As can be seen all those factors come from outside of the business and cannot be controlled by business. Only options organizations have in terms of coping with PASTEL are to adjust business with external factors. (Easterly, 1998) Next summary will evaluate how Lull’s convenient store copes or adapts to external factors in its present state. Political Factor- this factor represents political environment in the area of business and how uncertainties or unstable environment can influence business. If there is riots or government issues it is difficult for business to have stable operations.
This mind of uncertainty of political factor may bring a big risk to the businesses in that area. But as can bee seen from business plan there is no mention of any uncertain of problematic political issues in the are of Lull’s convenient store. Which makes it politically safe to operate in Huntsville. Social Factor- this factor considers age, race, religion and cultural preferences of the people in the area where business operates. It is important that business activity chosen is in line with those factors and do not operate against them.
According to Segmentation analysis on the business plan of Lull’s store it has to be said that preferences of the cultural and social layers of the external environment was considered by business. It also has to be mention that Lass’s convenient store uses this external information to its advantage in market segmentation. Economical Factor- this factor considers economic stability in the are of the business and its well-being. Only healthy economy can guarantee business survival and growth. It is important that economy has to be stable and can allow planning in long terms.
Lull’s convenient store analyzed its economical background ND was able to define not only its stability but also the income of its potential customers. This allows Lull’s convenient store to relay on economical stableness in the area of business operations. Technological Factor- this factor concerns technological advance of the business and its background. It is important that the business has as advanced technology as its external environment. It will help businesses operate with help of the technology and understanding of the expectation of outside market.
In terms of Lull’s store it is not mentioned what would be technological advancement for the business. But it would be recommended that cafe© provided by Lull’s would have a Wi-If services and would engage future consumers to spend more time in there. It also would be recommended to open web site. And lastly all technology such as tills and card machines in store has to be on high tech based as required by modern level. (Easterly, 1998) Ecological Factor- this factor evaluates echo friendly approach to the nature and how current businesses seek for competitive advantage to gain this factor.
Ecological impact on the business can be associated with friendliness of the business to ecology and how it will reflect on customer preferences. Many organizations nowadays are operating in echo friendly way and defining “green” ways to do business. It terms of Lull’s convenient store it was mentioned in business plan that convenient store orientated on the sales of organic production and fresh food. This illustrates that business is operating in healthy ecological environment and trying to promote it as competitive advantage. Legal Factor – this factor defines the lawful environment and requirements outside of some complications.
As can be seen from business plan of Lull’s and the healthy complex of other external factors it has to be said that company meets all legal obligations and complies with them. (Hatch, 2009) As can bee seen from PASTEL analysis of Lull’s convenient store has positive reflection on all above mentioned external factors. This illuminates that from the point of external analysis company is most likely to be found as appropriate in its area of the business. But it has to be mentioned that limitations of PASTEL analysis concern only external factors that can influence business. Gill, 2006) In order to define the measure of performance and its comparison for Lull’s convenient store it was decided to use Model of Performance Measurement that will fine business measures from perspective of Financial, Production, Marketing, Sales, Human Recourses and use of Technology. (Strategically. Com, 2014) According to current the model current measures can define success of the business in comparison with competitions. Next evaluation will be made on the performance of Lull’s convenient store and its performance measures.
The illustration will be made on the table of comparison with other similar businesses in the market and the area of Lull’s convenient store. Lull’s convenient store Other stores Finance Customer ticket: E. 50 5% growth in first year Customer ticket: E. 75 Main sales Beer cigarettes represent 1/3 of merchandise. Typical gross profits 20%-22% Market Specifically segmented Yuppies market 23-33 Typical customer blue collar male 18-34 Network Orientated on locals and has strategy of Lull’s store Aspic Estates store Mass oriented has no reflection on specific area.
Organization Owners qualified in management- understanding of employee issues and inventory management. Good relationships with Safely Group. Accounting- certified CA have dealt with hundreds of small business. Focus on customer service. Payment to employees’ minimum wage. Recruitment of older individuals to save cost. 24- 7 sales period. Based on busy streets. Managed on corporate level mostly franchise and adopted to specific pattern in most stores. Employing school and college age people. Payment to employees higher then minimum Full time employment. Operations Supply chain of High quality organic food and healthy products.
