Introduction
Innovative Business Idea- Online Pickle Shop will be developed in this report. An innovative business idea refers to a business idea in which the latest technology has been utilized to attain targeted growth (WALL, CODAY, and MITCHELL, 2014). In this report, possible sources for the new and innovative business ideas have been evaluated. Online pickle shop has been selected as the entrepreneurial idea and the market gap has been identified. Primary and secondary data have been utilized in order to identify the market potential. In the last part of the report, the entrepreneurial idea has been evaluated in the context of the market and competitors.
You may feel interested to read below posts:
Innovative Business Idea-Read and Eat
Entrepreneurial Ventures and Entrepreneurship
How background foster or hinder entrepreneurship
Impact of small businesses on the UK economy
Sources of business ideas
Sources of entrepreneurial ideas and innovation: Drucker’s 7 sources of innovation:
Drucker’s 7 sources of innovation:
Peter F. Drucker is the inventor of modern management who demonstrated the 7 sources of innovation opportunity. The 7 sources are evaluated below:
The unexpected: Innovation is encouraged by both unexpected success and unexpected failure (Hua, and Zongyi, 2011). When a business idea becomes successful unexpectedly, the success inspires entrepreneurs to invent another business idea. If a business idea fails to attain its expected growth, it also encourages entrepreneurs to invent new business ideas. It is the most effective way of inventing a unique business idea.
Incongruities: This source refers to the incongruent between need and supply (Isman et al., 2012). When people try to resolve existing incongruities, it fosters the innovation process. For example, the amount of car use is increasing but there is a shortage of parking space that creates incongruent between need and supply. Therefore, people invented small cars because small cars need less space.
Industry and market structure: Present industry and market structure also inspire entrepreneurs to innovate new business ideas (Gavrikov, 2013). Entrepreneurs need to be aware of the available scope that they can utilize. For example, there was much information on the World Wide Web which were distributed in a scattered way. Google utilized this opportunity and invented its search engine, which has made the process of searching for information easier.
Necessity: Necessity drives innovation greatly (Abduladze et al., 2013). The rising needs of people encourage entrepreneurs to invent new products or services that will fulfil customers’ demands. For example, communication costs are high when it is done through mobile calls and communication facilities are limited therefore Mark Zuckerberg invented Facebook. Facebook has made communication easier and people can communicate with people from other countries within a moment by sending pictures, texts and sharing videos.
Demographics: Lifestyle is one of the most famous sources of innovation (Clausen, and Madsen, 2014). People face different needs while leading their life, and it fosters innovation. For example, washing clothes is a tough task therefore people invented the washing the machine. Washing machine saves time which people used to waste in washing clothes. People can utilize the time in doing other important work and the washing machine will wash all of their clothes.
Changing perception: Changing perception also encourages innovation (Damanpour et al., 2018). It creates demand for new things and entrepreneurs invent new ideas. For example, overweight people are considered unhealthy in society because it causes many diseases therefore people invented a different types of exercise equipment such as treadmills. This changing perception also encourages entrepreneurs to get the business idea of a GYM.
New Knowledge: When people gain new knowledge it also takes them toward innovation (Nicholls, 2018). New knowledge about anything encourages people to invent something new. For example, when people got the knowledge of the microbial world, it encouraged them to invent something that will help them to explore more and this thought helped them to invent a Microscope. Through Microscope, scientists can observe more about the microbial world.
Other sources of innovation are:
Big Bang Change: Big bang change refers to the instant change of a process that brings innovation to business (Ramadani, and Gerguri, 2011). This process is the result of the activities such as coordination, planning, software changes, data conversations etcetera. For example, bank mergers are a type of big-bang change.
Incremental change: Incremental change brings innovation with a series of small improvements to an organization’s products, services or methods (West, and Bogers, 2014). With the incremental change, an organization take steps to develop its products with continuous improvement. For example, Coca-Cola goes through small-scale developments in order to add value to its products.
How to choose a specific entrepreneurial idea
Market gap:
The demand for pickles in the UK is increasing but there are limited stores that deliver online pickles. The UK pickle market has the potential to grow more. On the basis of the market gap, ‘Pick Pickle’ has decided to start their online shop across the UK. It will produce seafood pickles, fruit pickles, vegetable pickles and others with the best flavour and quality. ‘Pick Pickle’ will make a video while making the pickles and will post the video on social media and YouTube. When customers will see that the pickles are made by maintaining a healthy and hygienic processes, it will attract them to buy the pickles. ‘Pick Pickle’ will earn a profit on the basis of viewers’ rate of pickle-making videos and it is the key reason for making and promoting the videos. Customers will be able to buy pickles online and will get home delivery with cash on delivery services.
