Strategic Management for Small Businesses

This assignment delves into the crucial aspects of strategic management within small business enterprises (SMEs). It examines how SMEs can identify their strengths and weaknesses, leverage strategic alliances, and implement growth strategies like organic expansion and franchising. The document emphasizes the importance of creating effective business plans, managing change, and continuously monitoring performance improvements to achieve success in a competitive market.

SMALL BUSINESS
ENTERPRISES

INTRODUCTION
Economic condition of any nation is depend upon its number of enterprises. In UK, there
are many small businesses are developed which are assistive its growth and development. Small
business entities are those where a few number of employees are being worked and they do not
have high sales volume. SME's are implemented in order to provide something new and
innovative to the society. Their main objective is to attract wide range of customers so as to
maximise sales and make higher profitability (Altman, Sabato and Wilson, 2010). The
coursework is selected Zizzi restaurant for overall case study; it is one of the famous small
business enterprise of UK. Basically it is known for its attractive theme or decorum in local
areas. The assignment is categorized into four segments by describing the significance of small
business entities. It will be describe that managers have to use effective methods so as to get rid
from all barriers which affect firm's performance in future. There are certain ways that needs to
follow up entrepreneurs so as to cope its existing performance within target market. Furthermore,
business plans are accessible for effective completion of all working activities in a minimum
time frame.
TASK 1
1.1 Profile of small businesses and its strength and weaknesses
Profile of Zizzi restaurant: - It is one of the popular eating place in local streets of United
Kingdom; as in its initial stage the enterprise is focused to catch the interest of million of people
by providing them qualitative nutrients or eating items. Zizzi restaurant was entered by having
new and advanced ideas, i.e. impressive dinning tables and classy theme, it also offers delicious
food. Food and drinking breakages which are offered by this company are really demanded
among customers. Or we can say it is the first choice of people of local areas. Employees of
Zizzi restaurant are well-behaved with their guests; it also tries to fulfil social responsibilities.
On the other hand, the enterprise offers various types of deserts, drinking beverages, cheese food
items (Storey, 2016). Below mentioned the profile of Zizzi restaurant: -
Name – Zizzi Restaurant
Address – 20 BOW STREET, WC2E 7AW
Email - [e-mail]
Telephone – 0207 836 6101
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Opening hours – 10:30 AM to 11:00 PM
Website – www.zizzirestauraant.co.uk/
Average prices - £75 (4 courses)
Food served – Zizzy spicy nuts, calamari, gignati olives, arancini, mushroom brindisi
Open since – 1999
Type – Sophisticated fine dinning restaurant, with delicious food.
In order to get succeed in competitive market, owners of small business enterprises have
to find out those factors which will influence their future market position and profits. This
determination will be helpful for these firms as they can accomplish their aims and objectives in
the best possible manner.
Strength and weaknesses of Zizzi restaurant:
STRENGTH
 Low cost of production and high
employment rate
 Government support in terms of
financial as well as subsidies (Battisti
and Perry, 2011).
 Zizzi restaurant has maintained classy
decoration in different areas, there is a
huge space between furniture that gives
full privacy to guests. Although, it is
very useful to attract domestic as well
as foreign clients.
 Well trained and qualified staff
members who served people in an
effective manner. Attractive music and background which
WEAKNESSES
 Lack of experienced employees who
are not capable to know needs and
wants of target customers.
 Lack of good infrastructure.
 Lack of new and innovative
technologies.
 Unreliable cash flow and no market
presence.
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is assistive in bring numerous buyers.
1.2 Using comparative measures of performance
As a small commercial enterprise, Zizzi restaurant is not much prominent between
customers. Due to this, profits and sales of entire association is get affected. So that, its managers
have to implement various programmes or activities in order to measure performance.
Comparative measures of Zizzi restaurant and Cafe finix: -
Profit and loss account of Zizzi restaurant and Cafe finix for year ended 30th April 2017
are stated in the below table.
