Introduction to Business AssignmentTwo:Case study: Fra-PasFrozen Yoghurt shop The following case study, will provide abrief profile about how the Fra-Pas frozen yoghurt business is running, how thecompany can improve its relationships with suppliers and customers. This case study will be divided in three differentparts. Firstly, the report will discussthe different types of partnership business organisations, follow by the Porter’sfive forces to analyse the business and then will discuss any three of themacro environmental factors in order to improve the frozen yoghurt business.
Frank Jones and Paddy Jackson, both partnersof the Fra-Pas frozen yoghurt shop business, their store is located in the busyBullring shopping centre in Birmingham. Frank Jones was working as a chef in a large contract cateringrestaurant chain and Paddy as hospitality manager of a local hotel. Both decided to set up the business byinvesting thirty thousand pounds each, securing the three years lease on ashop. The Fra-Pas frozen yoghurt shop employstwo full-time members of staff from Monday to Sunday (10am-8pm), it alsoincludes two part-time members for the week-end as it gets very busy due to thevolume of shoppers using the shopping centre. Attracting workers of the area, Fra-Pas frozen yoghurt shop is tendedfor meeting place frequenting by teenagers and young adults. Frank Jones and Paddy Jackson both shares a partnershiptype as a business.
A partnership, which is a shared business between severalpartners whom owns part of the company. Relationships between duties and business partners areclarified in the partnership agreement.Based on the percentage share of partnership, they also shareprofits and losses, as well as they all invest into the business. As it has also been found out by Jean Murray writer ofthe article “Selecting a Business Partnership Type” from The Balance, here aresome different types of partnerships: · GeneralPartnership: A general partnership is running withgeneral business partners whom takes part in the management of the business aswell as taking responsibilities for any liabilities of the company. If one business partner is being sued, allbusiness partners should be held liable. · LimitedPartnerships: Bothgeneral partners and limited partners are included in a limitedpartnership.
It does not get involveswith day-to-day management of the partnership. Not to mention, their liability is limited. The limited partners are mostly investors, andthey do not desire to get involves into the partnership excluding investing orproving as well as collecting share from any profits.
· LimitedLiability Partnerships (LLP): Clarified different from the otherspartnership business types, but relatively stay closer to a Limited Liability Company(LLC). In that case, it is found that anybusiness partner of LLP has their liabilities to be limited. A limitedliability partnership associate characteristics of partnerships withcorporations. About corporation, anybusiness 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 thecompany gets involves in illegitimate and negligent acts would personally beliable while the others business partners would be protected from other’swrongful acts. “All partnershipsare consisted of partners who have come to an agreement to run a businesstogether, any involves partner will invests into the company”byJean Murray, from The Balance. This following tool (Porter’s five forces) was created byHarvard Business School in furtherance to analyse the attractiveness and the performanceof businesses. Published in 1979, it is in fact the most popular regarding the businessesstrategy. 1.
The threat of Entry & Barriers to EntryThe threat of entry is low when the barriers to entry are high and viceversa. Any business position can beaffected 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 instancelicensing 2. Threat of Substitutes Substitutes are products or services that offer a similar benefit to a company’sproduct or services, from a different process. For instance: likelihood acostumer found a different way of producing what a company produce, as it canbe dangerous for the genuine company as it will get weak and threats itsprofit. Customers will switch toalternatives: · Prices/performances ratio of the substituteis superior · The substitute benefits from an innovationthat improves satisfaction 3. The bargaining power of buyers Buys are the organisation’s immediate customers, not necessarily theultimate consumers.
If buyers are powerful, they can demand cheap prices or product/serviceimprovements to reduce profits.· Buyers are concentrated· Buyers have low switching costs· Buyers can supply their own inputs 4. The bargainingpower of suppliers Supplier are thosewho supply what a company need to produce the products or services.
If a company hasin its disposition many suppliers, it is then easy for them to switch to acheaper 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 acompany face, how the quality of product and service rival with thecompany.
Competitive rivals are seen asorganisations that sell similar items or provide same services, and has fortarget 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 Fra-Pas frozenyoghurt shop, holds good potential of being located in a busy shopping centre. It is certain that it has its faithfulcostumers from workers of shopping centre, teenagers and young adultsfrequenting the store as well as spreading words and mouth recommendations fromcustomers to customers.
Once bothpartners have achieved this step, Frank and Paddy, needs to really considerate theconcept of advertising and using promotional literature. As it could attract many more customers fromdifferent location as it can also encourage to improve to bring more incomes. On the otherhand, it is also very salient for Fra-Pas frozen yoghurt shop to take inconsideration to start using social media as it might be increasing the numberof customers walking in. The goals ofusing social media would obviously be to create more awareness of the Fra-Pasfrozen yoghurt shop in furtherance of driving more individuals into their storelocation. Furthermore, it is also an opendoor for new opportunities. The images and articles that could be sharedthrough the social media for instance: Facebook, Twitter, Instagram, wouldleave an idea in the audience’s mind.
Frank Jones and Paddy Jackson, can thenhave a control through advertising of how they want their customers and audienceto perceive their business. Frank and Paddywishes to change their suppliers from the local Cash and Carry to an organicfarm. They wish to use fresher organic ingredientsin order to provide the customers healthier product which could bring a raisingin the cost. Frank and Paddy areanxious about how this would affect their prices and margins and whetherpotential customers would pay for this. Inthat case Frank and Paddy could eventually keep their first suppliers Cash andCarry and they could also invest with a small amount of product from theorganic farm as they need to introduce the new products to their customers.
On the other hand, they would not be losingand income as a result of the new suppliers from the organic farm as they wouldbe charging more. TheFra-Pas yoghurt shop, highly thinks about how they could please their customersby offering them more choices while being quite worried about keep selling icecream during the cold winter. Chancesare the company can meet a great rise in the income when giving more choices tothe consumers. For instance, adding morefeatures into the menu, advertising hot drinks, warm pie, making sure all changingmade from the store would be updated on the social media. InSummary, Fra-Pas yoghurt is doing well in overall, although Frank Jones andPaddy Jackson needs to review their business plan in terms of using anotherroute in favour of making more profit and introducing their business to a new audiencethroughout advertising, Giving leaflets away outside the shopping centre. For instance, in the train stations. Furthermore, keeping their social mediaupdated with all news and any changing at any time in order to do be losingtime from the moment when a new product or new services came out. Listof References:-Power Point, Week 11, from Introduction to Business.
-Jean Murray, from The Balance.