs look for opportunities.
In order to generate the idea entrepreneur must study the market so that they can assess a
product or service and its needs with the level of demand. This way opportunity for bringing a
product or service is founded out and is attempted to convert into success.
The Incongruity-
Many entrepreneurs do not conduct a research and directly develop a product which
has high demand in the market. These types of assumptions lead an entrepreneur to failure.
But it is considered as one of the greatest sources for entrepreneurs to get innovation so that
they can get inspiration from it (Karimi and et.al., 2016).
Process Need-
This aspect focuses more on task instead of situation. This aspect states that innovation
comes from closely observing the process of the company and take out the errors which can be
improved. This way entrepreneur will be able to get innovative idea.
Change in industry and market-

Structure of industry and market is not predictable as it rapidly which is why
entrepreneurs needs to observe these changes on a continuous basis to look out for an
opportunity.
Demographics-
Any change in the factors related to demographics will affect the market. These
changes affect the market as it assesses the demand of the products and services. Age,
education and employment of people helps an entrepreneur to act in the new prospects.
Changes in Perception-
Entrepreneurs need to understand the way people perceive things as it changes with
time and it can help the entrepreneur to come up with an idea which will fulfill their changing
needs and target new customers (Karimi and et.al., 2016).
New Knowledge-
There are various sources of innovation such as technical and scientific area.
Entrepreneur cannot ignore change instead it needs to be adapted by them so that they can
discover something new which is improving the chain of supply and hiring talented
employees.
M 1 Evaluation of sources of innovation
Model by Drucker helps to assess all the factors which helps an entrepreneur to
generate idea. It states that proper research needs to be conducted of the market as if the
entrepreneur is just working on assumptions and demand of the product or service in the
market then they won't be able to get an innovative idea. Other than that they need to
understand the process of working of the company so that they get an proper insight to it
(Jarvis, 2016).
LO 2
P 2 Entrepreneurial idea and the market gap by using relevant tools and technique
Entrepreneur is coming up with the idea of getting into a business of accommodation
provider such as Airbnb. The name of the venture is going to be Cloud 9. The reasons for
choosing this business is because it deals in service industry and the flow of money and rate of

success is high if right amount of strategies is used to attract the consumers. USP of cloud 9 is
that it will allow the owner of the property to earn money as rent by providing them a place to
stay for few days and be their hosts. There is a gap in the market because there are many
competitors which affect the growth of the company such as 5-star hotels, Airbnb etc.
Porter's five force analysis
This is most appropriate method or framework that helps in analyzing external
environment of company so that firm can take suitable action to gain success.
Threat of new entrants-
Usually the threat from new companies entering into the same sector is low but it takes
just a website to enter into this industry. Still there are many barriers which affects the growth
of cloud 9 in the industry such as time when the company entered into the market, raising the
capital is not easy and barriers which are related to legal aspects.
Rivalry among existing firms-
This aspect exists in this industry at a high level there are many factors which the
entrepreneur of the company needs to keep in mind in order to survive the competition.
Growth rate of business needs to be assessed in the industry. Other than this strategies and
target audience of the competitors needs to be kept in mind so that new and effective strategy
can be taken. The most important factor is equity of the brand as it helps them to generate
more consumers and earn more revenues.
Bargaining power of buyers-
This aspect does not have a too much involvement which affects the business of the
industry. Less players in the industry which reduces the impact of direct substitution. Size of
buyers as compared to suppliers. Propensity of buyers to choose substitutes is less as people
don't get these type of facilities by other providers (George and et.al., 2016).
Bargaining power of suppliers-
The power of negotiation of suppliers is high as they deal with only one supplier which
gives them more power over the company.
Threat of alternatives-
There is a high risk of alternatives in this industry as there are many types of
accommodation provider such as hotels, hostels, couch surfing etc. which is a competition for

