Identifying Entrepreneurial Opportunities

Evaluation of different sources of entrepreneurial ideas and innovation.

In a dynamic environment, entrepreneurs are looking forward to new and innovative ideas to gain a competitive advantage. This will help them to enhance their productivity. Apart from this, they can use new technologies to implement their ideas (Audretsch, 2012). Entrepreneur of Coffee Meet is coming up with a new idea which is black coffee with brown sugar in the United Kingdom. Herein, an entrepreneur has adopted Peter F Drucker's seven sources of opportunity for innovation to know whether his innovation will be successful or not in the competitive market of the UK. These sources are elaborated below:

Unexpected success and failure: Acknowledgement of different reasons for unexpected success and failure leads to the generation of innovation. To understand this an example can be considered, IBM built their accounting machines for banks, but later on they discovered that libraries wanted to buy these machines. This did not lead to failure despite it led to new ideas. Unexpected product failure leads to the generation of new idea or innovations which can lead to something which the market likes.

Incongruities: It is variance between what it is and what it should be or assumption of people it to be. This indicates that if things are not happening in same manner as they were supposed to be then there can be scope of innovation. To understand this an example can be considered like when the number cars increased there came a shortage of parking space, this lead to the development of smart cars. They are small cars which can come in small space. Incongruities acts as important source of innovation.

Process needs: This stage involves the identification of weak points of organisation and redesigning them. Source of opportunity for innovation comes from this. An innovator can think out of box so that weak links can be removed. An example can be considered in this context like motel was short on help and was facing issues related with laundry, for this they installed a washer and dryer in room which is behind receptionist desk(Dimov, 2011). In spare time, reservation clerk can do towels and sheets. This helped to solve the problem.

Changes in industry and market structure: Changes in market and industry are prime sources that must be acknowledged. The emergence of new and fast growing segments provides different scope for innovation. An example can be taken to further understand this like tablets, cell phones etc. Before Google, search engines were not optimised and perfect. Google shaped them by making information searchable.

Changes in demographics: Organisations are affected by change in demographics. These changes strongly affect the market as it help to find out the demand of services. Innovation can be based on certain demographics like age, employment, education, etc. Lifestyle needs are not small and their fulfillment is important.

Changes in meaning and perception: Altering or changing perceptions in respect to certain things also lead to innovation. An example can be considered in this context like medical and cosmetic industries have changed. Like people who are of 50 appear to be of 45 or younger. It is necessary to acknowledge services and products which can alter perceptions.

New knowledge: It can also act as a source of innovation. It can be understood by this, whether it is artificial intelligence, biotechnology or nano-technology, new knowledge in any specific area can provide innovation(Fuentes and et. al., 2010). This knowledge can be used to develop new, innovative products. Innovations can be risky as emergence of new knowledge and their conversion into usable technology and there can be a gap before the product is launched within market.

These sources helped to gain new inspiration in leading business growth and having innovative ideas to enhance productivity in a specific sector.

Rationale for the entrepreneurial idea.

Depending upon the needs and tastes of individuals, the Coffee Meet is opting to provide its services in the Coffee sector. Coffee Meet is a new venture which is providing black coffee with brown sugar. This idea came into mind as people have become more health conscious and are opting for options that do not have any negative impact on their health. For this they mostly go for green tea and do not have many options available to them. Herein, an entrepreneur is coming up with this innovation in new marketplace of the United Kingdom. Entrepreneurs is focusing much on health-conscious people such as youngsters, professional workers and fitness freaks. The main objective of this innovation is to bring healthy lifestyle in busy working schedule of a person. They opted for this product as black coffee boosts up memory, enhance performance during workouts, helps to fight out with different liver problems, promotes weight loss, reduction in risk of diabetes, stress level can be reduced and many more. Brown sugar helps to prevent obesity, they are chemical free, energy is boosted naturally, digestion can be improved, provides relief from cold, prevents asthma and many more. These are some benefits of black coffee and brown sugar independently. When these both will be combined then they will provide enhanced benefits. As people are health conscious, it will provide them various benefits and will not not lead to any kind health issues.

SWOT framework to collate evidence to support objective assessment of a specific entrepreneurial idea.

