Evaluation of Partnership in Start-up Business: Fra-Pas Frozen Yoghurt Business in Birmingham

This paper evaluates the business partnership between the two owners of Fra-Pas Yoghurt business enterprise in Birmingham who both have previous work experience in hospitality sector. It also uses Porter’s Five Forces in order to analyse Fra-Pas Yoghurt business and further discuss three Macro environmental factors to understand Frozen Yoghurt business in Birmingham.

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Name of the Student:
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Introduction
Partnership in any form of businesses has been essentially an association between two or
more individuals who collaborate in order to set up business enterprise with a fundamental aim
of earning revenue (Lopez, Cauty and Guyomarc’h 2015). Individuals who work in partnership
have been typically regarded as “Partner and collectively as a business enterprise. Partners who
primarily offer the major proportion capital operate the business jointly and share business
liabilities equally (Eastham 2014). The following paper aims to evaluate business partnership
between the two owners of Fra-Pas Yoghurt business enterprise in Birmingham who both have
previous work experience in hospitality sector. In addition to this, the paper use Porter’s Five
Forces in order to analyse Fra-Pas Yoghurt business and further discuss three Macro
environmental factors to understand Frozen Yoghurt business in Birmingham.
Discussion
Evaluation of Partnership in Start-up business
In reference to the case of Fra-Pas Frozen yoghurt business both the owners have been
jointly contributing to the essential capital in order to execute the shop in utmost collaboration.
Additionally, according to Moulton (2017), there must be certain agreement between any start-up
business partners prior to the establishment of the business. Entrepreneurs have been drawing
great significance to “Partnership Deed’ which has efficiently laid down certain terms and
conditions for establishing and executing partnership firm (Sundara, Manez and Vieira 2014).
Furthermore, drawing importance to this agreement Frank Jones and his business associate,
Paddy Jackson have started its business underlying the provisions of the UK Partnership Act,
1890 which justifies business association as a relation between individuals who have mutually
agreed to share revenues and incomes of Fra-Pas frozen shop which would be carried on by all or

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any of the acting for all.
Significantly, one of the primary objectives of every business association relies on profit
sharing of business among its associates in the pre-decided proportion (Hegde and Tumlinson
2014). Evaluating the case of Fra-Pas frozen yoghurt it has been essentially noted that in any
absence of agreement for revenue sharing of the yoghurt shop, it should be sincerely is shared
equally among the partners. At this juncture, it is significant to note that Frank and Paddy have
put in £30,000, which protected the 3-year lease on a shop and other working resources in order
to guarantee payment to suppliers and comprise adequate amount of stock (Paton, Chia and Burt
2014).
Porter’s Five Forces Analysis
 Bargaining power of buyers- Purchasing power primarily depends on the structure of
market networks along with the product attributes. Reports of Hegde and Tumlinson
(2014) have stated that in Birmingham, the major distribution channels for dairy products
especially yoghurt is supermarkets with over 58.5percent of the total market value. The
market rivalry environment of the supermarkets is thus highly concentrated. Furthermore
according to Bocken (2015) the major grocery retailers in Birmingham aid multinational
companies with successive bargaining power. There can be found a non-vertical
integration between leading grocery retailers and dairy processes such as Fra –Paz frozen
yoghurt. Meanwhile as majority of supermarkets have been adopting unique promotion
tactics it can pose challenges to the market share of pro yoghurt (Paton, Chia and Burt
2014).
 Bargaining power of suppliers-The dairy processors have shown high dependence on
one vital raw material that is milk. Thus there can be identified no essential substitute

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imports for the dairy processing companies in Birmingham. However Validi,
Bhattacharya and Byrne (2014) have stated that several small dairy farms have recently
started to process on milk and produce similar milk products with increase value added or
even organic products for supply and distribution at local farmers market through
automatic milk vending machines and internet. These factors however have been
consequential for start-up milk processors and imply that supplier power in the dairy
industry in Birmingham to be relatively weak (Eastham 2014).
 Threat of substitute products-Milk and milk products especially yogurt have been
considered as vital components of an individual’s diet in Birmingham. Sanzo et al. (2015)
have noted that yoghurt have been essentially used directly or indirectly as ingredients for
homemade food. Thus there can be probability for consumers to shift away their
preference from conventional yoghurt to other form of vegetable alternatives like soya
milk coconut milk or Greek yoghurt. However the special alternative of yoghurt
primarily represent marginal market share in the Birmingham dairy industry. Furthermore
in the view of Paton, Chia and Burt (2014) yoghurt alternatives are conceptually costlier
in comparison to conventional yoghurt. These factors have signified that threats of
substitute yogurt products can be evaluated as relatively weak for Fra-Paz frozen yoghurt
to establish its business.
 Threat of new entry-In generalized view of Åstebro and Serrano (2015) yoghurt brands
entering into the dairy industry of Birmingham have the propensity to gain from
increased revenue turnover especially in comparison to primary sectors like agriculture
and mining as well as real estate activities. Furthermore according to Burns (2016)
branches comprise increased revenue turnover along with the comparatively declined