Cloud 9 as different people have different preferences and difference in budget which is why
they choose on their own.
M 2 Justification of entrepreneurial idea which helps to fill the gap of the market
The idea which is chosen by the entrepreneur will help to fill the gap in various ways as
people will be getting the facility of accommodation at cheap rates which will push them.
Other than that, they will be getting these facilities at almost every location. They can choose
according to their suitability. All the differences of culture and other demands of people will
be kept in mind. The most important aspect of this philosophy is it will help the people to get a
sense of privacy (Gaglio and Winter, 2017).
LO 3
P3 Gap analysis in evaluation of particular entrepreneurial idea-
How did you get up with idea for your business?
 Customer needs
 Change in hotel trends
 Growth in hospitality sector
What problems did hotels are facing today?
 High competition
 Change in customer needs
Do you think customer will like your business idea?
 Yes
 No
What gap is your business trying to fill?
 Fulfil customer needs
 Providing more facilities
The primary and secondary research have been conducted for analysing the data which
are taken for research. Through primary research it can be analysed that this business idea is
helpful in fulfilling the needs of consumer at providing them home feeling while they are
travelling at minimum cost. Whereas from secondary research it can be stated that business
could render great facilities to the traveller (Sheth, Karami and Murphy, 2019). This is helpful
for company to attract wide range of consumer successfully to the company. There is slight
gap among both of the research which can be overcome by company buy few efforts

significantly and render the business operation in such a way that they can gain huge success
further. The business idea must satisfy their consumer as well as great facilitates must be
provided to the customer so that their revenue and profit of company can be enhanced and thus
they can sustain in market for long term. So, business idea will like by consumer, and they will
be attracted toward company too greatly. The hotels are facing lot of competition due to the
high competition and changing preference of the consumer thus they can easily get through
with the consumer and fulfil their needs and demands (Xu, 2020). Further they can also update
their services as per the changing preference of consumer a company can thus gain huge
success further. So, the gap among both of searches methods primary and secondary can easily
fulfilled by the company who is entering into the market with the new business idea.
Primary and secondary are two main sources of gathering data. From the primary data
researcher has received all current detail related to subject areas. And by using secondary
sources individual has become able to manage previous industry market analyses results that
help in taking right action to set up the business.
P 4 Data Interpretation for the potential of market
Theme 1: Do you think that demand of accommodation services is very high
High demand 25
No demand 5
High demand No demand
0
5
10
15
20
25
30
25
5
Series1

Interpretation- According to the information presented above 25 respondents have viewed
that demand of such kind of services are very high, people search for best accommodation
providers. Whereas 5 stated that no there is not such high demand.
Theme 2: How frequently you use such hotel services
Very frequently 27
Not frequently 2
No use 1
27
2 1
Very frequently
Not frequently
No use
Interpretation: from the above data it is found that 27 respondents have viewed that they use
accommodation services very frequently. Whereas 2 out of 30 are not such frequent users. It
can be interpreted that company has high scope because large number of clients are frequent
users of accommodation providers.
Theme 3: What is unique in cloud 9 as compare to other competitors?
Fulfill consumer needs 23
Low cost services 7

Fulfill consumer needs
Low cost services
0 5 10 15 20 25
23
7
Series1
Interpretation- On the basis of the above information it has been interpreted that 23 out of 30
respondents has agreed to the fact that the gap that the business is trying to fill is so that they
can fulfil the needs of the customers. This philosophy works on the basis that working
according to their needs will help them to reduce the level of gap in the industry.
Theme 4: Do you like to pay for the hotel service that provides you value for money
value for money 28
best quality services 2
value for money best quality services
0
5
10
15
20
25
30 28
2
Series1
Interpretation: From the above data it is found that 28 respondents have viewed that they like
to buy services of company that offers them value for money. Whereas 2 answers have viewed
that they want to get best quality services no matters firm is charging high or low.

