Macro Environmental Factors Analysis

This report provides an in-depth analysis of the macro environmental factors that impact Fra-Pa's Frozen Yoghurt business. The study identifies key factors such as government policies, customer purchasing power, social values and behavior, and technological advancements that influence the company's operations and success. By understanding these factors, Fra-Pa's can develop effective strategies to capture larger market share and maintain a competitive advantage in the industry.

CASE STUDY

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Partnership as a business’s type reference to Frank Jones and Paddy Jacksons Fra-Pa's Frozen
Yoghurt Shop..............................................................................................................................1
Porters 5 Forces to analyse Fra-Pa's Yoghurt business...............................................................2
Three of the Macro environmental factors..................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
In present report, a case study which has been given is of Frank Jones and Paddy Jackson
that have launched a new set up 'Fra-Pa's Frozen Yoghurt Shop' at Bullring Shopping Centre in
Birmingham, United Kingdom. Report will include, specific partnership style for running this
cafe. Porter's 5 Model. Lastly, three different factors have also been used for analysing the
market for creating right environment for chosen company.
MAIN BODY
Partnership as a business’s type reference to Frank Jones and Paddy Jacksons Fra-Pa's Frozen
Yoghurt Shop
'Fra-Pa's Frozen Yoghurt Shop' speciality is in frozen yogurt and have been an attraction
to both young children at day time for weekdays and teenagers, young adults enjoys ice-creams
which is being offered by them on weekends. Both the partners have equally contributed for
launching of this new business with a capital of £30,000 which secured the 3-year lease on a
shop and some working capital to ensure they can pay suppliers and have enough stock as well.
Fra-Pa's have been in dilemma related which strategy they should adopt like low price based
products or focus on quality which makes its products prices really very high in nature.
Through looking at the case study, both Frank and Paddy are following “General
Partnership” where both have equal rights to make determinations as per the requirements.
Since, both the owners (Frank and Paddy) have made equal capital contribution which is giving
them opportunity to share equivalent risks and returns as well on the investment that they have
made. Away with this, it has also been analysed that. On the other hand, if it is talked about
business organisations than there are ample number of companies consists with a distinctive type
on the basis of the their major aim (Burns and Dewhurst, 2016). Some of knowledge has been
provided related to this context underneath:
Private organisation: This sector mainly enclosed with firms that integrated or run by
common business person with a specific aim i.e. earning heavy profit margins. Companies that
are coming under this sector mainly consists with partnership or solo. Since, Fra-Pa's Frozen
Yoghurt Shop have been launched, this organisation is coming in this.
Public organisation: This is being considered as another kind of organisation which is
mainly funded and run by parliament of a nation. Here, Fra-Pa's is not coming under this because
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it is owned by two owners who were already working in two different companies. Here, it is
being found that government mainly runs these organisations but the contract can be given to
individuals as per requirements.
Voluntary Organisation: This type of organisation focuses on social activities and tries
to perform its operations without asking anything from the customers. Here, main aim of
company that is coming in this sector focuses upon raising living standards of individuals that
are in need or old age (Sutherland, 2014). Henceforth, Fra-Pa's is also not coming under this type
of business because, ice cream parlour which has been opened by Frank and Paddy is kept an
aim of earning profit through offering organic products to their customers. Mostly, these sectors
performs their services at vast level and do consists with ample number of partners which helps
in executing both long and short term plans and procedures as well.
Henceforth, these are different types of organisations that mainly consists with different
working conditions and with various perspectives as well.
Porters 5 Forces to analyse Fra-Pa's Yoghurt business
Since business environment of today's world consist with rapid changing nature. It has
become vital for organisations to look at macro environment. With the help of this, maximum
profit margins can be gained right on time because it can lead a firm to create various
competitive advantages. In present case, 'Fra-Pa's Frozen Yoghurt Shop' is being launched by
Frank and Paddy. Dilemma which was faced by the company was that, they should adopt low
pricing approach on their products or take in use of organic products which would aid them in
enhancing products and services in much effective and efficient manner (Aithal, 2016).
Here, Porter's Five Forces model has been used which was formulated by Michael Porter
in 1979 (Porter's Five Forces, 2018). Professor has mentioned that, organisations that are rapidly
trying to bring alterations, it has become vital for organisations to focus on their competitors and
try to analyse the strategies that has been made by them. In present context, five forces of
Porter's model is given beneath:
Competitive Rivalry: In present context, it is being analysed that since Fra-Pa's have kept
its focus on two different strategies where one is low pricing and other one is developing profit
