Entrepreneurial Strategy Report

This report analyzes the entrepreneurial strategy of Ma Baker, a micro-bakery in London. It examines the company's resources, core competencies, and strategic situation using SWOT, PESTLE, and Porter's Five Forces models. The report also explores entrepreneurial and intrapreneurial strategies that Ma Baker can implement to achieve its objectives and sustain its growth in the competitive bakery market. Desklib provides past papers and solved assignments for students.

ENTREPRENEURIAL
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
Case Study..............................................................................................................................1
Types of Business Organisations............................................................................................1
IDENTIFICATION AND CRITICAL EVALUATION OF MODELS..........................................2
Resources................................................................................................................................3
Core Competencies.................................................................................................................4
SWOT Analysis......................................................................................................................5
PESTLE Analysis...................................................................................................................6
Porter's Five Forces Model.....................................................................................................7
RANGE OF ENTREPRENEURIAL AND INTRAPRENEURIAL STRATEGIES......................7
Entrepreneurial Strategies......................................................................................................8
Intrapreneurial Strategies........................................................................................................8
ORGANISATION STRATEGIC SITUATION AND OBJECTIVES............................................8
Objectives...............................................................................................................................9
IMPLEMENTATION STRATEGY................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Entrepreneurship refers to activities undertaken while planning, organising, setting up
and running one's own business organisation. Success of each venture is dependent upon their
business strategy which is required to be modified as per the changes that takes place within
dynamic business environment at frequent intervals (Feldman, 2014). The following report is
based on the case study of Ma Baker which is a micro-bakery situated at the heart of Fulham,
London. This report covers company's wide range of resources, its core capabilities and several
models which are used to analyse its internal and external strengths and competencies that assists
in enhancing the scope of entrepreneurial strategy making.
Case Study
Ma Baker is an enterprise that began doing business in September 2014. In the first year,
this micro bakery operated in a brick and mortar style format which means that the organisation
did not have an online presence in the beginning and only operated and fulfilled the needs and
demands of customers through physical outlet. However, later, analysing the dynamic and
competitive business environment, the owner of Ma Baker, Liz Wilson, decided to provide the
breads, pies and other products made from fresh dough and organic ingredients to customer via
online channel. For this, Liz selected the company’s website and incorporated a section with an
option of “Are you interested?” wherein customers can give their personal details in order to get
information about the latest products made by this bakery. This was strategically done by Liz to
provide latest updates to customers so as to enable them to gain knowledge about the new
products and influence them to make a purchase. As a result of this, the turnover and profits
more than doubled by the end of second year and this business turned from a standing start to a
successful young venture (Learning to bake at London’s only domestic bread-making school,
2016).
Types of Business Organisations
Various companies that exist as an active part of an economy operate at different levels
and satisfy different agendas. However, it is crucial to determine the types of organisations in
this regard. Thus, the types of business entities are briefly mentioned below:-
Micro Organisations: These organisations operate at a very low level and usually
incorporate less than 10 employees. Ma Baker is an example of micro organisation and operates
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within the boundaries of London, United Kingdom. Approaches and strategies used by micro
enterprises differ severely from large companies and they exist with the sole motive of fulfilling
the needs and wants of customers so as to retain them for a long duration in future. Along with
this, their approaches and strategies aim at withstanding local competition from large companies
and ensuring fulfilment of requirements and preferences of customers while aiming to build a
prominent nationwide name and position (Anderson and et. al., 2015).
Small Organisations: Bigger than micro companies, these organisations have a range of
employees between 10-50 individuals. These firms implement lenient strategies to effectively
survive the market forces and fulfil their standard business operations (Zehir, Can and Karaboga,
2015).
Medium Organisations: These incorporate employee range of between 1-250 people and
work on a medium level where their business strategies are aimed at enhancement of profit as
well as development of market share.
Large Organisations: These firms operate at a very large level and are mostly found to
be based in multiple locations. Such companies have immense turnover and employ more than
250 employees. These entities strategically carry out their operations and may have their roots in
various prominent developing as well as developed countries.
IDENTIFICATION AND CRITICAL EVALUATION OF MODELS
Strategic capability refers to ability of a business organisation to effectively sustain
market and its heavy competition while applying various competent strategies and resources
towards achieving utmost success within the market (Eggers, Hansen and Davis, 2012). Ma
Baker has been quite a prominent name in the local UK market and this is demonstrated by the
number of awards and recognitions that have been bestowed upon this micro bakery over past
few years. In this regard, this organisation has recently won Highly Commended Best Food
Business, two Great Taste Awards and 3 Gold Stars for company’s renowned Porridge bread. Ma
Baker’s cooking classes have been ranked amongst Top 4 of London’s best classes by Trip
Advisor. It is imperative that resources and competencies of this organisation are determined to
effectively perform an analysis of its key capabilities by implementing a number of models.
