The enterpreneual role for starting on a new business venture is to identify the various opportunities in the market which can resemble his personal capacity and varied risks which have been contemplating in the market in the contemporary business scenario. This vehemently helps them to translate these opportunities in business idea formation through which they can achieve for investors to contribute for financial support for growing their business (Schneider, & Spieth, 2013). In the following report, there will be an evaluation of the various approaches to entrepreneurship ideas and their strengths and weakness so that they can attributed for marking the creative abilities of the entrepreneurs before setting up a new business plan for starting on a food chain. Moreover through this report, there will be a learning experience about the different framework for setting up business ideas with inclusion of various types of benefits of the products, observing the target customers and most importantly the understanding of the specific industry where the entrepreneur wants to set up his business. Moreover there will be implications for phenomenon like market research through use of primary and secondary research techniques applied by the entrepreneur for his new venture to assert that his entrepreneurship ideas have been fitting with the market research outcomes and his business can be commercial
P1 Determine and evaluate different sources of entrepreneurial ideas and innovation
There have been identified a variety of sources for generating enterpreneual ideas for starting on his new venture. The various approaches to the generation of ideas for an entrepreneur are as follows:-
- Brainstorming – This approach helps the entrepreneur in accumulating large amount of ideas about product or service they want to start with. This is an important one for an entrepreneur as it leads to identity formation about the product or service he wants to render in the market. In this case, the student has to focus over new type of product ideas about foods he wants to enumerate in his business chain. The brainstorming of ideas can lure to sheer failure if the ideas generated is not guided by an expert advice as it requisites for proper evaluation and judgement for starting on a food chain for making the ideas suitable.
- Converting Hobby Into Business – This approach enacts for the mind-set up of the entrepreneur to be attached with his passion of innovativeness (Van Der Aalst et al., 2016). The adaptation of his hobbies into implementing business ideas is a crucial approach as it benefits the student to focus on his creative skills for carving out business plan. But it also follows on a disadvantage for depending too much on his passion and forsaking the practicality of the approach.
- Engage In Online Platform For Market Survey – This approach is a significant one as it adheres to the luring of the search engines for enacting business opportunities to be present in the area where he wants to open his food venture like restaurant chain or food joints. Through searching through various social media sites, one can optimize various sites and this trigger the concept for enterpreneual ideas. One of the benefits can be identified to be the extreme attachment of the customer’s attachment in social media sites and their feedbacks regarding different food products can lure into best enterpreneual ideas. But it also comes up disadvantages like the changing tastes and preferences of the customers in everyday life which can affect his business ideas (Autio et al., 2013).
- Producing A New Way With Existing Product – This approach can be emancipated by the entrepreneur as he can choose for existing product or service and make them presentable to the customers in a new layout which can advantage him for gaining larger customer base with a business venture. But it also accumulates a disadvantage like failing of new format of producing existing products which may not be addressable to the customer.
Innovation being the main source of entrepreneurship ability to create a new start-up, the assessment of Drucker’s seven aspects of systematic innovation is an essential thing to be considered upon. The model depicts for an incremental innovation opportunity.
- The Unexpected –Examining the market constantly for opportunities to find out the demand of the product or service he wants to start with.
- The Incongruity – To find out the inconsistency between the existing market reality and the entrepreneur assume to be as it stands out to be tricky for developing a effective innovation plan. For example, company like Facebook adopted this phenomenon prior to many other social media sites like Myspace (Mezger, 2014).
- Process Need – Examining the weak spots of the companies and redesign them through task orientation so that innovation can be identified within sustaining business capabilities. for example, for a restaurant, the customer service phenomenon like waiting of customers outside the restaurant is overcome through hiring of a professional chef for speeding the whole process of cooking.
- Changing Of Industry And Market Structure - has to keep a close watch over the flux of industry and market due to changing product lines and consumer demand. For example, deregulation can be identified as a perfect phenomenon.
- Demographics – The start-up business ventures are constantly looking forth changing in demographic conditions like populations, levels of income, age and human capital for making a proper targeting and segmentation tactics.
- Changes In Perception, Meaning And Mood - Identification of interests, way of life, feeling about products etc changes with the shift of time and for innovative framework, the company wants to capitalize on this scenario. For example, most of the cosmetic companies apply on “downaging” perception to attract customers for providing them solutions to look younger (West, & Bogers, 2014).
- New Knowledge – this denotes business entities to be involving in adoption of technological revolution like internet handling for improving their process. For example, the company like Intel paying attention in gaining new knowledge about processor manufacturing through academic research and investing right on their R&D.