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profit margin which tends to have lower barriers towards entry than branches with high
profit margin and low revenue turnover. Nonetheless there can be identified certain high
obstacles to entry in the dairy industry of Birmingham amongst them the vital have been
recognised as the legal activities on food safety consumer loyalty to established brands of
leading yoghurt market players along with the contracting with grocery retailers and milk
suppliers (Hegde and Tumlinson 2014). Meanwhile in the view of Åstebro and Serrano
(2015), yoghurt has been mostly perishable which requires a high revenue rate,
dependable supply chain as well as distribution network. Subsequently there can be
observed considerately weak barriers towards entry for small yoghurt processes such as
entry for Fra-Paz frozen yoghurt aiming to sell products in the local market. Thus for new
yoghurt to obtain competitive advantage in Birmingham daily market must obey laws on
food safety and further set up consumer reliability in the region.
 Bargaining power of rivalries-The market of the Birmingham yoghurt has been
primarily led by major brands like Activia, Muller Crunch Corner which play highly
decisive role in the market. Reports of Hegde and Tumlinson (2014) have mentioned that
amongst these brands there can be observed a highly intense competition in terms of
price, value and brand loyalty as all of them have been proficiently offering diverse range
of yogurt with organic properties reclaimed by the market. Even though Fra-Paz frozen
yoghurt has been ensuring an improved quality product primarily produced with fresh
milk and without any preservatives, artificial ingredients or colorants factors which will
distinguish the company from other brands with its unique promotion and selling
strategies.
Macro Environmental factors to analyse Fra-Pas Frozen Yoghurt’s business ability

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 Political Factors- In recent times, the Birmingham dairy industry has been relying on the
modifications of the VAT set by the UK government. Shefsky (2014) has revealed that as
there is a propensity for the rate to be changed by 2019, such modifications would pose
impact on the consumer price of yoghurts and on the regularity consumers would
purchase this kind of products.
 Economic Factors- Economic aspects in the view of Åstebro and Serrano (2015) have
been considered as all the macroeconomics factors which can impact on the means
through which businesses operate in the food industry. However Validi, Bhattacharya and
Byrne (2014) have found that the consumer price of frozen products has increased by
around 4.3% in 2017 since the second quarter of 2016. Reports of authors have stated that
the increase of customer price has been essentially explicated by the instability of raw
materials prices which typically gets used to make frozen yoghurts such as ilk,
including milk solids and milk fats along with corn syrup, yogurt culture, gelatine,
emulsifiers and flavourings. The production cost of milk recently has been accounted to
be equivalent to around € 414.30 for 1000 liters and further reduces every year (Sundara,
Manez and Vieira 2014). For example, authors have observed that in 2017, it has reduced
by around 5.4% from 2016 (Moulton 2017).
 Technological factors- The yoghurt industry in Birmingham has been impacted by the
advance of powerful kitchen appliances, which efficiently permit individuals to create
products like ice-creams and frozen yoghurts at home. Sanzo et al. (2015) have
mentioned that the materialization of new machines with their high competence of setting
up built-in-freezing system has allowed consumers to successfully prepare frozen
yoghurts at the minimum time. Such form of modernization has been contrary to the

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former types of frozen yoghurt makers which has high capacity to threaten start-ups like
Fra-Pas frozen yoghurt shops operating in this dairy industry as the efficiency of Frank
and Paddy possibly will drive consumers to wait for only 30 minutes at home before
eating their ice cream instead of going out to purchase one.
Conclusion
Therefore from the above discussion it has been concluded that a business partnership
enterprise has been proficient to form and improve resilience level in its operation. Through
strategic and successful business association Fra-Pas will be able to drive its resources and
formulate their optimum consumption by captivating superior decisions. These factors however
will consequently defend the importance of each and every partner and gets advantage out of the
focused awareness and expertise of individual partners.

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