margins as well, Therefore, in competitive market, it has become vital for Fra-Pa's to focus on
customers with aggressive price cuts and high-impact marketing campaigns (Harding, 2017).
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Supplier Power: Since, ‘Fra-Pa’s Frozen Yoghurt Shop’ have good capital for running
with heavy investments, it is being concluded that high number of suppliers could lead
organisation to lead its suppliers to increase their prices.
Buyer Power: As Fra-Pa's Frozen Yoghurt, its buyers mainly can be considered as some
of elements that can impact upon performance level of the company. Here, using organic
products and offering consumers with different tastes basically focussing upon taste, quality and
hygiene are some of reasons which could raise prices of its products. Therefore, it is required for
both Frank and Paddy to develop a strategy through which customers can be attracted for a
longer time frame.
Threat of Substitution. This is another factor, where consumers mainly finds a number of
ways that what needs to be done and what not. An example, can be taken is of a supplier where a
proper unique software product have been used for considering this process. Here, it is being
found that people mainly substitute whole process manually or by outsourcing it. Through this,
maximum benefits can be gained right on time.
Threat of New Entry. In present context, position of Fra-Pa's can be majorly gets
affected because of it's employees ability or because of new entry of different business
organisations in the same market (Thompson, 2017).
Henceforth, these are some of factors that needs to be considered while executing the
plan and they consists of external business environment. These elements plays a crucial role for
Fra-Pa's and here it could be analysed that, these elements could make or break a business
organisation (Argyris, 2017).
Three of the Macro environmental factors
Micro environment factors are play important role in improving the Fra-Pa's Frozen
Yoghurt business performance at market place. In this company needs to effectively analyse all
the Micro fact6ors so that they can easily improve their market share:
Political Factor: It has been observed that political factor is a major influential factor of
macro environment which impacts both positive as well as negatively over the growth of
company. In relation to Fra Pa's, it has been analysed that this ice cream parlour own favourable
political factors as they are following every law which is related to employees and their health
and safety. This helps the company in using organic ice cream flavours. As it attracts customers
to use healthy ice creams.
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Socio-culture factor: It is important for business organization to improve their
performance. Mainly it includes customers needs, society values and behaviour as well. In
context of Fra-Pa's Frozen Yoghurt business, they produce organic products to capture larger
market share. For attaining the same, company analyse customers needs and and wants towards
its offering (Hair and et. al., 2015). This will improve their positive image at market and
customers mind as well. In this, company also may enhance their customers base by service
quality and hygiene products to target customers as per their needs and wants. This may improve
the brand image at market and at the same time also established competitive advantage as well.
Economic Factor: It is also an important factor of environment in which Fra-Pa's Frozen
Yoghurt business needs to operate their activities as per customers purchasing power. Mainly it
includes GDP, sales tax, inflation, spending patterns and many more. All these factors are
important for the company to implement within their activities at the time of operate their
business. This will increase the chances of attaining future opportunities in which company can
easily capture larger market share. As Fra-Pa's Frozen Yoghurt business offer organic products
to customers that they have to analysis the customers purchasing power before providing the
same. By providing them quality services they can easily increase their market share and at the
same time also grab customers attention as well.
All these factors are important for company to make their brand image popular and
competitive as well. As these factors can make company image and break company image. Thus
company needs to effectively implement all the factors within their activities with the aim of
attaining success at market place (Chang, 2016).
CONCLUSION
With the help of above mentioned report, it is being concluded that macro environmental
factors are some of major elements which may lead an organisation to impact upon their profit
margins and could also lead a business company to develop issues as well. Here, it is required for
business firms to adopt right tools and techniques so that maximum benefits can be gained right
on time.
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REFERENCES
Books and Journals
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Sutherland, E., 2014. Lobbying and litigation in telecommunications markets–reapplying
Porter’s five forces. Info. 16(5). pp.1-18.
Aithal, P. S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems.
Harding, S., 2017. MBA management models. Routledge.
Thompson, J.D., 2017. Organizations in action: Social science bases of administrative theory.
Routledge.
Argyris, C., 2017. Integrating the Individual and the Organization. Routledge.
Chang, J. F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Hair Jr, J. F. and et. al., 2015. Essentials of business research methods. Routledge.
Online
Porter's Five Forces. 2018. [Online]. Available through:
<https://www.mindtools.com/pages/article/newTMC_08.htm>.
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