Importance Of Developing Business Skills To Review And Manage The Performance Of A Small Enterprise

Profile of the Small Scale Organization and its Strengths and Weaknesses

Prepare a report mentioning the importance of developing business skills needed in reviewing and managing the performance of a small enterprise.

In the modern era, there is a rapid expansion of several small-scale business enterprises. This is mainly due to their effective implementation of tools of strategic management. It can be deduced that several internal and external assessment tools are required to be implemented and monitored by the small-scale organizations in order to sustain in this competitive environment (Stokes & Wilson, 2010). This assignment will highlight a critical evaluation of a small-scale business enterprise named as Quality Retailers Private limited. The organization is a retail organization and lacks knowledge of business skills and development. It can be also deduced that the learner as a business consultant will conduct an effective internal and external audit of the organization.

The organization Quality Retailers Private limited is a retail organization and mainly deals with clothing products and accessories. It can be also inferred that the organization lacks resources and it has quite a number of competitors in the particular locality. The place of the organization is United Kingdom and the city is Birmingham. The total number of employees of the organization is around 20. In the company hierarchy, the top-level position is the CEO of the company. The next comes the four managers that are, marketing, human resource, finance and operations. The remaining 15 employees are their sales executives. 

The mission, vision and goals of the organization are to make their future sustainable by increasing their sales volume and profit margin. In addition to this, the short-term objectives of the organization are to improve their resources in an effective manner. The long term objectives of the organization is to provide better customer service to their customers with their diverse range of products.

There are quite a number of similar types of organizations, which are located nearby the place of the retail store. The internal audit of the given retail organization of Quality Retailers Private limited can be evaluated by the help of its SWOT analysis (Burns, 2010). 

Strengths- The major strength of the organization is its unique range of products with an effective pricing strategy. The organization Quality Retailers Private limited follows a low cost pricing strategy that has grasped the eyeballs of quite a number of customers. In addition to this, it can be also deduced that the core competency of the organization is its effective customer service. Being a small retail store, the organization has a few numbers of prospective customers. Nevertheless, with an effective customer service, the organization Quality Retailers Private limited has successfully turned their prospective customers to loyal base of customers.

Analysis of the Given Business with Help of Comparative Measures of Performance

Weakness – The major weakness of the organization Quality Retailers Private limited is in terms of their amount of resources. Being a small-scale retail enterprise, the organization has a lower amount of financial, operational and marketing resources. In addition to this, it can be also deduced that the organization has an ineffective management who lacks planning and coordinating skills. Due to this reason, the organization is required to evaluate and implement all the given tools of strategic management within their system. Another major weakness of the organization is their lack of knowledge in the implementation of several management principles and tools within their system. The structure of the organization is very simple and there is no proper organizational culture within their system (Revell et al. 2010). The organization does not implement any kind of updated operational resources.

The external audit or external factors of the organization Quality Retailers Private limited can be analyzed with the help of its existing opportunities and threats.

Opportunities- Being a retail organization, Quality Retailers Private limited has a great opportunity to grow. This is mainly because; the demand for retail products is on the higher side. In addition to this, the product width of any retail organization is huge. For this reason, there are chances that the organization can expand its product width in an effective manner. Therefore, there is a huge scope for the organization to develop their business in the competitive market.

Threats- Being a small-scale retail organization, the organization Quality Retailers Private limited faces a serious threat of sustainability issues. In addition to this, due to threat of competitors in the market, the sales of the organization may decline considerably. Another threat that the retail organization can face is in terms of modern form of technology. These are the major threats that the organization Quality Retailers Private limited can face in their internal environment (Ayanda and Laraba, 2011).

The performance of the small business organization Quality Retailers Private limited can be interpreted through several tools of performance measurement. Several performance measurement tools needs to be applied by the management of the organization to analyze and investigate its performance.  These performance measurement tools can be in the form of balance scorecard, interpretation of financial statements, management by objectives and feedback from the prospective customers. The similar kind of business in the same area has a higher amount of sales and higher amount of human resources. The biggest competitor has sales figures of 10,000 pounds every month. On the other hand, the sales of the given organization are low as 5000 pounds average per month, in addition to lower amount of resources. It can be deduced that the organization Quality Retailers Private limited can use either of the given tools to analyze and measure its performance. If it is seen that the sales and profits of the organization is not at par with the objectives designed by the management, then it can be deduced that the performance of the organization is not up to the mark. In addition to this, it can be also inferred that if the feedback of the prospective customers is up to the mark, then, the respective organization Quality Retailers Private limited has performed considerably well. However, it can be inferred that the sales and profits of the organization is not up to the mark due to lack of planning and availability of resources (Chaston and Mangles, 2002). In addition to this, the liquidity ratios and profitability ratios of the organization is on the lower side. This is due to lack of effective sales volume. The organization was able to sale only 10,000 units in the last quarter. The human resource efficiency of the organization is not up to the mark. This has resulted into lower production efficiency.

