Business Organisation: Partnership, Competitive Advantages, and External Factors

This report discusses the concept of business organisation, specifically focusing on partnership firms. It evaluates the competitive advantages using Porter's five model and examines the external factors that affect the organisation. The case study used is the Little Dessert Shop, owned by Mary and Sue. The report also explores the impact of political, social, and environmental factors on the business.

Business Organisation

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Evaluating Business organisation in terms of partnership ..........................................................1
Evaluating competitive advantages using Porters five model.....................................................2
External factor affecting the organisation ...................................................................................3
CONCLUSION................................................................................................................................4
.....................................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business organisation is an entity that form with the purpose of making profit and has
individual proprietorship or partnership and joint venture types of different organisation. This
focuses on generating profit or improving society and also follow social responsibilities towards
society (Abdulaali, 2018). In this report the organisation is Little Dessert shop which is provide
different of dessert variety and quite popular as it located in Birmingham city which is owned by
two partner Mary and Sue in the partnership contact. In this discussed about type of partnership
in organisation in the relation with given case study and porter five model that helps in achieve
competitive advantages. Apart from that three external factors that impact the business of
organisation and how it can improve efficiency in firm.
MAIN BODY
Evaluating Business organisation in terms of partnership
Partnership is one of the type of business entity in which are two partners were come
together to make profit with mutual consent in agreed agreement done by both of them. In this
case study Mary and Sue are join and contributing the equal amount in their small business that
is Little Dessert Shop in which they secured 3 year lease on shop with mutual consent. Some of
the characteristics of the partnership firm is are as follows-
 Agreement- In every partnership firm there is contract or agreement are signed by each
other after their mutual understanding and competent to enter into contract. It can be
written, oral and must mention proper rules and policies that every one could understand
it (Al Mamun and Hasan, 2017). In case study Mary and Sue both of them were agreed
on same partnership contract and started their own business and fulfil all condition
mention there.
 Mutual consent- It is important feature in partnership, that nobody can force anyone to
to enter into it, both must mutually give consent. As Mary and Sue were both started their
shop and which they provide certain products, so everything they do must contain as
sense of mutual agreement between them.
 Profit sharing- Another feature of partnership business is sharing of progit and loss both,
as it is stated that both the partners were required to divide the proportion of their profit
and loss amount equally or according to the ratio mention in agreement. As Mary and Sue
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both contributed equally in their business and will going to share their profit accordingly
their agreed ratios (Alamsyah and Nurriz, 2017). This is one of the benefit in partnership
where both partner could share their profit and loss, if they face huge loss then they could
share accordingly and burden will divide into two partners. It will reduce the pressure and
ensure proper working in organisation that will be enhance the productivity.
 Lawful- This is legal agreement that is allow and made by government to make profit.
The purpose of partnership agreement is to business mutually and legally and it does not
include Black marketing or smuggling. As in the case of Mary and Sue, they both legally
signed the agreement or contract to carry out their shop and fulfil all requirements that
needed in partnership.
Evaluating competitive advantages using Porters five model
Porters five models is important tool is used by company to determine five forces that
impact the business and shape the industry structure by evaluating strength and weakness of an
organisation (Allen and Kraakman, 2016). For 'Little dessert shop' it essential to analyse the
competitive advantages and the way it can achieve relationship with in following way-
 Competition in the industry: It refers to the number of the competitors and their ability
to charge less than the competitors price. The power will be less if there is large number
of competitors and services provided is same in the market. People purchase the product
from those company who offer lower price. It helps in increasing the higher sales and the
profit for company. Little dessert shop has enough competition in the market as there are
many players. Their are small shops on the large scale but the people prefers the quality ,
price of the product offered by different dessert shop.
 Potential of new entrants into an industry: The power of the company also affected by
the competitors force in the markets (Betta, 2019). If the time and the cost consume is
less by the industry the more the company will remain in the market. The company has
an ability to charge higher prices and also have ability to do negotiation. Little dessert
shop has high level of competitors in the market because it is easy to enter the market
with the less capital. The company can operate a success if it has its own brand image and
the loyalty.
 Power of suppliers: The suppliers have an ability to show how much cost is require if
the company switched to another suppliers. Suppliers have low cost between the rivalry
