Evaluate Partnership as a Type of Business Organization with Reference to Mary and Sue's 'Little Dessert Shop'

This essay evaluates partnership as a type of business organization with reference to Mary and Sue's 'Little Dessert Shop'. It discusses the Porters 5 Forces framework and macro environmental factors affecting the business.

Essay
Assessment 1 –
Individual Report
based on a case study

Table of Contents
INTRODUCTION......................................................................................................................4
Evaluate a partnership as a type of business organisation with reference to Mary and Sue’s
‘Little.....................................................................................................................................4
Dessert Shop’. .......................................................................................................................4
Porters 5 Forces framework .................................................................................................5
Macro environmental factors ................................................................................................6
CONCLUSION..........................................................................................................................8
REFERENCE.............................................................................................................................9

INTRODUCTION
There are different types of business organisations that are based on the type, structure
and their origin. These are differentiation such as it may be company, partnership, sole trader,
limited liability partnership. All these have established rules, regulations and a particular
legal structure that has to be compulsory followed for the survival of business. In present
report there is discussion of partnership as a type of business. There is a case study based on
“Little dessert shop”, that is owned by two partners Sue Jackson and Mary Jones. It is present
in bullring shopping centre in Birmingham (Mathu, 2018). The business have been impacted
by recent COVID-19 crisis that has resulted into long term negative affect on sales as
business have been closed for a time period of 3 months.
Evaluate a partnership as a type of business organisation with reference to Mary and Sue’s
‘Little
Dessert Shop’.
A partnership is a type of business organisation that consist of tow or more
individuals who are agreeing together to share their profits & losses of business. They are
coming together to share cost, risk, benefits & future responsibilities of business to run a
business organisation. It is regarded as a unincorporated business entities where partners are
self employed and are personally responsible for all the debts and losses of the business.
A legal partnership is a business firm that is operating between two or more individuals who
are sharing profits and management. There are two types of partnerships agreements that is
limited partnership and general partnerships. Ion general partnership the partner are managing
the company with assuming of responsibility of partnership debts and other such obligations.
Ion limited partnerships there is serving of business where limited partners are acting as
investors only (Mustikaningsih and et.al 2019).
In a partnership type of business each partner is also liable for negligence of other
partners and their misconduct. The overall profits and losses have to be shared among
partners that is according to the agreed ratio of profit sharing where each partner is paying tax
on their respective profit share.
The profits are shard according to the scenario that is decided in the partnership deed
by both the partners. In case of “The little desert” both the partners marry and sue have
made a contribution of 30,000 pounds each with a secured 3 years lease and by using of a
working capital. It is a example of a general partnership which is easy to establish, flexible

and low cost. The personal assets are risk in case of general partnerships. Here, partners are
also liable for each others actions.
Porters 5 Forces framework
Porters five forces framework is a model that is used for the purpose of making a detailed
evaluation of the competitive forces that are part of external macro environment and are
affecting the overall structure, strategic decision making process and development of
competitive strategies. In present scenario there is discussion of different factors that are
affecting “Little desert shop” that is located in the busy streets as mentioned below:
Threat of new entrants: The overall threat of new entrants is very low for Little desert shop
in the present situation of COVID 19 virus because no new business is willing to make
investments in the hospitality sector (Purnomo, Suryana and Sari, 2018). There is high risk
of return of investment and this creates a situation where there is no possibility of new
competitors for The desert shop in their immediate vicinity.
Threat of substitution: There is high threat of substitution for little desert because of
presence of competitors such as Kaspa's desserts west, Sweet surprise that can provide high
competition to The desert shop in the present situation of post COVID-19 impact. In order to
deal with the high threat of substitution the little dessert have to focus on attracting of
customers by use of promotional literature that has not been used by them till now in order to
promote the brand (Lewis, 2017).
Bargaining power of customers: when customers are powerful their bargaining power
increases especially in situations of customers who are more price sensitive. They are willing
to switch easily to other competitors as they posses zero switching cost. In the case of Little
desert the overall bargaining power of buyers is high and this has to be maintained by little
desert by focussing on offering high quality at reasonable prices (Wellner and Lakotta, 2020).
Bargaining power of Suppliers: The bargaining power of suppliers is depended on the
number of brands available in the same segment. In case of Little desert shop there is
availability of other similar brands offering same range of products and catering to the same
target market. In this situation there is high bargaining power of suppliers as the little desert
shop has to offer competitive prices to maintain long term relations with all their suppliers in
long run. Their supplier presently consist of local cash & carry but they are willing to switch
to local organic farms. There are limited local organic farms in Birmingham that is leading to
high bargaining power of suppliers.