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Resources
These are the tools, methods, personnel and techniques which are required by
organisations to run their operations smoothly to achieve their strategic and organisational
objectives. There are two types of resources which are mentioned as under:
Tangible Resources: These items within a company are physical in nature, i.e., they
could be felt and physically be present with the company. Assets under this include equipments,
machineries, cash, buildings and so forth.
Intangible Resources: These resources lack physical aspects and substance. Evaluation
of such assets is very complex for entity. Such aspects are inclusive of copyrights, patents,
goodwill, knowledge, etc.
Within an enterprise, resources belong to a number of categories also which are briefly
mentioned and explained as follows:-
Physical Resources: These assets have physical properties and are useful for a firm like
Ma Baker to carry out its bakery operations. The bakery equipments in its facilities and
machineries equipped to develop the pies, breads and other bakery items could be vital examples
of physical resources (Perry, Chandler and Markova, 2012).
Financial Resources: These constitute the financial support which is needed by
companies to buy effective tools and techniques and invest in various market opportunities
which would help them grow in the market. Ma Baker requires finance to effectively carry out its
day to day activities and fulfil business needs efficiently.
Intellectual Capital: This refers to a company's intangible value which covers each
aspect of organisation. One of its main components is intellectual property. These refer to the
copyrights, patents and trademarks which organisation has to maintain to protect its unique work
and ensure a better market positioning and strategies (Feldman, 2014). Intellectual capital is
essential for long term protection of company and ensures the smooth running of organisational
operations.
Human Resources: They are the key to success of an organisation as they lay the
foundation upon which growth and expansion of business is dependent in the long run. Within
companies, there are various individuals who together support the organisation and are
responsible to take it forward towards making it a global brand rather than just restraining it to
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national boundaries like Ma Baker. Human resources of an enterprise apply their skills and
competence to aid companies in achievement of their organisational objectives.
Core Competencies
These are the concepts which significantly consist of amalgamation of various resources
and channelizing their strategies towards attaining a better market position. The various core
competencies for Ma Baker are:
 Home-made bakery superiority
 Organisational knowledge
 Continuous market analysis
 Strategy building and implementation.
Ma Baker was operating by using the brick and mortal style store format in the initial
year. As it gained entry and conducted analysis of dynamic and competitive business
environment, it gained knowledge about the merits of using e-commerce to provide its products
to customers over online channels (Gans, Stern and Wu, 2016) . There are a number of reasons
why Ma Baker could not enter e-commerce market in its initial year, some of which are
mentioned below:-
Lack of knowledge: The year in which this organisation initiated operations started to
incline towards e-commerce market in order to render products to customers online thereby
ensuring their ease and convenience. Thus, it was required by this enterprise to take this into
account and make use of online distribution channels in order to appeal to a large base of
audience (Perry, Chandler and Markova, 2012). The owner of Ma Baker failed to analyse the
importance of selling online as per market requirements and thus could not deliver satisfactory
results in the initial year.
Lack of market analysis and evaluation: Ma Baker failed to anticipate future
requirements of bakery industry in initial year and got stuck in their brick and mortar style store.
On the contrary, companies like Greggs Plc modified their operations and entered the e-
commerce market as per the requirements and ease of people. Although other bakeries
underwent tremendous change in their operational formats and product availability, Ma Baker
couldn't structure itself as per the market requirements and entered the online selling market later
than other bakeries.
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SWOT Analysis
In 2016-17, this micro bakery entered the e-commerce market. It is essential for the firm
to look at its internal strengths and weaknesses effectively. To achieve this, the company would
be adopting SWOT analysis which would aid Ma Baker in appropriately analysing its internal
strengths and weaknesses to enhance opportunities and limit threats. The SWOT analysis of this
enterprise is conducted below:-
Strengths:
High quality products and customer experience: Ma Baker has been operating since
2014 in the market. This micro bakery has been continuously winning awards and recognitions
owing to provision of excellent quality products which are fresh and made from organic
ingredients so as to ensure that there is no harm to health of people of UK. This experience acts
as strength for the company to effectively perform various marketing function and retain its
customer base within the country (Hartsfield, Johansen and Knight, 2017).
Excellent customer service and effective selling via website: With establishment of
cooking classes and website for mail orders via “Are You Interested?” section, Ma Baker
perhaps has built a strong image and position within minds of people of United Kingdom by
providing fresh and organic breads, pies and other products.
Weaknesses:
Poor new product development: Observations in relation to this micro bakery reveals
that there has not been much new product development taking place within this organisation and
this has been criticized as this could affect its sales in the country due to negative publicity (Gao
and et. al., 2018).
Opportunities:
New Markets: With advanced technology rising within bakery industry and provision of
good quality products to customers, Ma Baker can effectively penetrate into new markets and
thereby enhance the scope of increasing its sales as well as profits.
