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Report: Arran Aromatics Case Study

Extracts from this document...

Introduction

Report: Arran Aromatics Case Study Attention Of: Mr Bob Hogg From: Miss Bhavini Vasanji (A063186) Module: Small Business Issues Course: BSc Business Studies: Part C Date: 26th November 2002 Word Count: 2986 CONTENTS 1. REPORT P2 1.1. Introduction P2 1.2. Question A P3 1.2.1. Part 1 p3 1.2.1.1. Importance Of Business Plan p3 1.2.1.2. Key Elements p4 1.2.1.3. Planning Tools & Models p5 1.2.2. Part 2 P10 1.2.2.1. Key Environmental Elements p10 1.2.2.2. Effect On Business p12 1.2.3. Part 3 p13 1.2.2.1. Growth Strategies & Models p13 1.3. Question B P17 1.3.1. Memo P17 2. REFERENCES P19 1. REPORT 1.1. Introduction This report is based on Arran Aromatics, a small to medium sized business owned by Mr Iain Russell. The business is located in Arran and has been in operation since 1989. This report seeks to answer the question, "What next for Arran Aromatics?" The business plan, environmental elements and growth strategies available for Arran Aromatics will be considered. 1.2. Question A 1.2.1. Part 1 1.2.1.1. Importance Of Business Plan "The business plan entails taking a long-term view of the business and its environment." (Burns & Dewhurst, 1996:180) Norton expands on this definition by stating, "A business plan is not only a requisite for seeking finance from investors, but also an essential document to describe aims and objectives and enable measurement of progress towards achieving them." (Norton, 1999:17) He also expresses that it takes account of the short-term, "The business plan provides the means to: * appraise the present and future of the business * work out short- and long-term objectives * establish a framework for action to achieve those objectives" (Norton, 1999:17) Thus a business plan is crucial in the establishment of a business, as it enables the entrepreneur to focus and crystallise his ideas. Aiding the setting of objectives it also provides a way of monitoring the performance of the business. ...read more.

Middle

However the PEST analyses focuses on the macro-environment, whereas SWOT combines an internal (business environment) and external perspective of the environment. Porter's five forces can also be employed for an industry specific analysis, which is the micro-environment for Arran Aromatics. For a detailed examination all three could be utilised. (Figure 4: Compiled By Author Of This Report, SWOT Analysis) Figure 4 illustrates the SWOT analysis on Arran Aromatics. On an internal perspective the weaknesses out number the strengths, thus it can be appraised that improvements to eliminate weaknesses are required, which in turn could be transformed into a strength. There with the market place it seems Arran Aromatics has a number of opportunities to pursue, however this should be analysed with respect to Ansoff's product/market matrix and to ensure a balanced product portfolio results to maintain business longevity. Figure 5 indicates the PEST analysis of Arran Aromatics over its history and present situation. (Figure 5: Compiled By Author Of This Report, PEST Analysis) The PEST analysis allows for identification and organisation of macro-environmental factors affecting and interacting with the business. This can used prepare for, react to and minimise impact or maximise benefits of the issues concerned. 1.2.2.2. Effect On Business Mr Russell's incessant frustration and non-compliance to authority saw the rise of what is now a lucrative business. The risk-bearing trait and intuitive approach of Mr Russell enabled the eventual emergence of Arran Aromatics, as well as the Russells' move to Arran. Despite the weakness of relationships with craft workers on Arran, the opportunity that arose through closure of the important supplier initiated a crucial chapter in the business. Ultimately the financial resources made available through grants and catering for the American market enabled the business to become change from being stead-fast to growing. The hurdles such as management buy-outs that the business faced steered it into extending its product line or diversifying. ...read more.

Conclusion

This has contributed to the reason why the capacity of the machines has not been maximised and attended to sooner. His indecisive nature has helped in that it stalls the implementation of his ideas, to allow him time to consider and give thought to his actions. However it is obvious that he does not plan, which is why his indecisiveness is more helpful than being a hindrance. In addition his innate dissatisfaction and long for independence stems from his character. The dissatisfaction only spurs him to go off on tangents, and provides a degree of instability in times when the business is facing problems. The extroversion in the meantime enables him to forge relationships and participate in effective networking, which counter-balances his quiet nature. However his low preference for team-working is a hindrance, as small businesses relies on good team-work to produce results. The Myers-Briggs Type Indicator (MBTI) was founded on the work by Carl Jung and the four dimensions of personality were defined. This reflects one's personality than just a preferred learning style and provides a useful tool for investigating how different learners develop learning strategies. The four psychological dimensions are energising, attending, deciding and living. The eight preferences, which are often referred to by the capitalised letter, are Extravert and Introvert in the energising dimension, Sensing and iNtuitive in the attending dimension, Thinking and Feeling in the deciding dimension and Judging and Perceiving in the living dimension. (www.strath.ac.uk, accessed 05/12/02) Mr Russell is classed as an ENFP. The MBTI is used in business to explore leadership styles (Hirsh and Kimmerow, 1990). Thus Mr Russell is suited to occupation in management and the opportunity to take on challenges continually. This explains his constant creative ideas as he seeks to find and fulfil new challenges once he has pursued one. (www.management.uta.edu, accessed 05/12/02) It is recommended however that he follow through each idea before moving on the next, to ensure stability of the business. 2. ...read more.

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