Small Business Enterprise
The small business enterprise being examined in this paper is MFC. It is a small business located in UK which sells fried chicken to consumers. The fried chicken shop is located in Barking Town. MFC has opened its store at very good location since it is easily accessible by people and the area didn’t have any fast food option previously. By definition, small business enterprise refers to an organisation which is independently owned by small number of employees (Longenecker, 2008). The definition of small business enterprise varies in different countries in legal terms. In UK, a business which is operated by 50-100 employees is a small business. With small business enterprises, the primary aim of the government is to encourage motivation and aspiration among young minds. As per reports, there are more than 5 million small business enterprises established in UK that has employed around 14 million people (Longenecker, 2008).
1.1 Profile of selected small business enterprise
Components of the business
As stated above, a small business enterprise is defined as an organisation which is owned by small number of employees, around 50 to 100(Needham, 2010). MFC is a fast food shop based in Earlsfield, London which aims at serving fast food such as fried onions, nuggets and chicken to customers. Since fast food is liked by consumers very much so MFC is a great option before consumers to get freshly made fast food and fried chicken. The key aim of the business is to provide homely fast food at affordable rates. MFC has 12 employees working in rotating shifts who include employees, managers and owner of the shop.
Objectives of the business
By definition, business objectives refer to as a detailed picture of steps that business is planning to achieve (Walczak, 2010). Business objectives are always SMART i.e. Specific, Measurable, Achievable, Realistic and Time Bound (Edmiston, 2008). The objectives of MFC are:
1. Providing fresh fast food and fried chicken to consumers at affordable rates
2. To achieve high productivity in business through effective organisation of all departments
3. To generate 10% profit every year with ongoing investment in the business
These are the business objectives set by MFC in order to achieve their status of being number one.
Internal and external factors affecting business performance
In order to study the internal and external factors, it is crucial to carry out SWOT of the business.
SWOT of MFC
SWOT is a strategic tool used by marketing managers to examine the strengths, weaknesses, opportunities and threats of an organisation (Hope, 2008).
S (Strengths): MFC offers highly affordable and superior quality fast food. Secondly, the food is made from fresh raw material and is easily accessible to consumers.
W (Weaknesses): Being a small business, it has not adopted high-tech solutions such inventory management solutions to manage inventory. Second, the company lacks strategic planning.
O (Opportunities): Although small but employees of MFC put real efforts in serving best to customers. They have the opportunities to expand the business through effective strategy planning.
T (Threats): There are big food chains such as KFC, McDonalds which give intense competition to food chains such as MFC.
Constraints and restrictions on business
There are constraints and restrictions existing within MFC. It is a small business so it hasn’t adopted high-tech solutions such inventory management solutions to manage inventory. Second, the company lacks strategic planning. This is seen as a constraint for the business (Fox, 2010).
1.2 Analysis of the business using comparative measures of performance
Typically, comparative measure of performance is defined as the measurement of outcomes and results of the company with competitors in the same industry which ultimately generates reliable data to monitor the efficiency of the organisation (Borden, 2010). The competitors of MFC in the same geographical area are ‘Bean and Hop’, ‘Clapham Junction’ etc. These are also fast food junctions serving vegetable and non-vegetable fast food to consumers. MFC specialises in fast food and chicken while the speciality of ‘Bean and Hop’ is coffee. In terms of production, Bean and Hop serves coffee and related to beverages to consumers and has adopted exhaustive marketing techniques to develop a large base (Needham, 2010). On the other hand, ‘Clapham Junction’ is located in the heart of Clapham junction and is easily accessible to people. The shop serves healthy and baked snacks to consumers. Clapham junction is known for its department which has been dedicated to health of the whole family. The employee strength for ‘Bean and Hop’ and ‘Clapham Junction’ is more than MFC. Being established prior to MFC, those organisations are able to motivate and encourage their employees to work with innovation (Needham, 2010)
Although all three shops operate in same industry but every shop has its speciality and making best efforts to serve customers the best.
2.1 Actions to be taken to overcome weaknesses
As stated above, there are weaknesses faced by MFC since it is a small business enterprise. Hence, some strategies are required to overcome these weaknesses. Various strategies which can be adopted by MFC are:
Adopting problem solving strategies: Strategies such as value chain analysis can be used to overcome the problems and find the business activities which need to be fixed. Value chain analysis of MFC is given below:
Value Chain, typically, explains the activities taking place in an organisation and provides analysis of the competitive strength of the business (Kotler, 2008).
