This document provides background information and establishes the foundation for a study on strategies small business owners use to achieve profitability beyond five years. It identifies that small businesses face challenges like lack of resources and management skills that contribute to high failure rates. The purpose of the study is to explore industry strategies successful small retail business owners employ to remain profitable for over five years. The central research question asks what strategies small business owners use to achieve long-term profitability. The conceptual framework draws from theories of disruptive innovation and susceptibility.
1. Running head: FOUNDATION OF THE STUDY 1
Evaluation of Doctoral Study – Foundation of Study
Student Name
Date
2. FOUNDATION OF STUDY 2
Section 1- Foundation Study
Background
Small business in the United States comprises the largest source of job creation and
economic growth. Alternatively, different factors in the small businesses are inherent and
volatile. According to Ayala and Manzano (2014), estimates of 56 million new jobs are created
annually by the small businesses. Small businesses are forms of businesses that have less than
five hundred employees. Small businesses face multiple challenges that hinder efficient
operation, such as lack of resources and managerial ability. In so doing, the United States
administration came up with mitigation measures to help the small business succeed in their
operations (Barrett, Mayson &Bahn, 2014). The government of the United States intends to
improve the background, management skills, and education level of entrepreneurs to get better
the success of the SME in the country.
Foundation Study Statement on the Problem
In the first two years of a business operation, about 30% of new ventures in the small
business market quit the businesses. In so doing, the number of jobs that small businesses create
reduces leaving a loophole in the available jobs. In 1993, the small businesses accounted for 22.9
million jobs, however, in 2009 the value reduced tremendously to 14.3 million (Brettel, Strese&
Flatten, 2012). Investigations show that the main reason for the failures is that most of the
business owners embarked on the initiatives without adequate training, leading to premature
dissolution. The specific business problem lies on the lack of strategies for the owners to record
profits beyond five years of operation (Chwolka&Raith, 2012). There is a need to resolve the
problems to enjoy the benefits of small businesses in economic growth.
3. FOUNDATION OF STUDY 3
Foundation Study Statement of Purpose
The primary intention of the case investigation is to explore the type of industry strategies
that the minor business proprietors custom to make sure that they are in a place to meet and
achieve profitability beyond the five years (Del Mel, McKenzie & Woodruff, 2014). The results
of the investigation will help in developing business models that leaders or the business owners
can refer to enable them to build successful business plans. In so doing, the research will give to
the positive social change helping small business owners maintain profitability margin. The
small businesses will also have the capacity of retaining employees in their enterprises hence
contributing to the country’s economy and the communities surrounding the enterprises (Koe,
Omar & Majid, 2014).
Foundation Study’s Central Research Questions
The above manifold exploration case study includes one fundamental research question.
What are the strategies that the small successful retail enterprise owners use to meet profitability
beyond five years? The research question will be helpful in discovering strategies that successful
small business owner’s use for them to receive the highest profitability level and support it for
some years above five years (Hwang & Chung, 2016). Individual interviews will be
implemented to meet the in depth of the investigation (Gurian, 2015).
Conceptual Framework of the Foundation Study
The theoretical framework of the research study consisted of disruptive innovation and
disruptive susceptibility. Christensen developed the disruptive innovation in 1997. Christensen
developed the theory with an intention of developing technical variations (Dombrowski&Gholz,
2009). Utmost investigators practice the disruptive innovation concept to discourse the position
4. FOUNDATION OF STUDY 4
that comes along with the difference among the creative customers. On the other side, the idea
of disruptive susceptibility will show readiness of creating values networks that will offer
channels for successful market entry (Gopinath&Mitra, 2007). Both the disruptive innovation
and susceptibility theory are directly related to this study since they are suitable for small
business leaders in forecasting on market change situations before entering the market. The
theories will help in mitigating the problems related to strategic management among the small
businesses.
5. FOUNDATION OF STUDY 5
References
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the firm. A longitudinal analysis. Journal Of Economic Psychology, 42, 126-135.
http://dx.doi.org/10.1016/j.joep.2014.02.004
Barrett, R., Mayson, S., &Bahn, S. (2014). Small firms and health and safety harmonization:
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Brettel, M., Strese, S., & Flatten, T. (2012). Improving the performance of business models with
relationship marketing efforts – An entrepreneurial perspective. European Management
Journal, 30(2), 85-98. http://dx.doi.org/10.1016/j.emj.2011.11.003
Chwolka, A., &Raith, M. (2012). The value of business planning before start-up — A decision-
theoretical perspective. Journal Of Business Venturing, 27(3), 385-399.
http://dx.doi.org/10.1016/j.jbusvent.2011.01.002
De Mel, S., McKenzie, D., & Woodruff, C. (2014). Business training and female enterprise start-
up, growth, and dynamics: Experimental evidence from Sri Lanka. Journal Of
Development Economics, 106, 199-210. http://dx.doi.org/10.1016/j.jdeveco.2013.09.005
6. FOUNDATION OF STUDY 6
Dombrowski, P., &Gholz, E. (2009). Identifying Disruptive Innovation: Innovation Theory and
the Defense Industry. Innovations: Technology, Governance, Globalization, 4(2), 101-
117. http://dx.doi.org/10.1162/itgg.2009.4.2.101
Gopinath, N., &Mitra, J. (2017). Entrepreneurship and Well-being: Towards Developing a Novel
Conceptual Framework for Entrepreneurial Sustainability in Organisations. Journal Of
Entrepreneurship And Innovation In Emerging Economies, 3(1), 62-70.
http://dx.doi.org/10.1177/2393957516684464
Gurian, L. (2015). Approaches to elaborating the strategy for investment in the professional
development of personnel for small businesses. Creative Economy, 9(2), 189.
http://dx.doi.org/10.18334/ce.9.2.118
Hwang, J., & Chung, J. (2016). The Roles of Business Ethics in Conflict Management in Small
Retailer-Supplier Business Relationships. Journal Of Small Business Management.
http://dx.doi.org/10.1111/jsbm.12271
Koe, W., Omar, R., & Majid, I. (2014). Factors Associated with Propensity for Sustainable
Entrepreneurship. Procedia - Social and Behavioral Sciences, 130, 65-74.
http://dx.doi.org/10.1016/j.sbspro.2014.04.009