Challenges And Issues Faced By Small Private Business Organizations In Australia

Difficulty in Finding Customers

The private business organisations in Australia contribute over $ 35 billion to the revenue generation of the country. They still fail to sustain in the top Australian business locations like Sydney due to several factors high costs, difficulty in building strong client base and competition from bigger companies (news.com.au 2018). The aim of research proposal would be to delve into the issues which result in lack of sustenance and ultimately closure of the small private business ventures in Australia. The issues facing small private companies which the paper would visit would be difficulty in finding customers, lack of leadership, competition from multinational companies and lack of government support.

The small business organisations in Sydney face several problems, the root problem being inability to obtain a strong client base. As per Saeidi et al. (2015), this issue leads them to generate insufficient revenue to support their business operations which makes them financially weak. Moreover, the new business ventures do not stress on marketing their products and services. This prevents them from transforming a large number of potential customers to actual customers which again contributes to the first issue, shortage of revenue generation. Catulli, Cook and Potter (2017), lack of marketing leads to limited knowledge about preferences of customers which ultimately leads these small business organisations make inappropriate products and inefficient business management. All this factors ultimately lead to bankruptcy of the private business organisations and they have to leave the market.

The literature review would deal with the following aspects:

Van Der Aalst, La Rosa and Santoro (2016) mention that customer satisfaction is very important for business organisations to sustain and grow in the competitive market environment. Business organisations must aim to serve the customers with appropriate products to generate revenue. This ensures in flow of funds which drives the growth of the business and also pave for making future business strategies. Yu et al.(2014) adds to the opinion of Van Der Aalst, La Rosa and Santoro (2016) and mention that customer satisfaction is directly linked to revenue generation. They mention that customer satisfaction does not lead to present revenue generation but can also guarantee future revenue inflow. Satisfied customers keep on buying the products of the particular business organisations which leads to continuous flow of revenue. Markovic et al.(2018), adds that satisfied customers provide references and promote the business through word-of-mouth which enable the business to gain more clients. Thus, it can be reiterated that customer satisfaction enables business organisations to secure future business development.

Lack of Leadership

Marketing is one the most important business activities which leads to revenue generation and further business growth. Private companies which do not or fail to market their products fail to generate continuous revenue from the market in the long run and are rendered redundant (smh.com.au 2018). Edelman, Jaffe and Kominers (2016) supports this and mention that marketing of products lead to generation of profits. The private business organisations market their products in the market and make the customers aware about their products. This creates demand for the products which enable these business organisations to sell their products to appropriate customer segments. This generates immense revenue for these business organisation and create loyal base of customers for them. However Kotler (2015) contradicts this statement and points out that private business organisations should not only emphasise on marketing their products. They should also invest their capital resources in manufacturing high quality goods and services. This would render their loyal customer base which would generate revenue for them on continuous basis.

The graph above shows that the gross domestic product of Australia shows a down trend in 2018. However, OECD forecasts as on November 2017, GDP would pick up as increase in demand for goods in the household sector would boost the industrial production (oecd.org 2018). This analysis shows that even though the market of Australia shows a downward trend, it remains hugely profitable which attracts large numbers of multinational companies towards it. Australia has its own indigenous international companies in diverse sector like retail, banking and telecommunication based in cities like Sydney (rba.gov.au 2018). These large foreign and Australian multinational companies compete with the small private companies for customer base and revenue. Chittoor, Kale and Puranam (2015) further points out that most of these multinational companies are public companies listed on stock exchanges. This allows them to generate immense capital to support their business operations. The small private companies on the contrary have limited financial resources which limits their competitive strengths. Vahlne and Johanson (2017) mention that these multinational public sector companies allocate immense resources towards production and marketing. Cui and Wu (2016) point out that these large multinational companies involve customers in developing products which enable them to align their products with customer preferences. This enables them to generate immense revenue by selling their products and sustain in the market. Kotler (2015) points out once again that private limited companies with their limited resources cannot match up the marketing prowess of these multinational companies and are forced to leave the market.

Competition from Multinational Companies

Hashim (2015) points out that government is crucial for the small businesses to sustain in the competitive market of Sydney. The government of Australia provides assistance and advices to small business but the financial aid available is very limited (business.gov.au 2018). Brau, Cardell and Woodworth (2015) mention that banks provide microfinance assistance to small private organisations in Sydney and enable them to acquire resources for their production. The small organisations in Sydney can also acquire their initial human resource using the capital. Hechavarría, Matthews and Reynolds (2016) questions the sufficiency of this aid by banks and the government of Australia provides to small scale enterprise in competitive markets like Sydney. They opine that the limited amount of loan or financial support the small scale enterprises get are not sufficient considering the huge initial expenditure that is involved with starting business productivity like obtaining licenses and permits. Grayson and Hodges (2017) further point out that multinational companies offer assistance like training to staff of small scale companies as a part of their corporate social responsibilities. The smaller organisations thus remain dependent on the assistance from multinational companies and fail to acquire sufficient resources to fuel their own business operations like marketing. As Kotler (2015 points out, marketing is important for business organisations to create demand for their products and acquire customers. One can infer that this lack of marketing prevents the small scale companies generating enough revenue and they remain dependent on the multinational companies. MNCs in some case acquire these small companies to bring about their growth. These limitation of financial support from government and dependence on multinational companies limit the financial strength of the small enterprises to sustain and grow in a competitive market like Sydney. Thus, instead of emerging as competitors to these MNCs, the small scale companies are reduced to the size of subsidiaries and ancillary units of the former.

