ENTREPRENEURIAL STRATEGY ANALYSIS FOR ROOT COFFEE HOUSE (UK)

This report provides a comprehensive analysis of the entrepreneurial strategy employed by Root Coffee House, a small and medium-sized enterprise (SME) located in Liverpool, England. The report begins with an introduction to entrepreneurial strategy and its significance in the modern business lan...Read More

ENTREPRENEUR
STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Situational analysis......................................................................................................................3
Critical review of strategic choices..............................................................................................7
Horizontal and vertical strategic..................................................................................................9
Recommendations......................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Entrepreneurial strategy is a strategy that different entrepreneurs has followed in their
personal life to achieve too excellent outcomes. Lots of people in the market place follows
entrepreneurial strategy as common business strategy which generally helps to a venture or
enterprise to gain very appropriate profit in the market place. In this modern world, there are
businesses in the market need for making some effective strategies, because this is too necessary
for generating huge profit within different segments of market. Nowadays those ventures or
companies can gain excellent profit within the selected market place which has lots of well-
developed strategies of business (Lee and Kim, 2019). This report discusses entrepreneurial
strategy in the context of Root coffee house. There is Root coffee is an SME of the United
Kingdom that currently situated in Liverpool, England. This company is generally a small coffee
cafe shop that offers different flavours of coffee in the market. There are different prim models,
frameworks and tools also has been used within this report to properly conduct situational
analysis of this SME. On the other side, critical review of Root coffee’s strategic choices also has
been converted in this report with proper recommendations.
MAIN BODY
Situational analysis
Situational analysis of Root coffee house is too essential task to the management of this
business, because by analysing various situations of the market, a company or a business can be
simply made various strategies to itself for gaining very high profit within the market place.
Nowadays upper management in most businesses is taking many decisions for analysing various
situations of market place. After analysing situations of the selected market place, there are Root
coffee also can be able for getting the appropriate idea to make various productive and efficient
business strategies. Of course, existing SME (Small and Medium Enterprises) already used many
productive business strategies, but this business still needs for improving its business strategies
through implementing situational analysis (Kuratko and Morris, 2018). Nowadays Toot coffee
house is a very reputed small coffee café house in the Liverpool, England. With the help of its
productive business strategies, this business has gained high success in its few years of business
operations within this market place.
According to various business specialists and experts, the management of every business
including Root coffee house needs to be conducted situational analysis through using different
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tools, frameworks & models. For example; PESTLE analysis. It is very important task for
different businesses to gain positive outcomes within the selected market places. Nowadays
many of companies within market are putting own excellent efforts to gain very high profit, so
that conducting market situational analysis is the most appropriate deal for each company to
generate huge revenue (Sanders and et.al., 2020). Upper management at Root coffee have fully
understood the common thing that, the competition of market in regularly increasing, in which
existing management at this coffee café tries for developing those strategies of business which
will be provided very highly competitive advantages to this coffee cafe within its selected market
place or segment.
The PESTLE analysis tool or framework has been implemented below which can
effectively help to top-level management at Root coffee café for properly analysing many of
market situations.
PESTLE Analysis
PSETLE analysis is very essential tool or model that helps to various organisations or
companies to effectively analyse different segments of market. This tool mainly shows six prime
external factors of business environment of various companies which can highly impact a
company or business in both ways negatively or positively. In this case, upper management at
Root coffee also need for taking decision to use this tool in its operations of business to
productively analysing market situations (Ha and PARK, 2017). PESTEL generally projects six
prime external factors; technological, environmental, social, political, legal and economic, so that
these all key factors of tool have been described below to systematically analyse current market
situations to Root coffee café.
