Evaluation of Partnership as a type of business organisation

This report evaluates partnership as a type of business organization, discussing its advantages and limitations. It also explores the application of Porter's 5 Forces framework and the impact of macro environmental factors on a business. Case study: Little Dessert Shop.

Introduction to Business

Table of Contents
INTRODUCTION...........................................................................................................................3
Evaluation of Partnership as a type of business organisation......................................................3
Porters 5 Forces framework.........................................................................................................4
Macro environmental factors.......................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business organisations are of several types and differ on the basis of their size, nature and
formation of business organisation. Little Dessert Shop is a partnership business organisation,
partnership business organisation is one in which business has more than one owner. Little
Dessert Shop is owned by Mary Jones and Sue Jackson and is located in Bullring Shopping
Centre in Birmingham. This report will discuss partnership and application of Porter’s 5 forces
framework and will discuss factors of macro environment.
Evaluation of Partnership as a type of business organisation
Little Dessert Shop because is owned by Mary Jones and Sue Jackson becomes a
partnership organisation. Partnership organisation can be defined as legal form of business
operations between two or more individuals who share profit and losses of business. Relationship
between partners is based on the partnership agreement between business partners. This
partnership agreement involves different elements like profit sharing, nature of partnership,
forms of decision making, process of conflict resolutions and nature of liability. This agreement
can be oral, written and implied. Mary and Sue with help of partnership agreement can ensure
that their partnership does not get affected due to any misunderstanding, because everything is
there in agreement (Dong and Rim, 2019). Partnership relation between partners is also differ on
the basis of type of partnerships. There are different types of partnerships, general partnerships,
limited partnership and limited liability partnership. On the basis of Little Dessert Shop case it
can be considered that partnership between Mary Jones and Sue Jackson is general partnership.
General partnership consists of partners who participate in everyday activities and share equal
liability. Limited partnership limits liability of other partners except one and limited liability
partnership limits liability of every partner. There are several benefits of a partnership business,
that are-
Feasibility in collecting financial resources- This is one of the best advantage of partnership.
Case of Mary Jones and Sue Jackson also outlines that they both together could invest enough
resources in business which would have become difficult for an individual.

Limited legal obligations- This is also an advantage of partnership business that it has limited
legal obligations that make it comparatively simple.
Access to more knowledge, experience and contacts- This means that a partnership business
involves more knowledge, experience and contacts as different partners bring different
knowledge, experience and contacts. Mary Jones and Sue Jackson also brought more knowledge
experience, and contacts together in Little Dessert Shop.
Better decision-making- More knowledge and experience help in better decision-making.
Risk-sharing is another important benefit of partnership business.
But certain limitations are also there in partnership business that are-
Business is not independent from partners- This means that in partnership business,
organisation and partners are not considered different from each other (Savickaitė, 2020).
Difference in opinion and higher probability of conflicts- This is another important limitation
that partnership can easily create conflict if their opinion and interest are not same.
Profit-sharing- This means that if risk sharing is a benefit than profit-sharing is also a limitation.
However, overall discussion outlines that benefits are more than limitations and benefits
are worth taking risk. This means that partnership business is very effective types of business and
partners with their collaboration can enhance and increase overall value of the business.
Porters 5 Forces framework
Porter’s five forces framework is a tool that is utilised to identify and understanding
different competitive forces and their impact on a business organisation. Porters’ five forces
analysis of Little Dessert Shop is as follows-
Threat of new entrants
Threat of new entrants is concerned with entering of new organisations in industry wear Little
Dessert Shop is operating. Entering of new organisations create more computers and complicate
existing competition within industry. Threat of new entrants gets affected by barriers to entry and
barriers to entry involve resources required skills and competencies required legal and regulatory

compliances and economy of scale. For Little Dessert Shop threat of new entrants is high
because of Limited resource required and Limited regulatory compliance.
Threats of substitute
Threats of substitute concerned with competition that is given by those product and services that
can be used at place of a given product or service. This force of competition gets affected by
number of substitute and cost of switching. For Little Dessert Shop there are several substitute
that can be utilised place of products of Little Dessert Shop (Isabelle and et.al., 2020). This
means that threat of substitute for Little Dessert Shop is high.
Bargaining power of buyers
Power of buyers enable them to reduce prices of a given product service. This power gets
affected by number of buyers as well as number of sellers. There is large number of buyers for
product of Little Dessert Shop and at the same time number of sellers is also high and this is why
bargaining power of buyers is high and because of this power of Little Dessert Shop in in this
force is low.
Bargaining power of suppliers
Suppliers are those who supply required material and inputs for business. Suppliers possess
strong power as operations and functioning of business get significantly affected by suppliers
and their relationship with suppliers. Power of suppliers gets affected by number of suppliers and
inputs in material being supplied by them. On this basis Little Dessert Shop has hi power in this
force because there are several suppliers who can supply required inputs in material for Little
Dessert Shop and cost of switching is also insignificant.
Industry rivalry
Industry level refers to competition between existing organisations within industry. This rivalry
gets affected by number of existing businesses and their competitive position in market (Varelas
and Georgopoulos, 2017). There is a strong competitive rivalry between Little Dessert Shop and
its competitors because there are several competitors operating in industry of Little Dessert Shop.
This discussion suggests that Little Dessert Shop operates in a very dynamic and
competitive business environment. In order to maintain competitive advantage and ensure long-