The three categories of research comprise descriptive, explanatory and exploratory designs. The analytical research design is used to obtain in depth knowledge in a particular area. Exploratory design is used to study areas which have not been researched in detail in the past and have scope of further research. The researcher sets the priorities, select applicable models and improve the quality of knowledge available on the subject (Marshall and Rossman 2014). Explanatory research tries to relate two variables recognised in the research.

The appropriate research design in the light of the above description would be explanatory research. The challenges faced by small private sector organisations in developed markets like Sydney already has large volume to research dedicated to it. Hence, exploratory design is not appropriate and neither is analytical design. This is because analytical design aim to analyse the area being explored by the exploratory design and the same has been as well. The appropriate research design would be explanatory because there are two variables in the research which have to be related (Wilkins et al. 2017). They are market sustenance tenure of small companies in Sydney and their profitability. The two variables are dependent on each other which justifies use of explanatory design.

Lack of Government Support

The researcher would be obtaining data from both primary and secondary sources of the data. The primary sources of data would comprise of interviews and surveys. The researcher would survey different types of people like customers, business men and employees of different organisations. He can also interview people working in multinational organisations which would lend him a deeper insight into the challenges small companies face. The researcher would also use social media to interview people (Jacobs, Stallmann and Pigeot 2015). This would enable him to gain access to more people compare to survey and interview. Moreover, he would be able to gain their feedback even with having to meet them physically which would save time and money. The secondary sources of data would include a variety of secondary sources like journals and articles. It would also include obtaining of information from government websites. As far the digital sources are concerned, reliability remains an issue because of the availability of unreliable websites. That is the researcher while conducting the research, would take into account reliable websites like government websites.

The researcher would use software like SPSS and statistical presentation technique to measure the data gained. The sample size would be 100 in order to gain considerable amount of primary data to conduct the research.

The researcher would opt for different primary data collection techniques like interviews, survey, online survey and social media. Among all the methods mentioned, online survey would be the most appropriate method. This is because opting for online survey would enable the researcher approach more number of people simultaneously. He would be able to gain feedback from a large number of people any time of the day. Moreover, online survey software enable exporting of the feedback obtained on excel sheets which can be used for comparison. The researcher may then use statistical software like SPSS to express the feedback statistically (Wilkins et al. 2017). He would also be able to retain the feedback obtained through online survey for future use and reference. This would enable him to compile large volume of primary data within limited time. Thus, using online survey would be able to save time and money.

The researcher may analyse the data using obtained from primary research using software like SPSS. The researcher would take 100 samples minimum to ensure that the analysis is rigorous. He should also take into account respondents from different professions to obtain more diverse data.

Marketing and Revenue Generation

The researcher needs to keep several ethical issues in view while conducting the study. First, the author should ensure that while giving survey to the respondents, he should not ask any personal question. The questions would strictly be about the topic around which the research would revolve. The researcher would obtain the consent of the respondents before giving them surveys. He must also abstain from forcing them to answer any question against their will. The researcher should not use unethical means like coercing respondents to gain responses from them. The researcher should also ensure that the responses obtained are authentic and reliable (Bryman and Bell 2015). He should in his research present reliable data and abstain from using fake data. It is advised that the researcher should conduct the complete research to present a complete paper.

The budget of the research require allowance of certain amount financial approval to carry out the required expenses. An estimate for the research has been attached.

The above budget shows that an estimated amount of $ 3100 would be required to conduct the research.

The following are the proposed activities for the research:

Activity 1: Selection of the topic of research.

Activity 2: Gaining of approval from the professor on the research topic.

Activity 3: Researching and development of a preliminary draft and questionnaire.

Activity 4: Preliminary investigation into the topic

Activity 5: Assembling and compiling of the preliminary investigation.

Activity 6: Submission of draft to professor

Activity 7: Acquiring new data.

Activity 8: Identification of sample.

Activity 9: Holding online survey.

Activity 10: Compiling of data.

Activity 11: Submission of final survey.

An estimated Gantt chart for the research proposal has been attached.

References:

Brau, J.C., Cardell,S.N. and Woodworth, W.P., 2015. Does microfinance fill the funding gap for microentrepreneurs? A conceptual analysis of entrepreneurship seeding in impoverished nations. International Business Research, 8(5), p.30.

Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.

