Operations of a UK Private Limited Company - EAT Ltd - Case Study Example

Business Environment Research and examine the operations of a UK private limited company with which you are familiar and discuss its various aspects in detail EAT Ltd. is a private company operating in UK since 1996. It is a restaurant chain with more than 100 branches in UK alone; the majority of them are located in London. The restaurant’s expertise is in food items such as sandwiches, soups and coffee. In October, 1996 the first outlet of Eat was opened near Charing Cross railway station in Villiers Street, London. The company sales freshly made food products which are completely hygienic while maintaining a good fast food taste (Bridge, Rachel, 2006). Eat Ltd. is in possession of Niall and Faith MacArthur, who are the core members operating the business. Eat is also pretty active in performing its social responsibilities as the company bequeath the unsold food to needy people and to those living in hostels (Hiscott, Graham, 2012). The outlets of Eat are designed similar to those of Café Rouge by the famous professional designer David Collins (Bread winners, 2004). Company generates substantial revenues every year. In 2008, Eat has sales for £68 million which increased to £100 million by the end of 2012. The company also enjoyed significant profits in the year 2012 which increased to the peak value of £2.7 million (Hiscott, Graham, 2012). In addition to this the company also started operating in The Strand, London which it opened as a flagship outlet with the investment of £1 million (Bold, Ben, 2012). The chief mission of the company was to serve its customers with the best handmade food at inexpensive and affordable rates. The business actually began its operations from home; at first as there was no office or kitchen owned by the company. Initially they did not have any functional design and working staff. However, with the passage of time they grew to extent that now the company owns more than 100 outlets in UK. The basic goal held by the company was to manufacture quality food with the finest ingredients used. Subsequently followed by the best quality service and maintaining customer friendly environment. The biggest secret behind the success of Eat as mentioned by the core team members and founders is their ‘Kitchen’ which is very well equipped and always ready to serve its customers. The products are not bought ready-made from any factor rather they all are made at the Eat kitchen using the finest ingredients. To ensure the freshness and quality of products they are placed on the shelves for not more than 24 hours. After which they are donated to some charity organization. Another key element behind their success is their innovative ideas and change adaptability as required by the society (Niall MacArthur and Faith MacArthur, 2012). The food range offered at Eat Ltd. varies from Sandwiches, Deserts, Beverages including cold drinks and coffees, Backed items such as cakes, etc. Additionally they have soups and pies as well. They have a close check over the nutritional and hygienic aspects of foods served to the customers as they never compromise on the quality of foods and health of their customers. In order to build up a comparison between Eat Ltd. and a public sector company operating in food industry let’s consider Marks and Spencer Plc. The company has expertise in selling apparel, home accessories and food. They have a vast business with 21 million people visiting stores every week. The company originated with the mission of serving people with the best quality food and maintaining the value system of service, innovation and trust. This has enabled the company to the reach to the present heights where it is operating now. M&S established the business in the city of Westminster, London, from where they are now operating 703 stores in United Kingdom alone. The current objectives of M&S includes further development of the company brands, enhancement of stores and paying due attention towards the apparel side. This was a three year plan starting from 2010 till 2013 whereas on the international level the company is planning to build independence and freedom so that they are no more limited to the UK economic cycle (M&S Corporate Home, 2013). Eat Ltd. as compared to M&S is a very small company operating on the private scale whereas M&S enjoys the extensive support by the government and public agencies which makes their existence more firm and consistent. On the other hand M&S operates internationally hence generating more profits with their more than 1000 outlets throughout the globe. The range of expertise also varies greatly when the two companies are compared since Eat Ltd. only deals in food whereas M&S has a wide range of apparel and home accessories as well which provides them a strong competitive edge. The objectives made by Eat Ltd. include the company development within the country while M&S is looking towards international brand development. This concludes that M&S is making more profits and enjoys better recognition in the world whereas Eat Ltd. has to go a long way for achieving better status. Stake Holders Stakeholder is someone who directly influences the company’s decisions and actions. They have power all the company matters and the managers have to satisfy them anyway. Like every other company Eat Ltd. also has the following internal and external stakeholders (R. Edward Freeman, 2010): Internal Stakeholders: These include those people who are directly involved in the production or manufacturing and selling process. For instance company purchases raw material from Suppliers bring it to the finished form with the help of Employees and sell the product to the Customers. The whole process is looked after by the owners of the company. The basic objective of suppliers is to sale quality goods so that the company keeps on making purchases from them. Employee work for the attainment of personal and organizational goals and customers’ objective is to satisfy the needs and wants. Above all