Natural Essence: Identifying Entrepreneurial Opportunities Report

This report analyzes entrepreneurial opportunities for the skincare company, Natural Essence. It begins by identifying and assessing various sources of entrepreneurial ideas and innovation, including Peter Drucker's sources and types of innovation like product, process, and place. The report then explores the rationale and market gap for potential entrepreneurial ideas, utilizing tools such as market segmentation (demographic, behavioral, and geographic) and Porter's Five Forces model to assess the competitive landscape. Data analysis is used to evaluate market potential and support gap analysis, followed by a SWOT analysis to assess the company's strengths, weaknesses, opportunities, and threats. The report evaluates the competitive and market environment to assess the potential viability of new entrepreneurial ideas and concludes with recommendations for Natural Essence to capitalize on identified opportunities in the skincare market.

Identifying Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Identification and assessment of various sources of entrepreneurial ideas & innovation.....1
TASK 2............................................................................................................................................4
P2 Rationale and market gap for particular entrepreneurial idea by using relevant tools..........4
TASK 3............................................................................................................................................4
P3 Data needed to aid gap analysis in entrepreneurial idea evaluation......................................4
P4 Interpretation of data to administer evidence of market potential.........................................5
TASK 4............................................................................................................................................6
P5 Application of SWOT analysis to assess entrepreneurial idea..............................................6
P6 Evaluation of competitive and market environment to assess potential viability..................7
CONCLUSION ...............................................................................................................................8
REFERENCES .............................................................................................................................10

INTRODUCTION
In modern market, identifying an entrepreneur opportunities is considered as important
sector through which company can develop new ideas and creation. This sector is growing day
by day because more of persons are much interested in starting their own start-ups in which they
can apply their own ideas and plans in external market so that they can earn more profits. Change
in the market are fastly adopted by company so that they can adopted new technology which is
introduced by young entrepreneur who focused on results by understanding of demand of
customer's (Block and Wagner, 2010). Under this case company Natural essence is consider
which deals in skin care products and established its business in 1998 as a exporter and
manufacture of massage cream. This company is also famous for start ups which is liked by
customers due to which they earn high profits from their products. This report is discussed about
through which new ideas can be examine so that they take rational decision on the basis of
external market scanning. In this SWOT analysis also discuss which help the company to know
their strength and weaknesses.
TASK 1
P1 Identification and assessment of various sources of entrepreneurial ideas & innovation
Entrepreneur are those person who can develop their own ideas and implement them in
innovative ideas in order to apply different business plan which help in generating profits for
organisation. These individuals are always try to apply their own new and innovative ideas in
order to increase increase economic growth of nation. With the help of applying STEEP factors it
develop lot of employment opportunities for people of nation. Entrepreneur take use of various
approaches of experts which help them in developing more structure in organisation. By
applying new innovative idea Peter 7's sources of innovation play a important role in establishing
organisation (Dimov, 2011). These sources are discussed below:
Social factor:- This factor is important in determining that people are able to understand
the value of technology or not. It is necessary to observed while starting a business that financial
condition of entrepreneur should be strong.
Economical factor:- There are some condition in which entrepreneur can invest huge
amount of capital through which they can earn more profits. It includes inflation rates, per capita
income, interest rates and GDP rates which show better economic condition of nation. It is
correct time for individuals to develop industries of cosmetic products.
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Technological factor:-Due to implementation of new technology in market it creates lot
of opportunities for people. In order to cope up with this new technology it is very important for
entrepreneur to hire such type of people who are experts. Due to this change company able to
produce more cosmetics product which help in increasing productivity of cosmetic products. So
entrepreneur can apply new and innovative technology in order to achieve different activities in
production of cosmetic products (Ekpe, Mat and Razak, 2010).
Political Factor:-While developing an organisation entrepreneur should take proper
knowledge of political condition of nation. They should maintain good relationship with political
government which help them in supporting new cosmetic plant in different countries. They also
get the proper knowledge of various taxes which they implement while establishing of plant.
Economical factor:- Entrepreneur should able to follow environmental factors if they
want to established plant in different place. For this corrective measures should be taken in
advance in order to cope up with problems while performing different function of organisation so
that they take proper care in order to not to give negative effects on nature.
