Mocha Cafe: Evaluating Entrepreneurial Ideas and Market Potential

This report evaluates the entrepreneurial idea of Mocha Cafe, a budding coffee business in the UK, focusing on various sources of entrepreneurial ideas and innovation. It explores the market gap and utilizes tools and techniques to analyze external environmental risks. The report assesses different sources such as work experience, interests, current trends, and customer feedback, and applies Drucker’s 7 sources of systematic innovation. It explains the rationale behind providing flavored drinks and identifies target customers through behavioral, demographic, and geographic analysis. Tools like McKinsey 7S and Fishbone diagrams are used to analyze market gaps and organizational weaknesses. The report also incorporates data to provide evidence of market potential and uses a SWOT framework to support an objective assessment of the entrepreneurial idea, ultimately evaluating the competitive and market environments to assess the potential viability of Mocha Cafe.

Identifying
Entrepreneurial

Contents
INTRODUCTION...........................................................................................................................4
TASK...............................................................................................................................................5
Determine and evaluate different sources of entrepreneurial ideas and innovation providing
specific examples.........................................................................................................................5
Determine and evaluate different sources of entrepreneurial ideas and innovation providing
specific examples:........................................................................................................................6
Drucker’s 7 sources of systematic innovation.............................................................................6
There are various sources of innovation that can be used in the idea of a business and can
attract the customer can increase the level of profitability as described below...........................7
Explain the rationale and the market gap for a specific entrepreneurial idea using relevel tools
and techniques to support your choice.........................................................................................8
Interpret data appropriately to provide evidence of market potential........................................11
Apply a SWOT framework to collate evidence to support an objective assessment of a specific
entrepreneurial idea...................................................................................................................13
Evaluate the competitive and market environments in which the idea will be launched to
assess potential viability............................................................................................................14
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
For starting a new business and maintaining it effectively in the industry many things are
required to focus effectively and this can further help in managing and expanding the business
effectively. This is a report is about Mocha café which is a budding idea in the UK it is known
for its coffee and is slowly expanding its market growth effectively. This report involves the
evaluation of various sources of various ideas and innovation and this report also involves the
market gap and various techniques and tools which can be used to analyse the risks of the
external environment. This report also involves the various data which is used to fulfil the gap.

TASK
Determine and evaluate different sources of entrepreneurial ideas and innovation providing
specific examples.
There are various sources by which the ideas of entrepreneurship can get and these ideas
come by day-to-day life to evaluate these each activity should be recognized properly. The
sources are described below.
Experience of work: As an idea comes from some past work or any experience which is some
field can be turned into professional field and can also be used in starting a business effectively
and the skills, experience, and knowledge can also be used in the business idea of opening a café
effectively.
Interest and hobbies: The interest in any business idea can also be developed by an individual’s
hobby and interest as by this work will be done with satisfaction and interest and cannot result as
a failure and in this, the idea possibilities build up and business can be run smoothly.
Strength: By having abilities and positive strength business can overcome many weaknesses and
risks faced by the organization and this can also help in gaining accomplishment by this, the
goals and objectives of the organization can be attained easily (Schührer, 2018).
Family and friends: They are the best source of motive for any business idea and by their
working experience an individual can get many ideas and ways to accomplish it effectively. As
in any business idea if a focus group combines then many ideas are generated.
Current trends: By analysing current trends and analysing customer requirements new business
ideas can be generated effectively and can turn the business into success as this can make sure
that the idea of the business will work effectively or not while introduced to the industry.
This café Mocha idea is generated from analysing the current trends of the industry and
this also results beneficial as nowadays with the busy schedule of individuals crave for coffee
there this idea is developed and can be placed around companies surrounding so that it can also
increase the sales of the organization (Jambulingam, Dorasamy, and Xavier, 2021).

