Report on Identifying Entrepreneurial Opportunities in Tea Business

This report investigates the entrepreneurial opportunity of starting a tea business in the UK. It begins by defining entrepreneurship and identifying various sources of entrepreneurial ideas, such as market research, incongruity, process needs, changing perceptions, new knowledge, industry changes, and demographics, with a focus on the tea market. The report then explains the rationale behind the tea business idea, emphasizing the market gap and the importance of customer segmentation through behavioral, demographic, and geographical factors. The report utilizes tools and techniques like gap analysis to evaluate the potential of the idea. It presents primary and secondary research data, including a sample survey, to support its findings and interpret market potential. Finally, the report incorporates a SWOT analysis to evaluate the competitive market and assess the viability of the tea business concept, concluding that the idea has strong market potential based on the collected data and analysis.

Identifying
Entrepreneurial
Opportunities

INTRODUCTION
Entrepreneurship is converting an idea into business, hence the core of entrepreneurship
lies in creating or identifying opportunities that it is said that there will not be any business if one
can not recognize opportunity (Aliaga-Isla and Rialp, 2012). The concerned process completely
depends on the ability of entrepreneur. It requires creativity and imaginative power in order to
turn idea into reality. In the following report the idea which has been considered for starting up
business is of selling tea. With respect to this idea there are different aspects which has been
covered such as determining and evaluate different sources of entrepreneurial ideas and
innovation, explain the rationale and the specific market gap with use of tools and techniques,
presenting data to support the gap analysis along with interpretation of providing evidence of
market potential. In the end application of SWOT framework that support specific
entrepreneurial idea along with evaluation of competitive market to assess the potential of idea
are also discussed in detail.
Overview: Developing ideas is not an easy task and being an undergraduate student
starting up business would require presenting ideas to the potential investors. Thus the in context
of the subject the detail about the idea is given below:
Tea might sound like basic idea but it has huge potential in the markets of UK, with
increasing consciousness of maintain health many people are now switching from coffee to the
tea. Expansion with regards to including different flavors and modes of selling has also been
considered. Customers will have several options like cinnamon, ginger, green, blue and black
along with the option of buying it online as well offline.
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation
From the book written by Peter Drucker, there are seven sources of entrepreneurship
through which ideas can be developed. These are the ways that allows young entrepreneurs to
gain knowledge about how to recognize opportunities. The seven sources are explained below:
The unexpected: In order to identity the opportunities the first and the easiest way is to
conduct market research. It is essential to constantly analyses the market as there are times when
entrepreneur missed potential opportunity due to negligence. The idea of startup of tea business
came into mind in the same way, while studying about the market beverage pattern suddenly

realization came that tea market has not been taped into in detail. If right measures are taken this
large amount of profits can be generated.
The Incongruity: In simpler words these are the situations that gives birth to innovation,
while solving unusual situation the entrepreneur might see something that leads to creation of
something new. It analyses the situation between what is and what should, for example Facebook
that successfully analysed there the world needs to become more connected. Thus it can be noted
that the key to success is taking the problems into account and then bringing change so that
society will found new ways to live.
Process Need: This is the source which involves recognizing organization’s weak points
and reshaping them in order to make the process more effective. There were not many authentic
tea outlets which are selling healthy flavoured tea thus taking the idea and converting it into
business is profitable as the customers have not experienced different attributes of tea. Thus
Changing the way of doing business can also lead to innovation (Alvarez, Barney and Anderson,
2013).
Changing perception: Trends are therefore considered as potential outcomes by many
entrepreneurs, these are the situations that brings change in the mindset of people. For example,
fashion of baggy jeans coming back because now they considered cool and comfortable, this is
the change in the perception of people which gives entrepreneurs reason to start up business.
New knowledge: The advancement of technology also provides several opportunities to
potential entrepreneurs. Customers are now becoming increasing aware about the issues through
internet, this new found knowledge should be explored in order to develop ideas. For example,
Customers becoming aware of side effects of coffee like heart attacks, low and high blood
pressure etc.
Industry and market structure change: Changes made by the government in regulating
the industry can be beneficial for the entrepreneurs as it gives them freedom to run their ideas
through business. For example, relaxation made by the government in the sale of tea has given
lucrative opportunity to freely conduct business.
Demographics: This source is connected with the change in the population, income
level, etc. this helps in determining the right target audiences. In context of tea business there are
large number young students and business professionals are its customers.

