Small Business Case Study

Enterprise & Entrepreneuralism

Bridgetown Newsagents - A Small Business Case Study

Introduction

Dillons newsagents is a late closing local shop with a 'Mini-Mart' service. The

'Mini-Mart' side of the business is franchised from Dillons to a registered partnership: Mr Charles Pettifer and Mr Marc Devis.

Full services are provided in the shop, a paper delivery service is also available along with the full complement of groceries, fresh sandwiches, confectionery, videos, cigarettes and alcohol etc..

The newsagents is located in Stratford upon Avon, on the Birmingham road, approximately half a mile from the town centre and situated within a very residential area. Tesco's are the immediate traders to the newsagents.

Nine years ago, the newsagents was expanded with the intention of providing the local inhabitants with a friendly convenient service. Lack of competition at the time provided excellent stability and potential for expansion which was enjoyed until two years ago when a superstore was opened nearby offering a major threat to business.

Business growth, structure, strategies and competition are to be addressed in the following document. Entirety of information sources and research are obtained from two year's part-time employment at Dillon's newsagents.

Growth of Dillons:

In 1988, Dillons employed Mr Charles Pettifer as the operational manager, from this date the shop solely provided newspapers and magazines for approximately eighteen months. During this period Dillons were developing their own ‘Mini-

Mart' theme and as such decided to expand the facilities to supply a range of groceries and other common consumer goods as well as the usual news literature.

The shop opening hours were also increased from the regular evening licensing hours of 5:30pm, to a more substantial one of 11pm.

At this point, Mr Pettifer decided to take on the shop franchise offered by

Dillons with the help of a silent partner Mr Devis. Mr Devis has shares in the business, but does not have authority to make unsupported decisions.

The franchise resulted in Mr Pettifer being able to obtain many goods for the newsagents at discounted prices. The entirety of the shop was responsibility of

Mr Pettifer provided that Dillons' standards were not infringed.

At the stage of development outline here, it can be seen that Dillons newsagents is akin to stage one of the business g...

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...illons management, location of the shop and the lack of any similar shops in the local environment.

At all stages of the business life cycle it appears that there is never a great financial threat to Mr Pettifer. During expansion, nearly all the risk involved was presented to Dillons management and Mr Devis in their capital investments.

After expansion, good trading and a good relationship with the priciple supplier of the shop's products enabled a sale or return method on all products (within a reasonable time period). This method proved ideal since it diminished any anxieties in regard to development of the shop's product range and ensured that there would be no profit loss on over ordering of goods, reduced slaes or changes in the market culture.

Pricing strategy was governed by the motivation of increasing the profit margins.

Short term risks such as the time to acheive profit on turnover were reduced whilst the risk of being dramatically undercut and pushed out of the market was increased exponentially. Ironically, this risk factor being the single largest reason for crisis was not recognised. External issues exasperated Dillons due to the neglect of any long term planning.