Particulars Cafe Finix (2017)
£
Zizzi Restaurant (2017)
£
Sales 150 300
Cost of Sales 80 180
Gross Profit 70 120
Overheads 10 20
Net. Profit 60 100
Balance sheet of Zizzi restaurant and Cafe Finix for year ended 30th April 2017
Year Cafe Finix
2017 (Value in £)
Zizzi Restaurant
2017 (value in £)
Fixed assets 40 30
Stock 10 15
Debtors 8 5
Bank 2 5
Total Assets 60 55
Creditors 40 35
Bank overdraft 20 20
Total Liabilities 60 55
Current ratio = current asset / current liability
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2016 2017
Net profit margin = net profit/ net sales * 100
60/150 * 100= 40
Net margin = 100/300 *100= 33.33
Gross profit margin= gross profit/ net sales *
100
70/150 *100= 46.66
Gross margin = 120/300*100= 40
Quick ratio = current asset – stock/ current
liabilities
20-10/60 = 0.166 times
Quick ratio = 25-15/55 = 0.181 times
Interpretation – As per this above data, it has been founded that net profit of was Cafe
finix was 60000 in 2017 and Zizzi restaurant has 10000. Therefore, the refereed business entity
has to use effective tools and techniques of production in order to gain high performance level of
employees.
TASK 2
2.1 Suggestions to overcome from weaknesses
In this global environment, there is several barriers that can affect growth and vitality of
small business organisations. In addition, it also generate many problems and issues in the goal
attainment process. Weaknesses put a huge impact on decision making operations of the
company and reducing employee productivity (Blackburn, Hart and Wainwright, 2013).
Therefore, it is must for small business entities to find out appropriate solutions for it so as to get
high market expansion. An effective business strategy will be helpful in to get rid out from
negativity and further obstacles. There is given certain recommendations in order to overcome
with weaknesses, such are stated as under: -
Free flow of communication
It is a foremost method that aids business owners to get the better of from all weaknesses.
In this regard, management have to implement an adequate communication channel in their
business entity. Through which employees can share their ideas with managers and find
appropriate solutions for working problems and issues. Effective communication can also
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establish cooperation and coordination among staff members as they can make important
conclusions towards working activities or operations. Apart from this, it also acts as motivational
tool which encourages workers as they can perform in well being mannered.
Sufficient capital
Strong finance is the life blood of business organisation, it is main reason for their growth
and vitality in competitive market. Managers of small business organisations have to identify
different ways from where they can increase their funds and make attractive operations. Apart
from this, owners of Zizzi restaurant have to certain amount of money; this contribute in
conducting various promotional and marketing activities. So that, customers can know about it
and its products as well (Bridge and O'Neill, 2012).
Having clear objectives
If a firm has clear business objectives then it can easily perform in competitive market.
Such aims and targets give directions to business functions. Along with this, the refereed
business organisation has its own vision and mission. In order to achieve it, the firm is
continuously practising, so as to get high competitive advantages. If a firm has certain goals then
it can easily grab itself and concerned to reach them in the best possible manner.
2.2 Ways to maintain existing performance of the firm
In order to get maximum benefits of competitive environment, it is indispensable for
small organisations to carrying out their current performance level. There is given various ways
in order to maintain existing performance and productivity of a firm, such are discussed as
below: - Produce high quality products and services – It is the common method of managing
current business performance in competitive market. If small business organisations will
be provided qualitative and delicious food products to its customers then this can easily
increases their sales and make higher profitability. Therefore, it is necessary for Zizzi
restaurant to serve value added food products to its guests in order to attract and retain
them for long time of span. Apart from this, the firm also have to emphasis on creating a
healthy and positive working for its staff members as they can produce in an effective
manner (Buck, 2011). Provide training and development to employees - For competing with external rivals,
small business entities need to render training and development assists to their workers. It
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would assistive in bettering skills and boost up knowledge of employees for a specific
topic. Well skilled and qualified employees are capable to produce new and unique
products through which customers are retain for long term period. These training sessions
are also assistive in managing positive relationship among managers and their
subordinates. If all persons will be worked together than any firm can achieve its goals
and objectives in a certain time framework. Focuses on marketing research – Managers have to focuses on marketing research, it
will be contribute in recognising customers needs and wants. If Zizzi will be adequate or
efficient to gratifying all requirements of its consumers then this can easily enhancing its
sales as well as market area in a systematic way.
