BUSM 4850

Individual Assignment

Instructor: Dr. Ivan Surjanovic

Spring 2017

Student Name: Ying DONG Student ID: 100275899

Date: 6 Feb 2017

TableofContents

Introduction...........................................................................................................................3

Section1:ExternalandInternalAnalysis................................................................................31.1 ExternalAnalysis:.................................................................................................................3

1.1.1 PESTELAnalysis......................................................................................................................31.2 IndustryLifeCycle..................................................................................................................71.3 Porter’sFiveForcesAnalysis.................................................................................................8

1.2 InternalAnalysis:.................................................................................................................81.2.1 Valuechain.............................................................................................................................81.2.2 MarketingMix......................................................................................................................11

Section2:VisionandMissionStatementAnalysis.................................................................132.1Visonstatement.......................................................................................................................132.2Missionstatement....................................................................................................................13

Section3:SWOTAnalysisandSWOTstrategymatrix.............................................................143.1SWOTAnalysis..........................................................................................................................14

Strengths...........................................................................................................................................14Weaknesses.......................................................................................................................................15Opportunities....................................................................................................................................15Threats..............................................................................................................................................15

3.2SWOTstrategymatrix...............................................................................................................16

Introduction

Yogen Früz is a Canadian store that produce frozen yogurt and smoothie. Their product

combines the frozen yogurt and fresh fruit together and allows customer to create their own

flavor. The first store opened in August, Promenade Mall, Thornhill (Toronto), Ontario, Canada

in 19861. After that, the brand developed very fast and opened 50 locations in its first two years.

The target customers for Yogen Früz are young people that ages 25-35. In this paper, there will

be three section: external and internal analysis, vison and mission statement, SWOT analysis and

SWOT strategy matrix. To specific the analysis, this paper will be focus on Yogen Früz in

Canada.

Section 1: External and Internal Analysis

1.1 External Analysis:

1.1.1 PESTEL Analysis

1.1.1.1 Political (threat and opportunity)

Public health policy discourages people to purchase unhealthy fast foods, especially for

school kids. It is an opportunity for the Frozen yogurt industry because frozen yogurt is a healthy

dessert food and recommend by nutritionist.

1.1.1.2 Economic (opportunity)

Positive global economic changing influences the frozen yogurt industry environment. The

industry is encouraged to expand its global plan. For this paper, the focus is about Yogen Früz in

Canada area, therefore, positive economic in Canada will help the company to grow in a stable

way.

1 1 YogenFrüz, “History”, accessed February 4, http://www.yogenFrüz.com/about-us/history/

1.1.1.3 Social

Health Trend. (opportunity)

People start to care more about health lifestyle and desire for fresh, healthy food. Therefore,

foods with high sugar become less popular recently. Because frozen yogurt is one of the healthy

options in the market, it becomes popular these days. Furthermore, the frozen yogurt is not only

having different favors options but also adding health ingredients in the products, such as fresh

fruits, dairy-free sorbets and probiotics. Therefore, people start to make healthier choices by

choosing frozen yogurt over ice cream. The products of Yogen Früz becomes a better dessert

option in this health trend and Yogen Früz can take this as an advantage in the market.

Customized. (opportunity)

The major customers for frozen yogurt industry is millennial. Customers from this

generation like to have more options and enjoy customized products. Millennial’s buying choices

are “original, specialized, and personal,”2, for example, when they are making a purchase,

millennial prefer to have a choice in picking their needs rather than a full package offered by the

company. The frozen yogurt industry introduced the concept of “customized just for me”3 to the

forefront, which meets the customized preferred trend perfectly. Furthermore, this self serve

frozen yogurt style is not only about customize but also make people feel fun and pleasure when

they creating their food.

Fast life style (opportunity)

2 The BBRIEF, “Customization: The Key Word in Millennial Buying Habits”, accessed February 1, 2017, http://thegbrief.com/articles/customization-the-key-word-in-millennial-buying-habits-621 3 Jillian Hillard, “The State of the Frozen Yogurt Industry”, accessed February 3, 2017, https://pregelamerica.com/pmag/articles/the-state-of-the-frozen-yogurt-industry/

In today’s fast life style society, snack or dessert becomes a replacement for traditional

meals. Traditional lunch and dinner hours have changed because of customers’ busy life. All

these consumers want are the quickest, tastiest and healthy snack or dessert, which frozen yogurt

comes to take an important role in their life, especially in a warmer weather.

