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 the predicted potential, Dillons agreed to finance the expansion
and also improve the presentation of the shop.

Again, the improved video services aided to further boost the custom to the shop.


The shop now had the space to dramatically increase the product range as desired,
although with this expansion, stage 2/3 considerations of the growth cycle were
required