The Business Analysis Of Famous Brands Limited Company Essay

News Article Analysis

Famous Brands Limited

In this News Article Analysis of Famous Brands Limited I will be providing a critical assessment of the company. I will supply a summary of Famous Brands Limited including a company background, a brief look into the Board of Directors, a concise look at a few of the main brands that make up Famous Brands Limited’s brand portfolio and create a clear comparison between their brand portfolio and that of another chosen company. I will also analyse the impact of specific current affairs on Famous Brands Limited as well as offer two incisive strategies in order for the company to efficiently manage these challenges faced through the impact of current affairs.

Summary of CompanyFamous Brands Limited continues to meet the needs of their customers by offering a variety of fast-food and casual dining brands that appeal to a vast selection of lifestyles and tastes. This means their franchises attract consumers with varying tastes and requirements. They listen to the target markets’ needs and aim to supply whatever they possibly can to stay involved in the market as well as keep ahead of rival growth by always ensuring consumer satisfaction. The meet the consumers’ needs by catering for all options instead of having an individual focus group.

A few of their main brands include Steers and Mugg & Bean. These examples provide a clear view into the diverse assortment of brands Famous Brands Limited is made up of. Steers fast-food restaurant offers quick-service, affordable prices and convenience meals whereas Mugg & Bean offers a casual dining experience. Steers is now an iconic, well recognized franchise known for their 100% pure beef flame-grilled hamburger and hand-cut chips. They have a strong brand reputation that ensures a Steers franchise’s success to be inevitable.

Mugg & Bean shares Steers’ strong brand reputation taking on the depiction of a traditional coffee house offering bottomless coffee, giant baked muffins and generous portions. Mugg & Bean is rapidly gaining popularity and recently has expanded to a grab-and-go, quick-service restaurant sector as well. [image: ]Mugg & Bean are only two examples provided to represent the contrast of quick-service chains and casual dining restaurants that are run by Famous Brands Limited. The company currently runs 27 growing brands.

By comparing the Famous Brands Limited brand portfolio to that of Taste Holdings Limited we can observe the drastic difference in each portfolio. As Famous Brands Limited runs 27 well-known, popular brands, they have a competitive advantage over Taste Holdings Limited who currently run 8 still well-known but less popular brands such as Domino’s Pizza and Starbucks. Although they are both international brands that appeal to the current scene, this also means their prices are steeper because of demand and therefore once the buzz around a new entrant dies down people will return to spending money on the brands that they have trusted for years and rely on to stay constant – such as brands owner by Famous Brands Limited.

Junk Status

In the article on South Africa’s new Junk Status, it speaks of the possibility of a reverse of the country’s financial economic deterioration due to the election of Deputy President Cyril Ramaphosa. The new elect will provide hope for future South African investments as well as boost business confidence and encourage economic growth – particularly regarding the implementation of reforms relating to fiscal stability. South Africa’s long-term debt being downgraded to junk status meant that foreign investments were quickly decreasing and the ability for South Africa to borrow money abroad became complicated as there is a higher risk of South Africa not returning the money. International bond funds are encouraged to withdrawal from junk status countries in order to guard shareholders money.

The result of junk status is that there is a significant portion of capital being withdrawn from the country and tax will increase as will the cost to borrow money and the cost of sourcing goods for retailers and manufacturers. In a junk status country there are less people working and lower pay for those that do. In turn, people will purchase fewer items and this will put added pressure on businesses on top of higher costs of raw materials and services. Junk status will also influence highly-qualified individuals to leave the country and hence the country will suffer from a lack of skill and ability and positions will be filled with less-qualified individuals and there is a decrease in the country’s over-all success. If the country cannot pay off its debt’s effectively it will face threat of collapse and so government would be forced to cut social grants thus effecting the poor dramatically and increasing rates of poverty.

The article promotes future hope that Cyril Ramaphosa can rectify and rebuild the economy with his market-orientated approach as South Africa is nowhere near where other countries have been prior to South Africa having been named Junk Status. The article provided an accurate and in-depth picture of what junk status could mean for South Africa and the many possible outcomes regarding South Africa having been given the title. Junk status meant that South Africans would need to pay more in order to raise more money to save their country which would have been increasingly difficult considering he high rates of poverty.

As said in ‘How Junk Status will affect South Africans’ by Money, ‘This would have a huge impact on the poorest of the poor and result in increased poverty and way more people going hungry.’ This article would form a part of the Economic factor of a PESTLE analysis as it is to do with economic growth as well as inflation and exchange rates indirectly. This means the junk status situation could potentially affect Famous Brands Limited capital costs as well as exporting costs. In turn, the situation could limit the growth and/or expansion of the company if not cause a collapse of the entire business.

Health

This article is focused on the reasoning behind the necessity for sugar tax. The claim is that the growing obesity epidemic is a side effect of excessive sugar consumption. Obesity is a slow killer that shortens lives and limits the quality. Obesity is a breeding ground for further medical issues such as strokes, blindness, amputation and kidney failure. Although obesity has been a worldwide epidemic, South Africa has been proven to have the highest rate of obesity in Africa sitting with 26,8% of people having being diagnosed as obese.

The research behind the epidemic has shown that calorie-dense, insatiable diets with excessive levels of salt, sugar, fat, animal products and gluten are to blame – such as convenience foods (ready -meals/processed foods). Studies have shown gluten is linked to obesity as it is ‘fattening, inflammatory and addictive’.

