Identifying Entrepreneurial Opportunity

In this project report a new Chinese restaurant Sweet and Spicy is going to be established in London, UK. Low-fat food items and beverages are going to be offered by the organization. It is a great place for foodies who are fitness freak. Various topics are covered in this report that are sources for a new and innovative business idea, choice of a specific idea, and primary and secondary data to identify market potentials. An assessment of potential viability and competitor analysis has also been covered under this assignment.

TASK 1

Different sources of entrepreneurial ideas and innovation

Most entrepreneurial ideas are based on innovation because these are made according to recent market trends. Entrepreneurs get business ideas from various sources that motivate and support them throughout their implementation. A new business is going to be established in London, UK. It is a restaurant that is Sweet and Spicy. The target market of the organization is fitness freaks and diet-conscious individuals. Chinese food and beverage items with less fat and calories are going to be offered by it. The concept of Sweet and Spicy is being identified with the help of Drucker's 7 Sources of Innovation which is described below:

Drucker's 7 Sources of Innovation:
All these sources are introduced by Peter Drucker to inspire individuals so that a new business can be launched successfully. All the 7 sources are described below:

• The unexpected: It is the first source of innovation that describes the unexpected nature of innovation that may result in massive success or failure. As the business idea of Sweet and Spicy is very interesting then it may help the entrepreneur to achieve all the business goals. Identification of unexpected situations may guide to finding the best idea (Alvare, Barney, and Anderson, 2013).
• Incongruities: According to this source the entrepreneurs need to gather appropriate data of the market so that a new business can be established with such items that customers are willing to buy. While introducing Sweet and Spicy the owner need to collect proper information of market so that the tastes and preferences of customers can be identified.
• The process needs: The entrepreneurs need to be task-oriented rather than situation-focused as it can help to identify best business opportunity. According to this source, entrepreneurs should use such a concept for business which has not yet been used by any other person. Differentiation and uniqueness of Sweet and Spicy restaurant will help to attract a large number of customers.
• Industry and market structure change: Modification in industry and market structure guides to create innovative idea for a specific product so that it can meet the expectations of customers. Sweet and Spicy is based on an innovative business concept and the idea is formulated according to market changes to reach a large number of customers.
• Demographics: Fluctuations in demographics such as population, education and income level guides individuals to create a business idea according to them. It will help to meet the goals of the new businesses such as Sweet and Spicy. For the restaurant, it is very important to give preference to these factors while launching a business. It helps to motivate entrepreneurs to set up a business by analyzing the demographics that are required to be focused on while establishing a business.
• Changes in perception: Preferences and perceptions of customers change with time. It can motivate Sweet and Spicy to offer them such food and beverage items that they are willing to have (Audretsch, 2012).
• New knowledge: It is the combination of scientific and nonscientific technology. Entrepreneurs need to have appropriate information of recent trends of the market. It may motivate the individuals who have formed the business idea of Sweet and Spicy to focus on the preferences and current market trends that have taken place in the food and beverage sector. and you can also go for help from the grammar Checker Tool.

All the above-described sources can motivate individuals to form innovative ideas for businesses so that future goals can be achieved. These sources may guide and support the owner of Sweet and Spicy to offer such food items to customers that may meet their preferences (Godley, 2013).

TASK 2

Rational and market gap for a specific entrepreneurial idea 

Market gap is concerned with business opportunities that can be used to implement an innovative idea to expand business by capturing large market area. Sweet and Spicy is going to use different targeting segments to identify best target market. All of them are described below:

Behavioral segmentation: It can be defined as the way of distributing the whole market in small homogeneous groups that are based on the buying behavior of customers. Sweet and Spicy can segregate the its target customers according to their buying behaviour such as brand loyalty, frequency etc. It may help to attract large number of customers and retain them by offering good quality food items.