Political factors
Political factors in the UK are highly influencing to existing SME’s business
environment, in which the management at root coffee needs to be taken few appropriate
decisions for perfectly dealing with the influence of these factors relating to political
environment of UK. Suppose, there are root coffee’ management always need for fulfilling the
taxation within the country for properly operating own various business operations, so that there
is the taxation is a very big aspect of these factors (Ding, Guo and Guo, 2018). Reason is,
countries mainly raises own governing revenue through imposing taxation formality on
companies or enterprise which commonly operates in their area of authorisation. There are local
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government in this country also has imposed the formality of taxation on different businesses, in
which there are existing management at each business including root coffee needs to be fulfilled
taxation formality to effectively run their respective operations business within the country.
Taxation formality can give opportunity to Root coffee to be legally formed. However, pay huge
amount in taxation is not favourable deal to a SME as Root coffee, so this is threat to this SME.
Economic factors
Economic factors of UK also impact the root coffee’s business environment in market
place. Suppose, when country has developed conditions of economy, then this SME can easily
achieve appropriate profit within the market place (Wilson, Perepelkin and Zhang, 2019). On the
other hand, when UK not has developed conditions of economy, then this small business needs
to be putted its great efforts to selling own products & services within the selected market place.
However, the UK’s economy factors give great growth opportunity to root coffee house, because
UK has developed conditions of economy. Due to well-developed economic conditions, there are
lots coffee café businesses coming in the market to earn profit, so this a threat to Root coffee.
Nowadays this coffee business can easily sale own various coffee café products within this
market place, because many of people here has very high standard of living, so that these people
can be simply afforded services and products and which has provided by Root coffee.
Social factors
These social factors in the UK are very productively influencing this root coffee business
in market place, because these factors of country are fully favourable to this SME. Reason is, lots
of people in the UK generally believes for purchasing only such services & products which has
excellent production quality. So that, there are root coffee already has offered very appropriate
quality of coffee products, and this is the key reason that these social factors give very
favourable development opportunity to this SME in market place. On the other hand, lots of
people in country UK are fully known about the impact of (CSR) corporate social responsibility,
in which these people very much like to buy many of services & products only from such
businesses and ventures which always be focused on fulfilling their CSR on time. Due to Covid-
19 pandemic, nowadays many people of the UK not believe in buying food and beverage
products from outside, so this is threat to the business.
Technological factors
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These factors give great opportunity to root coffee for productively enhancing own
performance in selected market place (Williams and Vorley, 2017). Generally, technological
factors at the United Kingdom are too favourable to this small coffee café business in existing
market segment, because through using different technological tools, gadgets, machineries, etc.
this SME can easily increase its performance & productivity in the UK’s coffee café market.
There are top-level management within root coffee should be taken steps towards gaining many
of advantages by technological factors of own home country. Of course, there are lots of
competitors of Root coffee also has highly used different gadgets & machineries in their
respective operations of busines, in which root coffee also has required to always be used various
new technologies in own daily operations to achieve too excellent results in market place.
However, this small business has to invest its huge fund to implement hi-fi technology, so this a
threat to Root coffee.
Legal factors
The management of root coffee house is completely responsible for adhering all legal &
ethical considerations in own workplace during running business operations within market place.
Basically, these legal factors provide opportunity to this SME for productively promoting an
ethicalness in own workplace. Government in the UK also has formulated various legislation,
regulations, standards which present management a root coffee needs to be adhered in own
workplace (Bischoff and Volkmann, 2018). Suppose, employment law is a big legislation of
these legal factors, in which existing management at this coffee café house responsible to employ
this employment law in own operations of business to provide a legal structure to its different
employees. However, understand and implement all laws is very complicated task to this small
business, so upper management can consider this as a threat, because business have to invest its
huge time and money to adhere laws in proper manner.
Environmental factors
These factors affect root coffee’s management to take steps for protecting and securing
the natural environment. Nowadays there are lots of rules & regulations has formulated by many
of organisations and NGOs that works for the protection of natural environment. Under these
rules & regulations, organisations commonly mentioned that, a business has no any right for
harming the natural environment during conducting its different operations of SME (Wilson,
Perepelkin and Zhang, 2019). In this case, root coffee’s management need to ensure that, it’s no
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any business operation or activity is harming natural environment. Through following
environmental regulation, root coffee café house can be simply protected the natural
environment in very effective manner. These factors give opportunity to company for working in
the welfare of natural environment. On the other hand, lack of natural resources is very big threat
to this business.
