Ella's Kitchen Business Analysis Report: Semester 2, 2024

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SMALL BUSINESS ENTERPRISE
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Table of Contents
LIST OF FIGURES.......................................................................................................................3
INTRODUCTION........................................................................................................................4
TASK 1...................................................................................................................................... 5
Identify type, structure, mission and objective of the business and internal restrictions
and constraints.....................................................................................................................5
Analysis of current performance with statistical data..........................................................7
TASK 2...................................................................................................................................... 9
Recommendation and justification actions to overcome weaknesses.................................9
Analysing the ways to maintain and strengthen current performance..............................11
Recommendations with the justification of actions can be taken for expanding the
business..............................................................................................................................12
TASK 3.................................................................................................................................... 14
Producing a business plan for Ella's Kitchen and detailing assessment of current plans and
objectives........................................................................................................................... 14
Revise plan to incorporate changes and objectives of the business...................................15
TASK 4.................................................................................................................................... 16
Investigating potential impacts on the organization internally and externally through
changes.............................................................................................................................. 16
Developing a plan for managing the changes.....................................................................17
Devising methods for monitoring and improving the performance after implementation of
change................................................................................................................................ 19
CONCLUSION.......................................................................................................................... 20
REFERENCES........................................................................................................................... 21
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LIST OF FIGURES
Figure 1 Ella’s Kitchen Structure...............................................................................................5
Figure 2 Ansoff matrix............................................................................................................ 12
Figure 3 Porter’s generic strategies........................................................................................13
Figure 4 Kotter’s 8 step change model...................................................................................17
Figure 5 Kurt Lewin's model...................................................................................................18
Figure 6 Kaizen Japanese Model............................................................................................ 19
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INTRODUCTION
This report will debate on the small business hospitality sector and the chosen company is
ELLA’S KITCHEN. This whole report will continue on the basis of Ella’s Kitchen which makes
food for babies and sold it into the markets of the UK, Norway, China, Finland, Canada etc.
This was started in the year 2006 by Paul Lindley and its headquartered in Henley-on-
Thames, Oxfordshire, UK.
This report has been conducted for carrying out the analysis of the company its structure,
operations, objectives, mission etc. This will show the effective approaches by studying the
current performance of the company and will also show the relevant statistical data for
highlighting the company's revenue, financial ratios and REVPAR. This report will also justify
the actions and provide recommendations for overcoming from the weaknesses of the
company and take actions for expanding the business. It also includes a plan and a revised
plan for the company for implementing the changes in the business. This will show the
potential impacts on the organization due to changes and managing by conducting an action
plan for it as well as it also shows the improvement of the performance after changes took
place.
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TASK 1
Identify type, structure, mission and objective of the business and internal
restrictions and constraints
Business type: Ella’s Kitchen is a small private business in the hospitality sector which deals
in the products for the babies including toddler food and organic baby and has 30% share of
the food market in the UK (Mattevi and Jones, 2016).
Structure: The Kitchen follows the functional organizational structure where the people are
subdivided into groups with authorities who select the presentation and processes of the
business can carry (Mattevi and Jones, 2016).
Figure 1 Ella’s Kitchen Structure
(Source Mattevi and Jones, 2016)
Size: the size of the company is small as it only produces goods and products for the
children (Mattevi and Jones, 2016).
Mission: The mission of Ella's Kitchen is to represent the interests of the staff, fosters their
professional and economic growth and provides nutrition to the babies for their growth.
Objective:
 Ella’s Kitchen wants to save the environment for future generations
 Ensuring maintenance of the standards of the kitchen and health of babies
 Minimizing waste and follow the practice of Reduce, Reuse and Recycle (Mattevi and
Jones, 2016)
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Internal constraints and restrictions of the company on the basis of their expertise and
resources:
Financial limitations The company has some boundations over the finance as it
is a small business enterprise and having less capital, as
well as investment and the government, also restrict the
company to invest more as it is a small business.
Lack of staff The company is lacking behind in terms of staff members.
Being in a small hospitality sector, the company faces
problems related to staff members and customers losses
their interest as well as they don't get satisfied with the
company services properly (Mattevi and Jones, 2016).
Location issues The company is satiated in Henley-on-Thames (HQ), UK
22 Greys Green Farm, Rother field Greys which is not an
issue for the people or the staff members of the company
(Mattevi and Jones, 2016).
Convenient The food products are of the best qualities as they have
included natural and organic ingredients and are
convenient for the babies (Mattevi and Jones, 2016).
Lack of latest technology The company is lacking behind in the latest technology as
its investment is less and a small company.
Unskilled staff Being a small business enterprise and having less
revenue, the company is not able to hire educated staff as
they want higher money which the company cannot
afford. The reason for having unskilled staff is that the
company wants to provide employment to them and
enhance their skills to improve their lives (Mattevi and
Jones, 2016).
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Analysis of current performance with statistical data
The analysis of the data of the Ella’s Kitchen’s current performance including financial
performance analysis as well as non-financial performance analysis:
FINANCIAL PERFORMANCE ANALYSIS:
Business revenue Ella’s Kitchen turnover is $121 million and the revenue
generated in the year 2017 was €51.2 million and currently,
in the year 2018, it was €53.94 million (Balfaqih et al.,
2016).
Key financial ratios Some of the key financial ratios are calculated and
interpreted as under Ella's Kitchen on the basis of the key
financials gathered of the year 2016.
Return on Assets= Net Profit ÷ Total Assets
= (30.0) / 32.1
= - 0.93
Since the return on assets of Ella's Kitchen is negative, this
depicts that the returns available to Ella's Kitchen from the
assets employed by it are not satisfactory.
