Development of a Key Business Opportunity - Essay Example

? Entrepreneurship Report Contents Contents 2 Introduction 3 Literature Review 4 Business Opportunity in Fitness Industry 8 Ansoff Matrix 8 Porter’s Diamond Model 10 Identification and Contrasting Mega Trends in the Business Environment 11 Conclusions 12 References 13 Personal Reflection 17 Introduction The research paper on entrepreneurship focuses on the identification and development of a key business opportunity in a developed economy like United Kingdom. The paper in this direction aims to conduct a feasibility study of the business event chosen in respect to the large amount of opportunities present in the external environment. It aims to forecast the future market for the product or service generated in the region. Forecasting in the context of business is taken to be an integral part of the planning function which is organised by business groups and is based on statistical analysis. (Arsham, 1994). Further the new product or service can be presented to the market by letting the consumers slowly adapt to it. The company can encourage the consumers to purchase products at basic levels in the first stage. Through the Freemium model the customers would feel better interested in moving over to more modified models for the product or service. (Anderson & Levine, n.d.). Again the new product or service must aim at reducing the use of materials and energy involved in the production process. The above condition would help in the protection of the natural environment. (Resourcities, n.d.). Observation made shows that United Kingdom offers a growing market for ‘sport and fitness’ products and services. The region offers a host of opportunities pertaining to the stated field reflecting the growth of several fitness centres and clubs promoting health and fitness services. This huge opportunity of the growth of health centres reflects that the people in United Kingdom are becoming increasingly health conscious. (British Council, 2004). The fitness industry in United Kingdom must be susceptible to dynamics of the external environment promoting innovation and other social impacts like growth of old customers who desire to spend a large amount of time in fitness and leisure activities. (National Guidance Research Forum, 2004). Literature Review In the literature review section the paper endeavours to focus on several concepts pertaining to the concept of entrepreneurship. Further the paper also tries to analyse the practical situation in respect to the theoretical concepts presented above. Literature review also focuses on the workings of the sports and fitness industry in particular to understand the entrepreneurship opportunity in the sector. The concept of entrepreneurship is being continually developed in relation to meeting certain stated objectives. Tiryaki (n.d.) observes to this end that entrepreneurship is developed in any sector focused on some specific issues. Firstly the entrepreneur endeavours to understand the operation of the marketing network in the region in relation to the stated sector. In the second phase entrepreneur seeks to relate the social and profit goals in relation to the level of entrepreneurship activities taken. In light of the above discussion, Tiryaki (n.d.) attempts to conduct a review of three essential theories pertaining to entrepreneurship activities. Firstly entrepreneurship theory devised by Marshall reflects a transparent external environment from where the entrepreneur can derive all types of needed information. This theory also states that the amount of profit generated from entrepreneurship activity does not exceed the benchmark of normal returns and moreover the entrepreneurship process is also compared to a normal process of production activities. However again the analysis rendered by Schumpeter in this direction is also studied which is found to render a more practical framework. Tiryaki (n.d.) states that though Schumpeter’s theory on entrepreneurship presents a more practical framework of the marketing system yet it relates all types of innovation activity as external to the business environment of the firm or industry. Finally the third theory analyzed in this respect is that of Kirzner who views the entrepreneur as a person who likes to go for profitable activities. Such a person is referred to by Kirzner as a highly profit centred individual who does not render importance to other activities. (Tiryaki, n.d., p.9). The concept of entrepreneurship is gradually gaining dynamism to adapt itself to the changing environment. To this end, Busenitz, Page, Shepherd, Nelson, Chandler & Zacharakis (2003) observe that in addition to the incorporation of modern technological aspects and allocating the right amount of resources the modern entrepreneur is also required to render further stress on the paradigm of information generation and sharing activities. The modern entrepreneur is thus required to enhance on the development of the communication paradigm through the increase in the amount of sharing activities among the large number of firms present in the industry. These firms joined to form communities which further helped in rendering of potential support in relation to both informational and other resources. These entrepreneurial groups encouraged modern entrepreneurs to form effective business units. Thus an effective entrepreneur must render a detailed outlook on the firm’s external environment to help gather lot of potential information so as to let the business sustain in the competitive environment. (Busenitz, Page, Shepherd, Nelson, Chandler & Zacharakis, 2003, pp.301-302). Entrepreneurship concept is analysed on a practical setting in respect to the growth of fitness industry in United Kingdom. To this end, the entrepreneurial activities of Nahid De Belgeonne, owner of Sorority Limited can be studied to gain