Approved Food's E-commerce Evolution

Introduction

The approved food is an online vendor of clearance drink and food. The company was founded by Dan Cludey in 2009 and is based at Sheffield, United Kingdom. Dan Claudey and his wife Nicola started as market traders. In 2009, the business changed into an e-commerce store and started selling products through an online platform. Notably, every year more than seven million tons of food and drinks are thrown away since they have passed their best before dates, but mostly these products are fit for human consumption. In this context, Approved Food Company deals with myriads of products ranging from foods, drinks, toiletries, households, and fresh produce among others. The company has over 2000 products in its stores which are sold at incredibly low prices. Approved food is a global electronic store which is both the retailer and market place specializing in e-commerce. The company exhibits substantial financial grounds since its inceptions in 2009; the company has demonstrated continued growth in terms of stores, a portfolio of products and number of employees. For this reason, it’s factual to state that, the approved food company is in good financial status.

SWOT analysis

SWOT analysis refers to the assessment of company’s strengths (S), weaknesses (W), opportunities (O) and threats (T). The internal and external strategic factors influence the operation as well as the performance of the business. Thus, the SWOT analysis of approved food shows the strength that the entity uses to combat its weaknesses to gain a competitive advantage in the market environment.

Strengths

Despite being a small business, approved food has an extensive product portfolio that captures the attention of considerable numbers of customers. This strength has played a critical role in enhancing the growth of the business. Broad product mix enables customers to find what they want on the entity’s website. Additionally, this strength enhances service attractiveness which is essential in maintaining the entity’s success.

Weaknesses

Approved food has a business model that is easier to imitate. For example, other companies could easily develop an online retail website that sells the products have passed their best before dates. Moreover, approved food has top convince customers that they are offering products of high quality which are not rejects of various outlets and supermarkets.

Opportunities

There are a variety of opportunities available for approved food in UK. This is because; it’s one of its kinds to specialize in products that have passed best before dates. In this context, the company can be able to penetrate developing markets in various parts of Europe through opening more retail stores. Therefore, approved food has significant opportunities for growth and expansion.

Threats

Since approved food is an online retail store and market price, cybercrime is one of the potential dangers that the company should address to protect consumers data and privacy. The occurrence of this threat is likely to reduce the market share of the company products. Also, the approved food is likely to face stiff competition from other online retail outlets such as kitchup, Tesca and Marks and Spencer among others.

Competitive advantage

The approved company has a competitive advantage in the sense that, it’s one online outlet of its kind. The market for their products is not well exploited as compared to other e-commerce business that deals with products that have not yet passed their best before dates. Therefore, it can strengthen its marketing efforts and competitiveness by venturing in developing markets.

Approved food is a small business based on its revenue and profitability. Small scale business revenues are lower as compared to large scale companies. In 2017, the approved food had an income of $ 4million. Also, the company has 50 employees. Small business often employs a small number of employees to keep costs lower and maximize their profits. Notably, approved food operates in a small market area within Sheffield, UK. Moreover, the approved food business is solely owned by Mr. and Mrs. Dan Claudey. The firm operates in a few locations thus justifying the fact that it’s a small business. Under UK laws, small and medium sized enterprises are any business that has less than 250 employees. In this context, approved food thus qualifies to be classified as small businesses.

Detailed Business Portfolio of Approved Food

The European market has grown tremendously due to various industries such as manufacturing, information technology, food processing, and service sectors. To sustain the growth of the UK economy, the growth of SME’s is imperative. Small business plays an integral part in a supply chain network of large scale industries thus provide an essential backward and forward systems to the entire industrial sector.

Marketing a Small Business

The 7P’s of marketing mix include price, place, product, process, physical environment, people and promotion (Chartered Institute of Marketing, 2017). The marketing mix focuses on the right product, in the right place, at the right time and the right price. In this context, small business should 7p’s model to undertake SWOT analysis, set objectives and conduct competitive analysis of their products in the market place. Approved food should understand 7ps model to develop unique products, change pricing model, develop new distribution channels, develop an effective marketing plan, plan retail outlets in terms of staffing and sanitation and know the customers. Small business adopts low-cost pricing strategies thus its essential to incorporate product differentiation for the development of the products. Small businesses should use selective product positioning strategy since same product positioning strategies are not effective .since, approved food deals with fresh produce as well as clearance food and drinks, it is adopting low-cost approach to penetrate its products to the market. Branding has a profound effect to company sales. In retrospect, branding disseminates the message of quality, reliability, and confidence to potential customers. For this reason, small business should incorporate brand endorsement strategy for maximized organizational bottom lines. Small companies should enhance their distribution channels for maximum coverage of the target market. For enhanced market coverage, adoption of the latest technology such as e-marketing helps the business to position the product to large numbers of buyers Approved food delivers products to their customers through state-owned mailing addresses and courier services. . To this end, digital marketing strategy plays a critical role in reaching a large number of consumers. Social media platforms such as Twitter, Facebook, YouTube, and Instagram offer a platform for small business to showcase their products and services to potential consumers (Chaffey and Smith, 2017). Approved food has opened up various social media accounts such as LinkedIn, Facebook, twitter where they market their products to target customers.

