Developing and Managing Small Business - Case Study Example

Question 1 Although there is always an ambiguity in business development during entrepreneurship stage of business growth, planning has been the relative evidence that usually leads to success (Hoing, 2004). Mary Anne with creative mind and good background for development of restaurant together with Mark who is a linear thinker in the world business both demonstrate powerful skills for success management of the franchise. However, there is lack of strategic planning for the business. Normally from the normative approach in entrepreneurship, developing a business idea to a viable production is a critical step. There should be a market research at the initial stages that will allow you realize if there are actually the customers for your products and services (Bragg, A and Bragg, M, 2005). Most of the successful franchisors ask themselves the following questions before going to action. These questions include; Do I have a unique skill that will form a new demand in the market? Am I aware of the gaps that exist in the market? Do I have a particular interest that will turn my idea into a successful franchise in the market? Did I lack a particular product or service before that made me come up with this change in my business? Will I surely help in solving the problem in the market? All this would have been in the minds of Marry Anne and Mark before initiating their plan. These questions would be the apparent guidelines for the couple in developing a good marketing concept for the success in converting the business into a franchise. It is not that Marry and Mark did not develop these questions in their minds, but they were supposed to have a marketing concept. Nieman, G and Barber, J (1998) focused on the differences between franchising already existing business and developing a fresh franchise concept. The conversion of existing business does not necessarily need a pilot operation since its existing business is a pilot operator. Though the couple really saw that the business was suitable for franchising since there was a growing demand of sauce, they had not nourished their concept. A nourished plan entails the following; 1. Broad feasibility study: this entails broad examination of business’s strength and weakness as well as extensive industry analysis. Developing a feasibility study will need a comprehensive marketing research that will identify the market and its potential consumers, define a problem, measure the extent of consumer behavior and develop a strategic plan that will enhance successful enhancement of the vision (Reichheld, F. 2003).. 2. Inducting the potential franchisees: since the existing business serves as a pilot operation ground, the potential franchisees will have to take most of his time in the business observing the operations within the premise and later giving a state of change if at all it is required in enhancing successful implementation of change in the business. 3. A need for systems and product test while maintaining a blueprint strategy: it is important for Marry Anne and Mark to evaluate and test the new system during the pilot operation before releasing it to the market. If the business maintains the blueprint strategy, then if at all there will be any deviation beneath from productivity level to profit margin realization, the franchisor will come in with an aid to remedy the shortcoming. Question 2 Taylor’s idea on scientific management on how to measure and achieve customers’ loyalty in the business has been well embraced by quite a number of developing enterprises in the world. Considering IPower Web Company, Net Promoter Score (NPS) model is greatly used to determine company’s reputation. The model is very effective since it categorizes customers into three; promoters, passive and detractors. Michael Porter appreciated the use of referral since it revolutionizes value adding activities like evaluation and transaction in an enterprise thus creating a competitive advantage to the company (Lumpkin and Gregory, 2004). For instance, Yesmail.com Company uses affiliate model of referral-based in which a new customer is led to the product or service by use of e-mail marketing. Business referral is normally fixed to the ‘centers of influence,’ for instance, the franchisors or financial planners in order to encourage the good reputation of the service in the company (Greg, 2009). Unlike advertisement where the respond of the customers is only realized after sometime, long enough, referrals has immediate response which will make the enterprises work on the effective strategies promptly and immediately. According to Frederick Reichheld and Phil Schefter (2000), loyalty is a secret weapon on the web based businesses when it comes to consumer service promotion in the industry. Subsequently, it should be first choice to be considered that is why IPower Web Company is reasonably developing by use of referral strategy in promoting their services. Michael, Ralph and Joe (2008) pointed out that customer service aids much in developing and implementing plans that will initiate an effective business referral as well as gaining much trust in the market. Therefore, customer service upraises the following values in the industry; 1. Increases the trust between the players in the market; the major players in the market are the enterprise and the customer. Therefore, if the company usually provides consistence and trusted services to the customers, the referral prospect of the customers will ultimately be the company. So in most case the customers will be referring only to the company of ‘faith’ not considering any other stranger in the market. 2. Good customer service lowers resistance to buying; NPS model differentiate customers which are promoters from those who are detractors. Therefore, the enterprise will realize which group needs to be referred in order to reduce resistance to whatever the company is selling (Michael, Ralph and Joe, 2008). 3. Customer service through referral reduces extensive marketing research as well as advertising costs. IPower Web Based Company demonstrated this value by introducing NPS model where the responses of the customers are the marketing research information/data while customers themselves advertise the services. So with referrals, the company will incur no or low cost if any when advertising its products and services. Generally, business referrals are very imperative in multicultural markets where the promoters (prospect customers) will not trust the strangers in the industry but rather have loyalty in you. This will ultimately lead to increase in sales of the company since more of the customers will not only be pulled by the price but also the assurance of the service (Lee, M. S, Roberts, R. R. and Kraynak, J. 2008). Reference Bragg, A and Bragg, M. (2005). Developing new business ideas: a step-by-step guide to creating new business ideas worth backing. Australia: Financial Times /Prentice Hall. Brown, A., Johnston, S and Kelly, K. (2002). Using Service-Oriented Architecture and Component-Based Development to Build Web Service Applications. Australia: Software Development Company, Gideon Nieman, J. Barber. (1998). How to Franchise Your Own Business Small Business Management Entrepreneurship series Juta Small Business Series. Australia: Juta and Company Ltd. Hayes, G. (2009). A practical guide to business valuations for SMEs. Australia: CCH Australia Limited. Honig, H. J. (2004). Towards On-line Logistics: The Linc Interaction Modeling Language. University of Michigan. DUP Science. Lee, M. S, Roberts, R. R. and Kraynak, J. (2008). Cross-Cultural Selling For Dummies For Dummies. Australia: John Wiley & Sons. Lumpkin, G. T. and Dess, G. G. (2004). E-Business Strategies and Internet Business Models: How the Internet Adds Value. Vol. 33, No 2. pp 161-173. ISSN 0090-2616/. Reichheld, F. (2003). The One Number You Need to Grow. Retrieved from; http://clients.marketingsavant.com/smbootcamp/docs/academics/The%20One%20Number%20You%20Need%20to%20Grow.pdf. Riecheld, F. and Schefter, P. (2000). E-Loyalty Your Secret Weapon on the Web. . Read More