Entrepreneurship: Creating a Business Opportunity - Research Paper Example

Entrepreneurship - Creating a Business Opportunity The business opportunity “Try to Escape is a Real Life Room Escape Game provider in London that presents the unique game to the mass in London” Executive Summary The research paper is a business proposal for a real like room escape game by the name of ‘Try to Escape’. The researcher –plans to open this game parlour in London city. The paper makes a detailed analysis of the business proposal through a careful study of the Macro and the micro environment of the proposed business using various businesses and marketing models. The paper also describe the complete product offering based on a detailed study of the markets, demand conditions, financial requirements, business feasibility and business proposition. The paper also identifies the key areas of business strengths and weaknesses and also examines the personal traits for assessing the suitability of the researcher for the proposed business undertaking. Table of Contents Executive Summary 3 Business Opportunity 5 Market Gap 5 Product Offering 5 Feasibility: Micro Market Analysis 6 Customer Profile 6 Target Market Size 7 Current Trends 7 Value Proposition 8 Macro Market analysis 8 PESTEL analysis 8 Competitive environment and direct competitors 10 Porter’s Five Forces 10 Industry Life Cycle 11 Sustainability 12 Unique Selling Point 12 3Cs: Consumer 12 3Cs: Competition 13 3Cs: Company 13 Funding Source 13 Pricing Strategy 13 Critical Success Factors 14 SWOT Analysis 15 Managerial Capabilities (Team Domain) 15 Personal Traits 15 Execution of CSF 16 Business and Social Networks 17 Reference List 18 Business Opportunity The business opportunity of Try to Escape is detailed by examining the market gap and the product offering. The market gap will help in determining whether the game parlour will succeed in London or not. Market Gap Real life escape games are the activities that aim at solving puzzles with the help of clues. The game is played in groups where they try to escape the designed predicament. The games sometimes have sub-plots. It was initially played online but latter in 2007, the first real life escape room was constructed in Japan and it received a good response from the mass. Slowly the concept is adopted by different countries and presently there are a number of game parlours who offers this game to its customers. In London video games are very famous and this has its origination from cultural phenomenon that is seen in the real world. With the passage of time the Real Escape Room concept has gained prominence in London where a group of people is locked in a room and they have to solve puzzles to escape the situation within a specific time frame. This game is famous among the teenagers and also among the professionals who after a tiresome week finds fun in a room with their friends. However, there is lack of proper game parlour for escape games in London as this is a quite new phenomenon in the market. Previously, people used to pay this game online but with the advancement in the global game industry, real life games have earned huge attention from the crowd. An escape room game parlour is needed in London as there are few such parlours which cannot encompass the large population. Product Offering Try to Escape is a real life escape room game parlour that will be set up in London for providing gaming experiences to different groups of customers. This room escape adventures gives challenging situations to the players where they have to solve puzzles and clues to escape. Though it is game but the situation during the game became intense and the players get engrossed with the elements that are around them. The players who are the customers of the game parlour will be provided with a real life situation in a room which is locked. The room has a number of puzzles which is left to be solved by the players. One after other clues indicates the doors, paths and objects that will help them to escape the room. The most interesting part of the game is that all the activities are executed within a limited time frame. The time frame is dependent on the nature of the puzzle. The games will give mental challenge and adventure to the players where they have to perform their best to win the game. The team can be either build by the customers or the game parlour will help them to find their co-players. The management of the parlour will be supervising the situations in the room at every moment through the CCTV camera. If anyone is injured or is not well, the game will be stopped at that moment. This game will provide scope for releasing tension and also teaches to do a work collectively with unknown people. Try to Escape will aim at providing the most exciting real life escape room game so that the players are satisfied with the games in return of the payment they are making. Feasibility: Micro Market Analysis Customer Profile The customer profile of Try to Escape will be the general crowd of London. More specifically, the crowd of London includes the children, teenagers, students and even professionals. The age of the children should be above 6 years. The children below 12 years will not be allowed without their parents. The game parlour will have provision for families too where the games will be customized according to the family