Critically evaluation
From the above resources it has been evaluated that entrepreneurial sources are important
for business organisation that helps to know what actions should be taken further in order to run
a business. An entrepreneur innovate new products and services which is not come in market and
will attracts customers. Such as the management of tea business has evaluated the market that
customers are interested to get tea. The management has decided to sell new taste of tea that will
influence customers. Sources are needed to start a business in business environment that analysis
the needs and complete it within particular period. Organisation covers different sources like
unexpected, incongruity, process need, changing perception, new knowledge, industry and
market structure change and demographics that helps to make decision to start a new business.
Organisation should focus on such sources that can help to run a business successfully.
P2 Explain the rationale and the market gap for a specific entrepreneurial idea using relevant
tools and techniques to support your choice.
From the business perspective customers are the god, therefore identifying the potential
buyers should be the first priority for every businessman. Tea markets in UK are unexplored,
there is large section of people who are consuming tea. There is need to identify the wants of
customers in order to increase their satisfaction level. There are many advantages of tea such as
mate tea that help in improving the appetite apart from that that unlike coffee drinking too much
tea does not have any consequences. The segmentation of the markets are as follows:
Behavioural: As per this factor customer are put into group on the basis of their buying
behaviour, analysing the buying habits of people shows whether the market is attractive or not.
As it was noticeable that behaviour of customers towards tea consumption was favorable thus the
idea is selected.
Demographic: Based on this factor grouping of customers involves age, status, income
and profession of people. This is used as tool to identify the target audience, in case of tea
business it was found most younger generation is devoid of the advantages and are considered as
potential market.
Geographical: grouping customers on the basis of country, region, location etc. also
gives effective insight about the market, for example there are many immigrants coming from
south Asian country which consumes high amount of tea thus this the scope of tea business is
large (Davis, 2012).

The market gap is related with business idea such as:
Technological advancement: new technology should be used by organisation that helps
to introduce from new products and services. This factor of market gap surely will help tea
business to launch a new tea selling business in London by knowing customer interest.
Identifying opportunities: To start a new business helps to create various opportunities
such as ti meet with new product, job opportunities and unique services. By launching new tea
business different opportunities can be create that helps to fill the market gap.
Such marketing strategy helps new business to evaluate the market gap fill it by
comparing with other organisation. New technology and identifying opportunities are considered
as market gap need to fill up by management and it helps to maintain the productivity. Having
entrepreneurial skills and innovative ideas helpful for organisation which helps to grow a
business successfully.
P3 Present data needed to support gap analysis in the evaluation of a specific entrepreneurial idea
The chosen idea has been investigated from various sources such as primary and
secondary sources. Gap analysis is one such tool that is used to compare the actual performance
with future desired performance. An analysis is made by the entrepreneur in which gaps are
recognized which occurs due to changing taste and preferences of people (Hills and Hultman,
2013). Recognizing whether the product is meeting the requirements of users or not is the main
purpose of using this tool. There are different ways to conduct the market research which are
explained below:
Primary research: This method of research is considered very authentic as data is
collected from the direct sources. By conducting surveys, interviews are the means through
information with regards to the consumption of tea are found. As it is exploratory in nature the
reasons can also be found in detail as to where the organization is lacking.
Secondary research: As per this method information from internet, newspapers,
magazines can be found. One of the article written in the newspapers showed that are over
millions of people who consumed tea. The main benefit of this source is that it helps in providing
actual finding as it considers large number of people and it takes much less time which is not the
case with primary research. Social platforms are turning out beneficial in providing information
about the society trends for example people discussing about subjects on food and beverage
forums (Hills and Hultman, 2013).

