Small Enterprise Strategies In An Unstable Public Environment - A Comparative Analysis Of Three Family-Owned Micro Businesses In Melbourne

Discuss about the Small Enterprise Strategies In An Unstable Public Environment.

Micro businesses are a novel way by which the economies of several regions of Australia have become self-sufficient and have flourished (Franco 2017). They have also contributed towards the growth of the National GDP (Shelton and Minniti 2018). In this report the focal point shall however be on a comparative analysis of chosen three micro business organizations based in the city of Melbourne of Australia. With regard to that the criterias of, the type of business each one is, the system which they employ for procuring the relevant means of production for their specific purpose, and an analysis of the vulnerability that entails with it shall be elaborated upon in the following sections

Before any discussion involving an in depth analysis of the chosen organizations on the given grounds proceeds, a definitional clarification with regard to what micro business means shall be provided. Micro businesses are simply small scale businesses which functions within a limited span. The sizes of the firms, the funds for running the business, the extent of the market, the amount of net production of its products, and the revenue generated, all of it is definitely very low compared to a large scale business (Flynn and Davis 2015). Given the small size of various important aspects of such firms, the level of complexity from the managerial perspective is also quite less. Owing to the fact even the number of workers functioning in such firms or even the number of persons placed at the managerial level are also small in number. They are usually run single handedly or by members of a particular family themselves. For the purpose herein, three organizations have been chosen which are basically family enterprises managed by individuals of immigrant origin (Thatcher et al. 2016). The businesses that shall be discussed in this report are a family restaurant run by a Turkish family, a tomato products producing family of Italian origin and a bakery specializing in varieties of artisanal French breads. The following sections shall be providing details about them with relevant informations under the specific headships.

As it has already been mentioned that these chosen organizations are micro businesses naturally the range of their products and the extent of the market shall be very limited. The restaurant run by the Turkish immigrant family is situated right at the heart of the Melbourne City, at a busy street making it very easy to spot. The restaurant is a favourite among the locals for short family gatherings and also among students to enjoy some gala times with friends. The takeaway counter serves packed meals from the regular menu and also serves as a snacks corner. The restaurant is known for the authentic Anatolian cuisine which it serves. Two of the major raw materials that they purchase for preparing their meals are meat and vegetables, on a regular basis so that they could serve fresh food to their guests. The ownership, cooking and managerial task lies as the share of responsibilities of the family members. Besides that they have employed a crew of staffs as server and cleaners.  The Italian immigrant family produces tomato products essential in traditional Italian cuisine, such as tomato sauce, tomato paste and dried tomatoes. They have their production unit at the backyard of their huge residential property situated in the outskirts of Melbourne City. The classic tomato products produced by them can be found on the shelves of the super markets and grocery stores across Melbourne and are highly preferred. The entire affair ranging from manufacturing to managing is done entirely by the members of the family themselves without any outside staff. Two key materials that they buy for producing their products are fresh tomatoes and bottling equipments. The French Bakery produces only artisanal breads of different varieties that are typical to France. They are quite preferred by locals of the neighbourhood, which houses people of various ethnic backgrounds. The bakery also serves as the sole outlet for their products. They even have few fast-food chains and restaurants as their customers apart from direct consumers. Excepting the manager and the owner, all other staffs are outside the family. They majorly require two products, wheat of several varieties and dry fruits for the rich collection of bread that they produce.

The Products and the Extent of their Market

From the above discussion, determining their position in the supply chain shall become easier. The Turkish Restaurant plays the role of both manufacturers and suppliers. They are manufacturer as they prepare the food in the production unit of their organization, the restaurant kitchen. They are simultaneously suppliers as their guests avail of their food directly from them, and consume it without selling it to someone else (Walker 2015). The family dealing in Italian tomato products are also manufacturers and suppliers like the restaurant. They produce their tomato products, seal them in containers at home and then they sell it to the distributors. Eventually following the process of buying and selling the tomato products end up in the super markets and grocery stores of Melbourne (Mikalef et al. 2014). The bakery too is a manufacturer and a supplier. They manufacture their breads in their ovens and then sell it through their outlet to direct consumers and the eating joints (Saastamoinen, Reijonen and Tammi 2017). It is thus very evident that all the three organizations are manufacturers and suppliers at the same time. The difference lies in the process in which their products reach the customers. For the restaurant the only method is the direct method, whereas the tomato products reach the customers only by indirect means with no direct channel. The bakery products however can reach the final consumers by both direct means and by indirect means through the food joints.

