Analysis of Small Business Management, CRM, and Internationalization

This report delves into the critical aspects of managing and running a small business. It begins by examining the main considerations necessary for effective resource allocation, emphasizing the importance of planning and identifying key resources like financial, human, and technical assets. The report then transitions to customer relationship management (CRM), detailing the CRM process and strategies used to analyze customer portfolios, build customer intimacy, and develop value propositions. Finally, the report explores the ways in which small-scale businesses can develop transnationally, including opening overseas operations and utilizing intermediaries, while also considering the drawbacks and benefits of global expansion, such as cultural differences and increased brand recognition. The report provides a comprehensive overview of strategies and challenges involved in small business management, customer relationship, and internationalization, providing valuable insights for aspiring entrepreneurs.

Managing and
running a small
business

Contents
TASK 1......................................................................................
P1. Main considerations required by small scale business
................................................................................................
LO2............................................................................................
P2. Customer relationship management................................
P3. Ways in which small scale business develop itself
transnationally........................................................................
TASK 1
P1. Main considerations required by small scale business
In order to run a business in an effective manner, it is very important for a small
business to plan and allocate resources in an appropriate manner for the purpose
of achieving business goals and objectives. Business can achieve its goals and
objectives when it has an effective planning for allocation of resources.
Allocation of resources is considered as a basic step in making an effective
business plan for a small business management. It includes identifying what
resources the business requires for achieving its various specific objectives.
It includes equipments and fixed assets, financial resources and human resources
such as suppliers, staff and other important valuable relationships (Attaran and
Woods, 2019). There are various things which must be considered by a small
business while allocating resources. The first thing which must be considered by
a small business is to identify the resources which are required. These resources
will be dependent upon the kind of business which is operating. These resources
includes human resources, financial resources, material resources, and so on.
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In order to allocate resources, small scale business can consider
these factors-
Vision and objectives of a business- The basic thing
upon which resources allocation is dependent is the objectives
and vision of a business. If the objective of a business is wide
such as achieving high amount of profit by 25% in upcoming
time, than the resources required would be of high amount as it
requires high amount of cost of production. If the business
objectives is to enhance market share than it will require high
amount of financial resources.
Evaluation of technical resources- It is very important
while starting up a small business, specially if business plan
deals with technology to have a strong IT network in order to
start it (Dvouletý and Orel, 2019). Technical resources are
required for allocating for web designing, developing and
evaluating expenses related to website and its development.
Understand the scope of a business- The other thing which
must be understood by a business in order to formulate and
allocate certain resources in an appropriate manner is to
understand the business's scope. On that basis business can
allocate certain resources which are required by an organisation.
For instance, in case of small business such as running a small
restaurant, the resources which are required would be less as
compared to the business which is operating on large basis.
Consider human resource management- The very
important thing which can be considered by a small business is
to make sure that effective human resource must be used in a
business. An enterprise must ensure that appropriate candidates
are selected in recruitment and selection procedures and must
human resource practices in an appropriate manner. If skilled
and talented workforce is available than it will help the business
in achieving business goals and aims.
Importance of resource allocation
Allocation of resources is a procedure of managing,
assigning, planning resources in a particular form which helps
in reaching towards the strategic goals of a business. It also
helps in making the work of an organisation more significant
and effective. It also helps in delivering the project in an
effective manner.
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LO2
P2. Customer relationship management
CRM procedure includes all the strategies and activities
which is utilised by an organisation in managing their
interaction with potential and existing customers. It is an
important tool for all kinds of enterprises whether its a sole
entrepreneur, global corporations or a start up business (5 Step
Process For CRM, 2019). In a small business, the process of
CRM can be used as follows in order to drive maximum amount
of profit from company's customer base as follows-
Analysis of customer portfolio- The first step which is
considered while implementing customer relationship
management is analysation of customer base of an enterprise for
determining what kinds and customer groups are profitable
(Iacobucci and Rosa, 2019). It will help in defining the target
customer base of an organisation.
Customer Intimacy- The second step which is considered in
this this process is customer intimacy which is a process to get
familiar with company's customers which are targeted (Truong,
2019). It helps in building relationship with customers by
understanding their tastes and preferences. It includes
developing database of customers for storing collected
information.
Network Development- It refers to developing and identifying
strong relationship with people, networks and within an
organisation which helps in achieving customer service success.
It consists of external partners like investors and suppliers, and
internal partners such as employees of an enterprise.
Value proposition development- The next step
includes gathering information while working upon intimacy of
consumers. After identifying targeted customers, organisation
can move to a step ahead and develop a value preposition of
tailored value for customers which must create value
preposition for the organisation itself.
Customer life cycle management- This cycle is the
journey of ideal customers such as from the potential client to
the advocated products and services. It is also related to conduct
the relationship which is maintained with customers. In order to
manage this cycle, it is required to that attention and structure
must be in process. It helps in determining the way in which an
enterprise approaches to its customers as well helps in
measuring organisation's performance.
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P3. Ways in which small scale business develop itself
transnationally
Transnational business means carrying out business activities
across the international boundaries (Kohler, 2019). Running a
business on a small scale is requires limited resources but
expanding it on international level requires a lot of resources,
efforts and strategies. Before expanding a small business at
international level, the first thing which must be considered is
that a firm has efficient resources or not. If the firm do not have
adequate resources and funds than it must develop them by
doing maximise sales or by granting loan from bank as global
expansion requires high cost of production. When a small scale
business thinks about expanding its business activities in order
to run it more effective and in order to earn profit, there are
various ways which can be used by it (4 Tips for Expanding
Your Business Globally, 2019). These are-
Exporting directly to customers- In this, the small business of
UK takes orders directly from customers and then ships them to
destination of customers.
Sending to distributors and agents- An agency and
distribution agency contract is made up of one or more
intermediaries such as agents and distributors that buy services
and stocks and in this customer is owned by these agents and
distributors.
Opening up an operation overseas- It includes physically
developing one or more locations of a business in target market.
In starting, small business can just set up one sales office that
leads to facilities and production.
Joint Venture- In this, business invests and acquires in
a present business which operates in target market.
For a small business enterprise, there are various
drawbacks and benefits when it expands its goods and services
at international market.
Drawbacks
Cultural Differences- When a business indulge in
international expansion, than it must requires to understand
certain influences of local culture for selling its services and
products in an effective manner (Pros and Cons of
International Business, 2019). For instance, a product can be
viewed as basic commodity at local home but it may not able to
achieve profits at international market due to cultural
differences.

Legislation- Legislation may vary on wide basis in overseas
markets that will affect the selling ability to them. A small
business must ensure that it adheres itself to local laws and
legislation. It also have to consider the way in which partners
are identified and selected in international countries.
Benefits
Increases company sales and profitability- When a
small business expand its products and services at international
level, than it will help in increasing profitability and sales of a
business enterprise due to market expansion and increase in
market share.
Brand Recognition- Expanding small business services
and products at international market will help in building up the
brand image and goodwill of a company. For instance, when a
business enters into a new market such as U.S. it will help in
boosting up the visibility, especially those companies from less-
developed markets (Kremer, Rizzuto and Case, 2019).
Stage model of internationalisation
The stage model as per Johnson and Vahlne elaborates
from a basic idea that companies internationalisation is a
gradual, dynamic and incremental procedure. This model
consist of two vital parts, first is internationalisation patterns
which is based upon findings and internationalisation model
which constitutes theoretical findings. This model can be
utilised by small scale businesses sell their products and
services in an appropriate manner.