Factors to Consider for Small Business Resource Selection and Customer Relationship Management

This report discusses the factors that small businesses need to consider when selecting resources to achieve their objectives, such as accessibility, cost, sustainability, and technology. It also explains customer relationship management and its main components, such as strategy and collaboration. Additionally, the report covers transnational development and its benefits and drawbacks, break-even analysis, financial statements, and legislations affecting SMEs. The report provides evidence from financial statements to evaluate the performance of EIS Café and suggests ways to improve its operations.

Unit 29 Assessment
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
The factors that a small business needs to consider when choosing the right resources to
complete their objectives/goals. ............................................................................................3
Define the term Customer relationship management. Explain the main areas within customer
research management and provide the advantages and disadvantages of each area..............4
Define the term transnational development and the ways of expanding business
internationally. Also mention the benefits and drawbacks of transnational development.....5
Explain what break even analysis is and how it is used to solve the problem.......................6
Define financial statements and find some financial statements and interpret them. Explain
how well you feel the company is performing and why. Use evidence from the financial
statements. Then explain how the statements can be used to improve the running of that
business...................................................................................................................................8
Define the term legislation and discuss few legislations which affect upon SME...............10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
The decision making process of the organisation requires a critical analysis of macro and
micro factors which help the organisation in terms of bringing the best results in organisation.
The objective of organisation is to increase the profitability by using different set of strategies
and techniques. In this report EIS Café is considered which is based in Birmingham, UK. This is
a small business dealing in bakery and desert products. In this report, the business related issues
are discussed which are crucial for organisation to sustain in the business environment. Customer
relationship management of the organisation is discussed in context of the respective
organisation along with the advantages and disadvantage. Further Break even analysis is
conducted for the organisation along with the interpretation of financial documents of the
respective company.
MAIN BODY
The factors that a small business needs to consider when choosing the right resources to
complete their objectives/goals.
There are a range of factors that the organisation need to consider in order to attain the set
objectives and goals in the organisation. The factors that must be critically assessed by small
businesses for choosing the right resources in the organisation are further discussed below: Accessibility- The business environment is dynamic and requires the organisation to be
adaptable in order to increase productivity in organisation (Rosanti, 2021). The
accessibility of the resources plays an important role in terms of bringing the resources to
best use possible. The organisation must use a range of techniques through which the
resources equipped in EIS Café can deliver the maximum results in the market. Cost of the resources- The cost of the resources plays an important role in the small
business as these organisations have limited funds and these funds must be used in the
best way possible. The organisation must consider the cost of substitute products and
equip resources according to the needs. Preparation of budget- The organisation should prepare a budget before choosing the
resources as the organisation will prepare the cost that they should allot to different
resource requirement. The budget must consist of all the resources and parts which will
be required in the near future operations of the organisations.
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 Sustainability- Before choosing the resources it is essential for the organisation to check
if they support the concept of sustainability or not. The resources should be environment
friendly and should sustain in the business environment for longer period of time. The
resources selected in EIS Café must serve the purpose of society by contributing to the
green movement of the environment.
 Resources must be upgraded- The resources deployed in the organisation must be
upgraded in terms of technology so that the organisation can compete in the environment
(Alnakhi and et. al., 2019). The organisation must use the new and upgraded technology
as the other organisations in the environment are also evolving with the advancement.
Therefore, it is essential for the organisation to use a range of advanced technology in the
resources so that the productivity can be maximized in EIS Café.
Define the term Customer relationship management. Explain the main areas within customer
research management and provide the advantages and disadvantages of each area.
