Entrepreneurial Strategy Analysis for The Little One Coffee Shop

This report provides a comprehensive analysis of entrepreneurial strategies for The Little One coffee shop. It begins with an introduction highlighting the importance of entrepreneurial strategy in business and the role of entrepreneurs in the economy. The report then delves into a situational analysis, utilizing tools such as the BCG Matrix, Porter's Five Forces model, Porter's Value Chain model, and the PIMS model to assess the coffee shop's current market position, competitive landscape, and internal operations. The external environment is examined using a PESTEL analysis to identify political, economic, socio-cultural, technological, and environmental factors impacting the business. The report concludes by discussing strategic recommendations for the coffee shop, aiming to improve its market position and overall profitability. The report is a valuable resource for students studying entrepreneurship and business strategy.

Entrepreneurial
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
Situational Analysis....................................................................................................................1
Strategic situation........................................................................................................................5
Business strategy.........................................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Entrepreneurs plays a key role in economy. There are the individuals who have essential
skills in order to effectively anticipate current as well as future needs into the potential market.
Within an economy entrepreneurship is a combination of land, natural resources, labour, capital
and several others through which profit in an organisation can be effectively generated.
However, in order to effectively carry out business activities implication entrepreneurial strategy
is must. Entrepreneurial Strategy is basically a process under which developing a new product is
the prime objective which is essentially helps an organisation to gain competitive advantage.
Furthermore, these strategies generally comprises of special adoption of techniques for
innovation which essentially helps in running business operations appropriately. This report is
based on The Little One coffee shop which was founded in 2009 (Byrne, 2016) . Moreover, this
coffee shop is owned by husband and wife. Prime products sold under The Little One includes
roasted coffee, own baked muffins, and crepes. Moreover, the outcome of this report is based on
range of entrepreneurial strategies which can be adopted in order to effectively carry business
operations. Furthermore, evaluation is also made to identify organisation's strategic situation as
well as development of smart business objective is considered. Lastly, implementation of
strategy is made in order to effectively achieve the desired business objective with proper
efficiency.
Situational Analysis
The BCG Matrix
Boston Consulting Group (BCG) Matrix, is a strategic tool which essentially helps an
organisation is effectively understand strategic options available to a respective company
(Cannavacciuolo and et.al., 2017). Through implication of these strategies the exact position of
product which is an organisation provides is identified. This matrix is divided into four quadrants
which are mentioned below:
 Stars: Stars within an organisation usually offers high growth and essentially helps in
attaining high market share. It is a area where company primarily aims at investing,
because stars are expected to become cash cows. With respect to The Little one coffee
shop stars for them are roasted coffee which they provide to their potential customers.
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Several strategic choices might to adopted like: Vertical Integration, horizontal
integration, market development and several others.
 Cash Cow: These are the most profitable product which an organisation sells in the
potential market. For The Little one cafe the cash cow is muffin where company not
invest. Moreover, product development, diversification, retrenchment and several other
such strategies might be adopted.
 Question Marks: Under question marks products which requires closer consideration are
included. It holds low market share under fast growing market and further it consumes
large amount of cash incurring losses. Crews produced by The Little One cafe is
considered under this. In order to effectively solve the issue market penetration, product
development and several other strategic choices are be adopted.
 Dogs: These are the products which have low growth and market share. Furthermore,
dogs are cash traps this is because the money tied up within the business. With respect to
Little One coffee shop, dogs for respective organisation would be some products are too
expensive which gradually results in decreasing the demand.
BCG basically aims at identifying increment of a product which results in increasing the
cash generations (Colombo and et.al.,2016). At glance it is tool to view organisational portfolio
and resource allocation. Furthermore, BCG Matrix is based on the theory that an increase in
market share will eventually help in increasing revenue through economies of scale.
Porter's Five Forces model: Porter's Five Forces basically aims at identifying the five
competitive forces which essentially shapes every industry. Furthermore, strengths as well as
weaknesses of a industry is effectively identified through implementation of this model. All
these forces basically helps in identifying the level of competition which shall be faced.
