Managing small & medium sized enterprises assignment

MANAGING SMALL AND
MEDIUM SIZED
ENTERPRISES

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION ..........................................................................................................................4
FINDINGS.......................................................................................................................................4
Nature of the entrepreneur behind the venture...........................................................................4
Business concept and sources of competitive advantage...........................................................5
Current demand level and competitive environment.................................................................6
Growth and development of business to date............................................................................8
Challenges of managing and running the business....................................................................9
Current growth and development strategy (Ansoff matrix).....................................................11
Government support measures to deal with the challenges faced............................................12
CONCLUSION (Solution for pure eat).........................................................................................13
RECOMMENDATION.................................................................................................................13
REFERENCES..............................................................................................................................15

EXECUTIVE SUMMARY
The report discusses the importance of managing small business and medium sized
enterprises. Brief evaluations have been made in the report to understand the start up process of
small medium enterprises. The concept of these enterprises and sources of competitive
advantages. Also, development and growth of business to date have been explored and the
challenges which these business faces while managing and running the business are there. The
report is in the context of Pure Eats which is a Manchester based organisation. The services of
the organisation include provision of fresh and organic food products. At last, the important
government measures have been explained that can make the organisation achieve its goals and
objectives.

INTRODUCTION
The below report interviews the entrepreneur who suns a medium sized business. The business
which Interviewer runs is food company named as Pure Eats. Launched in 2014, the company is
situated in Manchester, United Kingdom and is a sole proprietorship. The organisation produces
organic food products such as packaged dairy, whole foods, etc. and sells it to consumers on
retail and e-commerce platforms. The annual profit earning of Pure Eats is £95,000 to
£1,00,000. The below report identifies the nature of the entrepreneur in the venture. The start-up
process of Pure Eats, the concept of business and its sources of competitive advantage, the
current level of demand, its challenges, SME's growth as well.
FINDINGS
Nature of the entrepreneur behind the venture
The man behind Pure Eats is an individual with great skills and knowledge. Interviewer at the
age of 20 started finding new ideas and looked for a number of options in order to start new
business. He started Pure Eats with and idea of serving people with foods which are organic and
local (Karadag, 2015). The characteristics of Mike includes creativity, innovation, being goal-
oriented, leadership and managerial skills, etc. Apart from all these characteristics, he is one of
the leading entrepreneurs in United Kingdom's medium sized enterprise businesses.
Pure eats started with a concept of making foods that are easily available and does not
require too much time and effort. These foods are prepared and sold with great packings to the
consumers. The entrepreneur of Interviewer ensured that the organisation is achieving growth
and success and the businesses is running successfully. He ensured proper skills and ideas are
being used behind the success of the business.
The entrepreneur holds effective management skills. Better management skills allows
him to manage the team properly in order to achieve set goals. Also, it makes the organisation
run its operation's smooth and effective. His learnt leadership skills allows the organisation to
have an effective leadership where employees feel motivated and inspired. These characteristics
allow the entrepreneur to manage and lead the organisation as per its set goals and objectives.
His motivational skills ensures that he is motivating the employees of his organisation
from time to time and making sure that proper growth and achievement is taking place.
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The above characteristics of Interviewer explores that he holds required skills and talents
for being an entrepreneur. He made use of required creativity, innovation, goal-orientation in
order to take his organisation towards growth and success. These skills also made him achieve
required growth in his particular business idea. The overall business and its profits rose from the
talent of Interviewer made Pure Eats a successful medium sized organisation. Start-up process
Below mentioned is the process of starting up a Small and Medium Enterprise: Setting a budget and preparing a Blue print: This is the first step where a budget is set
and blueprint is prepared for the business. In case of Pure Eats, a skilled team was set in
order to understand the requirements of the business and necessary budget was prepared.
