Entrepreneurial Opportunities: Natural Essence Fitness Centre Report

This report provides a comprehensive analysis of entrepreneurial opportunities, focusing on the launch of a new fitness center, Natural Essence. The report begins with an introduction highlighting the significance of entrepreneurial opportunities for business growth and market share. It then details the process of determining and evaluating entrepreneurial ideas and innovations, utilizing Peter F. Drucker's seven sources of innovation and STEEP factors. The report delves into rational and market gap analysis using tools such as market segmentation, Porter's Five Forces model, and industry life cycle analysis. Data supporting the gap analysis is presented in a table comparing Natural Essence with its competitors, focusing on factors such as pricing, new entrants, supplier power, customer power, and the threat of substitutes. The interpretation of this data supports the conclusion that Natural Essence can capture a significant market share by offering competitive pricing and quality services. The report underscores the importance of understanding market dynamics and consumer behavior for a successful business venture.

Identifying Entrepreneurial
Opportunities

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P.1 Determining and evaluating various sources of entrepreneurial idea and innovation.....1
P.2 Rational and market gap for specific entrepreneurial idea through various tools ...........3
P.3 Data which supports gap analysis in evaluation of idea .................................................4
P.4.Interpretation of data........................................................................................................1
P.5 SWOT analysis to support specific entrepreneurial idea.................................................1
P.6 Evaluating competitiveness and market environments....................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Entrepreneurial opportunities is very important for every business. It is crucial so that
company can develop unique and creative ideas. Thus it can earn more profits and can increase
market share. Hence firm can also maintain competitive edge on others. Report focuses on
initiating a new business idea i.e. To launch a new fitness centre named as Natural Essence.
Hence it can satisfy many users (Arregle and et. al., 2015). Project explains about determining
and evaluating entrepreneurial opportunities, innovation and rational and market gap for
entrepreneurial idea using various tools. Assignment discusses the data to support gap analysis in
monitoring these plans,interpretation of data to provide evidence of market potential,use of
SWOT analysis to support objective assessment of specific entrepreneurial idea and checking of
competitive as well as market environment in which ideas are launched.
TASK 1
P.1 Determining and evaluating various sources of entrepreneurial idea and innovation
Natural essence wants to start a new and innovative idea that is starting of a fitness
centre business. So company can determine and evaluate different sources of entrepreneurial idea
and innovation.
For this it uses Peter F Drucker's 7 sources of innovation. It includes-
Unexpected: Company can determine the market conditions so that they can develop the
new machines and technologies for fitness level of all persons. It is important so that they can get
unexpected results.
Incongruity: Company has to develop differently from the competitors so that it can
survive in market. It can develop new and innovative tools so that they can create such machines
through which they can develop such beauty products through which people can become fit and
they do not have skin problems.
Process need: In this company identifies the weak points and then improving them. If
machines of Natural Essence are not according to latest technologies and market treads then new
idea of firm cannot run successfully . So hence company can develop that techniques which is
according to need of people (Ciravegna, Majano, and Zhan, 2014).
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Industry and market structure change: For surviving in market company have to evaluate
the recent market and industry trends (Gartner, Carter, and Hills, 2016). Then only it can
develop such machines and other tools through which it can maintain competitive edge on other
firms.
Demographics: Company have to evaluate the income level,sex of population. It is
important so that company can develop such machines and technologies which can fit all people
which the company has targetted.
Change in perception: Company has to evaluate behaviour and attitude of all people so
that it can create the technologies and tools which are suitable for customers. Through this it can
create unique image in front of all users.
New knowledge: Company has to innovate new technologies and tools through which
people can remain fit for long time. Through this firm can gain knowledge and skills and can
think of other ideas to develop machines.
STEEP factors: It is determine so that firm can evaluate the external trends . They are:
(Source: Analysing the external environment,2018)
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Illustration 1: Analysing the external environment

Social: Company can determine the trends such as customer attitude,values ,lifestyles
and other feature of people. It is important so that form can develop machines according to
requirements of all users (George,and et. al., 2016).
