Managing New Enterprises: A Case Study of Yo Yo Cafe

This report provides a comprehensive analysis of managing a new enterprise, using Yo Yo Cafe as a case study. It begins with an introduction to the importance of business plans and innovation, followed by a detailed examination of relevant academic theories such as the Business Model Canvas, Lean Innovation Management, and the Innovation Matrix. The report explores how these theories can be applied to the creation and management of Yo Yo Cafe, emphasizing the significance of innovation in a new start-up. Furthermore, it delves into the moral, ethical, and legal dimensions that can impact new enterprises, including health and safety, workforce diversity, fair treatment of co-workers and customers. The report stresses the importance of ethical considerations and legal compliance for the long-term sustainability of the business. The application of Schumpeter's theory of innovation is also discussed. The report concludes by highlighting the critical role of these dimensions in ensuring the success of new ventures.

Managing new enterprises

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Analysing by applying relevant academic theory to the creation and management of Yo Yo
Cafe.............................................................................................................................................1
The moral, ethical and legal dimensions that can impact on new enterprises ...........................5
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
For Managing a new enterprise a proper business plan is required as it is a management
tool that helps the business to understand all aspects of organising and running it. Various
strategies are implemented to manage the enterprise and create its value in the market.
Innovation is the key element that all the new start-ups comes with to create there market place.
Report include feasibility of a start-up that is Yo Yo Cafe. It also includes relevant academic
theory like Business model canvas, Lean innovation management and Innovation matrix that
tells about the importance of innovation in management of this new start-up. Report also tells
about the application of innovation to the creation and management of Yo Yo Cafe. Further
report includes different moral, ethical and legal dimensions that may impact this new enterprise
as there are different legal dimensions on which new enterprise have to work so that they can
work ethically and maintain the moral of there business(Faherty and Stephens, 2016).
TASK 1
Analysing by applying relevant academic theory to the creation and management of Yo Yo Cafe
Innovation is creation of new ideas, product or method that can help a firm to grab a
market with help of new technology so that they can bring out a competitive advantage for the
new enterprises. There are many problems that new enterprises face during there initial stages
but they take help of innovative methods to solve the business problems(Legg and et.al., 2015).
Creativity is the core skill that is required to start a Cafe and Yo Yo Cafe have develop
those skills to take there business in market. Every start-up is dependent on the innovation that
gives them platform to keep there value in the market with help of new innovative strategy or
techniques. There are different theories on bases of which enterprise manage its performance.
These theories are useful for all the entrepreneurs and they can use these theories in there start-up
to have a successful business(Kambey and Wuryaningrat, 2016). Yo Yo Cafe have use the
following theories to analyse their feasibility in market:-
Business model canvas:-
It is a strategic management or a start-up template that helps in building a business
model. It is in form of a visual chart that is representing different elements required to start-up
the business like infrastructure, customers and finances. It is basically represents all the building
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blocks to start a business. Building blocks that Yo YO cafe includes during there initial stage of
business are as follows:-
 Customer segments:- It help out the cafe to know about the customers that company have
to target. It helps in identifying customers needs and what perception they have regarding
the product.
 Value proposition:- It helps in identifying the value of products that cafe is offering in
eyes of customers that is, it tells the reasons of customers in using the product(Veza,
Mladineo and Gjeldum, 2015).
 Channels:- This block helps in identifying different promotional activities that can help
Yo Yo Cafe in selling the product. It also help in identifying different distribution
channels that they can use in delivering the products.
 Customer relationships:- It helps in bringing good relationship of customers with the
cafe.
 Revenue stream:- It tells the ways in which Cafe can earn revenue from the value
proposition and keeps it for long period.
 Key resources:- It gives a clear idea from where the enterprise will have the resources so
that it can compete in market.
All these blocks are revisited on regular bases by the Cafe so that business model is accurate and
their start-up is running effectively. Basically the start-ups use this model at an initial stage of
any project. Usually the enterprises use it to have a overall picture of business model and to
determine the value proposition for a customer(Brunswicker, 2016).
Lean Innovation Management:-
It is a framework to manage the innovation projects in more effective way as compared to
traditional project management. For this framework manager are not needed to make a full
business case that may include cost, risks etc. but the manager only required to ask about the
budget so that an market can be tested at an initial stage with different experiments. Yo Yo cafe
used this theory and at an initial stage they tested the market so that it can help out to test larger
number of innovations in less duration and cost as compared with that of traditional management
methods(Cook, 2015). There are different aspects of Lean innovation management:-
 It helps in encouraging small scale experiments with a less cost involved.
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 It also help out in testing the market by allocating small initial budget for Cafe instead of
a full project budget.
 It also direct the managers of Yo Yo cafe so that they are not going in wrong direction
with the help of feedbacks.