The primary activities at MFC include logistics (inbound and outbound), operations, marketing and sales, services. The support activities at MFC include procurement, human resource management, and technological support. As per (Geereddy, 2012), some of the ways to adopt that can help in creating sustainable advantage are Cost leadership, Differentiation and Focus. Cost leadership occurs when an organisation sells its products too expensive or cheap as compare to others in same industry. Differentiation refers to placing the products uniquely in terms of quality that customers are compelled to buy the products from that organisation (Kotler, 2008). Third, focus is concentrating on getting competitive advantage in local industry instead of international. For MFC to outperform its competitors and gain a competitive advantage, it is crucial to make business activities as efficient as possible.
Hence, value chain analysis can be used to gain competitive advantage in the industry and also improving the business activities.
Getting professional advice from experts: Second method to overcome weaknesses is by getting professional advice from experts in the industry. They have years of experience in the industry and can provide strategic direction to the business (Coleman, 2013).
Outsource some business functions: Third method to overcome weaknesses is by outsourcing some business functions of MFC such as human resource, payroll or marketing. With this, it becomes easy for a small business enterprise like MFC to focus on core areas of business such as operations.
These are some of the methods that can be adopted to overcome the weaknesses of the business.
2.2 Ways in which existing performance could be maintained and strengthened
In order to maintain and strengthen existing performance of MFC, the small business needs to take appropriate steps. Some of the strategies which can be adopted by MFC are:
Maintaining proper performance reports: One of the ways which help to maintain and strengthen the performance of MFC is tracking the performance and maintaining proper reports. With this, employees at MFC will be able to track the pattern of performance and effectively employ strategies maintaining it.
Developing business strengths: Second method to maintain and strengthen the performance of MFC is by developing business strengths. This can be achieved by adopting strategies such as cost leadership, differentiation and focus as suggested by (Geereddy, 2012). Also, competitor analysis is required in order to determine the ways adopted by competitors to develop a large customer base (Richbell, 2008).
These are some of the methods that can be adopted by MFC to maintain and strengthen existing performance of MFC. Once the performance of MFC is efficient, it impacts the image of the company. The efficient performance can help the company to sustain in long run and develop a large customer base.
2.3 New areas in which the business could be expanded
There is wide scope enjoyed by the company to expand. Different areas in MFC can be expanded such as niche markets. As of now, MFC operates only in Earlsfield. However, the food chain has numerous opportunities to operate in other towns of London also. Besides this, there is wide scope for more export opportunities. Employees at MFC can look for better export opportunities and exporting food items to different places. Although the company has take-away facility but it is only valid in nearby areas such as Battersea, Clapham etc. Also, the company can opt for higher research techniques to study the consumer market more closely and look for better strategies to serve consumers. Since the company has the potential to expand in other areas so looking for finance and sponsors for development is also crucial. Last but not the least; MFC should opt for method for risk assessment. By definition, risk assessment refers to monitoring and assessing the factors responsible to put the organisation at risk (Senio, 2013). For MFC, there can be many risk factors such as intense competition, changing customer tastes etc. Hence, a plan should be formulated in order to cope up with these risks.
3.1 Assessment of existing business objectives
The changes discussed above can help MFC to outperform than competitors and expand some business areas such as niche market, taking exporting opportunities etc. It includes assessment of existing business objectives, formulating a revised business plan and developing an action plan with proposed changes (Corrales, 2013).
The existing business objectives of MFC are helping the company to grow but lack a strategic direction. Hence, revised business objectives should be proposed that incorporate the changes discussed above. As already discussed business objectives should be SMART, hence the business objectives for MFC are:
1. To provide flexible services to all customers- Customers must be provided round-the-clock services so that they know where to come for fresh fast food even in the middle of night.
2. To gain high employee retention and motivation in order to ensure high business- Employees are asset for an organisation so motivating and engaging them is helpful. MFC should take steps in order to motivate their employees.
3. To provide high-quality fresh food at cheap rates- The USP of MFC should be to provide high-quality food at cheap rates.
4. To gain recognition in market as socially responsible fast food chain: Customers get enticed towards organisations that establish themselves as socially responsible. Hence, MFS should aim at gaining the recognition of being socially responsible.
These business objectives are SMART and can help MFC to perform efficiently than competitors. It is highly critical for MFC to put revised business objectives into practice since it will provide a strategic direction to MFC.
3.2 Revised business plans
By definition, business plan refers to as a written document which outlines the aims and objectives of the organisations along with strategies to achieve them. As per Taylor (2010), business plans have to be SMART i.e. Specific, Measurable, Achievable, Realistic and Time-bound. The business plan depicts that how the company will be able to manage resources, talent and ideas (Hope, 2008). An integrated business plan should incorporate financial, sales and marketing, production/output and personnel. The business plan of MFC including all the above aspects is as follows:
1. The manager cum owner of the MFC will be responsible for the overall marketing of the food chain.
2. There will be large investment of funds into the business to expand business in new areas as much as 50 million pounds
3. Employees will be given training to encourage team-work and motivation at work.
4. The food chain will make efforts to make food service as fast as possible.
5. The food chain will look into the possibility of home delivery to far-off areas also.
6. MFC will take steps to provide fresh food to customers. This will be the USP of the company i.e. to provide high quality food at affordable rates.