USP:
USP of ‘Pick Pickle’ will be the unique pickles and flavour of the pickles. It will deliver lime pickles, garlic pickles, mango pickles, green chilly pickles and many other mouth-watering pickles that will attract customers to the online shop. Customers will repeat purchase if they taste the pickles of ‘Pick Pickle’ once and they will suggest others to purchase from the shop also.
Porter’s five forces model:
Porter’s five forces analysis shows the competition of the targeted industry (Mathooko, and Ogutu, 2015). It has been evaluated below:
The threat of new entrants: High: Threat of new entrants is high for ‘Pick Pickle’ because it needs lower amount of capital to start the business. Therefore, new companies can enter the market at any time by investing the lower capital. And the new companies can replace the demand for pickles the online shop.
Threat of substitutes: High: Threat of substitutes is also high in the UK pickle industry. There are many online shops and restaurants that make pickles of different flavours. Customers can choose from the pickles and leave ‘Pick Pickle’ if they get more variation and better taste in that company’s pickle.
Bargaining power of suppliers: High: The power of suppliers for ‘Pick Pickle’ is also high. It will be a new company and has limited suppliers. If the suppliers do not supply good seafood, fruits and vegetables, ‘Pick Pickle’ will not be capable of delivering the best pickles. Suppliers have the power to influence the business.
Bargaining power of buyers: High: The bargaining power of suppliers is always high (Mathooko, and Ogutu, 2015). They want the best quality pickle with great taste including a lower price. Therefore, customers can stop purchasing anytime if they get better pickles from other shops. To hold on to their customer, ‘Pick Pickle’ have to deliver unique flavoured best pickles.
Competitive rivalry: High: Bengal Bake, Afghan kitchen, Mae+ Harvey, Scully, Indian Basket, Melbury & Appleton, Lakshmi stores etcetera are the top player in the UK pickle industry (Four Square, 2020). All of them created their demand by delivering best-flavoured pickles therefore ‘Pick Pickle’ will face high competition in the market.
Industry Life Cycle:
The industry life cycle refers to the stages through which a business is executed (Simonen et al., 2018). It has five stages and these are evaluated below:
Start-up stage: In the start-up stage, the demand of customers is limited because the product or service is new in the market (Rashid, and Yusoff, 2015). A distribution channel is undeveloped at this stage. The demand for ‘Pick Pickle’ will be low in this stage because the company is new in the market. Therefore, the company will get very low revenue or 0 revenue.
Growth stage: In this stage, the company and their products become able to attract a bigger market and start to attain growth (Vaidya, Ambad, and Bhosle, 2018). In the growth stage, the taste and quality ‘Pick Pickle’s pickle to help them to increase its demand in customers’ minds. The price of the pickle will be lower because of high demand and the lower price will increase its demand more.
Shakeout stage: The shakeout stage refers to the slowing down of cash flows, revenue and profit (Rashid, and Yusoff, 2015). ‘Pick Pickle’ may generate lower revenue and profit in this stage. Even the company can be attained by a strong competitor in the industry with a bigger market share.
Maturity share: In the stage of maturity, all the companies become well-established and maintain profitability by conducting their own marketing strategies to stop new entrants from entering the industry (Vanhaverbeke et al., 2015). ‘Pick Pickle’ will get maximum revenue, cash flows and profits in this stage furthermore will be more famous. A reasonable price for the pickles will hold on to customers and attract new ones.
Decline stage: It is the last stage of the industry life cycle where companies focus on the most profitable product lines to increase profit and stay in the industry (Davidson, Binks, and Gediga, 2016). ‘Pick Pickle’ may focus on their most demanding pickle in order to maximize profit and it will help them to deal with the decline.
Secondary research to find out market potential:
Value of the pickle industry and demand for pickles in the UK: The value of the global pickle industry was US$ 10.6 Billion in 2019 and it is expected to grow by about 12.6 billion by 2025 (IMARC Group, 2020). It refers to the CAGR of 2.8% (IMARC Group, 2020). In the UK, per person consumes 118 grams of pickles per week (Statista, 2020).
