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Introduction

Entrepreneurs used to grab an idea through his virtue and talent which gives many opportunities to open a new business. Before implementation of ideas they are required to firstly identify such opportunities using tools like marketing gap and competition analysis which is a most complex procedure (Kohlbacher, Herstatt and Levsen, 2015). Along with this, they use Porter's Five forces model, SWOT and PESTEL techniques as prominent tool for analysing competition at marketplace. With this assistance, following report is based upon a new start-up business by turning a new idea into it and named by Let's Chat. This new enterprise is a start-up of retail business of mobile phones which offers different plans for customers who are buying electronic products. Therefore, this file reveals from where entrepreneurs gets idea and they turn it into business.   

Task 1

P1 Evaluate various types of entrepreneurial ideas and innovations

A graduate person is going to start a new business outlet for which he has grabbed several ideas like if a customer has bought new phone then he will get 6 months talk time free along with 3 months internet services. Along with this, if consumers want to purchase its products on EMIs then they will get the same service but for 2 months validation only. These ideas can help in acquiring customer's mind in a profitable way (Mathias and Williams, 2017). Along with this, for getting success in such manner they are required to check feasibility of each idea. This can be done by conducting macro analysis like PEST factors and Peter F. Drucker's 7 factor of innovation. Furthermore, there are various sources which inspire entrepreneurs to develop business idea. Therefore, to open an outlet named by Let's Chat, business planners need to analyse sources and factors which impact on their ideas. It includes some external environmental factors as stated below:

            Social Factor: It reveals financial conditions of society like how uch they can pay for particular commodities. In today's global world people become Eco-friendly also which shows that feasibility of android application is much good. Reason behind this is that android makes them aware about there changes in laws and legislations as well as provides various information.

            Economical Factor: Economy of UK currently looks quite good and stable. This shows that per capita income as well as GDP growth rate are also good (Mueller and Shepherd,  2016). Therefore, for turning an idea into business, entrepreneurs get finance easily and on easy terms or conditions.

            Technological Factors: Due to technological advancement, changes in mobile applications are running at fast rate. This would provide several opportunities for technical sectors to launch their business in a profitable manner. In mobile world of technology, daily new applications and features are invented by various mobile companies through which they assist customers to buy their products on any cost. This factor gives innovative ideas to open a new retail business of mobile phones.

            Political Factor: In telecom section, due to rapid changes in technologies people used to switch their mobile phones by new ones in order to get something better. Life of people is surrounded by Wi-Fi and internet, therefore, they always wish to acknowledge this feature as their basic rights from government (Ramoglou and Tsang, 2016). These features are required on day-to-day operations in all field like in education sector, career development, official work and more. But due to political impact of regulatory bodies many changes are occurred in prices of such services like tax policies and legal rules. This process impacts on prices of commodities of telecom services, therefore, it is good for generating an idea into business of service provider. 

Therefore, from this macro analysis, it is clear that idea of retailing mobile phones is a feasible plan. Furthermore, another analysis which is based on Peter F. Drucker's innovation factors are stated as below which consists 7 sources of ideas:-

            Incongruity: Since every organisation wants to deal products in an ideal manner therefore, incongruity shows gap between before turning an opportunity into business idea to after its implementation. Thus, business planner can analyse effectiveness of idea in a proper manner.

            Process Need: It helps in identification of innovation's need in business model  for accomplishment of goals and objectives. Like in context of retailing mobile phones, if sales performance is running down then it suggests company to hire more persons in marketing department so that this process becomes faster (Suddaby, Bruton and Si, 2015).

            Industry & Market Structure Needs: Market structure impact on every business in such a manner like it creates many opportunities as well as threats to them. Therefore, before launching business needs to analyse market structure which shows the interconnected characteristics. It includes strengths of buyers and sellers along with forms of competition, product differentiation and the way of easy of entry as well as exit from market.