Net Profit= Net Profit ÷ Sales × 100
= (30.0) / 56.93*100
= 52.69%
Ella's Kitchen has a Net profit ratio of 52.69% which is
considered a good ratio that depicts the high profitability of
the business.
Current Ratio= Current Assets/ Current Liability
= 37.8/ 13.0
= 2.90
An ideal current ratio of a business is 2:1 and Ella's kitchen
has a current ratio of 2.90 which shows a high liquidity
position of the business and shows that it is in a better
situation to pay off its debt in situations if any arises, from
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the current assets (Balfaqih et al., 2016).
NON-FINANCIAL PERFORMANCE ANALYSIS:
Brand image: the brand image of Ella's kitchen is positive as well as it is a known company
of food products for the babies (Balfaqih et al., 2016).
Percentage of returning customers: the company has the brand name and many existing
customers who believe in the products of the company. It is an estimation of the returning
of customers is said to be 70% (Balfaqih et al., 2016).
Brand loyalty: it is the most famous hospitality brand in the small business. The brand
provides safety and security to its customers for satisfying their needs as well as to attract
new customers (Balfaqih et al., 2016).
Loyal customers: customers are loyal to Ella's kitchen as they have trust in their products
and believe that the products are good for their babies' health and growth (Balfaqih et al.,
2016).
Website reviews: many of the people follow the website of Ella's kitchen to know the
review of the company and its products. As an estimation, there may be more than 20% of
people checks and gives a review of the company and its products (Balfaqih et al., 2016).
Market share: the market share of the company is 30% in the UK.
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TASK 2
Recommendation and justification actions to overcome weaknesses
For meeting the criteria and overcoming from the weaknesses, following are the models
used by the company:
SWOT ANALYSIS
Strengths: the company has the strength of new approaches in the market as the
employees innovate many new replacements in the sweets for the kids (Nuutila, 2016). The
company has been also introducing many new products ideas for gaining a competitive
advantage in the market (Nuutila, 2016).
Weaknesses: the company is lacking behind in the financial matters and facing the financial
crises due to less revenue as compared to its competitors. Lack of employees is also a
weakness for the company (Nuutila, 2016).
Opportunities: the company can introduce different products for the kids from 10-15 years
of age. The company can vast their productions into many emerging cities or countries like
China and India (Nuutila, 2016).
Threats: the competitors of the company are the biggest threats for its position as well as
revenue. The parents are more focused towards the less sweet products for their children
are also a threat to the company (Nuutila, 2016).
ANSOFF MATRIX
The strategies for overcoming from the weaknesses of Ella's kitchen are as follows below:
Market development
 For existing products, it is important
to develop a new market
 Identify new geographies
 Identify new customer as well as
market segments (Medarac et al.,
Diversification
 Corporation diversification towards
new business (Medarac et al., 2016)
 Vertical diversification
 Concentric diversification towards
related business (Medarac et al.,
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2016) 2016)
Market penetration
 Increase in volume of sales with
existing customers
 Increase the occurrence of usage
 Increase sum of used foodstuffs
 Increase market share and the
customers (Medarac et al., 2016)
Product development
 Improvement of product
 Extension of a group of products
 Developing new products for the
same market and the existing as well
as new customers (Medarac et al.,
2016)
BALANCE SCORECARD: Vision & strategy
Financial
• The financial performance of Ella's kitchen is weak (Saunders, 2017)
• The company wants to overcome their weakness, so it has to improve its return
on investment and operating margin (Saunders, 2017)
Customer
• The company Ella’s kitchen focuses on its customers and their requirements of
the products
• The vision of the company is based on the satisfaction of the customers from its
products (Saunders, 2017)
Organizational capacity
• The organization of Ella’s kitchen is full of innovative ideas and employees
retention
• They have knowledge for innovating effective ideas for the new product
development (Saunders, 2017)
Internal processes
• Ella's business serves the quality products for the kids effectively and the
organization of the business is very efficient (Saunders, 2017)
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• Customers trust its brand so they also purchase new products
Analysing the ways to maintain and strengthen current performance
Some ways of maintaining and strengthened the current performance of Ella's kitchen are
as follows:
 The company can provide extreme value to its customers
 The company can develop its profession for setting themselves apart from the
competition (Ahmadi and Vogel, 2017)
 Provide high-quality product and services to the customers apart from the
competition (Ahmadi and Vogel, 2017)
 Value the customers for creating the growth and success of the business
 Pay more attention towards the satisfaction of the customers for boosting the
success rate of the business and cresting durability in a competitive market
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Recommendations with the justification of actions can be taken for
expanding the business
The hospitality company Ella’s kitchen wants to expand its business so here are some
recommendations and justification of actions which the company can use for its expansion.
Ansoff matrix
Figure 2 Ansoff matrix
(Source Medarac et al., 2016)
Market development: it is an important strategy for the expansion of the business into
markets by using its present offerings and services and products development. Ella's kitchen
should use different segments of the market as well as the customers and tries in the
foreign markets (Medarac et al., 2016).
Diversification: Ella's kitchen tries to diversify the business to grow its share in the market
by introducing many new things and offerings in the market. It is said to be a risky strategy
for the market as well as the product development which is required the most (Medarac et
al., 2016).
Market penetration: Ella's kitchen tries to grow its products and services by using the
strategy of market penetration in the existing markets. The company can expand its
business by lowering the price, increase promotion in support to distribution, modest
product enhancements etc. (Medarac et al., 2016).
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