Porter's Six Forces Analysis and Fego Café

Introduction

For my Business Studies primary research task on fast foods industries, I’ve chosen to do my research based on Fego café. This research will include a history background alongside with Fego Caffés mission statement, a research methodology, data collection method of a PEESTLLE analysis identifying two Ethical and two environmental macro environment threats. Using Porters six forces analysis where I’ll be identifying two market environment opportunities under each force where Fego Caffé can take advantages of.

FEGO Café History

Fego Caffé a European food emporium bought by Famous Brand is a family casual dining sector. They give one an opportunity to get into the family dining environment. They offer breakfast and coffee which is the most popular trend in South Africa. Fego Café gives the advantage to expand ones presence in the specific category. It was founded by George Halamanderes in the 1060s, he then moved to South Africa simply because he thought that South Africa needs an American style. Their headquarters are in South Africa, Middle East, rest of Africa and the United Kingdom. Fego Café has found ways to maintain the trend setting by partnering with the leaders in the South African retail environment, such as Exclusive books and Incredible Connections.

Mission Statement

We are intent on growing capability, capacity and scale across manufacturing, branding franchised and food services spaces. We are obsessed with being close to our trending partners and consumers across premium and mainstream markets. We are passionate about our unique consumer experience through innovation, flawless execution and continuous improvement. We are a team of results orientated people characterized by a unique culture of high performance. We are focused on organic and acquisitive growth in South Africa and selected international markets.

Research Methodology

My information will be gathered using questionnaires of ten questions which will be used to interview people preferably the customers. The questionnaires will help me with my feedback about the franchise that I’ve chosen. I’ll also include some internet research to gather up my information. As a class we’ll go to each of our franchise to do an analysis on them. I’ll be analyzing the common genders entering the restaurant age and race for my qualitative information gathering. Data Collection

Target Market

Fego Caffe’ target market is all age customers as it is a family casual dining sector, they aim at customers who are willing to pay for an affordable price for a unique and European style product. It is suitable for all age group as it’s not only a coffee cafeteria but also serves fulfilling meals. They are mainly targeting the middle age groups who need a place to relax, sit down and enjoy a well prepared European style meal.

Trend analysis

Fego Caffe’s in order for them to keep up with the trend and stay updated they have chosen to partner up with the leader of the South African retail environment such as Exclusive Books and Incredible Connection. At Midlands Liberty Mall we see the link between Fego Caffe’ and Exclusive Books as they have conjoined both of these stores, to create that European Style to South Africa.

Pestle analysis

Ethical

• Reviewed and accepted management’s feedback regarding the Group’s activities, having regard to the relevant legislation and best practice, matters relating to social and economic development, good corporate citizenship, the environment, health and public safety, consumer relationships and labour and employment.
• Reviewed and reported to the Board on the Group’s detailed B-BBEE strategy and reviewed and recommended to the Board for approval the non-financial disclosures contained in the Integrated Annual Report. These include, inter alia, the Sustainability disclosures as well as the Governance and Remuneration disclosures. The Committee is satisfied that Famous Brands is committed to ensuring that the Group is sustainable in the short, medium and long-term, and embraces its responsibilities with regard to the health and safety of its employees, the Group’s impact on the community and the environment.

Environmental, we are focused on organic and acquisitive growth in Africa selected international markets. The Social and Ethics working group is responsible for monitoring the Group’s environmental practices and reports to the Social and Ethics Committee on its activities. The Group has an Environmental and Climate Change policy in place. The policy sets out the Group’s commitment to responsible environmental practices and identifies key areas of focus and objectives with respect to climate change, air pollution reduction and eco-efficiency. These objectives include:

• Investigating alternative cleaner fuel and energy options (with lower GHG emission factors)
• Maximizing recycling opportunities for our general waste as part of our waste management initiatives.

Porters 6 forces Analysis

Level of rivalry (current competitors)

It is crucial for a business to be aware of their competitors are doing. The business will need to identify an area where the business is not performing well and then come up with ways of how they could use that opportunity to benefit their comp0any. If Fego café can use keep up with their customer loyalty because unlike other Cafes they also serve full meals, the have a wider range of products. There this hinders the current competitors from stealing their customers.

Threats of new entrance

Threats of new entrance means when a new competitors enter from any industry, channel or marketing activity. The opportunity that Fego can identify to try and prevent threats from new entrance is the business spending large sums of money on advertising and having promotions where products are sold at a lower price, this may make it difficult for other businesses to enter the market.

Availability of substitute products

Availability is a substitute product that does not refer to a different brand. An example of substitute products could be sugar versus artificial sweeteners, this is the same product that satisfies the same need. The business will need to ensure that their pricing maybe theirs could be more affordable, and most importantly they will need to increase availability of substitute products that are generated. This will help to outcome their competitors.

The power of suppliers

The business needs to be aware of issues such as their supplier not supplying to other businesses at a lower price because it may increase competition. The business needs to also be able to trust their suppliers because if there is always a shortage of stock or product the business might end up losing customers. In order to be successful they need to make sure that they are provided with good quality products when needed at the right time at an affordable price.

The power of buyers

The power of buyer may be a wholesaler ordering from a manufacture or a retailer buying the products for his shop. Price sensitivity is one opportunity Fego can look at, often customers are more willing to pay a higher price for delivery this maybe this may increase the number of customers.

The power of complementary products.

A complementary product is a product where the use of one product is interrelated with the use of the other. The products are paired together.one opportunity that the business could use is as I’ve mentioned above is the business having their own delivery, because if Fego relied on Mr. Delivery to deliver for them if might come with expenses if Mr. Delivery had to increase their price or is only available in certain areas only.