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Research Paper Example: Business Analysis Report

8 pages
1933 words
University of California, Santa Barbara
Type of paper: 
Research paper
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

This report highlights the challenges, and success factors facing small startups and in particular, from the food industry. It is a highly competitive area, but when a business well positioned, it can reap big until when the consumer's marginal utility is maximized, and they yearn for something new.

Challenges facing Start-Ups

Starting the business from the ground up comes with its set of challenges. They aim to start and run a mobile coffee cafe selling Egyptian coffee and desserts. First of all, for startups to succeed a critical factor is the commitment and time invested. This means they may have to abandon their career and start another. They need to evaluate if they are ready mentally, and physically as such a job will require physical exertion and endurance against mental exhaustion that comes with the pressure of being in the food-service industry.

Funding is another issue to contend with as they need money to purchase or lease a food truck and run the business. They need to make a living with what they have, and it is a question of how they can raise the capital needed. It might be difficult securing a loan, and funding it from their own pockets could put a strain on their lifestyle and their desire to keep on traveling. Consistent cash flow is essential to sustain normal operations of the business and also provide for themselves. Maintaining this will be a challenge especially should they have difficulty in securing financing other than using their own money.

The idea might be helpful and viable. However, lack of experience is another major hiccup (Bernat et al., 2014). The food industry is heavily reliant on cost savings, and efficient stock management in order to break even. They have a love for baking however same principles may not apply when it comes to baking for a large number of consumers. They need training or a mentor to guide them through production and stocking issues they will face. An example is how to make sure they do not prepare too much food than they can sell as food is perishable.

This is a couple managing the business together. Therefore, disagreements may arise as is the norm with business partners (Bernat et al., 2014). This might also put a strain on their relationship and affect them from working together as colleagues.

Lack of proper management skills is a sore issue for new entrepreneurs. Poor management of the business which includes poor decision making in reference to marketing strategies, pricing, work hours, and financing options (Bernat et al., 2014). Proper management gives business longevity and makes its activities sustainable.

They may face competition from already established and well experienced mobile food trucks. Their competitors may have already carved out a huge share of the market, and the Smarts need to bank on authenticity and uniqueness of their pastries. This would involve importing ingredients from Egypt to reproduce the taste of the Egyptian delicacies.

Importation of spices and coffee is not without its effect on the US economy. This will affect the balance of trade. It may create a trade deficit where more is imported than exported from the country. Furthermore, there is a possibility that these spices and the coffee can be found in the US, by encouraging buying them within the state boosts its economic output and increases jobs as far as the production and manufacture of the products is concerned. This is not to say that they alone would cause this however their actions would contribute to the deficit. Importation also contributes to the devaluation of the currency and raises the rate of inflation within the country.

Form of Business

Incorporating the business as a limited liability company will be appropriate as their business structure. The risks involved are numerous, and this will help get them personal liability protection from debts, obligation and any legal action against them in relation to the business (Cooper et al., 2016). There are also various tax benefits that are accorded to these types of companies, and raising capital will be a bit easier especially when scaling up they can get capital through the sale of stock. However, this has its downside such as additional paperwork and the cost associated with incorporation and continued business activity.

Leadership, Motivation and Team Building

Mobile food trucks need a lot of work. Due to lack of experience and since they are new to the business, it is advisable to hire skilled labor to support the business as explained by Lougui & Nystrom, (2014). Selection of a team would involve employment on given criteria for the roles they hope to fill. The employees should have time, a bit of experience in the business, and be competent in the tasks they are to undertake. They can do this by way of advertising for the position by handing out flyers or through online job forums, and the location should have good incentives to attract the right quality of employees needed.

The type of employees they have will determine the leadership and management styles to use. In this scenario, either participative or transformational leadership would be appropriate. For participative, the input of team is valued, and the whole team makes contributions to decision making. Their opinion matter as well but the final decision lies with them. Transformational style depends on having a high-level communication from them to the team. Here they as managers have to set goals together, and be highly involved in making sure that they are met furthermore productivity and efficiency are improved by good communication and transparency in their decision-making process. The transformational leadership style is best for them because the participative technique has a weakness when it comes to short-term decision making.