Determine and evaluate different sources of entrepreneurial ideas and innovation providing
specific examples:
Consumers- The consumers are important source of entrepreneurial ideas as they provide
effective and key ideas. Consumers are considered as most important stakeholders of a company
who provide effective feedback to a business. Many business entrepreneurs consider to take
ideas related to innovation in order to facilitate product development according to demand of
different customers.
Existing products/services- An entrepreneur can also take into consideration development of
idea and innovation on the basis of current services and products. It is key responsibility of a
business to focus on demand of existing products and develop new products accordingly.
Distribution channels- The entrepreneurs should take into consideration development and
assessment of distribution channel in order to formulate key entrepreneurial ideas.
Research and development- The research and development department of a business play an
important role in suggesting innovation ideas. A business must hire professionally trained and
experts in order to ensure optimum development of research for bringing innovation.
Drucker’s 7 sources of systematic innovation
The Drucker’s 7 sources of systematic innovation are a model which is universally
accepted and help in overall development of a business. It is essential for the business entity to
take support of this model in order to focus on key information perspectives. The Drucker’s 7
sources of systematic innovation which are mentioned below:
 Unexpected- In this approach, there is an evaluation of reasons which are leading
to unexpected success or failure of a product. This helps in generating more
opportunities to perform innovation.
 The incongruity- This is considered as the condition in which the things are not
happening according to the expectations. This leads to develop scope in innovation
and the industries which are growing and failing should consider this approach.
 Process needs- The process includes a big gap in most of the cases and there is a
major scope to innovate. In this technique an innovate. In order to develop and
satisfy needs of the customers through innovation, it is important to focus on
development of appropriate organisational framework.

 Industry and market structure change- The fastest growing segments develops
scope for innovation. This helps an entrepreneur to develop major emphasis on
formulating key innovation based practices.
 Knowledge- Knowledge is considered as major parameter of developing
innovation and it is key role of an entrepreneur to develop key framework. This is
major role of an individual to focus on developing knowledge of marketplace and
perform innovation accordingly.
 Change in perception, meaning and mood- The changes related to perception,
meaning and mood of customers should be considered by an entrepreneur. This will
help in development of innovation and will lead to new product development.
There are various sources of innovation that can be used in the idea of a business and can attract
the customer can increase the level of profitability as described below.
Market structure: The structure of the market also gives chances of innovation as globally there
are many pieces of information which are scattered all over the world and can be turn useful in
involving any kind of product for the better result and sales as in the idea of Café mocha it has
innovated the coffee with a cute packaging of “no sleep, work hard” which attracts the customers
and make them work more efficiently.
Demographics: As lifestyles of individual also differs according to different demographics
customer requirement as each customer has different culture and needs which they expect to be
fulfilled by any business and by this any business idea can get the opportunity (Eshgarf,
Hamidizadeh, and Danaee Fard, 2020).
Changing perception: With the changing perception of the environment and social innovation is
placed as people are switching from fast food to healthy alternatives which are making a change
in the perception of the people as this café had introduced the product according to their
preference.
Necessity: There are some of the innovations which is done for the necessity of the individual
and is required to do that change in the products so that it can change for the better society and
can be beneficial to the society and the organization.

Mocha café has introduced and developed the innovation according to the preference and needs
of the customer and uses demographics for the innovation and can allow the business for better
and more accessible opportunities in the industry (Saiful Bahri, and Abdul Aziz, 2019).
Explain the rationale and the market gap for a specific entrepreneurial idea using relevel tools
and techniques to support your choice.
Entrepreneurial idea
The idea about the entrepreneurial business is chosen for the business of Mocha Café is
“providing flavoured drink to different customers”. The Café Mocha will provide strawberry,
mango and guava flavoured coffee to the customers.
Rationale for the idea
The main aim and reason behind the idea is” only a few cafés in London provide
flavoured coffee to different customers. It is moral responsibility of the Café to develop a major
strategic and planning framework in order to serve the customers.
Identification of customers
 Behavioural- The Café Mocha will be understanding perception and mind set of
different customers in order to lead the marketplace. In order to understand the behaviour
of customers, Café Mocha will perform precise customer analysis.
 Demographic- Demographic factors create a major framework which includes
understanding of the population. Café Mocha will conduct a market survey and research
to focus on different customers.
 Geographic- The geographic location on the basis of different sectors and customers.
The geographic conditions of the city are essential to be understood by business to serve
different customers in an effective manner.
The are various tools and techniques which can be used to find a market and rational gap which
helps in analysing organizational tactics.
Mckinsey 7s
This is a tool that analyses the gap which occurs in the business and also identifies the areas
where it is required to boost the performance of the business it also examines the future
requirement and changes which is essential.