Peter F. Drucker give 7 innovative ideas which are stated below in order to manufacture
cosmetic products like Natural essence.
The Unexpected:-It is outside event that take place independent of what the enterprise is
working on . The market place is better are which help in find out opportunities. A good manager
should constantly study the market.
Incongruities:-It is a disconnect between what is and what should be. Foe eg. The steel
mills and the creation of mini mills.The demand for steel increased but the economic
performance from traditional large steel mills did not. It can be done between reality and
assumptions (Foo, 2011).
Process Need:-Organisation always try to implement new and innovative methods in
order to perform various function of business. The source of innovation for a process need is an
imperfect task or step in an existing process.
Industry and Market Structures:-Changes in industry and market are the good time to
innovate new ideas .For eg. It include cell phones, tablets and even shift from product based
business models to service based show a change in structure that offered platforms for
innovation.
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Demographic:-Sometimes innovation can be based on these factors which is related with
age distribution. This help in increasing level of income for company through which innovative
changes in organisation can occurred.
Changes in Perception, Meaning and Mood:-It occurs when one focus on perception not
reality of a group which can be in form of society and factors. For example Americans have
perception that they were unhealthy and needed to change and this opened up an opportunities in
health food, education, exercise facilities etc.
New Knowledge:-If the knowledge based innovation is used by any entrepreneur it is
useful for them to achieve more growth (Heinonen, Hytti and Stenholm, 2011). This help in
develop long term knowledge. It is seeing that companies are adopted new and innovative
technologies in order to achieve more results. Natural Essence should analysis the condition of
market in order to compete with competitors.
Type of innovation:-
Innovation plays a important role in growth and development of company. Organisation
is interested in considering innovative ideas and tools which help in developing organisational
performance and productivity. There are many types of innovation which are discussed below:-
Product:-This is important element of company which help in increasing growth and
success of firm. This involve different effective products which make a product different from
various product line.
Process:- This plays a major role in introducing new product and service in the
market. Innovative process help in accomplishing organisation goals and objective in proper
manner.
Place innovation:- This involves launching a right product at the right place as to gain
attention of more customers.
Schumpeter's source of innovation:-
This is useful theory which which perform various role in increasing spending of
business in their operations and functions (Quan, 2012). Applying of innovative ideas and tools
is related with financial condition of firm, So it is easy for firm to launch new and innovative
product in the market. Innovation in business cycle is related with Schumpeter's source of
innovation.
Difference between Innovation and Invention:-
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Innovation:-This is consider with developing of new ideas and thoughts in order to launch new
product and process for first time in market. This help in extra value to the existing good and
services to the firm.
Invention:-It is process which is related with occurrence of an idea for new product and process
which is created for first time in the market (Renko, Shrader and Simon, 2012). It help in
developing of new products and services.
Difference among business idea and product:-
Product idea:-It is a process of developing new ideas which comes from watching and listening
to customers. Customer's even create new products on their own .This help in introducing a new
and innovative product in the market which help in fulfilling need of customers.
Business Idea:-It refer to developing new idea for business which help in gaining more growth
in market. This is important concept which gives direction to entrepreneur for developing new
business.
TASK 2
P2 Rationale and market gap for particular entrepreneurial idea by using relevant tools
In today era, diverse change that takes place in business surrounding also affect the performance
and operation of company. The main objective of any business is to develop creative and
innovative products that assist in organisational growth and success and satisfying different
needs of customers in an effective manner. Situation like Brexit also posses an impact on the
working and business operation of Natural Essence. With the enforcement of Brexit, various
changes occurs in UK's legislation. Local residents were not aware of about such changes and
because of which activities are not executed in proper manner (Short and et. al., 2010). There are
ample number of opportunities that exist in market place that can be taken into consideration by
entrepreneurs by doing proper environment analysis. In context of Natural Essence, a good idea
can be in the form of offering completely organic skin product that is mainly consist of natural
ingredients only and very effective for potential buyers. With the introduction of this product,
they can easily seize the attention of large number of customers and attain high market share
over their competitors.
