Managing Growth in SMEs and Family Business - (Doc)

Managing Growth in
SMEs and Family
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
Overview of Food Attraction Limited....................................................................................3
SWOT Analysis......................................................................................................................7
Growth Plan............................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Small and medium enterprises are those organisations where the quantum of employees
does not exceed 250 employees. It is essential that SMEs are given the opportunity as well as
scope to carry out expansion of operations and functions (Ingley, Khlif and Karoui, 2017).
Further, family business refers to an organisation which is run and managed by one or more of
the family members. The present report is based on Food Attraction Ltd. which is a family based
food suppliers situated in Leicester, UK. This report will take into account the product market,
structure and type of company. Further, it includes SWOT analysis of company along with a
growth plan to deal with some key issues being faced by this family business.
Overview of Food Attraction Limited
This company is a family owned, run and managed food manufacturing business that
operates within the confines of United Kingdom. This organisation offers products of superior
quality, which are unique to the sector in which it deals and majority of the famous brands have
failed to imitate the goods provided by this small venture. This business is owned and managed
collectively by three family members and was launched into more than 2500 outlets within the
year 2018 (The best family-owned businesses in the UK, 2017). The famous brands to which it
offers and delivers its food supplies include Spar, Co-op, Budgens, Londis as well as one of the
most famous and largest supermarket chain named Sainsbury’s. The turnover for this family
owned business in the year 2018 was approximately £5million.
Their service is BRC A Grade and is known to be highly versatile. This allows the
organisation to carry out production of a wide variety of goods ranging from finger foods to
readymade meals as well as a great range of hand held snacks items. Their range of hand-held
snacks comprise of the well renowned 'NAANSTER' which is a product range produced with the
help of fresh Mango Chutney, Naan, sauce, pilau rice and chicken or vegetables (depending upon
type of food required- vegetarian or non-vegetarian). Some of the most famous flavours that this
family owned business offers are Balti Chicken, Chicken Tikka, Vegetable Tikka and Beef
Madras.
The most NEW addition made to the food being offered and delivered by them is
'STOWIES' which can be comprehended to be a range of filled pizza coming in wide varities
such as Meatball Marinara, Margherita, BBQ Chicken and Pepperoni. All of the before
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mentioned varieties are firstly folded in a new and fresh pizza base and then filled by the entity
with a traditional kind of pomadora sauce, traditional meatballs, BBQ Chicken, pepperoni and
lastly topped with the Mozzarella cheese to make it more smooth and tasty for eating. Further,
this organisation is planning to come up with a number of new products which will be introduced
in due course of time with the aim to enhance the sales and profitability of business. Further,
such new products are also being planned to be launched by the family owned business so as to
give a strong boost to the Food & Beverage sector, take it to a whole new level by incorporating
some unique and creative items in the menu of Food Attraction Limited and make the whole
industry even more exciting (The best family-owned businesses in the UK, 2017).
Greiner Growth Model
In the year 1972, Larry Greiner introduced an enterprise growth model for organisation
which consisted of 5 stages depicting the growth of businesses. Here, the shift towards the next
stage is hindered by way of resistance which is here referred to as the growing pains. Greiner’s
Model of Growth is a well renowned tool which is an important part of strategic management
and is generally utilised by the modern business organisations to take relevant as well as
adequate strategic and competitive decisions.
Figure 1: Greiner Growth Model
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1. Growth through creativity
In this first stage of Greiner Organisational Growth Model, the entity is found to be
relatively smaller and young. Here, the enterprise is acknowledged to be informal and
consequently the employees within such an organisation are found to display a deep sense of
loyalty. Here, the company makes use of a flat organisational structure (Schwab and et. al.,
2017). The entrepreneur in this phase is externally oriented which means that they are keen on
investing in new clients and building a strong and loyal client base. Food Attraction has
surpassed this stage and the entity has been in market for a relatively long time owing to which it
has earned a satisfactory goodwill.
Growing pains: Owing to the rapid growth of organisation and the company becoming more
complex, the entrepreneur here finds it difficult to take a significant control over the situation
and thus, a leadership crisis is found to arise (Greiner Growth Model, 2018). It is because of this
that the entrepreneur feels that the coordination as well as internal controls can not be
individually carried out by them alone. This gives rise to the need of an enhanced structure.