Effectively understanding the competitive forces helps an organisation in identifying the root
areas of how profitability is earned. The porter's five forces are mentioned below in detail:
 Bargaining power of Suppliers: Aroma Cafe usually faces weak force of bargaining
power of suppliers. This is because there is large availability of suppliers under beverage
industry (Drucker, 2018). Wherein each of these suppliers adopt several strategies against
each other with aim of gaining revenue. Bargaining power of suppliers usually weakens
the overall supply in the respective industry.
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 Bargaining power of Buyers: The Little one shop experiences strong forces of buyers
bargaining power. Moreover, this force is usually based on customers influences due to
which the company have to drive out the prices of product in order to attain the desired
revenue.
 Threats of new entrants: The Little one faces high force of new entrants this is because
new competitors can easily enter into potential market. Through new entrants the overall
profitability of the company usually decreases.
 Threats of substitute products: The Little one experiences strong force due to threat of
substitute. This because there are several competitors which provide similar product into
the potential market (Gans, Stern and Wu, 2019). These competitors usually tend at
reducing the overall profitability of the company. Low cost is switching is required under
this industry therefore this factors negativity impact the growth of Little one.
 Competitive rivalry: Aroma cafe faces strong force of competitive rivalry this is
because there are vast coffee chains which are operated under UK market. Through this
force are highly influenced.
Therefore, through adoption of porter's five force model by The Little One cafe shop
analyses shall be effectively made in order to identify the areas where respective organisation
have opportunities. This will further help in increasing the overall profitability in long run.
Porter's Value Chain Model: Porter's value chain analysis primarily focuses on the system with
customers as central principle rather than focusing on departments and other business categories.
Through implementation of this model identification of costs as well as profit is effectively done.
This model is primarily divided into two categories namely primary activities and support
activities.
Primary Activities: These activities have an immediate effect on maintenance,
production, sales and several other aspects (Harrigan, 2017). Following are major points which
are effectively considered under primary activities.
 Inbound Logistics: This primarily includes receiving, storing, distributing and other
activities through which goods as well as services are made available for operational
processes. The Little One cafe shall successfully aim at handling all the considered
activities appropriately.
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 Production: This activity is considered with transforming of raw material into final good
which is ready for sale (Jiang and et.al., 2016). The prime activities included production
are assembling, packaging and many others. The Little One cafe shall perform all its
production functions properly in order to supply services to customers within the
allocated time frame.
 Outbound Logistics: Under this activity collection as well as delivery of goods to
ultimate customers are essentially covered. However, all the products manufactured by
Little one cafe shall are effectively collected by outbound logistic team.
 Marketing and Sales: All the activities related to adversing, promotion, sales, public
relations and several others are effectively considered under marketing and sales. Little
One cafe shall implement the most effectively promotional activity in order potentially
increase the overall market share of respective organisation.
 Service: Services basically means the services which are provided to company's potential
customers. This enables to improve as well as maintain the value of product. This activity
primarily includes after-sales services, financing and many others (Karami, 2016).
Support Activities: Support Activities provides assistance to primary activities.
Accomplishment of support activities are only made possible through implementation of primary
activities. Factors included are support activities are:
 Firm Infrastructure: This is the area where an organisation carry outs its business
operations. Through this management system services to whole organisation are
effectively provided. It basically includes planning, financing, quality control and several
others. With respect to The Little One cafe the firm infrastructure should be attractive
enough so that more and more customers are attracted.
 Human Resources Management: It is the most important and essential activity which is
essentially required to be managed. Through management of human resource at
workforce excel of primary activity is made possible (Morgan, 2016). Therefore, at Little
one coffee shop the management shall effectively look after retention, transfer, appraisal
and dismissal of stage in order to carry out business operations with proper efficiency.
 Technology Development: Technology Development usually requires high investment
and this takes years to research and develop the most appropriate strategy. Furthermore,
benefits of this development is essentially enjoyed by an organisation. Little one coffee
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shop should develop several techniques which would benefit the respective organisation
in long run.
 Procurement: This activity basically aims at providing necessary inputs that are
material, machinery and several others. These activities are primarily required by Little
Little One cafe shop in order to properly carry out its business operations with efficiency.
