Guidance answer:

In section 1.2.2 the text defines entrepreneurs as, ‘Entrepreneurs are those persons who seek to generate economic and social value through the creation or expansion of economic activity, by identifying and exploiting opportunities for new products, processes, markets, and for meeting outstanding social and environmental needs.’

The economic and social value being generated by this company could be in terms of providing people with a means of making use of free water, rather than having to pay for bottled water. The social benefits would be in terms of reducing damage to the environment through the use of less packaging and transportation costs involved with bottled water.

Whether or not the economic value being generated really is as claimed by the entrepreneurs, will depend on the reaction by potential paying customers. If customers find this offering to be more convenient and cheaper than existing alternatives the entrepreneurs will have created economic value. But if enough paying customers do not take up the offer, the economic value would not have been created because the venture will not be financially sustainable.

Guidance answer:

The possible challenges could be, for example, having to compete with more established and better resourced competitors, and having to explain the business concept and the benefits of using the service to potential employers and employees.

The following point is quite a difficult one and you should not worry of you did not identify it. A business such as this benefits greatly from what is referred to as the ‘installed base effect’, the more users it currently has the more useful it is to new ones. So the benefit of a recruitment site to an employee, depends on the number of employers already using it. For a new venture in this type of business acquiring customers can become a chicken and egg situation.

Guidance answer:

Refer back to Chapter 1 to help you make these comparisons.