the owners of the company want to generate as much revenue as they possibly can for the expansion of the business through which the Eat Ltd. can come up with new and better product ideas for future (R. Edward Freeman, 2010). External Stakeholders: The government (current authorities operating the country matters), competitors (companies operating in the same industry with slight variation in product specifications), consumer advocates (who influences the consumers’ decision making regarding the purchases), environmentalist (they are mainly concerned about the environmental impacts of the company’s products), special interest group (they maintain significant position in the society which largely influences the company’s image and customer’s buying decisions) and media (it includes the electronic and print media along with social networking sites). The taxes and trade policies imposed by the governments are the basic source of intervention of law enforcing agencies in business decisions through the external forces. Competitors such as M&S in case of Eat Ltd. can impose great competition over the opponent company. The new products launched by the competitor or the successful utilization of some marketing strategy might lead to effect negatively the business operations of Eat Ltd. Consumer advocates, environmentalist and special interest groups are great influential forces when it comes to change the mindset of consumers regards some company or its particular product. Therefore Eat Limited would have to maintain close association with such groups and agencies. Media is a substantial source of marketing especially advertising. It is the media which changes the market trends and forces the company to come up with something new and distinctive (R. Edward Freeman, 2010). The UK Economic System The United Kingdom maintains a comparatively stable economy. From 1997 to 2007 the country has enjoyed significant increase of 3.2% in GDP annually. The country unemployment rate also decreased to 5.3% from 10.4%. All these economical elements imposed a positive effect over the development of Eat Ltd. as the company started its operations in 1996. However the recent financial crises that have hit the world economy have greatly influenced the UK economy as well. During the state of turmoil the overall GPD decreased to 4.4% in 2009 which affected the business world to a greater extent (Gabriele Giudice, 2012). As a consequence the performance of Eat Ltd. also reduced which demanded the management to come up with suitable strategies in order to face the upcoming challenges. Monetary and Fiscal Policy Monetary policy is used by the government agencies to make the economic development consistent and steady by imposing variables such as interest rates. Although UK has a very stable economic condition yet its monetary policy sometimes goes astray from the average of Economic Monetary Union (EMU). A common monetary policy for the world country has never proved to be feasible for UK since economic conditions differ greatly even within the same country. However UK has better labor mobility and fiscal transfers as compared to other countries. As the interest rates fluctuates the performance and productivity of companies such as Eat Ltd. greatly suffers because they are operating the business on bank loan which do raise their interest rates as per the monetary policy (Rupert Pennant-Rea, 1997). Fiscal policy on the other hand came in to play its role when a country losses independence over the monetary policy. According to fiscal policy government uses its revenues and funds generated through taxes in order to boost the economy by making certain expenditures. When government increases its expenditures the small businesses do get an opportunity to enhance their productivity and profits. So in this way fiscal policy acts in favor for Eat Ltd. (Rupert Pennant-Rea, 1997). Competition Policy Competition policy is built to enhance the industrial productivity, resource distribution, technical advancement and the capability of different company to adjust as per requirement of the environment (Barry J. Rodger et al., 2004). The Competition Policy has undergone several significant changes in the last few years. The Enterprise act and market investigation references are added to already edit competition policy of 1998. In addition to this dealing with merger policy has also become a part of the list. All these amendments lead to the changes in legislation in order to renovate the array of regulation of service industries in UK which ultimately ended up in affecting the competition authorities (Fergal McGrath et al., 2003). Eat Ltd. is going to get benefitted from all these amendments in the competition policy as it will help the company to deal with its competitors. Regulatory Policy Regulatory Policy is used by the Government to implement and attain the economic goals and objectives. Since the strength of regulatory policy determines the money related issues. Therefore it plays a key role in overall economic development because rightly made policies do not worth a bit if not correctly implemented. When the economy flourishes it directly influences the performance of companies especially those with the growing stage such as Eat Ltd. (Great Britain: National Audit Office, 2010). Market Structure and Pricing The pricing decisions often depend up on the firm’s own actions which are influenced by the market structure. Market structure is basically used to describe the type of market in which the firm is operating. The major distinction between different types of markets is built on the basis of the industry size and the type of the product they are selling. For instance, the competitive market structure is the one in which all the companies are selling similar goods to fulfill the excessive consumer demands. Let’s consider Eat Ltd., the company is operating in the food market and hence maintains competitive behavior i.e. other companies in the food market such as M&S are all struggling to excel and make most of the profits