term viability of business Little Dessert Shop should utilise its strong position in in force of
suppliers this requires it to identify right suppliers who can provide high quality product at low
price. This will enable Little Dessert Shop to produce high quality products and avail them for
customers at low price. In order to ensure long-term viability of business Little Dessert Shop
using its power in suppliers can acquire required inputs for different products and create variety
in its offerings. Effective quality and attractive variety at low prices can be a competitive
advantage for Little Dessert Shop.
Macro environmental factors
Economical Factor
Economical factor involves economic activities and their impact on financial conditions
of organisation. This is one of the very important macro environmental factors to affect overall
condition of organisation. This involves different economic and financial regulations (Visnja and
et.al., 2016). Little Dessert Shop is a small organisation and this is why gets affected by
regulations for small organisations. In order to help improve business of Little Dessert Shop it
can avail for benefits to small organisations. In this increasing disposable income of people for
food products and preference of healthy food is economic factor.
Social Factor
This is another important factor that affects and influences Little Dessert Shop. Social
factor involves customers and their preference and taste regarding product and services of Little
Dessert Shop. Further this involve considering cultural factors, health consciousness, and growth
of population and other demographic elements of population (Tur-Porcar, Roig-Tierno and
Llorca Mestre, 2018). In this macro factors elements regarding success of products of Little
Dessert Shop are involved. In order to improve business Little Dessert Shop can utilise
opportunities that are available in increasing demand for healthy food, vegan and natural food
and sugar-free desserts.
Technological Factor
Technology has become centre of organisation’s success and this is why it is important
that Little Dessert Shop also consider this factor. Technological factors affecting Little Dessert

Shop involves technology and system developed for producing high quality desserts (Kim and
Lee, 2020). Other than this, Little Dessert Shop can improve its business and its performance
through increasing distribution channels and online promotions and marketing of Little Dessert
Shop.
This means that there are certain elements involved in every factor that Little Dessert
Shop can utilise to improve business performance.
CONCLUSION
On the basis of above discussion, it can be concluded that partnership is an very
beneficial business type and this is because evaluation outlines that there are more advantages
and less disadvantages and disadvantages can be removed. Further report discussed about
porter’s five forces and discussion suggests that Little Dessert Shop is operating in a very
competitive and complex environment but still its high power of suppliers bargaining power has
an opportunity for Little Dessert Shop. This means that using this it can make positive impact on
business. Further report discussed about macro environment affecting and influencing Little
Dessert Shop and discussion outlined that every factor discussed has some type of opportunity
that Little Dessert Shop can utilise in order to improve its business operations and functioning.
Further it also requires identifying opportunities in its macro environment in order to ensure
success of business.

REFERENCES
Books and Journals
Dong, C. and Rim, H., 2019. Exploring nonprofit-business partnerships on Twitter from a
network perspective. Public relations review. 45(1). pp.104-118.
Isabelle, D and et.al., 2020. Is Porter's Five Forces Framework Still Relevant? A study of the
capital/labour intensity continuum via mining and IT industries. Technology
Innovation Management Review. 10(6).
Kim, S.S. and Lee, H.Y., 2020, September. A Study on the Factors Affecting the Performance of
SMEs. In European Conference on Innovation and Entrepreneurship (pp. 798-807).
Academic Conferences International Limited.
Savickaitė, Ž., 2020. Framework for sustainable public and private partnerships: business
perspective.
Tur-Porcar, A., Roig-Tierno, N. and Llorca Mestre, A., 2018. Factors affecting entrepreneurship
and business sustainability. Sustainability. 10(2). p.452.
Varelas, S. and Georgopoulos, N., 2017. Porter’s competitive forces in the modern globalized
hospitality sector–the case of a Greek tourism destination. J Tour Res. 18. pp.121-
131.
Visnja, I and et.al., 2016. Economic Factors Affecting Business Decision Making.
Online
What is Partnership? 2020. [Online]. Available Through: < https://byjus.com/commerce/what-is-
partnership/>
.