Identifying Entrepreneurial Opportunities: A Report

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Identifying Entrepreneurial Opportunities
Higher National Diploma in Business
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IDENTIFYING ENTREPRENEURIAL OPPORTUNITIES
Table of Contents
Introduction......................................................................................................................................3
LO1 Evaluate possible sources for a new and innovative business idea.........................................4
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation...............4
M1 Provide a detailed evaluation of Drucker’s 7 sources of systematic innovation providing
specific examples.........................................................................................................................5
D1 Critically evaluate the benefits and drawbacks of different approaches and sources that can
lead to the identification of entrepreneurial ideas........................................................................6
LO2 Explain the choice of a specific entrepreneurial idea for investigation and the market gap
that it addresses................................................................................................................................7
P2 Explain the rationale and the market gap for a specific entrepreneurial idea using relevant
tools and techniques to support your choice................................................................................8
M2 Provide justification of how a specific entrepreneurial idea fills a market gap using
different techniques for gap and competitive analysis................................................................9
D2 critically evaluate a specific entrepreneurial idea based on appropriate interpretation and
investigation of the competitive market place...........................................................................10
LO3 Use primary and secondary data to identify market potential...............................................11
P3 Present data needed to support gap analysis in the evaluation of a specific entrepreneurial
idea.............................................................................................................................................11
P4 Interpret data appropriately to provide evidence of market potential..................................12
M3 Justify specific sources and methods of data collection chosen and how data relates to
identifying market potential.......................................................................................................12
D3 Analyze appropriate specific sources and methods of data to provide justified business
objectives and identify market potential....................................................................................13
LO4 Evaluate the entrepreneurial idea in the context of the market and competitors and make an
assessment of potential viability....................................................................................................13
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P5 Apply a SWOT framework to collate evidence to support an objective assessment of a
specific entrepreneurial idea......................................................................................................13
P6 Evaluate the competitive and market environments in which the idea will be launched to
assess potential viability............................................................................................................14
M4 critically evaluate a specific entrepreneurial idea in the context of the marketplace and
competition................................................................................................................................16
D4 Formulate valid conclusions and justified recommendations on how a specific
entrepreneurial idea can be developed, managed and sustained within the competitive market
place...........................................................................................................................................16
Conclusion.....................................................................................................................................16
References......................................................................................................................................18
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Introduction
Entrepreneurs are the changing drive of the society. Entrepreneurs dare to dream big and achieve
what they aim for. They analyze the requirements and the issues of the market, so that they can
resolve it and are the only reason behind socio-economic growth. Entrepreneurs with their
creative skills and innovative ideas serve something new to the consumers that have never been
done before. Entrepreneurs are inspired by their hobbies and passion. They grab and capitalize
on the market opportunities and have the capacity to turn adversities into privilege. Innovative
idea in business helps to improve the existing products and services so that efficient services can
be presented to the consumers. Entrepreneurial ventures improve the infrastructural facilities of a
place and open up huge job opportunities. Entrepreneurial ventures help to resolve youth unrest
regarding unemployment and help them to financially support their families in the process.
Entrepreneurship is not an easy thing to pursue. It takes a lot of hard work, patience and a
different approach. Entrepreneurs have great communication skill and leadership abilities and are
capable of encouraging people to proceed towards development. They are brave enough to take
risks so that they can yield maximum profit from their ventures.
In the following report, the concept of creativity and innovation has been exploring which results
in developing creative abilities in a person. The researcher, as a new entrepreneur here used
various methods and framework so that the new venture can be developed and evaluated in the
competitive business environment. In the following report different research technique has been
applied to investigate the proposed business idea and evaluate its viability in the commercial
business market.
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LO1 Evaluate possible sources for a new and innovative business idea
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation
Entrepreneurs analyze the market using various sources to introduce new ideas so that they can
pacify the demands and the needs of the society. There are many factors that influence the idea
of an entrepreneur. They have been discussed below:
 Hobbies and Interests: The foremost source of entrepreneurial ideas is the interest and
hobbies of the person. Every person has different areas of interest that the person enjoys
in their leisure time. The passion of this interest or hobby creates the ability to dream and
achieve so that the person can satisfy his thirst of pursuing it as a career option. This
interest and passion make an entrepreneur different from the general lot.
 Brain storming and dreams: The way of solving market problem also acts as of source
of entrepreneurial ventures. Entrepreneurs analyses the issues face by the customers in
the market and focuses on resolving it. To come up with efficient and successful business
ideas, it becomes compulsory to find out the possible opportunities in the market by
solving an existing market problem (Richter et al. 2017).
 Customer surveys: Customer surveys act as an efficient source of business ideas for the
entrepreneurs as it helps them to understand what the wishes and requirements of the
customer or what do they want further. With proper customer surveys, entrepreneurs are
able to understand the scopes in the consumer market.
 Mass media: The various components of the mass media like newspaper, televisions,
magazines, radios also counts among the effective sources. It helps a person to
understand what the trend in the market is and what the opportunities are. It also at times
helps a person to understand his area of interest in which the person can invest his efforts
further.
