Introduction
This report will critically analyse an entrepreneurial business using the relevant research, academic journals and with use of relevant models and theories. The report will begin with description of the business and its entrepreneur, following on with the development and growth of the business, recommendations and the challenges the organisation may face from these recommendations. With this analysis, it will be clear if the business has potential to grow and become a successful, larger business.
The Business and its Entrepreneurs
Entrepreneurship can be defined as the pursuit of a discontinuous opportunity involving the creation of an organization (or sub-organization) with the expectation of value creation to the participants (Carton, 2001). The entrepreneur is the individual (or team) that identifies the opportunity, gathers the necessary resources, creates and is ultimately responsible for the performance of the organization (Carton, 2001). Hisbe food, which stands for how it should Be, is an entrepreneurial business which was founded in 2014 by two sisters Ruth and Amy Anslow. Both founders of hisBe, the two sisters were unhappy with the current local supermarkets as they felt supermarkets where not performing in a responsible way therefore, the sisters created their own independent supermarket. Hisbe is an independent supermarket located in Brighton, built on ethical and transparent trading practises and sustainable sourcing policies (Ted, 2018). The store sells recognisable products at affordable prices which are local, healthy, natural and ethically produced and sold (HISBE, 2019). The target market for this business has no specific age range but however, for customers who are looking for natural, organic food at a reasonable cheap price which is ethically sourced and sold. Prior to opening the store, Amy worked in the third sector on behavioural change projects and Ruth studied international business and modern languages at university and then went on to work in the private sector within sales marketing (Enterprise, 2017). This was beneficial for the store and its success as it brought both sisters together to use their skills to open their own ethical supermarket. Hisbe can be identified as a social enterprise. A social enterprise is when a firm invests on impact to achieve measurable social impact alongside a financial return, the social enterprise sits in-between traditional charities and traditional business as any profits made by the company are re invested however, there is no obligation for any leftover profit to stay within the business(see Appendix I). A social enterprise is a precarious activity that must always strike a delicate balance between commercial principles and social concerns (Lamy, 2019). Their passion for ethical, naturally sourced goods has created a successful start to their organisation. It is a different type of supermarket, it is one which puts the customers, suppliers and employees before profits and shareholders (Barrett, 2017).
The Business Development
Hisbe food have created a successful supermarket created to remind consumers the correct way supermarket and shopping experience should be. The VRIO framework is the tool used to analyse firm’s internal resources and capabilities to find out if they can be a source of sustained competitive advantage (Jurevicius, 2014) and contributes to the overall growth of the organisation. From the analysis (see Appendix II), it is clear that hisBe food through its value, has competitive advantage through the supermarket’s intangible assets. Firstly, the vision was to create a supermarket which was a sustainable and ethical place where consumers could buy natural, organic fresh products at an affordable price (Mason, 2018). This contributes to the value of the store as it is an original idea which not only concentrates on creating profit but however, concentrates more on the customers and employees. The overall vision for the store is to be an ethical enterprise which promotes how supermarkets should be, making hisBe food a unique store compared to others thus, attracting new customers who look for a more ethical approach within their shopping experience. In addition to this, the supermarket’s concept is one in which is new and rare to the market. It has dependant advantage compared to other supermarkets due to the overall values in which the supermarket holds (see Appendix III).
From this, hisBe has been successful now turning over £1.7m, the founders are determined to roll the concept out, they understand “To transform the food industry, we need to expand and be copied” (Mason, 2018). Furthermore, from the supermarket general vision, it would be difficult for other general supermarkets to replicate this. Through social complexity, resources and capabilities that are based on company’s culture or interpersonal relationships (Jurevicius, 2014), it would be difficult for others to duplicate directly the stores values. Hisbe may face substituting from different stores, with the copy of the service or products but however with regards to their overall mission, other organisations could not imitate their concepts. Hisbe sources locally where possible and has used insights from ethical consultancy Ethical Consumer to inform stock decisions, while gradually replacing bigger brands with smaller fledging companies (Mason, 2018) which contributes to the difficulty of other supermarkets replicating the stores resources. With this supermarket idea, they have hit 101% of their sales target in the first year and now employ 12 members of staff, together the hisBe team serve 2,500 customers each week (Mason, 2018). Hisbe can make use of all this throughout the organisation as they are aware of the difficulty of being in a narrow market but however, understand the importance of doing business the correct and ethical way. They have structured the supermarkets in a way which provides them with strategic development. By putting customers, employees and suppliers first has contributed to the success and development of the organisation. For tangible assets, Hisbe have been successful in the financial aspects, with a turnover of over £1.7million (Mason, 2018), as they are a social enterprise they may not find it as difficult to reinvest back into their business to allow it to grow in comparison to other social enterprises.
Recommendations for HisBe’s future growth and development
For small businesses, there can be different ways for the organisation to develop and expand within their business market. Therefore, there must be different ways to scale your business in order to successfully develop. For hisBe food, there are different recommendations which would help successfully establish this development.
