SME Management: Growth, Challenges & Strategies at Marshfield Bakery

This report provides an analysis of Marshfield Bakery, a small and medium-sized enterprise (SME) based in England, focusing on its entrepreneurial journey, business concept, and sources of competitive advantage. The report examines the bakery's startup process, current market demand, and competitive environment using Porter's Five Forces model. It details the company's growth and development since its establishment in 1984, highlighting the challenges faced in managing and running the business, such as lack of funds and skilled human capital. The report also discusses current growth and development strategies, including market penetration and market development, and explores government support available to SMEs in the UK. Recommendations for future growth include innovation and effective marketing strategies. The report concludes that SMEs like Marshfield Bakery play a crucial role in the UK economy by providing employment opportunities and contributing to economic growth.

MANAGING
SMALL AND
MEDIUM
BUSINESS

Table of Contents
Introduction.................................................................................................................................................3
Findings.......................................................................................................................................................3
Nature of entrepreneur.............................................................................................................................3
SME-Startup process...............................................................................................................................4
Business concept and source of competitive advantage...........................................................................5
Source of competitive advantage.............................................................................................................5
Current level of demand and competitive environment...........................................................................5
Growth and development of business till date.........................................................................................6
Challenges of managing and running business........................................................................................6
Current growth and development strategy...............................................................................................7
Government support to help business so that they can overcome the challenges.....................................7
Recommendations...................................................................................................................................8
Conclusion...................................................................................................................................................8
References.................................................................................................................................................10

Introduction
Small and medium enterprises are started with less amount of initial investment.
However these entities play a crucial role in the economic growth and enhancement of a country
(Branicki and et. al., 2017). In UK, SMEs contribute nearly 2.3 trillion in the economy and also
provide employment to nearly 16.8 million individuals. The present study is based on Marshfield
bakery that is it is small company based on England. It offers bakery products such as biscuits,
cakes, snacks and more. The present study will cover nature of entrepreneur of venture, start-up
process of a small business along different sources of the competitive advantage. Additionally,
existing level of demand and analysis of competitive environment will also cover in the
following report. It will also include development of business so far with a detailed analysis of
challenges and support of government authorities for future development of business.
Findings
Nature of entrepreneur
Entrepreneur is a person who starts a new venture by setting a creative and unique idea.
Entrepreneur aims to introduce a new product in society and also aims to earn higher amount of
profit. In context of Marshfield bakery, it is a small business which was initiated with an aim to
earn certain amount of profit. The bakery was founded by Mr Paul white and his wife Lenny. In
this context, nature of entrepreneur is discussed below.
Risk Taker: An entrepreneur needs to have risk taking ability to attain success in the
field of business. The main aim of starting an entrepreneurial venture is to earn profits
(Verreynne and et. al., 2019). However, there is no certainty to regarding profit and revenue of
the business venture. In current situation, Paul started a new venture with an aim to earn
significant amount of profit in future period of time.
Profit Maker: The main aim of an entrepreneur is to earn higher profit from the new
business venture. In the given scenario Paul and his wife started the bakery so that they can earn
significant amount of profit to keep the business running for longer run.

Innovator: It is one of the crucial traits of entrepreneur which make them enable to
introduce a unique project in market. For and entrepreneurial venture, it is important to include
some unique and creative aspects to maintain a different identity in the competitive environment.
In context of Marshfield bakery, they provide delicious taste and quality of bakery products to
the customer which help them in maintaining differentiation from the other bakeries working the
industry.
SME-Startup process
SME small and medium enterprises which are generally started with limited amount of
funds and resources. The process of starting a small business is given below:
Conduct market research: It is the initial stage wherein the administration of
Marshfield bakery undertakes effective market research in order to gather detailed and in depth
information regarding customers, profit, competition and more (Gray and et. al., 2017).
Writing business plan: After conducting market research, the next step is to prepare a
business plan. In reference of the respective company, they are required to prepare a business
plan including different elements such as mission and vision statement, marketing plan, financial
requirements, operational plan and more.
Fund the business: To commercialise the idea, it is crucial to have adequate amount of
funds which can be gathered from different sources like bank, personal investment and more. In
context of the respective bakery, funds will be taken from bank loan and personal investment to
run the business.
Choose business location and structure: It is the next step wherein location of business
is selected (Polonsky and Waller, 2018). Here, the Marshfield bakery is located in UK and
follow a particular structure in order to maintain proper flow of information.
Choose business name business: name of a business needs to be unique and align with
the product or services. In context of the respective bakery they have been selected a different
name which clearly reflects the project or services they offer.