Technological: Company has to continuously evaluate technologies so that it can adopt
latest and innovative machines through which it people remain fit and fine for long period of
time. It is crucial so that firm can survive in market.
Economic: Company have to evaluate various factors such as inflation,interest rate etc.
For example if there is inflation then company have to develop strategies so that it can provide
services at lesser costs,then only it can survive in market (Renko and et. al., 2015).
Environmental: It also evaluates environmental conditions such as water,wind etc. It is
crucial so that firm can develop those machines which do not damages environment.
Political: Company have to follow all rules and regulations,tax policies made by govt.
Firm have to pay taxes timely so that they do not face any problem and they can run their idea
successfully and smoothly.
P.2 Rational and market gap for specific entrepreneurial idea through various tools
There are various differences between actual and market. So tools to evaluate the
variations used by Natural Essence are-
Market segmentation: It is divided the users on various criteria. They are-
Behavioural segmentation: In basis of this segmentation is demographic profile,
perception, attitude etc. of consumers towards buying a particular product. In context to Natural
Essence launching its venture a fitness centre. Thus, with change in attitude of people to be
health and fitness conscious company's new venture will be reap positive results.
Demographic segmentation: It means segmentation on basis of income level,age,
gender etc. Thus, with enhancement in knowledge of customers to be fit and conscious to
workout for Natural Essence both female and male consumers of between age group of 20- 35
years belonging to middle and higher income groups forms the target audience.
Geographic segmentation: It means segmenting the whole population on basis of cities,
towns and villages etc. In this context, for Natural Essence UK cities like London, Liverpool,
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Oxford could be most profitable place to launch its fitness centre as they are among top 10 most
fitness obsessed cities of UK.
Tangible and intangible features
It includes the various tangible features such type of machines, equipments etc. that are
been presented for consumers in a fitness centre. In case of Natural essence tangible products of
its new fitness centre will be machines such as treadmill, abdominal crunch machines, cable
machine etc. (Shepherd, 2015).
Intangible features refers to health benefits that consumers will be getting after using the
services of fitness centres.
Porter's 5 forces model:
Industry competitors: Health and Fitness sector is subject to high competitor rivalry as
with change in the perception of people towards health there are many gyms and fitness centres
that are opening up in UK. Thus, this is to provide tough competition to Natural Essence.
Potential for new entrants: The threat of new entrant for Natural Essence is relatively
low as health and fitness sectors involves huge investment to be incurred on machines and
various other equipments.
Threat from substitutes: There are many substitutes which are available in market. They
charges lower prices so hence customers continuously switch due to lesser costs. In context to
Health and fitness industry of UK threat of substitutes is moderate. It is because although there is
stiff competition in market and also switching cost is low but with increased health awareness
among people now consumers are becoming peculiar about trainer's specialized knowledge about
various machines and their technical know how. Thus, for Natural Essence it is requisite to
employee proficient and professional trainers and employees in its fitness centres to get an edge.
Bargaining power of suppliers: For health and fitness industry the bargaining power of
suppliers are moderate to low. It is owing to low adoption levels and fitness machines being
more durable that reduces suppliers power. Thus for Natural essence it is not much of a threat.
Bargaining power of buyers: Customers generally switch from one to another company
as they want lower prices and good quality of services. In this case also in context to health and
fitness segment bargaining power of buyers is quiet high. It is due to availability of many options
and low switching cost for buyers. Thus for Natural Essence to be successful in its new venture it
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is requisite to provide quality not in its machines and equipments that are been used but also in
training and services that company is offering to its consumers.
Benefits of product and service: The fitness centre launched by firm will help in
catering the fitness related needs of of heath conscious consumers.
Industry life cycle: It consists of various stages of products. The stages are described
below:
Introduction: In this natural essence tries to promote its new venture fitness centre and
they tries to invest their money in production and promotion. Company tries to enhance
awareness level of all people.
