Little Dessert Shop: Partnership Evaluation and Market Analysis

This report presents an analysis of the Little Dessert Shop case study, focusing on the partnership between Mary and Sue. It evaluates the suitability of a general partnership structure, considering their equal investment and responsibilities. The report then applies Porter's 5 Forces model to assess the shop's competitive environment, highlighting threats from substitutes, supplier power, and buyer power, while identifying opportunities to gain a competitive advantage. Furthermore, it examines three macro environmental factors—social, technological, and environmental—and their potential impact on the business. The report concludes by summarizing key findings and recommendations for strategic improvements, such as adopting online delivery and sourcing organic ingredients to attract customers and enhance the shop's market position. The analysis draws on relevant academic literature to support its arguments.

Individual report based on a case
study
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Table of Contents
INTRODUCTION......................................................................................................................... 3
MAIN BODY................................................................................................................................ 3
1. Evaluate partnership as type of business with reference to Mary and Sue..........................3
2. Porter 5 force model to analyse little dessert shop and how Mary and Sue can gain
competitive advantage.............................................................................................................3
3. three macro environmental factors and how it can improve business..................................3
CONCLUSION............................................................................................................................. 3
REFERENCES............................................................................................................................ 5
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INTRODUCTION
A business may be started in different ways such as in partnership, sole proprietorship, etc. This
defimes the form of business and its type. It is necessary to register business within law so that
all rules and regulations are applied. Also, there is need to analyse competition in market as
well so that accordingly strategy is developed. For that there are various models available. This
also helps in finding out factors that can impact on business growth and development. This
report will describe about case study of Mary and sue and their dessert shop. Also, it will be
explained about porter 5 force and 3 factor that can improve business growth (Durand, Grant, .
and Madsen, , 2017)
MAIN BODY
1. Evaluate partnership as type of business with reference to Mary and Sue
From case study it is identified that Mary and Sue has started a business. They both have
contributed equal amount of 30000 Euros in their business as working capital. However, in order
to fulfill more capital requirement there is nees of 20000 Euros that need to be taken as loan
from Bank. As both are working with equal capital amount so it is required that business is
regarded as general partnership type. In this partnership the profits distribution will be 50-50.
This is because they both have invested equal working capital amount in it. The partnership is
suitable type of business for Mary and Sue. In this both will be liable for profit and loss. They are
having common objectives for starting it and are responsible for their roles. Here, limited
partnership can not be considered as business type because in that each partner is liable for
limited liability. The risk shared are not equal as well in it.
Hence, general partnership agreement must be made between Mary and Sue for it. This will
make it easy for them to define their roles and responsibilities. (Ethiraj, Gambardella, and
Helfat, 2016)
2. Porter 5 force model to analyse little dessert shop and how Mary and Sue can gain
competitive advantage
The porter 5 force is a framework that is used to analyse competitive environment. It
considers 5 factors that derive business economies and attractiveness within industry in terms
of profitability. Similarly, for Little Dessert shop business as well this model is used to gain
insight about it. Thus, it is as follows :
Threat of substitutes- it refers to power in which it shows threat of substitutes available of
particular product in market. So, if there are more number of substitute available then power of
switching to other products is high and vice versa. However, Little Dessert shop is dessert shop
and there are several substitute available of dessert. Thus, people can easily use other
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products. Here, Mary and Sue can gain competitive advantage by providing more products
along with desert. Hence, it will eliminate substitute of it. (Hitt, and Duane Ireland, 2017)
Bargaining power of supplier- In this it refers to power of supplier for changing price of
products. It means if there are more number of suppliers then less power they possess as
company can easily switch from one supplier to another. But if supplier are less then they
possess more power to influence price. The Little Dessert shop buys from cash and carry.
Hence, there are few suppliers and bargaining power is high as they can influence prices easily.
The shop can buy organic material from various suppliers. Thus, it will result in possessing less
power to them to influence price of product. In this way they can gain competitive advantage.
