Assessment 1: Managing SMEs - Analysis of Marshfield Bakery's Business

This report provides a detailed analysis of Marshfield Bakery, a Small and Medium Enterprise (SME), examining various aspects of its business operations. The report begins with an introduction to SMEs, their classification, and a brief overview of Marshfield Bakery's background. It then delves into the nature of the entrepreneur behind the venture, highlighting key entrepreneurial characteristics. The report further explores the SME start-up processes, the business concept, and sources of competitive advantage using Porter's Five Forces. It examines the current market demand, competitive environment, and the bakery's growth and development to date. The challenges faced by the business, including rising costs, price sensitivity, and the impact of COVID-19, are also discussed. The report analyzes the SME's current growth and development strategy using the Ansoff Matrix and concludes with a discussion of government support measures available to help SMEs overcome challenges. The report uses secondary data to support its findings and provides valuable insights into the management and growth of a real-world SME.

Assessment 1
Managing Small and
Medium sized
Enterprises

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
The nature of the entrepreneur behind the venture.....................................................................1
The SME start-up processes........................................................................................................2
The business concept and any sources of competitive advantage...............................................2
The current level of demand and the competitive environment..................................................3
The growth and development of the business to date.................................................................3
The challenges of managing and running the business...............................................................4
The SMEs current growth and development strategy.................................................................4
Any government support measures that may be available to help the business overcome the
challenges faced..........................................................................................................................5
CONCLUSION................................................................................................................................5
References:.......................................................................................................................................6

INTRODUCTION
Small & Medium Size Enterprises (SMEs) refers to the small and medium sized
businesses whose level of assets, number of working employees and revenue are already decided
by the government. Every country has decided various sizes of operations in SMEs. In United
Kingdom, SMEs are divided into 3 categories i.e. Small, medium and Micro businesses.
Involvement of 0-9 employees in any business is micro business, small business include 10-49
employees and it is necessary to have 50-249 employees in a medium sized business. This report
is based on Marshfield bakery. It include various concepts regarding SMEs such as nature of
entrepreneur, their start up process, Current level of demand, various challenges, managing,
growth and development of business etc. which are collected by various sources of secondary
data collection method.
MAIN BODY
The nature of the entrepreneur behind the venture
Marshfield Bakery was started in 1985 and incorporated in 2005. it was founded by Joanna
Louise Allen with the purpose of dealing in food, grocery and bakeries product in retail and wholesale
stores. An entrepreneur is the person who perform the activities of entrepreneurship. Starting or
innovation of any venture is only the result of nature of entrepreneur (Song and et. al., 2019).
Following are the nature of entrepreneur behind the Marshfield bakery: Related to innovation- An entrepreneur should have innovative mind so that they can
continuously think about new ideas. Continuously formation of new ideas result in adoption
of changes which is the only way of success. Risk bearing- It is not necessary that all the business ideas result in success, sometimes it
may cause huge loss as well. So the entrepreneur have to take risk. Only after taking risk,
they can adopt new ideas. Without risk it is not possible to get the success.
 Organiser- Another nature of entrepreneur is that they should be good in organising all the
activities in such way that they can generate revenue (Vrchota 2018).
Joanna Louise Allen had started Marshfield bakery by the adoption and organising all innovative
activities and taking risk. It shows that their nature was just like as entrepreneur . It is the reason how
they had started Marshfield Bakery.
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The SME start-up processes
For starting any business, entrepreneur should follow a pre decided process. It will help them
to do run business smoothly and make more profitable (Regnier 2017). Following is the process of
starting Small & Medium Entrepreneurship: Self Assessment- Firstly entrepreneur have to make ready themselves for making good
decisions, taking financial risk and willingness to work for uncountable hours. It is the first
step towards starting a small business. Write Business Plan- After doing self assessment, entrepreneur have to write the complete
business plan which will help them in making list of business goals and objectives. Along with
this, it makes availability of start up capital. Choose Legal Structure- Under this step, entrepreneur have to select best legal structure. This
will decide the structure of paying taxes and personal liabilities. For removing any type of
confusion, they have to decide their structure on the time of innovation. Obtain Financing- For the purpose of starting operations, capital in financial term is required.
Entrepreneur have to find and analyse the factors from where3 they can arrange money. Their
are many sources of obtaining finance i.e. loans, personal savings etc.