Local business protection (opportunity)

As global and international business becomes common in our surroundings these days,

people start to care about their local businesses, and tend to support these local business in

certain ways. For example, the customers tend to go to an independent grocery store rather than a

chain market if the products are in the same quality. For frozen yogurt industry, to protect local

business can be simple, such as using local products as frozen yogurt’s original material.

1.1.1.4 Technology

Increasing business effectiveness and efficiency (opportunity)

Technology can improve the quality and variety of the frozen yogurt and smoothie, in order

to meet the desire from customers. For example, it could make the producing process more

effective and productive or increase the flavour choices of frozen yogurt in a fresh and healthy

way. Also, Yogen Früz can implement automation to maximize its productivity.

Increasing sales via technology (opportunity)

Technology can allow the industry to increase the public awareness via social marketing,

which could help the business to grow. For example, Yogen Früz can post pictures of frozen

yogurt on its company website or its own Facebook, in order to attract more customer to try their

products. Furthermore, Yogen Früz can improve its mobile services application in order to attract

customers through its mobile app or webpage.

1.1.1.5 Environment

Eco-friendly (opportunity)

Whether the business is an eco-friendly business becomes more and more important to

today’s customer. It shows the responsibility of a business. Therefore, having a sustainable

business strategy becomes significant for all kind of business. Environmentally friendly practices

for a frozen yogurt business can start with using compostable packaging and eco-friendly

utensils such as cornstarch spoons. Further more, the industry can also implement environmental

friendly cleaning solutions and trash liners to support environment friendly program.

Temperature (threat)

The sale of frozen yogurt is related to the temperature of the day. For example, the graph

below shows sales by day for Boston (green line) with the maximum temperature for that day

(blue line) between June 1 and August 31, 20124. From the chart, it can be clearly seen that when

the temperature raised, the sale of the frozen yogurt increased. Therefore, doing a frozen yogurt

business should aware of the weather pattern in the business location.

4 “Infographic: How Temperature Impacts Frozen Yogurt Sales”, accessed February 1, 2017, http://www.vivonet.com/blog/bid/159345/infographic-how-temperature-impacts-frozen-yogurt-sales

1.1.1.6 Legal

New legal minimum wage levels in BC Canada. (threat)

The minimum wage level will be increased to $11.25 after 15-09-2017. The higher

minimum wages will lead to higher costs and prices for the product.

Local health regulations (threat)

Local health regulations are going to influence the food service in schools and workplaces,

and this might reduce the business’s revenue from these areas.

1.2 Industry Life Cycle

Graph: industry life cycle5

Yogen Früz is in the Maturity stage of the industry life cycle. Their products are becoming

more and more popular among people of all ages.

5 Graham Fane, “Strategic Management”, McGraw-Hill Companies, Inc.

1.3 Porter’s Five Forces Analysis

1.2 Internal Analysis:

1.2.1 Value chain

Graph: Value chain6

6 Graham Fane, “Strategic Management”, McGraw-Hill Companies, Inc.

Suppliers(Low)Therawmaterialforproductionaresimilarinthefrozenyogurtindustry,whichwillreducethesuppliers’

bargainingpower.

NewEntrants(High)Fastgrowthrateforthefrozenyogurt

industry

Substitutes(High)Manysubstitutesproductsareexisting;suchasicecream.

Buyers(Low)Largenumberofcustomers

Limitedbuyerinformationavailability

Rivalry(High)Menchie’sfrom

America,Qoola,etc.

According to this model, the value chain activity can be divided into two part: Primary

activities and support activities.

1.2.1.1 Primary Activities

Inbound Logistics

The inbound logistics for Yogen Früz is about to select the good quality of raw materials for

the product. In the case of Yogen Früz, the major quality criteria for the company is fresh and

health. Even though when making the frozen yogurt, the nutritional information is based on the

company’s standardized recipes and is calculated by using standard from suppliers and

databases7, the products still can have slightly difference. Because the frozen yogurt is freshly

prepared at each stores, all the raw material purchases, especially fruits, from each store might be

different.