Registered the business: It is the last step in which the business is registered with
federal or state government. In context of Marshfield bakery, it is a registered with the state
government which strengthen their brand image.
Business concept and source of competitive advantage
Business is an activity in which products or services are exchanged between the business
owner and the customers (O'Dwyer and Gilmore, 2018). In current scenario, Marshfield bakery
is a small bakery which was to startes as a family business to offer products such as cakes,
biscuits and so on. The owners of the respective bakery keeps on expanding the business as a
result they have presents at different location in UK. The bakery is known for the taste and
quality of products they offer hence they are able to maintain an edge over rival firms in the
market.
Source of competitive advantage
Quality: The respective bakery focuses on the quality in order to maintain long term
relationship with the customers.
Customer’s willingness to pay: The Marshfield bakery makes sure to provide the best
quality products and values to the customers so that they willingly pay the value of products. It
allows the entity in maintaining a unique presence within the industry.
Product attributes differentiation: To maintain differentiation, the owners of Marshfield
bakery add unique and different attributes in their product to gain the attention of the customers
(Julien, 2018).
Current level of demand and competitive environment
Marshfield bakery was started in 1984 and has been witnessed tremendous amount of
growth so far. They offer delicious and quality product hence able to gain the trust of customers
which further enhance the level of demand in an efficient manner. The company has an annual
turnover of nearly £ 2 million that demonstrates their efficiency of providing better services.
Competitive environment

The respective bakery is working in a highly competitive environment which can be
understood by the implication of Porter’s five forces model. Here, forces of this model are
mentioned below.
Threat of new entrants: Here, threat of new entrance is higher due to limited entry
barriers in terms of cost, initial investment and government regulation.
Bargaining power of buyers: Bargaining power of buyers is high due to presence of
several other options in the market.
Bargaining power of suppliers: In the bakery industry, suppliers have lower bargaining
power and they have to work according to the rules and regulations of the purchasing company
(de Araújo Lima, Crema and Verbano, 2020).
Threats of substitute: There is higher substitute present within the industry which also
affect the growth of the respective company.
Competitive rivalry: Marshfield bakery is working in a highly competitive environment
with presence of several rival firms that are offering similar products.
Growth and development of business till date
Marshfield bakery has recorded high growth in terms of increment in the sales and
revenue. They have expanded business in different location and also appointed new and
competent staff to serve the increasing demand in market. The business was started in a village at
a small location but now it has presence at different location within the country. The bakery was
started by two people Mr Paul and his wife Lenny. They used to cook cakes pudding and sold
those products to local stores, colleges and the schools. Later on, they started to get more number
of orders hence decided to expand the business and also appointed some people to help them
with bakery work (Marshfield Bakery, 2021). As a result, the company keep expanding and
manage to earn high amount of profit in an efficient manner.
Challenges of managing and running business
Start and run a new business is not easy. A business owner has to face several
complexities while establishing and running the business some of which are explained below:

Lack of funds: For each and every business funds are really important as it is not
possible to carry out the business activities in absence of adequate amount of funds (Agostini,
Nosella and Filippini, 2017). In reference of the respective bakery they also face the issues
related to funding in the initial days which affect their capability to purchase necessary material
and equipments to continue the business operation.
Lack of competent human capital: Human resources are one of essential stakeholders
of a company. In Marshfield bakery, they encounter the issue related to competent and skill
workers which negatively affect their overall productivity and profitability.
Current growth and development strategy
To grow, in the current competitive market, it is imperative to adopt growth and
development strategies. For this purpose, different elements of Ansoff’s growth are mentioned
below.
Market penetration: This strategy is about enhancing the profit margin with the existing
products. For this purpose, different offers like discounts, vouchers are given to the customers so
that they get attract towards the product or services of the organization (Melé, 2019).
Market development: In this, the entity enters into a new market after undertaking a
detailed market research of different aspects such as requirements of customers, profitability and
more.
Product development: This strategy is related to the development of new product or
services in the existing market.
Diversification: It is known as one of the riskiest strategy wherein new product or
services are launched by the company in an entirely new market. Effective implementation of
this strategy makes a company enable to earn high amount of profit (Seth, Rehman and
Shrivastava, 2018).
In contest of Marshfield bakery, market development is one of the effective strategies.
Through market development, the company can target more and more customers with their
existing product.

