Introduction to Business

This document provides an introduction to the concept of business and its significance in the modern world. It discusses the different types of business organizations, with a focus on evaluating the partnership as a type of business organization in the case study of Little Dessert Shop. The document also explores the use of Porter's five forces model for achieving competitive advantage and the impact of macro environmental factors on business performance. It offers valuable insights for students studying business and related subjects.

Introduction to Business
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Evaluate the partnership as a type of business organisation in context of the above mentioned
case study.....................................................................................................................................3
Use of Porter's five forces model by the chosen organisation so as to achieve competitive
advantage over other firms..........................................................................................................1
Impact of macro environmental factors in order to provide benefit to business and to improve
the business performance.............................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5
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INTRODUCTION
Business is define as the concept which is established and run by individuals or group of
people with the motive to earn profit or to make the money. In business activities the goods and
services are been exchanged between business and the customers (Rainer and et.al., 2020). These
business activities provide benefit to both the customers as they get the product which they want
and the business man as they get the profit. With the advancement in the technology the changes
take place that is earlier commodities are exchanged for commodities and now commodities are
exchanged for money. The report is based on the case study of “Little Dessert Shop” where the
key focus is on identifying and evaluating the partnership as the type of business organisation,
the application of Porters five forces model in order to identify the external business environment
and the various macro environmental factor in order to improve the business.
MAIN BODY
Evaluate the partnership as a type of business organisation in context of the above mentioned
case study.
Partnership is define as the business technique in which two or more individuals come
together in order to carry the business operation in the most effective and efficient manner.
Business in partnership is carried under agreement or contract where the responsibilities,
liabilities and profit ratio is been mention in the paper work that is in contact or agreement (Aral,
Dellarocas and Godes, 2013). In context of “Little Dessert shop” the business is been carried in
partnership that is two different individuals namely Mary and Sue carry the business operations
together.
From the government point of view the partnership is evaluated and differentiated in
three types which is describe as follow-
 General partnership: In general partnership the individuals involve in the business share
equal rights, responsibilities and liabilities. The decisions and actions are taken by
consulting all the partners as they are sharing equal rights.
 Limited partnership- In this type of partnership the companies want the outside parties to
become the investors and invest in the business where they are liable to the limited to
their investment. As per the contribution of investors they are responsible to take part in
decisions and other important issues related to business. This type of partnership is quite
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complicated and complex in nature as there are various investors which may or may not
agree on various matter due to which process become difficult and time consuming.
 Joint Venture: This form of partnership is consider and use according to projects that is
they are valid till the completion of project. If the performance of individuals working in
joint ventures provide effective results then they think of carry the partnership further.
This is very easy form of partnership which get dissolves along with the completion of
project.
From the above study and as per the case study, The little dessert shop is considering and
functioning on general partnership as they are equally liable for all the liabilities and share equal
profits (Bharadwaj and et.al., 2013). They are enjoying various advantages been in general
partner which is explained below-
 Carrying business in this form of partnership is quite simple as it doesn’t involve any
complex formulating as they have to do simple legal formalities of registering
themselves under general partnership.
 According to the case study both the owners are from different profession which
helps them in taking better decisions as they are from different background. Both
have different set of skills and abilities which helps in carrying business operations in
most effective manner. Mary has worked as the chef whereas Sue has worked in
hospitality industry as manager. One is expert in cooking while other is expert in
management which helped them in carrying its business operations in most desirable
manner and able to achieve the desire position in marketplace.
 Moreover they are sharing all the responsibilities, assets and liabilities in running
their own business that is are contributing equal capital which provides more funds in
order to carry business operations in most effective manner (Van der Aalst, 2013).
 They are taking risk in the business for which they are equally liable that is higher the
risk higher the changes of return in business.
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Use of Porter's five forces model by the chosen organisation so as to achieve competitive
advantage over other firms
Porter's five forces model is a model which determines main five forces forces that is
shaping the industry and it is basically an investigation of weaknesses and strengths of that
industry (Lewis, 2017). This theory has been devised by Harvard Business School professor
Michael Porter. Various companies are adopting this model so as to formulate an efficient
business strategy. This theory can be applied to every segment of the economy and it will ensure
the development of understanding of level of competition in an industry and also helps in
improving the profitability of a company in long term period. In this part of report, Porter's five
forces model has been applied to “little dessert shop”, to develop an understanding of techniques
so as to gain competitive advantage in the market:
 Industry rivalry: This factor is related with total number of firms in the industry and the
force of competitiveness that they pose to the firm. In this factor, the main principal is
that larger the number of firms in the industry, lesser the power of the company or firm.
This means that a company will be able to generate higher profitability in the market, if
there are lesser number of competitors. There are carious challenges posed to company in
case when there is increased level of competition in the market, such as, difficulty in
maintaining a loyal customer base, attracting new customers to firm, etc. In context of
“little dessert shop”, the company is confronting an intense level of competition and it is
affecting its operations in the industry. The company is facing challenge in maintaining a
loyal customer base and it can attempt to resolve this issue by opting for competitive
strategies, such as, differentiation strategy. This policy can help the business to serve
some unique products or services to its customers and this will help the business to form
a loyal customer base and also in attracting new customers to company.