 Personal experience and talent: Personal experience or talents are the integral part of a
person. It helps a person to find out what his strength and weaknesses are and what his
area of expertise is. It helps the person to identify his underlying passion and creates
ideas that can be implemented to come up with a new idea.
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M1 Provide a detailed evaluation of Drucker’s 7 sources of systematic innovation
providing specific examples
Peter Drucker is considered to be one of the greatest consultants of management and has
invented modern management. In his book ‘Innovation and Entrepreneurship’ he listed the seven
different sources of innovative opportunities.
 The Unexpected: As Drucker has said analyzing the market is the primary thing to
consider when seeking for opportunities. It helps an entrepreneur to comprehend the
demands and needs of the marketplace. This provides with a scope of seizing market
opportunities.
For example, nowadays, people are more health conscious so they spend more money to
stay fit. So, coming up with a fitness venture can turn out to be a great opportunity.
Figure 1: Drucker seven sources of innovation.
(Source: Yashkova et al. 2016)
 The Incongruity: Incongruity is the difference between what it should be and what it is.
It helps to understand what actually the targeted customers want and can turn out to be
great source of innovative ideas. This can be done by gathering effective customer
reviews and follow-ups. A product or service of a company is in high demands; the
economic condition of the company would eventually improve (Cosenz and Noto 2018).
For example, MySpace was a dominant in the social platform, before the prolific rise in
social media but failed. Later Facebook analyzed what improvement is further needed to
be made.
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 Process Need: This is the method of identifying the loopholes of the company and
correcting it so that the limitations can be eliminated. Eliminating the weakness in the
procedure of the company, there are chances of coming up with innovative ideas. For e.g.
if a restaurant consumes a lot of time to serve its customer, the restaurant can employ
another chef so that the service time is reduced.
 Demographics: Demographics in the business market deals with the age group, income,
gender, background, education and many more. With the change in time, what most gets
affected in the consumer market is the change in demographical factors. Opportunities
are high f the customers are segmented demographically and analyzed their needs and
wishes.
 Industry and Market Structure Change: It becomes compulsory to follow u with the
constant change of the market and technology. This helps to come up with innovative
ideas and save the company from getting dissolved. For example, people now want to sit
back at home and shop. They want to avoid the hassle of waiting in long queue. E-
commerce has here come up with an option and there are many famous companies
availing the same option.
 Changes in Perception, Meaning, and Mood: Change in lifestyle and livelihood affects
the requirements of the consumer market and help to think new ideas to survive in the
league of customer service. For e.g. the anti-aging creams and serums of various famous
brands promises make their customers look younger.
 New Knowledge: The companies and organization must be open and flexible enough to
the adapt the ongoing market trend. This also improves the supply chain and helps to
make the company successful. For e.g. if we see Intel, it is continuously improving with
the technologically so that it can provide its customers the latest.
D1 Critically evaluate the benefits and drawbacks of different approaches and sources
that can lead to the identification of entrepreneurial ideas
As stated by Cosenz and Noto (2018) innovation assists an entrepreneur to utilize the market
change and turn it into an opportunity in order to gain success. it directs a new way business by
using creativity. A creative approach helps a person to co e up with new ideas o that the issues or
the needs can be solved. However, as argued by Del, Chierici and Mazzucchelli (2018), coming
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up with new ideas can never assure success. The risk of suffering loss persists. The benefits and
disadvantages of the diverse approaches and the sources that may lead to the recognition of
entrepreneurial ideas are:
Advantages Disadvantages
 Helps to understand the gaps of the
market
 Gives an idea of the market trends and
demands
 Helps to understand what the customer
is looking for.
 Helps to improve an existing service or
product
 Helps to find out the loopholes or
limitations of an organization and
eliminate it so that better productivity
can be ensured.
 Provides more added value to the
customers (Karimi et al. 2016).
 Risk of not being successful all the time
 Risk of facing monetary loss if the idea
is not successful in the market
 High competitive business
environment.
 The capital that is needed to be invested
at times is too much to bear or is
unavailable
Table 1: Advantages and Disadvantages of Different Approaches
(Source: Karimi et al. 2016)
LO2 Explain the choice of a specific entrepreneurial idea for investigation and
the market gap that it addresses
There are people who love food as well as they are health conscious too. The idea here is to
introduce an Indian food restaurant, named Indian Express in the food industry of London. The
restaurant aims for service finger-licking healthy Indian food with less oil. There are many
people who love to taste food from different cuisine and London also has many Indian students
or professionals working who crave for the authentic taste of Indian cuisine. The restaurant also
will have delivery services and the customers need not to wait in the queue to get their food (Tell
et al. 2016).
