MINI PROJECT 3A: Big Fish, Small Fish: makes good business.

When we consider the hard realities we have to face when doing business today, we may wonder how we can stay ahead of the game in the future. We have experienced a rapid expansion of globalization and an unprecedented scale of competitiveness through the 21^st century, as new markets and customers seemingly appear and disappear overnight.

The advent of technology has enabled smaller companies to compete very effectively with larger businesses. Technology has facilitated communication, allowed for products to be manufactured and delivered more rapidly, and lowered barriers of entry for smaller companies, which has resulted in increased competition. Customers have become more cost conscious and demanding than ever. The customer of the future will be better educated, more discriminating, and even better informed due to the Internet. As businesses in developing countries progress, the playing field will only become more competitive. Companies will have to have the right kind of support if they are to survive.

There are several forms of business ownerships: Sole proprietorship (small businesses), partnerships, corporations, and corporations.

Sole proprietorship |sōl p(r)əˈprīətər sh ip|

A business owned by a single individual. Small businesses are the easiest and least expensive form of business to start. Owners have the satisfaction of being their own boss, they get to keep all profits after taxes, and retain privacy as they do not have to disclose performance or plans to anyone. Disadvantages of sole proprietorship include unlimited liability for the owner, limited skills and experience, and the difficulties to raise large sums of capital.

Partnership |pärtnər sh ip|

An unincorporated business owned and operated by two or more people. Partnerships are superior to sole proprietorships, largely because there’s strength in numbers. Partnerships benefit from having more people investing money, diverse skill sets, and the company experiences a longer life since partners can be replaced when required. Similar to sole proprietorships, partners also carry the weight of unlimited liability. Other disadvantages include potential personality clashes, sharing of profits, and having to deal with unproductive partners.

 

Cooperative |kōäp(ə)rətiv| (also co-operative)

A business that is owned and run jointly by its members. Cooperatives benefit from the bulk buying power, democratic structure, and the protection of limited liability. The disadvantages of being a member of a cooperative, the sharing of profits, deal with longer decision-making processes, and the potential conflict among members.

Corporation |kôrpərā sh ən|

A company or group of people authorized to act as a single entity (legally a person) and recognized as such in law. No other form of business ownership matches the success corporations enjoy in terms of raising capital, resources, and talent.

Interestingly, the relationships and interactions between the various forms of businesses can be found in the ocean. Aquatic creatures have survived for billions of years in such by conducting businesses in the ocean.

Corporations – Small businesses

The relationship between suppliers and distributors exists in a value chain. It is a string of companies working together to satisfy their needs for a particular product. Similarly, sharks and pilot fish also satisfy their needs by serving one another. Their relationship is one of mutualism; pilot fish are fed and gain protection from predators, while the shark gains freedom from parasites. Small businesses, like the pilot fish, can find profitable niches that fulfill the needs of larger companies. Many small businesses act as distributors, servicing agents, and suppliers to large corporations. These small businesses are able to survive by supplying a narrow customer base (in this case, only a particular big fish; the shark).

 

Cooperatives

The Japanese have a proverb; “By doing it together, you conquer all fears.” Thousands of miles below the ocean, small fish form shoals or schools to defend against predators. Every time I see the school of fish, it reminds me of a children’s book “Swimmy.” These fish get together and make a big fish shape to scare off enemies. Similar to those small aquatic creatures, small businesses form cooperatives to benefit from the synergies between members, increase purchasing power, create support systems, and share success and profits.

 

Partnerships

Symbiosis is the special relationship where two beings come together in perfect harmony. They become one, living together, changing together, staying together for all time. For instance, the shrimp and goby share this type of relationship. While the goby uses the shrimp’s burrow for protection from predators, it also acts as the pistol shrimp “eyes”. During the day, the goby hovers above the burrow, feeding and interacting with other gobies. Meanwhile, the shrimp uses its antennae to stay in constant contact with the goby’s tail while searching for food and maintaining the burrow opening. If a predator comes within striking distance, the goby will dart headfirst into the burrow. At night, the two simply rest together in the burrow. The partnership between the shrimp and goby enables them to utilize their strengths to support one another. Their ability to co-exist allows them to extend their life span.

 

For millions of years, aquatic creatures have survived by forming prosperous relationships. Business practices share similar survival tactics, but has evolved over the years to a point where the big fish (big companies) just keep eating the small fish (small companies) through mergers and acquisitions. It’s now a “eat, or be-eaten” mentality that has fueled the level of competition to another level. Perhaps businesses should look to nature for lessons on how to co-exist in harmony?  

Megumi Wada