P2 Explain the rationale and the market gap for a specific entrepreneurial idea using relevant tools and techniques to support your choice
Rationale For Food Chain Start-Up
The identification of relative customers for a food chain or restaurant industry is a prime need for the set up of a new business plan. The market segmentation stands to be an important part for the business plan of a new start-up business as it determines the way around for denoting the various behavioural, demographic and geographic dimensions of the customers where the start-up company want to establish their new products or services. For developing a food chain start-up the student has to mark up the investigation process in identifying the customers as this will contribute to the generating of what type of food business he can brainstorm idea about for targeting them according to their behaviour, demographic situation and geographic segmentation.
Behavioural - The behaviour patterns of the customers in UK are identified through their indulgence in fast food industry, their way of eating, approaches to payment etc. this can effectively help in identification of what type of foods the customers of the country want to be presented to them according to demands of the trend set upon in the food-joint environment.
Demographic - The demographic presence is also to be identified through their gender, age, income status and occupational background for revealing the fact that how the start-up food chain will proceed in their selection of customers for providing food through accessible formats (Morris et al., 2013).
Geographical - The identification of geographic location is also an important part as they denote the proximity of the customers from the allocation of the food joints in the initial days of the start-up business. This will help the start-up food business to denote the possible areas of distributing their products and services among the other sustaining competitors in market.
Gap analysis - It is a tool which an organisation use to analyse their current position and also detect the position where they want to go. Along with this, gap analysis, will help food chain start up in identifying the difference between current position and destination position, so that they can take appropriate steps to attain their goals. Following are the tools used for gap analysis of Food chain start up :-
- McKinsey 7S framework
- SWOT analysis
- Nadler Tushman model
Beneath Is SWOT Analysis Of Food Chain Start-Up :
Strengths : The special product of them, offered by them are their strengths. This will help them in providing different food products to their customers, so that they can get attracted towards that food items and beverage offered by them.
Weaknesses : Their main weakness will be shortage of funds, as they are new in market and for growing their business it is very important for them to have proper funds. This will help them in opening their stores and outlets at different part of nation.
Opportunities : The opportunities which food chain start up will get in new market place are attracting ample number of customers, so that they can get a good start from their beginning. This also help them in making a good customers base of loyal customers.
Threats : Competition from existing food chain are the major threat for them, as they already have their loyal customers, and has covered major part of customers in market. This will lead them in facing problem in attracting customers towards the products offered to them.
Identification Of Tangible And Intangible Features Of The Product – This also represents for an important part in the investigation of products which the start-up food joint will be allotting to the customers. For a restaurant chain, the tangible product stands for the food which is physically supplied to the customers and for a start-up business the quality of their tangible goods is an important part to consider upon. The intangible products stands for the delivery medium, food supplier, payment methods etc which has to be propagated effectively so that the start-ups can show their responsiveness in the following competitive foreground.
For the particular business of the food joint to be setup in UK, the student has to focus for the enterpreneual idea of market research which can give a thorough description about the various behavioural patterns of the customers in UK market through which they can represent their both tangible and intangible assets to be applied through a vehement enterpreneual idea.
Understanding The Industry Environment Through Porter Five Force Model
The choice of an entrepreneurship idea is facilitated with a greater understanding of the environment of industry of food market in UK. There have been various tools for analysing the industrial context in terms of market and sustaining competitors in the UK food joint market. The emancipation of Porter five forces tool is effectively crafted for analysing the overall market and competitor analysis for a start-up and small business entrepreneur in food market of UK.
- Threat Of Entrance – The recent food market in UK has been growing in its demand and therefore it has been attracting many new entrants from domestic and international market. But due to the strong entry barriers, there have been relatively non-significant competitive sources as new entrants in fast food industry in UK. Therefore it signifies to be neither too high nor too low (Autio et al., 2014).
- Threats Of Substitutes – It denotes to be high as there have been rapid development of mid-sized restaurants, small sit-down restaurants, provision for home-delivery pizza or pre-cooked and canned food items which make the substitute threats to be relatively high.
- Power Of Suppliers – The power of suppliers is weak in context of the flexibility of the supply chain and logistic sectors providing raw materials in UK’s food industry. Moreover the presence of numerous suppliers in food joints assumes to be industry to be strongly flourishing in the sector of UK.
- Power Of Buyers – The fast food industry in UK being rapidly spreading their grounds by various market leaders and also by many SMEs, therefore the bargaining power of the buyers are presumed to be high. This creates for an immense opportunity to earn profit, but with a heavy competitive situation for offering food items with a cheaper cost.
