Evaluation of an Entrepreneurial Business in Australia- Bakers Delight Company - Case Study Example

Evaluation of an Entrepreneurial Business in Australia- Bakers Delight Company Name: Course: Tutor: Institution: Date: Introduction Entrepreneurship is a developing business component in the global market. Multinational organizations face increasing competition from both large and small organizations in the international platform. In this case, global organizations face increased profit margin reduction. The Australian market is one such saturated market with two major competitive edges on its economic and political environments. On one hand, the economy has grown in its GDP output to the tenth global position according to the IMF figures in 2012. On the other hand, the market has a conducive political environment. As such, entrepreneurship organizations in the market have been continuously developed. In this case, entrepreneurs such as Lesley Gillespie have developed organizations such as Bakers Delight Company to mitigate these challenges. This essay seeks to evaluate the formulation and evaluation factors conformance by Bakers Delight Company and recommend necessary improvements to the CEO. In its analysis, the essay reviews the components of resource acquisition, sustainable business ideas and market competitive edges. Business Situation Analysis The organization, established in 1988, developed a new business idea in the fast foods industry. In this case, the organization adopted the franchising market expansion approach, a new strategy that fast food enterprises in the Australian market had not ventured into (Bakers Delight”, 2014). In this case, the organisation acquired an increased market ace and penetration in the economy. Consequently, the organisation has evolved into its current status as one among the leading Australian fast food organizations. In this case, the organisation currently serves a diverse recipe variety to customers in the Australian market and beyond. However, the economy has in the last decade shifted its eating behaviour. The emergence of healthy dieting and the emergence of increased local fast food stores pose a challenge on the organization. Therefore, the organisational management is at the crossroad of implementing new strategic decisions to not only increase its current market competitiveness, but also ensure increased market success in the future. It is based on this business situational analysis on the company that this essay elected it for review. Discussion Resources Acquisition Profit organizations are established with key strategic objective of providing value to the shareholders. In this case, organizational activities are geared towards establishing and attaining this objective. Therefore, revenue acquisition forms a paramount component is organizational formulation and evaluation processes. In this regard, in organizational formulation a business model is imperative to allow for objectivity in organizational operations. Currie (2004, p.47) argued that a business model is a vast business tool that consists of diverse tools and components that jointly propagate organizational market success. In this case, the authors stated that a business model has the revenue model structure as one of its critical components. A revenue model is a structured approach through which organizations acquire revenues from their customer base. In this case, the revenue model provides a clear framework through which the respective organizations collect revenue. Surlemont, Chantrain, Frédéric, Nlemvo and Johnson (2005, p.287) conducted a study to evaluate the need and appropriate revenue models. In its analysis, the study established that diverse organizations operating in distinct market had diversified ideal revenue models. As such, the study established that revenue models relevance was hedged on respective markets. However, it established some similarities about revenue streams and accounting procedures. On one hand, the study argued that organizations adopting more than single revenue streams acquired increased market competitiveness. Therefore, ideal entrepreneurial ventures provide the investors with diverse revenue streams. Consequently, these increased streams allow for increased revenues and profitability through reduced market competition. In addition, successful entrepreneurial organizations adopt the matching accounting approach. In this case, the organizations match their costs against earned revenues to provide for productive and non-productive activities for elimination, restructuring or improvements. In this case, the Bakers Delight developed a definite business model in its operations. In this case, the organization used franchise enterprises. Therefore, the organization developed two different revenue streams. On one hand, the organization acquired revenues from direct product sales into the market. In addition, the organization acquired revenues from sales made by the franchise organizations. Consequently, the double revenue streams provide the organization with and added advantage, allowing for increased sales and subsequent profitability margins increase (Bakers Delight”, 2014). Sustainable Business Idea Entrepreneurship organizations differ from small scale business in the market through the adopted business idea. On one hand, Volpe and Schenck (2008, p.14) stated that the small business base their established on the existence of a market gap. In this case, organizations established under this approach base ground their existence on the market gap. Therefore, the organizations do not introduce new business models but work with the existing business models to fill existing market gaps. On the contrary, the entrepreneurship organizations base their establishment on new business models. In this case, the organizations seek to establish alternative avenues for conducting business and availing products to the consumers. Consequently, their existence is based on the existence of deficient business models. However, despite the adoption of new business models by the respective entrepreneurship organizations, a majority collapse in the long run. Griffiths, Gundry and Kickul (2013, p.343) conducted a study to evaluate reasons and causes for the increased entrepreneurship organizations collapse despite the adoption of new business models. In its analysis, the study established that the majority of the developed