In modern market, identifying an entrepreneur opportunities is considered as important sector through which company can develop new ideas and creation. This sector is growing day by day because more of persons are much interested in starting their own start-ups in which they can apply their own ideas and plans in external market so that they can earn more profits. Change in the market are fastly adopted by company so that they can adopted new technology which is introduced by young entrepreneur who focused on results by understanding of demand of customer's (Block and Wagner, 2010). Under this case company Natural essence is consider which deals in skin care products and established its business in 1998 as a exporter and manufacture of massage cream. This company is also famous for start ups which is liked by customers due to which they earn high profits from their products. This report is discussed about through which new ideas can be examine so that they take rational decision on the basis of external market scanning. In this SWOT analysis also discuss which help the company to know their strength and weaknesses.
P1 Identification and assessment of various sources of entrepreneurial ideas & innovation
Entrepreneur are those person who can develop their own ideas and implement them in innovative ideas in order to apply different business plan which help in generating profits for organisation. These individuals are always try to apply their own new and innovative ideas in order to increase increase economic growth of nation. With the help of applying STEEP factors it develop lot of employment opportunities for people of nation. Entrepreneur take use of various approaches of experts which help them in developing more structure in organisation. By applying new innovative idea Peter 7's sources of innovation play a important role in establishing organisation (Dimov, 2011). These sources are discussed below:
This factor is important in determining that people are able to understand the value of technology or not. It is necessary to observed while starting a business that financial condition of entrepreneur should be strong.
There are some condition in which entrepreneur can invest huge amount of capital through which they can earn more profits. It includes inflation rates, per capita income, interest rates and GDP rates which show better economic condition of nation. It is correct time for individuals to develop industries of cosmetic products.
Due to implementation of new technology in market it creates lot of assignment writing opportunities for people. In order to cope up with this new technology it is very important for entrepreneur to hire such type of people who are experts. Due to this change company able to produce more cosmetics product which help in increasing productivity of cosmetic products. So entrepreneur can apply new and innovative technology in order to achieve different activities in production of cosmetic products (Ekpe, Mat and Razak, 2010).
While developing an organisation entrepreneur should take proper knowledge of political condition of nation. They should maintain good relationship with political government which help them in supporting new cosmetic plant in different countries. They also get the proper knowledge of various taxes which they implement while establishing of plant.
Entrepreneur should able to follow environmental factors if they want to established plant in different place. For this corrective measures should be taken in advance in order to cope up with problems while performing different function of organisation so that they take proper care in order to not to give negative effects on nature.
Peter F. Drucker give 7 innovative ideas which are stated below in order to manufacture cosmetic products like Natural essence.
It is outside event that take place independent of what the enterprise is working on . The market place is better are which help in find out opportunities. A good manager should constantly study the market.
It is a disconnect between what is and what should be. Foe eg. The steel mills and the creation of mini mills.The demand for steel increased but the economic performance from traditional large steel mills did not. It can be done between reality and assumptions (Foo, 2011).
Organisation always try to implement new and innovative methods in order to perform various function of business. The source of innovation for a process need is an imperfect task or step in an existing process.
Industry and Market Structures:-
Changes in industry and market are the good time to innovate new ideas .For eg. It include cell phones, tablets and even shift from product based business models to service based show a change in structure that offered platforms for innovation.
Sometimes innovation can be based on these factors which is related with age distribution. This help in increasing level of income for company through which innovative changes in organisation can occurred.
Changes in Perception, Meaning and Mood:-
It occurs when one focus on perception not reality of a group which can be in form of society and factors. For example Americans have perception that they were unhealthy and needed to change and this opened up an opportunities in health food, education, exercise facilities etc.
If the knowledge based innovation is used by any entrepreneur it is useful for them to achieve more growth (Heinonen, Hytti and Stenholm, 2011). This help in develop long term knowledge. It is seeing that companies are adopted new and innovative technologies in order to achieve more results. Natural Essence should analysis the condition of market in order to compete with competitors.
Type of innovation:-
Innovation plays a important role in growth and development of company. Organisation is interested in considering innovative ideas and tools which help in developing organisational performance and productivity. There are many types of innovation which are discussed below:-
This is important element of company which help in increasing growth and success of firm. This involve different effective products which make a product different from various product line.
This plays a major role in introducing new product and service in the market. Innovative process help in accomplishing organisation goals and objective in proper manner.
This involves launching a right product at the right place as to gain attention of more customers.
Schumpeter's source of innovation:-
This is useful theory which which perform various role in increasing spending of business in their operations and functions (Quan, 2012). Applying of innovative ideas and tools is related with financial condition of firm, So it is easy for firm to launch new and innovative product in the market. Innovation in business cycle is related with Schumpeter's source of innovation.
