Business Analysis of Little Dessert Shop: Porter's 5 Forces

This report provides a comprehensive business analysis of "Little Dessert Shop," a dessert service provider in the UK. It begins by examining different types of business partnerships, focusing on general, limited, and joint ventures, with specific application to the shop's structure. The report then applies Porter's Five Forces framework to assess the competitive environment, evaluating the industry competition, potential for new entrants, supplier power, customer power, and threat of substitute products. Finally, it analyzes the macro-environmental factors influencing the business, including social, economic, and environmental considerations, offering insights into how these factors impact the shop's operations and strategic decisions. The analysis aims to understand the market and competition, and to help the business operate effectively.

Introduction to Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BOODY...............................................................................................................................1
1: Business partnership................................................................................................................1
2: Porter’s 5 forces framework....................................................................................................2
3: Macro environment factors......................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
The process of buying and selling of products in order to earn money is called as business and
when two or more individuals are responsible for managing organizational activities then it is
called as business partnership. Mary and Sue’s little desert shop is taken for the analysis in this
report, it is a desert service provider in UK. Analysis of different types of business partnership is
done in this report. Evaluation of effectiveness of porter 5 framework on the organization is done
in this report, with that analysis of micro and macro environment is also done in this report.
MAIN BOODY
1: Business partnership
Business is the process of buying and selling of products or services such that money can be
earned through this activity, if a business is having two or more partners that it is called as
business partnership. This partnership is also seen in case of Mary and Sue’s little desert shop
where there are two organizational partners who are equally responsible for managing operations
and sharing liabilities. Business partnership is of three different types which are as following.
a) General Partnership-
In this partnership each partner is equally responsible for managing organizational operations
and sharing liabilities. This can also be seen in case of little desert shop where there are two
partners and each one of them is equally liable for the result achieved through company’s
performance such as profit and loss. Since each partner is equally responsible for managing
organizational operations therefore high involvement in organizational activities is seen due to
which probabilities of goal achievement increases (Nurmala, de Leeuw and Dullaert, 2017). This
partnership style is most seen in small organizations where working is limited because company
is not having wide geographic reach and limitations in resources.
b) Limited Partnership-
In this type of partnership organizations like little desert shop would be having more number of
partners than general partnership but in this case their partnership is not equally divided. But
instead their partnership is divided on the bases of their contribution for organization, since
increment in partnership will increase their liabilities towards organization due to which it is one
of most complicated form of partnership (Malik, Pereira and Budhwar, 2020). However only
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limited liabilities of organization are shred with outside investors due to which this would be
beneficial for little desert shop for getting capital investment.
c) Joint Ventures-
In this type partnership company is having limited sharing partnership with other organization
due to which it is able to provide new customer attracting products and services to its
organizational customers. Due to this short time collaboration little desert shop would be having
multiple partners which will provide it an advantage of getting high revenues and with that wide
variety of products would also be provided by organization (Nurmala and et.al, 2018). This is
one of the most effective ways of partnership because these collaborations are made on
experimental bases which can be easy broken if they are unable to achieve results as per
expectations.
2: Porter’s 5 forces framework
It is important for the organization to understand the company’s competitive environment
so that there is going to be higher performance. The following report is going to discuss the
porter’s five forces of Little Dessert Shop in Birmingham.
 Competition in the industry (High)
There are already well established stores and shops which are present in the market serving
the customers with the products which Little Dessert shop is providing them. Experience of Sue
and Mary in hospitality industry is going to make them be able to compete and get in unique
products and services which the customers are going to experience (Schwartz, 2017). Mary has
worked as a chef and Sue as a manager of local hotel which is a good combination of the two
which is going to make the organization be able to develop effectively and match the
expectations and demands of the customers which is going to be present.
 Potential of new entrants into the industry (Medium)
There are a lot of dessert stores which can come up in the location of Little Dessert shop
because there are unique products which can come up in this industry. There is a lot of
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investment and loans which the two partners have than to promote them as well as be able to
make a place for them in the market. The company is going to have a strong base for themselves
in the market so that new entrants will not be able to take away their market share.