Growth: In this stage, after developing awareness about its new business a fitness centre,
company further invest in its research and development activities so as to identify latest trends
and development that are emerging in Health and fitness industry of UK. This will help firm to
get an edge over its market rivals by introducing latest type of equipments and also to further
diversify its business by identify its potential market.
Maturity: Company tries to reduce the price so that it can easily beat the competitor.
Thus it uses market penetration so that it can attract many users. Here in Natural essence can
provide discount offers to its consumers on there monthly or annual gym membership.
Decline: In this company looses its market share and it leads to reduction in profits.
Hence company has to add additional features and then reposition it so that it can increase the
market share. To cope up with this phase Natural essence can opt strategy to provide free health
and diet consultation to its members.
P.3 Data which supports gap analysis in evaluation of idea
Company have to analyse difference between actual and market gap. It can due to
difference in the company policies and the competitors. Data is described below-
Basis Natural essence Competitive firm
Competition in market It charges its machines and
products approximately at
$8000.It charges lower prices
of their machines as compared
to rivals.
These companies take huge
prices that is 7% more price
from customers as compared to
Natural essence. So hence
users do not purchase the
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items.
New entrants in industry Company charges 3%
discount of the services which
is provided to the users. Hence
customers are satisfied and
convenient.
New competitors charge higher
prices that is $12000 for their
services and machines. Hence
they cannot survive in market.
Power of supplier It supplier charges $3000
approximate which is lower
from the competitors. It can
easily develop new
technologies.
Its suppliers charges $ 2000
from suppliers so hence it
affect its operations and profits
of company
Power of customer Company hove more value
and importance to all users so
that they can visit the fitness
centre daily and remains fit
and fine for long time
They give focus on the profits
and hence users are not happy
through using of various
products and technologies.
Threat of substitute Natural Essence is charging
less subscription fees that is
$800 approximately as
compared to rival firms. Thus
it can attract more users.
Rival firms $1200 from
customers which is higher as
compared to Natural essence
company. Thus users do not
purchase item.
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P.4.Interpretation of data
From the above question, P.2 there are various interpretations (Johnson, 2016). So hence
conclusion of data of Natural Essence are-
 They are various rivals in the market. So hence Natural Essence charge lower prices so
that it can capture many customers. Thus it charges $8000 from all users so that
consumers can avail services easily. Hence it can earn more revenues and can easily
expand the operations.
 Natural Essence charges 3% discount from all the users so that they can use various
machines at reasonable rate. It helps in capturing more users in minimum time. Thus it
can more revenues and can increase the market share. Hence it can easily widens and
expand the business.
 Natural Essence can maintain strong relationship with suppliers so hence it charges less
prices as compared to rivals. It charges $3000 from supplier. Thus company can easily
develop new technologies which can increase fitness level of all persons. Hence it ca
increase the satisfaction level of all users and can earn more profits.
 It puts more emphasis and firm on customers rather than generating more revenues. It is
done so that user can regularly visit fitness centre daily which is idea of firm. Thus they
can remain fit and satisfied. Hence it leads to long term growth of company.
 It charges $800 subscription fees from all the customer for fitness center. It is lower as
compared to other competitors,. Thus it can attract more users and it also increases the
happiness level. So company can easily generate more revenues and it leads to growth
and success of firm (Kirzner, 2015).
P.5 SWOT analysis to support specific entrepreneurial idea
SWOT analysis is performed by company so that they can determine the strength and
weakness. It is done so tat it can remove the weakness and take new opportunities which can
support the new idea. SWOT analysis of Natural essence are-
Strengths:
 Company can use different technologies and tools so that it can develop new ideas to
create unique and distinct machines in fitness centre. It is important so that it can unique
technologies which is different from the rivals and people can use these machines to
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remain fit and fine. Thus it can provide good quality of services to all users so that they
are attracted and avail these services (Kohlbacher, Herstatt, and Levsen, 2015).