a better understanding. Sorority (2011) states that entrepreneurial moves gained in United Kingdom in regards to the development of fitness industry was set against the development of niche markets focusing on women. Thus entrepreneurial decisions gain effectiveness when they focus on innovation and generation of new ideas. Entrepreneurship also involves the generation of innovative ideas to further enhance the product and service parameters. Sorority (2011) reflects that besides focusing on the development of a particular brand the company also enhance the fitness services offered through the integration of special yoga techniques. The company also through the integration of the views of dedicated experts further helps to generate needed health information for the clients. (Sorority, 2011). The range of entrepreneurship activities taken by Nahid De Belgeonne thus helped in cultivating the growth of the fitness concept among working and busy women in United Kingdom. The model of entrepreneurship to gain success in a particular business environment must depend on an effective philosophy and vision. To this end, INSEAD (2011) reflects that effective entrepreneurial decisions taken by entrepreneurs like Peter Sage helped in gaining potential success in several sectors. Highlighting on the scope of fitness industries in the region of United Kingdom the entrepreneur focused on the creation of a fitness group during 2002. The vision of Sage helped the group to become one of the rapidly expanding chains of in the health and fitness industry in United Kingdom. The success of the fitness group developed by the entrepreneur can be observed from the large number of awards received by the company. INSEAD (2011) also shows that amount of involvement that Peter Sage has developed with entrepreneurship bodies in order to enhance the informational and operational parameters. Development of skills and knowledge based help the entrepreneur to develop around six concerns in diversified sectors. (INSEAD, 2011). An entrepreneur focusing on developing an organisation pertaining to the fitness industry is required to conduct a host of activities to gain a potential market base. In this regard, Hecox (2007) observes that fitness companies along the global scale are generally divided into two segments. The first segment caters to the development of products for home use and the other for use in fitness clubs. Out of the total 100 percent the home fitness industry account for around 70 percent while the remaining is contributed by the fitness products developed for clubs. Retailers and entrepreneurs operating in European markets like United Kingdom gain the advantage of better distribution systems while marketing the products in the home fitness category. However the entrepreneurs must not only restrict them to one product or service category but must work on continuous innovation keeping an eye on the emerging trends. Further, Hecox (2007) also state that apart from working on the development of products the entrepreneur must also encourage the development of skills through the incorporation of suggestions and guidelines from a training population. The workforce in the health clubs being rendered effective training by the qualified and trained individuals would help them to render more effective service. This fact would help the firms in creating differentiation in the pattern of products and services offered. Further entrepreneurship attributes should also involve proper marketing and communication strategies to help reach the products to large number of consumers. Entrepreneurship activities would gain further potential if the individual carries out the entrepreneurship function after having conducted a large amount of market research functions. Effective marketing research would help the entrepreneur in properly gauging the needs of the market and thereby developing the right product or service. Moreover, Hecox (2007) also observes that effective entrepreneurial objectives fail to gain ground in an isolated environment. Thus the entrepreneur must act to form strategic partnership with other companies in the same domain in order to retrieve potential information that would help in improving sustainability in the business sphere. Finally the entrepreneur must also endeavour to gain entry into relevant trade shows and exhibitions conducted in the region to create further expansion of the brand image of the company and also of the products and services. (Hecox, Nugent, Fellman, Post, 2003, pp.4-6, 14-19). Business Opportunity in Fitness Industry The business opportunities in the fitness industry are huge. The people living in the modern society are very much health centric for which large business opportunities are emerging in the realm of fitness industry. Special business opportunities are emerging in the fitness sector with the growth of beauty and health clinics and other naturopathy centres. One significant business opportunity that is emerging in regards to the health and fitness industry is the growth of franchising options. The health entrepreneurs are moving towards franchising options for it helps in gaining larger markets through considerably less amount of investments. (Health Information, 2011). In regards to the health clubs the business opportunity in United Kingdom is projected to grow to manifold amounts owing to the emergence of health conscious people. Moreover the business of health clubs gained greater recognition for expansion of services to the corporate level. Gaining of corporate clients helped the health clubs to gain huge amount of revenues and also to expand their business areas. (Honeybourne, 2003, p.10). Further business opportunities in the fitness sector can be analyzed on the basis of strategic business models like Ansoff Matrix and Porter’s Diamond Model. Ansoff Matrix The Ansoff Matrix can be used to