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Student Name
Professor Name
Business
9 September 2012
Analysis of a Local Business
Amandas Fish and Chips Shop is a privately owned business that was established in
winter 1954. The first owner Mr. Jonson Fabrisio and his wife Mrs. Amanda Fabrisio were
among the first inhabitants of Redcar who decided to devote their life to satisfying peoples
hunger in a very traditional way through famous and extremely popular fish and chips shops
cuisine. At that time there were only five of such shops and now there are more than fifteen of
them, consequently the competition is really tough. Nevertheless todays owner Kevin Fabrisio,
grandson of the founders, makes his best to keep business status and attract new customers. It is
his achievement that Amandas Fish and Chips Shop is considered to be in the top-five of the
best shops and small restaurants of Redcar.
In order to make a broad and worthy analysis of the certain business, we should study and
describe lots of elements, which are the guarantee of companys successful existence. The
overwhelming analysis of Amandas Fish and Chips Shop would include the following aspects:
mission, target and goals of the business, legal form of organization and legal considerations,
marketing mix analysis (product, place, promotion, and price), competitors observing,
companys ethics issues, technology implementation, employees survey, SWAT analysis and
recommendation concerning shops further development.Amandas Fish and Chips Shop is situated in a picturesque area of Redcar, it is close to a
small parade of shops and several office centers, there is also a huge park area nearby. So we can
claim that shops position is really competitive. Shopper goers, tourists, people having rest in the
park as well as office workers are potential visitors of Amandas Fish and Chips Shop. In order
to make a business analysis of the company it is reasonable to start from its mission, main target
and goals. Mission is a written declaration of an organization's core purpose and focus that
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normally remains unchanged over time (Source 1). The main mission of this sole
proprietorships business is to provide their customers with the most qualitative and delicious
dishes in the best English traditions of fish and chips serving. The main target of the business is
the domination in the whole system of towns food serving. Among companys goals are the
following: support of the business image, improvement of the business processes in order to
obtain the highest quality, increase of customers amount and wining their loyalty. Amandas
Fish and Chips Shop also proclaimed its values, which are unchangeable since the companys
establishment almost 58 years. They are: orientation at the customers needs; efficiency and
mobility; intellectual leadership; team spirit, cooperation and goodwill.
There are three legal forms of organization: sole proprietorship, partnerships and
corporations. Amandas Fish and Chips Shop refers to the first category of legal forms sole
proprietorship. This type of business organizations has its own advantages and disadvantages
which we can see from the table 1 below.
Table 1 Advantages and disadvantages of different legal forms of organization (Source
2,3)
Legal forms of
organization
Advantages Disadvantages
1. Sole proprietorship It is established and closedfast and easy
Foundation costs are low A sole trader makes his own
decisions
The business is more flexible Simple accounting provisions A sole trader takes the whole
profit
Lack of required money andcapital to start the business
Personal unlimited liability ofthe owner
Limited credit worthiness tobank and other third parties
The business stops after theowner death
2. Partnerships:
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a) general It is easy established Chance to attract additional
funds with each partner
Profit participation Equal rights to make
decisions
High credit worthiness
Personal unlimited and jointresponsibility (each partner is
totally responsible for the
business debts with their own
funds)
b) limited partnerships It is easy established Chance to attract additional
funds with each partner
Profit participation Limited partner is liable with
only invested funds, not his
personal
Personal unlimitedresponsibility of the general
partner
No right of voice of thelimited partners
3. Corporations:
a) limited liability
company
Chance to attract additionalfunds without loans
Limited liability ofparticipants (liable only
within their share)
Shares are transferable
High foundation costs,establishments difficulties
Tough paperwork Higher taxes
b) public limited
company
Chance to attract additionalfunds without loans
Corporations can raiseadditional funds through the
sale of stock
Right to obtain dividends
High foundation costs,establishments difficulties
Shares can lose in value
Small shareholders dont haveinfluence on decision making
The analysis of the different legal forms of business shows that each type of legal form
has its pluses and minuses. Amandas Fish and Chips Shop is the simplest legal form, its only
owner Kevin Fabrisio is the one who is totally responsible for all shops activities and debts, he
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makes his own decisions, especially those refers to profit usage. Thanks to a such legal form the
business reacts quickly on new markets challenges. For instance, it was not a problem for Kevin
to introduce new dishes when the customers preferences changed (children and vegetarian
menus). When everyone started talking about the problems of sustainable development Kevin
introduced bio trays and bio boxes. Of course, sole proprietorship brings additional risk too. For
example, there is a difficult procedure to get a loan. Banks usually require a solid finance base
and they are more disposed to partnerships. Kevin Fabrisio is both the owner and the Managing
Director of the shop. At the same time he also has other staff to assist him. According to the
laws of Great Britain it is not forbidden for a sole proprietor to employ people.
