ENTREPRENEURIAL STRATEGY OF SME

ENTREPRENEURIAL
STRATEGY OF SME

Executive Summary
The report contains strategies used by Restaurant The Ledbury to overcome the situation. Report
involves various strategies that can be used in different situations and capabilities and positions
inculding PESTEL, SWOT, TOWS BCG Matric, Mchensey's 7's and value chain model and
product development as well as the PIMS. PESTEL and SWOT will help company in
identifying the factors that influence in the entering new markets and identifying strength,
weakness and opportunities of the restaurant. This report constants the SMART objectives of the
company which are to increase with 5% market-share of the restaurant till the end of 2019, to
decrease the employee turnover ratio in the restaurant, the company want to introduce new menu
before 2020 the restaurant wants to increase the sales of the restaurant by 15% within 3 months
and the restaurant wants to increase the quality of experience of the customers.

Table of Contents
INTRODUCTION...........................................................................................................................2
Critically evaluated a range of entrepreneurial strategies................................................................2
BCG Matrix on Restaurant the Ledbury:...............................................................................3
Poster 5 Forces: .....................................................................................................................4
Value chain model..................................................................................................................4
PESTLE analysis: ..................................................................................................................6
SWOT analysis:......................................................................................................................8
TOWS Analysis : This is the alternative of SWOT analysis. This tool is used to identify as
well as compare the strategies. In this the internal and external factors are exchanged........9
Organizational objectives:....................................................................................................10
Suggested Strategy for the restaurant..................................................................................11
1

INTRODUCTION
Entrepreneurial strategy is the business strategy from which a firm establishes as well as
re-establishes its relationship of fundamental set with its environment. This is a strategy which is
characterized by widespread and less-or-more simultaneous change in the decision-making
process of the organization. Restaurant The Ledbury is a Michelin start restaurant which is
owned as well as operated by the group, the restaurant is located at Royal Hospital road, London.
This report will consider the all the entrepreneurial strategies like BCG Matrix, Postel force 5
model and value chain which Restaurant the Ledbury can use to consolidate their situation such
as Pestle analysis, SWOT, TOWS and appraise subsequent strategy implementation in the
restaurant. This report will also discuss the strategic situation and capability and position. At the
end of the report will also highlight the strategy which the restaurant can use for the growth of
market share.
Critically evaluated a range of entrepreneurial strategies
2

According to the Wales, W.J., (2016) the entrepreneur strategies are uses to identify the market
position of the company, these consider market share of the business, Unique selling factor and
many more. To identifying the position of the business the company uses various models like
BCG matrix, Poster force 5 and many more,
BCG Matrix on Restaurant the Ledbury:
BCG stands for Boston Consulting Group. This is a very helpful business tool used
Analysing the attractiveness of a firm's product against the growth rate of market. Products of the
company are placed in four categories which include stars, question cash cow and dogs after that
the decisions. Restaurant The Ledbury is among the world most expensive restaurants and serves
much cuisine but the speciality among them is French cuisine. BCG matrix has been limited to
the firm's core business of food (Johnson and Van de Ven, 2017).
 Stars: The restaurant is a star in product portfolio (give specific example) because of the
reopening following with art deco redesign. This design more premium and more trendy
design which attract a lot of customers and helps to generate more revenue. The company
should focus on the infrastructure and Ambience to attract more customers.
 Question Marks: Restaurant falls in this segment of question marks when the market
growth of the industry high but the market share is low. The growth of restaurant is high
as they are operating in food industry but the competition is very in UK. The company
should maintain the quality of their products and services to increase their growth.
 Cash cows: These segments provide a financial stability in the organization. In this the
company compete in low sales growth and have high market share. Restaurant The
Ledbury can be included in this segment because the people in UK are switching to more
home-made and healthy food and the competition in UK for French cuisine is high, the
customer can replace the restaurant because of lots of options and regular new entrance.
 Dogs: It is fortunate that none of Restaurant the Ledbury falls in this segment of dogs. In
these segments of company, the company compete in a very low sales growth industry as
well as low market share of the company (Hartsfield, Johansen and Knight, 2017).
3

