HND Unit 33 Small Business Enterprise

This is solution of HND small business enterprise assignment, given in City of London College.


Profile of a small scale Business

Small scale business is generally owned by one individual or basically a family, which runs in a smaller range of investment and profit as compared to large-scale business. In this section we would take the case of study of a small scale retail store chain 99p in London. We would analyse the strengths and weaknesses of the business (Mead, 1998).

Entrance view of one of the 99P storesEntrance view of one of the 99P stores  
· The business is managed by a few individuals, thus statistical complexities of investment and monetary details is very simplistic. · Lesser complexity in dealing with the vendors and distributors, as the retail store has lesser quantities of items to deal with. · The business functionality is simple and precise with lesser variations.· With changing times, there is a competition with large scale retailers and supermarkets. ·  Small-scale fall short of some security measures, so it is very critical to identify honest workers to be employed in the business. · One critical weakness is that any heavy investment towards certain stuffs, if leads to failure, then there is a risk of heavy losses to the business, and sometimes the owner has to start from zero.

Measures of performance for 99P stores

There could be simpler ways to analyse the performance of a small scale business.

Porter’s Five Forces Model

Porter’s Five Forces - HND small business enterprise assignmentPorter’s Five Forces Model.

This model includes five way model of performance evaluation. It includes Threat of new entrants, Threat of substitute products or services, bargaining powers of customers, bargaining power of suppliers and Intensity of competitive rivalry. These five forces impact the business to a great extent (Grundy, 2006).

Balanced Scorecard: Consistency

The first performance evaluation parameter is consistency. The small scale business do not generate much funds if we compare them to bigger business organizations. Thus, it is very important for the small scale business to be consistent in generating the profits. The more consistent they are with the profit generation, the more is the growth for them. Another performance measure is customer relations.

HND Business Quality Management

Customer relations

Customer relations is a very crucial parameter for a small scale business. In larger retail stores, the bigger brands and marketing fetches customer at large scale, but due to lesser funds, there are lesser opportunities for the owners of small scale business. Thus, retaining of customer by good behaviour and sending quality goods can do a lot of favour to the business. Generally, we have a couple of workers in the shops, who need to take care of this parameter of performance evaluation.

Financial Measurement: Business growth

Another parameter is business growth. It is important for any small scale business to grow progressively in the concerned locality over a period of time. For this, the owners keep intruding new products every year. Another way of doing it could be extending the retail stores which would only get resulted due to better profit margins of the business. These are the performance measures that can be used for doing performance evaluation of a small scale business (Hallberg, 2000).

Advantages and disadvantages of performance measure in 99P stores

The performance measures of consistency, customer relations and growth advantageous to a business, because if one business keeps improving this, then it would benefit the business. But on the other hand over-emphasis on one particular parameter may turn it into a disadvantageous parameter. Emphasis on consistency would help the business to achieve certain targets, which would help the business to be secure through the course. Good customer relations could lead to better customer retaining for the business, which is very critical for a small scale business. Business growth enables the owner to expand the business and better investment on the retail stores to make it more convenient for the customers. It also helps the business owners to get a chance to put handsome amount into storage which could be used at the time of risk management (Chandler, 1993).

As discussed, the performance factors can be disadvantageous in certain instances. Achieving consistency could sometimes force the owner to give too much extra effort in the business, as the owner is not backed by too many co-workers in small-scale business. Similarly, sometimes, the business has to incur losses in order to keep certain customers happy. These are a few disadvantages that could occur keeping in mind the above stated performance measures.


Overcoming weakness of 99P stores

Every business has some weaknesses associated with it. We have already notified the weakness that the small scale businesses like 99P have, in the previous section. In this section, we would enumerate the ways through we can overcome those weaknesses.