Basically this theory is being used by the start-ups which has a limited budget and resources and
it is having three main methodologies that Yo Yo cafe have also used:-
 Identifying new opportunity in market with the help of design thinking.
 Having the ability to improve the business solutions in less time and resources.
 Having the ability to have a lean business processes that is helping out the team of Yo
YO cafe in reducing the waste and leading to the increment of the business(Gershman
and Thurner, 2016).
Innovation matrix:-
Figure:- 1
With the help of this matrix start-up can use different innovation strategy that the dimensions are
demonstrating to them. It helps the managers to understand the types of innovation and there
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Illustration 1: Innovation matrix

effect on market so that start-ups can choose the one by analysing there business. Yo Yo cafe
used this theory to make improvement in there strategies. These four dimensions are as follows:-
 Radically sustaining:- It is improvement in previous product or the strategies that the
business was using in the old market. There are many enterprises that upgrade the
manufacturing process of the components without having any affect on the consumers.
Yo Yo cafe started making improvement in there offerings with help of
innovation(Gusenbauer, Massini and Fink, 2015).
 Radically disruptive:- Here with help of new innovation market is created through a
completely new sales. There is growth in sales as customers are interested with the new
product and competition is also not there. This is creating entirely new market as a
completely redefine product is launched in the market that other competitors can not
match with. Yo Yo cafe started selling new innovative products that other Cafe's can not
match with.
 Incrementally disruptive:- There are chances that many incremental improvements can
lead to a disruption of market even if a new market is created. Yo Yo cafe have to work
smartly by innovating the product time to time but not very frequently so that they can
keep their value in market for long period.
 Incremental improvement:- Constant steady progress is common in all new enterprises
as they came with a simple idea and implement it with help of limited resources but they
keep improving there marketing strategies to create new market for there offerings. Yo
Yo Cafe's constant progress can lead to a good market share and are able to compete with
there rivalries(Joe, 2017).
Schumpeter's Theory of Innovation
This theory basically tells about the innovation in business and the way it is increasing
the investment and business fluctuations. Theory says innovation not means invention rather it is
application of new technology, new methods and sources of energy. Enterprises are making
changes in method of production and transportation to open up the business for new market like
Yo YO cafe is doing with help of this theory.
Schumpeter divided structural changes into 5 types that Yo Yo cafe is following:-
 Launch of a new product of an already recognised product in marketplace.
 Applying new methods of production
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 Opening a new market for the products that Cafe has not yet released
 Acquiring new sources to get raw material at a reasonable cost so that cafe can be
benefited
 Creation and destruction of monopoly position in market
According to theory innovation is the essential driver that helps to compete in market and helps
the enterprise to face the economic changes. Theory has divided the innovation process into:-
invention, innovation, diffusion and imitation. With help of this Theory Yo Yo cafe can compete
in market(Hillary, 2017).
The moral, ethical and legal dimensions that can impact on new enterprises
Moral, ethical as well as legal dimensions play a very important role in every
organization. It can be also called business ethics. It is very important for the entrepreneur to
keep in mind for starting up the new business that the moral principles ,values and various
ethical and social as well as legal responsibilities in order to run and sustain the business
successfully for the long term. Values and principles are the things that can motivate the
employees in the enterprise and ethics is the core aspect that determines what is right and wrong
and also it identifies moral and immoral values. Morals are the standards of good behavior in
society and it motivates and guide the individuals that how to behave as per the basic values.
Another one is the legal aspect that the entrepreneur have to remember to start the business is
that there have to be properly planned rules and regulations, licensing, proper structure. the
company have to adopt various laws like employment law, health and safety law that will result
to sustainability of the employees and the business for long term(Faherty and Stephens, 2016).
The owner have to consider the following dimensions-
Moral dimensions
The entrepreneur has various responsibilities to run the new business and one of the
important one is the moral duty. It refers to the duty of all the individuals working in the
enterprise who are responsible for all the activities and operations of the business. It also
includes moral standards and principles regarding the business. The entrepreneur is responsible
to make clear moral standards for Yo Yo cafe otherwise it may face various issues regarding:-
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1. Health and safety:- It is the duty of the owner to provide the healthy workplace. The
businessman have to take some steps to keep the employees free from various hazards like
providing equipment to the workers as well as to train them to correctly use the tools. The owner
must prevent from those materials that can hurt workers like illness. So the entrepreneur have to
take correct measures in order to protect from the accidents and must adopt health and safety act
for the employees(Legg and et.al., 2015).
2.Respectful and diversified workforce:- Current employees want the diverse environment for
working in the business. So the entrepreneur's moral duty is to recruit the diverse employees and
to provide equal opportunities while training in order to have the respectful working environment
and employees have to get value for their work. So the owner have to make the diverse and
courteous environment for the success of the business.
