Assignment of the Week - Research Proposal Management

MANAGING RESEARCH

 ASSESMENT TASK 1

Draft of Background and Problem Definition of Research Proposal

  Submitted to:

Stephanie Jones

  Submitted by: Gagandeep Kaur Student Id (ATMC): 1107894 Student Id (USC): G_K059 Word Count: 260 Challenges in expansion of small scale business: Patel hair and beauty salon is easy choice for men and women. Its located in Selanndra Rise Shopping Centre 4 2 Selanndra Blvd, Clyde North, VIC 3672.  It provides quality services, the range of services includes beauty and hair services mainly haircut, coloring, straightening, foiling, facial bleach, waxing. It provides special discount to pensioners upon all services. All these services are provided by professional and dedicated staff. Its objective is to provide a professional, still focusing on providing its clients relaxed atmosphere where both clients and staff can enjoy their time in the salon. Patel beauty salon is expanding itself but facing problems as how to establish itself and give healthy competition to others in Cranbourne market. Background of the problem How can we expand in view of the local competition? Management decision What the different factors are for expand the small scale business. Research question

• How to balance the cost of expansion and demand of products?
• What are the trends which can be adopted to promote Indian beauty product in international market?
• What is demand of people, who want to experience Indian beauty products and services?

Objectives

• To identify what are the local market trend.
• To determines public demands.
• To explain the services and products.

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Challenges in Expansion of Small-Scale Business

Introduction

As the access to funding and demands and needs for innovative products are increasing across the world, there has been a significant increase in the number of small businesses operating in different countries. Though there is no universally accepted definition to define a small-scale business, general agreement and analysis based on different organisations establishes small-scale businesses to be organisations with less than 250-300 employees and total assets of less than $15m (ACCA, 2010). It can be said that since these firms are such small in size and scope, they might not be important for global economy but it has been found that the small scale businesses and firms usually account for almost 95% of the total number of firms existing in the world and also contribute towards 60-70% of the overall employment (ACCA, 2010). Keeping such economic importance of such small businesses in mind, countries have developed special laws and have also defined special measures that can help in offering assistance to these firms for higher growth. However, these businesses still do face a plethora of challenges while expanding as compared to the bigger firms. The study will hence focus on evaluating and identifying these challenges that are faced by small-scale businesses for expansion.

Background to Research Problem

Study of the small scale businesses in the US reveals that almost 50% of the businesses operating at a small scale tend to fail within the first four years of establishment, among which a major problem is lack of human and capital resources (Nazar, 2013). Data reveals that 79.66% of small organisations that exist in the United States are self-employed and do not hire any additional manpower (Nazar, 2013). In addition, it is also argued that with an increase in immigration in the country, number of businesses that are opened every year is increasing. In fact for every 9 businesses that are closed every year, almost eight new companies are opened up (Walsh and Cunningham, 2016). Hence, the small scale businesses not only face a problem or competition from the large scale firms and companies but face a massive competition from other small-scale businesses as well. It is hence essential to study the challenges that these companies in terms of expansion so that effective strategies can be suggested. Patel Hair & Beauty Salon is one such small scale business that is located in Selanndra Rise Shopping Centre 4 2 Selanndra Blvd, Clyde North, VIC 3672. The business offers beauty and hair services for both men and women and a special characteristic of the business is that special discounts are offered to pensioners. The company also has a small staff group for offering these services to the customers and the employees are given complete training to enhance their efficiency and also increase their dedication. The primary mission of the firm is to make sure that it offers complete professional services to the customers and at the same time, provides a relaxed atmosphere to the customers as well as the employees. However, as competition is increasing, it is facing multiple challenges in the Cranbourne market. In addition, the firm aims at expanding and opening up new branches across Carolina but is facing multiple issues and challenges. The study would thus focus on exploring these challenges that are associated with the expansion of these small-scale businesses.

Problem Definition

The key management problem that is being faced in this case by the firm being studied is the issue of not being able to expand in the given market or in new markets. As competition is increasing, it has become essential for firms in the local market to expand its operations to be able to increase its sales and growth, but the management faces multiple problems in doing so (McKeown, 2017). It is thus essential to explore these challenges so that recommendations for improvement can be made. The study thus would explore the challenges for small-scale business expansion and study the needs of clients to be able to make recommendations for strategies that would help in eliminating these issues.

Aim of the Study

The research aims at identifying the challenges faced in expansion of small-scale businesses.

Research Question

What are the challenges that small scale businesses like Patel Hair & Beauty Salon face in expansion and what are the customer needs that need to be considered by them for expansion?

Research Objectives

• To explore the challenges that are faced by small-scale businesses in expansion
• To identify the needs of customers with respect to small-scale business such as Patel Hair & Beauty Salon
• To make recommendations for management of Patel Hair & Beauty Salon for expanding its offerings and services

The study will be thus focused on accomplishing these objectives. Next section of the report presents a review of literature on the subject that would help in forming the theoretical basis for the study.

