Impact of Partnership on Business Growth

This assignment delves into the impact of partnership on the growth of a frozen yogurt business, considering both positive and negative effects. The analysis also examines the role of five forces in the market, including competition, bargaining power, threat of new entrants, threat of substitute products, and bargaining power of suppliers. Furthermore, the study investigates how macro environmental factors such as social, technological, and legal changes influence the business's success. By understanding these factors, entrepreneurs like Frank and Paddy can make informed decisions to improve their business.

Individual Report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Evaluation of the partnership:.................................................................................................1
2. Porters Five Forces..................................................................................................................2
3.Macro Environmental Factors..................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
This report is based on the case study about FRA-PAS FROZEN YOGHURT SHOP which
is owned by two business partners Frank Jones and Paddy Jackson who are willing to
expand their business. This report discusses about the challenges and the opportunities
which can come across while expanding the business. This assessment will also discuss
about the evaluation of the partnership between Frank Jones and Paddy Jackson, what are
the pros and cons of the partnership and how it will have impact on the expansion of
business (Auster and Choo., 2014). This report also discusses about the various forces that
are present in the market that will help in achieving the competitive advantage and also the
macro environmental factors that could help in improving the Yoghurt business.MAIN
BODY
1. Evaluation of the partnership:
Partnership may be defined as the formal arrangement in which two or more parties are
willing to manage and operate the business activities. Any type of the business in which two or
more than two individual’s money, skills and other resources are involved and involves the
sharing of profit and loss as per the terms and conditions of partnership agreement. Partnership is
a specific kind of the relationship that is formed by the agreement of two or more than two
individuals who carry the business as co-owners of the organisation. As Fra-Pas Frozen Yoghurt
shop is run by two partners Frank Jones and Paddy Jackson and they entered in the partnership
18 months ago (Fahey and King., 2015). Partnership have both positive as well as the negative
impact on the business of shop. The pros and cons of partnership can be explained as follows:
Pros:
1. large Resources: By entering in the partnership they have large resources available for
running and expansion of the business. They can bring more capital to the business by the
join efforts of the partners, this will help them to run the business smoothly and face the
challenges in future.
2. Flexibility: As the partnership is generally easy to form, easy to run and manage. As
Frank worked as chef and Paddy worked as the hospitality manager in local hotel so they
will be able to make their business mobile, elastic, flexible and also will make it free
from the legal restrictions in operating business activities. Frank and Paddy can make the
changes in the business in order to meet the changing circumstances as they both have
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experiences in two different sectors. They can run the business without the interference of
the shareholders. So, partnership will increase the flexibility of the business.
3. Shared Responsibilities: By entering in the partnership Frank and Paddy can share their
responsibilities of the business and can support each other in carrying out the business
operations and can take the decisions in the business as per their experiences.
4. Decision making: In partnership partners can share their decision-making process and
both can help each other when there is a need (Fish and Rudolph., 2015). They are the
two partners which means two brains will be working on the common problem so this
will increase the decision-making process of the business. Frank can take the decisions
easily related to the issues in his sector and Paddy can take decision related to the
management problems.
Cons:
1. lack of resources and capital: The partnership between Frank and Paddy can come to
end if they are facing shortage of resources and capital and lack funding from one partner
can effect the whole business. This partnership can also come to end if any of the partner
is willing to dissolve the partnership
2. Dispute among the partners: Dispute between the two partners will also have a
negative impact on the business. As they come from two different sectors which may
give rise to different issues in their partnership.
3. Liability: This partnership would subject to the unlimited liability i.e. each of the
partners have to share the liability and financial risks of the business this advantage can
be put off by the limited liability partnership.
2. Porters Five Forces
There are five force available for Fra-Pas Frozen Yoghurt shop in the market which can
be explained as
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Competitive Rivalry: Fra-Pas Frozen Yoghurt shop don't have a direct competitor present in the
market but it has got other competitors present in the industry as more and more companies are
willing to enter in the organic and natural food businesses this will prove to be potential rivalry
for the Fra-Pas Frozen Yoghurt shop in future (Hambrick., 2014). So the company is facing a
moderate competition in the market.
Threat of substitutes: Fra-Pas Frozen Yoghurt shop does not have any direct substitutes
available for the yoghurt in the market which is a competitive advantage for the shop. But there
are always threats available as other eaters and restaurants are quite capable of selling various
types of the ice-creams could pose a threat for the shop like it could face a threat from
Marshfield farm ice-cream which popular ice-cream parlour in UK. This threat is moderate for
the shop.
Threat of new entrants: Due to huge expansion in the food industry there is always a threat of
new entrants in the market as there are not many barriers that prevents from entering this
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business segment so this could pose threat for the business and it even does not require a huge
amount of the capital to enter in this segment. This threat is high in the market.
Bargaining power of buyers: As Fra-Pas Frozen Yoghurt shop specialises in selling of Yoghurt
and there are no direct substitutes available to the product so this will lower the bargaining power
of the buyer, but Frank and Paddy are planning for the expansion of the business this will more
product categories this will slowly increase the bargaining power of buyers. So the bargaining
power of buyer is high in the market.