Owing to this stage, the owner of Food Attraction Ltd. introduced two family members into the
business to assist in handling of tasks.
2. Growth through direction
During this management stage of the model, functional managers are hired by the
entrepreneur owing to whom the middle management is developed which takes charge of
controlling the primary procedures of business. Here, the rules and procedures are formalized
and structured (Megaravalli and Sampagnaro, 2019). In case of Food Attraction, the business is
owned by two parents and their son. While the decision making power vests in the hands of
father, the other two members assist in management.
Growing pains: Owing to further growth, coordination problems increase in scale for
entrepreneur and the managers start demanding for more autonomy (Greiner Growth Model,
2018). This gives rise to an autonomy crisis. This is the reason why Food Attraction Limited is
currently facing managerial issues as the views and opinions of family members at times contrast
yet the decision taken by the owner (father) is at supreme level and is applied to overall
organisation causing discomfort and dissatisfaction among the other two family members.
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3. Growth through delegation
Here, decentralization takes control and entrepreneur delegates the essential tasks to
middle managers who are responsible for achieving organisational goals as well as objectives.
Here, a divisional structure is developed within the company with individual managers for
different product varieties (Greiner Growth Model, 2018). Food Attraction Ltd. is yet to enter
this stage and tap advantage of implementing a meritorious organisational structure across the
premises.
Growing pains: More the number of divisional managers, more the complexity within the
operations (Achtenhagen, Brunninge and Melin, 2017). Also, this makes it difficult for
entrepreneur to set coordination among all the divisions. This gives rise to the risk of
management crisis. Food Attraction Ltd possesses the capability to make use of delegation but
has to take into account the hurdles that pave the way to successfully do so.
4. Growth through coordination and control
Within the standardization phase, stress is upon setting coordination between different
units (Stenholm, Pukkinen and Heinonen, 2016). Food Attraction has not entered this stage
owing to which the organisation is currently suffering from issues associated with conflicts
taking place between middle management and entrepreneur.
Growing pains: When staff departments possess high power and there is least scope for
divisional managers, red tape crisis arises. Here, the rules make the organisation inflexible as
well as rigid.
5. Growth through cooperation
Within this phase, cooperation is set between line and staff departments. This phase
witnesses contact between employees which implies little formalisation or standardisation.
Growing pains: This stage is witnessed by a consultation crisis and the probability of declining
controls and supervision is on rise which should be feasibly considered by Food Attraction Ltd.
while entering this stage. This stage could even mean an end to the organisations unless the
option of external alliance is taken into account by business (López-Cózar-Navarro, Benito-
Hernández and Platero-Jaime, 2017).
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6. Growth through alliances
Here, in the ‘growth through undertaking’ phase, company requires good external
contacts as well as alliances. This can be carried out by way of extensive networking, mergers,
alliances etc. (Bhattacharyya, 2016).
Growing pains: Owing to the focus of enterprise upon alliances instead of its own core business,
the risk of identity crisis rises as the entity is wholly taken over by other businesses (O’Connor
and Kelly, 2017). Food Attraction Ltd. is a SME which can enter into an alliance with a brand of
UK to successfully grow in market and enhance its existing share in marketplace.
SWOT Analysis
Food Attraction Ltd. is a family owned SME which is carrying out an internal analysis so
as to gain knowledge of the internal capabilities of firm. This will assist the organisation in
finding out the probable opportunities that the market or business environment so as to tap the
advantage of these opportunities in the favour of this family owned business (Priem and Alfano,
2016).
Strengths: The strength of this business is its diverse product offerings. This
organisation provides food products with a touch of Indian flavours in it and the names of dishes
are also as per traditional structure.
Weaknesses: The organisational structure of this enterprise is flat which at times causes
discrepancies or conflicts within the organisation (The best family-owned businesses in the UK,
2017).
Opportunities: Being a family owned business, the conflicts arising within the
organisation can be easily tackled by way of introducing a divisional structure where the roles
and responsibilities of every unit or division is clearly specified so as to avoid any discrepancy
across the organisational premises.
Threats: The biggest threat to the existence of Food Attraction Ltd. is the nature of
rivalry within F&B sector which indicates that there is cut throat competition between rival
firms.
