Unit 3.23 Identifying Entrepreneurial Opportunities Level 3

Introduction

An entrepreneur can be stated as the person who have capability of taking risk in order to open a whole new business venture which includes involvement of various things like capital, resources and so on. Innovation word and unique ideas should be kept in mind by an entrepreneur while introducing or making plans in order to develop the business concern. Identifying entrepreneurial opportunities is must for an entrepreneur while setting up a whole new business (Baggen and et. al., 2015). Along with this, a business person has a lot of business ideas in his/her mind but it is very much required for him/her to select the most appropriate one after analysing all the business market trends. Cream & Coffee Bar a coffee house is going to be introduced in London under this assignment. Report is going to include, sources through which business ideas can be developed, gap analysis, SWOT analysis and so on which may aid entrepreneur in developing business in successful manner.

Task 1

P1. Sources for a new and innovative business idea

In modern era, most of United Kingdom's citizens are looking forward to introduce business ventures at marketplace. This is because a business helps a person in generating high capital rather than doing a job in an organisation where they have to go through various sort of restrictions and can earn only a fix amount of money. Unique business plans and ideas may aid an entrepreneur to develop their business venture that they are willing to do in much effective and efficient manner. It is must for entrepreneurs to look or analyse the situations of the market in which they are looking forward to introduce their new business (Davidsson, 2015). This may aid him/her to develop products and services according to analysis that has been done by them. Some of sources through which new and innovative ideas of doing business can come across in minds of entrepreneurs which are given below:

Brainstorming: This can be stated as a creative process in which problems and other things can solved in much effective and appropriate manner. Lots of ideas may come in a person's mind that may aid in resolving issues right on time. Entrepreneur have a different mind then a person who is doing job and other things, a lot of thoughts do comes in mind which may help in introducing a whole new venture in an existing market.

Onlinesites: There are ample number of websites which do not cost much to an entrepreneur or to a person in getting most suitable business ideas. Some of websites like entrepreneur.com, YouTube and so on can be stated as online sources that may aid an individual in getting various ideas of doing business or developing a whole new business venture. Data that this site have is authenticated which was examined by many superiors. Therefore, online sites and search engines can be considered as one of most relevant and appropriate source through which business ideas can get (THE BEST RESOURCES WHERE YOU CAN FIND BUSINESS IDEAS, 2015)

Business Opportunities and Ideas: Many bloggers are there that gives their views and thoughts after doing analysis of United Kingdom's market and keep on updating them through which a person can get knowledge of all the trends and techniques that have been used by existing companies (Foo, Uy and Murnieks, 2015). With the help of this, an individual can get most suitable idea in short period of time which may aid him/her in entering market and get successful in desired time frame.

BusinessIdea Forum: Another online website where an individual or entrepreneur can get business ideas and share with others through which he/she can make modifications in it if needed.

Mass media: Magazines, television station, radio, newspaper are some major sources under this through which a person who is willing to open a business venture can adopt different ideas. Proper concentration in looking into a advertisement or blog can help an entrepreneur to get all the ideas of doing new business with innovation in much effective and appropriate manner.

In order to open Cream & Coffee Bar in London, mass media, social sites, business idea forum are some most suitable sources through which an entrepreneur can get all the relevant information and open business with best products and services according to consumers needs.

Sources of innovative opportunities:

Theunexpected: It has been analysed that the organisations at market place needs to look into different aspects and then to opportunities as well. Here, Cream & Coffee Bar can analyse the market and develop their products with the help of taking innovational process.

The incongruity: Incongruity carries a combination among two things like what is there and what could be done. With the help of this, Cream & Coffee Bar can easily attain its goals and objectives that are related to developing products with goals and objectives.

The process need: It has been found that process need is something which plays a crucial role when it comes to identifying corporation's process that what are the weak points and where things needs to be changed through redesigning.

The industry and market need: Both the market and company like Cream & Coffee Bar carries continual flux. While developing a product, it is necessary for organisations like Cream & Coffee Bar needs to keep their eyes so that benefits can be gained right on time.

Demographics: Needs of citizens of a country their income levels, depending on their age get changes. It is required for Cream & Coffee Bar to look into this aspects in order to keep sustainability stronger.