business ideas by entrepreneurship model through innovating and inventive lack a sustainability aspect. Werbach (2009, p.17) argued that the idea sustainability in business is hedged on difficulty by competitors to imitate the process. In this case, such ideas should offer a strategic guarantee that the market cannot imitate it easily. Therefore, although an entrepreneurial business idea could be new and unique, a lack of sustainability of such an idea risk increased organizational failure in the long run. The Bakers Delight is an ideal case study of a unique and sustainable business model. On one hand, the organization developed in 1988 in the Australian market adopted a new trend in its approach to the market with the use of the franchise. The strategy allowed an increased drastic market expansion and approach. Consequently, the organization through franchising established an increased market branding (Bakers Delight”, 2014). As such, the branding and franchise approach created a market influence and familiarity that is sustainable as new entrants in the market require huge capital investments to achieve the organizational current market structures. Competitive Edge Da, Lee, Skott and Walter (2004, p.64) conducted a study to evaluate influencing market factors that propagate and increases organizational success in the market. In this regard, the study developed a hypothesis that an organizational success is based on the existence and presence of organizational advantages over their competitors in the market. These advantages represent areas through which the respective organizations obtain increased market influence over its competitors. Organizational market advantages are classified as the overall organizational competitive edges. An organizational competitive edge enables an organization retains its customer base. Ajitabh (2008, p.82) argued that customer loyalty and repurchases are based on respective organizational competencies. Therefore, in order for entrepreneurship organizations to establish a market influence and strategic long term approaches in the market. As such, the presence of a competitive edge and its sustainability forms the basis for the evaluation of a successful organizational performance. In this case, an analysis on the Bakers Delight Company reveals a major weakness. As established, the organizational key competitiveness is based on its business idea. However, the organizational has no additional competitive aspect in the fast foods industry giving it advantage over market competitors such as the McDonalds Company. Recommendations Based on the above establishments, it is apparent that despite the organization operating as a currently profitable entrepreneurship organization in the Australian market it has a number of challenges in its operations. A key identified challenge is the lack of additional competitive edges over market competitors. The organizational review established above reveals that the organization bases its performance on the existence as a unique and sustainable business idea. However, a business idea is not an enough strategic alternative to business success. Antony (2002, p.7) conducted a study to evaluate the performance of strategic business model. In this regard, the study established that the business models act as frameworks through which organizational operations are held. However, the study established that business models success in the market is hedged on the existence of supporting models and strategic approaches such as marketing and production strategies. Therefore, this essay recommends that the organisational CEO should support the organisational systems with increased strategic systems. In this case, this CEO should adopt alternative strategies to allow for increased market competitiveness. In particular, this essay recommends the adoption of alternative marketing approaches such as online marketing. It is apparent that the industry players are reluctant to engage in online marketing. This is due to the increased capital and initial infrastructure requirements for the adoption of this strategy. Consequently, developing on this approach increases the overall organizational competitiveness, an advantage that was sustainable. Conclusion In summary, this essay offers a review of entrepreneurship business formulation and evaluation factors. In this case, the essay evaluates the Bakers Delight Company as a case study. As such, the essay evaluates issues such as resource acquisition, business idea sustainability and competitive edge presence. In its analysis, the essay reveals that Bakers Delight Company adopted two revenue streams that allow for increased profitability. Moreover, the organization adopted a unique business model that gave it an edge over competitors. However, the analysis establishes that the organization lacks an additional competitive edge beside the business model. Consequently, the essay recommends that the organisational CEO should consider the adoption of alternative marketing strategies such as online marketing, an area that a few in the industry have ventured into. References Ajitabh, D. 2008, Global Competitiveness, Excel Books, New Delhi. Antony, J. 2002, "Design for six sigma: A breakthrough business improvement strategy for achieving competitive advantage", Work Study, vol. 51, no. 1, pp. 6-8. Bakers Delight”, 2014, Company Overview, [Online] Available at [Accessed April 21, 2014]. Currie, W. 2004, Value creation from e-business models, Butterworth-Heinemann, Oxford. Da, S.R., Lee, P., Skott, M. & Walter, T. 2004, "Competition in the Market for Takeover Advisers", Australian Journal of Management, vol. 29, pp. 61-92. Griffiths, M.D., Gundry, L.K. & Kickul, J.R. 2013, "The socio-political, economic, and cultural determinants of social entrepreneurship activity", Journal of Small Business and Enterprise Development, vol. 20, no. 2, pp. 341-357. Surlemont, B., Chantrain, D., Frédéric Nlemvo & Johnson, C. 2005, "Revenue models in haute cuisine: an exploratory analysis", International Journal of Contemporary Hospitality Management, vol. 17, no. 4, pp. 286-301. Volpe, R.P. & Schenck, N.A. 2008, "Small Business Lending Environment In Emerging Economies: A Comparison Of Brazil And Russia", Journal of International Business Research, vol. 7, no. 2, pp. 13-30. Werbach, A. 2009, Strategy for sustainability: A business manifesto, Harvard Business Press, Boston, Mass. Read More