Although the sole proprietorship is the simplest form of business organizations, there are
several legal requirements and legal consideration which should be taken into account. Among
them Amandas Fish and Chips Shop faced with the following concerns: owners registration as
self-employer; the proof that the employees are not registered as self-employers; special license
because the business deals with food serving and preparation; employees liability insurance is
also a legal requirement; VAT registration of the company.
There are six employees in Amandas Fish and Chips Shop: chief accountant, two cooks,
two waiters, one cleaner (sometimes if required the owner employs one more waiter on a part
time bases). The organizational structure helps to understand the hierarchy within the company
and staffing level; as a result each department and each employee knows its responsibilities and
has a sense of purpose. There are different types of organizational structure: line structure,
functional structure, divisional structure, matrix one and many other more difficult andcomplicated. The organizational structure of Amandas Fish and Chips Shop is quite simple and
we can see it from the scheme 1 below.
According to the scheme we see that there are three divisions within the company and
each division is controlled by and is reporting to Managing Director (owner). According to
classification of organizational structures, Amandas Fish and Chips Shop refers to functional
type. Functional Structure - this kind of organizational structure classifies people according to
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the function they perform in their professional life or according to the functions performed by
them in the organization (Source 4). So this form of organization is extremely convenient for
owner of a small business, because he can easily control each center of profit and costs within
the company.
Scheme 1 Organizational structure of Amandas Fish and Chips Shop
The companys internal ethic policy cares greatly after its employees. Lots of measures
are realized in order to meet employees needs and help them to feel like a part of the team, help
them to feel at Amandas Fish and Chips Shop just like at home. Its a great achievement of the
owner, Kevin Fabrisio, that the team of six employees demonstrates one of the greatest results in
the sector, their productivity even better than the results of the bigger teams with higher salaries.
The owner of the business has worked out a multi-faceted system of training and
employee development in the company. The system is configured for self-development. The
main idea is to help employees to improve their knowledge and skills. If a man does not want to
develop professionally, all of the company's efforts will be ineffective. That is why all business
efforts are aimed at assembling a team of fans of the business - people who likes their job. There
Managing Director (owner)
Accounting
department
Food preparation
department
Service personal
department
Chief accountant Cook 1
Cook 2
Waiter 1
Waiter 2
Cleaner
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is a system of quick response to the needs of the employee; each worker has a sufficient salary,
that is not lower than the medium salary in the sector; 30-days holiday is a rule; there is also a
system of financial incentives; one more interesting initiative within Amandas Fish and Chips
Shop each employee monthly has a set of discounts for visiting the shop, they could use it by
themselves or share with family or friends.
There are the following statements of the corporative ethics at Amandas Fish and Chips
Shop: the company bases its activities on the principles of rights recognition in all aspects of
social and economic life; the company is building a relationship with its employees on the
principles of respect for human rights and dignity, and equal opportunities for employees; the
company is building a dialogue and relationship with local communities, government agencies
and local government on the principles of openness, partnership and cooperation; the company
builds relationships with contractors on the principles of honesty, fairness and integrity; the
company builds relationships with competitors on the principles of free and fair competition in
strict compliance with the norms and rules of conduct; the company is fully aware of its
responsibility to the society for the preservation of the environment and see their activities in the
field of environmental protection as an integral part of successful business.
It is impossible to conduct business analysis without consideration of such extremely
important issues of each business as product, price, place and promotion. All these elements in
the marketing science are known as the marketing mix, or 4Ps.
Lets consider the first element of the marketing mix the product of the company.
Amandas Fish and Chips Shop operates in the food service industry. According to most
definitions food service industry is the practice or business of producing, transporting, serving or
dispensing prepared food, like in the restaurant or store (Source 5). Amandas Fish and Chips
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Shop provides eat-in facilities. The place operates both as the shop, where the visitors could buy
fresh fish and ready dishes cooked by the highly qualified staff, and as a small cozy restaurant
that serves a great variety of traditional fish and chips dishes and less traditional burgers, kebabs
and deserts. There are 52 inside and 12 outside seats in the shop. In summer additional outside
seating place is offered. The shop has its own free parking zone for clients what is highly
appreciated by visitors. As it was mentioned before Amandas Fish and Chips Shops menu is
diversified. There are around 60 dish positions, among which 15 types of fish and chips dishes.
The shop serves mostly such fish as cod, haddock and sole, there is also a great variety of
shellfish. The quality of fish is controlled very strictly, after being caught the fish should be
frozen within 5 hours - not more. The product range change sufficiently since the business
launching, but not radically. New food directions appeared, such as serving kebabs, sandwiches,
burgers, the children menu appeared. The present owner also decided to serve different deserts,
starting from ice-cream and finishing with pies and sweet cocktails. What remains unchangeable
is the fact that the shop doesnt sell any cigarettes or alcohol drinks. And this is highly
appreciated by the customers, especially those one with children.
