BA30591E: Introduction to Business - Partnership and Porter's Model

This report analyzes a business case study of a dessert shop, examining its partnership structure, competitive advantages, and the impact of macro-environmental factors. The report begins by defining business and exploring the partnership between the shop owners, highlighting the features,...Read More

Introduction to business

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1 : Partnership of business organization......................................................................................3
2 : Porters five model for achieving competitive advantage .......................................................4
3 : Macro- environmental factors ................................................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................7

INTRODUCTION
Business can be defined as organization or industries in which entrepreneur are easily
engaged in commercial or some professional activities. The term business also referred to
individual activities and efforts of organize to generate products and services for earning profits
(Hodge and Greve, 2017). Little desserts shop business located at busy Bullring shopping centre.
The company has worked in partnership with Mary Jones and Sue Jackson in Birmingham. They
have all products related to desserts along with that their main aim to satisfy more and more
customer. Desserts use the fresh, organic ingredients under all peoples budget. This report
explain about partnership in organization and porters five model which states about in achieve
competitive advantage. This study furthermore evaluate macro environment that helps in
business for more improvements.
1 : Partnership of business organization
Partnership is type of agreements between two or more parties which is known as
business partner. They also share profits and losses between them as there can be several types of
partnership agreements along with they share liabilities. As usually partners have limited
liability.
Features of partnership
Formation agreements:-
It is not just type of legal entity. This can be in formed of oral, written through which
they can easily share their profits and loss within their firm earns. Mary Jones and Sue followed
all business activity according to lawful along with their in keeping motive about profits.
Two or more persons:-
In Little desserts shops there are two persons for conducting their business in proper
ways. When they both earn more profits they share between them along with they also share
company have been in loss within working periods (Fenton, 2020). While in partnership Mary
and Sue things about customer satisfaction for which they could help their company for more
developments.
Lawful business:-
Mary and Sue have main aim in partnership for earning huge amount of profits this can
be happened while by conducting business activities according laws. Work as per legal actions

that could be more benefits, if suppose theft, fire and black marketing things can be certain it
cannot be known as partnership.
Unlimited liability:-
Mary and Sue in Desserts shop together accountable for liabilities payments and also
their personal property might be utilized in recovering their debts for business. They both if any
losses in their business activity than they could be sold their property and cover their losses for
making continuous in business.
Duration:-
Little desserts shop owners have legal formalities about their business duration they have
filled contract in which, if partners dies or retire their partnership will be exits. But now Mary
and Sue have decided to work together with their limited liability.
Advantage of partnership-
Their process in conducting accounts is too simple, but they still need to keep records of
expenses and income which are most important (Maro’ah and Subroto, 2018). Mary and Sue
faced some easy time in starting Little Desserts shop along with that they both are agreed in
creating verbal and written contracts between them. For making more profits decision-making is
most essential in every situation whether at standing decision would be more happen sometimes.
Disadvantage-
If partner do not have any business legal entity than there could be more losses for
business. Mary and Sue needs to work as per management what they have decided. In this
partnership some partners do not complete their work on time, some allow rewards to their
employee and other dislikes so doing this they can have more conflicts and business activities
track gets disturbed.
2 : Porters five model for achieving competitive advantage
Competitive rivalry:-
Mary and Sue have fear about more competitors in market with their same products and
services (Omsa, Abdullah and Jamali, 2017). Little Desserts shop is located in main market of
city where many other competitors are also, and they have threat about that no one can sale same
products in which they are dealing with customer. Suppliers and buyers in business can be seeks
to have more competitive, if when they are unable to deal or at low prices products. So for this
Mary and Sue are required to charge their prices at low along with that making some strategies.

