Analysis of Business Expansion Strategies, Failures, Risks, and Growth
The purpose of this report is to provide brief information related to the case that talks about the business expansion strategies, failures, risks, and growth. The report answers three questions given in the case that provides the analysis of the case of Bespoke Company. The case talks about Alison who had been working in an organization, suddenly faced the urge to start her own business. In response to which she along with her colleague opened the business of Bespoke thread but soon after that the owners started feeling deprived of freedom and life. Resulting to which, they hired a professional for the business who initiated heavy purchases and long run style objectives. This aspect decreased the original value resulting to which the partners sold their share. But Alison kept on running the business under the same name from home itself. She succeeded with her small work from home business also and now she is thinking to expand the business through licensing or franchising. More details about the report are discussed below:
Before forming any decision about Alison’s business, it is important to understand various circumstances faced by the business and the current position of the company as well. The company Bespoke had been originally formed by two people who initially invested their hearts and minds in the business to grow and the business grew as well. However, as nothing is constant in the same way the situation changed and both people started getting frustrated due to overloaded work. Resulting in which they invited another partner in the company who changed the policies of working. This change affected the products and services offered as well due to which the company lost its identity and went into liquidation (Scarborough 2016).
So, from the above analysis, it can be clearly seen that Alison is not in the capacity to invest her whole day in the business again. She wants to run a business that is simple, small and easy. However, her feelings to work hard and grow a business helped her to operate a business initially. Thus, it can be said that the dedication of Alison towards work can help her to expand the scope of business in the international market (Kirzner 2015). She just needs to find another person in the target market who is willing to work according to conditions of Bespoke and grow the business with its originality. No business can survive in the market without exploring the diverse situations. Also, it should be noted that Alison has once tasted the feeling of failure in business so now she will take step considering all the aspects that can match the business of Bespoke (Read, Sarasvathy, Dew, and Wiltbank 2016).
Potential of Alison to expand the business
An entrepreneur is a person who takes calculative risks and converts them into opportunities for the business in such a way that they earn profits in the target market. Similarly, it should be noted that there is very thin line difference between an entrepreneur and a businessperson, a businessperson takes available opportunities and uses them in the business. While an entrepreneur explores available market conditions and create opportunities for them to gain profits for the business. In the same way, Alison should make use of the entrepreneurial traits present within and should take risks to expand her scope of business. Also, it should be noted that working from home and setting up the business at home only limits the opportunities for the business to grow and explore the external market. With this type of business, Bespoke would be able to target the people living in the nearby only (Drucker 2014).
However, Alison has the potential to grow the business, expand it and create profit out of it. So, she should make use of the franchising technique. Franchising expansion strategy refers to the strategy under which, one organization authorize another organization operating in another part of the world to produce products for their domestic market under the label of the original company. And the franchisee has to pay for using the brand name franchiser company (Baum, Frese, and Baron 2014). This type of expansion strategy is not burdensome, nor it will hamper the daily working activity of Alison. So, she should adequately make use of this strategy in the external market to grow and succeed as well. This strategy will provide a platform to the company to showcase their products in the market, it will provide new target customers to the company. This aspect will also help Alison to increase the sales of original business as well (Hitt, and Duane Ireland 2017).
So, I would recommend that Alison should aim high targets in the market and expand the Bespoke business through franchising expansion strategies. The reason behind this choice is that Alison is a great entrepreneur who knows how to handle a failing business and give it life again. So, she can easily handle the expansion strategies of business as well. Franchising is the best option for her, as it will help her managing her business and expanding it without affecting her personal life. In the initial days, when the business actually failed, it was due to the fault of the third partner of the company and negligence of other partners as well. So, now she has learned from her mistakes and knows how to help a failing business to breathe again. Alison can successfully work in operating her in-house business as well, but in this way she will not be able to explore her capabilities nor will she be able to attain maximum profits from the business as well. Thus, she should make use of franchising expansion strategies to help the business Bespoke to grow (Kuratko 2016).
Franchising Expansion Strategy
There are various problems in growing the business further as expansions are not regarded as good for all the organizations. Further, the personal problems associated with the case of Alison and Bespoke Company are discussed below:
Lack of Support: support is the most important thing that an entrepreneur requires from her family in order to grow the business. In the case of a women entrepreneur, it is important for her to get support from her family members and friends in order to grow and attain a progressive return from the process. However, lack of support is one of the significant personal problems that affect the growth of business further in the external international market. Lack of support increases the stress level of leaders in an organization as they might start feeling that they are alone in their decision. This aspect might result in the failure of the decision as well (Parker 2018).
Confusion in Minds: while initiating an expansion decision and following it, the most important task for an entrepreneur is to have a clear picture of their objectives set in mind. However, confusion in mind of the entrepreneur for expansion strategies and further related issues might shake their confidence in their decision as well. Confusion is one of the biggest personal problems of an entrepreneur as it makes difficult for the leader to effectively take an adequate decision and work on it as well. Confusion can create the problem in post decision-making process as well (Kazanjian, Drazin, and Glynn 2017).
Poor confidence: confusion in minds of an entrepreneur directly leads to poor confidence problem within the entrepreneur. While facing the problem of confusion, the leader loses their capability to confidently lead the organization because they themselves are not sure about the decision that they have made for the business. So, this one of the personal problem faced by an entrepreneur in the current environment. It is important to have confidence in every activity that an entrepreneur perform irrespective of the consequences of the event. Alison, in the given case study also faces confusion in mind that shattered her confidence level to grow and succeed in the external environment (Storey 2016).