- Competitive Rivalry – It identifies to be quite high because of the price war among the different competitors in the small scale production. But because of the market leaders, the small food joints or start-ups can face a respective competitive pressure in terms of customer loyalty for the bigger market leaders ( Dobbs, 2014).
Industry Life Cycle
The life cycle of the start-ups food chains in UK denotes to be in positive forum. It identifies that the food joint industry has the most prospective status of expanding due to the immense contributions they make to economic sector of a country. The food service operations have the capability to pass through all life cycle stages which are stated below:-
- Introduction – In this stage, the food start-joint start up will exhibit a positive feedback to creation and launch of restaurant by keeping in mind about the respective food industry growth in UK.
- Growth – Due to the huge market share and increase in relative sales in UK food market demand, the start-up will be able to explore its chances for growing in the respective industry. Moreover they can have better options for franchise for concept of expanding their foodservice outlets in different parts of UK.
- Maturity – The start-up in this stage can definitely identify their stabilization of sales and also their brand identity can be secured through the predictability of their business as markets are clearly defined by the start-up company.
- Decline – This stage is less significant for a food joint start-up as it can be identified that food industry in UK has shown some remarkable expansion ini their profit margin through growing customer’s demands. But the company can face a decline in their standards, if competitors in market can show progressive upgradation in their food standards in meeting up customer’s demands.
Therefore from the following analysis, it can be represented that for a new enterpreneual venture in the food market of UK is crafted with enormous opportunities, but in the initial stage they has to contemplate with an intense pressure for attracting customers and competitors. Therefore the enterpreneual idea which can be best suited for this purpose can be going through the market research at every step for planning of product line which can interpret the thoughts and buying perception of the customers at cheaper cost with a high quality product range.
P3 Preset data needed to support gap analysis in evaluation of enterpreneual idea
- Description Of Business – The business will focus over starting ona new venture in food and restaurant market of UK. The business entitled to starting of this new venture will abide to present customer new and varied food items aligning to food trend set up of current food industry of UK.
- Market Research – The market research suggests that UK food market demonstrates that there have already 900 start-up food joints in UK which provides for a respective competition for a new start-up to venture as well as new possibilities for a new food joint.
- Financial Plan – The financial structure for a new start-up can be derived to be propagating with small investment, most of which has to be ensured for new product representation for customers so that they can earn maximum profit for company. The sales structure of the company has to be coordinated with investment in research and development of new products and services. This will help the company to earn maximum profit (Reeves et al., 2015).
- Market Plan – The market plan for the start-up business suggest for identification of proper marketing of products and services which can assure their sustainability. For this the company needs to focus over demographic, behavioural and geographic dimension of their business.
- Marketing Mix – The marketing mix is an essential component for giving the start-up brand recognition among the other competitors in industry. The company has to ensure their product’s dimensions and variedness so that it can enthral the customers. The price of the products by food joint start-up has to be cheaper in order to compete in market. The promotion of products by food joint is an important one as it identifies for making their products to recognizable among the customers through online media sites, advertisements and other means of promotions.
For gap analysis, the interpretation of the market research data through primary and secondary sources is an important factor for consideration. Through this collection of data there will be evidences collected about the target audiences as well as the target market. For investigating new business ideas, the incorporation of both primary and secondary data may be used.
- In-depth interviews of the customers within a particular demographic region for gathering insights about the opportunity in food joint business.
- Surveys can also act as a vehement source of information for collecting large data about preferences of food, their behaviour about fast food industry (Mathooko, & Ogutu, 2015).
- Focus group is another medium of collecting primary data about acquiring insights about customer’s thoughts about products during the early stages of planning process.
- Monitoring the social media sites about food habits of a particular age group can be a very well-directed data for undertaking the brand value of the start-up that can be created within the food market.
- The use of big data for assessing the market trends and other internet forums can also be adhered to be an important gesture to investigating new business ideas for a start-up food joint.
- Statistics from the government can be an effective source for evaluating the market data and give an ideal information about product shipments, various activity of trade, process of business formation, pricing of the competitors, economic trends etc.
- Websites of relevant industries can be useful source for collecting data about overview of the industry, various companies associated with food joint industry, ongoing trends among the customers etc.
- Company websites are some vital sources for collecting evidences about marked competitors in the market for the start-up food joint. It also helps to determine the access the annual reports, presentations of the investors for carving out a public image of the respective company (Simons, 2013).