However, the main focus of value chain model is to effectively satisfy the needs of customers
potential customers (Provasnek and et.al., 2017). Under this model each and every business
related activities are considered essential.
Profit Impact of Market Strategies (PIMS)
Profit Impact of marketing strategy is an ongoing and comprehensive study of
performance of strategic business units in thousand of companies in all major industries. This
project began at General Electric and continued at Harvard University which was taken by
Strategic Planning Institute(SPI). According to SPI, PIMS database can be defined as a
collection of statistically registered experiences which are drawn from various businesses and
designed to understand strategies to work at their best level (Ratten. and et.al., 2017). The data
comprise of key resources which is used to evaluate performance of business, analysing business
opportunities and screening best portfolios.
In context to The Little One coffee shop, its main function is to detail relationship
between business's strategic decisions and its results. This model assist this company to identify
and determine several variables such as market share, profit share, product quality, investment
and service quality.
Strategic situation
External Analysis
PESTEL ANALYSIS: PESTLE Analysis is a framework which is basically sued to
analyse as monitor the macro environmental factors which impacts the overall performance of an
organisation. Furthermore, this tool is primarily important when an organisation aims at
establishing itself into foreign market. It is part of external analysis through which identification
of market is done effectively. Factors considered under PESTEL Analysis is mentioned below:
 Political Factors: Globalization has enormously changed worldwide trend of all major
business activities. However, political factors basically includes the laws and regulations
which are implemented by government. Moreover, there are several laws which is
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invented by government of UK in order to effectively carry out all the business activity
(Salama, 2016). With respect The Little one cafe, business operation is highly impacted
and further the respective organisation need to effectively respond to all legislation
implemented.
 Economic Factors: Economic Factors also significantly impacts overall growth and
helps in identifying profitability rate. Prime factors considered includes: interest rates,
exchange rates, inflation and many others. Furthermore, these economic factors are
broken into macro economic and micro economic factors. In context to The Little One
cafe the pricing adopted by company is becoming priority for customers. Increasing rate
of inflation under UK market basically tends at increasing unemployment rate.
 Socio-Cultural Factors: These factors primarily includes shared belief as well as
attitudes of the population. It basically includes age distribution, health consciousness,
attitudes and so on. Furthermore, through this analysis different needs are customers are
effectively identified. The Little One business activities are highly impacted through
social and cultural factors.
 Technological Factors: The adoption of technology by an organisation plays a very
crucial role. Furthermore, UK market is highly advanced on technical grounds which
encourages the company to adopt the best available technique (Shams and Kaufmann,
2016). With respect to, The Little one cafe the respective organisation might adopt the
technology which impacts the way in which they market they products to potential
customers.
 Environmental Factors: These factors basically includes environmental as well as
ecological aspects such as climate, environmental offsets, weather and others. Moreover,
these factors directly or indirectly impacts tourism, agricultural, farming and several
other aspects. With reference to Little One the operations of cafe are enormously impacts
the overall growth of an organisation.
 Legal Factors: These factors includes specific laws such as discrimination laws,
employment laws, consumer protection, copyright and several other such laws. However,
it very necessary for an organisation to effectively understand what is legal and what is
illegal. However, with respect to The Little One company shall effectively find out of all
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the legal laws enforced by government of UK and aim at carrying out business activities
with accordance these policies.
For small business organisation identification of PESTEL analysis plays a very essential
role this because all the major factors which potential impacts the overall functioning within an
organisation are identified (Sperber and Linder, 2018). Furthermore, improvement shall be
adopted by Little One cafe under the areas necessary so that the overall growth of respective
organisation shows a positive shift.
Illust
ration 1: PESTEL analysis
Sources: What is PESTEL and how does it help your organization succeed, 2019.