analyse the strategy that any company can take to enhance its market share in any existing market or any strategy that a company can take to enter new market paradigm. The matrix can be represented as under. Figure 1 (Source: Mercer, 1996, p.171) The fitness companies can work in developing the fitness and health services by incorporating nutritional elements as suggested by nutritional and health experts. Moreover the fitness companies and other associations can make use of other weight reduction and health enhancing programs to capture newer customers in the existing market. Special fitness trainers can be employed to develop training parameters for people suffering from special ailments like cardio-vascular diseases. (Erwin, n.d.). Similarly the fitness company planning to enter foreign markets can plan an effective diversification strategy. Incorporating product or service diversification implies that the fitness companies can enhance the services offered through the incorporation of several health insurance schemes led by leading companies and other health and fitness magazines. (American Speciality Health, 2010). Fitness companies to further enhance its market share in the existing market must focus on high amount of penetration activities through the opening up of large number of outlets in several untapped regions. Market penetration activities can also be enhanced through rendering competitive pricing which would be highly economical and reasonable in nature. (Business in the Community, 2005, p.17). Fitness centres in order to expand their business in newer market areas must enhance the promotional paradigm aimed at creating huge amount of health and fitness awareness for the people. Thus the fitness awareness program can employ the views of health and fitness experts to create customer hype in the newer markets to become more health conscious. (Health Promotion Program, 2009). Porter’s Diamond Model Entrepreneurial action in the fitness industry can also be analysed through the Diamond Model framed by Porter. Diamond Model framed by Porter takes into account several advantages that a firm can gain through organized external and internal environment. Thus any business through helpful government regulations along with strong industry and resource base can perform better in newer markets. Again the industry or company must be organizationally strong and properly administered to optimise the use of external resources. (BusinessMate, 2010). In United Kingdom with the rapid growth of old people the realm of health consciousness has earned much significance. Large numbers of medical and health experts are advising the people to enhance their health paradigm through gaining membership in fitness centres. Thus taking entrepreneurship decisions to develop greater number of health and fitness centres in United Kingdom is taken to gain further potential in the future. (Peach, n.d., p.13). Again the government of United Kingdom is endeavouring to counter large amount of investments to help in the enhancement of health services. National Health Services in United Kingdom is steadily working to help in the better performance of external health services in the region. (Peach, n.d., p.12). The organisational atmosphere in many health centre organizations is generally very much informal in nature which helps in generating a collaborative atmosphere in the concern. Further rules and regulations must be framed to help in better governance of the members of the health clubs. Again a committee can be framed in different clubs which would work for the optimal utilisation of the resources of the region targeting at better development. (HG.org, 2005). Moreover the regional and local political bodies in United Kingdom are strongly focusing on the development of fitness centres in several areas. This activity helps in promoting the concept of healthcare in an enhanced manner in the region. More and more number of spaces is rendered to promote the growth of health and fitness zones in United Kingdom. Further large number of trainers and fitness experts are being increasingly groomed to help in rendering better services to the people. (marmotreview.org., n.d., pp15-17). Identification and Contrasting Mega Trends in the Business Environment Owing to the emergence of a mega trend like global recession the health club chains around the world suffered a lot like other industries in terms of loss of both internal and external people. The health clubs suffered from huge loss of business as customers started flocking to lower cost avenues. Health clubs to counter the adverse situation started rendering membership passes at reduced costs to gain large number of newer customers. Further speciality services were also developed like rendering personalized fitness trainers and also in providing better infrastructural facilities for development of sports like tennis. (IHRSA, 2010). Another major mega trend in regards to the health clubs is the development of the technological interface. Incorporation of better technologies helped in the growth and modification of leisure activities which led to changes in the behavioural patterns of the customers. (Wang, Wu & Quan, 2008, p.106). While comparing the effects of such mega trends on the health clubs of the world it is found that the first mega trend cited in this case i.e. recession has in fact changed the way the health clubs render services to the customers. The health clubs owing to recessionary changes had to strategise their product and service portfolio to gain the attention of newer customers. Product portfolio was enhanced through the incorporation of fitness trainers who helped in rendering personalized services to the people at reduced cost. Through the above mechanisms the health clubs devised strategies which would help in countering the loss owing to loss of existing members. Again