 Next Steps- At this level, business have to start doing operations, for this purpose they have to
contact with suppliers, leasing or buying office for performing operations. By doing this
process complete, a business start doing operations.
Above mentioned are the steps of process of start up a SME. Director of Marshfield had also
followed the same process while starting the operations in their bakery.
The business concept and any sources of competitive advantage
Business concept of Marshfield bakery and the source of competitive advantage can be
analysed by Porter's Five Forces which helps the organisation in identifying and analysing weakness
and strengths of industry (Misati and et. al., 2017). Competition in the industry- It states that the competition is high in the case of availability of
large number of companies offering same products. Also it implies that the power of
company is less. Any company can beat the competition by offering different products or
lower prices.
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 Potential of New Entrants into an industry- It analyse the entry of new companies in the
industry. If it is easy for any company to enter in the industry, it lead in the increase
competition in the market and vice versa (Mageswari and et. al., 2017). Power of Suppliers- It refers to the analyses of cost which is going to affect if the company
switches the supplier. Presence of large number of suppliers give chance to company in
decreasing their input cost by changing the supplier. Power of Customers- It is the fourth force of this model which states the purchasing power of
customers. If the company is client base, it means that the customer have power to negotiate
for lower prices and better product.
 Threat of Substitutes- At this step, companies have to analyse their substitute products
because higher number of availability of substitute goods decrease the chances of increasing
prices of their product.
Marshfield Bakery have done the analysis of Porter's five forces model, under which it is
found that it is very easy to enter in the same industry and they have various competitors who are
offering same and substitute products which increase the competition.
The current level of demand and the competitive environment
Marshfield Bakery is currently doing trade in various bakery products i.e. wedding cakes,
birthday cakes, rusks, bread, butter and many more. These items are very normal and everybody
makes demand of rusks, breads etc. So the current demand of their product is high as there are lots of
customers and their location of stores are also good which attract the customers. This is a positive
point towards their demand as it is working in increasing the demand by attracting customers.
But there is a negative aspect as well. There are lots of competitors offering the same products
to the customers. FairyPan, Chinatown Bakery, Companio Bakery, Queens Bakeries, Hambleton
Bakery, Simon's Bakery, The Old Post Office Bakery, Small food Bakery, Tetote Factory, Pollen
Bakery are various competitors of Marshfield Bakery. For beating the competition, they are offering
good quality products at very low prices as compared to others (Jewalikar 2017).
The growth and development of the business to date
Marshfield Bakery was founded by Joanna Louise Allen in 1985 and it was incorporated on
13 January 2005 with a single outlet and having almost 10 staff members. After incorporation, they
has started more outlets on a perfect location. As a result, their turnover increased by 155% and they
had launched 13 new products. This implies a positive effect to their growth. According to a report, it
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is analysed that currently there are almost 45 employees are working with them and their turnover
become above £2 million. For beating the competition, they started manufacturing of new products
which differentiate them from others.
They are continuously focusing on the innovation, which help them in the generation of
revenue and it implies a positive impact on the the competition in the market.
The challenges of managing and running the business
Challenges faced by the Marshfield Bakery while doing business are as follow: Rising prices- Most important challenge for Marshfield bakery is high rise in the prices of
various ingredients which are used in the manufacturing for bakery products such as flour,
eggs, oil etc. this result in high costing and high selling prices (Hsueh 2017). Price Sensitivity of market- Marshfield Bakery have a lots of competitors in the market and
customer want to buy the quality product at lowest prices. Competitors attract the customer by
providing products at less prices as compared to others. COVID-19 Effect- Due to COVID, all customers are are not preferring outside food. For
surviving in the market, Marshfield Bakery is following various safety and hygiene factors
which is also related to the increase in costing.
 Inventory management and planning- Bakery products can be used in a short period of time.
It is not possible for Marshfield bakery to store a huge amount of inventory and finished
product. It is an another challenge for bakeries to manage the inventory and finished product
otherwise it may cause huge amount of loss to them. For this purpose they had developed a
team of staff to manage all these things.
