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Why have small businesses like Bonnets the Bakers survived despite competition from Bakers Oven, which is a large local business.

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Introduction

Why have small businesses like Bonnets the Bakers survived despite competition from Bakers Oven, which is a large local business. Introduction There is a general decline in small businesses in St. Ives and throughout the country, this is due to things like the power of branding, improved transport, modern shopping habits and cheaper prices due to economies of scale (See explanation later on). Bonnets the Bakers has continued to survive but why? Is it because customers have other reasons to visit each shop, for example better customer service other than price? Could it be because larger businesses suffer from diseconomies of scale (See later explanation) more then we assume? I will try to find evidence to prove or disprove these questions or alternatively find another explanation. It is difficult to define what a small business is, it can be measured by a lot of things such as number of workers, size of premise and number of customers. Bonnets the Bakers is a SME (Small to Medium Enterprise). This means they have less than 200 workers. They produce bakery goods such as sausage rolls and loaves of bread they also have a takeaway facility and a restaurant aswell as the retailing facility, this means they are in the secondary and tertiary industry, the secondary industry is manufacturing, using raw materials to manufacture bakery goods. Tertiary sector is services such as its restaurant and its take away facilities. ...read more.

Middle

It has a more traditional style of a tea room. As you enter the shop the restaurant section is on the left of the shop, this consists of a few tables and chairs, on the right there is the counter and this is where the produce is displayed. Bonnets has an overall traditional look to it. Interview with Mr. Bonnet These are the main points of the interview. ~ Bonnets staff turnover is negligible ~ Mr. Bonnet believes there will always be an opening for small businesses. ~ He believes his U.S.P is the personal relationship between his customers and staff. ~ The big competitors for him are the big supermarkets. ~ Some of his prices are competitive, some are not. ~ His shop windows are his advertising ~ Customers spend on average �2.50 Interview with Bakers Oven Here are the main points of the interview. ~ Our prices aren't the lowest but people will pay out for top quality produce. ~ Staff turnover is around 20% ~ The average customer spends about �3.25 ~ "Our products are our advertising" ~ The outlet has been there for over thirty years. Taste testing I tested a small sausage roll from each shop, I concluded that I preferred the Bakers Ovens produce because it had a better texture and overall taste to it. Price comparison Bakers Oven Bonnets the Bakers Jumbo sausage roll 0.60 0.55 Cornish pasty 0.75 0.92 Steak and kidney pie 0.80 0.92 Cheese lattice 1.00 ...read more.

Conclusion

Bonnets could increase their opening times to make themselves more accessible to people, especially people that go to work in the town centre early in the morning. Evaluation In my questionnaire I had nine people as my sample size. I don't think this was a good idea because it did not represent the market in St. Ives. It would have been better if I had asked one hundred or more people, this would of given me a more realistic and accurate result. The interview with Mr. Bonnet and Mrs. Miles was useful because this was a good source of information, we would not of been able to find out the things in a text book. Although we couldn't find out some things because it was commercially sensitive information. I don't think Mrs. Miles interpreted some of the questions in the way I hoped. My observations of the shops went well, from this I could find out about the situation and the style of the shops. If I would have done this again I would of drawn a plan of the two shops to show there layout more effectively. I could of improved on the taste testing by tasting a wider range of products and testing them on other people, because I would of not shown the views of the whole market. I though my price comparison was good I compared a wide range of products and it proved that the price of products from one shop was not always higher then the price of the other shop. 1 David Watts Economics Coursework ...read more.

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