- Collaboration with other social enterprises could help hisBe develop as an organisation and could help generate future start up ventures. A big concept to the values of hisBe is ethical and natural consumption for their consumers as well as the tackle of reducing food waste. Hisbe should consider collaborating with another social enterprise which also looks to be ethical and tackle food waste and as this is an environmental issue which individuals are interested in tackling, by collaborating with other social enterprises could implement development and future growth for the organisation.
- Hisbe food should take on the responsibility of employing more staff within the business. With currently only 12 employees including the founders (HISBE, 2019), creates a small network of individuals who help run the business. This could result in delegation which may not be successful, this involves handing certain tasks over to another person so they are able to undertake any work required (Packham, 2005), for the business as trust needs to be established before an organisation can run efficiently. However, before the organisation can progress and even consider expansion to other areas within the UK more staff should be employed which will influence market penetration and provide a larger workload, all aspects needed in order for hisBe’s future growth within the market place.
- Hisbe food should consider the start up of alternative channels for their business. This is a growth strategy which involves pursuing customers in many ways (Dahl, 2016). Hisbe food should consider selling their products online to customers. This would produce a quicker and easier access for the store’s products to many different customers. From this, would bring hisBe supermarket existing and new customers who may live further away from the store. They would have access to specific products which the store sells and be provided with information on pricing before travelling to the store. With this alternative channel would bring the supermarket the ability to develop and consider, like other supermarkets, the option to deliver products to consumers at home thus, creating more profit and further growth for the business.
Ansoff Matrix Model
Following the recommendations above for hisBe food, the Ansoff model can be used here to explore and determine the marketing growth strategy for the business.
Hisbe supermarket are successful within their market penetration. The brand hisBe, how it should Be, is a unique service idea which has been a success within Brighton. It has created a new and affordable shopping experience for consumers compared to other supermarkets. Hisbe should consider developing new branding ideas, which can be recognisable to consumers within the store location and other areas across the UK for them to expand. The way they promote the supermarket is also key however, the supermarket should consider having a unique, personal brand or product which relates back to the store and is easily recognisable for consumers to remember, which links back to the store. A style of growth hisBe should consider is organic growth. Organic growth focuses on producing more products, services, and space for business success (Synerion, 2015). From this, the supermarket can concentrate on their market development and enter the difficult market of competition against other supermarkets. This development and penetration will help structure and grow the company.
Challenges
Firstly, the idea of collaboration with other social enterprises may cause challenges for hisBe. Other social enterprises which have the same values and ideas as hisBe supermarkets could see this as competition instead of collaboration and if different, others could not agree on the changing of their policies for another small business. One small business could feel a threat from sharing ideas with the company as material could be taken and interpreted within the collaborating business. Both being social enterprises, rely on profits to re-invest back into the organisation. If both enterprises where to collaborate and this turning out to be unsuccessful, could lead into financial loss for both companies. Hisbe supermarket should therefore consider promoting more of their organisations ethical approach and provide evidence of how successful they have become, even with putting employees, customers and suppliers before their profit and stakeholders.
Furthermore, employing more staff could be another challenge for the business. By having a small number of employees keeps managerial control easier for the social enterprise (Mason, 2018). Employing more staff could take away the personal value to the overall concept of hisBe. If delegation is unsuccessful, could result in financial loss for the company. The company should consider employing more individuals but be sure to try and employ the correct individuals for the job provided and have as much training as possible to avoid problems within delegation.
Regarding alternative channels, having the option to shop online with only one shop open and active could result in food not being enough in store and orders online. The products sold in store are fresh and organic which means hisBe will be spending a lot more money sourcing goods to trade in store as well as having enough for online consumers. This could result in consumers online purchasing products which may not be available in store, not being able to meet demands and causing lack of trust with potential loss of customers for the supermarket. Hisbe should therefore, make sure to re-evaluate their supply chain to ensure they have the correct products for the store as well as the consumers purchasing from home, and with development of the company, those consumers whose products will be delivered to their homes.
With the organisations market penetration, hisBe should continue to develop new ideas, however, not be influenced to becoming a traditional business due to their success. Hisbe should ensure they maintain their ethical approach for the supermarket and influence customers on how supermarkets should be, with affordable products still being available in store as they work towards expansion and development within the organisation.
Conclusion
In conclusion, hisBe supermarket is a social enterprise organisation which has the potential to develop and grow achieve the long term goal of providing natural, fresh and organic food which is sourced and sold ethically. It can be seen through the VRIO analysis that there is substantial amount of competitive advantage, which makes hisBe supermarket a unique and attractive organisation which shows the business will be successful within the market. In regards to the growth prospects, there are four different recommendations provided for hisBe to further develop: collaboration with other social enterprises, by employing more staff, provide an alternative channel for consumers such as online consumption and the development of new branding on their products to expand on their market development. Although there is challenges which come with these new recommendations, there are solutions which will help solve these challenges. Hisbe supermarket is a social enterprise which, with the correct growth prospects, will successfully develop and expand within the marketplace.
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