Analysis of Ella's Kitchen: Challenges and Successes of an SME

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Managing Small and Medium Sized
Enterprise

EXECUTIVE SUMMARY
Management of small business is going through various complex situations because of the
minimum amount of funds, employees, the absence of modern technology and many more,
Along with this, if there is a presence of any new entrepreneur, then he/she might face major
issue while handling business activities. Therefore, this project has gone through the phases that
are faced by an entrepreneur of small firms for gaining market attention. Ella’s kitchen is the
most prominent example of understanding the concept of managing small and medium-sized
business because this company had encountered a number of problems before entering into a
market.

Table of Content
INTRODUCTION...........................................................................................................................1
FINDINGS.......................................................................................................................................2
Nature of Entrepreneur................................................................................................................2
Start-up processes-......................................................................................................................4
Business concept and sources of competitive advantage-...........................................................6
Current level of demand and competitive environment:-...........................................................7
Growth and development of business.........................................................................................9
Challenges of managing and running the business:-.................................................................11
SMEs current growth and development strategy:-....................................................................12
Government measures:-............................................................................................................13
CONCLUSION..............................................................................................................................14
RECOMMENDATIONS...............................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Micro, small and medium-sized enterprises are those associations which are having fewer
employ than 250 persons and not exceeding around 50 million euro turnover per annum as well
as their balance sheet is also under 43 million euro. As per the opinion of European, Union
SMEs are legally independent organizations with not more than nearly 500 employees. However,
these types of business are mostly privately owned enterprises and operate by a sole trader,
corporations or any partners (Legg and et al., 2015).
Therefore, this assignment is going to throw lights on small business named “Ella Kitchen” by
expressing every aspect related to this enterprise. This company is seen as UK’s top most baby
food brand by making 100% organic, healthy and natural food for small babies and kids without
adding a high level of sugar, salt, additives or concentrates. Thus, the main objective of this
report is to highlight all the necessary information regarding “Ella Kitchen” such as; about an
entrepreneur who has started this company, reason, size of business, challenges at start-up,
funding and many more.
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FINDINGS
Nature of Entrepreneur
Age, gender, level of education:-
Paul John Lindley is an awarded British businessperson who is 52 years old and engaged in
well-being promoter for children’s to facilitate kids with various facilities. He was born in
Sheffield, England and transferred to Lusaka, Zambia at the age of eight years old for attending
the intercontinental university of Lusaka, Barlborough Hall School and Mount St Mary’s College
in Derbyshire, UK. He has completed his graduation from the University of Bristol in economics
and political affairs after that qualified as a commissioned auditor at KPMG which is in London.
Then, he had spent his almost nine years at children’s television channel Nickelodeon where he
promoted from financial controller to a deputy managing director of UK Company.
Reason for starting the business:-
The experience that encouraged him towards setting up a business is nine years at Nickelodeon
where Paul had developed the mind-set of the marketer. This gives him an actual passion for
problems of kids and comes to known about the key milestones of growing up. At the same time,
he had also noticed that television was also responsible for the declining health of kids and
obesity. As a result, the interest of Paul in children’s health gets increased after seeing the
complexity of obesity. Ella, daughter of Paul, was born in approximately 1999 and he had faced
numerous problem for feeding her because she hadn’t like to have food. Therefore, Paul decided
to make new food by making fun of it through silliness, mess and games to encourage her
daughter towards healthy food. This shows that main objective of commencing this business is
“to make food fun and too much healthy for children’s”.
Type of business is the entrepreneur involved in-
Paul Lindley founded natural baby and nutrition brand named as “Ella’s Kitchen” in almost
2006 on the name of her daughter. The corporate organisation has several styles through which
they can offer the best to overall society. Therefore, an organisation is a more sustainable style of
creating change in the overall world. Hence, Ella’s Kitchen has become “B Corporation” in a
year which means that it’s a group of companies that are always trying to see beyond short term
profit. In fact, according to this corporation return is not only in the form of money and Ella’s
Kitchen is based on this philosophy (Ahmadi and Vogel, 2017).
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Is this the first business he has involved in-?