The use of internet and social media platform can be an important source for reciprocating the targeted customers because the company can more easily reach them and can be provided with valuable feedbacks about their products. Some of the questionnaires for the targeted customers of the start-up company can be applied in their feedback form supplied to customers through each delivery supplied to customers. The company can set on questionnaires like:-
1. How was the quality of food being delivered?
Interpretation : After taking feedback from about 40 customers, it has been interpreted that 30 respondents says that the quality of provided food is good and it was healthy to consume. Along with this, out of remaining 10, 6 says that quality of served items was Okay, but they need to improve this where as, 4 says that the quality was not good and to survive in market it is very much important for food chain start up to improve their food item's quality.
2. Was the delivery being established on scheduled time?
Interpretation : In a food chain organisation, it is very much important for them to have proper delivery service. As this will help them in satisfying their customers, so that they get happy with the products offered to them and start loving organisation. In present content, out of 40 feedbacks, 35 says that the delivery of products to them was being established on scheduled time and this help them in getting fresh and hot food. Where as, 15 of them give review that the food delivery was not according to scheduled time, and food get cooler till it get served to them.
P4 Interpretation of data appropriate to the provided evidence of market potential
The market potential of a new start-up venture in food market of UK is an essential to be crafted through proper interpretation of different data being collected through primary and secondary methods. It is always essential to contemplate for long-term business sustainability and therefore customer preferences are ideally to be determined as they set a new trend for the market. Moreover about 18% of the people in UK are business minded with an initiative being identified to start-up a food joint. It creates a demanding phase for a new start-up to make its ground. By keeping mind about the various market related factors like identification of target customers, consumer behaviour, target area, supply chain networks and competitive dimensions, it can be emancipated that evidences collected about the recent start-up in the food joint industry of UK will be an effective feedback to gather evidences about proclaiming dimension of food market and what type of food line is much alluring to the customers within the local demographic periphery (Kokina et al., 2017). The identification of the demographic identification is crucial through primary data like focus groups identity; social media networks search optimization so that it can provide an effective feedback about the trending customers of the food market. Then to understand the competitor’s analysis and take idea from their enterpreneual ideas, the data collected through secondary evidences is a crucial one as they collectively asserts for new business initiatives to be incorporated within the following start-up food joint business planning.
P5 Apply SWOT framework to collate evidence to support an objective assessment of a specific entrepreneurship idea
The SWOT analysis stand to be an important tool for assessment for an entrepreneur to understand the feasibility of his business ideas he is going to enact for starting a new venture.
P6 Evaluate the competitive and market environment through which the entrepreneurship idea will be launched for assessing potential viability
The entrepreneurship idea for setting up a new business like food joints in the land of UK needs a thorough evaluation of competitive environment as well as the market environment.
Substitute Goods - The competitive environment suggest that food business has been venturing through a monopolistic nature as many big competitors like McDonalds, Subway and many other leading giants of this era. Therefore it will be difficult for a start up business in food industry to establish a strong foreground very easily because of the substitute goods represented to them by these big players.
Demand – The demand of the food industry in UK market has been growing vehemently which creates an opportunity for the start-ups to grow. But with the emancipation of many food SMEs to be growing in the geographic landmark of the country, it will be easy to find an enthusiasm to create an opportunity to strive in the market competition (Dayong, 2016).
Target Audience – The start-up company has to ensure they can identify their target audience which can align with the products and services they are presenting. It must be keep in mind that they has to go for a cheaper pricing strategy with a quality food product demonstration so that it can find a long term sustainability and growth in the market with greater target audience attachment in respective demographic sector of UK. The adherence towards creativity and delicious food items which may add innovation at its best can be an ideal market to stretch upon a competitive foreground in UK food market.
The macro environment of UK suggest that the country holds on a suitable demographic, technological, economic forces and most importantly political stability to make a new start-up venture glide to success through creating numerous opportunity. Moreover the country being culturally rich and the society forms up a wealthy economic health to buy foods and also the food industry of the country holds on a respectable social responsibility towards natives of the country regarding their quality.
The market environment of UK suggests that there has been presence of ideal customer base for stretching their product lines of variety of foods. The persuasion of new customers therefore has to be a prime target for the new start-ups as this can ensure the company to achieve an opportunity to spread their business layouts in respective sector. Moreover the enactment of customer advocacy through social media channels can also open up a new channel for targeted customers as it can be identified that UK belongs to a developed country and their customers are flexible to achieve any business product’s knowledge through grasping to social media interference.
Therefore from the following report, it can be identified that enterpreneual ideas for starting up a new food joint venture in UK can be proactive business approach to expand and invest money for business. In that respect, the following analysis regarding market and competitive atmosphere of the country has to be incessantly monitored so that they can bring upon maximum and positive output for the new start-up venture.
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