Poster 5 Forces:
Poster 5 force in a very famous business tool used by the organizations to identity the
competition in the market. Following are the five focus of poster.
 Threats of new entrance: Restaurant the Ledbury has a big threat of new entrance
because new entrance in the market bring innovation the in the economy. The new
entrance can include new food cuisine, new services and many more, the new business
will also reduce the value of product of Restaurant the Ledbury. The company should
increase the quality of their food and services to overcome these factor.
 Bargaining Power of Suppliers: In food industry restaurant and cafes all buy raw
material from different suppliers. In supplier dominating case the suppliers can increase
the price of their products such as raw meats, Fish, Salts, and Vegetable etc. This will
decrease the margin of the restaurant and lower the profitability.
 Bargaining Power of Buyers: The customer is always looking to get discounts and
purchase the product for minimum price. If the bargaining power of consumer is strong
they will ask for discounts and offer. This might increase the sales of the Restaurant the
Ledbury but surely will decrease the profitability of the company.
 Threats of Substitute Products: The food industry always suffers from this because of
lot of competition in the market as well as lot of new entrance. This affects the market
share of Restaurant the Ledbury because the substitute products offer a new value to it
product which is different from the product of Restaurant the Ledbury (Wales, 2016).
 Rivalry among the Existing competitors: The restaurant operates their business in the
competitive market of United Kingdom, sometimes the competitors provide special offers
and discount to their customers to increase their market share. The affects the market-
share and sales of Restaurant The Ledbury. To overcome this factor the company should
focus on their USP this will increase the loyalty of their customers.
Value chain model
This model is a business model used to classify the activities of the business in two parts –
Primary activities and Secondary activities.
4

Primary activities:
 Inbound Logistics: Inbound logistics is the first step in this the company had to maintain
relationship with their suppliers and doing all those activities which helps to receive the
raw material and store them (Stam and Spigel, 2016). The restaurant has maintained good
relation with their suppliers, they clear the payment of the suppliers on time.
 Operations: As the name suggested this activity means coveting the raw material into
finished good. In The Ledbury's restaurant the operational activity is to convert the raw
food into cooked food which is ready to serve.
 Outbound Logistics: The activities which are for collect and store all the output at The
Ledbury's restaurant are in outbound logistics.
 Marketing and Sales: The role of marketing is to sell the product which is produce the
by the company at the biggest marketing strategy of The Ledbury's restaurant is
maintaining their brand name and quality and taste of the food. This attract many
potential customers.
 Services: Good service of the company increase the loyalty of the customers. In case of
The Ledbury's Restaurant, the firm take the feedback and review and work on it to
improve their service.
Secondary activities:
 Procurement: Collecting all the resources and raw material in a very effective and
efficient manner is known as procurement, it means the restaurant need to acquire the raw
material and the other resource in a right price as well as of right quality. The company
has different supplier for different types of items which helps the restaurant to collect the
raw material at cheaper price
 Human resource management: It is the basic need of the companies to recruit and
select candidates accordingly to the need of the company and the skills of the candidates.
HRM plays and important role in the success of the restaurant.
 Technological Development: In the modern world technology plays a crucial role in the
success of the company (Sonfield and Lussier, 2015). Technological development gives
competitive advantage to Restaurant the Ledbury because it reduces the cost and also
manual work which ultimately lead to increase in profitability of the restaurant.
5

 Infrastructure : Good infrastructure is important in restaurant business (Stam and
Spigel, 2016)). The infrastructure of The Ledbury's restaurant is unique and attractive.
Customers visit the place to take experience of such place with great infrastructure as
well as great food.
Organization strategic situation, its capabilities and position and Objectives:
Restaurant The Ledbury is a Michelin start restaurant which is owned as well as operated by The
Ledbury has been engaged in providing quality products to consumers. They have a huge focus
on expanding their market share. It is a small sized restaurant based in UK. They focus on
providing various cuisines to consumers. The restaurant has a specialization in French cuisine.
PESTLE analysis:
This is a business tool used by the company to identify all the positive and negative impact of
macro factors on the company. Following is the Pestle analysis of the Restaurant the Ledbury.
6
Illustration 1: Pestle analysis of Restaurant The
Ledbury
(source: PESTLE analysis of restaurants in UK,