People effected with obesity have limited control over their lives and suffer from serious insomnia and chronic over-eating, Reduced sleep has also proven to be a cause of obesity. There are also studies to prove how obesity is linked to the stigma behind HIV/AIDS – that if you are HIV/AIDS positive then you are thin – and so people refuse to pay close attention to their health in order to maintain a stereotypical HIV/AIDS negative look. Obesity also impacts the productivity of the person/s effected and increase the amount of absenteeism as well as amount needed to be spent on medical costs.

Overweight woman is said to earn 11% less than a healthy woman. Unfortunately, healthier food is more expensive and so poorer people opt for cheaper, processed foods, rich in sugar and other harmful substances. This means there is an increasing rate of obesity in rural areas. The article goes on to express the need for awareness and for healthier foods to be more affordable and accessible to the poorer communities in South Africa. It explains the already progressing, information-based era we are moving into where people will and should be educated on the importance of healthy lifestyle choices.

They are promoting the necessity of the consumption of organic fruits and vegetables over processed, fast-food. The article has managed to capture the significance of a healthier lifestyle as well as offer insight into the current state of our country’s over-all health. It causes major expenditure as well as loss of life when people are uneducated about their lifestyles choices and therefore it is crucial that it be made a priority. As stated in ‘How one man’s vegetable and business plan let to a revolution’ by Amy Green, ‘poverty and lack of knowledge are serious obstacles for obesity prevention in South Africa.’ This current affair would form the Social factor of PESTLE as Obesity Awareness forms a part of ‘Health Consciousness’. This could impact Famous Brands Limited through either effected employees or effected consumers.

Effected employees will slow the rate of production and sales and therefore stunt the company’s income and growth rate. Effected consumers will mean less demand of certain products due to raised awareness and health hazards particular products may pose in regard to ingredients possibly being a health threat or a complete boycott of the company due to the trend in product types and processes. Chart Showing Obesity Rates in Africa.

Recommendations

In order to combat Junk Status, Famous Brands Limited must do three things: act, adapt and innovate. It is important for the business to stay positive and on an upward journey instead of succumbing to failure due to junk statues. First, Famous Brands Limited must act. Take advantage of the situation and use it to grow the business. Start by collecting information from employees of the business as well as customers and suppliers to start actively looking for ways to grow your business. Secondly, the company neds to adapt. If your business has been handled correctly and with insight into a possible future crisis, there should be a reserve set up to keep Famous Brands Limited afloat for a certain period whilst the business is settling into the current economic situation.

Start by assessing the company’s finances and see where you can alter fixed costs into variable costs (e.g. a monthly debit order altered to a pay-per-use system). In doing this the company will have freedom to control its expenses flexibly as the situation fluctuates.

Finally, Famous Brands needs to innovate. As problems arise for your business, the same will happen for the consumers. A mutually beneficial situation would be reaching out to the consumer to gauge what possible situations they might face, and you can start to look for solutions that will still keep your products and services open to them but it won’t be impossible for them to support the business. Find export opportunities by exploring foreign markets, the weakness of the ran may potentially be an advantage. This strategy could link to the Decision Tree Problem Solving Technique as it lays out all possible options and then weighs the consequences and chance-event outcomes as well as costs.

In order for Famous Brands Limited to ensure customer loyalty through this era of informational awakening, they will have the build a strong brand and promote healthy living instead of cheaper options. The company will need to provide a healthy alternative for all ingredients, remaining reasonable, to show their customers that they care about their well-being. This will build a strong consumer relationship with the business and most likely guarantee loyalty from the consumers.

Famous Brands Limited can also offer educational programs to assist in the education of poorer people that do not have access to information regarding healthier lifestyle choices or how to access healthier food options at affordable prices. This strategy relates to branding as in implementing it, it is building the image of the business and creating a strong brand that consumers will trust and retailers will most likely favour before a weaker brand.

Conclusion

In this business analysis of Famous Brands Limited I have investigated current social and economic issues and recommended specific strategies for the company the overcome potential challenges introduced by these current affairs, specifically challenges introduced by the obesity epidemic that Famous Brands Limited should pay critical attention to for the sake of the growth of the business. This report should act as a detailed guideline in order the ensure the business reaches the goals set in place for the future and makes a positive impact in the community in reach it is situated in.

References:

  1. En.wikipedia.org. (2018). Famous Brands. [online] Available at: https://en.wikipedia.org/wiki/Famous_Brands [Accessed 20 Feb. 2018].
  2. Famous Brands. (2018). The Home of SA’s most Famous Brands | Famous Brands. [online] Available at: https://famousbrands.co.za/ [Accessed 20 Feb. 2018].
  3. En.wikipedia.org. (2018). PEST analysis. [online] Available at: https://en.wikipedia.org/wiki/PEST_analysis [Accessed 24 Feb. 2018].
  4. Phitidis, P. (2018). Building a business to survive and thrive in a Junk Status economy – Aurik Business Accelerator. [online] Aurik.co.za. Available at: https://www.aurik.co.za/blog-news/158-building-a-business-to-survive-and-thrive-in-a-junk-status-economy [Accessed 25 Feb. 2018].
  5. Mail Online. (2018). Pacific islands see soaring obesity rates after adopting Western diets. [online] Available at: http://www.dailymail.co.uk/health/article-2920219/How-fat-country-nations-highest-obesity-rates-new-maps-surprise-you.html [Accessed 27 Feb. 2018].
  6. Tasteholdings.co.za. (2018). Taste Holdings | Fast Food Brands in South Africa. [online] Available at: http://www.tasteholdings.co.za/brand-fast-food-franchises.php [Accessed 27 Feb. 2018]. 4

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