 Using new technologies – Now these days, there are available different tools and
techniques which facilitates production process of small business organisations (Burns,
2010). In order to get high competitive, entrepreneurs have to try latest technologies so as
to create innovative products and diminishes the cost of production. This will save efforts
and time staff members.
2.3 Justify new areas in which a business could expand itself
Below mentioned various areas of market expansion: - Organic growth – This strategy gives strengthen to business functions by organic growth.
In addition, if a business organisation will spend its all profits into quality improvement
activities, then it can offers high value to its customers. Along with this, organic growth
is also beneficial in maximising firm's market share by improvising customers retention.
It encompasses, reinvesting profits into marketing activities and sales so as to improve
customers relationships. On the other hand, organic growth strategy present business
risks. Strategic alliance – It refers as a deal or contract between two business organisations
which are decided to share their resources and profits by undertaking a specific project. It
would help small business entities so as to develop in an adequate process therefore, they
can expand their market share over other competitors (Demil and Lecocq, 2010).
Furthermore, the main objective of strategic alliance is to connect two commercial
entities for the achievement of common goal and objective. It is done to gain short or
long term growth in a minimum time period. Often it allows companies to pursue
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opportunities quickly rather than if they functioned individually. If Zizzi restaurant, adopt
the concept of strategic alliance then it will increases its resources as well as of other
parties.
 Franchising – It is also a foremost tool that is adopted by small business organisations in
order to increase market growth and vitality. Franchising is also known as agreement in
which one party gives all rights to another one as it can sell products and services by
using its sign or trademark. Franchisee and franchisor are two main players of franchising
business. Now these days, many small business entities are worked on behalf of other
multinational business organisations so as to sell their products and services. With this
assistance, many customers get knowledge about firm, therefore it can be said that
franchising work as a marketing tool for many businesses.
TASK 3
3.1 Produce a business plan and business objectives
A business plan is a framework that look ahead for a business. It involves allocation of
resources, determine solution for problems and emphasis on key points as well as opportunities.
Along with this, business plan is very essential for smoothly running of any commercial entity.
SME's have to make plans so as to ensure development and optimise market growth. While
making business planning, decisions owners have to set various tasks as per their priorities
(Fassin, Van Rossem and Buelens, 2011). Its a written statement which encompasses definite
strategies so as to reach goals and targets in a pervasive way. Business plan of any start up
entails its vision and mission statements, market as well as break even analysis, keys of
advancement etc. this is sufficient to adjudicate business worth and its overall life cycle.
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(Source: Business Model vs. Business Plan, 2017)
While formulating a business plan, entrepreneurs are required to set objectives. There are
given fundamental objectives of a small business unit: -
 To create higher employment for lower section of society as well.
 To diminish regional imbalances
 To boost up the living standard of people Adoption of new technologies so as to produce in better manner.
Steps of a business plan Idea generation – It is an imperative step through which a proper business plan can be
made. Firstly, managers have to create new and unique ideas or conceptions with that
they can grow and diversify themselves in target market. Furthermore, ideas can be
linked with visualise market disparity and add quality in services or facilities of the
company. Market research – In this stage, managers have to conduct an effective market research.
With this assistance, they can know needs and wants of people. Market research will be
also assistive in maintaining healthy and positive relationship with customers (Gronum,
Verreynne and Kastelle, 2012). In addition, managers also recognise current market
trends and strength of competitors. After this, they are capable to make effective plans
and policies against competitors.
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Illustration 1: Business plan

 Developing a marketing strategy – In order to implement successful business planning
managers have to develop an adequate marketing strategy. It could be assistive in order to
vantage high competitive edge from global environment. Analysing financial situation – By using different tools and techniques managers can
examine their financial condition. Strong financial condition is beneficial in adopting
effective methods of production so as that firm can extend productivity of staff members
(Helms and Nixon, 2010).
 Formulation of the plan - At last, business plan regulates in organisation while
consulting it with all employees. It helps them to getting knowledge about how to
accomplish a task to meet aims of business plan.
