Small Business Management: Cambridge Satchel Analysis Report

This report provides a comprehensive analysis of Cambridge Satchel, a UK-based small business, examining its key elements of business management. The report begins with an introduction to small business management, defining the characteristics of a small business and the responsibilities of its owners. It then introduces Cambridge Satchel as a case study, highlighting its background, product line, and financial performance. A SWOT analysis is presented to assess the company's competitive position, identifying its strengths, weaknesses, opportunities, and threats. The core of the report explores Cambridge Satchel's business portfolio, focusing on marketing, finance, and operations management. The marketing section discusses market segmentation, the marketing mix (7Ps), and the application of the Ansoff Matrix to understand the company's growth strategies. The finance section examines budgeting techniques, including activity-based budgeting and zero-based budgeting, and the application of the cost of production theory. The operations management section is not available in the document. The report concludes by providing an overview of the company's strategies and performance in the context of small business management.

<University>
<Small Business Management>
by
<Your Name>
<Date>
<Lecturer’s Name and Course Number>
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Introduction
Small business is regarded as an independently owned as well as operated
company, which has the limitation of size and revenue depending on the type of
industry (Sampaio, Thomas and Font, 2012). It can be a sole proprietorship or a
manufacturing firm. Further, managing the small business in all aspects is a
responsibility of its owners. The management of the small business can be defined as
the alignment and coordination of various activities in a firm (Hatten, 2012). For
managing the organization, business owners utilize the managerial skills for
accomplishing its goals and objectives of the firm.
The present report describes the small business management of a Cambridge
Satchel, which is a small business firm of UK. The topic for this report is to explore
the key elements of a business and for that, company’s portfolio in regards to
marketing, finance and operations management has been explained (Storey, 2016).
Reason for the categorising the company into small business
Cambridge Satchel has been chosen for accomplishing the topic that is
exploring the key elements of a business. This particular firm has been chosen
because it is small manufacturing organization of UK and performs its operation in
limited part of the country (Bridge and O'Neill, 2012). Moreover, the revenue
generated is also limited as per the industry norms. Therefore, it satisfies all the
conditions of being a small sector organization and for that aspect, this company has
been chosen for carrying out this project report (Blackburn, Hart and Wainwright,
2013).
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This company was running its business in the city of Cambridge and now
operates four stores in the country UK (Adams, Khoja and Kauffman, 2012). Further,
it generates the revenue as $13 million, which falls under the category of small
business. Further, it also does not have the worldwide operation and that defines that
company is limited to only one nation. Moreover, the firm also has a single product
line. Furthermore, the company is satisfying all the conditions and requirements of the
small business sector of UK, therefore, this company is categorized as the small
business organization of the country UK (Eid and El-Gohary, 2013).
Background of the company
The small business firm, selected for this report is Cambridge Satchel that is a
British company producing satchel and other leather goods. This company was
founded in 2008 in Cambridge, England. Further, the product range of the firm is
generally satchel and few leather goods for women but they have recently launched
the first line exclusively for men.
The Mother Freda Thomas and her daughter Julie Deane founded this
company. The mother made the satchel for her grandchildren and unexpectedly, the
demand rose as a fashion accessory and this motivated them to begin its firm in 2008.
Later the duo started its own factory in Leicester under the name Cambridge Satchel
(Goss, 2015). Moreover, this company falls under the fashion industry as this industry
provides all kind of handbags, purses, pouches as well as a satchel. The financial
position of the business is progressing every year. In 2010, turnover of the company
was $8 million, and then in 2011, it was estimated at $15 million. In 2013, it was
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calculated as $21 million. Thus, it can be concluded that company is performing well
in terms of finance as its turnover is increasing every consecutive year.
Further, it is important to identify the current position of the company as this
will help in analysing the key elements of the business. For assessing the competitive
position of the firm, SWOT analysis has been carried out. SWOT analysis will help in
identifying the internal as well as its external environment (Wilson and Gilligan,
2012). The detailed SWOT analysis of Cambridge Satchel is as follows:
Strengths Weaknesses
 High quality product
 Popular among the Cambridge
and the people of this location.
 Demand of satchel is very high in
the market.
 Started own factory (Kotler,
2015).
 Product line is very narrow.
 Not popular among other parts of
the country.
 Lack of latest technology.
Opportunities Threats
 Expansion of market as well as of
product line.