Bargaining power of suppliers: Fra-Pas Frozen Yoghurt shop has many suppliers option
available which includes local, regional and national wholesalers and producers from which the
shop can buy their resources so this have decreased the bargaining power of suppliers for the
shop. So Fra-Pas Frozen Yoghurt shop's suppliers have low bargaining poer.
Fra-Pas Frozen Yoghurt shop can achieve the competitive advantage in the market by
analysing threat of new entrants in the market, by this force they can achieve the competitive
advantage by building the loyal customers for the shop. Fra-Pas Frozen Yoghurt shop can
achieve the competitive advantage from threats of substitutes by making the innovations in their
products which will keep the substitutes away from its products. Frank and Paddy can also keep
the bargaining power of suppliers in control which will help them in offering their product at
lower cost to the customers which will help in gaining the competitive advantage for the business
(Olsen, Murthy and Teare., 2014). By analysing competitive rivalry both the partners would
frame a strategies to make their product to stand out from their competitors which will help in
gaining the competitive advantage in the business. These forces will help them in earning the
attractive profits within the business by evaluating risk from uncertain factors. In accordance
with analysis ,it can be said that partners can make use of strategies -like cost leadership,
differentiation, focus, etc for standing out in competition. As per 5 forces it is outlined that
partners of ice-cream parlour style shop can focus on revising quality of services by
collaborating with premium regional suppliers (Individual Report, 2018). This will help the firm
in managing quality and uniqueness in its process and services. So these forces can prove an
important tool for gaining the competitive advantage for Fra-Pas Frozen Yoghurt shop.
3.Macro Environmental Factors
Facts of macro environment effects every business and it consists of many factors which
are important to check for the growth and sustainability of the business. Three major external
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environmental factors that will help in the growth of frozen yoghurt business are Social factors,
technological factors and Legal factors.
Social factors: Changes in Fast food trends are based upon what a consumer wants and
preferences. People of UK are becoming more educated about the food products and quality.
Society in modern era looks for the quality food which is major advantageous factor for growth
of the business of Frozen Yoghurt (Young and Cater III., 2016). As this business is already
popular in youngsters and teenagers so in order to attract different customer group Frank and
Paddy can market research which will helps in outlining individual preferences according to
culture, beliefs, lifestyle, etc. With the help of this partners can focus on potential improvement
areas of business when expanding. This can make the brand look more attractive and also
increase the quality of the product and this factor will help in the growth of the business.
Technological Factors: Technological factor can give Frank and Paddy a competitive
advantage in the business (Tolmay., 2017). Technology is important for packaging, to freeze the
yoghurt, making of food labels and also for the production of the products. So, this factor can
help in the growth of the frozen yoghurt business.
Legal factors: Legal factors have brought the changes in the food businesses. Major
legislation act which Frank and Paddy has comply in UK is Food Safety Act 1990 and it is their
responsibility to operate their business as per this act. So Frank and Paddy can be successful in
the business by complying on this act as this act ensures that the shop is serving quality food
products to its customers. increase the food quality and nutritive value of the Yoghurt which will
be a major factor to improve their business and also it is important for them to comply with the
legal changes to assure the growth of the Frozen Yoghurt business.
CONCLUSION
It can be concluded that partnership of Frank and Paddy have both positive and negative
impacts on the business but a better partnership can help in the growth and expansion of the
Yoghurt business. It is also concluded that the five forces that are present in the market can be
used by Frank and Paddy for growing their business and also will help in gaining the competitive
advantage in this business. It is also concluded that by studying the macro environmental factor
like Social, Technological and Legal factors that are present in the environment can also help
Frank and Paddy in improving Frozen Yoghurt business.
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REFERENCES
Books and Journals
Auster, E and Choo, C. W., 2014. How senior managers acquire and use information in
environmental scanning. Information Processing and Management. Vol. 30 No. (5).
pp. 607‐18
Fahey, L and King, W. R., 2015. Environmental scanning for corporate planning. Business
Horizons. Vol. (20). pp. 61‐71
Fish, M and Rudolph, P., 2015. The impact of changing conditions on international resort
returns: a case study in a developing country. International Journal of Hospitality
Management. Vol. (5). pp. 63‐9.
Hambrick, D. C., 2014. Environmental scanning and organisational strategy. Strategic
Management Journal. Vol. (3). pp. 159‐74.
Olsen, M. D, Murthy, B and Teare, T., 2014. CEO perspectives on scanning the global hotel
business environment”, International Journal of Contemporary Hospitality
Management. Vol. 6 No. (4). pp. 3‐9
Tolmay, A. S., 2017. The correlation between relationship value and business expansion in the
South African automotive supply chains. Journal of Transport and Supply Chain
Management. 11(1). pp.1-8.
Young, M. and Cater III, J. J., 2016. COMMUNITY INVOLVEMENT AND THE
HOMETOWN EFFECT: A FACTOR IN FAMILY BUSINESS EXPANSION
PATTERNS. Business Studies Journal. 8(2).
Online References
Individual Report. 2018. [Online]. Available Through <https://www.toppr.com/guides/business-
studies/forms-of-business-organisations/partnership-deed-and-registration/>
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