Business Strategy: Partnership, Porter's Model at Little Dessert Shop

This essay provides a comprehensive analysis of Little Dessert Shop, a hospitality business founded by Sue Jackson and Mary Jones. It begins by evaluating the advantages and disadvantages of their partnership, highlighting aspects such as cost-sharing, moral support, and potential conflicts. The report then applies Porter's Five Forces model to assess the competitive landscape of the hospitality industry in Birmingham, focusing on existing rivalry, the power of consumers and suppliers, and the threat of substitute products and new entrants. Finally, it examines the impact of macro environmental factors, including social trends, technological advancements, and environmental considerations, on the business's performance and strategies for improvement. The analysis concludes that a strong partnership, a deep understanding of competitive forces, and adaptation to macro environmental changes are crucial for Little Dessert Shop's success. Desklib provides access to similar solved assignments.

Introduction to
Business - Individual
Essay
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1 Evaluation of partnership..........................................................................................................3
2 Use of porter five force model..................................................................................................4
3 Macro environmental factors that contribute in improvement of business..............................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8
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INTRODUCTION
Business is process of making money by selling products and services to end users as per
its taste and preferences or it is organisation that is engaged in commercial activities to earn
maximum profit. Tourism and hospitality is one of the fastest growing business that have
recently adversely affected due to impact of Covid-19. This report is about one such company
named as Little Dessert shop that was started by two partner i.e., Sue Jackson and Mary Jones.
Therefore, it contain relevant information related to evaluation of partnership, porter five forces
and three macro factors that contributed in improvement of business.
1 Evaluation of partnership
Partnership is a term that means formal agreement between two or more individuals to
effectively operate and manages business equally or in definite ration so that enterprise can earn
maximum profit margin. In context of partnership business, all associated members are equally
responsible for taking accurate decision regarding business operations, sharing profit and losses
of firm. Partnership agreement can vary from person to person so there are several type of
partnership like general, limited partnership, limited liability partnership and public private
partnerships. It can be stated that partnership business has both advantages and disadvantages
that are illustrated below:
Advantages of partnership
Cost saving: One of the biggest advantages of partnership business is that both partners and
members are equally responsible for profit and financial loss of organisation. Sharing of
financial loss save both partners from heavy losses or mental stress. Thus, Mary and Sue both
have to bear any financial risk that arise form establishment and operation of business.
More business opportunities: Partnership contributes in sharing of resources, capital that are
required for smooth running of business operation. Mary and Sue can effectively use their
respective experienced and knowledge to make best utilisation of available opportunities for
growth and development of firm (Partnership – advantages and disadvantages, 2019).
Moral support: Another advantages of partnership is that it contribute in providing moral
support to owner or individuals that have planned to start and operate business in order to
achieve particular goals. Like in Mary can take decision related to cater as it have experienced in
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same field while all management related task can be handle by Sue. Thus, in this partnership
provide moral support and release or reduce stress level to minimum extend.
Better decision making: Agreement between individuals also helped in better decision making
as both individuals by using their respective knowledge, skills and experienced can take accurate
decision that contribute in growth of firm. So, Sue and Mary can collectively take right decision
regarding the way challenges can be removed and opportunities can be utilised.
Disadvantages of partnership
Unlimited Liabilities: Business is not separate entity so partners are respectively responsible for
losses that are incurred by enterprise while operating several functions. In case of mistake of one
partners, another member also have to bear a loss so liabilities associated with partnership is
unlimited. Like in case of Mary incorrect decision that yields to loss to organisation, Sue also
have to suffer or bear financial loss.
Loss of autonomy: Sole proprietor have right to singly or solely enjoy profit margin, make
decision related to organisation thus in partnership individuals loss right to solely manage
business (What Are the Advantages and Disadvantages of a Partnership, 2017). That means
partners are equally responsible for taking several decision of firm thus neither Sue nor Mary can
alone take decision in absence of others.
Emotional issue: Different individuals have different point of view, belief, idea and values thus
there are many circumstances where partners started fighting with each others. Differences in
opinion between Mary and Sue may result in conflict and directly impact adversely on business
operations. So, they need to have strong relationship, better understanding and written agreement
in order to avoid future conflict and promote partnership.
2 Use of porter five force model
Porter five forces is model that is used to identify competition level or analysis particular
industry so that company can formulate effective strategies to gain differentiates positioning.
There are five factors like threat of substitute products, threat of new entrances; existing rivalry,
power of consumers and power of suppliers are responsible for shaping any particular industry.
