Evaluation of Partnership as a Business Organization

This report evaluates partnership as a business organization using the example of Mary & Sue's Little Dessert Shop. It also applies Porter's Five Forces to analyze the shop's competitive advantage and discusses macro environmental factors for business improvement.

Introduction to Business

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
1Evaluation of partnership as a business organisations in respect with Mary & Sue Little
dessert shop............................................................................................................................4
2Application of porters five forces for analysing of “Little Dessert shop” and advise on
management of such forces to achieve higher competitive advantage...................................5
3Discussion of macro environmental factors with reference to improvement of businesses.7
CONCLUSION................................................................................................................................9
REFERENCE...................................................................................................................................9

INTRODUCTION
There are different types of business organisation based on the legal formation and other
associated features such as sole partnership, companies, partnerships. Depending on the legal
formation of a business it is different from other associated forms. Present report is based on
making a detailed analysis of evaluating partnership as a type of business with reference to the
partnership business of Mary and Sue with their venture of “Little dessert shop”. There is
application of porters five forces to advice how Mary and sure can achieve a competitive
advantage by management of these forces (Shafiq and et.al 2019). Further there is discussion of
various macro environmental factors that can assist in achievement of business improvement.
MAIN BODY
Evaluation of partnership as a business organisations in respect with Mary & Sue Little dessert
shop
Partnership is a business organisation that consist of two or more individuals coming
together for the purpose of sharing of profits and losses in a business. They are willing to share
all the cost, risks, responsibilities and benefits of running the business (Mustikaningsih and et.al
2019). The agreed profit sharing ration is pre decided and each partners has to pay taxes on their
agreed profit sharing percentage. Partnership is a type of business that is basically divided in two
parts that is general partnership & limited partnerships. In limited partnership has both general
and limited partners.
General partnership is operating the Business and are serving as investors, they do not posses
control over the company and are subjected to some liabilities as general partners.
Limited partnership are not the best choice of business as it consist of lot of filings and the
administrative complexities.
Personal liability is the major concern of general partnership as general partners are personally
liable for partnerships debts and obligations. Each general partner is acting on behalf of
partnership debts and obligations. Their decisions are affecting and binding on partners.
In partnership business each partner may be liable for negligence and misconduct. The Profits
and losses are to be shared between the partners according to the agreed ratio.
The type of partnership business shared by Mary and sue is based on general partnership as they
both have contributed towards 30,000 pounds and have secured a 3 year lease on shop

(PurnomoSuryana,and Sari, 2018). They are also contributing towards working capital to ensure
that they posses enough stock of products. Partnership is one of the most suitable type of
business because there is a proper partnership agreement formed via legal agreement amongst all
partners, it is not continued after the death of a partners it its insanity, the minimum number of
members required is two, there is presence of mutual agency as all the decisions are made by
partners.
Application of porters five forces for analysing of “Little Dessert shop” and advise on
management of such forces to achieve higher competitive advantage
For the purpose of understand the way porters five forces are affecting Little desert
shop there is a need to focus on analysing the five major factors that are affecting Little dessert
and achievement of higher competitive advantage:
Bargaining power of suppliers: It is related with little desert willing to maintain long
term relationship with their suppliers so that they can get all the required raw materials at the
Competitive prices. So little desert must focus on buying in bulk from their leading suppliers
cash & carry so that they are able to get a competitive advantage in terms of prices and they are
able to offer their final products at low prices to their customers. In this situation the bargaining
power of cash and carry is low as they are offering low priced raw materials.
Threat of new entrants: In the present situation of COVID outbreak the overall threat of
new entrants is low as no new entity is willing to make high investment in the hospitality sector
because of uncertain scenario of customer demands and preferences (ÖNEREN, ARAR and
YURDAKUL, 2017).
Threat of substitution: It is the factor that is related to presence of number of competitors
that can lead to customers easily switching to similar type of products. There are some other
dessert shops such as Kaspa's dessert shop that are present in the same location and is leading to
high threat of substitution for “The Little dessert”.
Bargaining power of customers: If Customers are having large number of options then
they are having higher bargaining power as they can easily switch between the different brands
easily because of zero switching cost. The bargaining power of buyers for Little dessert is
moderate it is because of presence of similar competitors but at same little dessert posses a
competitive advantage in terms of friendly services, high quality and healthy ingredients that
they are using in their products.