Customer relationship management refers to the technology that is used by the organisation
to manage all the relationships that exist with the customers (Zerbino and et. al., 2018). It further
helps in interacting with the potential customer and delivering the best results within the
organisation. The organisation must use a variety of strategies within the organisation which will
help in creating a stronger relationship with the customers. The organisation is required to create
a stronger relationship with the customer so that the desired objective can be attained within the
organisation. In order to improve the customer relationship management, the organisation can
use four set of components: Strategy- The strategy made by the organisation must be planned according to the action
plan so that the set objectives and goals can be achieved within the organisation. These
strategies help the organisation in terms of attaining growth and increased profitability
within the business. The strategy of the organisation must be helpful to attain the
competitive advantage within the business model.
 Collaborative- Collaboration plays an essential role in terms of integration of technology,
process and people within the organisation (Gil-Gomez and et. al., 2020). The approach
used by the organisation in terms of bridging the gap between the customers and
employees that are there in the organisation.
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Define the term transnational development and the ways of expanding business internationally.
Also mention the benefits and drawbacks of transnational development
Transnational development of a business refers to the expansion of business across the
geographical boundaries of nations (Gereffi, 2019). When a business start dealing with the
customers of other country than they are expanding their business globally which further help
them to gain high productivity and profitability.
There are few ways in which the business can expand internationally and these methods are
explained below-
Internet- It is one of the biggest reason for companies to expand their business across the
nations. Through internet they advertise their products globally from one nation to another. For
example, a company headquartered in UK can advertise their products in Asian countries
through many internet medium such as Social Media Marketing. Through SMM companies can
expand their customer base because when they advertise their product on any social media
platform than the followers of the companies get attracted toward their product and order the
product for their use.
Joint venture- When two or more companies come together to work jointly than it is called joint
venture. It is one of the best method of internationalisation of a company because here, company
analyse another company in the same industry which is having good customers base and
appropriate resources and technological condition to produce the products (de Vasconcellos,
Garrido and Parente, 2019). Here, a company make target to expand their business within a
country and analyse the popular company within that country to request for joint venture. Joint
venture help the companies to use technological tools of another company and use their customer
base for promoting and offering their product. In context of EIS Café, they can chose this option
because they are small scaled business and they can gain opportunity to use advance technology
of other bakeries in their targeted location.
Franchise- It is the method of international expansion of a business through a franchisor. For
example a company based in UK can allow the franchising in other countries and the franchisor
can use the same brand name and same procedure of producing the product. For example,
McDonald's, Burger Farm, Burger King, Domino's and many others are expanding their business
through franchising.
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There are various benefits of expanding business internationally and few of the benefits are
mentioned below-
Increase customers- The main advantage of expanding business internationally is it helps the
EIS Café to increase their customers. The company who expanded their business internationally
will become successful to expand their brand awareness among new geographical area and
hence, this will help the company to attract new customers toward the brand.
Opportunity to attract new talents for organisation- A international expansion of EIS Café is
considered as a good opportunity for a company to attract new talents for organisational
operational activities. A talented workforce help the company to improve their productivity and
profitability.
Improve company's reputation- A international company always have greater brand reputation
as compared to local companies. This will also help the company to gain competitive advantage
within their industry.
There are few drawbacks of internationalisation of a business and these are mentioned below-
Costly- It is one 0of the biggest disadvantage of expanding a new business internationally
because it require in investment for establishing the business at new place and hire new talents to
manage the business.
Time consuming to trade products- When a business choose exporting method of
internationalization then it consume a lot of time to deliver the product to customers when the
product is arriving from another country.
Increase in international competition- Another disadvantage of international growth of a
business is that they have to face huge competition within their industry.
Explain what break even analysis is and how it is used to solve the problem.
In the year 2020:
Particular Amount Amount
Sales 4950 4950
Direct material 2750
Direct labour 330
Prime cost. 3080
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Variable manufacturing overhead 440
Variable selling expenses 330
Variable administrative expenses 220 990
Contribution 880
Less : fixed cost
Fixed manufacturing 110
Fixed selling and distribution 145
Fixed administrative 67 322
Profit 558
BEP for the year 2020: (in Amount)
BEP = fixed cost / PV ratio
= 322 / 17.77%
= 1812.04
BEP (in unit) = Fixed cost / contribution per unit
= 322 / 22
= 15 units
Profit volume ratio= contribution / sales *100
= 880 / 4950 *100
= 17.77%
Margin of safety = profit / PV ratio (in amount)
= 558 / 17.77%
= 3140.12
Margin of safety = Profit / contribution per unit
= 557/ 22
= 25 units.
