Introduction to Business

This document provides an introduction to the concept of business and discusses the different types of partnerships. It also explores the Porter's five forces framework for a dessert business and analyzes the macro environmental factors affecting the business. The document offers insights and recommendations for business owners to make informed decisions.

Introduction to
Business

Contents
INTRODUCTION...........................................................................................................................2
ASSESSMENT 1...........................................................................................................................2
Partnership as a type of business..........................................................................................2
Porters five forces frame work for little dessert business...................................................3
Macro environmental factors affecting the business...........................................................4
CONCLUSION...............................................................................................................................5
REFERENCES..............................................................................................................................6
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INTRODUCTION
A business can be defined as an organisation which are involved in doing commercial or
professional activities. These entities are involved in selling and producing goods and services
for adequate amount of profit. Present report will lay emphasis on little dessert shop case study.
There are two working partners in this shop that is Mary and Sue. Both are in dilemma whether
to go for organic products or not. Study will discuss about the advises given to Mary and her
partner related to issues faced by them. It will also lay emphasis on evaluating partnership as a
type of business organisation. Assignment will highlight about the Porters five forces frame work
for little dessert business.
ASSESSMENT 1
Partnership as a type of business
Partnership can be defined as the legal form of business that exists between two or
more individual (Soltanizadeh and et.al., 2016). They share risk and profits of the business
together. This form of business is efficient for Mary and Sue. There are basically two forms of
partnership one is general and other one is limited. Owners of Little dessert shop is in general
form. In this the partners are involved in managing business and they also carry responsibility
for partnership debts and other obligations. In limited one, the general partners run the business
while limited one only invests. These people have no control over the company.
Advantages of partnership
It has been analysed that partnership business is really beneficial for Mary and Sue as
the expenses are shared and also debts and obligations are been shared. They can both work
and invest in company together. One of the biggest benefits of partnership business is that they
enjoy tax benefits (Akter and et.al., 2016). In this the partnership does not pay tax on its
business and passes through individual partners. Both Mary and Sue can take decisions on
behalf of companies and they can also take out loans. In this both owners of little dessert shop
can make use of their knowledge and expertise to expand and grow the business. This will help
the shop in gaining competitive advantage and they will also be able to be more productive.
There will be also no problem related to cash as the prospective partner can bring out infusion
of cash and also, they can manage all the expenses faced by company.
Business partners are really beneficial to have as one can always go for cost saving.
This is because financial burden is being shared. This can assist Mary and Sue to be more
productive and they can also invest in something better in order to diversify their business.
Thus, opening up to more business opportunities. As one partner is busy in working the other
partner can think about expanding business. This can assist Little shop desserts in earning
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more profit and also, they will be able to grow. This can assist them in achieving set target and
objectives (Ukko and et.al., 2019).
Disadvantages: In this the partners needs to share profit and also there are chances that they
do not agree on same decisions. This can increase the chances of conflict inside company.
Porters five forces frame work for little dessert business.
Porters five forces model is useful in knowing about the threats and opportunities which
can be faced by business in long term. This analysis can assist an organisation in gaining
competitive advantage, so Little Dessert shop can made use of it. This includes the following
points:
 Rivalry among competitors: It has been analysed that there are many players in
dessert industry. So, threat from competitors is high. There are chances that other
shoppers may be included in providing more healthier desserts than Little dessert shop.
The industry is being characterised by many small dessert shop owners. They are also
involved in giving consumers with organic desserts at lower prices. During the time of
novel corona virus crisis, this can affect business of Little dessert shop as consumers
mainly prefer to buy healthier food (Soltanizadeh and et.al., 2016).
 Threat of new entrants: This can be low, as economies of scale is necessary but are
not required for success of industry. If the small shops tend to enter the market at
starting, they will only have little capital and investment. So, it will be difficult for them to
compete with Little desserts shop. Main factor for success in dessert industry is to have
better distribution channels. This can assist the shop in increasing their brand reputation
and value. Distribution channels includes grocery shops and retail stores, so it can be
difficult for new entrants to cover them. For these Little desserts shop also need to
increase their channels of distribution.
 Bargaining power of buyers: In this context, it is high as buyers have so many other
shops who are providing healthy desserts at an affordable price. So, this can have
severe impact on little dessert shops. As a result of this buyers are able to go for low
prices and discounts. Little dessert shops need to revised their strategies related to