Sample size: The size of sample is 40
Name:
Age:
Occupation
Which one do you think is better?
Tea
Coffee
The amount of time you drink tea?
Twice a day
Thrice a day
None at all
Which flavor do you like the most in tea?
Lemon
Green
Black
Why do you prefer tea over coffee?
Taste better
Healthier
Both
Any suggestions that you would like to give
…………………………………………………………….
Which one do you think is better Frequency
Tea 30
coffee 10
The amount of time you drink tea Frequency
Twice a day 30
Thrice a day 5
None at all 5
Which flavor do you like the most in tea Frequency

lemon 5
green 15
black 20
why do you prefer tea over coffee Frequency
taste better 10
healthier 20
both 10
P4 Interpret data appropriately to provide evidence of market potential.
Interpretation:
As per the analysis made on first question it can be seen that majority of the respondents
said they prefer tea over coffee. This shows that the idea has potential to work successfully in the
market.
Interpretation:
As per the analysis made on second question the results show that over 30 respondents
drink tea twice in a day remaining 5 people said that they drink they drink tea twice a day. On
the other hand, there are still 5 people who does not drink tea at all (Hulbert, Gilmore and
Carson, 2013).
Interpretation:
As per the analysis made on the third question it can be seen there are over 20 people
who prefer black tea flavor the next 15 people likes green tea while remaining 5 prefer lemon.
Interpretation:
As per the analysis made on the third question it is shown the answer as to why people
prefer tea over coffee, there were 10 people said it is because the taste is better, the other 20
reasoned it by saying tea is healthier while remaining 10 agree to both the above mentioned
scenario (Nieto and González-Álvarez, 2016).
The data shows that idea will work in the market and investors should put money into it.
Majority of the answers in favor of tea. From the recommendations sections the insights of
product can be understood. This will allow entrepreneur to further explore the product and make
changes into it.

P5 Apply a SWOT framework to collate evidence to support an objective assessment of a
specific entrepreneurial idea.
SWOT is a framework that helps in evaluating the ability of organization or idea. In
context of business idea this tool is applied to understand the different aspects. The strengths,
weakness, threat and opportunity are explained below:
Strengths: Before selecting idea to run business one should first analyses the strength
which hold. An idea which is not lucrative should not be considered thus with the first element of
SWOT it is assessed what are the key strengths of selecting tea as business idea (Sahut, Gharbi
and Mili, 2015).
 IMO certificate: This certificate which is given by the international agency after
inspecting the quality of goods. Gaining this certificate gives advantage over
competitors as people are assured about the product being eco friendly. When
there is proof that ensure that customers can trust the company for selling quality
products. Therefore, it is beneficial for Tea business to get IMO certificate that
creates trust among people and increase business sale.
 Health safety: Tea business will cover natural ingredients that will keep healthy
people and make they happy which will helps to increase the profitability.
Another advantage is with respect to health of customers, as there are more and
more people who wants products that does not harm their health therefore taking
this idea can help in garnering more customers with time.
 Different flavours: Customers have different taste that helps to buy products
accordingly. Such new tea business will provide variety of different tea flavours
such as black, green, espresso, ginger etc. which are included in the product
profile, this allow the customers to try out something different. This helps in
serving the needs of variety of sections.
Weakness: These are the incapability or the areas where the improvement is required.
Through gap analysis it can be identified what are the issues that are required to be overcome.
Every entrepreneur goes through some several problems that affects the profitability of business.
Weakness of the discusses idea are as follows:
 Availability of Substitutes: The main weakness of tea as business is that there is strong
availability of other substitutes like coffee and other energy drinks. As coffee and drinks