Difference between Innovation and Invention:-
Innovation:-This is consider with developing of new ideas and thoughts in order to launch new product and process for first time in market. This help in extra value to the existing good and services to the firm.
Invention:-It is process which is related with occurrence of an idea for new product and process which is created for first time in the market (Renko, Shrader and Simon, 2012). It help in developing of new products and services.
Difference among business idea and product:-0
It is a process of developing new ideas which comes from watching and listening to customers. Customer's even create new products on their own .This help in introducing a new and innovative product in the market which help in fulfilling need of customers.
It refer to developing new idea for business which help in gaining more growth in market. This is important concept which gives direction to entrepreneur for developing new business.
P2 Rationale and market gap for particular entrepreneurial idea by using relevant tools
In today era, diverse change that takes place in business surrounding also affect the performance and operation of company. The main objective of any business is to develop creative and innovative products that assist in organisational growth and success and satisfying different needs of customers in an effective manner. Situation like Brexit also posses an impact on the working and business operation of Natural Essence. With the enforcement of Brexit, various changes occurs in UK's legislation. Local residents were not aware of about such changes and because of which activities are not executed in proper manner (Short and et. al., 2010). There are ample number of opportunities that exist in market place that can be taken into consideration by entrepreneurs by doing proper environment analysis. In context of Natural Essence, a good idea can be in the form of offering completely organic skin product that is mainly consist of natural ingredients only and very effective for potential buyers. With the introduction of this product, they can easily seize the attention of large number of customers and attain high market share over their competitors.
Another feature that makes it distinctive from that of competitors product is it can be utilized by people of any age group as the product is composed of all natural ingredients and dose not cause any harm. Some entrepreneurial ideas are discussed as follows:
Example for all:
Product is the most curious thing that is available in the market for both consumers and competitors. If the offered product is different and unique from the existing ones, then it can become good example for all. For example: Natural Essence become the first one to introduce innovative product that are crafted naturally. They came up with launching first organic skin care product rage that is made up of only natural or organic ingredients. No harmful chemical is used in their making (Tang, Kacmar and Busenitz, 2012).
Creates benefits for all:
As the product is innovative and unique, there is great possibility of satisfying customer needs and requirement which are changing rapidly. It creates employment in the country and also contribute in the GDP of economy as well.
Market Segmentation: It means classifying the broad range of consumer into different segments or small sub-groups. It help the company in examining their customers and make alterations on the basis of current likes and dislikes of customer. It is mainly categories into following segments:
- Demographic: Under this segment, population is classified on the base of income, age, lifestyle, gender etc. Skin care products are mainly sold on the basis of consciousness of customers in respect to their health which vary from person to person.
- Behavioural: Under this segment, perception and behaviour of customers are evaluated and market is classified on the basis of that. For example: If a person is more conscious about its health, then he/she can easily buy organic or natural product.
- Geographic: Population is classified on the basis of geographic region where they reside. For example: Each country is having different policies (Vaghely and Julien, 2010).
Porter's Five Force Model:
- Industry Rivalry: Various firms exist in marketplace that offers similar products leads to create competition. Rivals are using different pricing, product, promotional strategies in order to beat the competition. The main competitor of Natural Essence is Lavender Group.
- Threat from substitute products: Because of availability of various competitors in the market, ample number of substitute goods are available in the market.
- Bargaining power of suppliers: Suppliers posses great impact on firm's overall production and operation. They basically supply raw material to company that is essential for its procurement.
- Bargaining power of buyers: When buyers are more, price of goods gets affected. With high bargaining power, company's need to cut down their cost of the product (Consumers are changing their purchase behaviours, 2015).
- Threat from potential: The company is also facing strong competition from its competitors. Other common threats are: Lack of adequate capital requirement, economies of scale, product differentiation, government policy and regulation .
P3 Data needed to aid gap analysis in entrepreneurial idea evaluation
Thinking of an individual is influenced by several factors which an entrepreneur needs to assess. Evaluation of those factors helps in reducing their negative impact on working and operations of business. In cosmetics and beauty products industry, there are many competitors which needs to be keep in view by firm. Natural Essence should take care of its plans and policies in order to grow and survive in market (Wang, Ellinger and Jim Wu, 2013). Scope in this sector are so wide and it is the main reason behind entering of various firms in cosmetics market. Some data of firm are defined below:
Competition in market
As compared to other firms, the cost of Natural Essence products is low which facilitates benefits to company regarding growth and survival in market. Price of their product is $6000.
Competitive firms charge around 5% high price of its product from Natural Essence due to which people prefer less to buy such products.
New entrances in industry
Firm sale its goods at cheaper rates and they are having their stores in many areas which makes it easy for consumers to access their products. Regular customers also get some discount on visiting the store.