Theme 5: What is your expectation from such accommodation providers?
Cost effective accommodation services 15
Quality products. 8
Frequent services 7
15
8
7
Cost effective
accommodation services
Quality products.
Frequent services
Interpretation: From the above data it is found that 15 respondents like to get cost effective
accommodation services. Whereas 8 out of 30 answers have replied that they need quality
products. 7 participants have said that they need frequent services. Hence it can be interpreted
that accommodation providers are required to take care of thing that it offers quality products
at affordable rates so that more consumers take interest in the firm.
M3 Justifying method of data collection
The primary and secondary research method is being taken for conducting the
research. For conducting primary research, the questionnaire has been taken for analyzing
what is the reaction of individual upon this (Reuber and et.al., 2018). In secondary research
the data from Journals, Newspapers and books have been taken for conducting the research.
This will be helpful to analyze that whether the business idea can gain huge interest of
consumer towards the company's services or not.
LO 4
P 5 SWOT Analysis
Strength-
Cloud 9 is providing the consumers an alternative to hotel which is a lot cheaper from
them. Prices set by Cloud 9 is on the basis of competition in an area which gives a variety to

consumers. Other than this company also has a presence on all the digital measures such as
social media so that they can reach to more people. Also, they have the facility of customer
service which is open 24/7.
Weakness-
Laws and regulations have been the cause for Cloud 9 as there are many restrictions in
providing the house as a rent which needs to be followed. If the client has a bad host than the
client will leave unsatisfied from the place which will affect the image of the company and
they may have to suffer from negative reviews which can affect the business of the company.
The model that the company has formulated can be easily copied by many players in the
market.
Opportunities-
Cloud 9 has many opportunities as they can enter into those markets which are
emerging, and they will have the benefit of first mover which will help them to earn more.
Company also has the opportunity to diversify their portfolio and deal in other areas such as
providing the facility of car rental, travel guides etc. as this way they will be able to earn more
profits. Company has started their own application as it is convenient for users who prefers
phone over computers. The low price offered by the company will help them to achieve more
growth in the market.
Threats-
Cloud 9 is looking for expansion which states that they will have to meet with the
requirements of every country and face the laws and regulations of every country. If these are
not followed, then they will have to deal with lawsuits which will affect their image and they
will even loose the support from the government. Other than this there are a lot of competitors
of Cloud 9 such as tripping, VRBO and Airbnb which is the biggest of them all.
P 6 PESTLE Analysis
This is the method that is used by entrepreneur to analyses the situation of external
market and to know the factors that may affect this business. hence these political, economic,
technological factors need to be analysed before entering into this market.
Political Factors-

The model which is designed by Cloud 9 is not used by many competitors as not many
of the entrepreneurs has thought of making a room available for people in apartments and
houses. This is one of the reasons that they are going through many political concerns as many
of the customers do not follow the rules of house which makes them against the law. They
need to assess and take necessary actions so that they do not face more lawsuits. They also
need to keep the political factors of every country in mind so that they can serve in the country
(Clark and Ramachandran, 2019).
Economic Factors-
The philosophy of Cloud 9 works on the shared economy as it provides people a place
for short period of time in exchange for money. It works on a collaborative approach where
host and client share their resources for a short period of time. It provides a rental space to
people and the company is also presenting themselves as the competitors of the hotel. They
have the scope to increase the level of employment as they are expanding their operations.
Also, the rate of inflation will not matter to them as they are providing their clients a service at
cheaper rates.
Social Factors-
Cloud 9 keeps in mind the culture and differences of society which is the reason why
they ask the expectations of the client and match it with the requirement of host so that they do
not engage in a conflict. Both the host and client have differences in culture and as they
operate in different areas, they respect that differences and never go against the community so
that they serve and achieve growth.
Technological Factors-
These factors are concerned with taking the use of current updated trends and use them
to enhance the business which is what Cloud 9 has done. They have their own website from
where people can collect all the details and look out for areas which are suitable according to
their needs and budget. They can book and pay online and other than that they can read the
review of other guests which will help them to get the idea of the place and the service of the
host. Also, it allows to connect with the host and ask them the necessary questions so that
appropriate decisions can be taken. Technological factors have helped the company to makeall
these services possible (Andersson, 2018).
Legal Factors-