SWOT analysis is used to determine the competitive position of the organisation by determining their strengths, weaknesses, opportunities and threats. This helps them to work on certain factors and gain opportunities available within the market. Coffee Meet is new venture which is opting to serve in Coffee industry (Suddaby, Bruton and Si, 2015). SWOT analysis is done so that they can identify their strong points which can make them different from their competitors, and their weakness so that they can overcome those, find out their opportunities and analyze their competitors present within market. SWOT analysis of Coffee Meet is presented below:

Strength: They are described as factors that make organization different from its competitors like their brand value, image, customer base and many more. Coffee Meet is new venture in the United Kingdom but it acquires different features that make them different from the market. There strengths are mentioned below:

• Coffee Meet provides unique coffee that can attract customers.
• The price offered by Coffee Meet for their services is less as compared to their competitors.
• Coffee Meet provides their customer with unique product, apart from this they can customise their drinks as per requirements of customer's.
• They are more focussed on health of customers, for this they are using ingredients which do not have negative impact on customers.

Weaknesses: This addresses reasons which stop organisations from giving their best. They need to address these issues so that they can remain competitive within market. As Coffee Meet is new in market they have different limitations, they are shown below:

• Coffee Meet is new in the market.
• They need acquire and provide their customers with new products so that they can attract them.
• They do not want that they must be categorized in offering one product.
• Customers have their own taste and are addicted for products offered by competitors, it is difficult to attract them.

Opportunities: They are those factors which organisation can use to gain competitive advantage(Tang, Kacmar and Busenitz, 2012). Different opportunities are present for Coffee Meet which can be used by them. They are mentioned below:

• Coffee Meet has opportunity to create niche in market
• The respective cake shop must start their business during summer which is the second largest events quarter.
• Market can be analysed, premises offered by competitors and as per that relevant changes can be made within premises to attract customers.
• Coffee Meet can opt for outsourced caterers so that they can provide improved and enhanced quality of drinks in different tastes.

Threats: They refers to factors that can harm organisation like competitors, lack of customers, etc. Threats which can hamper or affect Coffee Meet are mentioned below:

• It will be expensive for Coffee Meet to start their own venture.
• There are large number of competitors who have strong customer base and people are addicted to them like Starbucks, Coffee Meet, etc.

Evaluation of competitive and market environments in which idea will be launched to assess potential viability

Pestle analysis and Porter's five force model analysis is done by Coffee Meet to determine their competitive and market environment of organisation (Welter and Alvarez, 2015). Pestle analysis is used to monitor and analyse external market environment which can impact organisation. Porter's five force model is used to measure intensity of competition and profitability on an industry. Results of these analysis are mentioned below:

PESTLE Analysis

Pestle analysis is done by Coffee Meet to analyse the environment in which they are opting to provide services. Pestle means political, economic, social, technological, legal and environmental factors which can have impact on organisation. These factors are mentioned below:

Political Factors: These are factors which help to determine extent upto which government can affect economy. Coffee Meet has analysed these factors before they entered within market. They are present below:

• Political stability in this sector in economy of country.
• Legal framework which is necessary for enforcement of contract.
• Pricing strategies related to same sector.

There are various opportunities a company can get in this factor. The political stability of country will create opportunities to the company to create its market. The policies and regulations set by the company will enhance the business operations and thus an opportunity is created.  If you want to receive an original document according to your university guidelines, then take our assignment helper right away!

Economical Factors: In this impact of certain factors like interest rate, saving rate, inflation rates, etc. are evaluated (Autio and et. al., 2018). Economical factors which can be considered by Coffee Meet are mentioned below:

• Extent to which government intervenes in this sector.
• Evaluation of unemployment rate, interest rate and inflation rate.
• Costs of raw materials must be analysed.

If the economy of a country is good and the purchasing power of customers is high this will create opportunity for the company to expand its market in the new sustainable economy.

Social Factor: They examine social environment of market like population analytics, demographics, cultural trends, etc. In this context following factors are analysed by Coffee Meet:

• Structure of power, hierarchy class structure within society.
• Education levels, cultural trends, changes in lifestyle and change in attitude.

The social factor of the country include the taste, perception and personal aspects of customers. The country in which company is going to invest should have the customers who have same perception of demanding the product from company.

Technological Factor: This will help Coffee Meet to analyse different technologies which are used within market and apart from that they can also acknowledge new technologies(Barazandeh and et. al., 2015). As per that they can use their innovation to attract more customers. Some factors are mentioned below:

• By using technology they can build their attractive website.
• They can take orders by using of online booking facility.
• They can develop their own applications with different features.

Technology also plays an important role in the succession of a business. If a country provides recent trends and technologies than there will be great opportunities for the company.

Legal Factor: Coffee Meet needs to carefully evaluate legal factors before they enter in market. As these factors can create problem to them like they must be aware of employment legislation, health and safety and many more. Some factors are anti- trust law and data protection, health and safety law and employment law .

The legal factor provide laws and regulations of that country. If all the process of setting up the business are going well according to the law than there is a great chance for the company to perform its business.