 Political Factor: All the government interference of government due to instability and
other factors comes under political factors. The government of United Kingdom is the
most stable government in the world so there will not be change of rules and regulation
due to instability of government. This will help the restaurant to stick on a single set of
rules and policies. This will increase the effectiveness of their employees as they do not
have change their ways of working frequently.
 Economical Factor: This considers the all the impacts of economic factor on the
restaurant. The economics of UK is strong and the Brexit increase the operational
activities of the firm because the restaurant is based on UK it has given a competitive
advantage to the Restaurant.
 Social Factor: The social factor is also known as socio-culture factors. This factor
considers the entire Social factor related to the company. The people of United Kingdom
is turning to vegans, more than 10% of the Population is vegan in UK. This trend reduces
the sales of the restaurant because it mostly serves meat products (Karami, 2016).
 Technological Factor: All the technological related impacts come under this factor. The
Restaurant the Ledbury Provide online service to the customers like free Wi-Fi, online
reservation, online order and many more
 Legal Factor: This factor considers all the legal factor which impacts the restaurant like
consumer right, health and safety right, employee rights. The restaurant follows all the
rules and regulation to avoid penalties and negative publicity of the company.
 Environment Factor: The entire environment related impact is in this factor. The
restaurant has a proper wastage management policy in their company whereas it does not
participate in any environmental campaigns. This is a good initiative from the company;
however, I strongly recommend the company might follow any new environment law
with carefully(Hartsfield, Johansen and Knight, 2017).
7

SWOT analysis:
SWOT analysis describes competitive position of the restaurant, identifying its strength,
weaknesses, opportunities, and threats and is the best resource to provide guidelines about
increment of its visibility, growth and profits.
Strengths:
Restaurant The Ledbury has high ratings of 3 stars and is providing good services, good
quality food, amazing atmosphere which is attracting no. of travellers and local people of the
London (Johnson and Van de Ven, 2017).
 Ledbury is located at the beautiful part of the London that all the best visiting places are
very nearby to it so it is becoming the first choice to the travellers.
 The staff members of the restaurants have very pleasant and welcoming personality and
are very friendly and helpful to their guests, and they provide fast services, and they have
perfect time management.
 The Ledbury Restaurant have unique and very amazing menu for their guests, and they
use fresh and healthy vegetables and provide delicious food.
 They offer variety of dishes with a surprise dish to their guests.
 Restaurant provides services for the management of private events such as weddings,
birthday parties, business meetings etc.
 Restaurant is very neat and clean and provides safe and healthy environment with all the
comfort services to their guests.
Weaknesses:
 Local competition: Competition from the local and nearby restaurants due to their high
prices and availability of the other nearby restaurants with low cost food.
 Switching of restaurants: Number of restaurants is increasing all over the world leading
to increment in number of options therefore people are switching from one restaurant to
another (Jin and et.al, 2017).
 Lack of facilities: Restaurants lack some facilities such as spa, gaming zone, gyms etc.
and the attracting views and decors inside restaurants.
8

 No speciality over cuisine: Restaurant doesn’t serve any particular speciality cuisine
according to the locality where it is present, and there is no availability of its own
speciality dishes.
Opportunities:
 More investment: They can invest at new and more demanding places so that their
visibility to the guests increases and their profit margin will also increase.
 Changing menu: They can add more cuisines to their menu, and they can add speciality
dishes of the locality where it is present, or they can add their own speciality dishes.
 Tie up: The Ledbury Restaurant can tie up with other high quality restaurant to increase
its own market value, its visibility.
 Low prices: They can decrease prices of food or some services as per the convenience of
the restaurant.
 Health and Fun services: They can add more services with the restaurant such as spa,
pool, gym, gaming rooms etc (Hartsfield, Johansen and Knight, 2017). And attracting
decors and historical views to their restaurants.
Threats:
 Competitors: The Ledbury has number of competitors throughout the world. Restaurant
needs a strategy to compete with them and to run the restaurant.
 Chef non-retention: Due to non-retention of the chefs, the restaurant has faced problems
in gaining the loyalty if their customers. Ledbury can increase the salary of the chefs so
that they don't leave the company.
TOWS Analysis : This is the alternative of SWOT analysis. This tool is used to identify as well
as compare the strategies. In this the internal and external factors are exchanged.
Strengths/Opportunities : In this the company grab their opportunities by their Strength
like the restaurant can easily introduce new menu because the restaurant is having a good
regulation of providing good quality of food.
Weaknesses/Opportunities : In this the company try to overcome their weakness by
garbing opportunities in the market. The Ledbury can overcome the competition factor by
providing more cuisine in their restaurant.
9

