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).
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).
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).
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 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. · Diversification in the business due to high demand. |
· Tough competition from bigger brands. · Limited size and revenue can cause loss to the business during expansion. |
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.
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 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:
(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 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 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.
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 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:
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.
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.
Therefore, all these elements of TQM ensure that high quality products has been produced by the Cambridge Satchel and it meets the high end demands of the current and potential customers. Moreover, this results in the increasing sells and revenues of the company every consecutive year.
Conclusion and Recommendation
Conclusion has been drawn from the above file is that for exploring the key elements of small sector business, it is important to identify its core areas of functioning. The core areas of functioning of Cambridge Satchel are marketing, finance and operations management. It is also concluded that this company is a small business enterprise of UK and has opened up its physical store in some parts of the UK. Moreover, the company is also operating its business through online stores. Further, the major marketing strategies for addressing its audience are the usage of online media.
Further, internal and external environment has been assessed and it concludes that the company is operating in highly competitive market with limited strengths. Further, the company has adopted marketing mix theory and Ansoff matrix theory for analysing its competitive strength and for formulating the further marketing strategies. Along with that, financial management of the company seems effective up to certain extent, as the firm has adopted appropriate theory for managing the financial resources. At the end, operations are handled by the firm using various techniques, which makes it easier for them to generate quality output. This has helped the organization in meeting the increasing demand of the customers in an effective manner. Moreover, with the help of these management techniques, operations of the firm has been simplified and this result in the production of quality products.
After analysing or exploring the key elements of the business of Cambridge Satchel Company, a complete business portfolio has been assessed and it reflects that company is performing excellently in the fashion industry. The success of the company can be viewed in the form of increasing revenues and sales every consecutive years. Furthermore, company still has certain limitations, which they require to overcome in order to accomplish its strategies in the future course of time. For that aspect, several recommendations has been made as follows:
Reference List
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