In the budget the overall needs of the business were identified and each and every need
were provided with required budget allocation (Hillary, 2017). Finance gathering: In this step, required finances for the business are gathered. The
owner of Pure Eats explained the business idea to a number of investors. These investors
understood and evaluated the thinking behind the business. Later, some investors
accepted the idea and decided to fund the business. In this manner, Pure Eats gathered
finances for its business and ensured that the business is successfully brought into
operations. Physical Location: In this step, the location of the business was identified and
established. Having a physical location ensured that the business is having a place to run
its operations and day to day activities. Pure Eats successfully found a place in
Manchester where it set up its manufacturing plant and ensured that the business is
operating as per its requirements. At last, it started its activities and started selling its
products and services to the consumers.
 Putting a Support Team: This is the last and final step where a support team was put in
place. Pure Eats incorporated a support team where it hired an attorney, accountant,
financial advisor, incorporation specialist, etc. These people allowed the organisation to
run its operations smoothly and made sure that there are no difficulties which are
hindering its growth (Johnson, 2015).
Business concept and sources of competitive advantage
Business concept refers to the idea of the business and the basic information on which its
stands on. The products and services offered by the business and its target demographic.
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Pure Eats is a food corporation. The idea behind Pure Eats is to serve people with foods
which are organic and local. The organisation gathers its raw materials from the local farms on a
daily basis which includes dairy, fruits and vegetables. These fooredds after being gathered from
the local farms arrive at the manufacturing facilities of the organisation and are packed in
packagings which does not destroy the freshness and organic quality of them for a longer period.
The funds which were taken from the investors were 200,000 pounds at the time of
starting the business and the personal funds were 25,000 pounds. The total funds required to start
the business included 2,25,000 pounds. It helped the business required growth. The return on
investment of the business were 20% which is 56,250.
After proper packaging, the foods are later sent to the supermarkets, retail stores and are
displayed on e-commerce platforms. From these methods, the organisation earns required growth
and profits (Nguyen, 2015).
The target market includes families, office workers, youngsters and senior citizens. There
was no particular age group that the organisation targeted as its foods were available for each and
every person belonging to any age.
Also, the organisation tried selling its products and services on online platforms where it
covered a large market. Products and Services of Pure Eats were sold in different cities and
villages surrounding the town of Manchester in United Kingdom.
The competitive advantage of the organisation is its unique offerings of fresh and organic
foods directly to the consumer's doorstep. The idea served its purpose well and the people across
the country were attracted towards the organisation product and services.
Current demand level and competitive environment
Today, due to rising issues of unwanted diseases and healthcare problems. People across
the world have started adopting healthy lifestyles. As per the report of The New York Times there
is a 28% increase in healthy food habits in the American Continent between 2015-17. Adopting
healthy lifestyle has made people to eat and drink healthy foods. This has made a number of
businesses to produce the food items which are in demand. Pure Eats is entirely based on the
same principle of fulfilling these consumers needs and demands (Trianni, Cagno and Farné,
2016). The organisation is producing food items which are fresh and organic.
The above scenario explains that the demand in healthy lifestyles of people has made a
number of people to choose healthy food options. Pure Eats has seen huge opportunities to
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increase its profitability and business demands. Along with it, the organisation is doing its best in
marketing and promotion of the products and services to increase profits and expand the overall
infrastructure and services.
Rising consumer demands has made a lot of businesses aware about the new choices and
trends of these people. These choices have made businesses to look for options to serve these
demands and earn profits (Brunswicker and Vanhaverbeke, 2015). Big organisations such as
Tesco, Whole foods, etc. have also invested in these demands of the consumers. In order to deal
with these demands the organisation has started producing products and services are per the new
trends and developments. Also, they have maintained their service of the best organic products
and services.
Porter Five Forces Power of Buyers: The organisation is having a small scale of consumer base. The buyers
of the organisation are very less and it provides the power to the buyers to ask for
required offers and coupons. Power of Supplier: The farmers and agricultural farms are the suppliers of the
organisation. It allows the suppliers to have good power over the company. The can ask
whatever amount they want in order to provide fresh foods and products. Threat of substitutes: Pure Eats products are fresh and unique. It provides the
organisation with the power to sell its products and services on large scale without being
impacted by anything(Haarr,Dieseth and Flåtten, 2017). Threat of new entrants: The new entrants are copying the products and services of Pure
Eats. This is making the organisation suffer in terms of growing itself.