Growth Plan
Mission: “To offer fresh, healthy and high quality food at reasonable prices.”
Vision: “To become a leading sustainable business within Food & Beverage Sector.”
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Values: The core values of this organisational will be honesty, integrity, service
excellence, hygiene and food safety to ensure customers get access to high quality food.
Key changes: The changes that are proposed to be brought within a period of next 6
months are:-
 To implement a divisional organisational structure across the premises.
 To make use of social media as the marketing channel to raise awareness about the
business and its offerings among people
 To implement a system of KPI within the organisation to track the performance of every
individual at regular intervals and find out deviations from desirable performance, if any.
Goals: The short term goal of this enterprise is to incorporate the above mentioned
changes and consequently enhance the sales of company by 18% and profits by 13% by the end
of next 1 year. The long term goal is to enhance the corporate contacts with a number of large
scale companies so as to carry out expansion of operations.
Tactics and strategies: This organisation will make use of product diversification to offer
food items which are different from those of rival firms to gain the attention of population. Also,
this entity will enter into an alliance with local small businesses dealing within this sector to gain
advantage of their loyal clientele data. Further, this company will also make use of social media
platforms such as Facebook, Twitter and Instagram to create awareness among the people of UK
about the business and its products and enhance its customer base.
CONCLUSION
As per the above report, it can be concluded that growth or expansion is the key to every
business. Also, it has been analysed that SMEs and family businesses relatively have lesser
resources and funds to carry out growth of operations at regular intervals. An entity should
conduct internal analysis with the help of SWOT so as to gain knowledge about the internal
strengths and capabilities so as enhance them as well as shortcomings to take measures to reduce
them significantly. Thus, it is of prime significance that these firms take into account the issues
hampering the performance of business and make a plan to deal with these to ensure that the
business smoothly conducts business operations with high sales as well as profits.
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REFERENCES
Books and Journals
Ingley, C., Khlif, W. and Karoui, L., 2017. SME growth trajectories, transitions and board role
portfolios: A critical review and integrative model. International Small Business
Journal. 35(6). pp.729-750.
Megaravalli, A. V. and Sampagnaro, G., 2019. Predicting the growth of high-growth SMEs:
evidence from family business firms. Journal of Family Business Management. 9(1).
pp.98-109.
Schwab, L. and et. al., 2017. Sustainable business growth: exploring operations decision-
making. Journal of Global Responsibility. 8(1). pp.83-95.
Stenholm, P., Pukkinen, T. and Heinonen, J., 2016. Firm growth in family businesses—The role
of entrepreneurial orientation and the entrepreneurial activity. Journal of Small Business
Management. 54(2). pp.697-713.
Achtenhagen, L., Brunninge, O. and Melin, L., 2017. Patterns of dynamic growth in medium-
sized companies: Beyond the dichotomy of organic versus acquired growth. Long
Range Planning. 50(4). pp.457-471.
Bhattacharyya, D. K., 2016. Talent Development in Family-managed Businesses: A Cross-
organizational studies on SMEs and large business units in India. Productivity. 57(2).
p.172.
López-Cózar-Navarro, C., Benito-Hernández, S. and Platero-Jaime, M., 2017. The influence of
cooperative relations on geographical expansion and diversification strategies in family
firms. International Business Review. 26(4). pp.764-773.
Mari, M., Poggesi, S. and De Vita, L., 2016. Family embeddedness and business performance:
evidences from women-owned firms. Management Decision. 54(2). pp.476-500.
O’Connor, C. and Kelly, S., 2017. Facilitating knowledge management through filtered big data:
SME competitiveness in an agri-food sector. Journal of Knowledge Management. 21(1).
pp.156-179.
Priem, R. L. and Alfano, F., 2016. Setting new directions for the management discipline through
family business research. Journal of Family Business Strategy. 7(1). pp.58-62.
Online
Greiner Growth Model. 2018. [Online]. Available Through:
<https://www.toolshero.com/strategy/greiner-growth-model/>.
The best family-owned businesses in the UK. 2017. [Online]. Available Through:
<https://realbusiness.co.uk/the-best-family-owned-businesses-in-the-uk/>.
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