3.2 Revision of a business plan
Alteration in a business plan is least eminent work for all small businesses. It is done for
making modifications in business policies or actions. Revision could be done as per the
requirement of market trends and customers demands'. An adequate commercial plan is
susceptible for growth and vitality of any business entity cause it is capable to cover up all the
necessary factors which are assistive in attaining vision and mission of the company. Apart from
this, revision of a business plan is a process through which administration can ascertain all
concealed hindrances and circumstances that will bear upon its incumbent market position.
Making alterations in existing plan and make it more sustainable is the prime task of a business
plan (Herbane, 2010). Furthermore, it also put a huge influence on decisional process of small
business entities and also determine future risks and uncertainties. With this assistance, owners
can also find out the areas in which they could expand themselves and get higher market
ontogeny. Therefore, managers of mentioned enterprise should to revising their business plan so
as to make fundamental changes. Therefore, implementation of new strategies in business plan
helps a firm to achieve its goals and objectives. It involves that decision makers have to
emphasis on their weaknesses and keep working on them. This is very eminent tasks for
management. For example- quality is one of the major problem for refereed business. In this
perspective they need to hire who are capable to give maximum level of satisfaction. Another
issue is weak financial position of the company. So that management tries to get funds and
capital from different sources, i.e. banks, creditors etc. If SME's have unique business plan as
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they can easily attract different shareholders so as to maximise financial capability of the firm
(Malhotra and Temponi, 2010).
While revising of a business plan, higher authorities also have to make changes in their
goals and objectives. For this purpose, the firm can endorse the concept of SMART targets. If
companies wants to access to its goals and objectives then they need to look on such things in
systematic proper manner (Thornton, Ribeiro-Soriano and Urbano, 2011).
3.3 Develop an action plan
It is essential for every firm to develop an action plan for implementing appropriate
changes. It enables effectiveness of projects which needs to be achieved in a certain time period.
Action plan is also reclaimable for management so as to complete of business functions and
tasks. It can be seem as a controllable tool that can demonstrate performance standards and
values. While formulation of a business plan, entrepreneurs can use different techniques: - agree
on objectives, allocation responsibilities, set time frames, establish communication channels etc.
Furthermore, an action plan gives direct response towards all activities so as employees
can raise their performances and skills (Marston and et. al., 2011). An action keep managers up
to date certain changes in business environment. It is crucial for management to develop
effective strategies with which work could be done in proper manner. If management found any
sort of deviation in operations they need to take strict actions upon it. For this, they also have to
make marketing strategies in order to make successful projects. Afterwards, they need to set
some priorities which must be completed initially. Then, future outcomes are determined. Below
mentioned some major activities which are involved in an action plan: -
Aims Actions Priority Benefits Material
resources
Time
scale
Responsibilit
ies
Monitorin
g strategy
Higher
customer
satisfactio
n level
Managers
have to
provide
them
qualitative
and value
added
products.
Very
important
This will
help a firm
to achieve
its vision
and
mission in
a certain
time
Need more
money for
conductin
g market
surveys.
2
months.
Production
and operation
department
By online
surveys in
order to
take
feedbacks
and
reviews
from
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They can
also
conduct
certain
marketing
campaigns
so as to
attain and
retain
large
group of
customers.
framework
.
buyers.
Providing
training
and
developme
nt
assistance
Helps in
rising
skills and
competenc
ies of
employees
.
Important Helps in
maximisin
g sales and
profits of
the firm.
Experts
and
Training
sessions.
1.5
month.
Human
resource
department
By
examining
their
performan
ce and
monitoring
production
level.
TASK 4
4.1 Impact of proposed on business and personnel
Variations in business functions highly bear upon its overall actions and policies; in
positive and negative manner. These changes not only influence evolvement of an entity but also
affect on the processes of entire association in which it operates. Along with this, proposed
alterations can aids in achieving high competitive advantages over its competitors. In Zizzi
restaurant, all functions are interlinked with each other, so that if managers make any
reformation it also bear upon the entire business association (Mensh and et. al., 2013).
