Introduction to Business
Case study: Fra-Pas
Frozen Yoghurt shop
The following case study, will provide a
brief profile about how the Fra-Pas frozen yoghurt business is running, how the
company can improve its relationships with suppliers and customers. This case study will be divided in three different
parts. Firstly, the report will discuss
the different types of partnership business organisations, follow by the Porter’s
five forces to analyse the business and then will discuss any three of the
macro environmental factors in order to improve the frozen yoghurt business.
Frank Jones and Paddy Jackson, both partners
of the Fra-Pas frozen yoghurt shop business, their store is located in the busy
Bullring shopping centre in Birmingham.
Frank Jones was working as a chef in a large contract catering
restaurant chain and Paddy as hospitality manager of a local hotel. Both decided to set up the business by
investing thirty thousand pounds each, securing the three years lease on a
shop. The Fra-Pas frozen yoghurt shop employs
two full-time members of staff from Monday to Sunday (10am-8pm), it also
includes two part-time members for the week-end as it gets very busy due to the
volume of shoppers using the shopping centre.
Attracting workers of the area, Fra-Pas frozen yoghurt shop is tended
for meeting place frequenting by teenagers and young adults.
Frank Jones and Paddy Jackson both shares a partnership
type as a business. A partnership, which is a shared business between several
partners whom owns part of the company.
Relationships between duties and business partners are
clarified in the partnership agreement.
Based on the percentage share of partnership, they also share
profits and losses, as well as they all invest into the business.
As it has also been found out by Jean Murray writer of
the article “Selecting a Business Partnership Type” from The Balance, here are
some different types of partnerships:
Partnership: A general partnership is running with
general business partners whom takes part in the management of the business as
well as taking responsibilities for any liabilities of the company. If one business partner is being sued, all
business partners should be held liable.
general partners and limited partners are included in a limited
partnership. It does not get involves
with day-to-day management of the partnership.
Not to mention, their liability is limited. The limited partners are mostly investors, and
they do not desire to get involves into the partnership excluding investing or
proving as well as collecting share from any profits.
Liability Partnerships (LLP): Clarified different from the others
partnership business types, but relatively stay closer to a Limited Liability Company
(LLC). In that case, it is found that any
business partner of LLP has their liabilities to be limited. A limited
liability partnership associate characteristics of partnerships with
corporations. About corporation, any
business partners have limited liability, including: disregard, inability,
mistakes, carelessness, and more committed by other employees or partners. By all means, if any business partner of the
company gets involves in illegitimate and negligent acts would personally be
liable while the others business partners would be protected from other’s
are consisted of partners who have come to an agreement to run a business
together, any involves partner will invests into the company”
Jean Murray, from The Balance.
This following tool (Porter’s five forces) was created by
Harvard Business School in furtherance to analyse the attractiveness and the performance
of businesses. Published in 1979, it is in fact the most popular regarding the businesses
The threat of Entry & Barriers to Entry
The threat of entry is low when the barriers to entry are high and vice
versa. Any business position can be
affected by the cause of ability of others enter to the same market. Main barriers to entry are:
Economies of scale/high fixed costs
Experience and learning
Access to supply and distribution channels
Differentiation and market penetration costs
Government restrictions for instance
Threat of Substitutes
Substitutes are products or services that offer a similar benefit to a company’s
product or services, from a different process.
For instance: likelihood a
costumer found a different way of producing what a company produce, as it can
be dangerous for the genuine company as it will get weak and threats its
profit. Customers will switch to
Prices/performances ratio of the substitute
The substitute benefits from an innovation
that improves satisfaction
The bargaining power of buyers
Buys are the organisation’s immediate customers, not necessarily the
If buyers are powerful, they can demand cheap prices or product/service
improvements to reduce profits.
Buyers are concentrated
Buyers have low switching costs
Buyers can supply their own inputs
power of suppliers
Supplier are those
who supply what a company need to produce the products or services.
If a company has
in its disposition many suppliers, it is then easy for them to switch to a
cheaper alternative. On the other hand,
if a company has few suppliers, the more the company will depend on them. Supplier power is likely to be high when:
· The suppliers are focused
· Suppliers bring an outstanding or rare input
· Switching coast are high
· Suppliers can combine forwards
5. Rivalry between competitors
Depending on how many competitors a
company face, how the quality of product and service rival with the
company. Competitive rivals are seen as
organisations that sell similar items or provide same services, and has for
target same audience than the company.
The degree of rivalry is increased when:
Competitors are of roughly equal size
Competitors are aggressive in search of power
The market is declining or mature
High fixed costs
Exit barriers are high
Low level of differentiation
yoghurt shop, holds good potential of being located in a busy shopping centre. It is certain that it has its faithful
costumers from workers of shopping centre, teenagers and young adults
frequenting the store as well as spreading words and mouth recommendations from
customers to customers. Once both
partners have achieved this step, Frank and Paddy, needs to really considerate the
concept of advertising and using promotional literature. As it could attract many more customers from
different location as it can also encourage to improve to bring more incomes.
On the other
hand, it is also very salient for Fra-Pas frozen yoghurt shop to take in
consideration to start using social media as it might be increasing the number
of customers walking in. The goals of
using social media would obviously be to create more awareness of the Fra-Pas
frozen yoghurt shop in furtherance of driving more individuals into their store
location. Furthermore, it is also an open
door for new opportunities. The images and articles that could be shared
through the social media for instance: Facebook, Twitter, Instagram, would
leave an idea in the audience’s mind. Frank Jones and Paddy Jackson, can then
have a control through advertising of how they want their customers and audience
to perceive their business.
Frank and Paddy
wishes to change their suppliers from the local Cash and Carry to an organic
farm. They wish to use fresher organic ingredients
in order to provide the customers healthier product which could bring a raising
in the cost. Frank and Paddy are
anxious about how this would affect their prices and margins and whether
potential customers would pay for this. In
that case Frank and Paddy could eventually keep their first suppliers Cash and
Carry and they could also invest with a small amount of product from the
organic farm as they need to introduce the new products to their customers. On the other hand, they would not be losing
and income as a result of the new suppliers from the organic farm as they would
be charging more.
Fra-Pas yoghurt shop, highly thinks about how they could please their customers
by offering them more choices while being quite worried about keep selling ice
cream during the cold winter. Chances
are the company can meet a great rise in the income when giving more choices to
the consumers. For instance, adding more
features into the menu, advertising hot drinks, warm pie, making sure all changing
made from the store would be updated on the social media.
Summary, Fra-Pas yoghurt is doing well in overall, although Frank Jones and
Paddy Jackson needs to review their business plan in terms of using another
route in favour of making more profit and introducing their business to a new audience
throughout advertising, Giving leaflets away outside the shopping centre. For instance, in the train stations. Furthermore, keeping their social media
updated with all news and any changing at any time in order to do be losing
time from the moment when a new product or new services came out.
Power Point, Week 11, from Introduction to Business.
Jean Murray, from The Balance.