Operations

Yogen Früz operates in more than 40 countries and has more than 1300 locations

internationally. Yogen Früz was selected as the #1 Global Franchise in 1999 by Entrepreneur

Magazine and ranked highly in the Top 100 Global Franchises continuously8, which shows the

positive operations for the company.

Outbound Logistics

There are none intermediaries in the product selling for Yogen Früz. All the products are

sold in their own stores only. All the frozen yogurt products are different because it is

customized by consumers.

7 YogenFrüz, “Menu”, accessed February 4, http://www.yogenFrüz.com/menu/disclaimer/ 8 YogenFrüz, “History”, accessed February 4, http://www.yogenFrüz.com/about-us/history/

Marketing and Sales

Yogen Früz’s franchise marketing fee is around 3% of gross sales monthly. Also, the

company explores its online marketing via Facebook, twitter, YouTube and Instagram, which

encouraged customers to share photos about the products online.

Service

Yogen Früz aims at providing healthy dessert choice to customers. At the same time, they

provide a high level of customer service at its stores, in order to create a moment that delight and

surprise its customers. Yogen Früz implements the customer self-service as a part of their daily

services by providing customers an opportunity to enjoy the light to create a customized frozen

yogurt.

1.2.1.2 Support Activities

Infrastructure

This section includes departments like management, marketing, finance, legal, techonology

development, etc., which keep the company operate positively. Yogen Früz has all these

departments in the corporate headquarters. Yogen Früz provides all kind of trainings to their

franchisees and their managers, and the major training is about marketing and management parts.

The innovation for the products is still initiative on the company’s hand.

Human Resource Management

Yogen Früz cares about teamwork experience of their employees. The company encourage

their employees by attracting, training and retaining outstanding team members in innovative

ways. Also, Yogen Früz employees are motivated through benefits and incentives.

Technology Development

Yogen Früz use their own producing system to service fresh product that is low in fat, high

in fiber, with vitamins, probiotics and/or antioxidants. Recently, the Yogen Früz achieved their

unique blending process where the system is capable to capture the natural sugars of the fresh

fruit9.

Procurement

This section involves the process from the raw materials to the final products. The company

build a strategic relationship with suppliers for the long-term purpose. All the suppliers are

qualified regarding to the high quality standards. In this case, the standard is about fresh and

health fruits and milk for Yogen Früz, which is the base level for maintaining a finest product.

1.2.2 Marketing Mix

There are four elements of a marketing mix: product, price, promotion and place. The 4 Ps

of Yogen Früz marketing is as following graph:

9 YogenFrüz, “About us”, accessed February 4, http://www.yogenFrüz.com/about-us/what-is-it/

Product- meetspecific customerneedsanddemands

-meetthehealthlifestyletrend

Price-customizeprice dependonhowcustomersmaketheir

products-overallpriceisfairinthe

industrystandard

Promotion-advertising-specialoffers

Place-three typeofstoreformat:streetlevelwalk-instore,in-

linestore,kiosk.-majoritystoresarelocatedinornearbytheshopping

mall-easytoaccessbycustomers

Section 2: Vision and Mission Statement Analysis

2.1 Vison statement

Yogen Früz: “We dream of a world where healthy choices are delicious.”10

A vison statement is about where do the business want to go in the future and it’s about the

purpose and values of the business. Yogen Früz values global brand integrity, uncompromising

quality, inspirational design, customer delight, community engagement, team member

experience, profitable growth and responsible growth11. In Yogen Früz’s current vision

statement, it shows their value about customer delight and uncompromising quality. However,

there is no clue about where the business wants to be in the future.

What I recommend for Yogen Früz’s vision statement is adding their business future in the

statement. For example, their vision statement can be “We want to be the No.1 delicious healthy

dessert choice in the world.” This statement shows the business want to be the leader for the

industry in the future and also mentions their brand value in customer delight, uncompromising

quality and global brand integrity.