manufacturing of desserts.
 Bargaining power of suppliers: They do not have high negotiating power in dessert
business. This is because market is already well developed and owners of shop have
variety of options from where they can purchase raw material. Little desserts shop needs
to look at more suppliers who can provide them organic raw material at lower cost. This
will assist them in making more healthier desserts. It can also assist them in gaining
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competitive advantage which is really necessary for their growth. This will also help them
in expanding their business (Park and Mithas, 2020).
 Threat of substitute: It is high as many substitutes exists for dessert industry. There
are various shops who are engaged in providing different healthier and tasty dessert at
prices lower than the Little dessert shops. Desserts purely depends upon price and
consumer can switch to another one if value is not provided to them and quality of
services are low.
Industry is profitable: Yes, this industry can assist Mary and Sue in making huge profit. They
should consider the point of getting organic.
By managing these factors Mary and Sue can gain competitive advantage. They will be having
knowledge related to the various threats and opportunities they can face.
Macro environmental factors affecting the business
Technological factor: In the present case study, it has been analysed that Mary and
Sue owns a dessert shop named Little dessert shop. During the time of pandemic situation, the
shop remained closed for almost three months. This affected their business. Owners are
involved in buying the raw material from local cash and carry because of which the prices of
dessert are affordable. Now they want to diversify their business and provide consumers with
more organic and healthier products. But they are worried that going organic will increase the
price of products and whether consumers will buy them or not. For this they need to be involved
in making sure that they go online as during the time of novel corona virus crisis, they should
ensure that consumers protection is must and they should be safe.
Social factor: These factors includes that the little dessert shop needs to be involved in
providing consumers with the product according to their needs and preferences. For the issues
faced by Little dessert shop, it is been advised to them to go organic and produce more
healthier desserts (Holotiuk and Beimborn, 2017). This is because during the time of novel
corona virus pandemic all consumers are going healthy and they do not want to consume any
such product which can affect their health aspects. So, it will be better for Mary and Sue to bake
more healthier desserts. This will assist them in gaining competitive advantage. The owners of
Little dessert shop are also in dilemma that going organic and diversifying their business can
increase prices. For this they need to explore various suppliers, they can engage in negotiating
with them related to prices of raw materials. This will help them in having better raw materials at
an affordable price. They can also be involved in lowering down the other expenses like for
example they can short down expenses on marketing. This will assist them in keeping prices
lower as other expenses are reduced. Little dessert shop owner can also make use penetrating
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pricing strategy. In this at first, they can keep price less and when the consumer base is
created, they can increase their prices. This can assist Mary and Sue in growing their business
and also, they will be able to gain competitive advantage because of this. It is been
recommended to them to go organic and negotiate with suppliers as healthier products will
make them earn better profits (Bıçakcıoğlu, Theoharakis and Tanyeri, 2019).
Legal factor: In this the company also needs to make sure that all laws, rules and regulations
are being followed by them. They should be involved in making sure that health and safety of
people working with them is followed.
Summary: The organisation can be benefited by following all three factors. They will be able to
become consumers first choice by following these factors.
CONCLUSION
From the above study it has been summarised that shop owners are going through
various issues and problems. They are facing dilemma related to whether to diversify their
business and go organic or not. It has also been analysed that both the people have made use
of penetrating pricing strategy in order to set up their consumers. They have thought to go
organic because of novel corona virus crisis. This has assisted them in attracting more
consumers. Also, partnership has been opted by them as a form of business. In this both
partners share risk together and bear financial burden. The owners have also been engaged in
exploring various suppliers, they can engage in negotiating with them related to prices of raw
materials. This has assisted them in having better raw materials at an affordable price. It has
also helped them in providing better and healthy desserts to consumers. It has also increased
profitability of business. They have also been able to achieve profit and revenue. It is also being
suggested to them to negotiate with suppliers in order to have better products.
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REFERENCES
Books and Journals
Akter, S. and et.al., 2016. How to improve firm performance using big data analytics capability
and business strategy alignment?. International Journal of Production Economics, 182,
pp.113-131.
Bıçakcıoğlu, N., Theoharakis, V. and Tanyeri, M., 2019. Green business strategy and export
performance. International Marketing Review.
Holotiuk, F. and Beimborn, D., 2017. Critical success factors of digital business strategy.
Park, Y. and Mithas, S., 2020. Organized Complexity of Digital Business Strategy: A
Configurational Perspective. MIS Quarterly, 44(1).
Soltanizadeh, S. and et.al., 2016. Business strategy, enterprise risk management and
organizational performance. Management Research Review.
Ukko, J. and et.al., 2019. Sustainability strategy as a moderator in the relationship between
digital business strategy and financial performance. Journal of Cleaner Production, 236,
p.117626.
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