Analysis of Famous Brands Limited

In this analysis, I will be looking at Famous Brands Limited. I will be looking at the overall history, tasks, main brands that form part of its brand portfolio as well as how their brand portfolio compares to another corporation and the impact of current affairs on Famous Brands. S The Halamandres family came to South Africa from Greece in the 1950s with just 50$ between them and the will to work hard and achieve something. George, who was one of the brothers, decided that Johannesburg needed a new addition; specifically an American-style Steakhouse. This would later be known nationally as Steers. The first Steers opened in the 60s. Famous Brands Limited is a holding company that is listed on the JSE (Johannesburg Stock Exchange) under the category of Consumer services: Travel and Leisure, and is now Africa’s largest branded food service franchisor.

Performed that help meet customer needs.  Brands has 15 manufacturing sites all over South Africa. It is a vertically integrated business that manufactures a lot of licensed products for both the franchises that fall under their brand portfolio as well as retail customers. Famous Brands is the largest branded food service franchisor in Africa and this is partially because their operations span the entire supply chain from raw materials to developed and/or finished products. They manufacture anything from bakery items to fruit juice. Logistics[image: Image result for Famous Brands logistics routes map]Famous Brands’ logistics division is customized to the preference of the franchise to which they deliver. This function gives the company a key advantage, both strategically and in terms of competitiveness, which helps boost the way they treat their franchises. The groups ‘Centres of Excellence’ allow them to get closer to their franchise partners by aligning their franchising and logistics businesses. These centres help Famous Brands deliver the best service and products to their franchises. Their total warehousing space consists of more than 20 000m₂ under roof and an average 1600 line items are held in their warehouses at any one time. Their fleet consists of a total of 117 trucks which are all refrigerated as well.

The brand is known best not only for its famous Wimpy Coffee, all-day breakfasts and specialty burgers but also for including a wide selection of grills, salads, shakes and desserts to their menu. Wimpy has become a common house-hold name in South Africa. This is largely due to their constant growth in popularity. In addition to high streets and malls, Wimpy is also represented on the forecourts of Engen petrol stations along the country’s major highways, where it is now standard issue to pick up something from Wimpy whilst filling up with feul.  Debonairs Pizza was born in 1996. It was the idea of two young men from Pietermaritzburg and on their opening night, they sold eight pizzas.

Unlike today where the company sells 2. 9 million pizzas a month! Debonairs Pizza has now become the leading pizza brand in Southern Africa. Over the years it has not only expanded across South Africa but into 14 other African countries. Debonairs owes most of its success to the fact that it focuses on innovation – from its creative pizza offerings and use of the latest interactive technology to its free home delivery service – and has won numerous awards from consumers and industry authorities alike.

Brand Portfolio Comparison Famous Brands Limited vs Gold

Brands Investments Gold brands investments has a much smaller brand portfolio than Famous Brands. Famous Brands has 23 brands as part of its brand portfolio whereas Gold Brands investments has only 9 brands as part of its brand portfolio. The brands that form part of Famous Brands are all quite well-known compared to those that form part of Gold Brands Investments’ brand portfolio. These factors all create a competitive advantage for Famous Brands. The fact that they have more than double the amount brands in their brand portfolio compared to Gold Brands gives them a huge advantage as people are more likely to end up at a chain that is part of famous brands. Also because Famous Brands’ brands in its portfolio are so well known and are all over the place, they have an advantage of Gold Brands.

The issue being discussed in this article is that of the minimum wage increase. The minimum wage for South Africa will increase to R20. 00 per hour. This may seem like a good increase however there are many debates going on about if this is enough to be considered liveable and how it will affect businesses positively and negatively. It could be beneficial to some workers however it could negatively affect others, especially those who work in smaller businesses and rural areas. Workers in rural areas and those currently working in small businesses could be particularly affected and are more likely to suffer job losses as a result of this national minimum wage increase as businesses (especially smaller enterprises) might not be able to afford to employ the amount of staff that they can now due to the fact that they will have to pay more per worker. They will therefore need to retrench some of their staff members in order to be able to afford to pay their workers the new minimum wage. Economists are now saying that this adjustment is not going to benefit South Africa but rather it will weaken its economy due to the amount of job losses.

For example, in better paying sectors (such as manufacturing), wages negotiated by collective bargaining councils have reduced employment by about 10%. However the affects in worse-paying, smaller enterprises are not so clear. This is due to the fact that these sectors are typically covered by government imposed minimum wage legislation. Agriculture is a huge focus in South Africa as it is one of our main sources of income. The increase in the minimum wage will affect smaller farmers as they will have to retrench workers in order to pay those who will keep their jobs the required minimum wage. This will affect production rates as less people will be working at one time so less will be done in the same amount of time. This isn’t a major problem for Famous Brands though as they are a huge corporation with many employees and this wage increase will not heavily affect them. If anything this will benefit them. The reason I say this is that now people will be able to buy goods from brands that form part of Famous Brands’ brand portfolio.

PESTLE factor relating to the article: This article relates to the Economic PESTLE Factor because it has to do with economic issues that we face as a nation and how the economy, in its current state, is causing huge problems for businesses. This article speaks the effects of South Africans and the extremely high obesity rate in this country. In fact South Africa is the second most obese country in the world and the most obese country in Africa. The article speaks about all the different ways that people become obese. One of them being genetics and another being Technological and lifestyle changes. It also touches on the different factors and/or causes of obesity. The article talks about how the amount of children that are obese is immense. Obesity is a huge problem in South Africa at the moment. So much so, that businesses are considering it a major threat and are figuring out different ways to overcome it.

Famous Brands is especially in trouble when it comes to the high obesity rate in South Africa as most of the brands that form art of its brand portfolio sell unhealthy food and/or have little or no healthy options on their menus. This is where the Famous Brands management team needs to step in and demand that brands implement healthier options to their menus to help deal with this problem. Brands such as Steers and Wimpy might have one healthier option on their menu which is not good enough. This item is probably also the most simplistic healthy item like a salad. People these days will be looking for healthier options to eat rather than fast food, especially millennials who are going vegetarian and vegan. The Franchise should also advertise healthier options as one of their main features and not in a minuscule sense. This will help attract more customers to their franchises. The PESTLE Factor that relates to this article the best is the Social factor as it deals with demographics and people’s personal beliefs and ways.

The business can make sure that it puts a certain amount of money aside to cater for issues with wages just so that if there is a dispute, they are covered. Businesses, in my opinion, should always have a back-up account in which it stores money so that when challenges like this pop up, they don’t have to retrench staff in order to be able to cover themselves. Avoiding retrenching staff will also avoid legal conflict as many staff will feel as though they have been unfairly retrenched and will probably take it up with the CCMA. Article 2Famous Brands really needs to encourage brands to introduce healthier options to their menus. This will help resolve the problem of limiting their consumers because there are no healthy options on their menus. A lot of people nowadays will be looking for healthier options instead of Fast Food in order to stay fit and healthy.

In conclusion, Famous Brands Limited is a very well organised corporation that makes a good amount of profit. There are however some areas that could be improved which I have mentioned above. A lot of people don’t even know about Famous Brands, but rather the brands that are part of its portfolio. The biggest problem that they will face in the near future is the obesity factor of South Africa. They will need to implement strategies to minimise the effect that this challenge will have on the businesses that form part of their portfolio and even themselves as a corporation. All-in-all though, I feel like they are running themselves impeccably and that they are in the right mind set.