Evaluate barriers to entrepreneurship including finance, skills, confidence, fear of failure, regulation and market uncertainty when considering a new business.
Sources for use with Extract E Niche brands are increasing their mass market appeal In the last 10 years there has been an increase in the number of health and well-being brands moving from a niche to a mass market. Many health products are benefitting from increased revenue, due to growing consumer desires to live healthier lives. These brands are no longer viewed as exclusive products and are now purchased by more customers each year. One of these brands is Pukka, which sells premium priced speciality tea. The global speciality tea market is predicted to grow by $50bn between 2021 and 2026. Extract F About Pukka Pukka sells a range of speciality teas including herbal, organic and fruit teas. Entrepreneurs Sebastian Pole and Tim Westwell launched Pukka in 2001. Sebastian had been interested in plants and conservation for many years. He was determined to follow his dream to start a business selling a healthy product. Sebastian saw an advertisement of Tim’s which offered to help start up an ethical business. They agreed to meet to discuss their ideas and Pukka was formed shortly afterwards. From the first moment Tim and Sebastian met, they were the perfect match. Although they had completely different personal skills, they shared a common marketing objective, to create a business that would benefit the health of people. Tim had 10 years’ experience as a business management consultant. They spent many hours in Tim’s house planning their future strategy. They worked evenings and weekends to turn their ideas into a successful business.
Discuss the barriers to entrepreneurship Sebastian may have faced when thinking of starting a business.
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.
Indicative content
- Entrepreneurship is the activity of setting up a business, taking on risks, normally in the hope of making a profit
- There are many barriers to entrepreneurship including access to finance, lack of skills and the fear of failure/lack of confidence
- Whilst Sebastian had a passion for plants and
conservation, he may not have had any business skills to help him start the business
- It is possible that Sebastian did not have sufficient access to finance to fund the start-up costs of a new business
- As the speciality tea market is growing, Sebastian may have been faced with a high level of competition. It may have been difficult/costly to establish a brand name
- However, Sebastian overcome his lack of knowledge by forming a partnership with Tim who had worked as a business consultant and is likely to have possessed the know-how about business start-ups
- The two partners both possessed entrepreneurial
characteristics needed to start a business. They were both hard working and determined to succeed
- They both shared a passion for the product as they were both concerned about the environment and healthy living.
This gave them the same business objective to pursue
Level
Mark
Level 0
Level 1
1-2
Level 2
3-5
An attempt at an assessment is presented that is unbalanced, and unlikely to show the significance of competing arguments.
Level 3
6-8
Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, well contextualised, using quantitative and/or qualitative information and shows an awareness of competing arguments/factors.
Question
Assess the challenges that a business, such as Pukka, may have faced when moving from a niche to a mass marketing strategy.
Indicative content