International Foundation in Management and Economics
Small Firms Case Study
Management & Finance
Dan Lu, Cicy
Wallace King Interiors
What is a small firm?
A small firm is usually owned privately in a personalized way in the form of corporations, partnerships, or sole proprietorships.
Usual employees in a small firm
Fewer than 15, Australia
Fewer than 50, EU
Fewer than 500, America
How is a company defined as a small firm?
Number of employees
Typical examples of a small firm
Terms related with a small firm
LTD = Private Limited Company
PLC = Public Limited Company
Because of the financial crisis in 2008, economy in Britain has not recovered yet. 120 firms per day were on the way to closure on the according to the true figure and the unemployment rate in 2011, according to Becky Barrow (2011).
Location: Rochdale, Maghull, Brighouse and Leatherhead in Surrey Company type: Private Limited Company with share capital
Business activity: Cricketing retailer
Number of employees: 10
Legal requirements for a LTD Company
Full registered company name
Number and place of company registration
The company registered address and the address of its place of business
*You don’t need to tell the directors’ name, but if you make the choice to name directors, then all directors must be included.
Romida Sports focuses on a niche market which specialized in doing cricketing from 30 years ago, but unfortunately was forced to go into administration in September in the year of 2012.
Romida became the first retailer who deputed manufacture of mini pads and gloves. Reasons for Failure
As a spokesman from PKF, the Manchester office of financial services firm, suggested, it was a difficult year for Romida mainly because the unsatisfying weather has swept the cricket season. What’s more, owing to many other well-known games like the Olympic Games, the Tour de France and Euro 2012 football, a huge amount of leisure money was spent instead of buying cricketing equipment. According to BBC news, summer in 2012 has become the wettest one since 1912. As we know, cricket is often played in summer, on a sunny and warm day. Therefore, Romida is doing a business which takes high risk because it relies significantly on the weather which cannot be controlled. This is the first reason why it collapsed.
Secondly, what leads to Romida’s failure is its marketing type. Romida specializes in cricket making, which is a typical niche market, and as a result, demands for cricket equipment will not be high compared with other integrated large-scale sports stores. It is well recognized that income and actions of competitors are crucial factors determining demands. If we regard high-profile events as competitors, and income of people is fixed, then leisure money will be separated, so Romida will definitely suffer a great loss as demands drop.
The stage that Romida is going through is that the Joint Administrators are seeking a purchaser for the business. This is a preferred way as Romida still continues to live but with the director changed.
As far as I am concerned, if Romida had not been into the process of administration, a favorable way could be differentiating the kinds of products they sell, which means they can sell sports clothes in addition to cricket equipment.