Paul Lindley was already involved in various other businesses before commencing Ella’s
Kitchen. He has also proposed biological preschool skincare product trademark Paddy’s toilet
after the name of his son. Along with this, he is also known for his successful book name as
Little Wins: The Power of Thinking Like a Toddler as well as engaged in launching social
enterprise and act as a co-founder of The Key is E with anterior child soldier. Additionally, he
was also assistant management executive of Nickelodeon UK (Grant and et al. 2014).
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Start-up processes-
Beginning of business:-
Paul has taken almost two years for launching his company at the marketplace, and he was
having a very little amount of savings that is approximately £20,000 for enhancing proposition.
Initial eighteen months was very tough because the company hadn’t got any distribution, but
instantly Paul has seen a green light from Sainsbury’s. Along with this, the accounting
background of Paul helped him a lot in commercial dealing on payment terms with end suppliers.
There are also two types of businesses are run without money; one is badly run ones, and another
one is that which grow too fast and work out of working capital. Therefore, Paul business falls
under the second category because his business grew too fast which resultant into the usage of
invoice financing (Anna Isaac, 2016).
Fund raised:-
Ella’s kitchen is asking various family members for providing virtual sprout to their close ones
by raising a smile in this Christmas and funds for kid’s charity organisation. It means that this
association have raised their funds through the various campaign, charity programs and social
events. For example; Russ Lidstone who was a CEO of Havas global states that: it's really
pleasuring while working with Ella’s Kitchen as well as helping a charity for kids’ enterprise.
Employees at start-up:-
The company is having almost 62 employees in their association who are handling entire
business activities and serving to the customers. Moreover, the company has almost 67 members
in their staff team from which almost 78% are female whereas nearly 22% are male and their
earnings are approximately £35000* (Garcia and et al., 2016).
Size of business at start-up:-
This business has its presence in nearly 35 territories by having almost 28% of market share
because of its biggest baby food brand in terms of value at UK marketplace with a global
turnover of approximately $100m (Bajo and et al., 2012).
Challenges at start-up:-
Paul has established his business Ella’s Kitchen in almost 2004, but still, its products haven’t
come out as his goods were launched in UK supermarkets around two years later. Yes, Paul had
also encountered numerous problems and made mistakes like another business enterprise. In the
previous year, he has given an interview in which he had a conversation on business values that
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was criticised by one supplier through email stating that “what the shit you are talking about?.
As a result, CEO Mark Cuddigan of Ella’s Kitchen went on the round for seeing that person to
apologise and asked for the suggestion in future improvement. But still, Paul had taken this
problem in a positive way by thinking that this was a very common way of human response.
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Business concept and sources of competitive advantage-
The main idea behind this business:-
It is really important that whatever idea has come out must have some set of values and ethics
while the working day has gone. Their main idea is to enhance the lives of children’s by
promoting positive connectivity with food.
What makes the business stand out?
One of the simplest things which are followed by the company is a simple pyramid or a kind of
Maslow’s hierarchy theory of needs in order to explain the structure of the business. However,
the base of the pyramid is “living” which means that business itself must able to live and be
sustainable like people who were working their must paid a living wage as well as treated in a
very well-mannered. Another step is all about “loving” own business, and whatever a person is
doing for attaining sustainability. Therefore, Paul always motivates their staff members to love
their job and enjoyed each and every moment of work. After this level, now it’s time to learn by
being prepared for making mistakes and learn how to improve problems. As per the opinion of
Paul, business is all about learning more or more by committing a mistake in life for attaining
mission. At the top of Paul pyramid is “legacy” which is the main reason behind the success of
various successful businesses because they are also worried about legacy as well as footprint
which is left by business on the public. Paul always motivates their staff members towards
legacy so that they can perform their job role in the best manner which helps in maintain their
goodwill at the marketplace (Oliver Holtaway, 2018).
How better than its competitors:-
Paul Lindley is so much creative that he had become co-founder of Consumer Forum in 2009
with numerous of other businessmen’s. Consequently, this forum has started developing a tax
relief proposal for promoting small associations towards understanding consumer requirements
for maximizing their trademark asset as well as build more high-class British brands. Therefore,
the concept of organic food makes this business far better than their competitors because every
parent wants to buy healthy products for their small babies.
