Entrepreneurial Opportunity: Sources, Analysis, and Evaluation Report

This report provides a comprehensive analysis of entrepreneurial opportunities, focusing on the identification and evaluation of new business ideas within the context of the skincare industry. The report begins by exploring various sources of entrepreneurial ideas and innovation, including Peter Drucker's seven sources and Schumpeter's theory of innovation, with an emphasis on social, economic, technological, political, and environmental factors. A case study of Natural Essence, a skincare product company, is used to illustrate these concepts. The report then delves into explaining the rationale and market gap for a specific entrepreneurial idea, focusing on the development of organic skincare products. It covers market segmentation, including behavioral, demographic, and geographic segmentation, to identify target customers. The report also includes a SWOT analysis to assess the strengths, weaknesses, opportunities, and threats associated with the entrepreneurial idea. Finally, the report evaluates the competitiveness and market environments, providing data to support the gap analysis and overall evaluation of the entrepreneurial opportunity. The report concludes with an assessment of the potential for success in the competitive skincare market, and the importance of identifying and capitalizing on entrepreneurial opportunities. This assignment is contributed by a student to be published on the website Desklib, a platform which provides all the necessary AI based study tools for students.

Identifying Entrepreneurial
Opportunity

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1...........................................................................................................................................1
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation.............1
TASK 2............................................................................................................................................4
P2 Explain the rationale and the market gap for a specific entrepreneurial idea........................4
TASK 3............................................................................................................................................8
P3 Presenting data to support gap analysis and evaluation.........................................................8
P4 Interpretation of data availed.................................................................................................9
TASK 4............................................................................................................................................9
P5. SWOT analysis to assess the entrepreneurial idea ...............................................................9
P6 Evaluating competitiveness and market environments........................................................10
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................13

INTRODUCTION
In contemporary market, identifying and capitalising on entrepreneur opportunities is
considered as of the prominent sector through which company can innovative ideas and
creativity. This industry is growing day by day because of individuals are interested in starting
their own venture in which they can implement their ideas and tactics in external market in order
to earn huge profits (Block and Wagner, 2010). Change in the dynamic market are carried out at
a very fast speed due to upcoming technology introduced by young entrepreneur who grab
opportunity by understanding the niche demand of customers. Under this assignment company
which is preferred I.e. Natural essence which deals in beauty and skin care products and found in
1998 as a exporter, manufacturer of massage cream. This organisation consider as start up which
liked by customer very well and earn huge profits from their products. This project discuss about
source from which innovative ideas can be evaluated and take rational decision on the basis of
external market scanning. Further SWOT analysis discuss which help organisation to know their
strength and weaknesses in their ideas.
TASK 1
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation.
Entrepreneur are those person who takes opportunities to implement its new and innovative
ideas in order to implement different business plan it help to generate revenues for organisation
(Dimov, 2011). These individuals always tend to implement new and innovative idea in order to
enhance the economic growth of any nation. By the implementation of STEEP factor it creates
lots of employment opportunities of people of certain nation. Entrepreneur use to take help of
various approaches of renowned writer which help them to organise the different structure of
organisation. In implementing innovating new idea Peter 7' s sources of innovation play a
significant role in establishing organisation. The seven sources of innovation are mentioned
below: Social factor: this factor is concerned on to determine that people should be able to
understand the values of technology. It is determined that before starting the business the
financial condition of entrepreneur should be in good. Brexit there are various changes I
laws and regulations from which population that are not aware and leads to be aware
about different legislation.
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 Economical Factor: there are good and stable condition in order to invest huge
amount of capital. It related to per capita income and high GDP rate which shows stable
economical condition of nation. It is right time for the individual to implement industries
of cosmetic productive.
 Technological factor: in present scenario, implementation of different types of
technology leads to create lots of opportunity to people of nation. In order to mange these
new and innovative factors of technologies it is very essential for entrepreneur to hire
such types of people who are expert in technology (Ekpe, Mat and Razak, 2010). It has
long range of working procedures which help to perform different types or work
activities in production of cosmetic products. So entrepreneur should implement new and
innovative technology in order to accomplish different activities in production of
cosmetic products.