requirements. The teenagers and students will basically accompany with their friends and spent a quality time together. After a tiresome week the professional finds it necessary to relax once a day. This game is a mode for refreshment for these professionals as they releases all their frustration and hurdles during the game when they search for escape with their friends and families. Target Market Size The size of the target market is almost as big as the entire population of London. Real Life Room Escape game is an entertainment source that people belonging to all age groups would want to experience. The population of London is 8.380020million as of 2013 (Londoncouncil, 2014). We can eliminate the elderly, specially challenged and small children form this group to obtain the total target market size of about 7.00 million people (Londoncouncil, 2014). Additionally, the population in London is growing at a rate which is the fastest in the world (Bentham, 2014). This assures of an ever increasing market for the game parlour. Current Trends The London market is not unaware of Live Escape Games. The city has a few live room escape games which range from 15 minutes to 30 minute games and are spread over the city. These include Cluequest and Escape land (Exitgames, n.d.). ClueQuest provide gaming experiences for a group of 3-5 people and charges £75 to £102 per team for games that span for one hour. Escape land provides escape games for a group of 3-5 and charges £70 to £90 per team for an hour long game (Exitgames, n.d.). The room escape games that begun in Japan have caught up and people desire entertainment which is different than regular movies or game sessions. The room escape games offer excitement, thrill, adrenalin rush, refreshment, novelty and a complete entertainment package that caters to all kinds of age groups. The present trends that have been highlighted in the London market are 1. 1 hour long games 2. Groups of 3 to 5 people 3. Average price per game at £70 to £100 per team of 3 and 5 respectively Value Proposition The value proposition for the new game shall be in terms of team size variations and also game duration variations. The new gaming parlour that is proposed to open up in London to offer competition to its other competitors shall have three types of game durations where the gaming area shall be split between 3 zones. Each zone shall have a different theme. The game durations shall vary as 30 minutes, 1 hour and 90 minutes. The rationale behind have varied hours of games is that it shall allow people to make a choice in the amount of time they would like to spend in games and the levels of entertainment they desire (Mullins, 2009). Each game shall be based on a different these and shall be entirely different from the other. The first game shall be a combination of laser tagging and clue finding between two teams that shall face each other as competitors. The second game shall be a video game along with clue finding for 60 minutes while the third game shall extend for 90 minutes meant for high thrill adventure gaming. The prices to each game shall vary accordingly. The maximum group size allowed shall be of 8 persons. Macro Market analysis PESTEL analysis Factor Analysis Political London political scenario does not offer much hindrance to the gaming industry because this is a low cost entertainment source and has a high demand among people as an effective de-stressing method. Economical The new wing to the online and web based gaming systems in the room escape games shall offer tremendous job opportunities for the UX designers. Additionally, the gaming industry shall see growth when people are seeking novelty in entertainment apart from regular movies and theatre entertainments. Social Social scenario supports the industry because it does not tamper with their culture or has any racists implications, also, the gaming format is easy to understand and thrilling in experience. Technological The technology of online gaming is gaining high acceptance. The digital technology is experiencing phenomenal growth where the video gaming platform is evolving at a very fast pace. Use of video games at escape games opens up a new wing for innovation on the technological platform for development of puzzle solving games. Environmental The room escape games use up closed and contracted spaces with least harm to the environment. The gaming experiences offer entertainment without much waste except little electronic waste. Hence the harm cause to the environment is the minimum possible for any entertainment stop. Legal The gaming experience has to get clearances for the child policies and adult entertainment certificates if any. (Source: Moore, 2008; Edwards, 2014.) Competitive environment and direct competitors Porter’s Five Forces Forces Level Analysis Power of Suppliers Low The power of suppliers is low because the game zone shall have customised games that shall be designed by company’s designers. The industry does not really have many standardised products and each escape room game provider tries to differentiate his game from the other to stand out in the market. Power of Buyers High The buyer’s demand patterns shall determine the success or failure of the games and the offering or product designs. Since the buyers are the sole source of business revenue in the service, hence the power of buying