Success Secrets of Joes Pizza Palace - Essay Example

Joe’s Pizza palace has managed to create an effective business model giving it a competitive advantage over its competitors since the products produced are of high quality and at a considerably lower price. 

The business currently implements the joint-stock venture form of business organization where their main suppliers and distributors are ventures in the business thus the cost of production and consequently the price of their products is lower than the competitors’. The business gets into business ventures with its suppliers and other parties of interest in the business to decrease the cost of operation and hence deliver products at a relatively low price thus increasing its overall sales and profit. By so doing, the business ensures that it is the main shareholder and owner of the business but only splits earned profits with the other ventures.

Unlike the partnership form of business organization, the business does not distribute its shares among the ventures but instead only distributes the profit earned thus the business owner retains ownership of the business even when the ventures dissolve their contracts. The form of business organization is also beneficial. When the business ventures decide to leave the agreement, the business does not need to be dissolved in order to complete the request, thus it is easier to add and remove ventures from the business contract hence more flexibility for the business to adapt to changes and customer demands to increasing/retain a competitive advantage over its competitors.

Compared to a sole proprietorship, the form of business organization implemented by the business is advantageous in that the operational costs of the business are shared among the ventures thus the business owner does not bear losses or the burden of meeting the business’s operational costs alone. This is important since it ensures business continuity throughout leading to increased sales due to its reliability. In addition, a sole proprietorship requires an individual to spend time searching for reliable suppliers for the business while in a joint-stock company the business owner ventures into partnerships with suppliers thus the resources are easily available to the business.

In a limited liability company, the business has to commence with a board of directors that will govern the activities of the business leading to the distribution of power and ideas about the business’s decisions and actions, which in this type of business would not be effective in addressing its issues. Compared to the company’s current form of business organization, the limited liability company form would lead to sluggish decision-making and reduced efficiency. Tax payments under LLC are also an issue since the business would be required to pay its taxes while under the joint-stock company ventures are required to handle their own tax payments based on their contribution to the business.