 Competitive rivalry: The competition which the organisation is having is very less but
still there are competitors which are selling fresh foods and products. In order to deal
with this, it is important for the organisation to keep selling its products and services on
large scale.
Growth and development of business to date
Pure Eats was launched in 2014, since its start the business saw opportunities in rising
consumer demands and maintaining a good market condition. The organisation made required
developments in each and every aspect to achieve required profits and fulfilling the consumers
needs (Kato and Charoenrat, 2018). The organisation was one of the largest fresh food producers
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in the country in 2014, because the demand was low at that time. Pure Eats at its initial stage
made profits of around £10,000 to £12,000.
The management of the organisation from the earned profits ensured that new
developments are taking place. Just after 16 months of its Inception, Pure Eats managed to
double its operations capacity and the management of the organisation set up new in house teams
including marketing, human resource, administration, R&D etc. These changes made the
organisation increase its capacity of selling its products and services to the consumers and made
it develop new products as per the current needs (Wang and Yang, 2016).
After the arrival of new team and management practices the organisation saw 30%
increase in sales and 27% increase in revenue. An increase in raw material costs made the
organisation invest more in buying of required products to manufacture and sell. This time few
profits were earned but the organisation earned a new rapport in the market and earned new
consumers.
In the first quarter of 2017, Pure Eats enrolled its service on e-commerce platforms
where it sold its products on its own website and other platforms as well such as Amazon. In its
next step, the organisation created a benchmark by receiving awards from the local government
authorities which earned itself a good reputation and new customers. The profits rolled and new
consumers arrived. The overall earnings in the first quarter of 2018, were between £55,000 to
£60,000. And 20% of market share.
Challenges of managing and running the business
PEST Analysis
As business develop, Pure Foods put in place a strategic management tools is to reduce business
threats.
By analysing the Political, Economical, Social, Technological, (Francis J Aguilar 1967)factors,
Organization gain significant point of advantages.
External Internal
Political Governments policy, Political
stability,
Tax,
Industry regulations ,Global
It supports to the Pure eat to
enhance their operation
because of political support.
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trade agreement and or
restrictions
Economical Exchange rate
Globalization
Economic growth/decline
inflation
Interest rate
Cost of living
Labour cost
Consumers spending habit
This helps to enhance
economic growth of the
company because company
contributes in the country
economic as well as
profitability.
Social Consumers trends/ tastes,
fashion
Consumers buying habitats
Lifestyle factors
Career attitudes
Work life balance
Population demographic
Social factors helps to know
the current demands of the
product and service of the
pure eat(Cipd.co.uk, 2019).
Technological Automation
Innovation
Disruptive technologies
Social networking
Upgrades
Robotics
Artificial intelligence
Security
It helps to enhance the
efficiency of the company by
adopting innovative
technology.
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since its inception faced a number of challenges that made it difficult for the organisation to
maintain its smooth operations and achieve desired growth and profits. Below mentioned are the
core challenges that organisation faced since its inception: Lack of awareness: In its initial stage, the organisation found troubles in selling of its
products and services as their was not a lot of awareness about organic products and
services and healthy lifestyle choices (Jordão and Novas, 2017). In order to increase the
awareness, the organisation made use of different promotion strategies to make people
understand about new choices and developments and why healthy eating its important? Consumer preferences: Another challenge was to understand consumer preferences in
organic food and healthy lifestyles choices. The organisation has to constantly do new
researches in order to find the choices of consumers and what they like or what they do
not. It made it to constantly take interviews, surveys etc. in order to reach new markets in
order to ensure consumer satisfaction and develop products accordingly.
 Expensive Storage: The products and services of Pure Eats were organic and fresh, in
order to maintain their organic nature and freshness the organisation has to install huge
refrigerators, in order to keep its products at their optimum temperatures. The instalment
and maintenance of the refrigerators was costly for the organisation and it required huge
expenses (Armitage, Webb and Glynn, 2016).
