BA3LC91O Introduction to Business: Little Dessert Shop Analysis Report

This report analyzes the 'Little Dessert Shop,' a partnership firm, examining its business structure, environment, and strategic positioning. The report begins by defining business organizations and then delves into the partnership model, highlighting its features, advantages, and disadvantages within the context of the case study. It then applies Porter's 5 forces framework to assess the competitive landscape, identifying threats, bargaining power, and industry rivalry. Furthermore, the report explores macro-environmental factors, including economic, social, and legal considerations, to suggest improvements for the business. The analysis incorporates relevant academic sources to support its findings and provides a comprehensive overview of the challenges and opportunities facing the 'Little Dessert Shop' and similar businesses.

BA3LC91O– Introduction to
Business

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Partnership as a type of business organization ...........................................................................3
Analysis of Little Dessert Shop based on Porter's 5 forces framework ......................................4
Macro environment factors to improve the business ..................................................................6
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business organization is an entity which is formed to carry on a purpose and achieve goals for
which structures are made and identify the ways in which their structures helps them meet the
goals. In the report a “little dessert shop” based case study will be discussed and it is a
partnership firm which is a start up. In the further report the following points will be addressed in
which different types of business organization will be recognized, relationship between the
business organization and its business environment will be addressed. Also light will be put upon
the organizational structure and marketing strategy and also roles and activities of main
functional areas within an organization will be understood.
MAIN BODY
Partnership as a type of business organization
Partnership is an association of two or more persons which formally agrees to do business
mutually and share their profits and losses. The success of this type of organization depends
upon trust, understanding, cooperation and adjustment by all the parties involved in partnership.
It is defined as a special kind of legal relationship (Shin, Park. and Park, 2019). In this case Mary
Jones and Sue Jackson both set a partnership named “Little Dessert Shop” which was located in
busy Bullring shopping Centre in Birmingham. There are various features of a partnership
business which Mary and Sue should remember such as:
There is an agreement between the parties which means in between Mary and Sue and
there should be a formal and legal agreement between the two. And they both are involved in a
food based start up which is a lawful business.
Another feature is unlimited liability which means Mary and Sue both have unlimited
liability in the business. Mary and Sue are equally liable for the firm and also for payments of
debts.
In case of retirement of death or bankruptcy or insanity of either Mary or Sue the
partnership between them will going to end.
Mary and Sue are in a partnership as the minimum members requires to have a
partnership is 2 and this condition is being fulfilled in this case. And the maximum they can have
is 20.

Mary and Sue both can carry out by both of them or can be alternatively carried on by
both of them. This means that Mary and Sue both act as an agent as well as principal of the
partnership.
They both decided to set up the shop following redundancy from their respective
employments. They used their redundancy money in the capital of this start up and they both
contributed £30,000 each.
In the current outlet they also have two-full time members of staff to cover the long hours
and two part-time members which help them cover the busy weekends.
There are certain advantages of partnership between Mary and Sue
There can be benefit to the organization as people with varied skills and abilities can come
together and can implement the same to fulfil the objective of the partnership.
The formation was easy as they both made the agreement to act as a partner.
The capital invested is divided as in this case Mary and Sue both contributed £30,000 each.
The risk is also shared between Mary and Sue which means in case of profits, it is shared but
also in case of losses, the loss will also be shared.
This type of organization gets combination of skills like in this case Mary and Sue with have
experience in hospitality sector. Mary worked as a chef in a large contract catering restaurant and
Sue was a hospitality manager of a local hotel.
There are certain disadvantage of partnership
The risk is too high as the liability is unlimited.
In case of death or retirement of Mary or Sue the partnership will going to end.
Due to misunderstanding between Mary and Sue the business efficiency can be hampered.
Sometimes it may lead to delay in decision making and inefficient management.
Analysis of Little Dessert Shop based on Porter's 5 forces framework
It is a business analysis model which identifies and analyse the five forces that are defines the
level of competition in the industry. It helps to determine the strength and weakness of the
industry (Shtal. and et.al., 2018). The following are the components of Porter's 5 forces model:
Threat of new entrants
If the investment and time required in the industry is low then the threat of new entrants
is high and competition is also high. As nowadays everyone is interested in opening their own
start up therefore the threat of entrants is high.