 Political Factor: Before establish organisation entrepreneur should acquire deep
knowledge about political condition of the nation. Entrepreneur should inculcate with
different political government to give support in establishing the new cosmetic plant in
other nation. It also acquire knowledge about various types of taxes which are impose
during establishing of plant.
 Economical factor: Entrepreneur should inculcate with environmental factor of that
particular place in order to establishment of plant. All corrective measures should be
taken in consideration so that while performing different function of organisation it
should take proper care in order to not to harm the nature or the people who are living
nearby the organisation.
Peter F. Drucker give 7 innovative ideas which are stated below in order to manufacture
cosmetic products like Natural essence.
 Incongruity: it is concerned about the gap of producing right products as per the desire
of customer (Foo, 2011). It is concerned about the processes of production of different
cosmetic products.
 Process needs: organisation should implement new and innovative methods in order to
perform different business operation.
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 Industry and Market Structure Needs: organisation should always implement various
types of changes in price of products. So company needs to innovate new pricing
strategies.
 Demographics: In present scenario in order to attain the level of income company
should do some innovative changes in organisation.
 Changes in Perception, Meaning and Mood: Management of natural essence should
gains feedback from customer which hep to discover the new cosmetic products for the
customer in order to maximise level of profit.
 New Knowledge: It has bee considered that new and innovative technologies are
implemented by other company in order to compete those company the management of
Natural Essence should analysis the condition of market in order to compete the rivals Unexpected: Entrepreneur of natural essence implement its new ideas in order to create
new opportunities for people of that particular place.
Type of innovation:
Innovation plays crucial role in growth and development of firm, organisations are very
much concern on adoption innovative ideas and tools as to developing organisational
performance and productivity (Heinonen, Hytti and Stenholm, 2011). There are various kind of
innovation that are described as below:
Product: This consist to be an essential element of firm which performs effective role in
growth and success of firm. It involves some effective products that make a product different
from other sort of product line.
Process: It plays effective role in introducing a new product and service at market place.
Innovation helps in accomplishing organisational goals and objectives in effective and efficient
manner (Quan, 2012).
Place Innovation: This element consist on introducing right product at right place as to
gaining attention of customers. The selection of distinct method is known as place innovation.
Incremental Vs. Big Bang Innovation: It can be described as the small series update
which can be done in available products and services of firm. This helps in implementing
effective changes in product as creating them more effective in nature.
Schumpeter’s sources of innovation:
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This is an effective theory which performs effective role in enhancing spending of
business in their operations and function. Implementation of innovative ideas and tools is based
on the financial condition of firm, so it is easy for company to launch new and innovative
products at market place (Renko, Shrader and Simon, 2012). Innovation in business cycle is
considered as Schumpeter’s source of innovation.
Comparison among Innovation and Invention:
Innovation This considered as the implementation of new ideas and thoughts in order to
introducing a product and process for the first time. It helps in adding some
value to the existing goods and services of firm.
Invention Invention states to the occurrence of an idea for a new product or process
which is created for the very first time. It helps in creation of new products
and services.
Difference among business idea and product:
Product Idea Business idea
It is an effective process that helps in
introducing a new and innovative product at
market place which helps in satisfying the
needs and wants of people at market place.
It can consist as an effective process of
establishing new business which helps in
gaining high growth and success at market
place. This is a vast concept which provide a
significant direction to entrepreneur as to
developing new business at market place.
TASK 2
P2 Explain the rationale and the market gap for a specific entrepreneurial idea
It is quite evident that business are transforming daily in order to adapt to various
changes that are taking place in external environment of company. The ultimate aim of various
companies is to make innovative and creative ideas and a proper implementation of the same
(Short and et. al., 2010). Due to some big events like Exit of Britain from European union there
has been various changes and transformation that has taken place within the legislation process
of UK but because of this people are not completely aware of these changes that has taken place
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because of this, business activities are not done properly. Hence there lies various business
opportunities which can be gained by entrepreneurs through effective analysis of there
environment. A good idea not only benefits a company, a entrepreneur but also to the society and
in some cases to the whole country as well. The innovative idea can be a skin product that is
completely organic and and is produced by or designed with the help of natural ingredients and
therefore can be very effective for consumers as it does not contains any artificial ingredients
which might not be suitable for the health of people. Therefore this product has a unique ability
to attract consumers and hence it may gain market share. One more thing which makes it easily
acceptable among consumers is the idea that it is finely suitable for almost all the skin type
whether it is dry, oily, rough etc.
