Little Dessert Shop: Porter's Five Forces and Business Analysis

This report provides a comprehensive analysis of Little Dessert Shop, a business established by two partners, Mary and Sue. It begins by evaluating the partnership as a business organization, highlighting the responsibilities and liabilities involved. The report then applies Porter's Five Forces framework to assess the competitive landscape, including the threats of new entrants, substitute products, bargaining power of buyers and suppliers, and industry rivalry. It advises on how Mary and Sue can achieve a competitive advantage by managing relationships within these forces. Finally, the report discusses three macro-environmental factors—political, economic, and social—and their impact on the business, offering recommendations for adapting to these external influences, such as adhering to government regulations, managing expenses, and adapting to changing customer preferences. The report concludes by summarizing the key findings and emphasizing the dynamic nature of the business environment.

Introduction to Business

INTRODUCTION
Business is that kind of activity that has been helping in selling, managing and plaining to
sell product and services that has been sold by an organization. This is one of the most important
part of an organization that makes sure that business is being done in smooth and proper manner.
Business is related to various kinds of elements like commercial, industrial and professional
activities. Such activity has helped in making contribution towards economic activities within an
business and has wider scope. Nature is dynamic according to tendency of business to be
impacted over economy within an country. Organization that is taken is Little Desert Shop.
Things to be covered in this reports is poter's five forces model, partnership and macro
environment is being covered.
MAIN BODY
Evaluate a partnership as a type of business organisation with reference to Mary and Sue’s ‘Little
Dessert Shop’.
Partnership is that business organization which is being formed that has been by
coordination of two or more then two partners. These organizations are is being making partners
come together with common motive to make sure that profit is generated out of business started
by them. They are wholly responsible for the activities that is being done within a business. In
this partners hold limited liability. There are various partners and different forms of partnership
which is involved within a business. In this partnership is being understood through multi pal
parties. These are related by government, non-profit enterprises, businesses or private individual.
Another way is through joint venture that is taken by two or more then two individuals major
categories of partnership. Partnership is general and limited partnership.
In general partnership all parties share within themselves any kind of financial liability.
These individuals is personally responsible for debts within partnership. Profit is shared equally
among partners. If a partnership firm is specified then only agreement has to be formed between
partners willing to form business. The arrangement limits a person and if one partners is sued
then malpractices increases which results into dissolution of partnership. Various law has been
form in order to make sure that accounting is maintained within the partnership firm. Latter is
more senior that is associated but in this ownership stake exists. These are generally paid and is
base upon profit making. Mainly senior is associate but ownership stake. They are generally pid

bonuses that is based on profit. These kind of partnership is hybrid within the nature and general
principals within limited liability. As per this one partners should be general and holds limited
liability over debts of partners. Such kind of business organizations in relation to case scenario
in a manner that “Little Dessert Shop is formed with the help of two partners and is willing to
earn profit out of it this is common motive of them.
2. Use the Porters 5 Forces framework to analyse ‘Little Dessert Shop’ business and advise on
how Mary and Sue can achieve competitive advantage by managing the relationships with
these forces.
Porters 5 Forces framework on Little Dessert Shop ( case study)
Threat of new entrant - Mary and sue both are business partner and running a dessert shop
named “ Little Dessert Shop”. Mary have experience as a chef and sue have experience as
a hospitality manager so both are experienced in hospitality field. They set up little dessert
shop of their redundancy money and purchase a shop on 3 year lease. Little dessert shop is
a start up so the force of new entrant is high for them because their shop is not well
established.
Threat of substitute products – Dessert shops is always on demand because most of the people
like dessert. Mary and sue shop is very popular in that area but they are facing good
competition too because there are many other shops which offering same products. Their
shop attract young children, adults and workers because they are providing friendly
environment and good services , quality products at low cost that is convenient for the
customers that is why customer do not easily switch to another shop. As their shop is just
a start up so they have moderate force of threat of substitute products because Mary and
Sue already know that how to attract the customers. With help of discounts and offers and
low cost , all customer do not want to switch to another shop.
Bargaining power of buyer-Mary and sue are offering their products at low cost. They are using
good quality organic ingredients in their products that are very healthy for health that is
why their demand is growing day by day. Some products demand is high in summers and
low in winters. Sometime they do experiments on dessert dishes so that time there is
uncertainty and rink that customers will like that experimental products or not. Their
product price is very low so that attract the customers and do not want to switch their shop

to make them loyal for their little dessert shop. That is why Mary and sue have low force
of bargaining power of buyers.
Bargaining power of supplier – Mary and sue started their shop in a very popular place so they
took a shop of 3 years lease and they also secure some capital so that they can easily pay to
their suppliers. They are using organic ingredients in their products they can also get from
the suppliers at low price. They are planning to take business loan from bank and think
over promotional activities within local communities. So that the force of bargaining
power of suppliers is low.
Industry Rivalry- Little dessert shop facing high competitive market situation because their shop
is on initial period. Their products market demand is more than others because of their
friendly services and low cost products in good quality but still competition are there.
Every shop are trying give their best to become more popular. So the threat of industry
rivalry is high. Mary and Sue are managing very well to attract the customers and there is a
need to always focus on customers needs and wants for making competition risk within
control of business.
Clearly discuss any three of the macro environmental factors with particular reference to how
they can help improve the business
Macro Environmental Factors
macro environmental factors are externally affected an organisation. There are three
factors in the consideration of Little Desert. The following factors are affects externally
Political Factor
These factors determine the government policies and influence the economy or industry.
This can include tax policy, tariff, bureaucracy, trade restriction. Political factors are greatly
influence the business. The government regulations can have significant impact on infrastructure
or health and safety guidelines. The food industries or restaurants are responsible to take care of
food from purchasing cooking packing to delivery. The little dessert may follow the government
regulation for creating trust in customers. Due to political factors if tax rate increases food will
become costlier which will impact on online business and customer interest. Reveal the calorie
and nutrition of food to customers or on website. Make the food is affordable for medium
income families. It may select the healthier food option.

Economic Factor
In this economic growth ,interest rates,medium income of consumer, unemployment
rate, exchange rate factors are included, that determine the performance of a certain economy.
These factors are affecting the purchasing power of customers. It could possibly change demand
or supply of company. Reduce the redundant expenses. It may manage the expenses in a manner
that affects positively to company. When the export rate or taxes are increase the product is also
increase for customer, that affects the production of company. They have good employees and
they are able to do full time in weekend. Due to covid19 pandemic the sales are decreased in last
3 months and customer wants the prices are affordable to middle class customers.
Social Factor
In this factor determine the what is the social trends, changes in lifestyle, educational
level, cultural level and requirements of their customers. It is focused on customers needs or
requirements of customers. It helps in targetting to customers. Due to covid19 pandemic Now
people are more health conscious. So the company should keep in mind health & safety
guidelines. The company should avail the food products according to age groups for increasing
customers. In the there is all businesses are operating and going through online platform so they
should switch on online platform and start home delivery of food. And they are totally
responsible for food quality or taste. To provide good service keep in mind the safety guidelines.,
CONCLUSION
From the above discussion it is clear that business is that kind of activity under which
monetary transaction is dealt with and is based on professional activities. In this file partnership
for of business firm is formed that makes situations to be clear which is faced by an organization
and seeks over making establishment of an organisation to start its business. Poter's 5 force
model is been explained that cover five forces helping in covering of business and make sure that
entering of business is done in market. In the end three macro factors is explained that deals with
impact over Little Desert Shop.

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