Prices of competitors are high in comparison to Natural Essence. They fix product's price at $9000.
Power of supplier
Supplier cost for providing readily available goods is $ 2000 that is less from others.
Competitive suppliers charge more commission which impacts profits of firm.
Power of buyer
They mainly focus on consumers and their needs in order to satisfy them and attract them towards brand.
Rivalry firms emphasize on profits instead of buyers. Hence, customer satisfaction is less.
Threat of substitute
Firm charge subscription fee of $700 which is less than others.
Rivalry firm charge more fee, i.e., $900 so consumers prefer their brand less.
P4 Interpretation of data to administer evidence of market potential
From the given data , following discussion are made:
- Due to more competitors in the market competition is more in beauty and skin care sector. So, company need to fulfilled the wants and demands of customer in order to fulfilled time. This help in attracting more customers towards their products. This company offer product in $6000 which is less in comparison to other firm.
- Natural essence offer discount to their regular customers. This company provide more discount to those people who recommend their products to other people. This will help in increasing productivity and growth of company (COSMETIC PRODUCTS, 2017).
- The organisation develop and maintain better relationship with their suppliers so that goods are available on time when needed .The cost $2000 which is low in comparison to other companies.
- They give more preference to their customers rather then to earn more profits and provide them high quality of goods. This will helped the organisation in maintain good image in mind of customers. At the time of various festivals they offer various innovative product to their customers.
- The biggest weakness that Natural essence is facing that their customers is shifting to other substitute products. But, that are able to cope up with this issue by taking feedback from their loyal customers on regular basis and they also charge less fees from others.
P5 Application of SWOT analysis to assess entrepreneurial idea
Natural essence requires to doing SWOT analysis for knowing their strengths and weaknesses. This also tell us about the causes of external factors of organisation. This analysis involves various factors these are:-
Various technologies are adopted by firms in order to expand their business in many countries. If demand of products is high in marketplace , then it is necessary for company to give better quality product which help in increasing the productivity of company. If company want to increase growth and sustainability in the market they provide high quality beauty product which is offered by Natural essence.
Prices of products is low which decrease the images of goods and sales. Products like oil, soaps , cream are costly which is not affordable by some people (Wood and McKinley, 2010).
Companies adopted online channels in order to increase sales. This give more advantage to firm.
There are more threats of firm because of more competitors of beauty products in market. In R&D sector, firms are not spending much amount and not able to expand their business in many countries. Due to this reason companies are not able to get more opportunities.
P6 Evaluation of competitive and market environment to assess potential viability
Market analysis is necessary in order to know current market trends, competitors strategies as well as preferences of customers. Consideration of all such factors is necessary for attaining high market growth. While starting any business, it is required by an entrepreneur to assess activities of rivalry firms. It helps in effective introduction of product at marketplace. Natural Essence analyse whole market before offering their organic product for checking its viability. Competitive analysis and market environment will facilitates in determining success of business idea in beauty product sector (Break Even Point, 2017).
By doing competitive analysis, sustainability of business can be identified. It renders growth opportunity to those enterprises which deals in same industry. Analysis of rivalry firm is very essential for Natural Essence for gaining competitive advantage from market. This analysis is done on basis of such factors:
Purchasing behaviour of customers are influenced many available substitutes. So, firm needs to execute such tactics which distinguish their goods from others. Use of effective pricing strategy is one of the tool that helps firm in it (Frank, 2012).
As organic product do not harm skin of people, demand of these products are high. Lifestyle of people are completely change now a days. They more prefer to use such goods which have no side effects. This factor highly influence demand of Natural Essence product in positive way.
Natural Essence majorly target on women for selling their product. Market analysis depicts that their product will get more preferred by people.
In this, 2 types of environments are considered by firm which as follows:
It consist of external environmental factors like political, social, economical, legal, environmental and technological. Firm conduct PESTLE for assessing external surrounding of business. As females are more conscious about their skin, Natural Essence target them. Firm's products are certified by FDA which shows that products are safer to use. Pricing strategy is also one of the main factor on which firm emphasize. It put direct impact on purchasing behaviour of customers (Tirumph, 2016).
Customers, suppliers, competitors are the forces that impact on business working. Firm needs to provide training to employees so that operations can be effectively performed. It in turns increase productivity and profitability of Natural Essence.
As per the above mentioned report, it has been concluded that in dynamic business environment, many opportunities are exist in market place which needs to be identify by an entrepreneur in order to exploit them. The industry of Cosmetic & beauty products is popular and fastest growing one. Today, many people shows their interest in starting their own venture in this sector. By implementing innovative and creative ideas, higher profits can be earned in this industry and it also gives the high competitive advantage over its rivals.
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