Another feature which makes it different is that it can be used by personalities of any age
group and with any skin type because of the fact that the ingredients used in this product are
completely natural and organic (Tang, Kacmar and Busenitz, 2012). There is no fear of
damaging skin or of any reaction of such products on consumers skin which makes it different
from other cosmetics and skin products which are being sold in the market. The product is being
manufactured by taking care of all the hygiene that is possible so that the product does not
compromise in its quality.
The various entrepreneurial ideas are listed as follows :
 Example for all : A new product is always a curious thing among market both for
consumers as well as for other competitors within the market. If there is an idea which is
unique and which can be differentiated from the existing products which are prevailing in
the market it can be an example for the rest of the people out there. Therefore a new and
innovative idea would contain these features. The company Natural essence is committed
to bring new and innovative products which are designed and crafted naturally.
Therefore, The company has came up with new skin care products which are completely
natural and are manufactured by using high quality natural ingredients.
 Create Benefits for all : As a new product hits the market, it creates benefits for all in
some sense or other, It includes customers as it come with various benefits, it also
generates employment for general people etc. It also contributes to overall GDP of a
country.
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Market Segmentation : This is a way to divide and distribute customers on various basis. It
helps company to analyse its customers and hence can make changes in their products and
services. The different types of segmentation includes :
 Behavioural Segmentation : Under this behaviour of consumers are analysed and
according to it they are divided into categories (Consumers are changing their purchase
behaviours, 2016). Example: a customer is more health conscious than he will look for
different kind of products than a person who is casual for his health.
 Demographic segmentation : It divides people on the basis of income, gender, life style
etc. Skin care products are sold on the basis of consumer consciousness regarding their
health which differs according to different person. Geographic Segmentation : Under this, Peoples are differentiated on the basis of of
geographic region in which they reside, for example a different policy will be framed for
people of US, and a different policy for people of Europe.
Tangible and Intangible features and benefits of a product and service:
Tangible Intangible
It considered to be some visible feature that are
seen by buyers and customers in their selected
product and service. The major benefit of this
is that people can easily use and consume
them.
These are refers as some invisible attributes that
can not be seen in a product or services. In this
services are involved.
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Porter's 5 force model on Natural Essence:
Industry Competitors: Rivalries of a company are develop when so many firms are
present at marketplace with same products and services (Vaghely and Julien, 2010). In order to
move forward, all competitors use their own advertising techniques, unique products, attractive
customer service, price strategies etc. Natural Essence also facing challenges like lack of product
differentiation, overcapacity, high-stakes investment and risk of exit from market place this time.
Currently, its major competitor in the same field is Lavender Group of Industries.
Pressure from Substitute Products: Due to many rivalries, substitute and alternative
products can be easily available at marketplace. Customers due to shortage of money, or finding
varieties always try to evaluate alternatives of costly goods.
Bargaining Power of Suppliers: Suppliers have a great impact on production of an
organisation. They are the persons who provides raw materials and other necessary products.
Presenting of many firms with same products influence bargaining power of suppliers. They can
rise prices of resources in their own way which effects cost effectiveness of Natural Essence.
Bargaining Power of Buyers: They force a company to price down, demand for higher
quality products etc. which result in loss of profits for an industry. When many buyers are
available at market then price of products also effects. They all are equally important for an
organisation. Their retention and satisfaction is major concern for a company.
Potential entrants: Following are some major barriers or threat of entrants for a firm:-
 Product differentiation, customer's loyalty and satisfaction.
 Requirement of capital to open an organisation and manage its production in a desired
way.
 Economies of sale force the entrant to enter on a big scale. It includes risks if many firms
are already present in the market with same products.
 New companies need strong distribution channels to advertise and sales its products in a
profitable manner.

 Government policies, rules and regulations also become a barrier for new entrants.