Lull’s convenient store is the only store with similar products in 2-mile radius of the Estate where it operates. Staple groceries, beer, cigarettes, dairy products, gasoline and some none food items. As can be seen from the table of Competitive performance Lull’s convenient store as major advantages as a small local store that sells specific products. But it has to be said that there is no full report for the competitors. The volume of the profits related with competition may be relevant to being corporative organizations like Tests Express and Kingsbury Local.
STOW analysis will help to analyze line of factors that defines Lull’s convenient store internally. These factors will help to identify what are the Strengths, Weaknesses, Opportunities and the Threats for the convenient store. This analysis usually used in coalition with PASTEL to represent fuller picture of the business from inside and outside. Strengths- main point of the strength of Lull’s store is that is located in specific area like Aspic Estate. Target market of this area is a wealthy individual who will have demand for high-end organic products offered by Lull’s convenient store.
Another strength of the store is in its strategy of becoming local favorites place to spend time as it has attached cafe© that can feet up to 20 people. And finally Lull’s store is family ran business that consists of two professionals in the management and finance. This creates an ultimate push from the professional perspective of the business. Law, 2009) Weaknesses- this factor considers the weaknesses of the business that may cause risk. First point of the weakness can be technology in the company. Business plan does not discuss any technological implementations to the business. Another weakness can be defined in hiring procedure.
Lull’s store will be hiring on minimum wage and only older employees. This may weaken their customer services from the perspective of unattached employees and also lead to reduce productivity of those employees. Final weakness of the Lull’s shop is narrow market segmentation that is orientated only on Yuppies even thou there are more Young Parents market in the Estate. (Law, 2009) Opportunities-This factors describes a new openings and prospects for the business. As described in business plan there will be new market opportunity for Lull’s store in eight-month time once Estate will fill up in currently UN-finished area.
Also there will be more opportunities in form of Lull’s coffee shop, gourmet chocolate shop, gift shop and bookstore that will be owned by village within its geographic area. (Law, 2009) Threats- current factor will illuminate factors that may cause risk for the Lull’s shop and will illuminate the reasons. At first threat can be due to interpretive idea of the Lull’s convenient shop. As this is the first shop with specific set of products in this area and it was not tested before. Second threat may be related with competitors that may open in on of the nee front house builds and gain the better market advantage due to the price point.
Also the reasons of the threat of competitors related with competitive advantage of those. As they orient all products on mass rather than specific type of customer. (Law, 2009) As can be seen from business plan there are ratio analysis and their comparison with industry profile. It has to be said that Lull’s convenient store has an obvious advantage in its Sales Growth, which is 18. 50% when industry states 2. 27% only. Also Main Ratios that indicate Current, Quick, Total Debt to total Assets, Return on assets are in advantage in comparison with industry. This illuminated the productivity of the assets and cost saving by Lull’s.
In terms of liabilities it seems that in average there are few increases and decreases by Lull’s store that may be in advantage in at Current Liabilities but in disadvantage in terms of Long term Liabilities. Overall ratios reform stable growth except first year considering return on investment. To overcome weaknesses Lull’s shop has to plan head and consider all external and internal factors of the business. Such activities like planning and improving business plan can help Lull’s convenient store in regulating fluctuations related with weaknesses of the business.
Also as was mentioned in STOW analysis Lull’s store has to consider factors of Technology and staffing as a points of its weakness and managing those is important for success of the business. (Gill, 2006) Strength of Lull’s store is that it is one of a kind in its region of operations. Also store offers specific high end products. It would be recommended for Lull’s to engage with its customers as planned and define bigger range of product demand. This will help Lull’s gaining not only one type of customers but also defining new markets in the area and familiarizing with them.
As mentioned in business plan Lull’s convenient store seek new opportunities in fresh builds that will have future customers. Also owners of Lull’s shop have a future business an opportunity as from house builds that will be turned in coffee shop, chocolate shop, etc. This shows how owners of the store already planning ahead in arms of future opportunities. As was already mentioned within current report both owners of Lull’s store are professionals in the area that concern business. Hannah Runner has many years of management experience and Toby Runner is qualifies accountant.