In the year 2021:
Selling price = 225 +25%
= 281.25
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Particular Amount Amount
Sales 6187
Direct material 2750
Direct labour 330
Prime cost. 3080
Variable manufacturing
overhead
440
Variable selling expenses 330
Variable administrative
expenses
220 990
Contribution 2117
Less : fixed cost
Fixed manufacturing 110
Fixed selling and distribution 145
Fixed administrative 67
Fixed cost 145 467
Profit 1650
BEP = fixed cost / PV ratio
= 467 / 34.22%
= 13.49
BEP = Fixed cost / contribution per unit
= 467 / 52.9
= 9 units
PV ratio = contribution / sales *100
= 2117 / 6187 *100
= 34.22%
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Define financial statements and find some financial statements and interpret them. Explain how
well you feel the company is performing and why. Use evidence from the financial
statements. Then explain how the statements can be used to improve the running of that
business
Financial statement is the collection of reports which will analyse the financial condition of a
company such as how much assets and liabilities they are having, their incomes and expenditures
and many others (Osadchy and et. al., 2018). There are few financial statements which are
explained below-
Balance sheet- It is the type of financial statement which helps to analyse the assets, liabilities
and shareholder's equity of a company. Assets are the things which is owned by the company and
which have greater value in organisational success. Liabilities are those amount of money which
is owes to others. It include money borrowed from banks and many others. On the other hand,
shareholder's equity is the capital or net worth of the company. It is considered that both asset
and liability should be equally balanced. There is a equation of balance sheet which is mentioned
below-
Asset = Liabilities + Shareholders equity
From the above picture of balance sheet it is evaluated that the EIS Café is performing well but
they are required to repay their loans and credits as soon as possible so that the company will not
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face the situation of bankruptcy. They are also suggested to increase the cash in hand for the
company which will further help them to manage their business operations appropriately and
fulfil the requirement which is needed.
Cash flow statement- It helps to analyse the inflow and outflow of cash from a company
(Palepu and et. al., 2020). This will help to analyse the expenditure of company to analyse
whether company is spending on productive activities or not.
Income statement- This financial statement helps to analyse the revenue of the company for a
specific period of time.
From the above diagram it is evaluated that company must lower than expenditure to earn more
income. Recently, the company is facing loss which is not good for the growth of company.
Hence, they are required to lower their expenses. It is suggested to the cafe that they must
analyse their productive and unproductive activities and stop spending on unproductive activities
which help the cafe to lower their expenditure and increase their revenue.
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Define the term legislation and discuss few legislations which affect upon SME.
Legislation is considered as all those laws which are made by government of a nation. It is
essential for a business to follow the laws and rules and regulations which are made by their
nation (Bokovnya, Khisamova and Begishev, 2019). It helps to maintain discipline and avoid
labour exploitation and support labour rights at workplace. There are few of the employment
legislations which are explained below-
Employment act 1996- The main aim of this law is to protect the right of labours and save them
from exploitation. There are few original provisions of the 1996 Act which is mentioned below-
 Contract of employment- It is essential for a company to provide a contract of
employment to the employee within two months of starting a new job by new employee.
This written document is the proof that the employee is hired by the company and this
contract must mention the code of conduct of employee and all policies of organisation.
 Rest Breaks- It is also essential for the employer to provide rest breaks to their
employees and this rest break will not be less than 20 minutes for the employees who
work for continuously 6 hours (Employment Rights Act 1996, 2021).
 Parental leave- It is essential for a employer to provide maternity leaves to their female
workers at the time of their pregnancy and delivery of a child. 52 weeks of maternity
leave could be provided to the needed employees.