SWOT Analysis of The Little One Cafe
This tool is used for assisting organisation to identify their strengths, weaknesses,
opportunities and threats that is related with project planning or business competition. The
SWOT analysis of respective cafe are as follows:
Strengths- The Little One Cafe provide fresh products to their consumers in proper
manner. It is small cafe which provide coffee, muffins and crepes by themselves and serve fresh
and hygiene to their users. Due to fresh and hygiene concept, it is earning high profits in market
which can helps in further expansion of cafes in various places. All the latest equipments are
used for products and provide high quality services which is strength for cafe.
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Weaknesses- The service of Little One Cafe is very slow as there are very few staffs.
The sitting capacity is less which is not possible for consumers to conduct any parties or large
functions. They have less money for investment, resources are limited and poor training practices
which create problem for carrying out activities in an effective and efficient manner.
Opportunities- The respective cafe has an opportunity to expand their business in other
areas and locations for their users. As it focus on high quality product and services along with
maintaining hygiene environment which is advantage for it. In order to attract large number of
consumers and earn maximum profits they can provide discounts to their loyal and regular
consumers.
Threats- The Little One Cafe has many competitors running same business in different
places. As respective organisation is very small having less spacious and few staff for running
business. The other threats can be in terms of rising prices of coffee beans and products. There
are many situation arise in market supply is limited that creates threat for respective organisation.
They have to make plan to overcome from threats and run their business in effective and efficient
manner.
Business strategy
Organisational Objectives:
 To increase business sales 20% more by implementing innovative ideas within 3 months.
 To implement promotional activities within 2 months in order to enhance brand
awareness 30% more.
 To introduce new services within 6 months as per customer's requirements in order
maximise business profitability 40% more.
These are objective which The Little One coffee shops aims at achieving. Furthermore,
through adoption of proper business strategy these objectives can be essentially be attained.
Proper evaluation shall be made so that all the major areas of business shall be identified in
detail. This identifying will essentially help an organisation to make the most appropriate
strategy which would fit in.
Ansoff's Matrix: Ansoff's Matrix is alternative corporate growth strategies which an
organisation usually adopts in order to the attain the desired business objective with efficiency.
This model is essentially a strategic marketing planning model where several growth
opportunities are identified so that he overall revenue earned by an organisation tends at showing
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a positive shift. This is the most widely used model which significantly helps an organisation to
identify the opportunities and increase their sales through adoption of several alternative
combination. Following are four growth strategies which can be adopted by The Little one coffee
shop in order to enhance their overall growth and effectively attain the desired business
objectives:
 Market Penetration: This is the first growth strategy which is considered under Ansoff
Matrix. Under this strategy the aim objective of firm is to attain growth within the
existing products of respective organisation. Furthermore, this type growth strategy can
be done in several ways. As in an organisation can effectively aim at decreasing the
prices of existing products so that new customers are attracted. Therefore, with respect to
The Little One cafe shop company shall sell its potential products at reasonable prices so
at overall revenue earned by respective company shows a positive shift.
 Market Development: Under this growth strategy steps might be undertaken by an
organisation to potentially enter into new market in order to enhance its overall business
operation with efficiency (Zakaria, 2018). With reference to The Little one coffee shop
several strategies might to adopted in order to expand company's business operation into
new geographical areas. Through market development also overall revenue generations
tend to show a positive shift.
 Product Development: Under this growth strategy measures by respective organisation
might be implemented in order to develop a brand new product into the potential market.
Moreover, the adoption of this growth strategy essentially requires extensive research so
that needs as well as demand of potential customers are effectively considered. The
Little one cafe shall also develop a in product into potential market so that overall sales
shifts upwards and established business objective is achieved.
 Diversification: This is risky growth strategy under which an organisation can
essentially entry into new market with new product. Therefore, in order to enhance The
Little One cafe the respective organisation shall adopt diversification growth strategy.
Therefore, it can be recommended that in order to effectively carry out business operation The
Little one cafe shall adopted product development growth strategy so that new customers are
captured and desired business objectives are accomplished.
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CONCLUSION
From the above report it has been summarized that entrepreneurial strategy play an
important role in order to attain desired goals and objectives effectively. In this process it is
necessary to analyses required need of a firm in order to make positive modifications. All these
activities are based on business analytical practices through which firm can carry out situational
and comparative analysis effectively.
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