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competitors suppliers so that it can lower the cost and enhance the profit. Little Dessert
Shop their is less negotiation power in the bakery industry because of their developed
market (Fjeldstad and Snow, 2018). Price of the dessert products can be affected by the
change in the raw materials which sometimes affect the price of the product sell by the
dessert shop.
 Power of Customers: The customer has an ability to choose the product which has lower
price. It affected by finding out how many customers or the buyers company have. The
customers has the power to negotiate and deal with the lower price. A company having
the less customer has an ability to charge the higher prices from the individual so that
they can increase the profits. Buyers of the Little dessert shop sell the products in the
super markets, hotel chains has an capability to increase the profit and by lowering the
price by laying heavy discounts. The competitors have an capacity to share the profit.
 Threat of Substitutes: The goods and services produce by the company has large threat
of the substitutes. Companies that have no substitutes will have the power to increase the
price also (Martínez, Galván and Alam, 2017). When the substitutes are available easily
the consumer has chance to shift to another products which make the power of the
company weaken. Their are many substitutes of the little dessert shop available in the
market. As the individual can make these products at home also. Dessert shops has to
maintain their price, quality and the convenience, if they did not maintain these factors
the consumers can easily switch to another.
External factor affecting the organisation
In every organisation company is there are many macro environment that impact the
business environment and decides its working condition (Salvato and et.al., 2019). In the
business of Mary and Sue that is 'Little Dessert shop' they are operating in business environment
where they many external factor that might impact its operational function in following way-
 Political Factor- In this factor political stability and its policies and rules of particular
country that influence the businesses. In Little dessert shop the political is stable as it is
located in U.K where political condition is quite stable and promote local shop to do their
business, they also provide financial help and other benefit to new firms who are want to
expand their profit. So, this is advantage to 'Little Dessert shop' to increase their business
in its locality and get the benefit from it.
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 Social Factors- This factors refers to buyer taste and preferences, behaviour and standard
of living that impact the business of firm. This is important one that shop really need to
pay attention to the needs and requirement of consumers. In 'Little dessert shop they
attract youngsters in weekends and where they tend to visit with their friends and have fin
their (Rane and Narvel, 2019). This shop is quite popular in its locality and does not
require much advertisement and depends on word of mouth publicity. The shop can get
advantages of it by providing more variety of dessert and can introduce healthy products
at low price with high quality, as changing in habits of costumer because they are
becoming health conscious.
 Environmental factors- This is one of the factor that concern with follow the Eco-
friendly and sustainable procedure that is responsibility for company to focus on (Snihur
and Tarzijan, 2018). In 'Little dessert shop' they are now planning for focusing on
providing healthy and safe products with organic taste. They want to give premium
quality product at low prices that also serves as environment friendly practices towards
society.
CONCLUSION
From the above report it is concluded that Business organisation is form of different
entity that which include partnership firm, sole proprietorship and joint venture that were come
into existence to make profit. In this report it has been discussed about partnership firm and its
feature that come in type of business. Apart from that porters five model is evaluated to
determine competitive advantages and way it can implement in organisation and macro
environment factors that influence the enterprises and identifying how it could benefit for shop.
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REFERENCES
Books and Journal
Abdulaali, A. R., 2018. The Impact of Intellectual Capital on Business Organization. Academy of
Accounting and Financial Studies Journal. 22(6). pp.1-16.
Al Mamun, C. A. and Hasan, M. N., 2017. Factors affecting employee turnover and sound
retention strategies in business organization: A conceptual view. Problems and
Perspectives in Management (15, Iss. 1). pp.63-71.
Alamsyah, A. and Nurriz, B., 2017, July. Monte Carlo simulation and clustering for customer
segmentation in business organization. In 2017 3rd International Conference on
Science and Technology-Computer (ICST) (pp. 104-109). IEEE.
Allen, W. T. and Kraakman, R., 2016. Commentaries and cases on the law of business
organization. Wolters Kluwer law & business.
Betta, M., 2019. Business, organization theory, and the current challenge of
neocharisma. Business and Society Review. 124(2). pp.261-281.
Fjeldstad, Ø. D. and Snow, C. C., 2018. Business models and organization design. Long Range
Planning. 51(1). pp.32-39.
Martínez, A. B., Galván, R. S. and Alam, S., 2017. Financial Analysis of Retail Business
Organization: A Case of Wal-Mart Stores, Inc. Nile Journal of Business and
Economics. 3(5). pp.67-89.
Rane, S. B. and Narvel, Y. A. M., 2019. Re-designing the business organization using disruptive
innovations based on blockchain-IoT integrated architecture for improving agility in
future Industry 4.0. Benchmarking: An International Journal.
Salvato, C. and et.al., 2019. Coupling family business research with organization studies:
Interpretations, issues and insights. Organization Studies. 40(6). pp.775-791.
Snihur, Y. and Tarzijan, J., 2018. Managing complexity in a multi-business-model
organization. Long Range Planning. 51(1). pp.50-63.
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