from the available consumers (Richard Lipsey et al., 2011). Market Forces and Organizational Response The market environment is build up by the composition of different forces including political and legal (they are more dependent upon the governmental policies), economic, regulatory, competitive behavior, technological advancement and sociocultural aspects of the society. All these forces influence the organization’s business activities in one way or the other. The key point for the organization is to handle this influence and turn it in to favorable element for the organizational progress (William M. Pride et al., 2011). To deal with all of these market forces Eat Ltd. uses different marketing, accounting and economic strategies. For instance, to cope up the competitive behavior of opponent companies Eat Ltd. comes with new and innovative ideas and also enhances its product line. Similarly in order to meet the modern day challenges company advances its Research and Development Department to develop new technology so that the severing to the customers can be made easy and effective. The impact of sociocultural forces is reduced by the extensive sociological research pertaining to the attitude and lifestyles of the people in which the company is operating or will to operate in future. Cultural Environment Culture plays a very significant role in the development and progress of a business. The managers try to keep the business activities consistent with the prevailing cultural norms of the society they are operating in. Through the advancement of globalization and the introduction of multinational companies the culture has also reached to the next level where it is analyzed within the global perspectives. As business flourishes and reaches to different regions of the world it automatically introduces the culture of the home country and also welcomes the norms of the new society. This enables the company to perform better and come up with new ideas and product diversifications (Fergal McGrath et al., 2003). In this regard Eat Ltd. would have to enter in to the global market as it is currently operating in United Kingdom only. This will bring new opportunities for the business while giving rise to further competition. International Trade The Multinational Companies have given rise to the international trade. In which the manufactures and agricultural goods are exported to a large number of countries and the imports are also done in the same way. This enables the international trade which is a broader spectrum of globalization. Internationals trade calls for extensive resources and the development of new technologies so that the needs of people all around the world can be fulfilled (Janet Dine, 2005). Eat Ltd. would have to develop deep understanding about the international trade along with its benefits and hardships. Global Factors Global factors include an extensive combination of cultural factors (explained above), usage and legal factors. In addition to product availability issues, ethics, issues related to global warming which is primarily increasing due to the usage of some toxic elements as a key ingredient in various products including perfumes, changes in the marketing strategies and the product life cycle. All these factors collectively influence the international and domestic trade (Isobel Doole et al., 2008). Eat Ltd. can use the different variables of global factors for facilitating the entrance into the global market. EU Policies The major businesses of United Kingdom are largely affected by the European Union Policies (EU). In the last few years European Union has identified distinguishing policies to be projected in some of the countries. This includes an approach based on stabilization i.e. the attainment of regional cooperation, integration further deals with the combined performance of different countries, finally comes the partnership approach which says that the neighboring countries should work in collaboration with one another to achieve the personal and organizational goals (Roland Dannreuther, 2012). References Barry J. Rodger, Angus Mac Culloch, 2004. Competition Law: An Introduction to Practice and Policy. Routledge; page 24. Bold, Ben, 2012. "Eat opens Strand concept store". Marketing Magazine.  "Bread winners", 2004. The Independent. Fergal McGrath, Dan Remenyi, 2003. Fourth European Conference on Knowledge Management: Oriel College, Oxford University, United Kingdom, 18-19 September 2003. Academic Conferences Limited; page 831. Gabriele Giudice, Robert Keunzel, Tom Springbett, 2012. UK Economy: The Crisis in Perspective. Routledge; page 1-10. Great Britain: National Audit Office, 2010. Assessing the impact of proposed new policies. The Stationery Office; Page 10. Hiscott, Graham (21 November 2012). "EAT ready to take it away: sarnie chain expansion starts". Daily Mirror: p. 40. Isobel Doole, Robin Lowe, 2008. International Marketing Strategy: Analysis, Development and Implementation. Cengage Learning EMEA; page 270. Janet Dine, 2005. Companies, International Trade and Human Rights. Cambridge University Press; page 10. M&S Corporate Home, 2013. M&S: about us. Marks and Spencer Plc. Niall MacArthur and Faith MacArthur, 2012. Eat: History. Eat.ltd UK. < http://www.eat.co.uk/pages/about.html> Rachel Bridge, 2006. "From rugs to riches for healthy eating tycoon". The Sunday Times. R. Edward Freeman, 2010. Strategic Management: A Stakeholder Approach. Cambridge University Press; page 8-22. Richard Lipsey, Alec Chrystal, 2011. Economics. Oxford University Press; page 132. Roger A. Clarke, Eleanor J. Morgan, 2006. New Developments in Unted Kingdom and European Union Competition Policy. Edward Elgar Publishing; page 1-5. Roland Dannreuther, 2012. European Union Foreign and Security Policy: Towards a Neighbourhood Strategy. Routledge; page 12. Rupert Pennant-Rea, 1997. The Ostrich and the Emu: Policy Choices Facing the UK. Centre for Economic Policy Research; page 3-9. William M. Pride, O. C. Ferrell, 2011. Marketing 2012. Cengage Learning; page 64. Read More