3. Fair treatment regarding Co-workers:- The another duty of the entrepreneur is to ensure
fair treatment of the employees towards their co-workers. The employees in the business have to
treat with respect towards their co-workers. The issues have to be avoided like discrimination
based on religion. So the businessman have to manage unethical practices in running the
business.
4. Fair treatment in respect to customers:- It is the very important part to run the business that
is it is the moral duty of the owner to avoid the misleading promotion regarding the product. The
entrepreneur must keep in mind to deliver the products timely as per the customer requirement. It
is the moral responsibility of the business that it have to maintain the relationship among
customers and employees as well as to treat the customers fairly that will make the business
successful for the long term(Kambey and Wuryaningrat, 2016).
Ethical dimensions
The business ethics defines the ethical dimensions for running up the new business for
the long term and to make the organization productive. Ethical dimensions applies to all the areas
of the business that is production, marketing, finance etc. it also covers controversial issues such
as discrimination and corruption. The values and objectives of the business have an effect on
ethical conduct. The entrepreneur have to have responsibility regarding the code of behavior that
ever employee must follow and put the ethics and values into action otherwise Yo Yo cafe may
face various issues regarding:-
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1. Fundamental ethical issues:- The basic fundamental issue that the business can face is
regarding trust, integrity. Understanding integrity refers to in what way the business is handling
the affairs by treating the customers fairly with honesty. If the customers think that a company is
having best ethical practices then the customers start with developing trust towards the business.
That can result to success of the business.
2.Decision making issues:- The another issue that the business can face is regarding decision
making. The business should protect the customer rights as well as have to ensure that the
business operations are fair enough to protect individuals value(Veza, Mladineo and Gjeldum,
2015).
Legal dimensions
Legal dimensions includes various laws and responsibilities that the entrepreneur have to
keep in mind to run the new business like licensing, copyright and patents. Otherwise the Yo Yo
cafe may face various legal issues like-
1. Licensing:- It is the common issue that any new start up business can face. The owner should
make sure that the company is licensed as per the legal requirements of the government as to run
the business successfully for the term. Otherwise the company may face problems regarding the
fees that cannot be easily avoided.
2. Trademarks:- Another major issue that the company can face legal issue regarding the
trademarks. The company must do proper research for naming the company as well as for
commercializing any product and otherwise other company will own the trademark.
3. Employee termination:- This can be another issue that company can face is that sometimes
the company hires the employee by believing that the employee is more qualified but soon it
realizes that it will be waste by keeping them. So it may affect the productivity as well as morale
of the company. So the entrepreneur of the business should select the appropriate employee as
per the position other it will result to decrease in legal repercussions(Brunswicker, 2016).
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CONCLUSION
From the above report it has been concluded that to Manage a new start-up a proper
business plan is required and the key element that helps the new enterprise is innovation. Yo Yo
Cafe have used different theories of innovation that helps the firm to take the place in market.
Business model canvas helped the cafe in segmenting the market and creating value preposition
with help of different channels and building relationship with the customers. On other hand Yo
YO cafe used lean management innovation theory at the initial stage to test the market so that it
can help out to test larger number of innovations in less duration and cost. Yo Yo cafe have also
used Innovation matrix and Schumpeter's Theory of Innovation to have a successful business in
market.
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REFERENCES
Faherty, U. and Stephens, S., 2016. Innovation in micro enterprises: reality or fiction?. Journal
of Small Business and Enterprise Development. 23(2). pp.349-362.
Legg, S.J. And et.al., 2015. Managing safety in small and medium enterprises.
Kambey, J.P. and Wuryaningrat, N.F., 2016. Examining leadership and knowledge sharing role
on small and medium enterprises innovation capabilities.
Veza, I., Mladineo, M. and Gjeldum, N., 2015. Managing innovative production network of
smart factories. IFAC-PapersOnLine. 48(3). pp.555-560.
Brunswicker, S., 2016. Managing open innovation in small and medium-sized enterprises
(SMEs). In Open tourism (pp. 171-187). Springer, Berlin, Heidelberg.
Cook, N.D., 2015. Crisis management strategy: Competition and change in modern enterprises.
Routledge.
Gershman, M. and Thurner, T., 2016. New development: State-owned enterprises as
powerhouses for innovation—the Russian case. Public Money & Management. 36(4).
pp.297-302.\
Gusenbauer, M., Massini, S. and Fink, M., 2015, February. Innovation Offshoring by Small and
Medium-Sized Enterprises–Establishing the Research Gap. In Global Sourcing Workshop
2015 (pp. 156-170). Springer, Cham.
Joe, T. ed., 2017. Promoting Innovation In New Ventures And Small-And Medium-sized
Enterprises (Vol. 28). World Scientific.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
ONLINE
Innovation matrix. 2019. [ONLINE]. Available.
Through<https://www.viima.com/blog/innovation-management-models>
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