Business and Management

This report analyzes Fra-Pa's Frozen Yoghurt Shop, a partnership firm that specializes in frozen yogurt. The report includes a macro environment analysis of Birmingham, UK, and Porter's 5 force model. The report also discusses the pros and cons of partnership firms and how to gain a competitive advantage.

Running Head: BUSINESS AND MANAGEMENT 0
BUSINESS AND MANAGEMENT
(student name)
12-9-2018

BUSINESS AND MANAGEMENT 1
Contents
Introduction......................................................................................................................................2
Partnership firm...............................................................................................................................3
Macro environment analysis............................................................................................................5
Porters 5 force model.......................................................................................................................7
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

BUSINESS AND MANAGEMENT 2
Introduction
This report discusses upon “Fra- Pa’s Frozen Yoghurt Shop,” case to study the type of business
organization, and how a company competes and sustain within the industry, and how Marco
environmental factors influence business. This yogurt shop was a startup, which initiated
eighteen months ago, established by Paddy Jackson and Frank Jones. The business presented like
an ice cream parlor, including product specialty as frozen yogurt. The place, where this shop
located is a populous shopping center of Bullring in Birmingham (Ho, 2014).

BUSINESS AND MANAGEMENT 3
Partnership firm
There are many types of business organizations like a sole proprietorship, partnership, private,
and public company. Considering Fra and Pa’s shop, it is a partnership firm. Partnership firm is a
business that is owned by more than one individual; with the name of “firm name.” It is not
considered as a separate entity different from its partners that are members. The features of the
partnership firm, that are also observed for Fra- Pa’s yogurt shop include:
 A number of people – the number of people to run a partnership firm is more than one
person. In this case, there are two-parters involved
 Contractual relationship – the partnership firm is created with the legal relationship,
either in the written or oral agreement between the two in this case.
 Profit and loss sharing – in the partnership business, the profit and loss of the company
are shared according to the percentage of share in the firm. In this case, it can be said that
both the partners are equal sharing in the firm, whether it is profit or loss scenario
 Restriction on transfer of shares – the shares of any one partner cannot be transferred to
any outsider without another consent
 Unlimited liability – the liability of partners are not limited to the firm, as in the case of a
company (Lee & Oh, 2017)
This yogurt partnership shop has various pros and cons. Here, Pros of being a partnership firm
for Fra- Pa’s shop are
 Ease of formation – forming a partnership firm was not very difficult, considering
Birmingham legal authority.

BUSINESS AND MANAGEMENT 4
 Capital enlargement – instead of a single person, two individual are involved in this form,
which leads to an increase in capital, because both of them introduce capital to the firm.
 Combination of skill – both the individual have a different set of skills and talent, for
example, one being chef has cooking talent, and another being hospital manager, consist
of skills to manage things within the firm.
 Diffusion of risk – since two individuals are involved, the risk to the firm is distributed,
and have mutual support on one another (Von, 2014)
Cons of the same include:
 Unlimited liability – like the company, the liability is not limited to the firm, it is
unlimited for Frank and Paddy
 Divided authority – the authority is divided among the two individual with a different
perspective, this could lead to conflict among the two
 Delay in decision making – since the decision is unanimous for both the individuals, this
may take time, and lead to delayed decision making
 Risk of implied authority – this is the major disadvantage is that the authority is implied
and if one incompetent person among the two can take wrong decision for the whole firm
(Course, 2015).
Macro environment analysis
The factors to study the macro environmental analysis of Birmingham for Fra- Pa’s to improve
the business of frozen yogurt are:

BUSINESS AND MANAGEMENT 5
1. Socio/ Cultural factors
These factors included the social and cultural factors exist in the external environment in
the Birmingham city of United Kingdom. These factors are very vital when it comes to
the food industry because of it, the culture that influences residents to perceive the taste
and preference of customers. Some aspect of these factors includes:
 Busy lifestyle – a lifestyle of UK residents are very busy, the impact of this aspect
leads to an increase in the use of ready to eat food. The organization can offer attractively
packed yogurt to attract most people with a busy lifestyle
 High health awareness – people of UK are very much aware of healthy products, and
ingredients. Therefore, it becomes essential for the organization to provide the best
ingredients that are beneficial to an individual health also
 Obesity level – obesity level in the UK is very high, due to which Fra- Pa’s while
providing health conscious a product, which will be helpful for the organization to gain
market. moreover, through this aspect, the organization can target people who are gaining
weight and like to have ice-cream or some flavored dishes without gaining weight
 Increased consumer spending – the spending has been increased to a large extent,
which can be advantageous for the organization to target residents. People have become
more interested in the entertainment fields like movies in the theater, sports club, and
various other places that are most visit. To gain opportunity from this aspect, the
organization has to ensure the product availability at these place to attract more
customers (Forster, et al., 2018)
2. Technological factors

