Entrepreneurship and Small Business Management

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Master of Business Administration (Oman)
Assignment Cover Sheet
Student Number
1033292

Module code

MAR015-6

Assignment No.

002

Module Title

Entrepreneurship and Small Business Management

Module Tutor

Professor Paul Burns

Due Date

20th December 2012

Growth audit report of Muscat Hair Care Partnership
December 2012

5,330 words

__________________________________________________________________ University of Bedfordshire -MBA Oman Growth audit report of Muscat Hair Care Partnership

Page 2 of 27

Executive summery
Muscat Hair Partnership is a small owner managed growth business that buys hair care products from manufacturers and resells them to large retail hair product chains and wholesalers, mostly for hairdressing salon use, and direct to the salons themselves under branded names and own brand name. The company has met with success so quickly since formation simply by adapting to changes in external environment once they have happened, and now questions its ability to continue current progress in the predominant environment .This report evaluated the growth potential of the company, in a SWOT analysis, by looking into what has made the business successful so far.The report also evaluated its growth options using Ansoff's Matrix. The evaluation has been guided by Burns’ growth audit check list (Burns, 2010).Muscat Hair Care was found to possess a growth potential that could be built on its strength in the entrepreneurial character of the owner-manager and his ability to lead and change, having a proper business culture, sustainable competitive advantage from customer intimacy and possession of unique resources and core competencies and finally enjoying strong growth in sales and good credit rating with its bank. However, Muscat Hair Care should shore up its weaknesses that could hinder its growth ability. The weaknesses lie in lack of managerial support and delegation of authority, unbalanced portfolio of products in terms of their life cycles, declining profitability due to weakness in cost control , and increase in inventory levels caused by rapid growth and introducing too many products and finally, increased gearing and interest costs caused by increased levels of borrowings to cater for capital investment.Analysis revealed opportunities in terms of scope of growth in current market share and product diversification. Threats to growth were found to exist in reduced product quality, loss of customer service reputation, increased competition and foreign exchange loss. Various routes to growth were examined using Ansoff's Product-Market Matrix to help the company to generate growth options. Finally, it was recommended that assuming market penetration will continue Muscat Hair Care should remedy the weaknesses and build on it its strength and core competences to derive growth from market development. It will be better for Muscat Hair Care to anticipate the impact of any possible changes in environment rather than simply having to react to them once they have happened.

__________________________________________________________________ University of Bedfordshire -MBA Oman Growth audit report of Muscat Hair Care Partnership

Page 3 of 27

Contents
Executive summery ...............................................................................................3 1. Introduction .....................................................................................................6 2. Background and context ................................................................................7 3. Analysis and evaluation..................................................................................9 3.1. 3.1.1. SWOT analysis .............................................................................................9 Strengths ...................................................................................................9

3.1.1.1. Positive motives of owner-manager for...
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