The above mentioned challenges were faced by the organisation in order to maintain its
products and services efficiency and keeping its operations smooth.
Current growth and development strategy:
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Pure Eats recently saw a boom in the market of organic and fresh products. This made the
organisation develop and maintain its products advantage in the competitive market. In order to
deal with it, Pure Eats made use of An-soft matrix that is adopted by Pure Eats in order to ensure
required growth and development of Pure Eats: Market penetration: This strategy helps to pure eat to acquire the large market share with
the help of increasing the sales of their existing products. The pure eat can use
competitive prices as well as appropriate marketing to achieve their goals. Product development: In this strategy the pure eat focuses on development of the new
products as well as improve their existing product(Jordão and Novas, 2017).
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 Market development: In this strategy, Pure Eats is focused on to enter into a new market
with their existing products. The pure eat uses direct export strategy for entering into new
market.
 Diversification: Pure Eats focus on entering into new market with new product that helps
to attract the market. This time new marketing strategies will be adopted by the
organisation such as marketing its new products and services on social media, internet
etc.
Government support measures to deal with the challenges faced
Below mentioned are the important government support measures adopted by the
organisation to cope with the challenges faced:
In order to raise awareness of the customers it is important for the organisation to ensure
that government policies are undertaken before implementing such strategies and core
developments. The food habits of the consumers and the food and health safety laws needs to be
evaluated well before any implications. This will ensure that the organisation is moving ahead
with the set government policies (Zhou, 2016). This would allow the overall organisation to
achieve desired goals and objectives properly and gather better government support.
To understand consumer preferences the organisation needs to make use of government
standards and statistics. This measures would allow the organisation to understand current
market trends and preferences of its consumers. Along with it, these statistics would also provide
brief information to the organisation about the consumers needs and demands. It can produce its
products and services as per the needs and demands of the set statistics and would make sure
proper growth and achievement of the organisation goals.
CONCLUSION
As per the above evaluation and analysis the report explores a variety of challenges that
SME's faced in today's business environment. The made understanding explains that the
enterprise Pure Eats is facing difficulties at a variety of situations which are making it hard for
the organisation to develop its products and services and ensure proper organisational growth.
Pure Eats is facing troubles in maintaining a strong competitive advantage. New competitors
have taken over the profitability of the organisation and have made its suffer from lack of growth
and advantage. In order to deal with its competition the organisation has made use of required
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strategies and developments. At last, in order to ensure proper government support the
organisation has made use of important approaches and necessary actions. Using right marketing
strategies would allow the organisation to develop its products and services as per its own and
market needs. Also, this will ensure proper promotion and organisations reach to the market.
RECOMMENDATION
Pure eats has seen to be facing a variety of issues that are making it face proper growth
and development. These issues include competitors advantage and lack of market growth,
profitability issues etc. In order to ensure that the organisation is achieving growth it is important
to ensure that consumers preferences are being understood properly. Understanding the
consumer preferences would allow the people of the organisation to develop products and
services are per the needs of its customers (Huang, Tan and Ding, 2015). This is going to resolve
the issue of consumer shifting. After this, the organisation has to make sure that it is marketing
its products and services on a wide range of platforms. These platforms can include social media,
Television commercials, etc. These efforts alone will help the organisation to develop its
products and services and ensure better profitability and growth.
To make sure that government provides proper support to the organisation, it needs to
develop such systems where government policies are evaluated and understood well. These
policies will make sure that the organisation is facing proper government support and developing
its products and services accordingly. At last, in order to make sure that required raw materials
are in place the organisation can convince local farmers and increase their pay. This change
would bring the organisation its required growth and would ensure that there are none of the
pitfalls left which are making it face growth and development. Along with it, the management of
the organisation needs to be aware of the surrounding issues and should deal with them
effectively, this will increase their experience of problem-solving and would develop make sure
better performance of the organisation (Krishnan and Scullion, 2017).
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REFERENCES
Books and Journals
Armitage, H.M., Webb, A. and Glynn, J., 2016. The use of management accounting techniques
by small and medium‐sized enterprises: a field study of Canadian and Australian
practice. Accounting Perspectives. 15(1). pp.31-69.