Procurement process of the raw materials shall be analyzed under three chosen headships, the source of procurement, the mode of payment and the involvement of legal contractual factors in regulating transactions between the organizations and the providers of raw materials. The restaurant procures the vegetables from the wholesale market in the vicinity, and the meat from their trusted halal meat sellers. They make them the payments on a daily basis since they buy limited quantities good enough to feed guests for the day only. The presence of any legal contract is absent as the transactions are based on good will and mutuality of trust. The Italian family procures their tomatoes from the farms of Melbourne located nearby to their residence. They make payments on credit basis to the farmers as tomato cannot be grown all throughout the year, hence they buy tomatoes in huge quantities. Similar mode of payment is also followed in dealings with the glass factory as the containers are bought in huge quantities. A Melbourne based glass jar making factory supplies them with the containers. Verbal agreements and mutuality of trust is the guiding spirit behind the transactions with the farmers. Legal factor is however important in dealings with the glass factory since copyright issue for protection of the labels particular to the products of the family cannot be evaded. The personal touch in the process of buying the wheat and the dry fruits is absent on part of the bakery since they do not buy those two major products from any fixed buyer. Whichever wholesaler offers them the best quality at the lowest possible price, they buy from them. They make payments in cash as they do not buy in huge quantities and they are also not well acquainted with the wholesalers. Naturally, any legal contract binding the transactions is not necessary.

Position in the Supply Chain

Vulnerability refers to the dependence on time and relationship factors. Following the classification of Svensson (2002), only three forms of dependence are applicable for analyzing the vulnerability of the chosen organizations, time based, social and judicial. Time based dependencies basically mean fulfilling the needs of two business organizations on the basis of regularity and irregularity (Green and Kohntopp 2016). For the restaurant it is high for both the products as they need raw materials on a daily basis. For the Italian family, time dependency with regard to the dealings with the farmers is high as tomatoes are seasonal and they have to procure as much as possible during a specific time of the year for their production. It is low in dealings with the glass factory as they can keep on supplying round the year. Time dependency is low for the French bakery as wheat and dry fruits are available all throughout the year, and the bakery can make purchases any time as per their need. Social dependency refers to the factor of reliance on good relationship between business organizations in fulfilling the transactions (Fazekas, Cingolani and Tóth 2016). For the restaurant it is high as they have good rapport with the vegetable wholesaler and the butcher from whom they daily buy and make payments on the basis of credit. Same for the dealings between the Italian family and their raw material suppliers, the tomato farmers and the glass makers owing the mode of payment which is in credit system and the suppliers are well acquainted with each other. This factor is totally absent for the bakery as they are neither acquainted with their raw material suppliers nor do they make payments in credit system. The judicial factor essentially entails a legal contract in conducting the transactions between business organizations (Picoto, Bélanger and Palma-dos-Reis 2014). It is absent in case of both the restaurant and the bakery. For the Italian family it is partly important, with regard to the transactions with the glass maker due to copyright issue. The need of precaution undertaken is low in the dealings of all the three chosen organizations.

Conclusion

Thus it is very evident that the determinants vary according to the workings of each of the organizations, and it is by and large dictated by the specific needs of each of them. This also hints at the fact that micro businesses are seemingly not complex, however they are not as simple from the operational point of view.

References

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Flynn, A. and Davis, P., 2015. The rhetoric and reality of SME-friendly procurement. Public Money & management, 35(2), pp.111-118.

Franco, M.A., 2017. Circular economy at the micro level: A dynamic view of incumbents’ struggles and challenges in the textile industry. Journal of Cleaner Production, 168, pp.833-845.

Green, D. and Kohntopp, T., 2016. Small enterprise strategies in an unstable public environment.

Mikalef, P., Pateli, A., Batenburg, R. and van de Wetering, R., 2014. Business alignment in the procurement domain: a study of antecedents and determinants of supply chain performance. International Journal of Information Systems and Project management , 2(1), pp.43-59.

Picoto, W.N., Bélanger, F. and Palma-dos-Reis, A., 2014. An organizational perspective on m-business: usage factors and value determination. European Journal of Information Systems, 23(5), pp.571-592.

Saastamoinen, J., Reijonen, H. and Tammi, T., 2017. The role of training in dismantling barriers to sme participation in public procurement. Journal of public procurement, 17(1), pp.1-30.

Shelton, L.M. and Minniti, M., 2018. Enhancing product market access: Minority entrepreneurship, status leveraging, and preferential procurement programs. Small Business Economics, 50(3), pp.481-498.

Svensson, G., 2002. A typology of vulnerability scenarios towards suppliers and customers in supply chains based upon perceived time and relationship dependencies. International Journal of Physical Distribution & Logistics management, 32(3), pp.168-187.

Thatcher, J., Alao, H., Brown, C.J. and Choudhary, S., 2016. Enriching the values of micro and small business research projects: co-creation service provision as perceived by academic, business and student. Studies in Higher Education, 41(3), pp.560-581.

Walker, H., 2015. New development: Public procurement research at IPSERA—aligning research and practice, and future trends. Public Money & management, 35(2), pp.141-144.