2.2 Mission statement

Yogen Früz: “Your well-being is our passion. We delight customers around the world with

guilt free frozen yogurt treats.”12

10 YogenFrüz, “Mission statement”, accessed February 4, http://www.yogenFrüz.com/about-us/mission-statement/ 11 YogenFrüz, “Mission statement”, accessed February 4, http://www.yogenFrüz.com/about-us/mission-statement/ 12 YogenFrüz, “Mission statement”, accessed February 4, http://www.yogenFrüz.com/about-us/mission-statement/

A mission statement shows why do the business exist and how the business are helping

people’s life. Yogen Früz’s mission statement indicate their willing to delight customers and

spread their business all over the world in an honest way. However, this statement can expend

more by showing their wish to help people’s life by providing customers a healthier dessert

choice. For example, their mission statement could be “Your well-being is our passion. We

delight customers around the world with natural source in your frozen yogurt treats, which are

essential to keep your body healthy and strong.”

Section 3: SWOT Analysis and SWOT strategy matrix

3.1 SWOT Analysis

According to what mentioned above in section 1, the SWOT analysis is as follows:

Strengths

- Unique brand name and logo, which is easy to remember; the brand logo is a pink smile

face: “ ü ”

- Customize concept and self service is unique concept for customer experiences

- Large selection of frozen yogurt and variety toppings to choose such as fresh fruits,

chilled toppings, syrups and sauces

- Fresh and healthy: non-fat, low-calorie, natural source; recommended by nutritionists and

health experts.

- Many locations and majority stores locate nearby or in the shopping mall

- Training program for all the stores lead to standard quality in all locations

Weaknesses

- Limited purchases for customers at one time due to the type of product is a cold dessert,

difficult to take-out.

- Limited customer services

- Lack of flavors at sometimes because of the limited quantity of fresh material each day,

might leads to customers’ dissatisfaction.

- Expensive to franchise a Yogen Früz store, leads to limited number of stores.

Opportunities

- Health life trend

- Customize life style

- Fast life style

- Local business protection trend

- Technology can increase business effectiveness and efficiency

- Eco-friendly

- Stable Canadian economic

- Public health policy

Threats

- Local health regulation

- New legal minimum wage levels in BC Canada

- Temperature

- Business with similar concepts and cheaper price

3.2 SWOT strategy matrix

SWOT STRATEGY MATRIX Strengths (S):

1. Fresh and healthy 2. Many locations and

majority stores locate nearby or in the shopping mall

3. Unique brand name and logo

4. Customize concept and self service

5. Large selection of frozen yogurt and variety toppings

6. Training program

Weaknesses (W): 1. lack of flavors at

sometimes because of the limited quantity of fresh material each day

2. limited purchases for customers at one time due to the type of product is a cold dessert, difficult to take-out.

3. Limited customer services

4. Expensive to franchise a Yogen Früz store, leads to limited number of stores.

Opportunities (O) a) health trend b) local business

protection trend c) Eco-friendly d) Customize life

style e) Fast life style f) Technology can

increase business effectiveness and efficiency

g) Stable Canadian economic

BE AGGRESSIVE (MAX – MAX) • (a-1) Emphasize the fresh

and healthy of the products, in order to meet the health trend from customers.

• (b-1) Using local fruits and milk to keep the product fresh, also help the city to protect local business

• (c-1) Use eco-friendly package to keep the health concept of the product.

REDESIGN (MIN – MAX) • (a-1) Clear instruction

of limited quantity of each type of toppings, shows to customer their topping is fresh, which meets the health trend

• (c-2) Find a special eco-friendly case for take-out.

Threats (T) a) Similar business

with cheaper price

b) Temperature c) Local health

regulation d) New legal

minimum wage levels in BC Canada

DIVERSIFY (MAX – MIN) • (a-1) Increasing the

public awareness of products’ healthy and fresh, in order to beat other similar business

• (c-6) Training program about local health regulation

BE DEFENSIVE (MIN – MIN) • (b-2) Offering

discount in cold weather for take-out

• (b-1) Create special events for different weather and provide unlimited topping for the event in a package value.