            Demographics: In order to start-up a new business, a person needs to consider demographic changes also which includes alteration in population, level of income, capital etc.  Like if economy of a nation is growing at fast rate then income level of citizens also grow which  impacts on purchasing power of them (Renko and et. al., 2015.). In context with mobile phones, people having good income can avail such products easily.  

            Changes in Perception, Meaning and Mood: Due to changing in trends at marketplace, life style and preferences of people also get change. They  always awaited for new features and android applications to fulfil their desires. Therefore, it is good for business planner to start-up their outlets in technical sector.

            New Knowledge: According to invention and innovation entrepreneurs are required to generate ideas thoroughly. They should consider on each and every factor before turning their ideas into business.

            Unexpected: In order to start a start-up a business, persons are needed to identify all opportunities of marketplace first which helps in acquiring more and more customers easily (Ramoglou and Zyglidopoulos, 2015).

Type of Innovation:

There are different kinds of innovation present at marketplace according to type of business. In context with small business, some types of innovation can be stated as:-

  • Product: It shows product differentiation of one company's goods from others. It refers features and qualities of commodities and services of telecom services.
  • Process: Process reflects innovation in business operations where an innovator is start-up an outlet having different concept to sell its commodities.
  • Incremental vs. Big Bang Innovation: Incremental innovation involves a small updates in products or processes of a company in order to improve their qualities. On the other hand, Big Bang is a better product development process which generate enthusiasm and innovation by identifying roots of problems.
  • Schumpeter’s sources of innovation: It is a business cycle which states that due to innovations a company can increased investment in business operations.

Difference between Invention and Innovation:

Invention

 Innovation

It creates new products which is based on innovative idea (Gielnik and et. al., 2015). Thus, an inventor requires scientific skills to create inventions which has never used before.

Innovations consist fresh ideas to create modification in existing products so, it doesn't requires invention. Along with this, it adds value in commodities in order to introduce more creativity as well as a person requires skills like technical, marketing and formulating strategies for introducing innovations.

Difference between product or business idea:

Product Idea

Business Idea

It is a concept of creating modification in existing one or manufacturing new products according to demand of customers.

Business idea relates with earning more and more money by turning opportunity into it. Therefore, in order to turn opportunities into business idea a person needs product idea.

Task 2

P2 Explain the rationale and the market gap for a specific entrepreneurial idea

            In order to start-up a new business, an entrepreneur needs to identify needs of customer related to mobile phones. It includes what people actually desire in mobile apps according to their purchasing power (Ramoglou and Zyglidopoulos, 2015). This process would help business planner to start outlets according to desires of customers. Along with, people associated with new business should know features of all products so that they can make product differentiation easily. Furthermore, analysing marketing gap also needs to evaluate which defines the difference between current market conditions and desired circumstances. Market gap is taken as a tool by entrepreneurs to evaluate future opportunities and how it will be helpful for generating profits through business idea.

            Need to identify specific customer types for target idea: Since preferences and lifestyles of every individual is different. Therefore, to sell products of single brand is not so beneficial to complete their demands in an effective manner. In context of business idea for start-up at marketplace, a retailer needs to offer commodities of wide range of many companies. They should provide products on various discounts as well as on different range according to purchasing power. A shop having wide range of products of various brands assist customers to buy easily which is depend on features of mobile phones.

            Market Segmentation: It is a process of distributing marketplace into potential customers on the basis of characteristics. This procedure helps in catering services accordingly. In context with start-up business of mobile phones market segmentation can be done as:-

  • Behavioural Segmentation: In this era, marketplace is segmented according to behavioural patterns of customers. Like if people of an area are Techno-friendly rather than Eco-friendly then they can easily purchase mobile phones of new features.
  • Demographically Segmentation: It this section, segmentation of an area is based upon status, lifestyle and level of income of people. In context with mobile technologies, such products cannot offer on easy or affordable cost, but to necessities of mobile phones every individual purchase it.
  • Geographic Segmentation: This area of distribution is depends upon geographical places. Mobile technologies are much affected by geographical condition, therefore, new business launcher needs to analyse this in order to sell their commodities in a profitable manner (Kirzner, 2015).