TASK 3
P3 Presenting data to support gap analysis and evaluation
Business runs in society and entrepreneur has to take care of social factors. There are
many other factors which affects what person thinks and what actual held. It is important that an
entrepreneur has to analyse these factors and try to reduce their negative impact (Wang, Ellinger
and Jim Wu, 2013). There are many competitors firms of Natural essence and they have to take
care of plans and policies of these firms. As the scope of cosmetic industry is very wide, so many
companies are entering market. Data of Natural Essence is as under-
Basis Company Competitive firm
Competition in market This company has cost lower
as compared to other firms
which proves to beneficial in
their growth. Price of their
product is $8000
Competitive company have 5%
more price as compared to
Natural Essence of their all
product and services.
Customer does not like to
purchase product when they
achieve higher price.
New entrances in industry This company sells product at
cheaper rate and they have
outlets which provide ease to
customer in approaching
brand. They fixes 2% discount
for regular customers.
As there are new entrance, so
they fix their price at $ 10000
which is higher than Natural
essence.
Power of supplier Supplier cost for providing
product readily is $2000,
which is less as compared to
other.
Supplier of competitive firm
charges more commission i.e.
$2500 which is more and
affects profits also.
Power of customer They give more weightage to
their customer so custom,era re
satisfied with the services
They give more importance to
profit factor and hence
customer are not satisfied with
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hence they regularly want to
visit ans shop.
the services.
Threat of substitute They are charging $700
subscription fees which is low
as compared to other
companies.
Competitive firms are charging
$1000 from customer so
customer may not like to shop.
Gap Analysis
It is an approach which is undertaken to identify the differences in current situation of the
market and its potential circumstances. It has been identified that Cosmetic industry in UK have
experienced a significant growth. Despite the political uncertainties in the UK, cosmetic industry
have been successful and carries a worth of over £10.2bn in 2017 (What is the current state of
UK beauty market?, 2018). The researchers have identified that the future of the cosmetic
industry will be experiencing a boom and will emerge as a fastest growing statement. The
customers in UK have been paying more than earlier to pamper themselves and it has been
forecasted that there will be 27.9% rise in the 2022 (UK health & beauty market set to reach
£27bn as it outperforms all other sectors, 2017). The rise will be expected out of product
innovation in both commercial and premium markets. The above provided statistics are sufficient
to analyse that people are ready to pay more for skin and cosmetic items however there are a few
brands which are dealing in organic segment can be identified as a major market gap. The
organic offering by Natural Essence will fall in the premium category and can serve the market
gap well and result profitable for the company as well.
P4 Interpretation of data availed
This section focuses on presentation and evaluation of the data which has been identified
through gap analysis. It has been identified that there are numerous organisation operating in the
industry such as L'Oreal, Proctor & Gamble, Avon and MAC and intensity of competition
amongst them is intense. Although it has been ascertained that large number of organisation are
operating in commercial segment where as there is an increase in the demand for premium and
organic skincare cosmetics. The incident of Brexit did not have a major impact upon this
industry as it continued to expand in the country.
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For the year 2017, the worth of cosmetic industry stood at £1.98bn and most of the
purchases were carried out on retail hubs at airport. It can be evaluated from this figure that there
is a positive growth in this segment which provides business with an opportunity to launch their
organic line of skincare cosmetics as the trends seem favourable. Most of the organisation are
inclined to enhance their sales figure through commercialising their products and services but
very few organisation are looking to capitalise upon the trend of launching chemical free and
organic skincare products for the premium segment.
The trend in this segment have stated that most of the people buy cosmetic products from
store and have emerged to be primary channel of sale. 78% of total buyers in this industry are
Female which poses as a opportunity to launch products which are unisex or male oriented (The
UK Health & Beauty Market 2017-2022, 2017). The scope of new product development is high
and organisations are continuously working to launch something which can serve them with
higher profits. But organisations are serving their existing customer base and are not
emphasizing to innovate which provides Natural Essence to an opportunity to which they can
serve the less emphasized segment to fulfil market gap.
To support the gap analysis of the Natural Essence it is very crucial to state it with the
desired proof that an organisation will be able to achieve it. To showcase the result it is necessary
to analyse the growth rate of market.
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