patterns, choices and preferences of buyers is very high. They have the power to shape product offerings, schedules, durations and entertainment types through their preferences. Substitutability Low Online games are possible replacements to the Escape room games but they do not offer the thrill and adventure as associated with the theme of the escape room games. The format for Escape the Room Game is new while that of online games is old and evolving, Also, there is no other new entertainment format that can take the place of this game in the short term. Rivalry Low There are only 2 providers of escape room games in the city. This allows for limited competition. Also their game formats and group size allowances are quite different from that of the proposed company. For larger groups and smaller or larger game times, the numbers of competitors are quite few. New Entrants High The game format is easy while the investment required for such a business is very less. One only needs to design a space and an appropriate game to get going. Only a few electronic tools and equipments are required to get started. Hence it is easy to face competition from new entrants in the industry. (Source: Kozinets, 2002) Industry Life Cycle Figure 1: Industry Life Cycle (Source: Rao, 2006) The Escape Room Game is has moved on from the introduction phase of the industry life cycle and is moving on to the growth phase which is marked by experimentation and innovation of new formats and styles in which the game can be played so as to popularise the game within the masses and gain a larger market share of London and gain from untapped market potential. Sustainability Unique Selling Point The USP of this product shall be the live entertainment and real life experience it offers on the gaming platform. The online game has been converted into a physical activity which shall become a major success factor for the business (Stevenson and Skillern, 2006). 3Cs: Consumer The main customers of this proposed game parlour shall be the local residents of the city. Along with this, it has been found out that real room escape games are quite popular among the corporate as in New York. Large companies like Google, Facebook and Twitter have organized their own room escape games for their employees for the purpose of enhancing puzzle solving skills, team management, enhancing team spirit, role plays and strategic thinking (Cheng, 2014). 3Cs: Competition Competition from Escape World and ClueQuest shall be tough because even they are new in the industry and shall to constantly innovate in their offerings in order to remain competitive. The company might also face competition from any new entrants in the market (Gronroosm 2000). 3Cs: Company The company shall be a partnership concern where the three partners shall have relevant expertise in the online gaming area, financial management5 and marketing and advertising streams respectively. The partners are expected to bring their own funds and borrowings from the start up sources in order to begin company operations. The partners also jointly decide to raise additional; funds from the bank to finance promotional activities of the new proposed business. Funding Source The source of funds shall mostly be owned funds with a few borrowings from the bank to finance marketing and advertisement costs. The owned funds shall come as personal investment and borrowings from friends, families and as partner’s contribution. The borrowed funds shall be up to a maximum of 20% of owned capital and shall be devoted into making marketing and advertisement expenditure. The owned funds shall be used towards hiring of game space, developing room escape games, buying appropriate and necessary equipments (Leach and Melicher, 2008). Pricing Strategy The company plans to price its games at par with the industry for the 60 minute games. The 30 minute and 90 minute games shall be priced proportionately. The 90 minute game is one of thrill and adventure and shall have a lot to offer for which premium prices might be charged. This pricing strategy is to ensure that the costs of the company are met while making no compromises on price competition offered by the industry (Ross, Westerfield and Jaffe, 2005). These games are cheap sources of entertainment with the given prices and there is no further scope for price cuts to mitigate competition (Kotler and Armstrong, 2010). Critical Success Factors Factor Description Financial Capital £80000 = Owned Funds of Partners £20000 = Borrowed funds from Bank (Brealey and Myers, 2011) Location Located in Westend, high profile area with people having interest in art and theatre which implies that the people in the vicinity shall have high entertainment interest. Indoor Look The entire rented space shall be split into four main rooms, one each for the three games as per requirement and one office space for CCTV surveillance and office work. Each game room shall be designed as appropriate with the theme of the game assuring maximum adventure and thrill. Human Resources The three partners who have come together for this venture have desired experience and expertise in the area. Critical functions like Game Development, Financial Management and marketing activities shall be controlled under the supervision of the owners. Business Model The business model offers to provide three types of games with each