Threats:
Competition: Many prominent and large-scale organisations such as Greggs, Costa
Coffee etc. are already present in the market and have a large market share in United Kingdom
which might increase the threat for Ma Baker to ensure its sustainability within marketplace.
Diversification: Almost all the bakery organisations available in the market have
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diversified models and better range of products available for customers to choose from. Thus,
such high investment of time, effort and money by other rival companies for ensuring
diversification could be a threat for Ma Baker.
PESTLE Analysis
While establishing itself effectively in UK, Ma Baker needs to analyse its external
environment in order to develop appropriate strategies to enhance its profitability. For this,
PESTLE analysis is used which determines external pointers which influence working of a
company.
Political: UK is a developed and politically stable country. Its democratic nature reflects
well in the policies set out for businesses in the country. With such effective political
environment, the policies of the country foster the growth of small businesses like Ma Baker
which are willing to undertake initiatives.
Economical: UK is an economy which is affected by various factors such as inflation,
demographic rates, interest rates etc. which have to be effectively considered by Ma Baker while
carrying out its operations in UK.
Social: The consumer market of UK is quite vast and wide range of buyers having
different technological needs is present in the country which is effective for the company. In
addition to this, people in the country favour health conscious food products such as those
provided by Ma Baker.
Technological: UK is a technologically advanced country where attempts have been
made to digitalise each and every aspect of business and social activities. The government and
various local companies have effectively made digital technologies available even in remote
areas of the nation. This factor would allow Ma Baker to enhance its customer base by
incorporating automation.
Legal: Ma Baker has to consider a number of laws and policies that affect the bakery
segment. The use of ingredients which may be harmful for consumer health are not used by Ma
Baker to ensure its sustainability in market.
Environmental: Each company set up in UK is required to effectively constrain
themselves from causing any harm to the environment and the nation has set up various
legislations that are required to be followed by these companies. Thus, Ma Baker carries out and
will continue to conduct operations in the interest of society and environment.
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Porter's Five Forces Model
With effective internal and external environment analysis, Ma Baker must effectively
determine its industrial attractiveness which would set a base for its strategies in UK. For this
purpose, Porter Five Force Analysis could serve as the most appropriate strategy to analyse the
competition for Ma Baker.
Suppliers' Bargaining Power: The power of suppliers within bakery industry is quite
low (Ott, Eisenhardt and Bingham, 2017). Yet as Ma Baker makes breads and pies out of organic
ingredients thus it has contacts with one or two specific suppliers only which render bargaining
power to them.
Customers' Bargaining Power: With lots of existing companies and a customer-centric
market environment, bargaining power of customers is constantly increasing as they could
switch to other bakery companies which provide similar products at lower rates and thus, this
makes their bargaining power quite high (Wales, 2016).
Threat of Substitutes: The threat of alternative products is quite high within bakery
industry as close substitutes are available out of which customer can select the one with optimal
quality and lowest price.
Threat of New Entrants: The current scenario of bakery market reflects that low
investment is needed to gain entry into bakery industry and compete with the companies who are
already present in the market (Khan and et. al., 2019). This tends to cause threat for Ma Baker.
Threat of Existing Competition: Various bakeries are present within UK such as Greggs
Plc, Pret A Manger which are very popular among the country. The reason for this is their
product quality and service features which are as per the needs of consumers (Lee and Liu,,
2018). Thus, threat of rivalry is quite high for Ma Bakery.
RANGE OF ENTREPRENEURIAL AND INTRAPRENEURIAL
STRATEGIES
It is imperative for Ma Baker to determine various strategies to build itself within the
online selling market as well as in global market. This is because such strategies would allow the
firm to sustain heavy competition and expand its customer base within the country. A range of
Entrepreneurial and Intrapreneurial strategies that could be applied by Ma Baker are evaluated
below:-
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Entrepreneurial Strategies
Effective Market Analysis: One such entrepreneurial strategy for Ma Baker is to
effectively analyse the market as per the trends, values and advancements which could help drive
the company forward. Ma Baker could make use of various tactics for market analysis which is
effective and quite essential for the firm to regain its position in the market.
Customer Orientation: Another strategy which could effectively be used by Ma Baker is
analysing customer trends. Each customer is important and it is crucial to determine their trends
and their preferences which would allow the company to manufacture products as per customers'
need.
Intrapreneurial Strategies
Innovation: With dynamic market needs, it is crucial for Ma Baker to innovate its
products and processes in relation to support the changing environment of bakery industry. The
firm must ensure effective use of different methods which could help its bakery items stand
ahead in the market and beat competition from other small or large entities (Ott, Eisenhardt and
Bingham, 2017).