 Power of suppliers (Low)
The supplies for Little Dessert Shop is very common and found at supermarkets as well but
to get in bulk Mary’s contacts are going to be very helpful. Mary has worked in large contract
catering restaurant chains which is why she will have a lot of contacts which can be used by the
organization to be able to have cost friendly measures to be able to operate in the market which
is very important for the organization to have higher profitability (Ritter and Lettl, 2018).
 Power of customers (Low)
Customers are going to appreciate the products and services which Little Dessert Shop is
going to provide to their customers since both the partners are going to put in their experience in
this shop so that they will be able to satisfy their customer base. Customers are understood well
by Sue and Mary since managing and Chef is their expertise in the market which is going to
make the customers be well satisfied with the services and products of the organization.
 Threat of substitute products (High)
There are a lot of large organizations in the market which have developed a base for
themselves in the market in this department therefore this is a great threat for the company
(Karpenko and et.al., 2019). It is going to be difficult for the Shop to be able to make a place for
themselves in this competitive industry but having experience is going to make Little Dessert
Shop be able to get the base that they expect which is going to be very good for the functioning.
3: Macro environment factors
For Little Dessert Shop it is important for the company to understand the factors of
external influence which the organization is going to have. Decisions have to be taken on this
factor so that the company will be able to operate effectively and efficiently in the market.
 Social factor
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The company will have to make sure that all the standards of the customers are being
matched by the organization. Desserts are going to be in different varieties as well which is sugar
free and other products so that the trends and needs of the customers is fulfilled. The company
would want to have loyal customers in the organization which is why Little Dessert will have to
understand their needs and improve on their products accordingly (Bozarth and Handfield,
2016). There is a quality which will be maintained by the shop in the market which comes from
experience and that is good for the reputation and brand image.
 Economic factor
There is a lot of investment which the two partners, Mary and Sue are putting in Little
Dessert Shop which is going to make the organization have higher functioning. There are loans
which the two have taken from bank in order to be able to invest in promotions which are going
to attract more customers in the company and the organization will be able to do better. There is
going to be a lot of investment required in the raw material as well for the products and services
to be manufactured by the shop which is also present by making the same contribution by the
partners.
 Environmental factor
The organization is going to make sure that there are organic ingredients in the products and
services which are going to be present and the company will be able to operate effectively. The is
going to be bulk buying of raw material but they are going to be used effectively and wastage
which is going to be produced by the company is going to be disposed off well so that the
reputation of the organization is going to be higher in the market and the company is going to
find it easier to be able to operate effectively in the market (Evans and et.al., 2017).
CONCLUSION
From the above report it can be concluded that there has to be effective measures and
understanding of the market so that the business will be able to compete with the competitors in
the market. There are unique ideas and products which a business has and without understanding
the market the company will not be able to make a strong base for themselves in the market.
There has to be good understanding of the partnership as well which the company should have so
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that there are going to be higher performance which is going to be expected from the business in
the market and the company will be able to operate effectively as well.
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REFERENCES
Books and Journals
Bozarth, C.C. and Handfield, R.B., 2016. Introduction to operations and supply chain
management. Pearson.
Evans, S and et.al., 2017. Business model innovation for sustainability: Towards a unified
perspective for creation of sustainable business models. Business Strategy and the
Environment. 26(5). pp.597-608.
Karpenko, L and et.al., 2019. Formation of the system of fair business practice of the company
under conditions of corporate responsibility. Academy of Strategic Management
Journal. 18(2). pp.1-8.
Malik, A., Pereira, V. and Budhwar, P., 2020. HRM in the global information technology (IT)
industry: Towards multivergent configurations in strategic business
partnerships. Human Resource Management Review. p.100743.
Nurmala, N. and et.al, 2018. Cross-sector humanitarian–business partnerships in managing
humanitarian logistics: an empirical verification. International Journal of Production
Research. 56(21). pp.6842-6858.
Nurmala, N., de Leeuw, S. and Dullaert, W., 2017. Humanitarian–business partnerships in
managing humanitarian logistics. Supply Chain Management: An International Journal.
Ritter, T. and Lettl, C., 2018. The wider implications of business-model research. Long Range
Planning. 51(1). pp.1-8.
Schwartz, M.S., 2017. Business ethics: An ethical decision-making approach. John Wiley &
Sons.
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