Strengths/threats : Form this company identify how to eliminate their threats with their
strengths. The Ledbury can overcome their competition factor by providing extra services like
organizing private events, weddings and many more.
Weaknesses/threats : This step helps the company to eliminate their weaknesses by
identifying the threats. The restaurant can introduce more variety of food as the competition is
increasing this will help Ledbury to attract customers with different taste.
Organizational objectives:
 To increase with 5% market-share of the restaurant till the end of 2019. The restaurant
can achieve this by introducing new cousins in their menu.
 To decrease the employee turnover ratio in the restaurant. The restaurant can increase the
retention rate by providing proper salary and growth opportunities to their employees.
 The company want to introduce new menu before 2020. The company can introduce
Asian menu in their cousin as the Asian population is very high in UK.
 The restaurant wants to increase the sales of the restaurant by 15% within 3 months. The
company can do promotion actives like organizing event, festival celebration and many
more.
 The restaurant wants to increase the quality of experience of the customers. By increase
the quality of services and introducing unique feature in the restaurant. The firm can
achieve this objective.
Above mentioned objectives are discussed with the application of SMART technique.
The Restaurant Ledbury is of the most expensive hotel in the UK but the firm is having many
problems like competition for local competitor and international brands. The new entrance in the
market also affects the restaurant moreover the restaurant is facing many problems with their
Chefs and has a high employee turnover ratio. The positive factors of restaurant are their good
reputation in the market, their quality of products and services as well as their unique and
attractive infrastructure (Hakala, 2015). The restaurant is having many opportunities to expand
its business by introducing new menus, flexibility in work and many more.
10

Suggested Strategy for the restaurant
The company can use Ansoff matrix to develop new strategic for the growth of the business of
restaurant The Ledbury. These are the following strategies of Ansoff Matrix
 Market Penetration: In this strategy the restaurant will do more advertisement to
increase their sales of a particular branch. This is the least expensive as well as safest
strategy for the Restaurant the Ledbury
 Product Development: The restaurant develops new product in the existing market. The
restaurant is more focused on French cuisine. The restaurant can have introduced new
cuisine in their restaurants.
 Market Development: In this the company enter into a new market with the existing
products. In this the company can enter into new market of different country like the
restaurant their brand in new country and still serving French concision to the consumers
 Diversification: The Company enter new market with new products. This is the riskiest
strategy for Restaurant The Ledbury.
The best strategy for the Restaurant The Ledbury in product development because the
company is having good reputation in the market of United Kingdom, the restaurant is currently
serving French cuisine if the restaurant introduces new cuisines like Indian, Chinese or any think
according to the need of market then the chance of success in this strategy is much higher than
other strategies (Gupta and Batra, 2016).
The above study focuses on the entrepreneur strategies which are beneficial to established
relationship of fundamental set with its environment. Evaluating a range of entrepreneurial
11

strategies that can be used to develop or consolidate this situation for Restaurant The Ledbury,
which consider many models such as BCG Matrix, Poster Five Forces, Value chain model and
PIMS of restaurant The Ledbury and also analysis the company based on these models. This
report will also highlight the Organization strategic situation, its capabilities and position and
objectives which considers various models which showed the positive and negative impact as
well the strengths, Weaknesses, Opportunities and Threats, the models in these were SWOT and
PESTLE moreover this report focused on the objectives of the Restaurant The Ledbury. Lastly
the report discussed the the strategies that the Restaurant The Ledbury can use to expand their
market and which is the best strategy for the company, this is explained with the use of Ansoff
matrix theory
REFERENCES
Gupta, V.K. and Batra, S., 2016. Entrepreneurial orientation and firm performance in Indian
SMEs: Universal and contingency perspectives. International Small Business Journal.
34(5). pp.660-682.
Hakala, H., 2015. Entrepreneurial strategy orientation. Situations. 7(10). p.11.
12

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.
Jin, L.and et.al, 2017. Entrepreneurial Team Composition Characteristics and New Venture
Performance: A Meta–Analysis. Entrepreneurship Theory and Practice.41(5). pp.743-
771.
Johnson, S. and Van de Ven, A.H., 2017. A framework for entrepreneurial strategy. Strategic
entrepreneurship: Creating a new mindset. pp.66-85.
Karami, A., 2016. Strategy formulation in entrepreneurial firms. Routledge.
Mosey, S. and Kirkham, P., 2017. Entrepreneurial strategy. In Building an Entrepreneurial
Organisation (pp. 21-35). Routledge.
Sonfield, M. and Lussier, R., 2015, February. Firm Size and Entrepreneurial Strategy: A One-
Way Anova Analysis. In Small Business Institute® 2015 National Conference
Proceedings (p. 116).
Stam, F.C. and Spigel, B., 2016. Entrepreneurial ecosystems. USE Discussion paper series.
16(13).
Wales, W.J., 2016. Entrepreneurial orientation: A review and synthesis of promising research
directions. International Small Business Journal. 34(1). pp.3-15.
Pestle analysis of restaurants in UK. 2016. [ONLINE] Available through:
https://freepestelanalysis.com/pestel-pestle-analysis-of-restaurant-industry/ (Accessed at
1st August 2019).
13