BUSINESS AND MANAGEMENT 6
 Flavor innovation – considering technology, people are interested in experimenting and
trying a new flavor, which is also necessary for the firm to improve their products,
and improvising taste of the yogurt
 Ingredients – as already discussed the ingredients must be healthier, as the product is
yogurt, which is consumed by the customer to healthier food. Therefore the firm
should introduce healthy ingredients, targeting different flavors for different age
groups. For example fresh fruit flavors for kids, strawberry, mango, chocolate flavors,
and some flavors like avocado, Aloe Vera, and various another flavor for old age
consumers as well (freepestelanalysis, 2018)
3. Economic factors
 The decrease in inflation rate – in the UK the inflation rate tends to decrease, which
will eventually increase the willingness of residents to spend more. This could be
the best time to target customers for yogurt that firm wishes to offer. Moreover,
the brand needs to get awareness, for which Fra- Pa must promote and market
their products.
 Cash-strapped consumers – for the price sensitivity of customer, it is better for the firm
to offer goods at less price than those of competitors to attract more customers
(Read, 2013)
Porters 5 force model
1. Rivalry among industry – the yogurt industry is very large in the UK, and major
competitors include Muller, Onken, Activia, Yeo Valley, Actimel, and many more. The
firm has to bring innovation in products to gain a competitive advantage (dairyreporter,
2018)

BUSINESS AND MANAGEMENT 7
2. The threat of substitute – this is the major force that will influence the firm operations
because the substitutes for the products include ice cream and various other dairy
products. which can take customers. For this, the firm needs to attract more and more
customers, but retaining those customers are more crucial (Utami, 2014).
3. The threat of new entrants – entering into this market is not difficult in this industry,
which is beneficial for the firm, as there are no restrictions while investing in this market.
nevertheless, this can be challenging as well, because any new firm can enter into the
market with more innovation in the future, which will eventually become the competitor
(Harding, 2017)
4. Bargaining power of buyers – since the competition is high, and shifting from one brand
to another is easy for the customers, the power goes in hands of buyers and the firm has
to offer the products within competitive prices only. This factor could be handled by
providing the best quality product, and best taste that no other firm can beat. If product
differentiation is done by the firm, it would be possible to keep their prices high even in
the competitive market (Ogutu & Mathooko, 2015)
5. Bargaining power of supplier – this aspect is in the favor of the Fra- Pa, because the
ingredients that are used are available through a number of suppliers, and shifting from
one supplier to another is not very difficult for the firm. This is the reason that the ball is
in a court of the firm and not the suppliers, due to which the firm can minimize the cost
of the product while improving the profit margin in each product. Therefore, bargaining
power is not with a supplier in this case. The firm can select the best supplier considering
price, but most importantly considering the quality of ingredients to create the best
product out of it and serve the customers (Dobbs, 2014)

BUSINESS AND MANAGEMENT 8
Conclusion
To conclude through this report, it can be said that FRA- PA’s frozen yogurt shop, is offering
yogurt to the residents of Birmingham. The location to offer the product was the Bullring
Shopping Centre. The firm is specialized in frozen yogurt of different flavors. The type of
business that the organization is working was a partnership firm, where two people work
together for equal profit and loss. UK macro environment was analyzed and the social factors
included busy lifestyle, high health awareness, obesity level, and increased consumer spending.
Technical factors were flavor innovation, and ingredients. Moreover, while analyzing
competitive industry through Porter's five-force model, Fra – Pa’s can achieve competitive
advantage.

BUSINESS AND MANAGEMENT 9
References
Course, U., 2015. Department of Commerce. Computer, Volume 6, p. 7.
dairyreporter, 2018. Top-10-UK-Yogurt-Brands-Mueller-dominates-Danone-dwindles. [Online]
Available at: https://www.dairyreporter.com/Article/2013/08/30/Top-10-UK-Yogurt-Brands-
Mueller-dominates-Danone-dwindles
Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), p. 32.
Forster, J., Gill, R. & Dunn, M., 2018. Public attitudes towards “pest” management: Perceptions
on squirrel management strategies in the UK. Biological Conservation, Volume 222, p. 52.
freepestelanalysis, 2018. Pestle of dairy. [Online]
Available at: https://freepestelanalysis.com/pestelpest-of-dairy-industry/
Harding, S., 2017. MBA management models. London: Routledge.
Ho, J., 2014. Formulation of a systemic PEST analysis for strategic analysis.. European
academic research, 2(5), p. 6478.
Lee, J. & Oh, Y., 2017. When do firms enter a repeated partnership? The effect of contract terms
and relative partner characteristics. Management Decision, 55(10), p. 2237.
Ogutu, M. & Mathooko, F., 2015. Porter’s five competitive forces framework and other factors
that influence the choice of response strategies adopted by public universities in Kenya.
International Journal of Educational Management, 29(3), p. 334.

BUSINESS AND MANAGEMENT 10
Read, G., 2013. A political, economic, social, technology, legal and environmental (PESTLE)
approach for risk identification of the tidal industry in the United Kingdom. Energies, 6(10), p.
5023.
Utami, R., 2014. Development competitiveness model for small-medium enterprises among the
creative industry in bandung. Procedia-Social and Behavioral Sciences, Volume 115, p. 305.
Von, A., 2014. Does the emergence of publicly traded professional service firms undermine the
theory of the professional partnership? A cross-industry historical analysis. Journal of
Professions and Organization, 1(2), p. 137.