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The current level of demand and competitive environment:-
Discuss Porter’s five forces:-
Porter five force model is a very holistic scheme which helps to take strategic decision instead of
just assessing the present competition. However, manager of Ella’s Kitchen not only use Porter
five forces for enhancing strategic position but also exploring profitable probabilities in the
entire service sector.
 The threat of new entrants- Emergence of new competitors comes up with creative
products, modern technique of handling businesses which pressurize this firm and
enforce to change their pricing strategy, reducing costs and offers new value propositions
to the end users. Therefore, Paul is handling all these complex situations and tries to
make a proper strategy for dealing with competition. For example; bringing creative
products or services, trying to offer a genuine reason to the old customer and use many
other techniques in order to deal with new entrants (Majumdar, 2016) .
 Bargaining Power of suppliers- Each and every company is buying raw materials from
various suppliers, and those who are in a dominant position can minimize the margins. In
fact, suppliers who are powerful in the service sector are always using their negotiation
power for extracting a maximum price from the companies of the restaurant field. Thus,
Ella Kitchen handles this situation by creating a positive supply chain with numerous
suppliers as well as trying to experiment with product designing by using distinct
materials in order to maintain its inventory.
 Bargaining powers of buyers- Demand of buyers are always get maximized, and they
wanted to buy the best product by paying the minimum amount. But, Ella’s kitchen
always thinks about its customers by manufacturing organic products which are
qualitative product and healthy for kids. As a result, the company can automatically get
succeeded in maintaining its dominance at the marketplace (Zohoori and et al., 2012) .
 Threats from substitute product or services- As per this stage, if there is a presence of
similar product then industry have to suffer such as; services drop box, and Google driver
is a major substitute of storage hardware devices. Thus, member of Ella’s kitchen always
tries to become service oriented instead of just product oriented by the understanding the
requirement of the end user.
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 Rivalry among existing competitors- Paul has built sustainable differentiation for
handling this problem for competing at the marketplace with various market players.
Current sales level:-
ELLA’s Kitchen which is famous for its organic food is acquired by US group of food sector
Hain Celestial is forecasting its sales level approximately £60 in the current year ( RAVENDER
SEMBHY AND GEOFF HO, 2013). On the other hand, the founder of this association has also
stated that business is running in a very smooth manner as now the company is having almost
19% share in the baby food market.
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Growth and development of business
Discuss market share:-
Global baby food market was measured at US$ and estimated almost 40.17 Bn in 2017 whereas
it has been expected that this can reach by US$ 84.1 Bn by 2026 with CAGR rate nearly 9.68%
(Morris Beck, 2019). In fact, this company is having new techniques for the entire world by
coming up with creative items.
Discuss the history of growth or growth trend of business since the beginning:-
This Company is based on two factors one is a dream, and another is a mission. However, their
initial dream is to ensure that business must move towards the right direction in an ethical and
sustainable way. Basically, this organization believes that businesses must force for good
because of which Paul had joined the B corporation movement. As a result, Ella’s kitchen has its
goodwill at the heart of the global network, and member of this association are passionate for
leading the movement at UK market for promoting other businesses to get connected with B
corps too. Member of organization is looking for good stuff for supporting and delivering UN
sustainable development goals. However, there are almost 17 goals are overall from which
around 3 goals are determined for Ella working. Mainly, their main target is to reduce all type of
malnutrition by 2030 by encouraging entire society towards healthy food instead of unhealthy.
Moreover, this motive is aligned with the mission of Paul that is maintaining positive
connectivity between food and kids (Marais, 2016) .
Apart from this, the government system is one of the major advantages of this company for
maintaining the growth of a company on a track. Therefore, the company get succeeded in their
target by taking a number of initiatives such as;
 Packaging- Trying to make it recyclable
 Ingredients- Need to set the standards and enforce to remove the use of palm oil.
 People- This means that the company is going to help well-being by being good with
friends and changing little things as well as gives value to diversity.
 I am being the change- Support friends for being a better change and “Bang the drum”.
Consequently, little and beautiful pouches of Ella Kitchen are really outstanding as they are very
much light in weight, convenient and keep yummy food fully organic which is very helpful for
little ones. Additionally, an organization had taken part in 12 industry conferences and seminars
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