Enterprise and Entrepreneurial Management - Essay Example

Enterprise and Entrepreneurial Management Contents Introduction 3 Discussion 3 Importance of market research 3 about sole trader business– Evarlast 5 Critical evaluation of market research methods and approaches 5 Application of methods to the proposed start-up business 7 Conclusion 8 References 10 Introduction An enterprise majorly focuses on enterprising mindset development through enterprising attitudes, skills and behaviours. An entrepreneur is often considered to be an innovator who generates new ideas so as to compete in the market place. The ideas that are generated are based on certain techniques such as brainstorming, crystal ball, pretending as if there is some problem and mind mapping. For a business start-up it is very essential that an entrepreneur appropriately identifies the opportunities prevailing in the market and then focus on strategic thinking to gain competitive advantage so as to survive in the industry. In any business start-up one of the most vital factors is the technique of the market research that is incorporated by an entrepreneur so as to identify the consumer market demand, potential competitors, rate of market growth and to forecast the future success of the business. The start-up business that is been considered is a private shop named as Evarlast that would serve pizzas to the customers. The market research process would be employed so as to analyze the market demand and to position the product in such a manner that it proves to be highly competitive in the market. The market research even provides sufficient information as to whether the ideas of an entrepreneur would be appealing or not to the target market. Discussion Importance of market research Market research is the most important factor that is taken into consideration before starting up a business. For an entrepreneur in order to take the business idea into the next possible stage it is required that reliable information is gathered so as to prove that the idea would be appealing to the target market. An entrepreneur needs to be very realistic in terms of the business idea and the service or product that is been offered to the market so that the business is successful. The importance of market research is that it gives an entrepreneur a chance to be informed and to gain perspectives so as to enhance the decision making. It is often considered that starting up a new business is an unknown step that is taken by an entrepreneur that essentially requires more of data and information on the target market so that the business strategies are accordingly developed. This technique is very important for the growth and survival of business. This eventually helps in reduction of business risks and enhances the competitive nature of the enterprise (McAuley, 2013). For instance in the case of Everlast the competition is very intense as the products that would be offered by this private shop is offered by other shops in the town. So it becomes very essential for the owner to gain information of the consumer demand so that the positioning of the product can be appropriate. In the scenario of setting up a new business there is often need for capital and in that situation the people who are approached desires for the market research information so as to analyze whether their investment would be profitable or not. Market research is also essential before setting up a business as it helps to identify the probable threats and opportunities that are prevailing in the market place (Kanagal, 2012).On basis of this information an entrepreneur can make sound decisions for smooth running of business. It helps the owner to be aware about the changes that is taking place in the market. The owner of Everlast through this market research can identify the changes that can be incorporated successfully into the business idea so as to offer the best dishes at affordable cost in a pleasant ambience. The importance of market research can be described in various ways and before starting up a business it helps an entrepreneur to identify new services and products, anticipate market changes or trends, to determine whether the satisfaction level of customers is high or low and if it is low then the reason behind it, to be ahead by one step from all its competitors, to spot warning signals and trends that is taking place in the business sector, to decide on suitability of advertising media, to be updated with the technology existing in the market place and to make aware as to whether the new business idea would be viable or not. Description about sole trader business – Evarlast The sole trader business is of a pizza shop. Everlast would not only be focused on delivering the best pizzas in the region but also create the best ambient conditions so that its customers can cherish their time spend in the shop. The major objective of the business is to lower down the overall operating costs and to enhance the production system so that the pizzas are delivered to the customers at the least time possible. The shop would be offering some of the standard pizzas and along with that there would be flexibility of customers choosing their ingredients for the pizza. The central location which the business targets have less number of pizza shops and the idea of home delivery is very rare in the town. A business start-up requires certain capital to run the business and execute all its operations. The start-up cost or capital for this particular business would be £29,150. The level of risk is moderate in this particular segment majorly because of the factor that the investment rate is low and the opportunity is high. The major risk would be associated with hiring competent workers who would be capable enough to deliver high quality dishes so as to gain competitive advantage. The segment in which the business would operate has low market entry barrier which would be a risk factor in the future. Critical evaluation of market research methods and approaches Market research can be broadly classified into two types that form the tools for start-up business; they are primary and secondary market research. However these two types are grouped under two categories that are qualitative market research and quantitative market research. The qualitative market research is a technique through which information is collected by talking to individuals and tracking their opinions and feedback. On the other hand the other form of market research that is quantitative market research relates to compiling numbers and figures on the basis of meaningful graphs, charts, tables and statistics. These market research techniques possess their own strengths and weakness and it totally depends on the nature of the business in order to choose the appropriate tool for collecting market information. The qualitative market research is the best when information