Wendy, the wife, is responsible for the kitchen food serving and one waitress and chef assistant. The kitchen, affiliated by the Castle hotel, occupies approx. £5,000 turnover per month. Its serving time is about 7 hours per day for breakfast, lunch and dinner except Saturday and Sunday. There are some frequenters, such as Clive driver, Comprehensive school teachers in Lampeter. The peak serving is in every Friday lunch time as well as the Christmas Eve and New Year’s Day.
Anita, their daughter, is responsible for the accommodation and three cleaners for daily maintenance. The accommodation is also affiliated by the Castle hotel. Accommodation is a ‘cash cow’ of the John’s Castle hotel, which they invest the least capital and gain an increasing profit, £3,000 per month.
4.0 History of the Castle hotel and its business partners
The oldest Castle hotel was established for hundreds years ago. Over the past 600 years, the Castle has been owned, together with its estate, by Lords and Ladies whose names were frequently associated with the turbulent history of the Kingdom. It was refurbished in 18th century, offering a 60-seater non-smoking restaurant, a traditional Welsh pub with real ales. In early time, the Castle Hotel had already got restaurant, weddings, Stuart banqueting suite and conference facilities.
In 1882, a local historian, Bates, purchased the property and started a rudiment hotel business management. This indicates that the Castle hotel has a long history in hotel business transactions. However, as a real hotel and restaurant, it originated from the reign of Edward III, about 1930s, and offered a traditional Welsh pub, which was an early entrepreneurial behaviour in the Castle hotel. These days, ‘Castle hotel’ has becomes a well-known brand chain-shop in tourism industry in the UK. Now, today’s franchisor is Mike & Nan Jones.
Brain Brewery Co., Ltd is a partner of the Castle hotel, which grew from Cardiff's own brewer into ‘The National Brewer of Wales’ over the last 100 years. In 1882, it was purchased by Samuel Arthur Brain and his uncle Joseph Benjamin Brain. The company has remained in the family ownership ever since and the present chairman is a direct descendant of one of the founders.
These days, the company operates over 200 pubs across South Wales and the West Country and within Cardiff's city centre and it has a venue to suit everyone’s taste by both day and night. In 1997 the company purchased South Wales' other leading independent brewery Crown Buckley which had been formed from the merger of the Crown Brewery of Pontyclun with the famous Buckleys brewery of Llanelli, founded in 1767. Today the full range of Brains and Buckleys ales are still produced in the traditional manner at the company's Cardiff brewery.
John and his family took up the Lampeter Castle hotel as a tenant in 2000. The whole family moved to Castle hotel in Lampeter renting the hotel premise and living upstairs. From then on, they started running the small family business. Before that, they lived in the South Wales, and ran a small hotel, Oqmore Juwction, by their own.
5.0 Characteristics of the entrepreneur in the Castle hotel
There are several typical characteristics of John as an entrepreneur:
Self-starting: John and his family moved to Lampeter Castle hotel three years ago, which obviously demonstrated this point. Though there is help from supporter, they still need to depend on their own decision making.
Confidence: John considers the ‘beer’, which is provided by the Brain Brewery Co., Ltd., as a strongly competitive advantage compared with other local hotel. And he is also satisfied with his management skill to balance the Castle hotel. Essentially, he does.
Commitment to others: John is not selfish. His leadership is not only just about giving people jobs to do but offering them the support they need in order to do those jobs.
Assertiveness: John’s mutual understanding and good communication skills lead to a commitment of outcomes.
Eager to learn: John and Wendy actively learnt how to use a new till machine as staff, which shows their pro-activeness in an entrepreneurial business.
According to Landau’s classification of entrepreneurial types (1982), John and his family are classified as a consolidator. They developed a venture based on low levels of both innovation and risks. The John’s family in that it is really, at best, a marginal improvement on what existing players are doing. Though risks are low, so too must be expected returns.
6.0 Evaluation:
In this section, the article gives the analysis of entrepreneurial characteristics: risk-taking, proactive, innovative, self-motivated, competitive, and money-oriented.
Risk-taking: In 2000, John decided to take up Castle hotel; as he said: ‘I really want to be a perfect entrepreneur in middle Wales and expand my business in a new area.’ His family strongly supported him and they all moved to Lampeter to start a new business. John could easily manage the former hotel and made profit. But he sold that old one and applied for the Castle hotel from the franchisor three years ago. It is obviously that he should face many circumstances those haven’t happened to him before. He hoped to expand, which indicated that he was not satisfied with the current situation and hoped to make progress. Actually, entrepreneurship is the process of creating something new and assuming the risks. So, he took the risk at that time.
Proactive: There is a lack of efficient human resource management in the daily business, as well as forecasting. He often makes redundant staff arrangement on quiet nights but to deal plenty with busy time. The arrangement of Lampeter Darts’ night in 2004 could be a case in point. Though it is a party but happens at the beginning of year, people have less money because the spending during the New Year’s vacation. John arranged 4 bar staff for this year’s Darts’ night, but only about 30 thirty customers came. The income even could not cover the wages of employment, let alone make profit. Thus, he is not an exact entrepreneur according to this criterion.
Innovative: John has become lacking of innovation-generating and imitative behaviour. He tended to resist change after achieving that application. There was a good opportunity came from ‘Foster’s Night’, which was sponsored by a Scottish Courage Ltd. He could have a big business deal at that night as long as he made advertisement on the streets of Lampeter. But that was a disappointed night with about one quarter ‘Fosters’ not sold. John confirmed that no advertisement and promotion, only trick gifts from the original promoter led to that failure.