The Partnership firm of Mary and Sue can get a competitive advantages by identifying their
unique selling points and concentrating on them. They are conscious of trends towards healthier
eating so believe there is growing demand for their product, but they also realise it is a product
for which there is much less demand in Winter months. As a result, they are keen to diversify
their product range, to provide choice to customers all year round.
Threat of substitutes
It is the threat which the firm has from the substitute products offered by competitors. As
in this case the threat of substitutes are high as there are many players in the area in which the
shop is located.
The firm can get the completive advantage by switching cost, substitute their price and value.
Bargaining power of buyers
The bargaining power of buyers in this case is higher as there are many food venues in the area
in which their shop is situated therefore this gives customers more options to choose from. In this
case the customers can force Mary and Sue to reduce the prices of their food.
The firm can get competitive advantage by product differentiation (Kumar. and Pansari, 2016).
Bargaining power of supplier
The bargaining power of supplier in case of this firm is moderate as the firm has two
options to choose from based on the objective which they have to fulfil. On the one hand they are
attracted by low prices and the convenience of buying in bulk from the cash & carry. This helps
them to keep the prices of their desserts low. On the other hand, they would like to use fresher,
organic ingredients and experiment with more premium products.
The firm can get competitive advantage by backward integration in which they can acquire small
suppliers from which they make buy on regular basis.
Rivalry inside the industry
The location of the shop is in the busy Bullring Centre, a very large and popular shopping
centre in Birmingham city centre. There are many shops in the immediate vicinity, as well as a
number of other food venues. This creates rivalry inside their industry as there are many more
food venues located in that area. If there are larger number of competitors then there is greater
competition for this partnership (Lewis, 2017).
They can get competitive advantage by offering people customer with new varieties of food and
also innovative marketing of their venture. They can also go online delivery services. The

promotional activities are targeted during the day time when the shop is less busy. Mary and Sue
think they offer a very friendly service, a good quality, healthy product and at a low price. So far
their business has grown based on their signage and word of mouth recommendations.
Macro environment factors to improve the business
Macro environment are those factors which are external to the business and are also
known as external environment. It helps Mary and Sue to understand the impact of the external
factors on the shop. There are following factors of macro environment factors:
Economic factors : These factors take economic condition of the economy into the
consideration like disposable income, unemployment level, interest rates etc. The disposable
income of the people can improve the working of “Little Dessert shop” as people will spend
more on these stuffs. As nowadays are is a trend to hangout in cafes and these types of places
where desserts are served (Perera, 2017).
Social factors : These factors take buying habits, emotional needs and behaviour and age
too of the customers into the consideration. As young children teenagers and young adults tend
to come frequently to meet friends therefore this can improve the business as young adults and
teenagers like desserts more. Therefore this can improve the business working and profits.
Legal factors : These factors take legal laws into considerations. Mary and Sue have to
take certain laws into consideration while undertaking the business. As they are in the food
segments therefore they have to consider health and safety measures into consideration. Also
they have to take hygiene into consideration.
CONCLUSION
It can be concluded that Mary and Sue has a partnership firm and are partners in it. And
there are various feature of their business named “Little Dessert Shop”. T to analyse their
business, porter's 5 forces model is used and also some points are found out where they can get
competitive advantage by managing the relationship with these factors. By the economic factor,
social factor and legal factor the business of Mary and Sue can be improved in many ways.

REFERENCES
Books and Journals
Shin, N., Park, S.H. and Park, S., 2019. Partnership-based supply chain collaboration: Impact on
commitment, innovation, and firm performance. Sustainability. 11(2). p.449.
Kumar, V. and Pansari, A., 2016. Competitive advantage through engagement. Journal of
marketing research. 53(4). pp.497-514.
Shtal, T. and et.al., 2018. Methods of analysis of the external environment of business activities.
Lewis, R., 2017. Porter's Five Forces of competitive advantage.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.