So Sue and Mary by understanding and evaluating all this factors can take accurate decision and
formulate effective strategies that help company in gaining competitive advantages. Such as:
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Existing rivalry: It is factors that illustrate competition level within particular industry like
Mary and Sue have planned to operate their business in hospitality industry that is suffering from
tough competition. There are large number of enterprise with several products and services
operating in hospitality sector of Birmingham to earn maximum profit by meeting needs of
diverse individuals in best possible way (Sekaran and Bougie, 2016). Therefore, it can be stated
that existing rivalry is high but Mary and Sue can manage by emphasis in improving quality of
products or services or personalised, better services to end users.
Power of consumers: Customers are main source from which company is able to generate large
amount of profit margin by delivering goods and services as per their expectancy level. Power of
consumers is high due to low switching cost or more availability of alternative options in
hospitality sector. So, Sue and Mary by conducting market survey and understanding recent
trends, taste and preferences of customers can easily contribute growth and success of enterprise.
Power of suppliers: There are number of suppliers of raw material in hospitality industry that
are ready to offer products at relative low cost. Thus, Both Sue and Mary by finding best
suppliers out of several options and maintaining strong relationship can motivate suppliers to
deliver products in limited time frame.
Threat of substitute products: In hospitality and tourism sector, there are number of small and
medium enterprise that tries to imitate products and services of enterprise in order to attract
numerous individuals. Mary and Sue needs to ensure that no one else can copy or imitate its
method of operation or the types of products offered by it in order to enjoy differentiate
positioning and grow in high competitive market (Denysenko and et.al., 2019).
Threat of new entrances: Due to globalisation and increase demand of people to spend time to
travel across different parts of country or foreign visitor’s number of individuals has decided to
start their own business. Threat of entrance is high so Mary and Sue by offering unique,
innovative or products that are beyond expectancy of customers can contribute company in
gaining competitive advantages for longer run.
3 Macro environmental factors that contribute in improvement of business
There are numerous external factors that contribute in development and expansion of
‘Little Dessert Shop’ in Birmingham like innovation in technology, changes in social preferences
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and environment factors. The way all this three factors have contributed in improvement in
business operation can be illustrated as follows:
Social factor: Taste and preferences of customers are dynamic in nature or ever changing thus
company in order to sustain and survive in market needs to meet their expectancy. Now a – day
people like to consumer more healthy, tasty and delicious food at lower price for satisfaction of
their needs. So, Mary and Sue by offering good quality, healthy food or product at minimum
prices have motivated maximum customers to be part of organisation (Buckley, Burton and
Mirza, 2016). More demand of organic products have forced partners to find local organic farms
where it can get qualitative products to achieve its goals Thus, with changes in customers taste
‘Little Dessert Shop’ have improve its quality of products so that they can be retained in
organisation for longer run.
Technological factor: There are numerous development and advancement in technologies that
provide opportunities to business to effectively expand their operation. Company by making
invest in new technology or digital media can easily market its products or services to range of
customers (Akerkar, 2019). Company can improve its operation by maintaining record of
performance of employees, inventory through information technology in order to take correct
decision for benefit of organisation. ‘Little Dessert Shop’ can post image, videos on social sites
to generate awareness among customers or deliver best services to them.
Environmental factor: It is another factor that have also contributed in improvement of
business operation as with increase forced form government and consumer to take steps towards
sustainable management of resources. Mary and Sue partners of ‘Little Dessert Shop’ have
decide to make best utilisation of available resources, reduce amount of wastage thus bring
economic of scale. Thus, in this way environment factors have helped in improvement of process
and delivery of maximum value products to customers at minimum rates (Geissdoerfer,
Vladimirova and Evans, 2018).
CONCLUSION
It can be concluded from above analysis, that partnership has helped in effective sharing
of resources and financial risk associated with business. It has also learn from above report that
porter five forces helps in understanding factors that shape or effects industry thus partners are
able to decide appropriate course of action that can yield maximum benefit to organisation. At
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last it can be summarised that macro environment factors have lead in improvement of business
function and achievements of goals.
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REFERENCES
Book and journals
Akerkar, R., 2019. Artificial intelligence for business. Springer.
Buckley, P. J., Burton, F. and Mirza, H. eds., 2016. The strategy and organization of
international business. Springer.
Denysenko, M and et.al., 2019. International regulatory experience business activity. Research
and Innovation.
Geissdoerfer, M., Vladimirova, D. and Evans, S., 2018. Sustainable business model innovation:
A review. Journal of cleaner production, 198. pp.401-416.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Online
Partnership – advantages and disadvantages, 2019, [Online]. Available Through:
<https://www.business.tas.gov.au/manage_a_business/tax/choosing_a_business_structure
/partnership_advantages_and_disadvantages>.
What Are the Advantages and Disadvantages of a Partnership, 2017, [Online]. Available
Through: <https://www.americanexpress.com/en-us/business/trends-and-insights/
articles/what-are-the-advantages-and-disadvantages-of-a-partnership/ >.
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