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Industry Analysis - Frozen Yogurt

Frozen Yogurt Industry in 2015 at a Glance

 

 

People may be more aware of their diets these days, but they certainly have no less of a sweet tooth. Frozen yogurt, a hybrid between the traditional ice cream dessert and the healthier (and hipper) yogurt based products, is an innovative way for customers to “have their cake, and eat it too.”  Although the popularity of the frozen yogurt franchise industry suffered a decline in the late 1990’s, the category has been making a colossal comeback in the last decade, with a new generation of flavors, toppings, and store settings leading the charge. With this new wave of frozen yogurt franchises blossoming, new franchisees will find that this industry is nowhere near its freezing point.

Barriers to entry (Medium pressure)

 

  • The barriers to entry in the frozen yogurt market is very low. 

  • Entry barriers are relatively low for the froyo industry

  • There is no consumer switching cost and low capital requirement.

  • There is an increasing amount of new brands appearing in the market with similar or low prices than llaollao products

  • Having a brand image becomes most essential here

Supplier power (Low pressure)

 

  • The ingredients for frozen yogurt are readily available

  • Many suppliers for the ingredients

  • The suppliers are not concentrated or differentiated.

  • Hence very low supplier power.

Buyer power (High pressure)
 

  • High buyer power.

  • People have capability to set the price.

  • Hence there is high pricing pressure.

Threat of substitutes (moderate pressure)

 

  • Frozen yogurt is considered a substitute of high calorie ice creams.

  • There are alternatives for sweet cold dish but the nutritional value of the product makes it better than its substitutes.

  • Hence threat of substitutes is moderate.

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