Threat of new entry :-
In business when Mary and Sue earn more profits they are afraid of new entrances in
market. The less time and costs for competitors in market that could be effective along with that
developing company can also lead in earning profits. They both have main fear about that targted
customer will get more effected through new entry in business. For more goals they can reduce
their products price with some offers and discounts.
Threat of substitute products
Restaurants work on providing services as little dessert shop has threat of substitute
products because all the restaurants provides similar products, so the customer loyalty is very
rare in this industry (Lin, 2020). To attract the customer little dessert is providing food at low
prices as they target youngsters and they have changed in their menu as well so that families and
salaried person can also visit their restaurant so the threat of substitute is high.
Bargaining power of Buyers
This is the important factor for food industry, because the little dessert shop is also get
affected by the buyers choice and decisions if they take little premium price, customers can
easily shift to another restaurant, so they can't provide over priced food as they operate in
engaged street they want to attract more and more customers, therefore the bargaining power of
suppliers is high.
Bargaining power of Suppliers
Suppliers are the one who supplies raw material to the restaurants, as Marry and Sue
decided to offer healthy, green and organic food to its customer, for that they've to pay higher
prices for the raw material. So here the bargaining power of suppliers are high.
3 : Macro- environmental factors
These factors are the one who directly impact the working of any business and company,
mostly these factors are hard to control by the management, and are affiliated to the specific area
or location where the business get operated.
Demographic factor
it includes the size of population, location, gender, income level, living of standard etc.,
which plays a wide role in the restaurant (Özbük, 2020) . As in the little dessert shop the main
changes are found is in the change of age group, as the children and youngsters are often visit the
restaurant instead of other people. Due to that, restaurant is focusing on providing fast food,

healthy food at an affordable price, as many young age people ring their to meet their friends so
they want tasty food at reasonable price.
As the little dessert shop is situated nearby the shopping centre so it remains engaged on
weekends, as the professionals and salaried persons get time on weekends and holidays. To take
the advantage of demographic factor, they want to expand or add on in their menu to attract the
families because they seldom go for proper lunch and dinner instead of having fast food only.
Cultural factor
The environment and culture of Birmingham is getting changed rapidly, where the little
dessert shop is operating. Now the people are very much concerned about their health, they don't
want to have unhealthy food which harms their health (Mungi, 2020). Therefore, they are
switching to healthier, green and organic food, and they prefer to have vegetable salad and food
rather than junk food. After seeing this new trend in the taste of people, Mary and Sue decided
to mention organic food in their menu, as they have strong belief that by adding this into menu it
will increase the profit margin. But for offering organic food they need to purchase fresh
vegetable from the farm and they will take little high price for green food.
They don't want to lose their customer therefore they decided to offer dessert at low
prices and organic food at a premium price so it will make balance and customer also not have to
get bothered. Thus, they can take advantage of cultural factor.
Political factor
These are such factors which can affect the entire working of restaurant. Because changes
in government also brings changes in laws, rules and regulations. As per the current situation,
little dessert has to face major issues in their business owing to the proliferation of Covid, as per
the government rules they have to shut their restaurant for three to four months, this affects their
profit, they were not having any income in those days (Yang, 2020). Due to lock down, staying
at home has affected so the things were not in the hand of Merry and Sue. But now the restaurant
has opened, but for attracting customer they need to promote that they are using all the
precaution, they have proper sanitized sitting area, sanitizer available on the entry and exit of the
restaurant, thus they are dealing with this factor.

CONCLUSION
By analysing the entire report it is concluded that it speaks about the business which
operates in the food industry. This report explained various type of organisation and how the
businessman can earn more profit and market capitalisation by working in a partnership business.
Apart from this, it has been described that, how a business can take advantage while
implementing porter's five forces model. Besides this, impact of macro environmental factors,
and how business is taking advantage of such factors have been mentioned in this report.

REFERENCES
Books and Journals
Fenton, M., 2020. Decision making in the partnership. BDJ In Practice.33(11). pp.30-30.
Hodge, G.A. and Greve, C., 2017. On public–private partnership performance: A contemporary
review. Public Works Management & Policy.22(1). pp.55-78.
Lin and et.al, 2020. Formal and informal SME financing in the restaurant industry: The impact
of macroenvironment. Journal of Hospitality and Tourism Management.45.pp.276-284.
Maro’ah, S. and Subroto, W.T., 2018. Implementation of Partnership Program in Human
Resources Development and Business for Small Entrepreneurs. International Journal of
Economic Research. 14(10). pp.305-318.
Mungi, A., 2020. Analyzing Industry Environment.
Omsa, S., Abdullah, I.H. and Jamali, H., 2017. Five competitive forces model and the
implementation of Porter’s generic strategies to gain firm performances.
Özbük and et.al, 2020. Factors affecting food waste at the downstream entities of the supply
chain: A critical review. Journal of Cleaner Production.244. p.118628.
Yang and et.al, 2020. COVID-19 and restaurant demand: early effects of the pandemic and stay-
at-home orders. International Journal of Contemporary Hospitality Management.