Self-motivated: Although the motivations for venturing out alone vary greatly, the reason cited most frequently for becoming an entrepreneur is independence—not wanting to work for anyone else. As John himself said ‘I am self-employed, I hope to work for myself, as well as my family.’ Essentially, he wants to make money for his own and family. But with time goes, the entrepreneurial activity decreases. No food serving on Saturday and Sunday is another essential case. Therefore, John and his business went to be a consolidator.
Competitive: As Porter M E mentioned, there are two classic strategy texts, one is competitive strategy (1980), and the other is competitive advantage (1985). In the case of the Castle hotel, John doesn’t seem to have strongly competitive sense. He makes average advertisement on local leaflets, no more promotion. Compared with it, the Loyal Oak hotel, which is a strongly competitive novice, really focuses on the local marketing. Though John’s Castle hotel has its own competitive advantage, such as good beer, long history and reputation, it will still influence to the future of business. Critically, the Castle hotel is only a small business without ambition.
Money-oriented: There are two aspects indicated this issue. On the one hand, some times he is quite generous to increase wages for staff, and often buys free drinks for old ladies or new customers. On the other hand, he seriously bargained with a businessman who sells a new till machine. In the end, he sold the old till machine at £100 to reduce the price of that new machine. He does clearly understand the sense of money and profit to the business, even 1 penny. Based on this analysis, John seems to be a combination of a small business owner and an entrepreneur.
According to Wickham (2001), there are also four aspects to measure the success of an entrepreneurship: economic responsibility, legal responsibility, moral responsibility, discretionary responsibility. The following presents as analysis.
Economic responsibility: John’s family successfully supplies a recreation pub, fine ales and good food to local residents in Lampeter, provides comfortable bedrooms and breakfast to travelers who passing Ceredigion. They make good profit and support themselves very well.
Legal responsibility: the Castle hotel obeys tax and accounting laws, as well as criminal and civil law. There haven’t happened any unsafe incidents for the past three years.
Moral responsibility: the Castle hotel lives in local ethical standards and has a good reputation in local Lampeter. The business culture of the Castle hotel is sheer accepted by the local philosophy.
Discretionary responsibility: the John’s family really appreciates for their own business, bar, kitchen and accommodation. They are really satisfied with employee treatment, products serving, and environment around the hotel. They give the training for novice rather than too much critical employment.
Therefore, based on Wicham’s criteria, the Castle hotel is a typical entrepreneurial business; John and his family are real entrepreneurs.
7.0 Conclusion:
Connecting with the first and second evaluation, we can find an interesting conclusion of the case study.
Essentially, John is a small business owner and his Castle hotel is run as a small family business. They are supported by two traditional entrepreneurial businesses. Their small business does not dominant in its field, and does not engage in any new marketing or innovative practices (Birley, 1994). The owner, John, perceives the business as an extension of his personality, intricately bound with family needs and desires (Birley, 1994). John’s business was established for the principal purpose of furthering his personal goal, survival and life-style maintenance but not growing, expanding employment and developing into a larger enterprise.
Not all small businesses are entrepreneurial businesses. Storey and Sykes focus on uncertainty, innovation and management as potential separating factors. John’s business is less concerned with growth, innovation and strategic objective (Wickham, 2001). It is likely to adjust more quickly to situations of market disequilibrium and embodies the characteristics of the classic entrepreneur (Burns & Dewhurst, 1994).
However, there exists some entrepreneurial management in the business. The early motivation of establishing can be classified as a typical entrepreneurial behavior. And some of the daily business activities demonstrate as entrepreneurial management, as well, John’s behaviors indicate entrepreneur characteristics.
Hence,
Small business owner Entrepreneur
Consolidator
After a critical analysis, with time going on, John and his family is a consolidator or a small business owner with certain entrepreneurial behaviors. The Castle hotel is a small business but not all entrepreneurial business in essence.
8.0 Reference:
[1] Charles R. Greer, Strategic human resource management: A General Managerial Approach, 2nd Edition, Texas Christian University, Prentice Hall, 2001
[2]
[3] Tulgan, Bruce, Managing generation X: how to bring out the best in young talent, Santa Monica, Calif: Merritt Publishing, 1995
[4]
[5] Philip A. Wickham, Strategic Entrepreneurship: A Decision-Making Approach to New Venture Creation and Management, 2nd Edition, 2001
[6] Jim Stewart, Employee Development Practice, Nottingham Business School, Financial Times, Prentice Hall, 1999
[7]
[8]
[9] Robert D. Hisrich, Michael P. Peters, Entrepreneurship, 4th edition, 1998
[10] Richard W. Scholl, Motivation Inducement Model, Source: Leonard, N.H et al, A Self concept-based Model of Work Motivation, Proceedings of the Academy of Management Annual Meeting, Vancouver, B.C.
[11] Porter, M E (1985), Competitive Advantage, The Free Press, New York
[12] Neil M. Kay, The Innovating Firm: A behavioural Theory of Corporate R &D, 1979
Boston Matrix Introduction,
The webpage of Castle Hotel,
Robert D. Hisrich, Michael P. Peters, Entrepreneurship, 4th edition, 1998, P.9
Neil M. Kay, The Innovating Firm: A behavioural Theory of Corporate R &D, 1979, P. 10
Robert D. Hisrich, Michael P. Peters, Entrepreneurship, 4th edition, 1998, P. 74
Landau’s classification of entrepreneurial types (1982), which is stated by Wickham, Strategic Entrepreneurship: A Decision-Making Approach to New Venture Creation and Management, 2001,
Porter, M E (1985), Competitive Advantage, The Free Press, New York
Philip A. Wickham, Strategic Entrepreneurship: A Decision-Making Approach to New Venture Creation and Management, 2nd Edition, 2001, P. 51
