Fra-Pas Frozen Yogurt: Business Analysis for UWL IBT Module

This report provides a comprehensive analysis of Fra-Pas Frozen Yogurt, a business venture by Frank and Paddy. It evaluates their general partnership structure, highlighting its advantages and potential disadvantages, and suggests exploring options like Limited Liability Company (LLC) for long-term sustainability. The report also conducts Porter's Five Forces analysis to assess the competitive landscape, identifying challenges related to new market entry, existing competition, supplier power, buyer power, and the threat of substitutes. Key solutions for achieving competitive advantage are proposed, including cost-effective advertising, product diversification, and balancing quality with price. Furthermore, the report examines macro-environmental factors such as demographic, economic, and technological forces influencing the business, emphasizing the importance of adapting to market trends, managing costs, and leveraging social media for promotion. This analysis aims to provide insights for Fra-Pas to enhance its market position and ensure long-term success.

Running head: MANAGING A BUSINESS OF FROZEN YOGURT
Managing a Business of Frozen Yogurt
Name of the university
Name of the student
Author note

1MANAGING A BUSINESS OF FROZEN YOGURT
Executive summary
This report has focused on the case study of Fra-Pas frozen yogurt business in order to
understand crucial areas of partnership types. Further, porters’ five forces analysis has been
conducted to evaluate company’s potential to compete, sustain and accomplish goals of
longer terms. This report has also discussed three macro environmental factors for improving
the business. The entire discussion revolves recent trend of food industry and the way Fra-Pas
frozen yogurt shop is trying to capture market value by addressing the same. It has been
found that being comparatively new to the industry, although they are successful in
acknowledging customer demand yet they need to improve promotional techniques, culture
of innovation and investment policies in order to ensure long-term sustainability within
competitive business environment.

2MANAGING A BUSINESS OF FROZEN YOGURT
Table of Contents
Overview of the case study............................................................................................3
Evaluate partnership as a business type: Fra-Pas Frozen Yogurt Shop.........................3
Porter’s five forces analysis...........................................................................................4
Key solutions to achieve competitive advantage...........................................................6
Macro environmental factors for improving business...................................................7
Demographic forces...................................................................................................7
Economic forces.........................................................................................................7
Technological forces..................................................................................................8
References......................................................................................................................9

3MANAGING A BUSINESS OF FROZEN YOGURT
Overview of the case study
The entrepreneurs of Fra-Pas Frozen Yogurt business, Frank and Paddy, are aware of
potential low rate of sales during months of winter. Although, they never fail to meet market
trends yet this concern has made them think for product diversification. Acknowledging the
tendency of youngsters they are trying to provide healthy, fat free yogurt made from organic
material. In this due course, they cannot meet the expectation of low price and if they try to
meet that criteria they cannot provide premium quality. Therefore, two central issues has
been identified which are as follows. At first, they are facing issues to balance quality and
price and secondly, the sales target cannot be achieved without diversifying the products into
some healthy alternatives. In addition to that, market is highly competitive.
Evaluate partnership as a business type: Fra-Pas Frozen Yogurt Shop
Being experienced in Hospitality sector both Frank and Paddy have created a unique
balance between taste and how the taste must be served. They contributed the same amount at
initial stage to gather basic capital of business. As stated in Iyer (2013), co-owning a business
is quite normal and the case study is an example of general partnership where both of them
came together to carrying out equal responsibilities in terms of business and its legal
boundaries too. The advantage they have is to return the tax at lower rate as profit amount has
been divided between them equally like liability. Considering the case study, their partnership
cannot be considered neither as limited partnership nor as limited liability partnership
business. On one hand, limited partnership requires a partner with unlimited liability and the
other one signs a contract for a limited duration whereas, limited liability partnership offers
limited liability to each owner along with equal protection from financial and legal risks. This
can be called a combination of both general partnership and co-operative business.