Due to globalization, product placement, promotion, brand building as well as sales maximization solely depend on the type of advertisement adopted by the company (Chaffey, and Chadwick, 2015). Small business should be engaged in regular publications and promotional techniques to increase awareness and information of the product to consumers. In this context, Approved Food regularly advertises their products and services daily mail, Sunday Mirror and the times among others. Market intelligence system is vital for small business and customers. Market intelligence framework encompasses the macro environment, internal environment, and the microenvironment. Macro environment focuses on technology, economics, social and political factors that together affect that smooth running of the business (Burns, 2016). Also, the internal environment encompasses customers, competitors, suppliers, and distributors. On the other hand, the microenvironment is comprised of stakeholders, resources or assets and organizational culture. Market intelligence information is obtained from market research. Therefore, small businesses should continuously conduct market research to understand real internal and external forces that influence the operation of the company. Market research collects essential demographic variables such as income levels, buying patterns, ages, lifestyles, education, tastes and preferences, and psychological profiles among other components.

Business Law and Regulatory Environment

Business legal environment plays a critical role in ensuring the success of the businesses. Moreover, the government through various regulatory bodies formulates measures that cushion consumers from exploitation by the firm. It’s imperative to comprehend the legal environment in which the business it's operating to account for all activities that business undertakes. Organizational law is one of the requirements that small business encounter during registration. In this context, state law governs different types of business formations such as corporations, partnerships, limited liability companies, and sole proprietorship. Businesses should be involved in legitimate activities. According to Taylor (2014), online business is a soft target for cyber-attacks. Whenever a cyber-attack occurs, customer data is stolen; companies' losses money and consumers lose confidence with the company. In this context, it is essential for small businesses to develop and implement cyber security framework to protect against possible cyber attack. Different countries have put in place different, measures on how to respond to cyber-attacks. For this reason, approved food should familiarize itself with Europe data privacy laws to cushion customers against privacy breaches.

Small business often hires employees to assist in delivering quality service to customers. However, business should ensure that it is conforming to employment laws that have been put forth to address labor issues. Be that as it may, employee’s duties and responsibilities, employment conditions, and rights are written down in employment contracts. Also, employment tribunals and trade unions cushion the employee from unfair summary dismissal, discrimination, and inequitable salary deductions. To this end, the approved food should ensure that it has employment contracts with its employees and company grievance procedure to handle work-related conflicts. Otherwise, if the business ignores such laws, it is likely to find itself in court battles with employees. Under UK law, employers should provide a safe working environment by conforming to the provision of occupational health and safety act. Health and safety aspect encompass electrical safety, personal protection gears, gas safety, noise and harmful or dangerous substances such as chemicals. Every employer should give employees the right instruction, information, and training not only it’s a legal duty but contributes significantly to the success of the business. Therefore, the human resource officer of the approved food should consider the regulations as mentioned above enhance the growth of the enterprise. It's clear that if you take care of your employees, they will also take care of your business.

Consumers can either break or build the business. In addition, some companies deal unfairly with their consumers. For this reason, most nations have formulated consumer protection laws to protect consumers from unfair dealings with businesses. Some of these laws include Weight and Measures Act, Consumer Credit Act, and Sales of Goods Act among others. Weight and measures laws ensure that businesses only sell goods that are weighed on standard weighting instruments. Consumer credit laws provide that consumers are given information regarding credit agreement, credit period as well as interest rates. Moreover, Sales of Goods Act stipulate that it is illegal to sell defective products and it ensures that all goods sold conform to prescribed standards. In this context, approved food needs to adhere to the aforementioned consumer protection laws to ensure that consumers are proof from exploitations. Another important area of regulation is safeguarding the business idea. In this context, small business should protect their names, brands, logos, and slogans. The intellectual property office is mandated by the UK government to oversight and registers intellectual property rights to avoid imitation by other persons or businesses. In this context, approved food should ensure that it protects their name and logo to safeguard the reputation of the company. If a company has a plan for expansion and growth, it's essential to protect the company’s goods and logos to effect an action against any company that incorrectly used the company’s name. Further, if the company creates a new invention or product, it is essential for it to patent such innovations. Registered design rights protect new products and offer exclusive rights for use and benefits associated with the design right.

Generally, trade secrets are protected by the law of equity since they are not regarded as property trade secrets governance has been developed through precedence. Companies can file separate claims regarding true secrets. These claims include a tort of misuse of private personal information and the equitable remedy for breach of confidence in technical and commercial secrets. For this reason, small businesses should have the info on available intellectual property rights to protect their business particulars and new products.

Small Business Challenges and Growth Strategy

Entrepreneurial process refers to the steps taken in the establishment of a new business. Entrepreneurship process incorporates five steps including discovery, developing a business plan, Resourcing, managing company, and harvesting. The entrepreneurial process commences with the invention of an idea; in this step, the entrepreneur identifies and assesses the business opportunities available in the market place. Second, the entrepreneur develops a business plan. Business plan plays a critical role in the success of the business since it serves as a benchmark and evaluation framework of the achievement of the organizational goals. The business plan highlights the capital requirement, mission and vision, Objectives of the business, and overall description of products and services that would be offered by the enterprise.