Changes inperception: It has been examined that fluctuations stays there in demands of public. Therefore, it is required for business firms like Cream & Coffee Bar to keep on looking into these aspects so that benefits can easily be gained.

New knowledge: Because of rapid changing nature of technology it can be said that organisations like Cream & Coffee Bar contains high chances of opportunities which may aid them in attaining a good position at marketplace of UK.

SOCIAL FACTOR:

London people carries a unique taste, therefore, it is required for Cream & Coffee Bar to look at all the tastes and then develop appropriate products with innovation through which benefits can be gained like high profit margins and many more.

ECONOMICAL FACTOR:

After when Brexit took place, it has been analysed that UK's economical conditions have taken a step ahead just because business people that are attached with big brand names have started doing business because of literacy and liberal policies. This raised profit margins of business firms and impacted positively on economic conditions as well. This can be helpful for Cream & Coffee Bar at the time of launching because they UK's condition of economy is pretty much good at current moment.

TECHNOLOGICAL FACTOR:

Technology in modern world plays a crucial role when a firm starts its business. Because it has been located that every single business company tries to adopt new and updated technology which may aid them in delivering appropriate services to customers as per their needs and requirements along with current trends as well.

Enviromental Factor:

Cream & Coffee Bar which is delivering products like roasted coffee can easily grab a good position at market of London. Because depending on the atmosphere, people of this country mostly likes to have coffee with good quality beans. If this organisation will directly start maintaining the taste as per needs then it is may be possible that firm may grab a good position in short period of time.

Types Of Innovation:

Process innovation: This term can be understood as implementing new technology that are related to innovation can easily be considered as something through which benefits can easily be gained right on time. This type of process is being considered as a major element which plays a crucial role when an entrepreneur looking forward to launching its products at marketplace.

Product innovation: This type of innovation can easily be carried out through which many benefits can easily be gained. For an instance: Change in characteristics of an existing product may help company in enhancing their sales and productivity. This can easily be done through looking into different aspects like customers needs and requirements.

Incremental innovation: This can be considered as a type of innovation which helps a business organisation in upgrading existing products and services depending on perceptions of customers.

Difference among invention and innovation:

Invention

Innovation

When an organisation manufactures a whole new product when there is no existence of item that has been made in past can be known as invention.

Changes in existing products and services if a company made in order to enhance sales of it then this can be defined as an innovation.

Task 2

P2. Explanation on entrepreneurial idea for investigation the market gap

United Kingdom's economy is growing in rapid manner as entrepreneurs are entering in both domestic and international market who are citizen of this nation. Rather than spending 8 hours while doing a job it is much more profitable for an individual to become an entrepreneur. Money can be made in huge amount if a business idea is soothing marketplace where products and services are being sold to consumers according to their needs (Gielnik and et. al., 2015 ). Proper acquisition of business idea sometimes may not give desired outcomes in specific time. Therefore, it is very much required for entrepreneur to have patience, stay motivated, keep on taking initiatives and making modifications in strategies if it is required in order to make new business venture successful in nature. Difference in market conditions can be stated as market gap. This is much related to market share. As when an idea is there of opening a coffee bar, possibilities are there that cost of coffee beans may get differ while introducing bar in real time. This needs to be analysed by an entrepreneur in an appropriate manner so that venture do not face losses. Market gap is there in every single business idea which was found through:

Trends and new technologies: Technology do consist of rapid changing. Thus, it is mandatory for an entrepreneur to adopt best suitable and updated approach in business while entering in market. With the help of this, market gap can be filled in an appropriate way and through this a new venture can remove all the risks factors and can done business in successful manner (Hatak and et. al., 2015). Using innovative tools may lead entrepreneurs in developing products and services and through this, organisation can look into various aspects which can lead whole new company to a new level.

Create combinations: Developed & updated tools/techniques are not every single time helpful in nature. Therefore, it is much required for entrepreneurs while formulating new business to consider both old and new technology in consideration as through this a new venture can develop their products and services in proper way which can improvise consumers experience in much effective and efficient manner.