Industrial rivalry: The industrial rivalry denotes the amount of competition that is existing
in the industry to which a particular brand belongs. There is presence of high competitive
rivalry for the little desert shop because of other similar brands. Bit at same time they posses
a competitive advantage in form of having a approach towards healthier eating that is leading
to a differentiation feature that is not presence in other competitive sweet shops.
From above discussed porters five forces analysis of “Little desert shop” it can be
summarized that there has to be more focus on maximisation of the healthy eating so that it
will lead to attainment of competitive advantage in long run. In the post COVID situation
there is need to ensure that customers are feeling safe and hey are willing to spend towards
external eateries. The location of the little desert in the busy streets of Birmingham that is a
again a competitive advantage but is affected by the presence of many such competitors in
the immediate vicinity. The target market of the little desert is not just limited to one segment
of customers that again is going to benefit them in terms of having a diverse market
approach.
Macro environmental factors
The macro environment plays a very effective role in framing the present business
conditions in organisation,. It affects their long run profitability and the way external
environmental, conditions are affecting the business. It is divided according to various
segments of external environment as mentioned below:
Political factors: In UK the country is said to be a fair and stable country with plenty
of opportunities for the ones who are operating in the country. Birmingham is third largest
city in UK according to the terms of are as Birmingham as a metropolitan region (Mugo,
2020). They are contribution approximate 1.4 percent to the national economy. There has
been rapid growth in tertiary sectors and industry that is leading to higher growth in business
services and professional sectors. This is a supporting factor for the little desert shop as they
will be able to expand their present market share.
Economic factors: the present GDP growth has declined in the last two quarters in
2020 because of lock down situations in UK and many such affected countries. This situation
is affecting the long term growth of business as they are not able to cope up with the losses
incurred because of losing of revenue for past 4-5 months period. In this scenario there The
little desert has to deal with the negative impact of the present economic situation in
Birmingham that may affect their future sales (10 predictions for Birmingham's business
world in 2020).

Social factors: These factors are related to the society and the target market of
customers for the little desert. The target market views, notions, beliefs and perceptions are
posing a impact on the changing preferences of customers. The little desert shop is targetting
children on their weekdays and young adults and teenagers in weekends as a place to meet
friends & hand out. They are changing their services by using of a friendly approach, healthy
and good quality products.

CONCLUSION
From the above discussed information it can be summarized that partnership is a type
of business necessity where partners are coming together with a similar objectives. The share
of profits and losses is according to pre decided agreements between partners. The recent
COVID 19 situation has affected business in both negative and positive manner so there is a
need to focus on effective business strategies in order to deal with its negative effect. Porters
five forces analysis is a framework that assist in getting insights of the five major forces that
are affecting the business so that there can be development of long run Competitive
advantage.

REFERENCE
Books & Journal
Mathu, K., 2018. Transforming South African public-sector supply chain using public-
private partnership business Acumen. Journal of Contemporary Issues in Business and
Government, The, 24(1), p.23.
Mustikaningsih and et.al 2019. Building business performance through partnership strategy
model: Evidence from renewable energy industry in Indonesia. International Journal of
Energy Economics and Policy, 9(5), p.297.
Purnomo, D.S., Suryana, Y.S. and Sari, D., 2018. The effect of business partnership and
innovation management to business performance of business units of multiplay
provider In Indonesia. Academy of Strategic Management Journal, 17(2), pp.1-12.
Lewis, R., 2017. Porter's Five Forces of competitive advantage.
Wellner, S. and Lakotta, J., 2020. Porter's Five Forces in the German railway
industry. Journal of Rail Transport Planning & Management, p.100181.
Mugo, P., 2020. PORTER’S FIVE FORCES INFLUENCE ON COMPETITIVE
ADVANTAGE IN TELECOMMUNICATION INDUSTRY IN KENYA. European
Journal of Business and Strategic Management, 5(2), pp.30-49.
Online
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