LITERATURE REVIEW

Need of Expansion of Small-Scale Business like Patel hair and beauty salon

It has been established earlier that small-scale businesses form a major portion of the overall corporations present in the world and also contribute towards overall employment and it can be hence deduced that these businesses and companies play an extremely important role for the economic growth and development of countries in which they operate (Boswell, 2014). Though it can be argued that the small-sale businesses usually operate in a small local market and hence expansion might not be the right strategy for them, Conta et al (2015) suggest otherwise. According to the discussions presented by Conta et al (2015), the brand awareness and knowledge of these small firms are extremely low in the market. Hence, higher expansion is required and is essential to make sure that higher number of customers are attracted to them. It can be hence assessed in the case of Patel Hair and Beauty Salon that the business primarily attracts customers who reside in the locality and vicinity of the business and hence overall awareness remains low, thus requiring it to expand to be able to grow further.

Challenges faced in Expansion of Small-Scale Businesses: Patel hair and beauty salon

One of the key challenges faced by small-scale businesses in expansion is the lack of capital. Goffee and Scase (2015) argue that expansion of any business requires financial investments and capitals and since the small scale businesses do not have a lot of capital and work on small amounts of money, it is difficult for them to expand. Though there are multiple financing and loan options that are available to these firms that can offer them support for obtaining resources and funds for expansion, Patel Hair and Beauty Salon did face challenges in obtaining loans due to lack of adequate collateral and references, making access to capital challenging. Andries and Czarnitzki (2014) argue that it is not only the financial capital that imposes challenges or restrictions for small scale firms, but even the lack of human capital makes it challenging for them to expand. As discussed by Rauch and Rijsdijk (2013), small-scale business like Patel Hair and Beauty Salon are highly labour oriented and hence finding talented and skilled labour at lower wages is essential for them to earn higher profits. However, the business finds it challenging to not only hire people who can offer salon services effectively but is also difficult to retain them for a long period of time. Despite these issues, it can be argued that the small scale businesses usually earn high profits because of their low cost services or higher innovation, which makes them different than the bigger, multinational firms contributing to higher growth. But as discussed by Nguyen et al (2015), increasing globalisation has led to a massive price war between firms wherein even the bigger firms are continuously minimising prices of their products and services to increase sales. There are a large number of bigger beauty salon chains offering services similar to Patel Hair and Beauty Salon at similar rates but with bigger brand names, making it difficult for the business to expand effectively. While these discussions highlight and identify the challenges related with factors caused due to external factors for small-scale businesses, there are also certain shortcomings of internal capabilities of these firms that make it difficult for them to expand. According to Liedholm and Mead (2013), a major challenge for the small-scale businesses is their inability to understand the employee and customer requirements before developing their strategies. Hence, the study would try to identify challenges that are relevant and specific for Patel Hair and Beauty Salon and would also focus on identifying the needs and requirements of its customers so that suitable recommendations can be made based on the needs identified by customers.

Customer Needs from Small-Scale Business: Patel hair and Beauty Salon

An interesting discussion presented by Tajeddini et al (2013) establishes that one of the most important needs for small-scale businesses is innovation. Tajeddini et al (2013) explain that customers often tend to choose a newly established, small scale firm because of the innovation in terms of products and services offered by it. Though it can be argued that the bigger firms are expected to offer better quality products, Baden-Fuller and Haefliger (2013) argue that technological advancements have resulted into high quality of products and hence innovation and high quality are what is expected by consumers. Patel Hair and Beauty Salon thus needs to improve its beauty services and make them innovative. The current strategies of the business are focused on traditional services and there is nothing that differentiates its services from that of another salon and thus differentiation is a key requirement from customers’ perspective. Another need or requirement of customers from small-scale businesses as identified by Storey (2016) is the personalisation of services. Customers of Patel Hair and Beauty Salon prefer communicating with the employees and owners of the salon, needing higher personalisation of services. An interesting argument by Dalton and Kahute (2016) establishes that the small-scale businesses usually have repeat clients and hence tend to form a stronger relationship with their buyers. The study would thus carry out a study with respect to Patel Hair and Beauty Salon and its employees to explore its expansion challenges and customer needs.

RESEARCH DESIGN AND METHOD

Research Method: Mixed Methods Research

The aim of the study is to explore the challenges faced by small-scale businesses in expansion and it also requires identification of the needs of customers to suggest suitable strategies for the firm. The study can be thus based on either the qualitative or quantitative method of research. The qualitative method requires the researcher to focus upon gathering and utilising theoretical information for carrying out the study such that an in-depth understanding of the topic being researched can be obtained (Creswell, 2013). The quantitative method on the other hand requires collection and statistical analysis of numerical data and information, which helps in testing hypotheses (Creswell, 2013). While the qualitative method is common for organisational studies because of its ability to provide detailed understanding of the research problem, quantitative method is said to be beneficial for gathering data from a large number of participants, leading to generalisation of outcomes (Berger, 2015). The study here requires twofold data collection, wherein the first part of the study is to explore the perspectives of employees and owners of Patel Hair & Beauty Services regarding the challenges that they face while expansion and the second part of the study is to explore the needs and requirements of customers. Since the study of employees require data collection from a smaller number of research participants, the qualitative method seems to be effective to obtain in-depth understanding of what are the issues that company faces. Customers’ perspectives on the other hand need to be generalised for the entire existing and potential customer segment and hence execution of quantitative strategy seems to be suitable (Berger, 2015). Use of mixed-methods research is thus being proposed to make sure that the perspectives of employees and customers are obtained effectively for accomplishing the research aims and objectives.