Hidden opportunities in industries: An entrepreneur needs to gather all the information which is related to market trends and then to apply all the strategies which are being prepared by them. With the help of this, new venture can attain all goals and objectives right on time and in much effective ways as well (Hmieleski, Carr and Baron, 2015). Every single sector has some points which most of organisations do not look into but this point may help firms in raising their profitability. These components can be helpful for an entrepreneur while introducing business firms at marketplace of United Kingdom.

Henceforth, these are some sort of tools and approaches which needs to be taken care in an appropriate way by an entrepreneur while introducing new venture so that to grab good position at marketplace of United Kingdom.

Market segmentation: Market segmentation is being considered as a process where a company sets dividends among customers depending on business market and their perceptions or needs. In other words, dividing consumers in sub groups can be helpful for business companies in developing products depending on their needs and requirements. This includes some of factors and these are given below:

Behavioural Segmentation: In this process, customers can be divided as per behaviour of people. In this manner, cafes are needed to provide services as per people who belong to business and educational area. As they used to come on daily business as compared to common people. Demographically Segmentation: This section where market segmentation depends on citizens as per their demographics. Buying process, trends and their needs are being considered as some of basic lifestyle needs can put positive and negative impact on companies. Therefore, it is required for them to manufacture distinctive products so that they can fulfil needs of customers according to their tastes.

Geographic Segmentation: Geographical segmenting can easily be understood as when a company looks forward venturing at a whole new place. Through this, customer base can easily get stronger.

Tangible & Intangible features and benefits of a product or service

Tangible

Intangible

Unique featured machineries where a customers can look into process of making coffee and other products which they can touch can easily be considered as tangible feature.

Strategies which cannot be seen and has been adopted by Cream & Coffee Bar in order to grab attention of customers can be taken as an intangible feature.

Porter five force model:

  • Rivalry: For a firm which is doing business at a small scale, it has been analysed that competition for them stays at a small area. Lets take an instance of five kilometres. Cream & Coffee Bar which is going to be launched in London needs to look at strategies that has been made by their rivals near by five kilometres and then develop a strategy through which they can gain competitive advantages.
  • Threat of substitutes: It has been found that company can look into different aspects like threats of substitutes because coffee products can easily be found at any place. Therefore, it is required for business organisations to keep up their products unique so that benefits can easily be gained right on time.
  • Buyer Power: If income level is going to stay high then it can easily be said that products supply will keep on going through. With the help of this, many benefits can easily be gained right on time.
  • Supplier Power: It has been examined that this factor can be both negative and positive at the same time. Because, if supplier is one at targeted area then he/she can ask for means of exchange as per his/her own need.
  • Barriers to Entry: It has been examined that, entry level is carrying many barriers. It has been analysed that if government has made some distinctive policies then it is required for company to follow them in order to run business in successful manner.

Industry Life-Cycle

This type of cycle carries different phases and these are given below:

  • Pioneering phase
  • Accelerate Growth Phase
  • Mature Growth Phase
  • Industry Maturity Phase
  • Decline Phase

(Source: Industry Life-Cycle Phase, 2018)

Task 3

P3. Data to support gap analysis in the evaluation of a specific entrepreneurial idea

It has been examined that most of the time gap analysis is being done when an entrepreneur is looking forward to build a new venture and would like to introduce at marketplace in near future. On the other hand, existing business companies does this sort of analysis in order to gain competitive advantages. With the help of this, modifications can be made if it is required (Karimi and et. al., 2016). Here in the context, entrepreneur is willing to start a coffee shop with many innovative ideas but there are some concerns which should be kept in mind before entering the market and these are given below :

Competitors: As per given report, it has been located in United Kingdom almost 5,000 coffee shops are present, reason being that citizens of this country mostly likes to drink rich coffee of high quality coffee beans. Here, it can be stated as ample number of issues and high competition can be faced by Cream & Coffee Bar while launching its products and services at marketplace.