4MANAGING A BUSINESS OF FROZEN YOGURT
The reason of being an example of fifty-fifty partnership is, Fra-Pas does not have any
prior experience on business field and the case has not mentioned any legal boundaries or
contract between them. Therefore, Fra-Pas can easily convert their type of partnership to a
corporation or explore the opportunity of upgrading the business in a Limited Liability
Company (LLC) to ensure long term sustainability of both the business and partnership too.
The reason they have started business based on food and agro industry, is evident from their
professional history. Much like the theory stated in Ng, Ding and Yip (2013), they have
evaluated few criteria before choosing the correct business partner and eventually, become
successful at it. As both of them are form hospitality sector; more precisely Frank used to be
a chef and Paddy used to serve as hospitality manager at local hotel; it made the business
process easier in terms of identifying the market trend and managing the logistics.
The advantages they receive out of this partnership are 1) liability has been divided
according to prior responsibility, 2) as discussed in Vomberg, Homburg and Bornemann
(2015) success rate increases due to availability of more monetary along with varied human
skills and efficiency, 3) legal structure and tax return have become easier as it can be divided
between them. Besides, disadvantages they might face in the long run are 1) decision making
would take time as two of them may disagree at some points occasionally. Yet, being like-
minded and having same interest can help them to avoid such opposing counters, 2) problem
will occur if one of them wishes to leave the business and his partner. That is why Fra-Pas
must consider the plan of converting their company into a LLC.
Porter’s five forces analysis
 New market entry: Entering into a frozen yogurt market or ice cream industry will be
highly competitive for the newcomers at initial stage as there are numerous entry
barriers. The cost of establishing production facilities and freezers along with

5MANAGING A BUSINESS OF FROZEN YOGURT
maintaining the quality. Home-made and high pricing yogurts with natural ingredients
can be a good strategy to enter yet the profit margin can be lower due to its premium
segmentation. According to Dibrell, Craig and Neubaum (2014), not only the higher
cost but also high product diversification, culture of innovation are the reasons behind
facing difficulty while entering into the ice-cream market.
 Existing competition: Premium and traditional ice cream brands offer various
flavours and targets different communities and segmentations. As they are more
powerful in terms of resources they can comply with industry regulations, catch
attention of public with advanced ways of advertisement, and have brand recognition
along with large variety to offer from. Therefore, as discussed in Tsimonis and
Dimitriadis (2014), competition will be difficult for Fra- Pas without cost effective
promotional techniques in social media, wide range of offerings and ability to address
the market trend.
 Suppliers’ power: Food industry has high safety regulations to maintain in terms of
packaging and freshness. Suppliers’ power is higher as there is consistence need of
supplying quality yogurts. Large and established dairies conquer strength as they are
major driver of boosting quality. In order to assure packaging safety guides
companies have to maintain trust worthy relationship with such sources. The power is
moderate as there are numerous suppliers in market as it is hard to find good quality
organic materials and dairy products.
 Buyers’ power: Definition of brand loyalty has changed due to economic crisis when
it comes to consumption of healthy desserts. Ice creams and yogurts are not
something people eat as necessity. Being a part of shopping centre, most of the people
come in weekends. Therefore, it varies according to different tastes, economic
background, occasions and many more.

6MANAGING A BUSINESS OF FROZEN YOGURT
 Threat of substitute: Frozen yogurt is the substitute of ice cream. However, according
to Vadiveloo et al. (2014), as within a market where fitness concern is increasing and
in severe winters people do not really crave these frozen products the company needs
to think for product divarication too in order to get replaced by some other products.
Established brands and local cash and carry companies may replace yogurt recipes
due to their low pricing strategy.
Key solutions to achieve competitive advantage
i. Fra-Pas must secure their position as a new comer first before combatting the
competition against other new entrants. In order to build a competitive edge against
the existing ice cream and dessert companies with higher brand recognition they have
to find out ways of creating market value first through cost effective mode advertising
that would be impactful too Verhoef and Lemon (2013). As discussed in Nestle
(2013), with limited resources whatever a company can offer that must address recent
market trend of healthy consumption as Fra- Pas has done by serving healthy frozen
yogurt rather than sweetened favoured ice creams.
ii. Besides, to crack the barrier and gain competitive advantage against existing brands
the company needs to diversify their product range gradually for attracting different
taste buds (Urbancova 2013). People will recognise them not for serving healthy
alternatives of desserts only but for serving quality organic ingredient infused yogurts
as well. It will make them strong as a new brand and give them potential to fight
existing premium quality brands as well.
iii. According to Rosli and Sidek (2013), small firms like Fra-Pas can conquer the
buyers’ attention not only by effective promotions but also differentiating their brand,
flavour innovation and restricting amount of calorie. They have to be conscious