Tangible & Intangible features and benefits of a product or service

Tangible

Intangible

It relates with visible features of commodities which customers seek before buy.  

It shows invisible features which can feel after using services of a product. 

For instance: Features like camera quality, touch screen, fingerprint scanner, battery, RAM and ROM etc. comes in tangible.

For example: Applications, software and  automatic updates are intangible features.

Industry Environment:

            It is a factor of macro environment which helps in analysing knowledge about benefits and threats of new entrants. From analysis shown in above part, it has concluded that turning a business idea into start-up is a feasible and economic idea (Kirzner, 2015). Therefore, an entrepreneur needs to evaluate opportunities and threats of marketplace before launch its business.

Porter's Five Forces Model

            Porter's five forces model is taken as a good tool in analysing the opportunities and threats present at marketplace. It helps in assuming the future position of a new shops which an entrepreneur going to be launched at marketplace. It includes:-

            Supply Power: It reflects power of suppliers from whom an outlet purchase the products for further selling. But in context with mobile phones, suppliers haven't much strong position as companies are need to sell their products as much as possible (Karimi and et. al., 2016).

            Buyer Power: In order to gain high return on investment, strengths of buyers is a strong factor. An entrepreneur, therefore, needs to evaluate purchasing power of buyers. Likewise for retailers of mobile phones, these products are offer on same MRP rates. Hence, outlets need to develop marketing strategies in order to attract customers to buy their products.

            Threat of New Entrants: It shows threats of new entrants for a business planner. Thus, entrepreneurs are required to analyse marketplace like how many competitors are present there. Apart from this, it reveals new business planner about how much it is easy to enter in a competitive market.

            Bargaining Power of Suppliers: This factor shows negotiation power of suppliers. As telecom companies are used to provide new and unique features of mobiles phones. Through which products of such companies are increasing at high rate (Hmieleski, Carr and Baron, 2015). This would generate high bargaining power of suppliers. In order to gain competition advantage, a new outlet of mobile phones need to provide demanded products at shop which helps in acquiring large number of customers.

            Threat of Substitutes: Telecom companies are used to produce innovative techniques in their mobile phones having unique features. Another factor of substitute can be linked with  a particular firm is selling their products which consist of all the features at higher rates and the rivalry firm is selling the similar products of another company with the similar features For Example APPLE and VIVO smartphones are having the similar features but there is different in the prices of their products due to their brand image.

            Using Porter's five force model entrepreneurs can analyse the profitability of competition for analysing future performance of business (Hatak and et. al., 2015.). Further, they need to consider on approaches to rivalry analyse which consists a six step model as stated beneath:-

Approaches to Competitor Analysis:

  • An entrepreneur needs to identify current and potential competitors at marketplace.
  • Business planners should determine the areas where they are more effective as compared to rivals in terms of product quality, customer service, media and price.
  • Marketing mix strategies.
  • Competition matrix should be created according to demographic.
  • Recognise which areas are much vulnerable for matrix.
  • Consider marketing gap which shows difference between current area and expected one.

Industry Life-Cycle:

Life cycle of industries shows following phases:-

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

Task 3

P3 Present data needed to support gap analysis in evaluation of entrepreneurial idea

In order to analyse actual and future opportunities of marketplace, business planners are required to hire a researcher who will investigate the same in a proper manner (Gielnik and et. al., 2015). Since in present scenario, an entrepreneur start-up a new business therefore, investigator should conduct many analysis like behaviour, demographic and geographical segments of customers. They must carry out a survey on people of particular area in order to know needs and demand of them. Therefore, for opening an outlet named by Let's Chat in UK marketplace, researcher of this firm along with a group of expert members, carry out a survey on 100 persons by making a questionnaire format and take their feedbacks accordingly (Foo, Uy and Murnieks, 2015). Therefore, as per analysis they have concluded that out of 40 respondents, near about 15 wants mobile phones at low cost but having new and unique features. Along with this, 18 respondents wants products of high qualities according to their status, while rest are believe on items of high technologies available at any price. Therefore, entrepreneur needs to offer products of high demanded mobile phones and wide range of prices.