Third, resourcing encompasses identification of sources of finance and human capital .Upon raising the requisite; the entrepreneur commences business operations to achieve the desired goals (Jones et al., 2014). In managing the company step, the entrepreneur formulates the management hierarchy that is functional in addressing operational hitches. The last step of the entrepreneurial process is harvesting. The entrepreneur determined the prospect of the enterprise. In most cases, every entrepreneur aspires to grow and develop the business. Future expansions plans focus on stability as well as the expansion of business operations (Burns, 2016). Approved food business is distinctive from other online outlets in the sense that it’s the first outlet in the UK dealing with clearance approved food and drinks. Also, the market size it's sufficiently large provided it will incorporate appropriate marketing penetration strategy. Approved food business is also defendable from competitors since it's serving a unique market segment for low-income earners. Approved food has succeeded in creating a value proposition for their products by shifting the focus to customer satisfaction.

Approved food business has adopted a low price /low-cost model. In this context; approved food has a competitive advantage in maintaining cost leadership and enjoying economies of scale. Moreover, this cost leadership strategy ensures that the business attains high sales volume with low operations costs. For growth strategy, the company should focus on maintaining positive customer relationships as well as adapt to changing the business landscape. Approved food can strive to offer quality customer service as well as products to maintain customer loyalty. Also, approved food should encourage creativity and innovation among its staff to develop a competitive advantage over other companies selling similar products. Greiner's growth model highlights steps that businesses undergo as they grow. Notably, all organizations are bound to experience the phases regardless of the services or products that are sold in the organization. On a similar note, Greiner's model provides a framework for describing the development of an enterprise, but more specifically the managerial challenges facing the entrepreneurs as they hire more staff. Some of these crises include leadership, autonomy, control, red tape, growth, and identity crisis (Horváth, 2015). In this context, Greiner growth model can be instrumental in approving food in tackling possible growth challenges.

As noted above, Approved Food has a profound effect on the UK’s economy. Small business makes a significant effect in the marketplace by bringing innovation and growth to the society in which the business is operated. Approved Food faces the risk of business structure imitation. For this reason, it should continuously innovate; improve on product differentiation as well as the opening of real stores on multiple locations to increase brands visibility. Product differentiation results in improved brand recognition and customers loyalty. Also, since the market for clearance drinks and food is not exploited, the company has an opportunity for growth and expansion in the Europe market. Moreover, since the approved food acquires its products from retail outlets and supermarkets at a low price, the company can compete favorably with online retail companies getting products at market price. Approved food shoulders the burden of explaining to the consumers that the products are safe for human consumption and have not expired despite passing their best before dates. Consequently, if this information is not communicated well to the consumers, it can affect business performance negatively. For this reason, it should enlighten consumers on the distinction between best before dates, display until dates, used by dates and sell-by dates.

As discussed earlier, approved food has shown its commitment to the conformance of various business laws and practices. The company is licensed under small business as stipulated by UK laws. Additionally, companies should adhere to employment laws, health and safety laws, consumer protection laws and environmental laws. Adherence to such laws creates an enabling environment for business to operate without significant litigation issues. New ventures are prone to growth problems including lack of enough funds for expansion. The entrepreneurial process offers insightful steps to take when starting a business. These steps provide a platform for an employer to develop a business idea, determine the source of capital as well as set objectives of the company. Moreover, the Greiner model makes it easier for an entrepreneur to understand various phases of business growth as well as challenges that are likely to affect the business in such stages.

Small businesses should adopt a comprehensive marketing strategy to increase brand visibility. Social media platforms play a critical role in marketing small and medium business. Different social media platforms such as Facebook, YouTube, and Instagram have a wide audience. For this reason, most companies advertise their products through such platforms. Also, digital marketing channels such as email marketing, affiliate marketing, and search engine optimization among others promote company products and services in the online world. Therefore small business should utilize online platforms to market and promote their brands.

References

Burns, Paul (2016) Entrepreneurship And Small Business. 4th ed. London: Palgrave.

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Chaffey, D., and Chadwick, F., 2015. Digital business and E-commerce management. Harlow: Pearson.

Horváth, A. (2015). Modern growth lifecycle management models for micro, small and medium-sized businesses. Strategic Management, 20(1), 3-10.

Jones, Oswald, Allan Macpherson, and Dilani Jayawarna. 2014. Resourcing The Start-Up Business. 1st ed. Oxon: Routledge.

Karimi, S., & Naghibi, H. S. (2015). Social media marketing (SMM) strategies for small to medium enterprises (SMEs). International Journal of Information, Business, and Management, 7(4), 86.

Musa, H., Ab Rahim, N., Azmi, F. R., Shibghatullah, A. S., & Othman, N. A. (2016). Social media marketing and online small and medium enterprises performance: Perspective of Malaysian small and medium enterprises. International Review of Management and Marketing, 6(7S), 1-5.

Taylor, R. W., Fritsch, E. J., & Liederbach, J. (2014). Digital crime and digital terrorism. Prentice Hall Press.