Research Approach: Primary Study

The study will be based on primary method of study and data collection. Among the two options of primary and secondary studies, primary study is the one that is based on data gathered from target research participants via the researcher and secondary study is the one that is based on data gathered from already published sources of information (Bryman and Bell, 2015). Bryman and Bell (2015) argue that primary method is important for gaining better understanding of perspectives of people related to the study. The aim of the present study is to explore the challenges faced by small scale businesses such as Patel Hair & Beauty Salon and it is hence essential to gather data from the owners or employees of the business itself so that the actual challenges can be identified. Also, the perspectives and needs of the customers of the business can be identified and explore only by obtaining and collecting data from the customers themselves. Hence, the use of primary study is being recommended. Though the method can be more time consuming as compared to the secondary study, the method will help in targeting the issue closely by gathering data from targeted group of people as relevant for the research (Schmidt and Hunter, 2014). In addition, there will also be no time lag between the time data is collected and utilised as is the case of secondary research, thus leading to higher efficiency (Schmidt and Hunter, 2014).

Data Collection Methods and Procedure

Interviews

The study aims at exploring the perspectives of employees of Patel Hair & Beauty Salon in order to understand the challenges faced by the firm while expanding via qualitative method and hence interviews can be used for the study. Interviews are commonly used qualitative data collection methods for a research and allows the researcher to understand the perspectives and preferences of research participants (Taylor et al 2015). Since the study aims at exploring challenges of small-scale business in expansion with reference to the case of Patel Hair & Beauty Salon, it is important to gather data and responses from its employees to be able to meet the aim and objectives of the study. Researcher would thus make use of the interview method to identify the challenges that the businesses face. The researcher will carry out telephonic interviews with the owners and employees of the business and the responses will then be transcribed to obtain the key findings. Interviews will be carried out based on a fixed questionnaire as developed for the study, thus helping in collecting information relevant for the study.

Surveys

Surveys are used for gathering qualitative as well as quantitative data, wherein specific questions are asked to the research participants and their responses are then utilised for meeting the research aims and objectives (Wildemuth, 2016). Surveys are said to be extremely effective because they are less time consuming and also helps in collecting responses from a large number of participants, thus enhancing the ability to generalise findings for the entire population (Wildemuth, 2016). As the aim of the study is to explore the perceptions of consumers of Patel Hair and Beauty Salon to identify their needs and expectations from the business, it is important to make use of the survey methodology so that adequate data can be gathered from a large number of customers, allowing response generalisations. The study will thus carry out paper based survey wherein the customers visiting the salon would be requested to fill the questionnaire, which would take only 5-6 minutes. The questionnaire used for surveys will be based on Lickert scale, which will help in gathering quantitative data for generalisation, thus resulting to effective outcomes and results. The data thus gathered with the help of surveys would be analysed with the help of graphs and charts for generalising.

Sampling

The study would be based on the convenience sampling approach, wherein respondents will be randomly selected based on their convenience of participating in the research. The researcher will interview 3-4 employees of the company depending on whoever is conveniently available for giving interviews and would gather survey data from around 50-70 customer respondents to be able to understand and evaluate their responses. The data gathered would be then analysed based on a thematic approach and based on the use of graphs and charts so that the outcomes can be used to answer the research questions.

ADDITIONAL ISSUES

 

Ethical Issues

A major ethical issue that arises with primary studies is the ethical issue or need of maintaining anonymity of research participants. The researcher is thus going to ensure that the report does not mention any personal information of the participants and hence the questionnaire will be designed in a manner that it asks for no personal information, hence avoiding the ethical issue (Taylor et al 2015). Another ethical concern is safety of data. It is important that the data and information that is collected is used only for research purposes and does not get used by unauthorised parties. The researcher will thus keep the data password protected and would destroy the data as soon as the research is completed.

Research Limitations

The research focuses on only one organisation, i.e. Patel Hair and Beauty Salon and hence the limitation that exists is the inability of researcher to generalise findings for all small-scale businesses. However, it does provide a basis for future research that can focus on data collection from multiple small-scale businesses for drawing conclusions. Another limitation of the study is that it gathers data only at once and not over a period of time because data collection over a period of time helps in understand changes and better understanding of the problem. The limitation can be overcome by carrying out similar studies in the future to present comparable outcomes.

Time Schedule and Budget

Gantt Chart

Conclusion

The research plan as proposed above would be able to help in exploring the challenges faced by small-scale businesses in expanding their operations and would help in meeting the defined aims and objectives effectively.

References

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