Environmental Factor: Coffee Meet can acknowledge ecological aspects and their surrounding environment. This will help them to understand their growth in this sector. They need to address these factors like climatic change, laws related to environmental pollution and waste management in respective sector.

Porter's five force model Analysis

The environment of the country should favour the company so that it can perform its operations smoothly. If the company is following all the environmental laws and regulations than it will be great opportunity for the company to perform its operations.

By using Porter's five force model, Coffee Meet can keep an eye on their competitors. There are five factors which can drive competitive position of organisation within specific industry (Barazandeh and et. al., 2015.). The five factor of Porter's which Coffee Meet should analyse are mentioned below:

Threat of new entry: This refers to the situation where new entrepreneur launch business in same industrial sector and offer innovative services to win competitive advancement. In respect the company it can be evaluate that in respective business there is high threat of new entrance. So according to situation here threat for Coffee Meet is high because in coffee cafe sector any one can establish their business in very easily.

Threats of substitutes: This includes options which customers have in same products. This can affect business of Coffee Meet as different alternatives are available like Costa Coffee provides wide range of products in same sector. Some factors which can affect Coffee Meet are: wide range of substitutes are available, secure relationship with other brands, brand dependability. These are some factors which can have adverse impact on Coffee Meet. Here for respective company threat of substitute is high because there are number of coffee cafe who serve safe and related products. So to overcome this situation they can introduce some new innovative techniques which is unique and different.

Bargaining power of suppliers: Raw materials in Black coffee with brown sugar are black coffee, brown sugar, milk, etc. which are easily available within market. Some factors that may impact Coffee Meet are: few suppliers of raw materials, alternatives may not be present so they have to accept prices offered by suppliers, switching cost can be high, etc. here it can be evaluated that bargaining power of suppliers is high which affect company operations. To overcome this managers of respective companies develop effective relationships with suppliers by which they able to get raw materials in low price.

Bargaining power of buyers: For customers, there are many options available for customers and competitors within market due to which bargaining power of customers or buyers is high (Welter and Alvarez, 2015). Here the bargaining power of customers is high because if respective company offer their products at high price then their customer can go to another cafe. This can be so because there are several coffee cafes available in market.

Competitive Rivalry: Coffee Meet can find their strong competitors and can identify their strengths. Companies can exercise some or no control on prices of services and goods. For this Coffee Meet can opt for new and innovative products that will help them to survive within the market for longer time. Rivalry is intense when: organisations are of the same size, they have comparable strategies, the growth rate is low, the loyalty of customers is high, barriers to exit are high and many more. Coffee Meet must focus on quality of their products so that they can attract large number of customers. Competitive rivals of Coffee Meet is high because there are high number of coffee cafe available in market. To overcome this risk they can introduce new unique and innovative technique.

Conclusion

From above report it is clear that entrepreneurs have large number of options available with them and they can use opportunities to formulate their ideas. For launching a new venture it is necessary to analyse external factors so that organisation can lead to success. Furthermore, SWOT analysis is conducted to analyse different factors in respect to business idea. Apart from this Pestle and Porter's five force analysis is used to have analyze competition.

Related Services: Effects of Globalisation

References

• Audretsch, D., 2012. Entrepreneurship research. Management Decision. 50(5). pp.755-764.
• Autio and et. al., 2018. Digital affordances, spatial affordances, and the genesis of entrepreneurial ecosystems. Strategic Entrepreneurship Journal. 12(1). pp.72-95.
• Barazandeh and et. al., 2015. Investigating the effect of entrepreneurial competencies on business performance among early stage entrepreneurs Global Entrepreneurship Monitor (GEM 2010 survey data). Journal of Global Entrepreneurship Research. 5(1). p.18.
• Dimov, D., 2011. Grappling with the unbearable elusiveness of entrepreneurial opportunities. Entrepreneurship Theory and Practice. 35(1). pp.57-81.
• Fuentes, M. D. M. F. and et. al., 2010. Prior knowledge and social networks in the exploitation of entrepreneurial opportunities. International Entrepreneurship and Management Journal. 6(4). pp.481-501.
• Grégoire, D. A. and Shepherd, D. A., 2012. Technology-market combinations and the identification of entrepreneurial opportunities: An investigation of the opportunity-individual nexus. Academy of Management Journal. 55(4). pp.753-785.
• Kohlbacher, F., Herstatt, C. and Levsen, N., 2015. Golden opportunities for silver innovation: how demographic changes give rise to entrepreneurial opportunities to meet the needs of older people. Technovation. 39. pp.73-82.

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