What age group/gender likes the pickle most: People of all ages such as 6 to 50 up like to eat pickles (Wen, Li, and Zhang, W.X., 2011). Children are fond of sweet pickles and people of younger to middle age like a spicy pickles. And women like the sour flavour of pickles.
How many pickle manufacturers in the UK: Branston, In a Pickle, Lakshmi Stores, The Pickle Factory etcetera are the top pickle manufacturers of the UK (In a Pickle, 2020). Except these, there are many small brands that produce pickles.
What is the problem of current pickle manufacturers: Brexit issue will create problems for pickle manufacturers because 30% of fresh vegetables and fruits are imported from the EU (Dhingra et al., 2016). After Brexit, the EU may delay giving delivery in the UK and the price of fruits and vegetables may increase.
Is there any pickle manufacturer in UK publishing the mouth-watering pickle-making videos as well as selling the pickle: Pickle manufacturers in the UK do not make mouth-watering pickle-making videos. But some chefs and YouTubers post pickle-making videos.
Conducting Primary research to find out market potential:
To collect primary data, the researcher has compiled three questions. The intention is to conduct survey questionnaire.
The first question has been asked to assess the sufficiency of existing pickle manufacturers of the locality.
Above question was asked to understand the satisfaction level of customers with existing pickle manufacturers.
And final question was asked to assess the validity of the business idea.
Analysing of secondary data to find out market potential
Pickle market tends to be valued about 12.6 billion within 2025 which refers to the vast business opportunity of business (IMARC Group, 2020). It seems that pickle market will grow more and ‘Pick Pickle’ has taken right business decision. One person of UK consumers 118 grams of pickle in a week which also indicates the great business opportunity of UK pickle market. ‘Pick Pickle’ will be able to generate higher revenue if they deliver best quality pickle with great tastes. People of all the ages and gender like pickle therefore ‘Pick Pickle’ will get many customers if they become able to deliver best pickles to the customers. There are less online pickle service provider in UK and no manufacture have conducted the marketing strategy that ‘Pick Pickle’ has targeted which is publishing videos of pickle making. Therefore, ‘Pick Pickle’ will attain revenue when customers will view the videos. It is an unique marketing strategy, ‘Pick Pickle’ will be capable of attaining desired growth.
Analysing of primary data to find out market potential
From above analysis, this can be seen that there is certainly market for pickle manufacturing along with mouth-watering spicy pickle making videos.
SWOT analysis of the innovative business idea
SWOT analysis helps an organization to identify their internal strength, weakness, threats and opportunities. Therefore, companies make them stronger by utilizing their internal strength and available opportunities furthermore remove weakness and threats to ensure growth. SWOT analysis of ‘Pick Pickle’ has been evaluated below:
| Strength * Customers will get different type of pickle such as: fruit pickle, vegetable pickle and seafood pickle from ‘Pick Pickle’. * The pickles will be available in all tastes such as: sweet, sour and spicy therefore customers of every type will get their favourite pickle from ‘Pick Pickle’. * The mouth-watering pickle making videos will have high regulation to deliver customers exclusive quality videos which will attract more customers. * ‘Pick Pickle’. Will ensure strong online presence that will help them to get many customers. * It will ensure fastest delivery of pickles to deliver customers’ best purchase experience. | Weakness * Customers’ changing perception may reduce their interest toward pickle therefore ‘Pick Pickle’ will not be able to attain targeted goal. * ‘Pick Pickle’ will be a new brand and customers’ will not purchase from their shop at the beginning. * ‘Pick Pickle’ have no experience about executing business therefore it may face many difficulties while operating the business. * Company may not be able to make effecting marketing strategies because of experience lacking. |
| Opportunities * Though there are less online pickle seller in UK it is a great opportunity for ‘Pick Pickle’ to create its demand on customers’ mind. * There are no pickle manufacturer of UK who publish their mouth-watering pickle making videos therefore the company will be capable of attracting many customers toward them. * Good quality videos of making mouth-watering pickle will encourage them to see the videos many time and it will help ‘Pick Pickle’ to generate more revenue. * ‘Pick Pickle’ will provide fastest delivery that will increase customers’ satisfaction toward their services. | Threats * New entrants may enter into UK pickle at any time and replace the demand of ‘Pick Pickle’. *Established pickle manufacturers have created outstanding image on customers’ mind therefore ‘Pick Pickle’ will need long time to convince the customers. * Because of Brexit import cost of may increase and ‘Pick Pickle’ have to bear higher tariff also which will increase its operational cost. * Increasing health awareness may demotivate customers from buying sweet pickles. |
Applying PESTLE to assess external environment for the new business idea
PESTLE analysis assists an organization to analyse the impact of external factors and identify better solutions to interact with the impacts (Bosdriesz et al., 2012). PETLE analysis of ‘Pick Pickle’ has been evaluated below:
Political environment: Political environment of UK is stable and the government has made fair business policies for the organizations. UK government helps new companies to grow therefore ‘Pick Pickle’ will be capable of establish their business without more complications and become able to attain the desired success.