are available in market that is substitute of products which can decrease the sale of
organisation. Even though there is large market of tea but there is large section of people
who still prefer coffee over tea therefore idea needs to be marketed appropriately in order
to change the preference of audience.
 Labour intensive: To produce a new tea there is need to many employees who helps to
introduce different flavours of tea. Such labour charges high amounts from organisation
which reduces the profitability. The industry is considered largely as labour intensive
thus changes in the wage rate act as roadblock in the profitability of business. The
companies have to comply to the demand of workers with respect to settlement of wages
which increases the cost of business.
 No brand value: Being an undergraduate there is lack of experience in understanding
how the business works and how to determine the factors in order to control its impacts.
As customers are not aware about the brand thus generating sales would be difficult.
Opportunity: Under this aspect identifying potential situations that can provide valuable
outcomes hence entrepreneur has to strongly analyze the market and understand each and every
detail so that advantages of opportunity can be availed (Siegel and Renko, 2012).
 International borders: By collaborating with the other tea businesses there is an
opportunity to expand the company. As the product is used internationally there is
not much requirement to spend tons of money in generating advertisements which
explains the usage of products.
 Greater antioxidant: Rich ingredients in the tea provide several opportunities for
further growth of business. By getting new flavours of tea customer will attracts
and would start to buy tea that will help to grow business continuously.
Threats: These are the problems that impacts the businesses though it one uses his
expertise these threats can be converted into opportunity. Fluctuations in the demand of
consumers due to availability of other beverages like coffee, juices and other drinks is the treat
for tea business.
Therefore, SWOT analysis of tea business helps to know the strength, weakness,
opportunities and threat of such business. After analysing this, organisation can reduce the
market gap which arises while running a business. It helps to make further decisions and increase

the business opportunities. Therefore, it can be suggested to business organisation to use SWOT
analysis and know the strength and opportunities of business.
P6 Evaluate the competitive and market environments in which the idea will be launched
to assess potential viability.
Competitive research or competitive intelligence is a field of strategic research that
specializes in the collection and analysis of information about rival firms. It's an essential tactic
for finding out what your competitors are doing and what kind of threat they present to your
financial well-being (Spigel, 2017).
Identify competitors: Every business has competitors that threats the position of
business, in order to compete with others one should have the potential to drive out such
elements so that profitability of business remain intact. The selected business proposal has
competitors like bird and blend tea co, Britannia tea company, canton tea etc. Though most of
these are already established brand therefore fighting with them would require strong strategic
plans (Wilson and Martin, 2015).
Competitors profiling: in this step detailing the competitor’s strengths and weakness is
done, this is done understand what are the factors that makes them stand out from others. This
also include the marketing strategy which they use, financial policy etc (Wood and McKelvie,
2015).
To analysis the potential viabilities PEST of tea business has been described:
Political: To start a new business it is important that to know the rules and regulation of
country in which business is going to set up. Such as the management of tea business are
introducing tea business in London then they need to follow UK's rules and trade practices that
helps to grow the business.
Economical: Entrepreneurs should introduce products and services after knowing the
income level of customers that helps to attracts them effective manner. Such as Tea business
follows new inflation rate that helps to fix the reasonable prices of their tea and influences
customers.
Social: Organisation should introduce products according to latest trend and social
culture. Such as management has analysed that people are interested to get new flavour of tea
that will help to run a business by introducing it.

Technological: It is influencing factor that covers new technology in order to continuous
development. The management of tea business uses new technology and introduce different
flavour of tea that influence people and increase sale of business industry.
Therefore, it has been evaluated that competitive market and environmental factor
are important factor that helps to run a business by comparing with others. Management should
analysis micro and macro environment that helps to make right business decisions and increase
the productivity and profitability.
CONCLUSION
From the above report it has been concluded that starting up business would involve
identifying the opportunities and converting them into reality. Every entrepreneur has different
ideas into their mind before they decide to pitch them in front of investors. Though recognizing
opportunity is not easy task but there are different sources through attractive ideas can be found.
Through the peter Drucker entrepreneur innovation book one can find the appropriate source
such as changing perceptions, process need, unexpected etc. Gap analysis is a tool that helps in
finding the flaws or gaps which needed to be covered. It helps in reaching the desired position by
meeting the customer expectations. For the purpose of checking the potential of business
proposal in the market, techniques such as primary and secondary can be used. Tools like SWOT
and competitor analysis different aspects of idea can be explored and based on that decisions are
taken by managers about how they achieve success in the market.

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