Industrial rivalry: the overall industrial rivalry of “The little dessert”: shop is high
because of presence of three major competitors that are creams cafe, sweet escape cafe and
Kaspas Desserts. But they have able to maintain it by using of their key advantage of prime
location, focussing on different target segments that is teenagers, young adults, offering friendly
services, healthy product ingredients and all this at low prices. But there has to be increased
focus on the promotional techniques in order to achieve a high competitive advantage.

From the above made analysis it can be summarized that “The little dessert shop”
achieve a higher competitive advantage by focussing on their local organic farms for enhancing
the quality of their products and their target segment of customers who are willing to eat healthy
(Coombesand Nicholson, 2020). The product range can be diversified towards launching of some
new products such hot desserts like brownie, hot chocolates, hot beverages so that some special
menu can be formed for coming winters.
Discussion of macro environmental factors with reference to improvement of businesses
For the purpose of making necessary improvement in the COVID outbreak situation little
desert shop have to ensure that they are making a in depth analysis of the external environment
so that there can be formation of adequate strategies in order to deal with the changing
uncertainties of the external market situation. For this there are three major factors of the
PESTLE analysis that have been discussed that is posing a impact on The little dessert and the
way it is going to recover from it in the coming future time period after post COVID outbreak.
Economic factors:
The present situation has impacted inflation level of countries that can leads to decrease
in the purchasing power of people so which subsequently can be seen the demand level of the
product of the Little Desert Shop. The purchasing power of people have declined in the present
situation and they are willing to focus only on the necessary essential commodities. So there is a
need to ensure that the prices are set according to affordable range so that there can be timely
dealing with the future sales prospective (Alabsy, 2016).
Social Factor-
Country has the multiracial ad multicultural population. If we talk about the preferences
of the customer related to food product in the country then during COVID impact people were
preferring healthy food items and are becoming more health conscious as they were increasingly
avoided to have unhealthy food items (KADŁUBEK, 2016). Now the impact is going low and
people have many safety measures that lead towards enhancement of product demand. Further if
little dessert shop will launch a new product range for winters then it is going to maintain the
future sales level.
Legal factors:
There are certain legal factors that are affecting the present state of Little desert such as the
partnership contract between Mary and sue is also a result of formation of a legal partnership

between them. This is governed by all the issues that are part of desert shop such as all the safety
ensures have to be properly undertaken in the situation of COVID-19 impact that include proper
sanitisation safety measures for customers. If there will be proper adherence then it is going to
lead towards a positive impact on the mental state of the target segment of customers.
Above mentioned are some of the factors that are part of the changing macro environment that
have to be timely dealt in order to ensure that there can be maximisation of sales and the future
strategy of product expansion in the coming winters will also be successfully implemented.

CONCLUSION
From above discussed scenario it can be said that the present outbreak of coronavirus has
created a impact on may different business because of the changing preferences of customers.
The present situation there has to be focus on achievement of higher competitive advantage by
focussing on high differentiation of products. In this the factors such as product range, location
of shop, targetting different segment of customers can lead to achievement of higher customer
loyalty.

REFERENCE
Books & Journal
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model through financial inclusion and marketing strategy in Balochistan-Pakistan.
European Online Journal of Natural and Social Sciences: Proceedings, 8(4 (s)), pp.pp-99.
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.
Coombes, P.H. and Nicholson, J., 2020. Exploring dynamic capabilities in open business
models: The case of a public–private sector partnership. The International Journal of
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KADŁUBEK, M., 2016. The Analysis of the Impact of Macro-environmental Factors on
Management of Logistics Service Provided by the Selected Company. Valahian Journal of
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