Economic environment: The economy of UK is one of the most successful economy of the world and GDP per capita is $42,385 (Country Economy, 2019). It refers the financial ability of UK people and they will be able to afford the pickles of ‘Pick Pickle’. Therefore, the company will be successful by generating higher revenue.
Social environment: Increasing health awareness of people may decrease the demand of ‘Pick Pickle’ because different type of spices, sugar and much oil are used in making pickles. ‘Pick Pickle’ have to focus on making healthy pickles to maintain its demand and increase sales.
Technological environment: UK is a developed country and technologically advanced. ‘Pick Pickle’ will be able to utilize the technological advancement to expand its online business. The company will ensure its strong presence on social media and web in order to attract more customers. ‘Pick Pickle’ will utilize the advancement of transport facilities and deliver the pickles fast which will create high customers’ gratification.
Ecological environment: ‘Pick Pickle’ will be careful to reduce their impact on the environment. Plastic bottles and polythene paper pollutes environment therefore ‘Pick Pickle’ will use environment friendly paper to package the pickles. Even it will recycle the packets to stop soil pollution.
Legal environment: ‘Pick Pickle’ will follow every rules and regulations of UK to avoid penalties and increase the reputation of their business. It will maintain food related law, employee related law, cyber law while operating business. As a result, it will be able to execute business without any legal difficulties.
Conclusion and recommendations:
‘Pick Pickle’ will success in UK pickle industry if they operate business by utilizing all their strengths and available opportunities properly. It will stay connected with the targeted customers through social media to maintain good sales rate. ‘Pick Pickle’ should make best quality pickle with variation in testes. It should make the videos in attractive way and with the help of good devices to make clear and attractive videos. It will face high competition in UK pickle market therefore ‘Pick Pickle’ should highlight their USP while promoting the pickle. It should ensure fastest delivery to ensure customers’ satisfaction. ‘Pick Pickle’ should find out the suppliers who will supply fresh fruits, vegetables and sea food within reasonable price. Therefore, ‘Pick Pickle’ will be capable of controlling its operational costs. As a result, the profit will increase automatically.
References
Abduladze, L., Balster, E., Börsch-Supan, A., Czaplicki, C., Das, M., De Luca, G., Matos, A.D., Gál, R., Ganninger, M., Häder, S. and Kézdi, G., 2013. SHARE wave 4: innovations & methodology. Munich center for the economics of aging.
BURNS, P. 2011. Entrepreneurship and Small Business. 3rd Ed. Basingstoke: Palgrave MacMillan.
Corporate Finance Institute, 2020. Industry Life Cycle. Retrieved from: https://corporatefinanceinstitute.com/resources/knowledge/strategy/industry-life-cycle/. [Assessed on: 21 March 2020]
Country Economy, 2019. GDP improves in United Kingdom. Retrieved from: https://countryeconomy.com/gdp/uk. [Assessed on: 25 March 2020]
Four Square, 2020. The 15 Best Places for Pickles in London. Retrieved from: https://foursquare.com/top-places/london/best-places-pickles. [Assessed on: 20 March 2020]
Gavrikov, D.S., 2013. Logic and principles underlying the emergence of timber-framed architecture: sources, identity, innovations. Saarbrücken: LAP.
In a Pickle, 2020. How it All Began. Retrieved from: https://www.inapicklefoodco.co.uk/. [Assessed on: 23 March 2020]
IMARC Group, 2020. Pickles Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2020-2025. Retrieved from: https://www.imarcgroup.com/pickles-market. [Assessed on: 21 March 2020]
Statista, 2020. Weekly UK household consumption of pickles and sauces 2006-2018. Retrieved from: https://www.statista.com/statistics/284513/weekly-uk-household-consumption-of-pickles-and-sauces/. [Assessed on: 22 March 2020]