 Bargaining power of suppliers: Next factor relates with total cost of inputs and the
power that suppliers have to fluctuate the cost of inputs. This factor relates with the
reason that if there are few number of buyers for the company, than they will not be able
to fluctuate prices much as they have very few options to sell their products. But in case
suppliers have large number of companies that want their products to proceed with their
production process, than they can make the pricing schemes in accordance of their
choice. It is affected by the number of suppliers of key inputs of a good or service, how
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unique these inputs are, and how much it would cost a company to switch to another
supplier.
 Bargaining power of buyers: This situation is referred to as the power of customers to
drive the price of several products and services that are offered by the company. This
intensity of power of customers is determined by the important that one customer holds in
the market. In this case, the significance of customers is determined by the number of
customers in the market. If there are few customers, than each and every customer is
holding a high power and if there are large customers than each customer has very low
significance. The former situation of few customers can put an significant impact on
fluctuation of prices of products and services offered in the market. Therefore, company
should analyze this issue as well before devising any competitive strategies. If company
wants to achieve competitive advantage, than reducing the bargaining power of
customers holds high importance. The chosen company can formulate competitive
strategies as it is having a large customer base, which ultimately means that customers
have low bargaining power (Safari, Farhang and Rajabzadehyazdi, 2016).
 Threat of substitute: Substitute goods are explained as those goods and services that can
be bought by customers in place of those products and services offered by the company.
The purposes served by these substitute products are similar to that purposes served by
company. According to this factor, if the company is having large number of close
substitutes, than he will not be able gain competitive advantage. In this respect, it can be
stated that if “Little Desert Shop” wants to achieve the competitive advantage in the
market, than it should concentrate on creation of goods and services those do not have
close substitutes in the market.
 Threat of entry: This factor relates with the threat that can be posed to company in view
of new entry of competitors in the market. If any new entrant is taking less time and less
cost as well to esa6tblish in the market, than in long run, it can be a big face in the market
and also a serious competitor for the company. In context of chosen company, company
can come up with regular changes in their policies and their serving pattern, so that they
can always have an upper hand on its competitors.
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Impact of macro environmental factors in order to provide benefit to business and to improve the
business performance.
Macro environment factors (external factors) refers to those factors which exist outside the
business but effects the operations of business (Lambert, 2015). These factors have positive and
negative impact on the operations and activities of business and in context of Little Desert shop
there are mainly three external factors which are effecting their business activities.
 Political factor- Political variables allude to the political circumstance in the
facilitating nation. These circumstances strongly affect working of the firm. For
instance, political soundness, legislative guidelines, tax assessment structure, and so
on In the picked association, organization is getting a charge out of the benefit of
stable world of politics in UK. This guarantees that organization can likewise think
for development and broadening as they have security in world of politics. Another
solid point in this fragment is that UK is having fruitful economic deals with
different nations which guarantee import of explicit crude material in more steady
way.
 Economic factor- This factor is connected with the cash intensity of the nation and
furthermore the business. To show, trade rates, loan costs, individual discretionary
cash flow of directed market, work rates, and so forth In the given case, the main
factor that emphatically impacts the organization is that the focused on market is
having a diagram of developing salaries. This incites them to spend more and this
causes the organization to become their business.
 Environmental factor- Little Desert Shop has positive effect of this factor as the
organization is consistently zeroing in on advancement of idea of maintainable
utilization of normal assets. For this reason, the board guarantees streamlined and
maintainable utilization of information sources that are started from indigenous
habitat. This procedure makes a difference in making great picture of the
organization is market, which at last outcomes in expanding the business (Maylor,
Blackmon and Huemann, 2016).
CONCLUSION
From the above study it has been concluded that there are various ways in which business
operations can be carried by the individuals that it is totally dependent on their capabilities
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and preferences. The internal and external business environment factors affect the business
operations hence it’s important to consider these factors and take step accordingly in order
to accomplish the effective results. In this report Porter’s five forces model has been used in
order to identify the various external factors and to accomplish the competitive advantage.
Doing business in partnership helps in achieving effective results as it helps in taking better
decisions and formulation of effective business strategies.
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REFERENCES
Books and Journals
Lewis, R., 2017. Porter's Five Forces of competitive advantage.
Safari, N., Farhang, M. and Rajabzadehyazdi, E., 2016. The study on the competitive status of
construction companies based on Michael Porter's five competitive forces (Case study:
Armeno Project Development and Management Company). European Online Journal of
Natural and Social Sciences: Proceedings. 5(3 (s)). pp.pp-72.
Rainer, R.K. and et.al., 2020. Introduction to information systems. John Wiley & Sons.
Aral, S., Dellarocas, C. and Godes, D., 2013. Introduction to the special issue—social media and
business transformation: a framework for research. Information Systems Research. 24(1).
pp.3-13.
Bharadwaj, A. and et.al., 2013. Digital business strategy: toward a next generation of
insights. MIS quarterly, pp.471-482.
Van der Aalst, W.M., 2013. Business process management: a comprehensive
survey. International Scholarly Research Notices, 2013.
Lambert, S., 2015. The importance of classification to business model research. Journal of
Business Models, 3(1).
Maylor, H., Blackmon, K. and Huemann, M., 2016. Researching business and management.
Macmillan International Higher Education.
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