Bargaining power of buyer- In this it refers to power of buyer for changing price of products. It
means if there are more number of buyer then less power they possess as they can easily
switch from one company to another. But if buyer are less then they possess more power to
influence price. In Little Dessert shop there are lot of buyer so they can easily influence price of
products. (Makadok, Burton, and Barney, 2018)
Threat of new entrant –it means entry of new businesses in this industry. If entry and exit
barriers are strong then it becomes difficult for them to enter but if there are no barriers then
new entrants can easily enter in it. As Little Dessert shop is dessert shop so the threat of new
entrant is high. There are no entry and exit barriers in it.
Competitive rivalry – this means the level of competition which exists within industry. Here, there
are no competitors of Little Dessert shop in that market. Therefore, competitive rivalry is less.
Here, Mary and Sue can promote dessert and retain customer. It will enable them in building
Loyal customer base and gaining competitive advantage.
In this way Mary and Sue can gain competitive advantage in market by including more supplier
and retaining customer so they are able to compete with rivals.
3. Three macro environmental factors and how it can improve business
Every business is affected by certain factors in which it operate. These factors are internal or
external. However, it is necessary to identify those factors so that on basis of it strategies are
developed. The factors may impact either in positive or negative way. The macro environmental
factors exist outside business and it can not be controlled. Likewise, for Little Dessert shop as
well change in macro factors will improve business. Thus, they are discussed as below
(Trigeorgis, and Reuer, 2017)
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Social - it is a factor that is related to change in taste and preference of customers, cultural
ethics, values, beliefs, etc. Any change in this highly affect on their needs and wants. Thus, due
to covid 19 there is change in people needs. Now they are more health conscious and prefer to
eat organic food which boost immunity. Besides that, they want fresh and hygienic food that
does not harm their health and body. Similarly, the change in this factor can benefit Little
Dessert shop as they can buy from organic farms. It will help in maintaining nutrients and
minerals of food.
Technological- this is another external factor that can help improve business. It refer to bringing
technological advancement. Due to covid 19 there is change in way of lifestyle of people.
Furthermore, more companies are using online way of doing business and delivery goods to
customers. This has led to attracting large number of people and generating sales and profits.
Similarly, Little Dessert shop can also start adopting online delivery system so that more people
can be attracted. They can merge with online food company like just eat. It will enable in getting
more order and increasing sales. In addition, shop can do promotion on various social sites as
well to attract people. (Zhao, and et.al., 2017 )
Environmental- this is also factor that can impact on business to great extent. Here any change
in laws and regulations related to environment will affect firm operations. Similarly as Little
Dessert shop produces dessert for people they can buy organic raw materials and fresh
ingredients. In This way they can engage wih sustainability factor and contribute towards
society. Buying of organic material will create positive image in mind of people and it will result
in increase in sales of shop.
Thus these are 3 factors that can support Little Dessert shop in improving its business. It will
enable them to develop strategies and tactics to promote product and attract more people.
(Durand, Grant, . and Madsen, , 2017)
CONCLUSION
It can be concluded that Little Dessert shop is a shop located in Bullring shopping centre. It
provide various dessert and other products to people. Sue and Mary can
It is found that Little Dessert shop is can gain competitive advantage within market by offering
more products. Besides that, threat of new entrant and substitute is high. Moreover, bargaining
power of supplier is high as shop purchase from few suppliers. The 3 environment factor that
can help company to improve its business are social, technology and environmental. By
producing dessert with organic material and using online food delivery it can attract more
customers.
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REFERENCES
Books and journals
Durand, R., Grant, R.M. and Madsen, T.L., 2017. The expanding domain of strategic
management research and the quest for integration. Strategic Management
Journal, 38(1), pp.4-16.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2016. Replication in strategic
management. Strategic Management Journal, 37(11), pp.2191-2192.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management. Strategic Management Journal, 39(6), pp.1530-1545.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.
Zhao, E.Y and et.al., 2017. Optimal distinctiveness: Broadening the interface between
institutional theory and strategic management. Strategic Management Journal, 38(1),
pp.93-113.
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