Strategy
As Mocha café has taken all the responsibilities which involve in making the strategy as this had
helped the organization in devising, managing performance, and guiding actions and they made
strategies for attaining goals and also brings flexibility and adaptability.
Structure
As Mocha café has a flatter hierarchy which has benefited in the decision-making process and
also helps in the interdepartmental coordination in an organized and effective form for the
smooth working of business operations.
System
In café Mocha, the organization system is well managed and this also ensures and resolves
conflicts in the workplace and helps in evaluating and monitoring the control system of the
organization (Ashrafi,and Najafi Hezarjaribi, 2020).
Shared values
As café Mocha has the core values which help them in expanding the business by creativity,
transparency, trust, honesty, and transparency, and this also supports the culture of business
which reduces discrimination.
Style
This involves the leadership styles and effectiveness in the same as this café follow democratic
leadership style which helps in the better understanding and cooperation with the employees of
the organization and this organization, everyone supports each other and work as a team.
Staff
As Café Mocha staff and employees and highly knowledgeable and skills which help in attaining
business goals in an effective manner and by this gap inside the organization is also filled and
increase the capability of the employee of attaining the goals.
Skills
For the better-assessed skills, an organization can grow and expand with their proper
development and this also allows competitive advantage to the organization which can further
fulfil the requirements of the organization effectively (Ilonen, Heinonen, and Stenholm, 2018).

Fishbone
This is a tool which is used to analyse the gap by making a diagram which helps in
isolating the problems and the weakness of the organization as for developing this starts with the
challenge which café Mocha is facing or the desired goal they need to achieve and in which one
individual process all the details which are essential to reach to a goal and then another
individual go into deeper and important details which are required by the organization and the
last one allow the model to process and put all the models which can together find the gap in the
market place and this is done in the group with employees and the managers and the main
purpose of drawing the diagram is to analyses all the effects and the causes for serving the better
quality to the customer. This tool can be further evaluated by the people who have the skills to
perform than the required methods and procedures which can involve training and development.
It also involves material, procedure, measurement, machinery, and different environments which
can help in accomplishing the goals on a long-term basis (Jha, Makkad, and Mittal, 2018).
Figure 1Cafe mocha, 2022
Present data needed to support gap analysis in the evaluation of a specific entrepreneurial idea.
As gap analysis is known as the assessment which describes the current performance of the
organization and it also identifies the difference better the current state of the organization and

desired state of the organization. Huge data is required to analyses the gap between the market
are described below.
Identifying the current state of the organization.
As it is important to firstly identify the current state in numeric terms which makes it easier in
managing the goals of the organization. As this café Mocha has analysed its current growth of
8% and they are desired to turn it 10%.
Identifying the wants of the organization
It is important to set future goals and targets to reach them and accomplish them effectively and
this also helps in filling the gap by stating the terms of the future and making an appropriate
strategic plan and target.
Identifying the gaps
This also identifies the market gap and also helps in attaining the profit of the organization in a
specified period and this also ensures that goal can be fulfilled effectively and efficiently as café
Mocha has decided to ensure the 10% in 2 years (Rogers, 2022).
Devising improvement
It is important to always devise the improvement so that all the problems can be resolved before
identifying the gaps and each implementation can be done with the ability of the customers this
is known as the last and most effective step to identify the gaps.
Interpret data appropriately to provide evidence of market potential
There are various data analyses and points which are required to analyses the market
potential effectively and that is described below. The analysis of data is important in the
organization to reduce the cost and also helps in an effective decision-making process. This also
helps in targeting the market and the customer base in an effective form.
Data analyzation
Descriptive analytics: This is a method in which questions of “what” have been answered
effectively and this is done by interpreting, manipulating, and ordering raw data so that data can
turn into valuable insights to café Mocha. This is done in the table and in bar graph form which
can easily be understandable in numeric values
Exploratory analysis: This method is in which the main aim is to explore and make a relation
between data and variables and after the investigation of the data the solution of the problem is