Business.gov.au. 2018. Results. [online] Available at: https://www.business.gov.au/assistance/results?q=market%2c+marketing%2c+advertise%2c+sales&b=481258f4988f4c169ef258f03d51adbb&b=31466d0e18284ff3a743b04c0808834c&b=879c5dfeb9eb42e3a93787450323f187&b=26d47f25681d4acaac571e3a7f3f7c20&s=5ae1af3d8caa473ca4e4630d3fe0cfde&s=dfa0b8b02d244c5480ec05d4755face8&a=624e8316977c45c094d07bb8daede62e&a=51916ed9363f4995937514f17f8cbeda&a=3270e47aff04423facc881a46bc85b43&a=884876a1fb9b46a8b970c27d91f4b47a&goal=3ca0594cf9764748a939da0f0eb7983b [Accessed 26 May 2018].

Catulli, M., Cook, M. and Potter, S., 2017. Consuming use orientated product service systems: A consumer culture theory perspective. Journal of cleaner production, 141, pp.1186-1193.

Chittoor, R., Kale, P. and Puranam, P., 2015. Business groups in developing capital markets: Towards a complementarity perspective. Strategic Management Journal, 36(9), pp.1277-1296.

Cui, A.S. and Wu, F., 2016. Utilizing customer knowledge in innovation: antecedents and impact of customer involvement on new product performance. Journal of the academy of marketing science, 44(4), pp.516-538.

Edelman, B., Jaffe, S. and Kominers, S.D., 2016. To groupon or not to groupon: The profitability of deep discounts. Marketing Letters, 27(1), pp.39-53.

Engler, T.H., Winter, P. and Schulz, M., 2015. Understanding online product ratings: A customer satisfaction model. Journal of Retailing and Consumer Services, 27, pp.113-120.

Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. Routledge.

Hashim, J., 2015. Information communication technology (ICT) adoption among SME owners in Malaysia. International Journal of Business and Information, 2(2).

Hechavarría, D.M., Matthews, C.H. and Reynolds, P.D., 2016. Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics. Small Business Economics, 46(1), pp.137-167.

Jacobs, S., Stallmann, C. and Pigeot, I., 2015. Linkage of large secondary and registry data sources with data of cohort studies: usage of a dual potential. Bundesgesundheitsblatt, Gesundheitsforschung, Gesundheitsschutz, 58(8), pp.822-828.

Kotler, P., 2015. Framework for marketing management. Pearson Education India.

Markovic, S., Iglesias, O., Singh, J.J. and Sierra, V., 2018. How does the perceived ethicality of corporate services brands influence loyalty and positive word-of-mouth? Analyzing the roles of empathy, affective commitment, and perceived quality. Journal of Business Ethics, 148(4), pp.721-740.

Marshall, C. and Rossman, G.B., 2014. Designing qualitative research. Sage publications.

Mooney, D. 2018. Five mistakes to avoid when starting a business. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/small-business/five-mistakes-to-avoid-when-starting-a-business-20141216-1288m9.html [Accessed 26 May 2018].

NewsComAu. 2018. Why SA’s small businesses need a boost. [online] Available at: https://www.news.com.au/national/south-australia/sa-small-business-confidence-is-on-the-rise-but-red-tape-and-high-costs-remain-a-barrier-to-growth/news-story/d457731e510a5dbec0de386da79272b9 [Accessed 26 May 2018].

Oecd.org. 2018. Australia – Economic forecast summary (November 2017) – OECD. [online] Available at: https://www.oecd.org/eco/outlook/australia-economic-forecast-summary.htm [Accessed 26 May 2018].

Reserve Bank of Australia. 2018. Domestic Economic Conditions | Statement on Monetary Policy – May 2017 | RBA. [online] Available at: https://www.rba.gov.au/publications/smp/2017/may/domestic-economic-conditions.html [Accessed 26 May 2018].

Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), pp.341-350.

Tradingeconomics.com. 2018. Australia GDP Annual Growth Rate | 1960-2018 | Data | Chart | Calendar. [online] Available at: https://tradingeconomics.com/australia/gdp-growth-annual [Accessed 26 May 2018].

Vahlne, J.E. and Johanson, J., 2017. The internationalization process of the firm—a model of knowledge development and increasing foreign market commitments. In International Business (pp. 145-154). Routledge.

Van Der Aalst, W.M., La Rosa, M. and Santoro, F.M., 2016. Business process management.

Wilkins, E.L., Radley, D., Morris, M.A. and Griffiths, C., 2017. Examining the validity and utility of two secondary sources of food environment data against street audits in England. Nutrition journal, 16(1), p.82.

Yu, H.S., Zhang, J.J., Kim, D.H., Chen, K.K., Henderson, C., Min, S.D. and Huang, H., 2014. Service quality, perceived value, customer satisfaction, and behavioral intention among fitness center members aged 60 years and over. Social Behavior and Personality: an international journal, 42(5), pp.757-767.

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order