Enterprise & Entrepreneuralism
Bridgetown Newsagents – A Small Business Case Study
Dillons newsagents is a late closing local shop with a ‘Mini-Mart’ service. The
partnership: Mr Charles Pettifer and Mr Marc Devis.
available along with the full complement of groceries, fresh sandwiches,
approximately half a mile from the town centre and situated within a very
residential area. Tesco’s are the immediate traders to the newsagents.
Nine years ago, the newsagents was expanded with the intention of providing the
time provided excellent stability and potential for expansion which was enjoyed
until two years ago when a superstore was opened nearby offering a major threat
Business growth, structure, strategies and competition are to be addressed in
obtained from two year’s part-time employment at Dillon’s newsagents.
Growth of Dillons:
In 1988, Dillons employed Mr Charles Pettifer as the operational manager, from
eighteen months. During this period Dillons were developing their own ?Mini-
Mart’ theme and as such decided to expand the facilities to supply a range of
groceries and other common consumer goods as well as the usual news literature.
The shop opening hours were also increased from the regular evening licensing
hours of 5:30pm, to a more substantial one of 11pm.
Dillons with the help of a silent partner Mr Devis. Mr Devis has shares in the
newsagents at discounted prices. The entirety of the shop was responsibility of
Mr Pettifer provided that Dillons’ standards were not infringed.
At the stage of development outline here, it can be seen that Dillons newsagents
is akin to stage one of the business growth cycle.
Recognition within the local community and attraction of regular customers
resulted from this and thus so did a modest, small shop turnover.
Fatima was employed initially in running the shop (issues in employing family
friends and relatives are recapitulated later). Because of this, only limited
professional management skills were required.
customers, providing key information to a number of customer needs, although no
formal research was carried out.
Systems and Controls:
Due to Dillons’ requirements, the accountancy was in advance of a role model
stage-1 business, providing efficient systems and controls for Dillons’ auditing.
Sources of finance:
increased expansion of the store.
At this stage, no further investments were made due to the limited product range
and turnover within the shop. Major investment here was therefore not justified.
The product range was initially limited due to floor space, and the occupying
range purchased, in bulk, at a recommended cash and carry outlet.
Dillons had now become a very stable stage-1 business due mainly to the support
and expertise of Dillons’ management. Also, the newsagent’s position was
providing the previously mentioned services in the local area. ((Both businesses
in the area also added tremendously to the custom in the shop.))
expand the shop product range to the domains revealed by his marketing strategy
(albeit a very limited one!). A proposal was made to Dillons’ management to
expand the shop premises approximately by four-fold. After the initial success
of the shop and the predicted potential, Dillons agreed to finance the expansion
and also improve the presentation of the shop.
Again, the improved video services aided to further boost the custom to the shop.
The shop now had the space to dramatically increase the product range as desired,
although with this expansion, stage 2/3 considerations of the growth cycle were
required at the very least to re-establish the business.
Now, maintaining original customers and expanding the customer base was
imperative to ensure maximum stock turnover. Further resources could now be
exploited due to the expansion. Increased size and stock suggests that further
staff are needed.
Due to employing more staff, a professional style of management should have been
adopted. ‘Friends’ were employed thus keeping the managerial position an
Research techniques had not improved in any way from the original methods and
because of this (see later) a product stagnation was induced. Sales
representatives suggested leads and ideas, however, these ideas were instigated
for other reasons.
Systems and Controls:
accounting systems in operation. The entire business system was professionally
audited by Dillons on a bi-yearly basis. Suppliers also checked control and
display systems on their relevant products.
The entire product range was now entering an established market in itself. Each
product was purchased from the main suppliers on a sale or return agreement
(this agreement was a key principle to Mr Pettifer entering a new product into
The shop had an impressive product range at this stage, the customer base was
newsagents now enjoyed economic success.
Personnel Structure and Culture
The following tree structure demonstrates the personnel hierarchy throughout the
newsagents: [diagram of management hierarchy goes here]
Explanation of the company hierarchy:
all supervision of goods delivered and provide regular audits. Visits from the
area management are frequent and always stringent. Dillons also provide major
investments throughout the Bridgetown store.
Mr Pettifer works a typical day between 9am and 5pm, provided there are no
anomalies. He is solely responsible for book keeping, reports, control systems
and ordering of tobacco, alcohol and video supplies. Being the operational
manager, Mr Pettifer is continually managing and assessing the store.