Long queues at 99P by HND small business enterprise assignmentLong queues at 99P
  • A business could not avoid the competition with the large scale retails and supermarkets. But the small scale business owners can do measures to retain the customers they have. They should make sure that the quality of goods that they offer to the customers should be very good. The customers should be treated in such a way that they become permanent customers and concentration should also be on potential customers.
  • Security concerns are genuine concerns for the small scale stores. This could not be avoided to certain extent because having superior security required lot of funds. CCTV cameras and laser locks could be available for the small scale business owners to utilize at affordable rates. But it is very critical that the sub-ordinates at the store are kept with proper enquiry, and the workers should be made to believe that they own the shop and should be treated increase their trust.
  • In small scale business, some heavy ambitious investments resulting into losses could force the owner to bankruptcy. Thus, it is always important to keep some funds for risk management before investing heavily for expanding the business.
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Maintaining an strengthening existing performance of business

In this section, we would deduce how we could convert the weakness into strengths and threats into opportunities for small scale business like 99P stores. As already notified, we discussed the performance measures by which there could be overall improvement in 99P stores. We can even improve upon the weaknesses that we have with the business. The quality of products and services need to be enhanced, so that the customers are satisfied. Moreover, most of the products that are sold at the store do not have any guarantee. New products that can have more reliability factors can be introduced by the store. Membership card can be introduced by the store for the regular customers. In this scheme, the customer could be provided with certain facilities and perks. In return, the store will certainly be able to retain those customers. The long waiting time in the queues spent by the customer is also a big problem. For that, better setting to the store shelves could help. Also, the store can focus upon increasing the number of purchase points inside the store.  These are a few areas that 99P stores can work upon to strengthen their business performance (Donckels, 1991).

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Recommendation on expansion of business

Keeping in view the performance measures of the 99P stores and after understanding the weakness they have at their level, following could be our recommendations for the store.

  • 99P stores should use the S-T-P strategy of marketing. This includes segmentation, Targeting and Positioning. Segmentation involves dividing the customers into various group using certain dividing criteria and each segment is approached differently. Targeting involves doing the marketing keeping a particular segment in view. Positioning is the third compliment of the process, which involves branding of the products to a certain segment of customers.
STP process of 99P - HND small business enterprise assignmentSTP process of 99P  
  • New technologies should be used inside the shops including more enhanced CCTV cameras. The tracking of goods needs to be more precise through the better barcoding systems. The present equipment are not very fast and secure. This can be improved by using better equipment available.
  • 99P store should look to enhance the customer services. One major problem they have is the long queue at cash counters. Number of cash counters needs to be increased to minimize this problem.
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Assessment of existing business objectives and plans

There are a lot of strategies in place by the 99P stores for better growth and risk management. One very common business strategy that 99P store uses to overcome the problem of price rise and inflation is to cut down the supply from vendors. When, inflation becomes prominent, then wither they cut down the supplies or they reduce the quality they offer for a certain price limit. As bulk of the customers are middle class or lower middle class, to keep them interested in buying goods, 99P does not increase price of a commodity, but decreases the size or amount of the good, so that the customer is comfortable in buying it. This is very effective way in a small scale business. 99P stores also opened new business chains by the name of Family Bargains, in which the variety of goods was increased. This was resulted out their objective of expanding the business. It is very crucial for any business to expand itself for increasing growth margins. Thus, both these plans have worked well for the 99P stores in terms of achieving their objectives (Shmueli-Scheuer, 2012).

Business plans Revision to incorporate changes

99P store owners have continuously been looking for changes related to business growth. A fair amount of investment have been made in expanding the business and opening new stores. For example opening altogether a new chain by the name of Family Bargains. Apart from all this, 99P stores management also need to look upon the existing problems in the stores. The customer relations has to be kept as a topic of utter importance. Customers generally have complaints about long queues for a long time. This can be minimized by effective handling of customers and by two simple steps. Firstly, the set-up inside the store should be very streamlined and the products displayed at the stored should be continuously sorted by the staff, so that lesser time would be wasted for the customer and that would also help in clearing the aggregation of customer on a certain spot, thereby minimizing the rush. Also, the number of cash counters can be increased to get rid of very long queues and faster service can be done by that. Thus, these kind of solutions can be given priority by the 99P stores administration before thinking of opening new stores in new locations (Nooteboom, 1994).