This is the revised business plan to be followed by MFC in next 6 months.
3.3 Action plan with proposed changes
Action plan is a medium to ensure the proposed business plan is enacted by the company (Fox, 2010). For MFC, action plan will be short-goals to be attained in a fixed time-line. The key components of action plan are actions, measurement and time-frame. A table demonstrating these aspects is given below:
Increase the sales by 3 to 5% in next 1 year
Through effective Promotions
Boost in daily traffic of customers by 10%
By exhaustive advertising and promotions
To get recognition of social responsible organisation in next 1 year
By adopting fair business practices
Effective and safe working environment for employees
By providing frequent training and putting in place an efficient HRM system.
Table 1: Action Plan of MFS
The increased sales will be beneficial for expansion of the company in other cities of London by pulling in more money for investment. Secondly, the increase in number of daily customers will increase the visibility of the company significantly. Customers often get allured towards organisations which are socially responsible. Hence, being socially responsible will be a plus point for MFC. Finally, employees are an asset so retaining them and providing them safe working environment is crucial.
This action plan can be adopted by MFC in order to increase the performance.
Change management is always important for an organisation since many times, changes can be a reason for failure if the organisation isn’t prepared (Edmiston, 2008). This task examines the impact of changes on MFC, planning of how changes will be managed by MFC and monitoring the improvements.
The proposed changes will have significant impact on the business and its personnel (Hope, 2008). The key departments where the change will impact include finance, job roles, morale, workloads etc. There is high probability that proposed changes might shoot the sale of the company and helping them become quite recognised among consumers. Secondly, the training provided to employees will help them be engaged and motivated. With this, they will be able to serve customers better and in an efficient way. It will make customers happy and satisfied and there will be high probability that customers become loyal to the food chain and come back. The proposed changes will pull more money in the business, thereby, resulting in more investment in building office infrastructure. There are changes that MFC adopt better technology solutions to manage business, such as, inventory management solutions. The investment in risk management will enable the company to assess the problems and find solutions effectively.
4.2 Plan how changes will be managed in business
In order to manage changes in business, plethora of strategies will be employed. These are as under:
1. To monitor effects of change consistently: Foremost, the employees at MFC can monitor the effects of changes consistently to ensure changes are having positive impacts. In case of negative impacts, those can be withdrawn right away.
2. Maintaining systems and record to evaluate change: Second method is by maintaining the systems and records to assess changes frequently. This can be achieved by employing an efficient inventory management solution in the business (Kotler, 2008) .
3. Revision of plans in response to actual results: Since changes are necessary so there is high need to be revised plans based on the performance of the company. This can be achieved by revising the business objectives, business plan and formulating a new action plan after every financial year.
4. Maintaining position of the business in market: Third method is by maintaining position in the market or by gaining a market share. This can be achieved by adopting product differentiation strategy (Richbell, 2008). By product differentiation, it is defined as placing products exclusively in the market. This can be achieved by producing fresh quality fast food and chicken with superior quality.
5. Understanding customer retention: Customer is an asset for every organisation, no matter large or small. MFC need to understand the customer retention strategies i.e. employing methods as addressing their queries promptly, asking them for suggestions and feedback in food is crucial to retain customers.
These are some of the strategies that can be employed by employees of MFC in order to bring efficiency of the business.
4.3 Monitoring the improvements in business
In order to monitor the improvements in MFC due to proposed changes, some strategies that can be employed are:
Setting specific targets: One of the methods is to set targets and timeline of every task happening in the food chain. It will be the duty of the manager to examine whether or not the employees are able to meet their targets or not.
Benchmarking food chain: Another method is by benchmarking food chain against other small food chains to determine the strategies used by competitors. With this, employees at MFC will be able to know the strategies benefiting competitors.
Taking feedback from stakeholders: One of the methods can also be to take feedback from stakeholders i.e. from customers, employees and shareholders about the working of the organisation. This will lead to improvements in MFC.
These are the strategies that can help employees of MFC to consistently monitor the improvements and reap the benefits.
In nutshell, small business enterprises like MFC have a wider scope to expand and sustain in long run if they opt for strategic direction. SWOT and PESTLE analysis can help MFC to determine the weaknesses and threats to the business and accordingly employ strategies to cope with them. The report has formulated revised business objectives and plans for MFC. Also, there have been numerous strategies discussed in the report to monitor these changes and reap the benefits. This paper has critically evaluated different aspects of small business enterprise with reference to MFC.
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