 Company is continuously performing research so that it can search the new technologies
and methods to create machines which is used in fitness centre. It is doing innovation
technologies and methods so that it can create such products through which people do
not face any skin problems and it provides convenience to all users. Thus it can earn
more profits.
 Company puts more emphasis on the promotional activities such as advertising so that
more people can be attracted. This medium is used so that Natural Essence can reach to
large number of customers. It is done so that it can affect and persuade people. Hence it
can attract many users and leads to increasing satisfaction of many buyers.
Weakness:
 It charges lower price from all users hence it cannot attract many users. As people are
very sensitive about the rates which are being charged so they switch to other rival firms.
Various latest and unique technologies are not affordable to all middle and lower income
families. Thus it cannot earn more profits.
 Company has many divisions in fitness centre which is their main idea. So hence there
are many employees who have to manage all the activities and tasks in fitness centre.
Thus company have to spend huge amount of money on selecting many technical and
educated and qualified staff members. Thus it takes huge costs of company and they
cannot focus on important activities.
 Lower profits: As company is performing research so it incurs huge costs in investment
in research and new technologies which is used to create different machines. So due to
this, it reduces the revenues of firm and it cannot easily expand and diversify the
business. Thus it cannot maintain competitive edge on other companies.
Opportunities: Company have opportunity to promote its fitness centre through online
sites. It can create unique and attractive websites in various internet applications. Thus customer
are attracted towards it and can avail the services very easily and conveniently. Hence it can earn
more revenues (Koryak, and et. al., 2015).
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Threats: Due to various rivals it creates threat for the firm. Company is not able to spend
huge amount of money on researching various machines and cannot widens the operations in
different countries. So hence it cannot take benefits from other nations. It directly reduces profits
(Lima, and et. al., 2015).
P.6 Evaluating competitiveness and market environments
Company have to evaluate the competitive environment and other market conditions so
that it can create plans and policies according to these factors. It is crucial so that it can earn
more profits. Competitive analysis and market environment of Natural Essence are-
 Competitive market: Firm have to evaluate the market technologies and tools so that it
can easily adopt them. It is crucial so that company can earn more products and can
increase the market share. Some factors of competitive analysis are-
Substitute products: Company tries to create unique and different pricing strategies and
other plans so that it can be different from other substitutes. It also create such plans and methods
to develop latest technologies which is different from competitor.
Target audience: Main focus is on the women. So hence it creates technologies and
machines generally for women so that they can become fit and they do not face any skin
problems. So hence the create tools and techniques which are suitable and appropriate for
women.
Demand: Now a days organic products are in demand. So hence company creates such
technologies and machines which can create organic items and it has no negative effect on
people. So hence it can fulfil needs of market.
 Market environment: Company has to evaluate marketing environment conditions so
that it can easily evaluate the factors and can survive in the market. Factors monitored by
Natural Essence are-
Macro environment: In this company evaluate the PESTEL analysis. Hence it evaluates
the political,social,technological,economic,environmental and legal factors. Its main target is
women. So hence it develop technologies,tools and machines which are suitable and appropriate
for women. It charges lower prices from all users and customers. It has to approval from FDA so
that it can use legal tools (Marvel, Davis, and Sproul, 2016).
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Micro factors: It means internal factors which are inside firm. Firm have to evaluate the
employees attitude,perception behaviour and culture (Muzychenko and Liesch, 2015). It is
crucial so that it can develop plans according to them. All staff members are given training and
provided knowledge of applications of technologies .This is important so that they can explain to
all persons regarding use of various tools.
CONCLUSION
It is very crucial to identify the entrepreneurial opportunities in firm. Evaluating different
sources of entrepreneurial ideas and innovation. Different techniques an methods are used to find
rational and market gap. Company uses primary and secondary data to identify the market
potential. Firm evaluate market and competitors so that potential of idea can be assessed.
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Analysing the external environment. 2018. [Online]. Available.
<http://www.open.edu/openlearn/ocw/mod/oucontent/view.php?id=19062&section=3>
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