Quality: Quality of products and services plays an important role in marketplace. Therefore, it is much required for entrepreneur which is launching Cream & Coffee Bar to manufacture their products with quality which may win heart of consumers in ample number when they use or drink it. With the help of this, Cream & Coffee Bar can develop proper relation with customers for a longer period of time. Apart from this, it has been located that Cream & Coffee Bar can make high profit and revenue through offering roasted high quality coffee beans to user in order to main sustainability.

Economical situations- Entrepreneurs develops business which provides job opportunities to the unemployed people. It helps an organisation to give strengths for competing with rivals and enhance productivity in an effective manner. New companies maximise economic development of region (Kirzner, 2015). In addition to this, there is a requirement to an individual to determine all environmental factors which can develop negative impact on business.

Technologies- Economic development of business is based on the technologies which are used at workplace. It provides may opportunities to company to increase its productivity and operations in easier manner. Launching an attractive cafe can work in a easy way driven through new or effective techniques.

After determining all these given factors concerned with begin new business, the gap analysis is conducted through situating particular target through evaluating vision, missions, aims of company. Through using better gap analysis on Cream & Coffee Bar, given data has been analysed through using questionnaire format.

Gap Analysia

Basis

Cream and Coffee Bar

Starbucks

Costa coffee

Products and services

Cream & Coffee Bar offers good quality coffee goods with the ice – cream with an affordable costs as comparison to its rivals.

Starbucks is the strongest competitor of coffee houses in today's scenario. Starbucks provides a quite developed range of coffee and coffee products at standardised prices. Also infrastructure provided in Starbucks stands out for itself.

Cost coffee offers excellent quality coffee and coffee related products at quite competitive prices. Also they keep their menu updated on a regular basis.

New entrants

Threat of new entrants in context of Cream and Coffee bar is quite high as there are a number of cafes and coffee houses that provide coffee in UK.

Threat of new entrants in context of Starbucks is absolutely low as it is a well developed brand name. Also its products and services stand out for their authentic aroma and flavours.

Threat of new entrants in context of Costa coffee is quite less but more if compared to Starbucks.

Organisational Structure

Managers of Cream and Coffee bar prefer adopting a functional organisation structure in their cafe.

Starbucks practices a matrix structure in their organisation. As per this this structure roles and responsibilities of employees are determined as per functions and products.

Costa coffee employs a stable and divisional organisation structure in their organisation. Here works gets divided as per skills of employees.

Primary research:

In present report, questionnaire which is one of effective approach of primary research method has been chosen and is developed underneath:

QUESTIONNAIRE

NAME:
AGE:

ADD:

GENDER:

MAIL ID:

Q1) Do you have any knowledge related to coffee products offered by Cream & Coffee Bar?

· Yes

· No

Q2) What type of coffee beans you like to have in a coffee product?

· Roasted coffee beans

· Fresh Coffee beans

· Coffee Robusta

· Coffee Arabica

Q3) Are the pricing range of coffee products of Cream & Coffee Bar is affordable ?

· Yes

· No

Q4) Are you fully satisfied with quality that Cream & Coffee Bar delivers?

· Yes

· No

Q5) Recommend ions ?

 

P4. Interpretation on Data in order to provide evidence of market potential

Theme 1: Services of Cream and Coffee Bar

Q1) Do you have any knowledge related to coffee products offered by Cream & Coffee Bar?

Frequency

a) Yes

30

b) No

10

 

Theme 1:

Central Tendency

Data

Mean

23.5

Median

23.5

Mode

13

Standard Deviation

9.19

 


Interpretation: With the help of above graph, 40 out of 30 people were aware of the company and are utilising products that are offered by them. On the other hand, only 10 respondents were not having information about Cream & Coffee Bar.

Theme 2: Facilities offered by Cream & Coffee Bar

Q2) What type of coffee beans you like to have in a coffee product?

Frequency

· Roasted coffee beans

9

· Fresh Coffee beans

12

· Coffee Robusta

13

· Coffee Arabica

6

Central Tendency

Data

Mean

10

Median

10

Mode

3

Standard Deviation

3.16

Interpretation: From the above mentioned graph it has been assessed that 40 individuals were interviewed out of which 9 people believe that cafe should use roasted coffee beans. 12 respondents said that company would require to use Fresh Coffee beans. 13 have said that they expect the cafe to be well equipped with Coffee Robusta. Lastly 6 people wish the cafe may infuse Coffee Arabica in its products.