Gap Analysis: It reflects gap between actual performance with expected ones. If an outlet fails to fulfil demand of customers on time then it will impact negative on its image at marketplace and people will start to move on new shops. Along with this, it shows key areas also which reflects differences and how an entrepreneur can overcome from such a situation.

For this purpose, to evaluate between actual and expected performance of business, data analysis has been given below:-

Questionnaire

Name

Age

Address

Contact No.

Q1. Do you think Let's Chat offers innovative services?

A. Yes

B. No 

Q2. Are you satisfied with services of Let's Chat?

A. Yes

B. No

Q3. Which service of Let's Chat attract minds of customers more?

A. Discount

B. Customer Service

C. Easy Payment Method

Q4. What are the major factors affect business of Let's Chat?

A. Number of competitors

B. Ineffective marketing strategies

C. Delay in customer services

Q5. Any Recommendation... 


Theme1. Let's Chat offers innovative services

Q1. Do you think Let's Chat offers innovative services?

Frequency

A. Yes

22

B. No 

18

 

Theme2. Customers are satisfied with services of Let's Chat

Q2. Are you satisfied with services of Let's Chat?

Frequency

A. Yes

23

B. No 

17

Theme3. Services attract minds of customers

Q3. Which service of Let's Chat attract minds of customers more?

Frequency

A. Discount

15

B. Customer Service

12

C. Easy Payment Method

13


Theme4. Factor affects business of Let's Chat

Q4. What are the major factors affect business of Let's Chat?

Frequency

A. Number of competitors

10

B. Ineffective marketing strategies

14

C. Delay in customer services

16


P4 Interpret data appropriately to provide evidence of market potential

As per above information, the following result has been interpreted:

Theme1:

Central tendency

Total

Mean

20

Median

20

Mode

4

Standard Deviation

2.82

Interpretation: From this above statistical calculation, average and median of data is same. So, it has interpreted that people didn't think much that Let's Chat provide innovative services at marketplace. Along with this, standard deviation and mode move in same direction that this enterprise needs to concern on providing much effective services.

Theme2:

Central tendency

Total

Mean

20

Median

20

Mode

6

Standard Deviation

4.24

Interpretation: With above data, it has evaluated that near about half of the customers are satisfied with services of Let's Chat while rest of them didn't go with same. Apart from this, deviations also reflect as large gap between actual and desired performance of company at marketplace. 

Theme3:

Central tendency

Total

Mean

13.34

Median

14

Mode

2

Standard Deviation

1.52

 

Interpretation: With mention data, it has evaluated that most of people are thought that easy payment method provided by this company, attains mind of customers more. Along with this, discount and customer service also attracted them towards its services.

Theme4:

Central tendency

Total

Mean

13.34

Median

13

Mode

10

Standard Deviation

3.05

 

Interpretation: By above central tendency, it has interpreted that among various factors, delay in customer services and inappropriate marketing techniques, affect business of Let's Chat more.

Information collected in above portion is gathered by using primary and secondary sources (Kohlbacher, Herstatt and Levsen, 2015). In this context primary source gives original data which can be collected by taking surveys and interviews of customers at particular place who want to avail such products. While, secondary source provides information of existing data available on internet, magazines and newspapers. On interpretation of following data it has concluded that:- 

  • Since threats of competition is presented at high manner in marketplace, therefore, entrepreneurs are needed to adopt new marketing skills. This would help in increasing sales performance. Therefore, entrepreneurs of Let's Chat Company offer its product at different techniques (Davidsson, 2015). It provides products on EMIs with 0% finance in order to attract customer's mind.
  • Along with this, Let's Chat used to maintain strong bond with suppliers in order to products which are in more demand and available at few shops only.
  • It recruits employees who provide effective services to consumers which helps in gaining retention of them easily.