the innovations rendered in regards to the health and fitness services owing to development of machines helped expensive health clubs to gain a sophisticated and niche group of customers. Lower category health clubs had to render huge amount of expenditure in firstly gaining such machines and also in conducting training operations of the health club staffs to rightly operate such. Thus both these mega trends are found to render significant impacts in changing the service and operational dynamics of the health clubs in the world. Conclusions Entrepreneurship decisions taken depend on key managerial decisions which focus on creation of new business units to attract the minds of customers dwelling in existing market. The entrepreneur can also largely depend on innovation activities to counter development in the products which would help the company in gaining huge market share in both existing and expanded markets. The paper in this light focuses on the development of fitness and health services through entrepreneurial actions taken in respect to the geographical area of United Kingdom. Entrepreneurial actions taken in this direction involve enhancing the consumer mindset in resorting to the fitness and health zones for improving their physical status. Further the fitness activities and services can be better enhanced through developing such based on incorporation of the views of health experts. These views can be used to develop the nutritional elements of the diet of the clients along with gaining of expert understanding in developing of the training paradigms in relation to fitness exercises. Special training can be extended to render specialized services to those clients suffering from severe health problems. References American Speciality Health. (2010). News. Available At: http://www.mye-fitcoach.org/News/Default.aspx?id=19-37372. [Accessed on April 18, 2011]. Anderson, H. & P. Levine. (No date). Complex Sales Systems. [Doc]. Available At: http://entrepreneurship.mit.edu/sites/default/files/files/15396_syllabus_v02Dec2010.doc. [Accessed on April 15, 2011]. Arsham, H. (1994). Time-Critical Decision Making for Business Administration. [Online]. Available At: http://home.ubalt.edu/ntsbarsh/stat-data/forecast.htm. [Accessed on April 15, 2011]. British Council. (2004). Sports and Fitness. [Pdf]. Available At: http://www.britishcouncil.org/learning-infosheets-sports-and-fitness.pdf. [Accessed on April 15, 2011]. Busenitz, L. Page, G., Shepherd, D., Nelson, T., Chandler, G., & A. Zacharakis. (2003). Entrepreneurship Research in Emergence: Past Trends and Future Directions. Joumal of Management. Vol.29, issue, 3. pp.285-308.[Pdf]. Available At: http://www.simmons.edu/som/faculty/docs/entrepreneurship_in_emergence.pdf. [Accessed on April 15, 2011]. Business in the Community. (2005). About the Organisations. [Pdf]. Available At: http://www.stuffit.org/bnb/research/regeneration/pdf/BITC_Underserved_Markets.pdf. [Accessed on April 18, 2011]. BusinessMate. (2010). What is Michael Porter’s Diamond Model? [Online]. Available At: http://www.businessmate.org/Article.php?ArtikelId=49. [Accessed on April 18, 2011]. Hecox, M., Nugent, N., Fellman, P. & J. Post. Network Externalities, Evolutionary Dynamics and Firm Internationalization. [Doc]. 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How One Health Club’s Business Expanded During the Recession. [Online]. Available At: http://www.ihrsa.org/home/2011/4/28/how-one-health-clubs-business-expanded-during-the-recession.html. [Accessed on May 10, 2011]. INSEAD. (2011). Peter Sage. [Online]. Available At: http://www.insead.edu/facultyresearch/centres/entrepreneurship/advisory_board/P_Sage.cfm. [Accessed on April 16, 2011]. marmotreview.org. (No date). A Tale of Two ObesCities: Comparing Responses to Childhood Obesity in London and New York. [Pdf]. Available At: http://www.marmotreview.org/AssetLibrary/resources/new%20external%20reports/city%20university%20of%20ny%20and%20london%20met%20-%20obescities.pdf. [Accessed on April 18, 2011]. Mercer, D. (1996). Marketing. Wiley-Blackwell. Erwin, G. (No date). Services. Available At: http://www.ginetics.org/services.html. [Accessed on April 18, 2011]. National Guidance Research Forum. (2004). Sector information. [Online]. Available At: http://www.guidance-research.org/future-trends/sport/info/printAll?lang=en. [Accessed on April 15, 2011]. Resourcities. (No date). What is Dematerialisation? [Online]. Available At: http://resourcities.acrplus.org/dematerialisation/what_dematerialisation.htm. [Accessed on April 15, 2011]. Tiryaki, A. (No date). Theories of Entrepreneurship: A Critical Overview. [Pdf]. Available At: http://sbe.dumlupinar.edu.tr/13/31-42.pdf. [Accessed on April 15, 2011]. Sorority. (2011). Fast Fitness. [Online]. Available At: http://www.thesorority.org/wisdom/fast-fitness. [Accessed on April 15, 2011]. Wang, B., Wu, C. & W. Quan. (2008). Changes in Consumers Behavior at Fitness Clubs among Chinese Urban Residents —Dalian as an Example. Asian Social Science. Vol. 4, no. 10. Available At: http://www.ccsenet.org/journal/index.php/ass/article/download/930/895. [Accessed on April 15, 2011]. Personal Reflection United Kingdom is a country which is becoming increasingly health conscious. People in the region are focusing on developing habits that would help in the reduction of their obesity and help in better living. Thus entrepreneurial decisions taken to grow fitness and health centres in the region is considered as a major breakthrough in the direction to help the people help gain a better living. Moreover the government of United Kingdom is also endeavouring to render huge amount of investment and potential resources to help in the development of the skill base for betterment of those services. Hence taking entrepreneurial decisions in developing health centre in United Kingdom is considered a relevant success. Read More