Theme 3: Price Range offered by Cream & Coffee Bar

Q3) Are the pricing range of coffee products of Cream & Coffee Bar is affordable ?

Frequency

a) Yes

35

b) No

5

 

Interpretation: From the above mentioned graph it has been interpret that 35 out of 40 people are satisfied with the pricing range of Cream & Coffee Bar whereas 5 people find it to be really very expensive.

Theme 3:

Central Tendency

Data

Mean

20

Median

20

Mode

0

Standard Deviation

1.21

Theme 4 : Satisfaction with quality that Cream & Coffee Bar delivers

Q4) Are you fully satisfied with quality that Cream & Coffee Bar delivers?

Frequency

a) Yes

30

b) No

10

 

Interpretation: From the above mentioned graph it has been interpret that 30 out of 40 people being surveyed are satisfied with the quality and taste of food whereas 10 people believe that flavours can still be enhanced giving it an authentic touch.

Theme4:

Central Tendency

Data

Mean

20

Median

20

Mode

0

Standard Deviation

4.14

Secondary method to collecting data:- Under this, data collected through books, journals, articles etc.

  • Cream & Coffee Bar its coffee and other eatable items with many discounts and also give offers to existing consumers to make them loyal. It helps in enhancing productivity of an organisation (Mathias and Williams, 2017).
  • The main focus on firm is on customers to provide better services to them to generate more profit. It is helpful in attracting large number of customers.
  • Cream & Coffee Bar company has strong bond with its suppliers in order to getting better quality of raw materials on continuous basis and at reasonable cost.
  • There is also a big threat that consumers can switch to other companies if in case they have any issue regarding cost, quality, infrastructure of coffee bar.

In this sector, there is more competitors, so it is necessary to Cream & Coffee Bar to take care demands as well as requirements of people and try to fulfil them in an effective or better manner. With the help of this, customers will be loyal towards firm and retain for long period of time.

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Task 4

P5 Conduct SWOT analysis to assess the entrepreneurial idea

It is essential for management of small business organisations to conduct SWOT analysis so as to determine whether their ideas will be worked or not in market. The analysis assess strength, weaknesses, opportunities and threats so as to gain maximum market share and growth opportunities (Mueller and Shepherd, 2016). Cream & Coffee bar serves most tasty or delicious food and provides best of table services in London street. Basically, SWOT analysis isn't a complicated thing yet its a worthwhile task that supports firms to implement best marketing strategies and policies in order to accomplish business goals and objectives. Following is described SWOT analysis of Cream and Coffee Bar: -

Strength – Strength of every business association supports them to do or serve best in respect of providing quality products, serving tasty foods and rendering a décor which gives luxurious experience of eating to customers. Further strength also consists with pricing policy of the firm which attracts many customers towards the firm. In context of Cream & Coffee Bar are – exterior of the restaurant is clean and tidy, prices are more cheaper than competitors, having a new or innovative service style, effective brand image and offers unique products rather than its competitors (Ramoglou and Tsang, 2016). Due to its effective market goodwill, the cafe is still generating traffics while slow times through using various promotional strategies, i.e. it gives 20 to 305 discount to customers who comes before 5PM.

Weaknesses – Weaknesses gives an idea to firm so as to determine those areas which are going to be improved within restaurant. The main weakness of Cream and Coffee Bar is it is highly depended upon them for some personal service which is provided at each table. The restaurant also not provide proper training and development assistance to employees which results workers does not know how to treat guests or attend them in well being manner; it reduces staff retention.

Management of the bar is not capable to clearly explain to culinary personnel how food will be prepared and presented.

Opportunities – Looking for future opportunities aid the bar in raising sales and profits, like expanding the range of food and beverages. In order to take advantage from market trends is related to serve healthier foods items, like involvement of organic or low calorie dishes in restaurant's menu. Adoption of ways which generates more traffics represent growth opportunity for the restaurant (Ramoglou and Zyglidopoulos, 2015). Effective and efficient quality of services is one of biggest opportunity for Cream and Coffee Bar which supports it to gain high competitive edge. The restaurant has strong people management which involves recruiting and training; it is still a key of winning as well as keeping customers for long term period. The main opportunities that Cream and Coffee Bar has – a new office complex is opening nearby which increases sales and profitability, a main competitor of the firm has closed down, a new housing development is being built nearby etc.