been analysed for data mining. By this method problem of each functional area can be resolved
effectively.
Diagnostic analysis: This is a method in which it empowers the top management for a better
understanding of the happening of a problem and then the team internally directs the answers and
research the data according to for the better expanding results of café Mocha. This method also
provides an actionable solution to the driven problem.
Cluster analysis: This is a method in which a set of similar data is been combined to target the
effective area this can also provide a dataset and trends and this helps in analysing the customer
base of the organization. The group in this method is based on monetary value, demographics,
and purchasing power (Zabelina, Tsiring, and Artemeva, 2021).
Cohort analysis: This is a method that can be analysed by using historical data for combining
and examining all the segments of a group’s behaviour with similar characteristics. By using this
method organization can easily gain insights into a potential customer for a targeting group. This
is considered a useful tool and is also done by google analytics.
Five elements are used to determine the potential of a market effectively are described
below.
Market size: This is considered an important factor as this determines the potential market and
the market size of the product. As the market size is known as the total of the market sales
potential of each organization together. Market size is considered huge and can also help analyze
market potential.
Market growth rate: This is known as the ongoing trend of the industry and this is required to
be forecast between the product line of the Café Mocha products which will determine all the
figures and facts and helps in the initialization and this also depends upon the growing industry
rate (Lerman, Munyon, and Williams, 2021).
Profitability: This is the method in the potential market that determines the relation between
profitability and the forecasting of the market potential and this can be done by some common
terms like return on investment, return on sales, return on net assets, return on employed capital.
This is calculated in numeric form.
Competition: This is to identify the competition in the market and industry and this also
determines the potential market on the organization product as high competition can affect the

café Mocha and they need to make effective strategies to remain in the competition by reducing
the pricing of the products to remain in the competition (Wahyudi, 2021).
Apply a SWOT framework to collate evidence to support an objective assessment of a specific
entrepreneurial idea
SWOT analysis
This is a tool that is used to evaluate the competitive environment for effective strategic
planning and this possesses all the external and internal factors this also analyses the future and
current potential of the organization. This always facilities the data-driven, realistic, and fact-
based in industry. Café Mocha has used this tool to analyse the internal and external environment
of the organization.
Strength
Strength is the potential positive point of the organization which gives a competitive
advantage to the business. Café Mocha has various strengths as they have a high service level
which is beneficial to gain a high customer base and also helps in increasing the sales of the
organization.
As this café has highly skilled employees which are given the best experience to their customers.
As this café follows a customer-centric strategy to allow more profit to the business and in an
effective way. This business is also close to the customers and has a clear value proposition.
Customers will also show a positive attitude toward the brands (Byrne, Fattoum, and Diaz
Garcia, 2019).
Weakness
Weaknesses are the weak point of the organization that can reduce the market share and
growth of the products. As this Café Mocha has limited access to the data of marketplace and
this café also relies on the manual system. This café is also facing difficulty in generating the
publicity of the organization and has not introduced any online application or website. This café
also has a low barrier to entry in the market and also has strong competitors in the market. This
business also has a low brand awareness of the organization (Roundy, 2022).
Opportunity
There are various possible opportunities that this café can grab for the better results of the
investment in the product. As Café Mocha can develop the relationship between customers and
their culture. This business can also attract a new customer base by allowing discounting tactics