Change resistance: change resistance is one of the biggest issues that affects the entrepreneur in the current environment. This current personal problem affects the interest of entrepreneurs like Alison in the current environment. Many times the leaders face the incapacity to change the working of their business due to the process of expansion. The leaders are very comfortable working in the current environment due to which they resist changing when the situation comes. This aspect affects the growth process of business and expansion strategies. Further, change is the most important aspect that is required by the leader to adopt while initiating the expansion strategies so that the business can effectively grow and survive (Brenkert 2017).
Recommendation
Work pressure: it is difficult for leaders like Alison to work on their business and manage the family at the same time resulting in which they face the problem of work pressure. The process of business expansion demand time and efforts of the leader that the leaders like Alison are unable to provide effectively. Resulting in which, work pressure is created on the entrepreneurs. Also, it should be noted that problems like lack of confidence and change resistance also give rise to the problem of work pressure within the leaders in an organization (Aldrich 2017).
Time Management: an entrepreneur is a person who wears many hats at the same time. This phrase means that an entrepreneur performs different jobs at the same time. Due to such a typical job role, the entrepreneur faces difficulty in managing the personal and private life. This was also one of the reason due to which Alison hired another partner and business failed. Leaders like Alison have to manage a successful person as well as professional lives due to which they have to effectively manage the time. However, time is not an easy task to manage, as the leaders have to complete all the tasks and save some personal time as well. So, this is one of the personal problem faced by leaders in growing their business nowadays (Davidsson 2015).
Self-doubt: It is easy to discourage a person when they are going to start a new task. Self-doubt is another major personal problem that makes it difficult for an entrepreneur to survive in the external international market. Many times the leaders feel that they are incapable to grow the business and manage their personal life at the same time. Resulting in which, their business fails to expand. So, this is also one of the personal problem faced in initiating expansion strategies (Burns, and Dewhurst 2016).
Alison is more likely to succeed than fail in the target market. It can be clearly seen that many organization are currently working in the external market without having fixed place of work. Similarly, Alison is also working in a business that is operating out of a shop. The fact is true that Alison’s Bespoke partnership failed that does not mean that the business ultimately ended; yes, the business struggled in growing but somehow Alison managed its path to succeed in the market (Cooper 2017). More than failure, Bespoke is a successful business has faced failure and survived in the target market as well. There are many business presents in the current environment that are placed online and do not have any physical store, however Alison have a physical place for the customers to visit So it can be clearly said that the business Bespoke is a great successful business that is operating in an out of shop manner (Burns 2016).
Personal Problems Faced by Alison
Coming up to the next part that is the growth of the business, it should be noted that the business of Alison is working well in the current the environment but the business needs exposure as well, in regards to which she needs to expand the business. The fact should be noted that an entrepreneur can think of expanding the business only when they feel that the business is well settled in the current environment and they should explore the diverse environment as well. So, this aspect clearly states that the business is running successfully in the target market and it would be wrong to say that the business is failing in the environment (Glaeser, Kerr, and Kerr 2015).
From the above reasoning, it can be clearly seen that Alison is not failing in the current business process and there no scope of failure in the future business prospects as well. So, Alison should adopt the process of franchising for the purpose of business expansion (Acs, Autio, and Szerb 2014). The franchising strategy is best suited for the business of Alison as it helps her in expanding the scope of business with increasing much work pressure as well. Franchising will also help to target a large customer segment in a diverse market and initiate the sales in that area as well. The process of expansion will help the business Bespoke to work as a clothing business that is operating out of a shop (Meyer, Neck, and Meeks 2017).
Till date, the business has survived so there is no future chance of failing the business instead the franchising strategy will introduce a brand in a diverse market. This strategy will attract more customers in the target market resulting to which sales increase and business will grow. Franchising strategy will help Alison to handle responsibility and delegate it at the same time, as under this process she will provide her brand name to another organization. This strategy will help Alison to grow the business and promote it in the international market as well. Thus, the fact should be noted that Alison’s business expansion strategy and the current process is more likely to succeed in the target market with such growth decisions taken by her (Barringer 2015).
Conclusion
Thus, in the limelight of the above mentioned events, the fact should be noted that it is important for the business to grow in the external international market in order to succeed and earn profits. Entrepreneurship refers to the act of taking risks in the business and converting them to earn profits and growth. Alison in the given case is an entrepreneur who started her business, faced failure but still managed to survive and is now thinking to expand it in the international market by the way of franchising. The report provides information and the rationale to go for the business expansion strategy by the way of franchising so as to increase the profits margin for the company.
References
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Aldrich, H., 2017. Learning together: National differences in entrepreneurship research. The Blackwell handbook of entrepreneurship, pp.5-25.
Barringer, B.R., 2015. Entrepreneurship: Successfully launching new ventures. Pearson Education India.
Baum, J.R., Frese, M. and Baron, R.A. eds., 2014. The psychology of entrepreneurship. Psychology Press.
Brenkert, G.G., 2017. Entrepreneurship, Ethics, and the Good Society. In Entrepreneurship (pp. 85-128). UK: Routledge.
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. UK: Macmillan International Higher Education.
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Drucker, P., 2014. Innovation and entrepreneurship. UK: Routledge.
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Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship?strategic management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
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Read, S., Sarasvathy, S., Dew, N. and Wiltbank, R., 2016. Effectual entrepreneurship. UK: Routledge.
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Storey, D.J., 2016. Entrepreneurship and new firm. UK: Routledge.
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