Another feature that makes it distinctive from that of competitors product is it can be
utilized by people of any age group as the product is composed of all natural ingredients and
dose not cause any harm. Some entrepreneurial ideas are discussed as follows:
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Example for all: Product is the most curious thing that is available in the market for both
consumers and competitors. If the offered product is different and unique from the existing ones,
then it can become good example for all. For example: Natural Essence become the first one to
introduce innovative product that are crafted naturally. They came up with launching first
organic skin care product rage that is made up of only natural or organic ingredients. No harmful
chemical is used in their making (Tang, Kacmar and Busenitz, 2012).
Creates benefits for all: As the product is innovative and unique, there is great possibility of
satisfying customer needs and requirement which are changing rapidly. It creates employment in
the country and also contribute in the GDP of economy as well.
Market Segmentation: It means classifying the broad range of consumer into different segments
or small sub-groups. It help the company in examining their customers and make alterations on
the basis of current likes and dislikes of customer. It is mainly categories into following
segments:
 Demographic: Under this segment, population is classified on the base of income, age,
lifestyle, gender etc. Skin care products are mainly sold on the basis of consciousness of
customers in respect to their health which vary from person to person.
 Behavioural: Under this segment, perception and behaviour of customers are evaluated
and market is classified on the basis of that. For example: If a person is more conscious
about its health, then he/she can easily buy organic or natural product.
 Geographic: Population is classified on the basis of geographic region where they reside.
For example: Each country is having different policies (Vaghely and Julien, 2010).
Porter's Five Force Model:
 Industry Rivalry: Various firms exist in marketplace that offers similar products leads to
create competition. Rivals are using different pricing, product, promotional strategies in
order to beat the competition. The main competitor of Natural Essence is Lavender
Group.
 Threat from substitute products: Because of availability of various competitors in the
market, ample number of substitute goods are available in the market.
 Bargaining power of suppliers: Suppliers posses great impact on firm's overall
production and operation. They basically supply raw material to company that is essential
for its procurement.
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 Bargaining power of buyers: When buyers are more, price of goods gets affected. With
high bargaining power, company's need to cut down their cost of the product (Consumers
are changing their purchase behaviours, 2015).
 Threat from potential: The company is also facing strong competition from its
competitors. Other common threats are: Lack of adequate capital requirement, economies
of scale, product differentiation, government policy and regulation .
TASK 3
P3 Data needed to aid gap analysis in entrepreneurial idea evaluation
Thinking of an individual is influenced by several factors which an entrepreneur needs to
assess. Evaluation of those factors helps in reducing their negative impact on working and
operations of business. In cosmetics and beauty products industry, there are many competitors
which needs to be keep in view by firm. Natural Essence should take care of its plans and
policies in order to grow and survive in market (Wang, Ellinger and Jim Wu, 2013). Scope in
this sector are so wide and it is the main reason behind entering of various firms in cosmetics
market. Some data of firm are defined below:
Basis Company Competitive firm
Competition in market As compared to other firms,
the cost of Natural Essence
products is low which
facilitates benefits to company
regarding growth and survival
in market. Price of their
product is $6000.
Competitive firms charge
around 5% high price of its
product from Natural Essence
due to which people prefer
less to buy such products.
New entrances in industry Firm sale its goods at cheaper
rates and they are having their
stores in many areas which
makes it easy for consumers to
access their products. Regular
customers also get some
discount on visiting the store.
Prices of competitors are high
in comparison to Natural
Essence. They fix product's
price at $9000.
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Power of supplier Supplier cost for providing
readily available goods is $
2000 that is less from others.
Competitive suppliers charge
more commission which
impacts profits of firm.
Power of buyer They mainly focus on
consumers and their needs in
order to satisfy them and
attract them towards brand.
Rivalry firms emphasize on
profits instead of buyers.
Hence, customer satisfaction is
less.
Threat of substitute Firm charge subscription fee
of $700 which is less than
others.
Rivalry firm charge more fee,
i.e., $900 so consumers prefer
their brand less.
P4 Interpretation of data to administer evidence of market potential
From the given data , following discussion are made:
 Due to more competitors in the market competition is more in beauty and skin care
sector. So, company need to fulfilled the wants and demands of customer in order to
fulfilled time. This help in attracting more customers towards their products. This
company offer product in $6000 which is less in comparison to other firm.