The next element of the marketing mix, that should be examined is the place. Amandas
Fish and Chips Shop, as it was already mentioned, is located in the central part of Redcar,
Cleveland, which is a seaside resort with population around 37,000. Due to such towns position
lots of tourists visit Redcar during the whole year, especially in summer. And this is a great plus
for owners of the towns shops. Business location means a lot for successful existing. Such
factors should be taken into account while analyzing location of the company: potential
customers, population, accessibility, visibility, competition, location expenditures, traffic and
others. In our case the position of the shop could be estimated as extremely advantageous. The
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following reasons could prove this statement: 1) Amandas Fish and Chips Shop close to park
zone, business offices and shops; 2) traffic is not very tough, there is a very convenient approach
to shop, public transport is also available; 3) few competitors in this part of town; 4) location
costs are moderate. Analysis shows that location of Amandas Fish and Chips Shop is maybe one
of the strongest competitive advantages of the shop, not all shops and restaurants of Redcar could
boast such a location.
Lots of different variables have an impact on pricing of a product. The main questions in
pricing refer to products costing, marketing expenses, expenditures for the advertisement, any
price fluctuations in the market, costs for suppliers services and others. While choosing a
pricing strategy there are also other things which have to be taken in consideration. For instance,
competition or pricing like an instrument of products positioning and goods promotions through
the system of discounts. There are several price strategies and almost each of it have been used
by Amandas Fish and Chips Shop at different stage of development for certain products:
premium pricing, penetration pricing, economy pricing, price skimming. For instance after
introducing new products and dishes which were common for the market and where the
competition was high the company used the strategy of penetration pricing in order to win its
customers and occupy a certain niche with that product. Economy pricing was used when the
catch of cod was very high as a result the prices for that fish dropped down dramatically.
Examination of the Amandas Fish and Chips Shops menu demonstrates the following results:
1) the company has average prices among other 10-top shops of the town; 2) certain dishes that
are unique among other competitors are more expensive; 3) there is a range of special price
offers, such as lunch hours and happy hours (from 15.00 to 17.00 p.m.).
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Promotion initiatives depends a lot on the on the product and pricing decision. It is
important to consider the budget allowance for promotional activities, the stage of product or
service recognition and its novelty level, as well as the target of the promotion. There are the
following means (tools) of promotion: advertising - massive non-personal communication; sales
stimulation (consumers stimulation, stimulation of marketing intermediaries and sellers,
stimulation of employees of the company); goodwill establishment trough relationships (links)
with the public (public relations). As well as independent methods (tools) of promotion is used:
direct marketing and Internet marketing (Source 7). Analysis of the promotion system of
Amandas Fish and Chips Shop unfortunately shows not very satisfactory results. Among
promotion issues the following are worth mentioning: price promotion (special offers, happy
hours as it was mentioned before); stimulation of the employees through the system of monthly
discounts for each worker; participation in the competitions for the best fish and chips dish and
competition for the best service quality. Lack of advertisement initiatives is a great drawback of
the company, the research showed that the advertisement campaigns of the shops competitors
were extremely successful this aspect should be taken into consideration in future. Free or not
very expensive delivery system could be also become a successful promotion step.
Finally, to see how Amandas Fish and Chips Shop uses the main instruments of
marketing mix lets consider the following table 2.
Table 2 Marketing mixs instruments used by Amandas Fish and Chips Shop
Element of
4P
Product Price Place Promotion
Instruments
used by
company
QualityDesignCharacteristics
TariffSpecials offersDiscounts
Distributionchannels
Market
Sales promotionAdvertisementService sale
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NamePackingServiceWarranties Return
coverage
RangePlacementInventory
management
Transport
Public relationsDirect-response
marketing
Because of the constant business changing each company goes through several stages of
its development so-called life cycle. This business life cycle is close to the life cycle of the
human. Each stage of this cycle brings its own challenges and provides owners with new
opportunities. Thats why it is extremely important to know at which stage the company operates
at the moment to choose the right approach of success achievement. It is not an easy task to
identify the current stage of Amandas Fish and Chips Shop. Different sources provide different
classifications of the stages of business life circle; the amount of these stages varies sufficiently
as well. According to one of the approaches there are 7 stages each company should go through
within its life, they are: seed stage, start-up stage, growth stage, established stage, expansion,
decline, and exit stage (Source 6). Analysis of the each stage description allows to make the
consequences that Amandas Fish and Chips Shop is at the established stage now. The following
arguments prove why this choice is reasonable: first of all, due to the companys long successful
history now it has its own market niche; secondly, the company has its constant loyal customers;
thirdly, sales growth is not very rapid but sufficient and constant; and last but not least, business
life seems to be more routine. At that stage the company could face with the following problems:
illusion belief that the company operates well, could put the owner in the difficult financial
condition lack of money for business modernization, absence of ideas of further development,
lost opportunity to win new market and segment, and as a result lagging behind the competitors
and ending up with decline. In order to stay at the market the company should transfer to the next
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stage - expansion stage and this is possible only through new ideas of business diversification,
through new markets and channels, as well as through improving the existing business
productivity.