7MANAGING A BUSINESS OF FROZEN YOGURT
enough while addressing the customers’ preferences and ability to increase their
buying power.
iv. In order to combat substitution issues they have to create a balance between perceived
quality and price. Being a small firm, maintaining trustworthy relationship with more
than five suppliers would be wise to avoid high investments during economic crisis.
Macro environmental factors for improving business
Demographic forces
While discussing the case study, two major issues have been identified in the first
place. Among those two the second one can be mitigated by correct identification of
demographic forces and addressing the market needs properly. Bullring shopping centre is
mostly crowded on weekends as compared to weekdays. As there is no other frozen yogurt
shop, opportunity of attracting customers is easy yet the treatment of addressing their various
concerns is difficult. Most of the people coming to have this dessert are with children
otherwise presence of teenager groups are increasing from different community. Following
the study of Neumark-Sztainer et al. (2013), the business can improve and sustain
competitive advantage over ice cream brands by acknowledging trend of fitness, migration
among people of all age group. They have to conduct market oriented research to recognise
their choice of dessert during winters and according to that product line demands
diversification to avoid fallen profit margin.
Economic forces
Current economic crisis has been working as restriction in front of people’s desire to
shop for their pleasure. Ice cream cannot be a product of necessity yet recipes of frozen
yogurt if curated infusing healthy and organic ingredients it can make a place in list of regular
consumption. People who think being healthy is not luxury, they will definitely consume and

8MANAGING A BUSINESS OF FROZEN YOGURT
advice to consume such products. However, the challenge is to avoid providing flavoured
yogurts in low price instead of serving organic yogurts of premium quality. As per the study
of Rao et al. (2013), as people prefer to have quality food at affordable range Fra-Pas needs
to research the ways to keep a balance between price and quality consulting with chefs and
food technologists.
Technological forces
As mentioned before, extraordinary investment is needed for managing logistics as
frozen food products must be stored within high performance freezers. Therefore, resources
must be invested to improve technical dimension of facilities and logistics department.
Moreover, following the trend of social media marketing Fra-Pas can create an effective yet
cost friendly way of promoting the brand and enjoy higher brand recognition.

9MANAGING A BUSINESS OF FROZEN YOGURT
References
Dibrell, C., Craig, J.B. and Neubaum, D.O., 2014. Linking the formal strategic planning
process, planning flexibility, and innovativeness to firm performance. Journal of Business
Research, 67(9), pp.2000-2007.
Iyer, E., 2013. Theory of alliances: partnership and partner characteristics. In Nonprofit and
Business Sector Collaboration (pp. 48-64). Routledge.
Nestle, M., 2013. Food politics: How the food industry influences nutrition and health (Vol.
3). Univ of California Press.
Neumark-Sztainer, D., Wall, M., Fulkerson, J.A. and Larson, N., 2013. Changes in the
frequency of family meals from 1999 to 2010 in the homes of adolescents: trends by
sociodemographic characteristics. Journal of Adolescent Health, 52(2), pp.201-206.
Ng, I.C., Ding, D.X. and Yip, N., 2013. Outcome-based contracts as new business model:
The role of partnership and value-driven relational assets. Industrial Marketing
Management, 42(5), pp.730-743.
Rao, M., Afshin, A., Singh, G. and Mozaffarian, D., 2013. Do healthier foods and diet
patterns cost more than less healthy options? A systematic review and meta-analysis. BMJ
open, 3(12), p.e004277.
Rosli, M.M. and Sidek, S., 2013. The Impact of Innovation on the Performance of Small and
Medium Manufacturing Enterprises:: Evidence from Malaysia. Journal of Innovation
Management in Small & Medium Enterprises, 2013, p.1.
Tsimonis, G. and Dimitriadis, S., 2014. Brand strategies in social media. Marketing
Intelligence & Planning, 32(3), pp.328-344.

10MANAGING A BUSINESS OF FROZEN YOGURT
Urbancova, H., 2013. Competitive advantage achievement through innovation and
knowledge. Journal of Competitiveness, 5(1).
Vadiveloo, M., Scott, M., Quatromoni, P., Jacques, P. and Parekh, N., 2014. Trends in dietary
fat and high-fat food intakes from 1991 to 2008 in the Framingham Heart Study
participants. British Journal of Nutrition, 111(4), pp.724-734.
Verhoef, P.C. and Lemon, K.N., 2013. Successful customer value management: Key lessons
and emerging trends. European Management Journal, 31(1), pp.1-15.
Vomberg, A., Homburg, C. and Bornemann, T., 2015. Talented people and strong brands:
The contribution of human capital and brand equity to firm value. Strategic Management
Journal, 36(13), pp.2122-2131.