Government support to help business so that they can overcome the challenges
Government authorities offer different kind of grants, loans as well as subsidies to small
business units to ensure their growth in future. The main aim of government is to enhance the
capabilities of small and medium business units to purchase necessary resources and equipments
to keep the business running for longer run. For this purpose, different scehme have been started
by the government of UK. Seed enterprise investment scheme is designed with an aim to provide
financial assistance to the small entities up to 150000 there are nearly 75,000 small businesses
has already gained support of this scheme. In addition, enterprise investment scheme is the
another scheme that gives the opportunity to SMEs to raise fund of worth up to 5 million each
year (A guide to government support for small businesses, 2021).. Therefore, the government
support to the small and medium units in different ways so that these units can face the
constraints effectively and accelerate in future.
Recommendations
 It is suggested that small business units are required to undertake innovation in order to
make a separate identity in competitive environment. Producing innovative products will
help in gaining the attention of customers which will further help in enlarging the sales
and revenue. In UK, there are several entities which are working at small and medium
level hence the innovation and creativity is the only way to maintain significant
difference from competitive firms.
 SMEs are required to embark effective marketing and promotional strategies to attract
the customers in an efficient manner. They need to consider effective and cost efficient
marketing techniques such as use of social media platforms, online marketing and so on.
It will help in improving the business presence that will escalate revenue and profit
margin.
Conclusion
Out of the above information, it is summarized that small business units are crucial part
of the overall economy of UK. These entities play a significant role in economic growth by
enlarging the employment opportunities and source of income of people within the country. The
above study is based on Marshfield bakery that has a small bakery based on UK. There is

discussion regarding the nature of entrepreneur and the process of starting and managing small
business units. It is concluded that the bakery has record a significant growth in terms of
expansion and enhancement in profit. However, they also faced constraints in terms of lack of
funds and competent human resources. Further, it is analysed that government is providing
complete support and assistance to the small business units so that they can face the future
hurdles effectively.

References
Books and journals
Agostini, L., Nosella, A. and Filippini, R., 2017. Does intellectual capital allow improving
innovation performance? A quantitative analysis in the SME context. Journal of
Intellectual Capital.
Branicki and et. al., 2017. How entrepreneurial resilience generates resilient
SMEs. International Journal of Entrepreneurial Behavior & Research.
de Araújo Lima, P.F., Crema, M. and Verbano, C., 2020. Risk management in SMEs: A
systematic literature review and future directions. European Management Journal, 38(1),
pp.78-94.
Gray and et. al., 2017. Why in the world did they reshore? Examining small to medium-sized
manufacturer decisions. Journal of Operations Management, 49, pp.37-51.
Julien, P.A. ed., 2018. The state of the art in small business and entrepreneurship. Routledge.
Melé, D., 2019. Business Ethics in Action: Managing Human Excellence in Organizations.
Bloomsbury Publishing.
O'Dwyer, M. and Gilmore, A., 2018. Value and alliance capability and the formation of strategic
alliances in SMEs: The impact of customer orientation and resource
optimisation. Journal of Business Research, 87, pp.58-68.
Polonsky, M.J. and Waller, D.S., 2018. Designing and managing a research project: A business
student's guide. Sage publications.
Seth, D., Rehman, M.A.A. and Shrivastava, R.L., 2018. Green manufacturing drivers and their
relationships for small and medium (SME) and large industries. Journal of Cleaner
Production, 198, pp.1381-1405.
Verreynne and et. al., 2019. Innovation diversity and uncertainty in small and medium sized
tourism firms. Tourism Management, 72, pp.257-269.
Online

A guide to government support for small businesses, 2021 [Online] Available through:<
https://thepitch.uk/government-support-for-small-businesses/ >\
Marshfield Bakery, 2016 [Online] Available through:< https://www.swmas.co.uk/success-
stories/marshfield-bakery />