Business Objectives: For any company, it is recommended that it should set up business
goals and objectives which could serve as targets for the firm to achieve. Ma Baker can make use
of this strategy to ensure short and long-term success in UK marketplace.
While market analysis would provide the company with information about other entities
their technologies, customer analysis would accurately help in determining preferences of buyers
and thus, analysis of customer trend is a viable entrepreneurial strategy for Ma Bakery. On the
other hand, implementing innovation as well as setting business objectives is crucial for Ma
Baker to adopt for creating an exceptional customer service delivery for long term.
ORGANISATION STRATEGIC SITUATION AND OBJECTIVES
The company is currently struggling to make its place in the online selling market with
such advanced competition and vast range of diversified products (Eggers, Hansen and Davis,
2012). For this, the firm must effectively set out few objectives which could be helpful in
ensuring its long-term success and sustainability in marketplace.
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Objectives
 To research and analyse the market and develop at least 3 new products within the next
one year.
 To enhance its customer base by 4% within the next 6 months.
IMPLEMENTATION STRATEGY
The firm must adopt various ways and strategies which would be appropriate in
achieving the objectives set above. The organisation in order to ensure long run sustainability
must effectively implement various strategies which would set a competent image of this
company over its competition. Various strategies are mentioned below:-
 Ma Baker must adopt diversification as a long term strategy to develop bakery items
which would serve the needs of various customers in a unique and effective manner.
 The company must adopt penetration pricing strategy in order to provide top quality
home-made bakery items to customers of less income group. The utmost advantage of the
same would be that a significant segment of population prevailing in United Kingdom
belongs to middle which and thus this strategy could help in appealing to them and
thereby enhancing the company’s existing customer base.
CONCLUSION
Thus, it is concluded that entrepreneurial strategy is quite important and imperative for
the company. Also, SWOT analysis effectively allows the company to judge its internal
competence, skills and weaknesses. Besides this, PESTLE analysis helps in gaining an insight
into and analysing the external business environment. Lastly, Porter Five Force model helps in
determining the industrial attractiveness. All these models are imperative for developing
implementation strategies to help companies in ensuring sustainability in the marketplace and
enhance the existing customer base.
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REFERENCES
Books and Journals
Anderson, B. S., and et. al., 2015. Reconceptualizing entrepreneurial orientation. Strategic
management journal. 36(10). pp.1579-1596.
Eggers, F., Hansen, D. J. and Davis, A. E., 2012. Examining the relationship between customer
and entrepreneurial orientation on nascent firms’ marketing strategy. International
Entrepreneurship and Management Journal. 8(2). pp.203-222.
Feldman, M. P., 2014. The character of innovative places: entrepreneurial strategy, economic
development, and prosperity. Small Business Economics. 43(1). pp.9-20.
Perry, J. T., Chandler, G. N. and Markova, G., 2012. Entrepreneurial effectuation: a review and
suggestions for future research. Entrepreneurship Theory and Practice. 36(4). pp.837-
861.
Hartsfield, S., Johansen, D. and Knight, G., 2017. Entrepreneurial orientation, strategy, and
marketing capabilities in the performance of born global firms. International Business:
Research, Teaching, and Practice. 2(1). pp.12-38.
Gao, Y., Ge, B., Lang, X. and Xu, X., 2018. Impacts of proactive orientation and entrepreneurial
strategy on entrepreneurial performance: An empirical research. Technological
Forecasting and Social Change. 135. pp.178-187.
Ott, T. E., Eisenhardt, K. M. and Bingham, C. B., 2017. Strategy formation in entrepreneurial
settings: Past insights and future directions. Strategic Entrepreneurship Journal. 11(3).
pp.306-325.
Gans, J. S., Stern, S. and Wu, J., 2016. Foundations of entrepreneurial strategy. Strategic
Management Journal.
Khan, N. U. and et. al., 2019. The Role of Entrepreneurial Strategy, Network Ties, Human and
Financial Capital in New Venture Performance. Journal of Risk and Financial
Management. 12(1). p.41.
Wales, W. J., 2016. Entrepreneurial orientation: A review and synthesis of promising research
directions. International Small Business Journal. 34(1). pp.3-15.
Lee, T. and Liu, H. M., 2018. How do Firms with Management Ability Promote Competitive
Advantages? An Integrated Model from Entrepreneurial Strategy Making and Internal
Resources. Entrepreneurship Research Journal. 8(2).
Zehir, C., Can, E. and Karaboga, T., 2015. Linking entrepreneurial orientation to firm
performance: the role of differentiation strategy and innovation performance. Procedia-
Social and Behavioral Sciences. 210. pp.358-367.
Online
Learning to bake at London’s only domestic bread-making school. 2016. [Online] Available
Through:<https://businessadvice.co.uk/on-the-up/learning-to-bake-at-londons-only-
domestic-bread-making-school/ >.
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