 Installation of new technology to
get low cost of production.
 Tough competition from bigger
brands.
 Limited size and revenue can
cause loss to the business during
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 Diversification in the business due
to high demand.
expansion.
Business portfolio
A business portfolio is defined as the firms’ set of investments, products,
holdings, brands and other businesses. The business portfolio of Cambridge Satchel
has been defined using three areas of the business and those are marketing, finance
and operations management (Hutt and Speh, 2012). In order to explore the key
elements of the business of Cambridge Satchel Company, it is essential to describe the
business portfolio in terms of the above-defined three areas of an organization. The
rigorous comprehensive d detailed knowledge of three sectors has been defined
below:
Marketing
Marketing is the most crucial department of any business because, without
this, the company could not introduce themselves to the market. Further, it is very
important for the company to make appropriate marketing strategies in order to stay
competitive in the market and to acquire maximum market share (Huan and Sarigöllü,
2014). Similarly, Cambridge Satchel has also adopted effective marketing tactics in
order to remain competitive in the market of Cambridge and in some other parts of
UK.
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By analysing the available information of the firm, it has been assessed that
company has made strong marketing strategies, which make it stand in the highly
competitive market of UK. Firstly, it is important to know that which types of market,
a company is serving in (Leonidou, Katsikeas and Morgan, 2013). Segmentation of
the market has been done based on demographics and psychographic way and in this
firm has targeted the customers of age group 16-50 years of the female. Further,
geographically, the company has targeted only those customers who are residing in
the UK. Furthermore, the firm is also addressing the consumers
through behaviour aspects.
The marketing aspect of the company could be understood by analysing the
theories of the marketing. Firstly, the theory of marketing mix will be applied to the
firm (Hussain et al., 2013). As it is known that in contemporary time, seven Ps are
considered under marketing mix and these Ps have been described in context to the
Cambridge Satchel Company as follows:
Marketing Mix
Elements
Description
Product Product of the company is the Satchel made from leather
and few other leather goods.
Price Price of the company has been kept on a higher side.
Place Company sells its products in the area of UK. Earlier only
supplies of the product were done and now company has
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opened up 4 of its stores in and around UK.
Promotion Promotions of the products are done using internet and
online medias. Utilizing the benefit of Google Chrome Ad,
Julie Deane promoted its company to the UK (Kotler,
2015).
Process Process of manufacturing the Satchel is very smooth and it
results in the perfectly made product. Moreover, customer
care process for customization of the satchel is also carried
out in an efficient manner.
Physical Layout The company has opened up its four outlets for selling the
products and it has been designed to attract large number of
customers.
People People are the employees and workers of the firm working
in the manufacturing unit. They carry out its working in an
effective manner.
Further, for identifying the market opportunity for the business of Cambridge
Satchel, Ansoff Matrix will be used in context with Cambridge Satchel is as follows:
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(Figure 1: Ansoff Matrix)
(Source: Marketing Theories)
Cambridge Satchel has adopted the Ansoff Matrix theory for expanding its
market as well as product line. In the first quarter of market penetration, company’s
ranking is low which means that market penetration is not done with the existing
product (Team, 2013). Further, second quarter is ranked high because company is
entering into new market of UK using existing product. The third quarter of product
development is high because company is planning to expand its product line in the
existing market. Last quarter is ranked low because company is not planning for
diversification of its business.
Through the above discussed theories, it can be assessed that the strategies of
the company is highly effective and this has helped the firm to grow in the industry
and to stay competitive in the market. The strategies of the company are to enter new
market of UK by opening more stores and reaching to the potential customers through
its online store (Mac Innis, 2013). Moreover, company’s strategy is to expand its
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product line by introducing the new products in the existing products. Further, the
firm is using the online medium as its promotional strategy.
Finance
Finance is regarded as the lifeblood of any businesses because without
finance, company could not carry out any of its function. Thus, it is very important for
the firm to manage its finance in an effective manner so that it could identify the cost
and revenue, which will help in knowing the financial position of the business
(Bashir, 2016). Managing finance is not an easy task because it requires lot of effort
and mental work so that proper figuring could be done.
Cambridge Satchel Company is also working because of the effective
management of finance in the company. There are various theories linked with the
financial aspect of the company and this firm has adopted some of the theories in
order to manage its finance for carrying out smooth working.