cannot be easily gathered so as to apply statistical tools. This form of research is often considered to be subjective research and in most of the cases cannot be generalized as it is based on the opinions of individuals. However the major strength of this form of market research is that it traces the feedback of experts in the particular field who are able to provide appropriate information that would be beneficial for the growth of the business. On the other hand the cost for this form of research is also and more valuable information can be collected at the least time (Anderson and Simester, 2013).On the contrary quantitative market research is descriptive form of study that is based on analysis of the gathered information through statistical tools and methods. In this form of market research the information is either collected through structured interviews or through questionnaire survey and then the data is statistically analyzed so as to check the feasibility of data for the business. The major strength of this market research is that it does not rely just on the feedback of people and so the information can be more generalized. The information that is gathered is not subjected to any form of biasness as proper analytical tools are employed to check viability of the data. However the weakness of this form of technique is that it is very time consuming process and also at the same time it requires sufficient amount to carry on the process. In certain scenario it may happen that the statistical tools fail to analyze the data correctly which would eventually lead to misinterpretation of the market research information that would affect the start-up business to function appropriately. In these market research techniques there are two forms of data collection methods that are secondary and primary data collection techniques. The secondary sources majorly comprise of trade journals, websites, books, yellow pages, magazines, etc. The major strength of these sources is that it gives well proved data that has been applied by other business or information regarding the market where the business is to be launched. The weakness being often it may result into valid information not being available in these sources or they may not be updated with the changes or trends in the marketplace. The primary research or data collection procedure is the most vital part of market research as it deals with the current market scenario. The major forms of this technique are questionnaire survey, focus group study, observation, interview and feedback from customers or staff. This form of market research helps in outlining the competitor’s strengths and weakness and also at the same time provides valuable information that proves to be advantageous for the business for long run. The major strength of this technique is its high levels of accuracy and an opportunity to interact directly with the customers. However the weakness lies in the area that it is a costly procedure, biasness can affect the information collected, often the respondents are not willing to give right information and is a time consuming process. Application of methods to the proposed start-up business Everlast a private pizza shop needs to conduct extensive market research so that it is able to detect the consumer market demand and gain competitive advantage. The approach that is most suitable for this form of business is both qualitative and quantitative research methods. The qualitative research would enable to gather information from the secondary sources or existing articles related to the competition prevailing in the region and the scope of growth for a pizza shop in that region. The major secondary data collection technique that can be employed for this particular business would be journals and internet. The quantitative research would also play a major role in the market research for this start up business. This technique would encompass interviews and questionnaire survey. These tools would be used because it serves as a medium to interact directly with customers so as to analyze their hidden demand in terms of what extra they need from a pizza shop. Thus it can be stated that the primary tools that would be incorporated is structured interviews and survey. The interviews that would be conducted will be with experts belonging to the same industry and some customers who are almost daily visitors to a pizza shop. The major questions of the interview would encompassing the factors such as ambient conditions, suitable menu for a pizza shop, opportunities that can be availed by this form of business, changing taste and preferences of customers towards a pizza shop, importance of price and quality for customers and best location for setting up the business. The answers to these questions by the respondents would enable the entrepreneur to interpret as to whether the business idea is aligned or not with the changing market trends (Gupta, 2012).The other form of market research technique that can be implemented is questionnaire survey. In this survey it is very important to opt for the correct sample size. The sampling method that can be used is random sampling method and the sample size would be of 300 respondents. The survey questions would be focused on identifying the areas of dissatisfaction of customers in relation to a pizza shop and to understand the hidden demand of consumer market. The major strength of this process is it would outline the opportunities and threats prevailing in the market in context of the new business idea. Conclusion Market research is very essential before starting up a new business. It is very important that an entrepreneur is aware of the pros and cons that are prevailing in the market before setting up the business and investing lump sum amount for the business. In case of Everlast it is very important that market research needs to be carried before setting up the business as it would be operating in the highly competitive market segment. On the other hand the information that is obtained through the market research would enable the owner to set its own competitive advantage in the form of either establishing brand name, offering high quality products or services, or by lowering down the overall costs so as to position its products at a competitive price. References Anderson, E. T., and Simester, D. I. 2013. Reviews Without a Purchase: Low Ratings, Loyal Customers, and Deception, Journal of Marketing Research. Vol. 51(3). Gupta, S. 2012. Interdependence between experience marketing and business strategy, Journal of Indian Business Research. Vol. 4(3). Kanagal, N. B. 2012. Customer Value Proposition and its Linkage in Marketing Strategy, Academy of Taiwan Business Management Review. Vol. 8(1). McAuley, A. 2013. Entrepreneurial education: meeting needs better, Journal of Research in Marketing and Entrepreneurship. Vol. 15(1). Read More