Sometimes changes are liable for managing working practices in an appropriate manner whereas
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sometime it becomes the prime reason behind major financial losses. Therefore it can be said
that changes affect business as well as its human beings.
Impact on businesses
It is very cleared that environmental changes can hinder overall business association. For
example- if managers of Zizzi restuarant make proposed modifications in order to resoluteness
financial issues. In this context, new venture affect overall activities and function. With this, firm
is able to adopt new and strong tools of production. Apart from this, changes could be made up
for improving overall organisational structure in which employee get healthy and positive
working environment.
Impact on personnel
It involves that if management make certain changes in order to improvise skills and
knowledge of staff members. If employees' will be produce in better manner then firm can easily
attain its aims and targets in a certain time period. Due to tight working schedule, an action plan
is projected to recruit new employees who have abilities to work in new projects who are capable
to carry forward the operations very smoothly (Petit, 2012). Then, this could reduces working
schedule of people within workplace. In addition, changes also assistive in increasing workers'
morale through they can motivate to perform any tasks.
4.2 How changes will be managed
Change management refers to manage all those aspects which will influence a business
and its performance in target market. It provides important directions which is required to cope
all operations and activities in a systematic way. Although, this would help a firms to accomplish
sustainable advantages. Change management process will accessible in taking essential decisions
so that employees can effectively perform in different functional areas. The change work is
categorized into three parts, such as -
Current → Transition → Future
In order to briefly understand the process of change management, readers have to go
through Kotter's approach of change management.
Kotter's eight step processes is described as below:-
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(Source: Change Management, 2017)
 Establishment a sense of urgency by examining market as well as competitive realities. It
also involves creation of the catalyst for any changes.
 Form a powerful coaliation through evolving strategies so as to attain goals and
objectives. Managers also can assemble a group of people who have enough power to
make efforts regrading any changes.
 Create a vision which gives direction and guidance to change management activities.
 Communicate the vision within workplace. It can be done through by using attractive
channels of communication so as to guide and lead coalition by various examples.
 Empowering or influence other as they can react towards vision. In this perspective,
managers have to remove all obstacles for change management process (Rae, 2010).
 Planning of short term goals. For example- taking actions for improving performance.
Employers can also initiates to staff members by giving them appreciations or rewards.
 Consolidating improvements and again emphasise on formulating more changes.
 Institutionalising new approaches by developing leadership styles and managerial skills.
4.3 Monitor improvements in performance level
Small business enterprises have to always evaluate on the progress of business plans.
They need to keep track of all activities as they can prepare effective action plans. It has to be
updated as per the completion of tasks so as managers can determine the progress of proposed
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Illustration 2: Change management plan

changes. Furthermore, it is necessary for business entities to have effective control measures for
handling deviations. They also have to be different documents and past records of deviations in
order to take future business decisions (Schaper and et. al., 2014). Management could be adopted
various tools of performance measurement, such as- key performance indicators, management of
objectives, 360 degree feedbacks etc. On the other hand, action needs to be timely up gradation
and it must be revised as well as circulated in teams therefore, every people can aware about it.
The firm also have to be document lessons as this would help it to applying certain
modifications. With this assistance, any firm can attain its goals and objectives.
CONCLUSION
From the above mentioned report, it has been concluded that small business units plays a
vital role in economic ontogeny and vitality of a nation. In order to get high competitive
advantages, entrepreneurs have to identify strength and weaknesses of their business so as to
make effective conclusions in order to resolve all barriers which will affect firm's performance.
Apart from this, managers needs to make a comparison between performance level of two years
so as to determine the areas in which they need to perform. With the help of strategic alliance,
organic growth strategy and franchising, SME's would spread their functional areas in a short
time of span. Another task is of this report is emphasised upon creating an impressive business
plan as to achieve business goals and objectives. In order to implement certain changes, business
owners have to revise their business plans so as to get better outcomes. The documentation is
also enlighten impact of proposed changes on working activities as well as personnel.
Entrepreneurs also have to evaluate performance improvements in order to determine the
progress of business plan.
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REFERENCES
Books and Journals
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