Appropriate Actions to Nullify the Weaknesses of the Organization

Several steps are required to be taken and implemented by the organization Quality Retailers Private limited.  It can be inferred that the organization has to opt for several sources of short term and long-term sources of finance. With availability of sources of finance, the organization Quality Retailers Private limited can maximize its amount of operational and financial resources. In addition to this, the management of the organization is required to apply tools and techniques of planning and coordinating to evaluate their future prospective. In addition to this, it can be further inferred that these strategic management tools will help in the sustainability of the give retail organization. Quality Retailers Private limited is required to work on their respective strengths to develop a competitive advantage in a successful manner. This will further help the retail organization to overcome their weaknesses in terms of their present competitors. The weakness of the organization in terms of their structure and culture can be overcome through proper knowledge management tools that are required to be implemented by the management of Quality Retailers Private limited. In addition to this, the top-level management has to use several communication and promotional tools to communicate and promote their products with the amount of resources they have (McAdam et al. 2010).

It is of great essence for every business organization to analyze and maintain their existing performance in an effective manner. It can be deduced that there are several process of maintaining the existing performance of the organization Quality Retailers Private limited. This can be done with the help of performance measurement tools like balance scorecard. The retail organization needs to maintain its effective service quality and maintain it by taking feedback from the prospective customers.  In addition to this, it can be also deduced that the organization can process the feedback through filling up of questionnaires of the customers who visit the store. The performance of Quality Retailers Private limited can be more strengthened through evaluation of effective source of funds. If the organization can procure source of funds, then it can be implement modern operational resources. These operational resources can be improved in the form of application of E-CRM, SAP and other forms of modern technologies. If the organization Quality Retailers Private limited can effectively implement these forms of technologies, then it can easily maintain and strengthen its existing performance in terms of effective customer service.  In addition to this, the organization needs to maintain a proper balance scorecard to monitor its performances. These performances can be further strengthening through minimization of the different variances of the performance of the organization Quality Retailers Private limited. In addition to this, it is important for the organization to maintain their existing performance and develop their strengths in order to develop a competitive advantage in terms of its competitors. In this manner, Quality Retailers Private limited can maintain and improve their existing performance (Wiggins et al. 2010).

There are several areas through which the given small-scale retail business organization can expand. Being a retail organization, there is wide scope of opportunity for the particular business to expand. This can be in the form of product expansion and strengthening of the given resources. At present, the organization only deals with clothing items. In future, the organization Quality Retailers Private limited can diversify its business activities into several food items and accessories. This is further help the organization to segment a wide variety of range of customers in all parts of market segments. In addition to this, the organization can also go online like other retail organizations in the current market scenario. This will further help the organization to compete with the big competitors in the retail market segment. However, it can be deduced that if the organization can effectively procure the total amount of resources in terms of sources of finance, then, they can easily make their future sustainable. In addition to this, it can be also deduced that the organization has to work on its strengths to make their future mission and goals. Due to this reason, it is important for the organization to overcome their near obstacles and think about their prospective future. The organization can also expand its branches to all parts of the city. However, it is important for the organization to set up their long term and short term business goals. The first and foremost step of the retail organization Quality Retailers Private limited to improve and increase their product width and product ranges. After this, the organization can increase and expand their store branches. In addition to this, the small-scale retail organization is required to cater and segment the online platform as well. This will help the organization Quality Retailers Private limited to position itself as a brand and target the potential retail customers of United Kingdom. In addition to this, the organization may also diversify in new markets. These may be in the form of electronic items. However, this can only happen in case if the organization can attain and breach its break-even point effectively. In this manner, the organization Quality Retailers Private limited can expand its operational activities of business (Kim and Park, 2006)

Being a small-scale retail organization, Quality Retailers Private limited does not have proper organizational structure. They also lack in terms of implementation of different management objectives and principles. However, one of the existing plans of the organization is to survive in terms of sustainability in the current competitive market. The organization has plans to achieve complete sustainability by providing effective customer service to the prospective and loyal customers to visit the stores on regular basis. On the contrary, the retail organization Quality Retailers Private limited lacks an effective long-term strategic planning process. In addition to this, one of the primary visions of the organization Quality Retailers Private limited is to maximize its sales and increase their resources. This can be done through the help of effective utilization of funds. However, the management of the organization Quality Retailers Private limited lacks skills of planning that will drive the organization to their potential success. Therefore, it is important for the small-scale retail organization to revise their existing plans in terms of the current needs and requirements of the respective markets (Burns, 2010).

Figure 1: List of existing objectives of the organization

The retail organization Quality Retailers Private limited has to revise their existing plans in an effective manner that will help them to gain competitive advantage. At first, the organization is required to procure a sufficient amount of short term and long-term sources of finance. This will further help them to maximize their amount of financial and operational resources. In addition to this, the organization needs to take effective feedback from their customers in terms of improving quality of their products and services.