These all are prime or major factors of the market place that can impact root coffee café
in both ways negatively & positively (Khalid, Salykova and Capar, 2020). So that, the
management at this SME need to take some proper decisions for easily facing and dealing with
these external factors of market place.
Critical review of strategic choices
PORTER’S MODEL OF GENERIC STRATEGIC
Porter has suggested four various generic strategies of business that this SME can be
adopted for gaining very higher competitive advantage in the existing market place.
Cost leadership
The main objective of cost leadership strategy is to offer the very lowest cost
manufacturer within the market, and root coffee has focused for providing very low-cost service
and product, and also business’ own name of brand to get large customer base within market of
coffee café house. In traditional strategy or method, the key objective is for producing large scale
for enabling economic scale of SME. On the other side, Cost leadership is too essential, because
it require the cooperation between different functional areas in the root coffee (Clinton and et.al.,
2020). for lowering the cost develop, SME like for achieving the following aspects; enhance
levels of performance and productivity, effective utilisation of resources, take excellent work
from different employees, etc.
Cost Focus
Cost focus is generally referring to the company seeker for lowering its cost of benefit in
a specific segment of market. There is the product very similar to the higher price market and
product leader. Roo coffee mainly has focused on offering the best and quality product within
different market segments which projects the accurate targeted customer for being associated
with the target strategy to that specific market place. If some products of this SME are at high
price, then existing management of coffee café house will need to provide some exclusive range
of products and services, because most people expect excellent quality while they paid higher
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price on product or service. Cost focus strategy is very essential to all the manners for reducing
cost on the basis of market demands, needs and wants of various customers.
Differentiation Focus
Different focus strategy projects the way with objective in one and the small market segment and
the target number (Almeida and Duque, 2017). These services and products for the specific
customer for target market with appropriate segmentation, and the service and product will fully
innovative differently from its competitors that support to this SME for working productively to
generate effective profit. The necessary issue to root coffee for adopting the strategy for making
ensure different customers with their various needs & wants. Root coffee has focused on the
customer satisfaction, so that it always tries to maintain the good quality of products and
services. It offers different exclusive flavours of coffee as well.
Differentiation leadership
The differentiation leadership strategy is very helpful to target a business within the large
market for aiming to competitive advantage for the full new levels within market place. This
strategy mainly includes more than one criterion of customer and market with positioning for
meeting the actual criteria. This strategy mainly used in associated for charging very premium
cost of any service or product. Root coffee need to use leadership strategy for capturing the best
audience or customers within market place and offering them excellent products & services with
this differentiation focus and the leadership for market place to the orientation of customers.
STP MODEL
This is very helpful model in the terms of deeply understanding customer and market
segments. This model generally indicates three key stages of marketing which has been
discussed below;
Segmentation: In this stage, the SME have to divide its large market into small segments of
market to systematically understand customers’ needs in the market. It can divide its large
market geographically or demographical etc.
Targeting: After segment, Root coffee should target its customer segments and market segments
on the basis of various aspects, like; people behaviour, attitude, interest, caste, income status etc.
Positioning: In this stage, business should run its marketing activities to effectively promote its
services & products in the selected customer and market segments (Gillin and Hazelton, 2020).
SME should make its supply chain more effective as well in this stage.
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Horizontal and vertical strategic
VERTICAL BUSINESS MODEL
Vertical business model has included autocratic leadership. It also projects the
management of this SME about different rules, and boss oriented within that the boss imposed
the command on employees for working effectively in the workplace. The SME undergoes for
this way of strategy tool for acquiring the procedure of the production within same market place.
This is generally helping in company’s strength for making supply chain effective, and reduce
the cost of production. Root coffee should prefer this vertical model for increasing the deduction
within production fund and enhance the distribution chain that supports root coffee in getting
actual business missions (Venugopal, 2016). Vertical model helps to business from own newly
operations through selling own services & product to customers directly. This step generally
helps in the cut down for the deals of delivery.