Demographic segmentation: This is the segment that is divided according to age, gender, family size, income, education and other factors of customers. Sweet and Spicy can divide its individuals based on demographics to know them more accurately. All the socio-economic characteristics of consumers may help the restaurant to target such individuals who are going to buy the food items (Grégoire and Shepherd, 2012).

Geographic segmentation: In this type of segment the market is divided based on geography. It can be segregated into areas, cities, countries, states and regions. Sweet and Spicy is going to be launched in London, UK and the geographic segment which can be selected by it is A country which is London.

From all the above-described segmentations the best-suited segment for Sweet and Spicy is the demographic in which the targeted customers are the young, foodies and fitness freak customers. It will help to reach a large number of individuals who are willing to have such food items that are going to be offered by Sweet and Spicy.

As Sweet and Spicy is a new restaurant and the food and beverage sector of UK is broad hence there are various competitors are available in the market. These are Min Jiang, Kai Mayfair, and Rice Republic Chinese restaurant. All of them are well established and famous and for Sweet and Spicy it is very important to be competitive in the market to survive in the market. In the food and beverage sector, there is a high possibility of getting failure due to the number of competitors but the business idea is unique and innovative and may help to get huge success in the market. There are a number of growth opportunities for the restaurant in the market along with this organisation also have to face various risks such as higher competitors. This can be reduced by offering unique food items to the customers.

Gap analysis is the process of assessing the gap between market demand and organization's products. As the requirements of customers in food and beverage sector are very high and Sweet and Spicy need to meet their aspirations so that business can be executed appropriately. The organization has planned to offer fast food items and soft drinks with less fat. Demand of such products is continuously increasing in the market. It has been estimated that in the future Sweet and Spicy can attain higher growth because customers are becoming fitness freak and health conscious. The main objective behind the business idea is to offer unique food items so that the business can be established successfully. This can be achieved by meeting the requirements of customers.

TASK 3

SWOT framework to collate evidence

SWOT analysis: It is a technique that is used by organizations to analyze their strengths, weaknesses, opportunities, and threats. A SWOT analysis of Sweet and Spicy is conducted by the entrepreneur that may help to formulate new strategies to successfully establish the business (Mitchelmore and Rowley, 2013).

The analysis is as follows:

Sweet and Spicy have various risks such as high competition and the restaurant can overcome the risk by offering unique food items that may grab the attention of customers and meet their requirements.

Evaluation of competitive and market environments

Competitive market analysis is a process of analyzing existing competition that may affect a new business or a running business. The best technique that can be used by Sweet and Spicy to analyze the competitive market is Porter's five force model. This model is described below:

Porter's five force model: This model was introduced by Michael Porter in the year 1979 to facilitate new entrepreneurial ventures while assessing factors that may affect their business in the future. This model can be used by Sweet and Spicy to identify the competitive forces that are affecting the food and beverage sector (Porter's Five Force Model,2018). All the five elements of this model are described below:

(Source: Porter's Five Force Model, 2018)

• Industry rivalry: For all the new businesses that are going to be launched in the market it is very important to identify existing competitors in the market who are providing the same products to the customers. For Sweet and Spicy it is essential to gather information of existing firms that may affect the business of the restaurant. The main competitors of the firm are Min Jiang, Kai Mayfair, and Rice Republic Chinese restaurant. Sweet and Spicy need to be competitive in the future which is possible by offering good food and beverage items to the customers.
• The threat of new entry: In the Current era competition in the food and beverage sector is continuously increasing and new restaurants are launching frequently. Sweet and Spicy needs to keep information on new entries in the same market so that a unique feature can be added in the food items to get a competitive advantage (Smith and Ibrahim, 2012). In UK there are fewer rules and regulations on small business like Sweet and Spicy so the organization has a higher threat of new entry in the same market.
• Threat of substitutes: Various cuisines are eaten by customers and for Sweet and Spicy it is very important to analyse such restaurants which are supplying substitutes to the customers. These are Mexican, Thai, Continental etc. It will help the restaurant to retain its customers by offering them food and beverage items that may fulfill their requirements. In the market demand of Chinese and fast food is continuously increasing which will reduce the threat of substitutes because Sweet and Spicy is going to offer fast food items with less fat.
• Bargaining power of suppliers: In Food and beverage market of the UK there are several suppliers hence it may help Sweet and Spicy to bargain on food materials. It will help the restaurant to get food materials on low prices so that monetary resources can be saved for future (Suddaby, Bruton, and Si, 2015).
• Bargaining power of buyers: In the UK demand of fast food items is very high hence there is less bargaining power of customers. It will be very beneficial for Sweet and Spicy because there are end number of buyers that will decrease their bargaining power.