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Action Plan to implement changes

In this section we would try to deduce the plan of action which could be used by the 99P stores to improve the performance. As discussed, the first and foremost is to have a very vigilant support staff which can quickly sort the item displayed for the customers. This would help the customers. Security systems in the 99P stores need to be increased. The bar-coding scanners could be replaced with more advanced equipment. This not only would help in securing the stores from stuffs like picking thefts, but also would be convenient for the customers at the time of billing. In addition to these, the marketing needs to be increased on slight level. For this, the customers need to be targeted properly, with proper segmentation. Appropriate offers and schemes can be used for attracting customers. As discussed, most of the customers of 99P stores and either lower middle class or middle class people. Thus, offers and schemes can be a very good way to attract the customers. All these steps need to be followed in a planned manner. Thus, it could come very handy for the 99P stores to utilize the recommendations to be followed by a proper action plan (Penrith, 2013).


Impact of proposed changes on business

The changes that have been proposed will have significant impact on the performance of 99P stores. Use of latest technologies will enhance the efficiency of the business and will help in making the customers satisfied. The latest monitoring system will make the stores more secure to any theft or spot picking by thieves. However, this will take a considerable amount of money to install latest technology to all the stores and it will be a very big strategic decision for the owners of the chain. One other recommendation regarding the marketing processes needs very clever fund allocation. The investment on marketing need to be done in a planned manner, specially using the criteria of segmentation and targeting. Offers and discounts can need to be put on certain things very smartly. Suppose, a particular good is not getting a good response from the customer. It can be used with another product as an offer, and the manipulation should be in such a way that it should not result into a loss. These are various impacts of proposed changes on the small scale business of 99P stores (Bolton, 1991).

Advanced security model of a retail storeAdvanced security model

Management of changes in Business

Management of 99P stores should make sure that the performance of the business should get positively impacted by the changes. We need to analyse the changes properly and act accordingly in such situations. Talking about the Porter’s Five Forces Model, the changes should be done in such a way that the five aspects are properly met or at least should not be negatively impacted. Threat of new entrants can be minimized by the brand building that would happen if 99P stores would effectively work on product quality. Threat of substitute products or services needs to be addressed by putting suitable price and the quality should be good such that the customer is satisfied on buying that product. Bargaining powers of customers is very less applicable in this scenario. However, bargaining power of suppliers is of great interest, as stuffs like raw materials need to be taken from vendors and we have to manipulate the vendors well especially at the times of process rises and inflation. Intensity of competitive rivalry can be tacked once again by keeping the quality of goods and services at the best level. This is how, the change in business for the small scale business could be managed (Bygrave, 1991).

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Improvement in Business performance over a given time-scale

The 99P stores management have already used a lot of strategies in improving their business. We have already detailed some of the already used strategies by the business. This has driven the stores business to very handsome amount of profit in the after-half of the decade of 2000-2010. In 2010, the net turnover was close to 185 million pounds for them, which was quite better than the preceding years. One important thing is that the turnover for them has become more than double in last three years for them. Thus, we can say that despite our analysis on the areas of improvement and the weakness a small scale industry might have, the 99P stores did a fabulous job from 2007 to 2010. However, in these times, there always have been negative feedbacks about the stores. The overcrowding of stores has always been a problem for customers. Apart from that, cleanliness is a big concern for them too. A few fines had also been put on the stores on 2005 for controversial selling of certain goods. But still, the overall profit and turnover of the group was commendable. Thus, we can see a lot of improvement in business proving the potential of the small scale business.


Bolton, R. N., & Drew, J. H. 1991, A longitudinal analysis of the impact of service changes on customer attitudes. Journal of marketing, 55(1). Bygrave, W. D., & Hofer, C. W. 1991, Theorizing about entrepreneurship. Entrepreneurship theory and Practice, 16(2), 13-22. Chandler, G. N., & Hanks, S. H. 1993, Measuring the performance of emerging businesses: A validation study. Journal of Business venturing, 8(5), 391-408. Donckels, R., & Fröhlich, E. 1991, Are family businesses really different? European experiences from STRATOS. Family business review, 4(2), 149-160. Grundy, T. 2006, Rethinking and reinventing Michael Porter's five forces model. Strategic Change, 15(5), 213-229.

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