Vertical business model has included the upper management of business into own
decisions, and then it flows from upper first, then middle, finally low in Horizontal. Different
employees have given leeway for choosing the appropriate decisions and steps on the behalf of
company and the company’s guidelines. In the practical manners of business, there are vertical
structure projects the style of autocratic leadership that works for the boss oriented, and boss
command. In this structure of horizontal company can show the visionary leadership approach,
and allow for making decisions, after this works according to the boss’ instructions and orders.
At the end, boss will feel that, employees are very creative and too efficient for making excellent
outcomes.
HORIZONTAL BUSINESS MODEL
There is horizontal business model mainly used for increasing diversity of any company’s
different products & services. This model also uses for gaining the actual scale of economies. It
also contributes in the reduction of daily competition. Even horizontal integration uses
businesses for effectively boosting its daily business operations. Of course, there are lots of
downsides in horizontal integration for market place, and mainly when business do succeed
(Hitt, Tung and Ralston, 2016). Root coffee need to choose the vertical model of business, and
should be focused on very less horizontal as the working like a huge platform the company needs
to be considered proper management strategies as well for systematically managing the impact of
this model.
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Recommendations
Nowadays root coffee is doing very well in its existing market segment, so that there are
top-level management at this SME fully responsible for always maintaining this existing position
of its business operations in the market for forever. Nowadays market competition within coffee
café business continually increases, in which this business needs to be developed some effective
strategies of business to achieve excellent competitive advantage within the market place
(Memon, 2019). There are effective strategies of business can be positively impacted to root
coffee cafe within existing market place, that’s why it needs to always implement various
effective strategies of business within own business operations.
CONCLUSION
On the basis of report’s finding, it can be concluded that situational analysis is very
necessary task to the Root coffee café house, because this step will contribute in this SME for
making some effective business strategies (Guerrero and et.al., 2016). Top-level management of
this SME always needs to be focused on developing new and new business strategies for
achieving very appropriate outcomes in the market.
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REFERENCES
Books and Journals
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entrepreneurial behaviours within the transgenerational entrepreneurial
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Ding, X., Guo, T. and Guo, Z., 2018, August. Research on Innovation Strategy Choice of
Science and Technology Entrepreneurial Firms Based on Technological Innovation
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Gillin, L. M. and Hazelton, L. M., 2020. Bringing an entrepreneurial mindset to health-care: a
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Guerrero, M., and et.al., 2016. Entrepreneurial universities: emerging models in the new social
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Hitt, M. A., Tung, R. and Ralston, D., 2016. International strategy and institutional
environments. Cross Cultural & Strategic Management.
Khalid, N., Salykova, L. and Capar, N., 2020. The Contribution of Environmental Strategies,
Entrepreneurial Innovation and Entrepreneurial Orientation in Enhancing Firm
Environmental Performance and Energy Efficiency. International Journal of Energy
Economics and Policy. 10(3). pp.282-288.
Kuratko, D. F. and Morris, M. H., 2018. Corporate entrepreneurship: A critical challenge for
educators and researchers. Entrepreneurship Education and Pedagogy. 1(1). pp.42-60.
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Memon, S. A., 2019. A never die entrepreneurial spirit-case of a struggling
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Sanders, M., and et.al., 2020. A reform strategy for Italy. In The Entrepreneurial Society. (pp.
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Venugopal, V., 2016. Investigating women’s intentions for entrepreneurial growth. International
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Wilson, G. A., Perepelkin, J. and Zhang, D. D., 2019. The roles of diversification and
specialization strategies in the entrepreneurial orientation and performance
relationship. Journal of Small Business & Entrepreneurship. pp.1-20.
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Wilson, G. A., Perepelkin, J. and Zhang, D. D., 2019. The roles of diversification and
specialization strategies in the entrepreneurial orientation and performance
relationship. Journal of Small Business & Entrepreneurship. pp.1-20.
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