For Sweet and Spicy it is essential to conduct a PESTLE analysis to analyse market conditions. All the elements of this model are as follows:

• Political: In UK political parties are supporting new businesses in order to develop the economy. They are implementing low tax rates on such businesses which have higher potential to get developed in the future. For Sweet and Spicy it is a great opportunity to establish the business successfully..
• Economic: In UK food and beverage sector is growing massively. This sector contributes a higher amount in the national income of the country hence the government supports the sector. As Sweet and Spicy is also a part of this sector then it will be beneficial for the restaurant to successfully launch a new venture..
• Social: These factors depend upon the education level and psychology of a person and it can be also enhanced by doing a psychology assignment if you need help you can opt for psychology assignment help, taste, and preferences, paying capacity of customers, etc. The local public of the UK likes to have different types of cuisines and Sweet and Spicy is offering Chinese food with less fat hence it is a unique concept that may help to target a large number of customers. The firm needs to set appropriate prices for food items that may attract the target market (Tang, Kacmar and Busenitz, 2012).
• Technological: All the elements that are related to the latest technology in the market. In UK People are interested in technology hence Sweet and Spicy need to use some technological factors. If the organization is using any new technique then it will help to grab attention of customers.
• Legal: Rules and regulations of legal parties are required to be followed by all the businesses as it may help to smoothly run the business. If Sweet and Spicy is not able to implement the rules that are imposed by the government then it will affect its launch in the market.
• Environmental: Environment protection laws and regulations are part of such factors. Sweet and Spicy needs to make sure that it is not harming society and the environment as it is required to perform all the operational activities (Wilson and Martin, 2015). It will create different opportunities for the restaurant because the government supports such business entities that are concerned with social and environmental welfare activities.

All the above-described factors are required to be analyzed while launching a new business because all of them may help to form appropriate strategies to successfully conduct all the operations.

Conclusion

From the above project report, it has been concluded that entrepreneurs are the individuals who analyze market opportunities and grab them. All entrepreneurs need to identify the actual needs and wants of customers so that an innovative idea may be created to meet their expectations. If a businessman is not able to analyse current trends of the market then it is not possible to establish a successful business. PESTLE analysis is a tool that can be used to assess the external environment that may help to form appropriate strategies to run the business.

Know more - R5080522 Sainsbury Research Proposal

References

• Aliaga-Isla, R. and Rialp, A., 2012. How do information and experience play a role in the discovery of entrepreneurial opportunities? The case of Latin-American immigrants in Barcelona. Latin American Business Review.13(1). pp.59-80.
• Alvarez, S. A., Barney, J. B. and Anderson, P., 2013. Forming and exploiting opportunities: The implications of discovery and creation processes for entrepreneurial and organizational research. Organization Science. 24(1). pp.301-317.
• Audretsch, D., 2012. Entrepreneurship research. Management Decision. 50(5). pp.755-764.
• Godley, A. C., 2013. Entrepreneurial opportunities, implicit contracts, and market making for complex consumer goods. Strategic Entrepreneurship Journal. 7(4). pp.273-287.
• 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.
• Mitchelmore, S. and Rowley, J., 2013. Entrepreneurial competencies of women entrepreneurs pursuing business growth. Journal of Small Business and Enterprise Development. 20(1). pp.125-142.

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