The SMEs current growth and development strategy
For analysing the current growth of any organisation and developing strategies regarding the
same, organisations apply Ansoff Matrix (Hong and et. al., 2018). It is a tool which is used to help
the marketers for understanding the risks and growth of any business. Below mentioned is the
explanation of strategies of Ansoff matrix: Market Penetration- This strategy of Ansoff matrix focus on the increase of sales of existing
product in an existing market. By these strategies, organisations use various instruments like
marketing which result in the sale of existing product in the existing market.
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 Product Development- For the purpose of increasing sales and attracting customers,
organisation launch new product in the existing market (Graafland 2017). These strategies
involve various innovations. Market Development- These strategies make a focus on the development of market. In
simple words, they focus on entering a new market with their existing product. Organisations
wants to target new audience for the purpose of spreading their business and coving all the
population.
 Diversification- This strategy is act as huge challenging for the organisation as they are
going to introduce new product in a new market. There is no any product with brand and no
market. Hence it is difficult to apply these strategies.
Marshfield Bakery is focusing on product development. Under these strategies they are
continuously focusing on the new ideas by introducing various new products in existing market. This
strategy also helps them in beating the competition on the basis of products and innovations.
Any government support measures that may be available to help the business overcome the challenges
faced
Small and Medium sized Entrepreneurship are the business which leads to the growth of
economy. UK government has announced The Government Action Plan for small businesses in 2004.
Because of this plan, government wants to build United Kingdom as the best place to start and growth
of business. It build a culture of enterprise by encouraging many more dynamic start up market. Along
with this, the government has also launched many schemes for arranging funds for the small scale
enterprises, some of them are given below: Funding for Lending Scheme- This scheme started providing mortgage loans to the
consumers and business which help in the building of confidence and increasing lending to
the household and businesses of United Kingdom.
 National Loan Guarantee Scheme- Under this scheme, government of UK guarantees on
unsecured borrowing by banks (Agwu 2018). It provide cheaper finance to the business by
reducing the cost of bank loans by up to 1 percentage point.
CONCLUSION
From the above report it is concluded that Small and Medium sized entrepreneurship are
classified only on the basis of size of business like operations size, investment, number of
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employees and many more. Furthermore, it is analysed that Marshfield bakery have various
challenges while doing work in UK market. Also, they are following Product development
strategies for developing organisation. They can also apply Market penetration and market
development strategies of Ansoff matrix, which may also result in the growth and development
organisation. Start up loans, Business Finance Partnership, Enterprise Finance Guarantee are
various schemes made by government of UK for supporting SMEs.
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References:
Books and Journals
Agwu, P.E., 2018. Analysis of the impact of strategic management on the business performance
of SMEs in Nigeria. Academy of Strategic Management, 17(1).
Graafland, J. and Smid, H., 2017. Reconsidering the relevance of social license pressure and
government regulation for environmental performance of European SMEs. Journal of
Cleaner Production, 141, pp.967-977.
Hong and et. al., 2018. Sustainable supply chain management practices, supply chain dynamic
capabilities, and enterprise performance. Journal of cleaner production, 172, pp.3508-
3519.
Hsueh, S.C. and Kuo, C.H., 2017, August. Effective matching for P2P lending by mining strong
association rules. In Proceedings of the 3rd International Conference on Industrial and
Business Engineering (pp. 30-33).
Jewalikar, A.D. and Shelke, A., 2017. Lean integrated management systems in MSME reasons,
advantages and barriers on implementation. Materials Today: Proceedings, 4(2),
pp.1037-1044.
Mageswari and et. al., 2017. A comprehensive analysis of knowledge management in Indian
manufacturing companies. Journal of Manufacturing Technology Management.
Misati and et. al., 2017. The internationalization of African small and medium enterprises
(SMEs): a South-North pattern. Africa Journal of Management, 3(1), pp.53-81.
Regnier, P., 2017. Small and Medium Enterprises in Distress: Thailand, the East Asian Crisis
and Beyond: Thailand, the East Asian Crisis and Beyond. Routledge.
Song and et. al., 2019. Technological challenges of green innovation and sustainable resource
management with large scale data. Technological Forecasting and Social Change, 144,
pp.361-368.
Vrchota, J. and Řekrř, P., 2018. Retracted: Importance of teamwork for the satisfaction of
managers in small and medium-sized enterprises in the Czech Republic. Journal of
Fundamental and Applied Sciences, 10(4S), pp.644-648.
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