I. Challenges o After finding a partner who is willing to invest and become a partner in his business, Terry Smith is having difficulty in deciding whether he should make a counter offer to the proposal that his partner Barney Harris has made, to look for a new partner, or to walk away from the deal altogether. After re-evaluating the partnership proposal, Smith realized the real question was not whether the deal was good enough but whether the proposal will help him reach his goals.
II. External environment o This Ice Cream Shoppe would be located in the southern region of the country in Gainesville, Florida with a population of 91,000 excluding students of the local university which enrolls about 38,000 students. Economically, marketing research shows that Gainesville can potentially surpass the average sales of some areas since it will be located in a college town. With many competitors in the frozen dessert industry in the area, Beano’s have received several competitive advantages in the industry because there are no national competitors of superpremium desserts, no local competitors have a place for customers to sit outside, and no local competitor has a policy of “giving back to the community”. With $40,000 invested in equipment for a Beano’s franchise shop, current use of technology seems to be of importance. o 5ForceM:
New entrants: Increased competitive pressures from new entrants such as Starbucks, Colombo, TCBY, and Swensen’s; and new product development for novelty items like Haagen-Dazs’s frozen yogurt bars made the industry fiercely competitive.
Power of buyers: Beano’s have used the finest, high-quality, and all natural ingredients to differentiate them from the competition.
Substitute products: the level of substitution is high in this industry. Customers may choose other frozen products from local supermarkets that could satisfy them