Personnel plan of the Lull’s store also has timeline of three years and also company will avoid paying more than minimal rate of pay. It is planned by the stoneware to hire the older individuals who will add onto high level of customer service and will be part time based. Current objectives of Lull’s convenient store are next: 1 . To make Lull’s the preferred convenience store for the residents of the newly build Aspic Estates and surrounding neighborhood. 2. To break even by the end of the first year As can be seen from the graph of Break even analysis in business plan Lull’s planning to reach its break even within firs year.
The graph shows stead growth of the sales and (Hazier, 2006) 3. To achieve a net profit of 5% by the end of the year three As can be seen Lull’s shop concentrates on most important aspects for any business in their objectives. It has to be said that these objectives are very realistic and achievable but in valuation of those it would be recommended for Lull’s to include few improvements in first objectives. As known strength of the Lull’s convenient store will be in supplying organic high end products for specific type of the customers.
This should be evaluated in objectives of the company. Also objectives should evaluate strong customer service emphasis of the convenient store to ensure it becomes favorites store in the area. And finally one of the objectives should mention generation of new businesses with the help of Lull’s convenient store. The aim of any business plan is to evaluate realistic aspects of the business and to illustrate financial, operational, HER, marketing production, internal and external factors of the business. Business plan help understanding business activities, duties and the ways it makes profit. Castles, 2001) Current model of business plan clearly illuminates all aspect and parts of the business plan that has to be considered. Next table will illuminate application of this model on the business plan of Lull’s shop and will evaluate importance of each factor. Table will also asses Lull’s business plan and recommend appropriate changes to it. Lull’s Business Plan Timeline Company has Three years of timeline in mind. Cash flows, profit and Loss account Current analysis on business plan illustrate that main competitors of Lull’s store is Tests express and Assassins Local who is mass orientated convenience stores.
STOW Analysts STOW analysis of the store was made in first part of current report and they evaluate all internal factors of the Lull’s convenient store. Mission Statement Mission of the Lull’s convenient store is to provide packaged food, fresh food, soft drinks, beer, cigarettes, groceries, and selected non-food items to the residents of the Aspic Estate and surrounding neighborhoods. The store will provide fair price items o customers and healthy profit to the owners. Marketing Plan Lull’s has marketing strategy that has developed research regarding potential market in the area and its requirements.
Knowing this helps Lull’s define preferences of the market and develop specific approach to its new customers. Product Description Range of fresh, organic produce, staples, package foods, drinks, pre packaged fresh meals and pastries, newspapers, pet foods, medicine, healthy and beauty items etc. Financial Planning Currently store has financial plan for three years. And objectives of the financial plan state that: 1. Growth will be moderated, cash flows steady. . Marketing will be minimal. 3. Tight inventory control. 4. Gaining higher growth margin than industry average.
Operations Operations in Lull’s convenient store managed by owners who has a big experience in finance and accounting. This already helps control operational cost. Also Lull’s uses Milestones program to manage its operations ad tasks related with them. Change in organizations is one of the complicated by necessary activities. Change guarantees the growth of organization and implementation of that change on professional level is important in order to guarantee high level of understanding of nee rules. Change has to be implemented by managers and planned ahead. Cotter’s 8 steps of Change Management (Coppersmith et all. 2013) As can be seen from the graph there are eight steps into implementation of change. In terms of Lull’s convenient store change would be implemented in next order and specifics: 1. Create a sense of urgency. On current step store has to define first priority implementation in the business. If it is to do with technological implementation or new product supply chain. Which one is more important and will generate profit. In this case it would be recommended that food chain supply would e prioritize before technology changes. 2. Form a guiding coalition. Do research define where products can be supplied from.
Assess and gain information from potential suppliers. 3. Create a Vision. See how current suppliers and options can Communicate the vision. Let work colleagues in store know about new products that will be presented in store. Make staff familiar with place of merchandise and features of new product. 5. Empower others to act on the vision. Empower staff to feel free to share information that was delivered to them. 6. Create quick wins. If staff was effectively participating in sales and merchandise of current product appraise them and an knowledge. 7. Build on Change.