Small Business Management - A Case Study

This essay Small Business Management - A Case Study has a total of 2251 words and 16 pages.

Small Business Management - A Case Study



Enterprise & Entrepreneuralism

‘Bridgetown Newsagents’ - A Small Business Case Study



Introduction

Dillons newsagents is a late closing local shop with a \'Mini-Mart\' service. The \'Mini-Mart\' side of the business is franchised from Dillons to a registered partnership: Mr Charles Pettifer and Mr Marc Devis.

Full services are provided in the shop, a paper delivery service is also available along with the full complement of groceries, fresh sandwiches, confectionery, videos, cigarettes and alcohol etc..

The newsagents is located in Stratford upon Avon, on the Birmingham road, approximately half a mile from the town centre and situated within a very residential area. Tesco’s are the immediate traders to the newsagents.

Nine years ago, the newsagents was expanded with the intention of providing the local inhabitants with a friendly convenient service. Lack of competition at the time provided excellent stability and potential for expansion which was enjoyed until two years ago when a superstore was opened nearby offering a major threat to business.

Business growth, structure, strategies and competition are to be addressed in the following document. Entirety of information sources and research are obtained from two year\'s part-time employment at Dillon’s newsagents.

Growth of Dillons:

In 1988, Dillons employed Mr Charles Pettifer as the operational manager, from this date the shop solely provided newspapers and magazines for approximately eighteen months. During this period Dillons were developing their own ‘Mini-Mart’ theme and as such decided to expand the facilities to supply a range of groceries and other common consumer goods as well as the usual news literature. The shop opening hours were also increased from the regular evening licensing hours of 5:30pm, to a more substantial one of 11pm.

At this point, Mr Pettifer decided to take on the shop franchise offered by Dillons with the help of a silent partner Mr Devis. Mr Devis has shares in the business, but does not have authority to make unsupported decisions.

The franchise resulted in Mr Pettifer being able to obtain many goods for the newsagents at discounted prices. The entirety of the shop was responsibility of Mr Pettifer provided that Dillons’ standards were not infringed.

At the stage of development outline here, it can be seen that Dillons newsagents is akin to stage one of the business growth cycle.

Key Issues:

Mr Pettifer strongly believed in providing a personal and friendly service to all customers and from the outset instigated this within the shop environment. Recognition within the local community and attraction of regular customers resulted from this and thus so did a modest, small shop turnover.

Management Styles:

The style of management was very individualistic; only Mr Pettifer\'s wife, Fatima was employed initially in running the shop (issues in employing family friends and relatives are recapitulated later). Because of this, only limited professional management skills were required.

Market Research:

This was initially achieved by close relationships with the regular local customers, providing key information to a number of customer needs, although no formal research was carried out.

Systems and Controls:

Due to Dillons’ requirements, the accountancy was in advance of a role model stage-1 business, providing efficient systems and controls for Dillons’ auditing. All secondary audits were made into a fully computerised relational-database system.

Sources of finance:

A great boost for the business was the initial investment by Dillons, this was followed by continued investments by the silent partner, Mr Devis, to enable increased expansion of the store.

Major Investments:

At this stage, no further investments were made due to the limited product range and turnover within the shop. Major investment here was therefore not justified.

Products:

The product range was initially limited due to floor space, and the occupying range purchased, in bulk, at a recommended cash and carry outlet.

Dillons had now become a very stable stage-1 business due mainly to the support and expertise of Dillons’ management. Also, the newsagent\'s position was integral to the initial success it achieved, being the sole organisation providing the previously mentioned services in the local area. ((Both businesses in the area also added tremendously to the custom in the shop.))

After one year, Mr Pettifer decided that there simply wasn\'t enough room to expand the shop product range to the domains revealed by his marketing strategy (albeit a very limited one!). A proposal was made to Dillons’ management to expand the shop premises approximately by four-fold. After the initial success of the shop and

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