Threats - These are the main threats which can harm market image of Cream and Coffee restaurant, such as – a high street brand is moving into London street, operating costs are increased soon, a competitor will be reduced its prices; it starts price war and business lease is up for renewal and rent will increase.

P6 Evaluation on competitive and market environment to launch ideas

It is supposed from entrepreneurs to conduct a market analysis in order to gain maximum defensible benefits. Although, functionality or working activities of a small businesses are rely upon several factors like- customers' preferences, taste, nature of business environment, competitive position etc. Before starting a new project, it is fundamental for management to assessed all competitors which are currently presented at marketplace.

Competitive Market – Assessing the market competition supports Cream & Coffee Bar in respect of preserving prominent amount of competitive edge and retain sustainability at marketplace (Renko and et. al., 2015). It results firm will be able to deal with all external aspects that have a direct or indirect impact on business activities and operations. Therefore, evaluation of market competition helps the bar to recognise that how the competitors are dealing with customers and serving them. Then, the bar can upgrade its strategies and policies in order to serve better quality products to target and potential audiences. This section comprises with different sub points, such as -

  • Substitute products – Business entrepreneurs must be informed about substitutes which are already exists in market and on what price they are sold.
  • Target audiences – Before introducing any new product in market firm should know who are the target audiences and their demands as well. It supports to realise an estimate amount of sales and if demand will be moderate then it will aids in assessing future profits.

Market Environment – Below is defined two major factors which are taken into account by Cream and Coffee Bar while defining market environment: -

  • Macro environment – It entails all the internal factors which have a vast impact on firm's market value and position. Main macro environment factors are – political, economic, social, technological, legal and environmental factors. Furthermore, main target of Cream and Coffee Bar is young and college going students who are willing to cafes usually, this health is major aspect that should be considered (Suddaby, Bruton and Si, 2015).
  • Micro environment – There are several internal factors which affect business operations and activities, such as- employees, organisational cultural, management, goals and objectives etc. All these components should be taken into consideration so to grab better future opportunities from target market.

Conclusion

From the above mentioned report, it get analysed that new entrepreneurs have wide range of opportunities which forces them to conduct all operations in the best possible manner. It is necessary for individuals to analyse all market factors that have direct or indirect impact on firm's activities so as to determine several opportunities and threats which are present at marketplace. The report has involved Porter's five forces model to assess competitive position of the restaurant and here is conducted SWOT analyse to determine strength, weaknesses and opportunities and threats so as to implement entrepreneurial ideas.

References

  • Baggen, Y. and et. al., 2015. Linking complex problem solving to opportunity identification competence within the context of entrepreneurship.International Journal of Lifelong Education. 34(4). pp.412-429.
  • Davidsson, P., 2015. Entrepreneurial opportunities and the entrepreneurship nexus: A re-conceptualization.Journal of Business Venturing. 30(5). pp.674-695.
  • Foo, M. D., Uy, M. A. and Murnieks, C., 2015. Beyond affective valence: Untangling valence and activation influences on opportunity identification.Entrepreneurship Theory and Practice. 39(2). pp.407-431.
  • Gielnik, M. M. and et. al., 2015. Action and action-regulation in entrepreneurship: Evaluating a student training for promoting entrepreneurship.Academy of Management Learning & Education. 14(1). pp.69-94.
  • Hatak, I. And et. al., 2015. Age, job identification, and entrepreneurial intention.Journal of Managerial Psychology. 30(1). pp.38-53.
  • Hmieleski, K. M., Carr, J. C. and Baron, R. A., 2015. Integrating discovery and creation perspectives of entrepreneurial action: The relative roles of founding CEO human capital, social capital, and psychological capital in contexts of risk versus uncertainty.Strategic Entrepreneurship Journal. 9(4). pp.289-312.
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