Objectives	Achieved or not
To increase sales	No
To increase customer base	No
To increase total amount of resources	Yes
More effective customer service	Yes
To increase product width	Yes

 Sales and customer base of the organization can be increased with more effective means of marketing and promotional tools.  The organization needs to improve their customer base by catering different segments of products and depend upon word of mouth marketing. This will help the organization to increase sales by the next quarter. In addition to this, the organization Quality Retailers Private limited needs to hire more amounts of sales executives to promote their products on door-to-door basis (Race and Stewart, 2007). This is mainly because of the fact that the organization does not have many resources in order to promote their products on large-scale basis. Therefore, the organization is required to divide their objectives on short term and long-term basis. It is important for the organization to attain their short-term objectives at first and then opt for their long-term objectives. In addition to this, the organization needs to implement a functional organizational structure within their system.  In addition to this, it can be also deduced that the organization Quality Retailers Private limited is also required to make effective strategic plans in order to introduce new products as per the requirements of the existing customers. Apart from this, the organization Quality Retailers Private limited may implement a participative leadership style within their system to motivate the employees effectively. This will further guide the organization to resolve all their issues of sustainability and fewer amounts of sales. This will be further evaluated with the help of an effective action plan.

The action plan that can be formulated for the small-scale retail organization Quality Retailers Private limited is in terms of SMART objectives in an effective manner. The designed for the organization is extremely specific in nature. It is also measureable through effective feedback of the customers.  In addition to this, it is also achievable and attainable for Quality Retailers Private limited in terms of management of service. Such kinds of objectives are also realistic for the given organization. The period for the designed objectives can be framed within the first two year of its implementation. The sales and customer base of the organization can be increased wit the help of the following action plan:-

Activities	1-2 months	2-4 months	4-8 months	8-12 months	12-18 months	18-24 months
Evaluation of objectives	·
Allocation of resources		·
Product expansion			·
Promotion of products				·
Strategic alignment of resources to increase sales and customer base					·
Measuring and monitoring the objectives						·

 Table 1: Gantt chart for the proposed changes of Quality Retailers Private limited

(Source: Created By Author)

There are several positive impacts for the organization Quality Retailers Private limited due to the proposed changes. First, the organization can manage and increase their operational, financial and marketing resources in an effective manner. Second, the organization can attain a degree of competitive advantage and core competency with respect to their competitors. This will further guide the small-scale retail organization Quality Retailers Private limited to direct them at a level of sustainability. In addition to this, the organization Quality Retailers Private limited can improve and increase their number of resources in terms of human resources. In addition to this, the employees of the organization will be highly motivated due to the impact of positive structure and culture of the organization.  Apart from this, the organization can easily achieve economies of scale with the implementation of the given strategy. This will further assist them to achieve them to attain their goals and objectives of the business. It can be further deduced that the sales and net profit of the organization will increase at an increasing rate (Zhang, 2012)

There is several process of change management in case of every modern business organizations. In the given case, it can be further inferred that the small-scale retail organization Quality Retailers Private limited can implement Lewis’s change management model. This mode has three stages. These are unfreezing, implement and re-freeze. In case of the given organization Quality Retailers Private limited, the management has to unfreeze all the existing business processes that are not at all suitable for them. Apart from this, the organization needs to implement all the respective changes that are required to be implemented in an effective manner. The process of implementation is of great essence for the given organization Quality Retailers Private limited. In the last stage, the organization has to make these changes permanent in their internal environment. These can be done with proper communication with all the internal and external stakeholders. The organization may use several effective communication and performance measurement tools to manage and implement these changes in an effective manner. In this manner, the organization can implement and manage the overall process of change management (Blackman, 2010). The organization must all also have a contingency plan if there are variances of results.

The small-scale retail organization Quality Retailers Private limited needs to monitor their respective changes in an effective manner. In addition to this, it can be deduced that these changes can be monitored with the use of tools like management of objectives, balance scorecard, feedback of customers and figures of sales volume and profit margin. It can be also deduced that the management of the retail organization Quality Retailers Private limited can divide their objectives based on short term and long-term preference. If it is seen that the organization has achieved their short term objectives with an period of time, then it can be said that the organization Quality Retailers Private limited has achieved their desired objectives. In addition to this, it can be further deduced that the organization can take the feedback of their customers in terms of their achievement of their objectives.  They also implement performance monitoring tools like balance score, which will help them to compare with all the elements of performance in their internal and external business environment. This will further help the organization to overcome their challenges (Torri, 2012).

Conclusion

A small-scale retail organization like Quality Retailers Private limited faces many challenges in their internal and external work environment. This is mainly due to the efficiency of their management.  This can be solved with effective utilization of different strategic management tools and techniques. This will further help them to sustain in the end of business environment.

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