Mr Kiesel’s Shoes Business Report

1.0: Executive Summary

Mr Kiesel’s shoes is a shoe shop located in Castle Hill, North-western Sydney. The last 2 years saw the
store go through a decline in sales, a situation largely due to heavy from larger businesses in the vicinity
of Mr Kiesel’s shoes. Furthermore, the council have determined a rezoning of the land around the
business, allowing for the development of new suburbs in the proximity of the business. This
circumstance has influenced Mr Kiesel into thinking about taking on a business partner to help him
pursue new opportunities for business growth. This report will analyse which phase of the business cycle
the business is currently in. This report will additionally highlight the ramifications of changing the legal
structure of the business from a sole trader to a partnership. This report will also outline major internal
and external influences Mr Kiesel’s shoes are experiencing.

2.0: Post – Maturity phase and the Decline stage

Mr Kiesel’s shoes presents all the characteristics of a business in the post maturity phase, more
specifically in the decline stage in a business’ cycle. The post – maturity stage is the final phase of
business’ life cycle. In the decline stage of the post maturity phase, business typically have failed to
respond to increased competition, which results in a decline of sales. Customers will stop buying from
this business, which will largely reduce the cash flow of the business. The recent decline over the past 2
years in sales due to competition suggests that the business has entered the decline stage. The potential
for new opportunities with the rezoning of land and development of new suburbs could potentially
present new opportunities for growth and indicate a move towards the renewal stage. Furthermore, Mr
Kiesel has not changed his business methods or product lines in over ten years, clearly suggesting that
the business has failed to adapt to the everchanging customer needs and trends. This gives other
companies such as Sketchers and Footlocker that have adapted according to consumer preferences an
edge over Mr Kiesel’s shoes. Moreover, a decline in sales will result in profit margins coming under
pressure, which makes the business struggle in self sustainment.

3.0: Change from Sole trader to partnership

If the business does indeed change from a sole trader to a partnership, especially at this stage of the
business cycle, the impact will massively influence the further operation of the business for the better or
for the worse. The shared risk and responsibility factor of a partnership will positively impact the
business, as Mr Kiesel could split the costs and liability between the 2 partners, and they may pool their
resources and expertise together to manage the business and take decisions. This factor could lead to a
possible rebrand, with newer products and the access to more sources of capital to potentially be used
to advertise the business, increasing the reach of the business’ name. This could potentially push the
business to contend with the larger companies in the monopolistic competition of the shoe industry.
Furthermore, a partnership would mean a larger skills base and more knowledge shared between the
partners which generates more modern ideas for the business, different approaches to address current
problems for the business, such as only advertising to a certain type of shoe buyers, hence bringing the
name of the business up in a new category of the shoe industry, encouraging sales to trend upwards,
which attracts more investors, which enables the business to possibly open a second store, possible
changing the legal structure again from a partnership to a public company. But there are negative
impacts should Mr Kiesel decide to take on a business partner. In a partnership there are 2 people
making decisions, and a difference of opinions is inevitable in this case. This will lead to a more complex
decision-making process, and common ground between Mr Kiesel and his partner will take longer to
arrive on, translating to the fact that the business will be inefficient. An inefficient business will mean
that there are resources at hand that are not being utilised, which means the business will not be
meeting its production possibility. This could have a rather catastrophic effect on the business which is
already in decline, as quick and decisive decisions are needed to generate profits again. This further
suffering of the business could cause a rift in between Mr Kiesel and his partner, causing the partnership
to become completely unresponsive in terms of decision making. This could lead to a lack of motivation
in the partners to work on the business, eventually leading the partnership to its demise.