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P2 Explain the rationale and the market gap for a specific entrepreneurial idea using
relevant tools and techniques to support your choice
Indian cuisine is diverse, both in taste and spices. There various people in London who look for
different cuisine to try. The restaurant that has been planned to set up is different from the other
existing Indian restaurant in London. The restaurants aim to serve authentic Indian food to the
customer and exhibit the culture and heritage of India in abroad. The market gap analysis helps
company to find out its real place in the market. It aids the company in take necessary steps to
achieve the desired target that it has set in the market.
The targeted customers for this restaurant are the Indian student, family or professionals who are
now in London and the people of London who like to experience different cuisines. London has
many Indian restaurants but the area chosen in this scenario has an Indian complex and many
offices nearby. So the location serves as an advantage than that of the immediate competitors.
The restaurants also provide a delivery service at home and offices where one can enjoy good
and affordable food without waiting in the long queue.
Figure 2: Gap Analysis
(Source: Maylor, Blackmon and Huemann, 2016)
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After the restaurant settled, it was observed that it has failed to attract more people and the sales
are intended to increase by 25% in next 6months. To do this affectively and gain competitive
advantage from the competitors of the market, the company must adopt differentiation and
penetration strategy. Effective advertisement of the restaurant needs to be made in the market so
that more people get to know about it. This would help the company to reach its targeted
customers. The company also aims to serve food at affordable prices that would make the
company different from its competitors in the market. This would help the company to gain a
competitive advantage in the market. After doing this, it is expected that the customers would
increase so the seating arrangement also needs to be increased. The restaurant, also, to make its
own mark, is planning to serve free desert with every order (Lilien, 2016).
M2 Provide justification of how a specific entrepreneurial idea fills a market gap using
different techniques for gap and competitive analysis
Gap is that specific area in the market where opportunities can be found in order to gain
competitive advantage by eliminating all the limitations. It helps the company to differentiate
from its competitors in the market. Entrepreneurial ideas fill the market gaps and turn them into
opportunities. The competitive analysis of the market can be done using Porter’s five forces that
help to get the better view of the position of the company in the market among its competitors.
Figure 3: Porter’s five forces
(Source: Dutt et al. 2016)
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In the food market of London, competition is fierce. People look for good food and the Indian
restaurants aims to serve that with different offers in affordable price. Hence, to make a strong
place, it is important to carry out a competitive analysis of the market.
 Threats to new entrants: The food industry needs moderate investments so there are high
risks of new entrees in the market also, the food market is always is the demand so, it can
attract a lot of competitors who aim to offer the same thing. Food industry also provides a
profitable outcome so it is an attractive entrepreneurial venture.
 Threat to substitution: With the rise in competitors in the food market of London, there
is always a change to get substituted by any other competitor if the company fails to live
up to the expectation of the customer. There are always new vendors, who seek to serve
the customers with good food and in reasonable price. However, there are not many
popular Indian restaurants in the area, so there is a moderate rate of threat of getting
substituted (Dutt et al. 2016).
 Bargaining Power to the suppliers: As the suppliers in the food market of UK are many,
so they have little bargaining power in the market.
 Bargaining power of the Buyer: As restaurants are many, the bargaining power of the
customers is very high in the market. The company hence needs to provide quality food
and services to the customers.
 Competition: The market of UK is not that much saturated regarding Indian cuisine.
There are only few popular outlets that have made its place in the market. Among these
Indian restaurants, the competition is fierce and hence the pressure to attract more
customers persists (Dutt et al. 2016).
D2 critically evaluate a specific entrepreneurial idea based on appropriate
interpretation and investigation of the competitive market place
As Stated by Dutt et al. (2016) Food industry is always a lucrative sector for entrepreneurial
ventures. People, even though are health conscious, love to experiment with food. Indian cuisine
has a rich heritage within itself with its vast range of varieties. However, London has many
Indian restaurants that aim to serve the customers with the best service and value. As Nagy,
Schuessler and Dubinsky (2016), have argued the competition in the food industry of UK is
much as it attracts a lot of vendor due to its moderate investment. The rate of yielding profit is
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also high in the Food industry so, it is more a convenient option. In the market of UK, there is
always a chance of getting substituted if the company fails to perform as per the expectation of
the customers. So, it has to be made sure that the company provides good service and value to
the customers in order to gain competitive advantage in the market. The company needs to
promote itself in such a way, and has to keep a lot of varieties in the food menu and offers for the
customers so that they prefer the restaurant other than its competitor.
LO3 Use primary and secondary data to identify market potential
P3 Present data needed to support gap analysis in the evaluation of a specific
entrepreneurial idea
To know the market and understand the choice and taste of the people, a market survey has been
carried out asking people various questions and interviewing them about their preferences. The
survey was carried out among 1600 people among the locality asking them about their
preferences. Among the number of 1600, 20% percent denied to participate in the survey.
Among the rest of the, they were asked with various questions asking the type of taste they
prefer, and the type of cuisine they prefer the most. The survey was carried among various
groups of people who were Indian and also non-Indian. The participants were randomly selected.
30% of the participants were reluctant to answer in detail and did not fill all the questionnaires.
People were also interviewed and asked question related to their Food preferences and taste
(Braun, 2016).
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