 Employer insolvency- It states that if the employer become bankrupt and unable to pay
his/her employees than the State will compensate the employees working within the
company.
Data protection act 1998- According to this act it is compulsory for the organisation to protect
the personal data of their employees and customers (Carvalho and Spataru, 2022). In case of
leakage of data by the company or employer, a strict action could be taken by government
against employer and the company. In context of EIS Café, they must use advanced tools and
software to record the data of their customers and employees. It is essential for them to aware
their employees about the type of data which they are recording such as their personal details like
mobile number, address and many others. The employee of the company must know what their
employer is recording about them.
Company law 2006- It is the legislation which include how a company should run, manage and
financed. The main aim of this act is to modernize and simplify corporate law, to enhance
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stakeholders sights and many others (Companies Act 2006 – What is the Companies Act 2006?,
2021). It include the The UK Corporate Governance Code which mentioned few effective and
ethical practices of the company which provide benefit to organisation by maintaining relations
with stakeholders, providing them appropriate remuneration and many others. In context of EIS
Cafe, they must apply this law within their business and maintain a record of paying dividend to
their stakeholders. It is essential for them to pay fair dividend to their stakeholders.
CONCLUSION
From the above information it is concluded that there are few factors which a small bus8ines is
ned to consider while setting their goals and objectives such as cost of resources, budget and
many others. It is essential for the company to maintain their relationship with their customers
for the growth of the company. It is also concluded that the company must focus toward
international development which help them to increase their customers and profit. There are
various options of international growth such as franchise, internet and many others. It is also
essential for the company to maintain their financial statements regularly and try to reduce their
unproductive expenditure. Following all legal laws and rules will help the company to develop
their brand reputation and brand recognition.
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REFERENCES
Books and Journals
Alnakhi, W.K. and et. al., 2019. Motivational factors for choosing treatment destinations among
the patients treated overseas from the United Arab Emirates: results from the
knowledge, attitudes and perceptions survey 2012. Tropical diseases, travel medicine
and vaccines, 5(1), pp.1-17.
Bokovnya, A.Y., Khisamova, Z.I. and Begishev, I.R., 2019. Study of Russian and the UK
Legislations in Combating Digital Crimes. Helix, 9(5), pp.5458-5461.
Carvalho, P. and Spataru, C., 2022. Legislation, statutory instruments and licenses for storing
energy in UK. In Storing Energy (pp. 793-810). Elsevier.
de Vasconcellos, S.L., Garrido, I.L. and Parente, R.C., 2019. Organizational creativity as a
crucial resource for building international business competence. International Business
Review, 28(3), pp.438-449.
Gereffi, G., 2019. Global value chains and international development policy: Bringing firms,
networks and policy-engaged scholarship back in. Journal of International Business
Policy, 2(3), pp.195-210.
Gil-Gomez, H. and et. al., 2020. Customer relationship management: digital transformation and
sustainable business model innovation. Economic research-Ekonomska
istraživanja, 33(1), pp.2733-2750.
Osadchy, E.A. and et. al., 2018. Financial statements of a company as an information base for
decision-making in a transforming economy.
Palepu, K.G. and et. al., 2020. Business analysis and valuation: Using financial statements.
Cengage AU.
Rosanti, N., 2021. The Influence of Cultural, Social, Personal and Psychological Factors on
Customer's Decision of Choosing Bank Insurance.
Zerbino, P. and et. al., 2018. Big Data-enabled customer relationship management: A holistic
approach. Information Processing & Management, 54(5), pp.818-846.
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Online-
Employment Rights Act 1996, 2021 [Online] Available through:
<https://www.politics.co.uk/reference/employment-rights-act-1996/>
Companies Act 2006 – What is the Companies Act 2006?, 2021 [Online] Available through:
<https://debitoor.com/dictionary/companies-act-2006/>
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