The first theory of finance is the budgeting of the financial resources so that
money constraint does not get arise. The company uses two budgeting techniques and
that are Activity-based Budgeting and Zero-based Budgeting (Moran, Porter and
Curth-Bibb, 2014). In activity-based budgeting, company tracks each activity which
incurs cost in all the department and then their relationships are described and
assessed. In this, the firm do not simply adjust prior budgets to accounts but develop
budgets on these activities after analysing its efficiencies. This ensures the smooth
working of the firm and also it helps in reducing the unnecessary cost to the company
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because only those activities are performed which has efficiencies (Vernimmen et al.,
2014).
Secondly, zero budgeting system is also used where all expenses are justified
for each new period and in this, every function of Cambridge Satchel is analysed for
its need and cost. This ensures the minimal wastage of money on useless activity that
does not produce effective results (Liu, 2013). Moreover, they are regarded as flexible
budgets lower costs and disciplined execution. This kind of budgeting gives accurate
result, which helps in the appropriate management of the financial resources.
In addition to these theories, Cambridge Satchel has also adopted the Cost of
Production theory in order to decrease the overall production cost of the
manufacturing of satchels. In general manner, cost of production theory is defined as
the price of an object is identified by the total cost of resources, which incurred while
making it. The cost is comprised of labour, land, material and capital. This theory has
helped the company is assuming the constant returns to scale and the existence of one
non-produced factor of production (Coleman, 2014). This helps in eliminating that
factor for saving the unnecessary incurrent of cost. Within these assumptions, the
long-run price of a commodity becomes equal to the total cost of the inputs into that
commodity which includes interest charge.
Operation Management
Operations management is referred to as the administration of the business
practices for creating the highest level of efficiency possible in an organization
(Mohammadi and et al., 2013). It is generally concerned with the conversion of
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materials and labour into goods and services in a most efficient way possible for
maximizing the profit of a firm. Furthermore, every manufacturing as well as service-
based company has a separate department for operations management. Thus, without
this unit, company could not provide the customers what they are demanding for it.
Similarly, Cambridge Satchel also has an operations unit where the material and
labour are converted into finished goods. This department plays an essential role in
the success of the company (Stoppato, 2012).
Thus, it is very essential to manage the production or operations department of
the company in order to meet the increasing demand of existing as well as potential
customers. Cambridge Satchel Company is managing its unit in a most effective
manner for satisfying the customers with its brilliantly manufactured products. The
firm has applied efficient managing techniques for achieving the quality production
with least wastage and low cost of production. Two major operation management
techniques of Cambridge Satchel have been defined below:
1. Lean Management: It is generally an approach to run an organization, which
supports the concept of continuous improvement and a long-term approach for
working in a systematic manner for seeking small and incremental changes in the
process of manufacturing for improving efficiency and quality as well (Li, Li and
Feng, 2014). In other words, it seeks for eliminating the waste of time, money,
material or effort after identifying each step in a business process and then removing
those steps, which do not generate any value. In simpler words, it is a systematic
method for waste minimization in a manufacturing unit.
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Similarly, Cambridge Satchel has adopted this technique for minimizing the
waste of time, efforts, material and money. This reduces its cost of production and it
enhances the quality of its product. For minimizing the wastage, company first
identifies each step involved in producing a satchel that is designing, cutting, stitching
and finishing (Sallis, 2014). After that, if the firm founds out any of the step is time
consuming or redundant then it shortens or eliminate the step from the process so that
at low cost product can be produced.
2. Total Quality Management: It is a system of management, which is based upon the
principle that must be adopted by all the employees of the company in order to
maintain the high standard work in all the aspects of an operation of a firm (Goetsch
and Davis, 2014). In other words, it is an approach for long-term success through the
satisfaction of a customer. It is highly used by the manufacturing firm for solving its
quality issues so that high customer satisfaction could be achieved.
In a similar manner, Cambridge Satchel has opted for this technique in order
to produce high quality products which can meet the high demand of the customers in
a competitive market. The company has installed this technique in every aspects of
operation so that quality aspects could be accomplished in all the departments of the
firm. For this purpose, the firm has firstly emphasized its customers and its need and
then achieved the complete involvement of its employees in achieving the quality
aspects (Coleman, 2014). Further, process of manufacturing has been defined in a
simplified manner and has considered the process centrally. After that, the firm has
installed an integrated system in the business, which will ensure that TQM has been
achieved.
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