Analysis of a Local Business

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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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