Fatima Pettifer works similar hours to her husband and is responsible for all
stock orders except the above mentioned. General shop maintenance is also an
There are shifts designated to each of the workers:
5am – 11am11am – 5pm5pm – 11pm
The above shifts were maintained so that someone was constantly available to man
in the event of a subsequent shift worker not being on time. Each shift is
covered seven days a week, with the exception of Christmas day. The labour
involves till-operation, re-stacking shelves, petroleum regulatory checks and
general shop duties.
Shelf stackers are generally employed together to ensure that all stock is
efficiently replaced. Both work six evenings per week and are responsible for
re-stacking the enirety of the shop.
Due to the individualistic style of management, problems arose when Mr Pettifer
was not present within the shop (anytime between 10am and 5pm daily) since no
management issues could be delegated to anyone else. Any sick or holiday leave
would result in a further backlog of paper work and reduced stock in the areas
for which he was concerned.
greatly helped in promoting a friendly shop environment for the customers; good
working relationships prevailed and common interest in the success of the
business was reflected in the workers’ attitudes. Although this method of
employment assisted in creating a friendly atmosphere, the following internal
management problems soon became apparent:
Exploitations of relationships between manager and personnel was intrinsic in
many staff related issues, e.g., salaries, hours worked, holidays etc..
that trust, i.e., opportunities were made available to all employees
disregarding their status.
life were often perceivable since husband and wife were working within the same
environment. Although this situation was occaisionally embarrassing and no doubt
detremental, the shop definitely benefitted overall by the traditionality and
because of this a unique, informal shopping environment was created but it was
inefficient and poorly structured; small problems continuously plagued Mr
consequently not being dealt with effectively.
Although the above problems prevailed since the expansion of the shop,
of competition in the local market.
As Dillons was the sole convenience store within the local area, prices tended
to be expensive because of the lack of price wars with competition. This proved
to be an almost fatal error when the competition entered as they were able to
effectively compete with all of Dillons’ price range.
In the early stages of 1996 a Tesco superstore opened less than a mile along the
same stretch of road as Dillons. Since Tesco is an extremely large shopping
chain (and not a small business), large financial backing was employed and the
product range was undoubtedly greater. Prices considerably undercut those
presented by Mr Pettifer, drawing away regular shoppers and leaving mainly those
who frequented the store even before it was expanded.
Tesco opened during Dillons’ most profitable times (i.e., 7-10am and 4-7pm), and
this reduced a high percentage of custom from the shop, threatening the profit
margins that had been developed.
Within six months of operation, major recruitment of captial was required by
Dillons just to help the business survive. Mr Pettifer was forced to reduce all
staff salaries (including his own) dramatically.
Business Life Cycle:
Applying the business life-cycle to Dillons newsagents, it can be seen that
progression from the Inception stage to the Expansion stage was unnaturally ???
During Inception, Dillons was actually similar to the life cycle model, with
products tending towards expensive so the company would gain more profit. This
point is re-enforced seeing that the business opening hours were 5am to 11pm
during all days of the week; not taking into account ?overtime’, it is obvious
that the newsagents is already a very large commitment for Mr Pettifer.
Dillons soon drifts from the business theory since there was very little time
spent in the survival stage. Here, the business structure should be improved and
strengthened, but as no survival issues were presented to Dillons, this vital
stage of the life cycle was missed presenting future problems.
Even as Dillons grew and expanded into new markets, no new competition was
encountered thus diverging further from the life cycle and making the
organisation even more fragile and vulnerable.
Management did not develop at all throughout the life cycle and remained
individualistic and supervisory instead of developing towards a more distanced
and decentralised managerial operation.
Currently Dillons is still under major financial threat and business is not
of the business it can be seen that very little long term strategies were
employed and no foresight of major competition was predicted, although this
The original success of the business seems to be largely due to the major
investments made by Dillons management, location of the shop and the lack of any
similar shops in the local environment.
At all stages of the business life cycle it appears that there is never a great
financial threat to Mr Pettifer. During expansion, nearly all the risk involved
was presented to Dillons management and Mr Devis in their capital investments.
of the shop’s products enabled a sale or return method on all products (within a
reasonable time period). This method proved ideal since it diminished any
anxieties in regard to development of the shop’s product range and ensured that
there would be no profit loss on over ordering of goods, reduced slaes or
changes in the market culture.
Short term risks such as the time to acheive profit on turnover were reduced
whilst the risk of being dramatically undercut and pushed out of the market was
increased exponentially. Ironically, this risk factor being the single largest
reason for crisis was not recognised. External issues exasperated Dillons due to
the neglect of any long term planning.