4.1: Internal Influence on the Business

Internal influences are factors that originate within an organization. These influences affect a company’s
general activities and direction. Internal influences can be anything from the organizational structure of
a company to the attitudes of its employees. An internal influence that has had a substantial impact on
Mr Kiesel’s shoes is the location of his store. The business is located in a prime location in Castle Hill,
North – Western Sydney. The business however, faces a problem in terms of customer access, and even
has a lack of parking for customers to even park and visit the store. These problems cause a loss in
business as customers that were attracted could’ve been driven away. Furthermore, the business is in
the same location as bigger, globally renowned brands such as Skechers and Footlocker. To solve the
issues of the business’ location, along with attempting to put the business into the renewal stage, Mr
Kiesel must make some changes to the location of the business. Mr Kiesel could invest into a more
online – located business, selling products through a website, and after ordered the shoes could be sent
to the address of the household. This not only expands Mr Kiesel’s reach into the online market, but
could bring the business more name and cash flow, as businesses reach name and fame at a fast rate
online. Furthermore, to help with the parking problem, the business could offer parking coupons to park
at the Castle hill mall parking spot, so that people can park at a smaller cost. The business could
moreover open a pop-up outlet in Castle Towers or Castle Mall, the 2 biggest malls in the suburb and
put the business out there amongst the consumers, so not only would the location of the business
expand, but it is in one of the most consumers – filled malls in Sydney. Furthermore, the council
rezoning, which will eventually lead to the development of new suburbs provide opportunities for
growth and expansion of the business. If Mr. Kiesel believes that the new developments will bring in
more foot traffic and potential customers, then it may be worthwhile to consider a partnership. A
partner could bring in new ideas, expertise, and financial resources to help the business grow and
expand in this new market. On the other hand, if the location and lack of parking continue to be a
significant issue, a partnership may not be the best solution.

4.2 External Influence on the Business

External Influences are defined as factors that originate from outside of an organisation that affect the
operations and decision-making processes of said organisation. These can range from the technological
influences to the changes in the global and domestic financial market. The external influence that has
most impacted the business is the competitive situation it is in. Competitive situation is defined as the
competition between firms to be the market leader or to win customer loyalty. the competitive situation
is a crucial external influence on Mr. Kiesel's Shoes business, as it has been impacting the sales and
growth of the business over the last 2 years. Competitors such as "Sketches" and "Footlocker" have
been offering similar products at competitive prices, which has led to a decline in sales for Mr. Kiesel's
Shoes. The presence of these well-established competitors creates a barrier to entry for new businesses
that want to enter the completely saturated shoe retail market, especially for a sole trader business like
Mr Kiesel’s shoes. The availability of substitutes such as online shopping and direct-to-consumer brands,
increases the level of competition for Mr. Kiesel's Shoes, making it challenging to retain customers. To
counter the external influence of competition, Mr. Kiesel may need to consider developing a unique
selling proposition (USP), investing in marketing and branding, enhancing customer service, and
improving the product line to differentiate his business from competitors. It may also be essential to
monitor the competitors' strategies and pricing to stay competitive in the market. A partnership can
provide the business with the additional resources needed to develop new strategies for competing in
the market. For example, a partner may have experience in marketing, branding, or product
development, which can help differentiate the business and attract new customers. A partner can also
bring in additional financial resources to help Mr. Kiesel's Shoes expand its product line or invest in new
technologies that can improve the customer experience. However, it is important to note that a
partnership is not a guaranteed solution to the competitive situation. Before deciding to enter into a
partnership, Mr. Kiesel will need to carefully evaluate the potential benefits and drawbacks. He will need
to assess the skills and expertise that the partner can bring to the business, as well as the financial
resources they can provide. He will also need to consider the impact on the business's structure,
decision-making processes, and ownership.

5.0: Recommendation

Given the current state of Mr Kiesel’s shoes, taking on a partner could have several benefits, such as
increased financial resources, shared responsibilities and access to more sources of capital.
Furthermore, the incoming of a new partner will bring forward a new perspective on how the business
could operate, opening the eyes of both partners and debating on new pathways for the future of the
business, and to eventually lead the business into renewal. However, there are also potential risks to
taking on a partner, such as conflicts over decision-making or disagreements over the direction of the
business. Overall, Mr Kiesel has in the best interest of the business to take on a partner to help run and
expand the business, but when choosing the partner, he must choose one who has connections and
resources in terms of capital and a profit minded mentality, along with motivation to work and to have
modern and realistic solutions to the problems faced currently and eventually by the business.