Task 4

P5 SWOT framework to collect evidence to support an objective assessment of a specific entrepreneurial idea

SWOT Analysis of Mobile Software Idea

Strengths

Weaknesses

·       Unique Idea to acquire customers mind.

·       Consider demands of middle persons first.

·       Lack of finance.

·       Lack of Loyal customers.

Opportunities

Threats

·       Rapid change of technologies in mobile world, enhance sales performance of outlets as people always used to switch their existing phones with new ones.

·       Good economy of country provides opportunity to new shops to easy enter into marketplace. 

·       Since UK government support new firms in launching their business so, it generates many threats for existing ones having same products.

·       Delay in launching new outlet provides opportunity to rivals to open before them.

 

P6 Evaluate competitive and market environments in which the idea will be launched to assess potential viability

In present scenario, it has cleared that business planners of start-up possess required skills and knowledge for analysing a situation properly. Along with this, they have many unique ideas to open their outlets in a profitable way. They get idea through various sources using PEST and Peter F. Drucker's innovation factors which helps in analysing impact of macro elements on business environment. Further, to gain competitive advantages at marketplace they have to evaluate opportunities and threats present at marketplace (Baggen and et. al., 2015). But, these advantages can be attained only when outlets is launched on time otherwise competitors can hack their idea and use it for business-orientation. Apart from this, idea of entrepreneurs also reflects some weaknesses of start-up business like they have failed in identifying locations where they can easily open shops in a profitable manner. At last, to avail customers and all opportunities present at marketplace, entrepreneurs are required to formulate effective strategies also along with strong business idea in order to overcome from weaknesses and face challenges of competitors in a proper way. In this regard, concept of  Drucker's innovation factors can be summarised in following manner:-

  • The Expected: It is the first step of innovation which assist owners of Let's Chat to conduct proper market research. It will help in determining if a particular service in high or less demand that anticipated.
  • The Incongruity: There is always a discrepancy occur between what is going on and what should be. So, this part provides a key to develop success of business. Therefore, for this process, it is necessary for managers of this outlet to identify complaints of customers by taking feedback of them. It will provide hint by which services are created more innovative and attractive.
  • Process Need: This part also known as task oriented solution under which weak points of business are identified and redesigned them. For example: At outlet of Let's Chat, customers wait too long for resolving mobile related problems. For resolving this issue, it is better to recruit more workers at store who are good in that.
  • Industry and market structure change: This stage of innovation shows change in trends of marketplace and expand of particular products. So, it shrink life-cycle of existing products or services. Therefore, managers of Let's Chat should watch it on continue basis so that changes can be done accordingly.
  • Demographic: It shows changes in perception of population, level of income, educational background and more. Therefore, smart companies like Let's Chat are constantly paying much attention to this for offering services accordingly. As combining demographic data with market segmentation refers to a powerful method of meeting target of business.
  • Changes in perception, meaning and mood: In android products, perception of customers changes at high speed. So, by creating changes in discounts, services like increment in durability of internet packs, trimmed price of data plan and more, help in gaining attraction of customers.
  • New Knowledge: With technological revolution, companies are not getting more opportunities to generate new ideas for launching a business. New knowledge will aid Let's Chat in finding better ways to conduct business in profitable manner.

Conclusion

From this report it has concluded that entrepreneurial opportunities give various chances to new entrants to open their business at marketplace. For this assistance, entrepreneurs need to grab ideas through analysis of various factors like competition, marketing gap, Porter's Five Forces model, Schumpeter’s sources for innovation, SWOT and PEST, industry life-cycle, macro analysis etc. This would help in analysing effectiveness of ideas so that an entrepreneur can turn it into formation of new business.

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