They have to find ways to motivate their employees. This increases their output and commitment to the job. It also encourages creativity and empowers them to do more than is required. As a management tool, it helps boost employee satisfaction and coordination within the team setting. It is, therefore, an important factor and needs to be integrated into their leadership styles as pay alone will not make for a satisfied well-adjusted team.


Marketing is another important aspect of the success of their start-up business. It encompasses four main criteria which when the right mix is attained will bring success to the business. The factors otherwise known as 4 P's are price, product, place, and promotion as outlined by Fill & Turnbull, (2016).

Price is the monetary value attached to their pastries and services. It has to be well thought out and cover all the costs incurred. Price determination will direct demand for the product, so they have to carefully consider what their competitors are offering, how to value their services, i.e. labor, the costs they need to cover and the clientele they are targeting. This will also determine the type of marketing strategy to use when promoting the product.

Place is the ideal location to carry out marketing and sales activities. This will be their target market and where they hope to reach the most consumers. Their timing must also be precise when it comes to different locations, as the crowd flow will be different compared to other places at the same time.

Product is their major focus. This is what they want to sell to the consumers. Its design, taste, and presentation. All this has to satisfy the consumers' needs and expectations of the product as promised. Their main selling point on the product is making it as authentic as possible to the Egyptian pastries. They also have to work on presentation since it is a tangible, edible product and as much as the taste might be good, it should look good as well. They should also consider baking a variety of products, not just the two they want to focus on. This will ensure that equipment and staff are utilized at their maximum capacity, and that clientele has a variety to choose from.

Promotion is based on marketing and creating awareness for their products. This involved disseminating information of their pastries and undertaking any activity that would capture consumer attention. They could market through social media outlets, advertising using flyers and if allowed they could use the school's channel of communication to pass this information about their business and its products.

The more they sale and demand increases, this would lead them attaining cost savings by buying materials in bulk and increased efficiency in making them. If followed by a fall in prices, this should see the demand for pastries rise due to the more affordable prices and make a core competency when pitted against fellow competitors.

To promote their brand, they first have to ensure that the pastries are well made, and the service is top notch, this is the minimum requirement for brand promotion. Further promoting their brand means they have to set themselves apart from other competitors and find that which makes them unique (Fill & Turnbull, 2016). In this case, it is the authenticity of their pastries. They should capitalize on that and even go further to create that Egyptian ambiance through how they present their products, how they wrap or the decorations on their table sets.

Operational Management

Operational management is the administration and oversight of daily business activities to promote efficiency and effectiveness of roles played by all resources available to them. For this, they need to focus on the location of daily sales, quality management of their products, design, and layout of their table settings and packaging, employee roles, their stocks or inventory, daily food truck maintenance, and process involved in making the pastries (Kafetzopoulos & Gotzamani, 2014). It is therefore important to have a clear organizational structure that will encompass all this and make sure there is no ambiguity on any of the tasks.

For such a small startup, a functional structure with one tier of management would suffice. This suits them as the employees are divided according to the tasks and the roles they play. This would enable them to utilize each employees' skill as they will be placed where they are best skilled at. However, they have to watch and ensure that this division does not get in the way of teamwork. This structure is best equipped to promote speed and efficiency which will be needed especially during the rush hour. Since coordination is centralized at first then tasks disseminated, it makes production of a limited number of products predictable and routine. This is to ensure that costs savings are attained in the long run, and the truck is at its maximum efficiency.

Most structures are better suited for complex and large organizations where the scale of their operations is quite wide. The culture promotes one of constant self-evaluation to improve each of their skills and be useful to the team, as a lag in tasks carried out can easily be pinpointed to an individual.

Technological Management

Technology management is the use management skills to the development and proper utilization of technology to create value for the business. Technology when properly used is a core competency and gives business a competitive edge over its competitors. The Smarts can use technology to their advantage as a channel for product promotion, e.g., use of social media platforms and also integrate this into their production processes. It will help cut down on production and labor costs (Kafetzopoulos & Gotzamani, 2014). Furthermore, they can use various software to keep track of their stocks to prevent stockouts, to record costs, sales and revenue earned and also carry out various analysis on patterns in the market that would help in reaching the right clientele.



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