Brunswicker, S. and Vanhaverbeke, W., 2015. Open innovation in small and medium‐sized
enterprises (SMEs): External knowledge sourcing strategies and internal organizational
facilitators. Journal of Small Business Management. 53(4). pp.1241-1263.
Haarr, N.L., Dieseth, L. and Flåtten, D.L., 2017. Pure Pride(Bachelor's thesis, Handelshøyskolen
BI).
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Huang, X., Tan, B.L. and Ding, X., 2015. An exploratory survey of green supply chain
management in Chinese manufacturing small and medium-sized enterprises: Pressures and
drivers. Journal of Manufacturing Technology Management. 26(1). pp.80-103.
Johnson, M.P., 2015. Sustainability management and small and medium‐sized enterprises:
Managers' awareness and implementation of innovative tools. Corporate Social
Responsibility and Environmental Management. 22(5). pp.271-285.
Jordão, R.V.D. and Novas, J.C., 2017. Knowledge management and intellectual capital in
networks of small-and medium-sized enterprises. Journal of Intellectual Capital. 18(3),
pp.667-692.
Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises: A
strategic management approach. EMAJ: Emerging Markets Journal. 5(1). pp.26-40.
Kato, M. and Charoenrat, T., 2018. Business continuity management of small and medium sized
enterprises: Evidence from Thailand. International journal of disaster risk reduction. 27,
pp.577-587.
Krishnan, T.N. and Scullion, H., 2017. Talent management and dynamic view of talent in small
and medium enterprises. Human Resource Management Review. 27(3). pp.431-441.
Nguyen, D.M., 2015. A new application model of lean management in small and medium sized
enterprises.
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Trianni, A., Cagno, E. and Farné, S., 2016. Barriers, drivers and decision-making process for
industrial energy efficiency: A broad study among manufacturing small and medium-sized
enterprises. Applied Energy.162. pp.1537-1551.
Valentim, L., Lisboa, J.V. and Franco, M., 2016. Knowledge management practices and
absorptive capacity in small and medium‐sized enterprises: is there really a linkage?. R&D
Management. 46(4). pp.711-725.
Wang, M.H. and Yang, T.Y., 2016. Investigating the success of knowledge management: An
empirical study of small-and medium-sized enterprises. Asia Pacific Management
Review. 21(2). pp.79-91.
Zhou, B., 2016. Lean principles, practices, and impacts: a study on small and medium-sized
enterprises (SMEs). Annals of Operations Research, 241(1-2). pp.457-474.
https://www.investopedia.com/terms/p/porter.asp((Accessed5April2019)
https://www.cipd.co.uk/Images/pestle-analysis-example-v2_tcm18-27108.pdf (Accessed 7 April
2019)
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Appendix
 Interview of the Entrepreneur
(10:00 am) Interviewer: What is business name and concept?
(10:02 am) Interviewee: My company’s name is Pure Eats which was established in the year
2014 at Manchester, United Kingdom. It’s a sole proprietorship company which produces
organic food products such as packaged diary.
(10:05 am) Interviewer: What is the annual turnover of your company?
(10:06 am) Interviewee: The annual profit of Pure Eats is £95,000 to £1,00,000?
(10:08 am) Interviewer: Which is your company’s target market?
(10:09 am) Interviewee: Pure Eats aims on consumers which employs healthy lifestyle choices
and institutes such as schools, colleges, hospitals, etc.
(10:10 am) Interviewer: What is the competitive advantage of your company?
(10:11 am) Interviewee: The competitive advantage of my company is its unique offerings of
fresh and organic foods directly to the consumer's doorstep.
(10:12 am) Interviewer: What are the challenges you faced?
(10:12 am) Interviewee: The major challenges my company faced was changing consumer
preference, Lack of awareness and lack of government support.
(10:13 am) Interviewer: What are the current development strategies used by Pure eats?
(10:14 am) Interviewee: We are using various strategies to achieve our company goals such
as Promotion, developing new products, recruiting new employees and focusing on research
development to know consumer needs.
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