game defining level of thrill desired and the duration of game desired. Different games are also offered for each game period. Hence people shall have more to choose and the business can run more than one game at a time ensuring higher revenues. (Source: Zimmerer, Scarborough and Wilson, 2002) SWOT Analysis Strength Weakness Unique Game Format and New in London Larger group allowance Low investment requirement Cheap Entertainment source Multiple duration games Needs constant innovation for new games Easy entry for new players in the market Does not ensure a repeat visit unless game formats are constantly updated. Opportunity Threat Innovate into longer games that can be played at parties Organising theme parties at game location Having theme based games to attract young crowd or family crowd during exam seasons and other low business times New game formats and entertainment sources for the masses Live Sports play Other entertainment options like amusement parks, movies, theatre and game parlours (Source: Harrison et al., 2007) Managerial Capabilities (Team Domain) Personal Traits Based on the results at the General Enterprising Tendency Test, I have a moderate enterprising personality with a score of 69% (Get2Test, 2014). I have some key strength areas and some extreme weakness areas which make me a balanced entrepreneur. It is suggested that I might get extreme enterprising at occasions and take the business to extremely high levels but at other times, I tend to get back to my shell where I like routine and non competitive work. I have creative tendencies which are strong and can go innovative and artistic at times. It cannot be assured that creativity brings in entrepreneurial skills but it forms a critical component of successful entrepreneurs. This implies that in the absence of any workable opportunity, I might not like to take up the business task if it does not involve the use of my creativity. Try to Escape is a business which offers to innovate and get creative at the same time with gaming options or even game arena designs. There is immense potential in using creativity with the marketing strategies as well for the promotion of the new business. Strengths Application of creativity Ability to innovate Team Spirit Weaknesses Lack of Risk taking ability Dwindling motivation Difficulty in moving away from zone of comfort Execution of CSF For the implementation and successful execution of ‘Try to Escape’ shall need a small group of resources. Role Responsibility Contractor To help with hiring of gaming parlour space as per requirements. Interior designer To help with designing of the game arena Game Developers To assist with game development for the three different formats and also innovating with the games on a regular basis. Marketing Company To engages in sound marketing actives that reach the maximum customer set and communicate the message of marketing effectively CCTV Surveillance staff For assistance on the CCTV surveillance and keeping constant checks on games for any mishaps. Business and Social Networks The business and social networks to be used for the purpose of ‘Try to Escape’ gaming parlour are personal contacts and business houses that have had prior experience in the industry and might also have helped competing firms in formulating their business strategy. Reference List Bentham, M., 2014. London population to top 10 million within the next 15 years. [online] Available at: [Accessed 28 June 2014]. Brealey, R. A. and Myers, S.C., 2011. Principles of Corporate Finance. New Delhi: McGraw-Hill. Cheng, E., 2014. Real-life escape rooms are new US gaming trend. [online] Available at: [Accessed 28 June 2014]. Edwards, A., 2014. What UX Design Skills Were in Demand in the UK Job Market in 2013? [online] Available at: [Accessed 28 June 2014]. Exitgames, n.d. Cluequest and Escapeland. [online] Available at: [Accessed 28 June 2014]. Get2Test, 2014. Enterprising rating. [online] Available at: [Accessed 28 June 2014]. Gronroos, C., 2000. Service management and marketing: a customer relationship management approach. New Jersey: John Wiley and Sons. Harrison, R., Benjamin, C., Curran, S., and Hunter, R., 2007. Leading Work with Young People. Connecticut: Sage. Kotler, P. and Armstrong, G., 2010. Principles of marketing. New Jersey: Pearson Education. Kozinets, R. V., 2002. The field behind the screen: using netnography for marketing research in online communities. Journal of marketing research, 39(1), 61-72. Leach, J. and Melicher, R., 2008. Entrepreneurial finance. Connecticut: Cengage Learning. Londoncouncil, 2014. London Key facts: Demographics. [online] Available at: [Accessed 28 June 2014]. Moore, C. W., 2008. Managing small business: An entrepreneurial emphasis. Connecticut: Cengage Learning. Mullins, J., 2009. The New Business Road Test, 3rd Ed. New York: Prentice Hall. Rao, V.R., 2006. Analysis for strategic marketing. New Delhi: Pearson Education India. Ross, S. A., Westerfield, R. W. and Jaffe, J. F., 2005. Corporate Finance. New Delhi: McGraw-Hill. Stevenson, A. and Skillern, J., 2006. Social and Commercial Entrepreneurship: Same, different or both? Entrepreneurship: Theory and Practice, 30(1). Zimmerer, T., Scarborough, N. M. and Wilson, D., 2002. Essentials of entrepreneurship and small business management. New Jersey: Prentice Hall. Appendix Appendix 1: Enterprising test Read More