 Natural essence offer discount to their regular customers. This company provide more
discount to those people who recommend their products to other people. This will help in
increasing productivity and growth of company (COSMETIC PRODUCTS, 2017).
 The organisation develop and maintain better relationship with their suppliers so that
goods are available on time when needed .The cost $2000 which is low in comparison to
other companies.
 They give more preference to their customers rather then to earn more profits and provide
them high quality of goods. This will helped the organisation in maintain good image in
mind of customers. At the time of various festivals they offer various innovative product
to their customers.
 The biggest weakness that Natural essence is facing that their customers is shifting to
other substitute products. But, that are able to cope up with this issue by taking feedback
from their loyal customers on regular basis and they also charge less fees from others.
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TASK 4
P5 Application of SWOT analysis to assess entrepreneurial idea
Natural essence requires to doing SWOT analysis for knowing their strengths and weaknesses.
This also tell us about the causes of external factors of organisation. This analysis involves
various factors these are:-
Strengths:- Various technologies are adopted by firms in order to expand their business
in many countries. If demand of products is high in marketplace , then it is necessary for
company to give better quality product which help in increasing the productivity of company. If
company want to increase growth and sustainability in the market they provide high quality
beauty product which is offered by Natural essence.
Weaknesses:-Prices of products is low which decrease the images of goods and sales.
Products like oil, soaps , cream are costly which is not affordable by some people (Wood and
McKinley, 2010).
Opportunities:-Companies adopted online channels in order to increase sales. This give
more advantage to firm.
Threats:-There are more threats of firm because of more competitors of beauty products
in market. In R&D sector, firms are not spending much amount and not able to expand their
business in many countries. Due to this reason companies are not able to get more opportunities.
P6 Evaluation of competitive and market environment to assess potential viability
Market analysis is necessary in order to know current market trends, competitors
strategies as well as preferences of customers. Consideration of all such factors is necessary for
attaining high market growth. While starting any business, it is required by an entrepreneur to
assess activities of rivalry firms. It helps in effective introduction of product at marketplace.
Natural Essence analyse whole market before offering their organic product for checking its
viability. Competitive analysis and market environment will facilitates in determining success of
business idea in beauty product sector (Break Even Point, 2017).
Competitive market: By doing competitive analysis, sustainability of business can be
identified. It renders growth opportunity to those enterprises which deals in same industry.
Analysis of rivalry firm is very essential for Natural Essence for gaining competitive advantage
from market. This analysis is done on basis of such factors:
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Substitute goods: Purchasing behaviour of customers are influenced many available
substitutes. So, firm needs to execute such tactics which distinguish their goods from others. Use
of effective pricing strategy is one of the tool that helps firm in it (Frank, 2012).
Demand: As organic product do not harm skin of people, demand of these products are
high. Lifestyle of people are completely change now a days. They more prefer to use such goods
which have no side effects. This factor highly influence demand of Natural Essence product in
positive way.
Target audience: Natural Essence majorly target on women for selling their product.
Market analysis depicts that their product will get more preferred by people.
Market environment:
In this, 2 types of environments are considered by firm which as follows:
Macro environment: It consist of external environmental factors like political, social,
economical, legal, environmental and technological. Firm conduct PESTLE for assessing
external surrounding of business. As females are more conscious about their skin, Natural
Essence target them. Firm's products are certified by FDA which shows that products are safer to
use. Pricing strategy is also one of the main factor on which firm emphasize. It put direct impact
on purchasing behaviour of customers (Tirumph, 2016).
Micro environment: Customers, suppliers, competitors are the forces that impact on
business working. Firm needs to provide training to employees so that operations can be
effectively performed. It in turns increase productivity and profitability of Natural Essence.
CONCLUSION
As per the above mentioned report, it has been concluded that in dynamic business
environment, many opportunities are exist in market place which needs to be identify by an
entrepreneur in order to exploit them. The industry of Cosmetic & beauty products is popular and
fastest growing one. Today, many people shows their interest in starting their own venture in this
sector. By implementing innovative and creative ideas, higher profits can be earned in this
industry and it also gives the high competitive advantage over its rivals.
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