Analysis of the companys competitors is a key instrument of the marketing and strategic
planning. The companys reaction towards competitors actions varies from business to business:
so the company could just copy all the steps of competitors, it could ignore its competitors at all
or be totally obsessed with tracking the actions of competitors. None of these actions would not
be beneficial for the business. Competitors analyzing helps to understand competitive
advantages and disadvantages of the business, shows the information regarding competitors
strategies and plans, could become a great base for forecast of the sector trends and challenges.
In Redcar there are around fifteen small and big shops and restaurants that offer the
services close to the ones Amandas Fish and Chips Shop proposes. Analysis of the situation on
the market of fish and chips food shops services shows that the main competitors of Amandas
Fish and Chips Shop are Park Avenue Fish Shop and Small Fry Traditional British Fish and Chip
Shop. Their products are of a great quality, there is a wide range of dishes, great promotion
activities. The main drawback is the high prices. Results of the study could be given in the form
of a comparative table 3.
Table 3 Comparative analysis of the Amandas Fish and Chips Shops main
competitors (Source 8,9)
Parameters Amandas Fish and
Chips Shop
Park Avenue Fish
Shop
Small Fry Traditional
British Fish and Chip
Shop
1) Quality of products 9 10 8
2) Quality of service 9 9 8
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3) Price 10 7 8
4) Advertisement
(other promotion
activities)
5 8 7
5) Location 10 9 9
6) Attractive facade 9 9 9
7) Internal interior 8 9 7
8) Ethical issues 10 10 6
Total average: 8,75 8,88 7,75
The estimation is based on the clients responses and feedbacks. The system of marks
was used (from 10 the best estimation till 0 the worst). Regarding this analysis we see that in
general Amandas Fish and Chips Shop general score is high 8,75, but the score of its main
competitor (Park Avenue Fish Shop 8,88) is higher. This analysis helps to see the main
drawbacks of the company: lack of advertisement and other promotion activities and not very
attractive inside interior in comparison with its competitors. Nevertheless, we could see that
company has won the competition regarding its location, price and ethic issues here Amandas
Fish and Chips Shop has obtained the best marks in the sector.
SWOT-analysis method is the method for the analysis of the SWOT environment
(acronym composed of the first letters of the words: strengths, weaknesses, opportunities and
threats), it is a fairly well-recognized approach that allows you to conduct a joint study of the
external and internal environment. SWOT analysis helps to establish the connection between the
strengths and the weaknesses, and between external threats and opportunities. Finally, SWOT
matrix is built to see the connections between all four components: strengths, weaknesses,
opportunities and threats. Analysis of Amandas Fish and Chips Shop external and internal
environment with consideration of 4 main elements of SWOT analysis is depicted in the
following table 4 - SWOT matrix.
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Table 4 SWAT matrix of Amandas Fish and Chips Shop
Positive influence Negative influence
Internal environment Strengths:
- Prices are lower than mostcompetitors
- Not high foundation costs- Strong corporate spirit- High quality of service- Valuable ethical issues as well as
sustainable development supporting
Weaknesses:
- Tough competition- Advertisement absence- Automatization is not
implemented
- The company doesnt haveits web-site
- Not efficient promotioncampaigns
External environment Opportunities:
-Location is very attractive (officeblocks, shops, park)
-The average income of Redcarsinhabitants is rising
-People tend to eat more often out ofhome
Threats:
- The main competitor isplanning to cut down prices
- Competition from foreignfast foods
Finally, the results of the Amandas Fish and Chips Shops business analysis could be
combined and the overall recommendations could be represented. Firstly, the owner should
consider the opportunity of efficient promotion strategy introducing usage of the advertisement
in the newspapers and on big boards, television; participation in different social activities of the
town, maybe act as a sponsor. Secondly, it is recommended to reconsider the interior of the shop,
maybe chance the furniture. Thirdly, the owner should pay attention at the advantages of
automatization. It also would be great if the company launched its website. One more
recommendation is to observe new possible niches of the market maybe delivery introducing to
both flats and offices, introducing new product such as pizza (the surveys showed that pizza is
under demand among competitors clients).
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