Bakers Delight Energy Efficient Showcase Bakery - Essay Example

Risk Assessment Plan – Bakers Delight Part I Stakeholder analysis Bakers Delight is an Australian based bakery franchise that bakes fresh bread and bread products in store. There are more than 700 individual stores in the franchise currently, having a strong presence in New Zealand as well as Australia, and trading in Canada under the name of COBS bread. Internal Stakeholders Stakeholder information was derived from Bakers Delight (2010), as well as information about employees and company structure. Employees Around 15,000 employees, averaging between 15 and 30 employees per franchise Executive Chairman: Roger Gillespie (Founder) Executive Director: Lesley Gillespie (Co-founder) Non-executive Directosr: Barry Brownjohn, Robert Newey Canada Branches Vice President COBS Bread Canada: Elise Gillespie, Aaron Gillespie, David Christine, John Gilson General Managers Marketing and Operations (NSW and QLD): Chris Caldwell Property and Supply Chain: Gerry Gerrard Finance: Debbie Dowling Regional Managers NSW/ACT: Grant Goldsworthy WA: David Tierney SA/NT: Orna Terpstra QLD: Todd Martin Chief Information Office: Joanne Stubbs Owners/Shareholders External Stakeholders Customers Suppliers Ovens: Moffat Australia Refrigeration: Bettacool Refrigeration The Chia Company. This company has an agreement with bakers delight for the production of Chia bread within the bakery. Government Franchise Council of Australia (FCA) Franchise Association of New Zealand (FANZ) Canadian Franchise Association Scope of Risk Management Bakers delight is a large franchise company that has been effective for a number of years, with the first bakery being founded in 1980 by Roger and Lesley Gillespie in Hawthorn, Melbourne. The franchise has around 700 individual stores, but risk management can focus on problems and risks that apply to a single store and apply this outwards to all stores in the franchise. As such, the scope of the risk management assessment is to look at potential risks within a single Baker’s Delight store. SWOT analysis A SWOT analysis looks at the Strengths, Weaknesses, Opportunities and Threats for a business. It is used to produce a model that can serve to provide direction in development, formulation and assessment of project management plans. Strengths The company has successfully expanded from Australia to having a large presence in both New Zealand and Canada Has a wide number of store locations, particularly in Australia Offers freshly baked bread, baked on site each day Provides a healthy option for food compared to fast food, especially breads such as Chia and Grain breads Uses a blog and social networking to increase social media activity and customer interest Weaknesses Bakeries use a large amount of energy, especially through the use of electric ovens Uses quality ingredients, so the prices are higher than that for a fast food outlets Opportunities Could offer hot coffee at outlets, or other easy to make and serve hot beverages Threats Competition from other bakeries Competition from fast food outlets Substitute products such as bread from supermarkets and convenience stores that are cheaper or more easily accessible Suppliers increasing price Buyers looking for cheaper products Standards need to be in place to prevent workers getting injured while working Buyers looking for more environmentally sustainable products Contexts of Risk to the Organization Inner Contexts Bakers Delight is a franchise that operates over 700 bakeries across three continents. Their customer base is currently above two million customers per week. They offer franchise opportunities for any of the locations, offering options of either purchasing a franchise, or a manage-to-own system. The organization is operated in a hierarchical manner through management or through franchising. There are regional managers, area managers down to the managers of individual bakeries, production managers, sales mangers and the general bakers and sales assistants. In addition there are multi-site franchisees and single-site franchisees. The business operates to bake and sell fresh bread and bread products each day at each of the franchise locations. Many of the franchises are independently owned, with a significant number of franchise owners owning multiple stores. The business aims to produce high quality products and ensure customer satisfaction. The company is continually making improvements to become more environmental. In the period of 2008 – 2009 they began work to create a sustainable system for waste, aiming for a ‘Zero Waste’ policy for all of their bakeries (National Packaging Covenant 2008). The company also produced an energy efficient showcase bakery in 2003 to determine how to best reduce energy costs (Energy Efficiency Best Practice 2003), but there is little information about how much of this has been put into practice. There is high customer loyalty to the brand, which has been present for many years. The business puts a lot of effort into working with its current franchisees, ensuring they have all the tools and knowledge they need to succeed at their businesses. Most franchisees are highly satisfied with the support they receive. Bakers Delight offers a diverse menu that is constantly changing with new additions and variety to ensure that there is something to meet every meal and all times of day. Outer Contexts Bakers Delight faces competition from different stores and chains depending on which location you consider, although in all locations they face competition from locally owned stores. In Australia, one of the main competitors for Bakers Delight is the Brumby’s bakery chain. Brumby’s offers many similar products to bakers delight and it also offers franchising opportunities. The Brumby’s chain is also prominent in New Zealand, and is the main competitor in this market too. The franchise is not as well established in Canada, and competition mainly comes from locally owned businesses. Bakers Delight came under fire for behavior towards some of its franchisees, it was accused of selling franchises at full price, withdrawing support and forcing the owner to bankruptcy and consequently re-buying the franchise at a much lower price. However, it has since been cleared of the charges. As the world markets are struggling financially, Bakers Delight faces the problem of consumers having lower available money to spend, and adjusting their spending habits. In all three continents that the company is prominent, bread is a common staple item, with the company representing 13.8% of the Australian bread market in May 2011. In New Zealand especially, there is increasing demand for companies to be environmentally conscious and energy efficient, with many consumers preferentially choosing producers that can offer this. Part II Risk Management Objectives and Critical Success Factors One of the major selling points of Bakers Delight products is that they are freshly baked, healthy and use quality ingredients. Risk management needs to take this into account, for example it is no good decreasing the cost of bread by choosing lower quality ingredients in order to entice more customers as it goes against the company’s core values. Compliance with Occupational Health and Safety (OSH) is also important. Employers must ensure that their business is a safe place for employees. This takes into account factors like working around hot ovens, the potential for slips and falls, working with chemicals, such as those needed for cleaning, especially cleaning ovens. The business has preferred suppliers for products such as Chia bread, and for ovens and refrigeration. Where possible, the business should stay with suppliers that it has an established history with, as the companies understand each other and know each other’s needs. Bakers Delight aims to continue expansion in its three continents of Australia, New Zealand and Canada through the selling and establishment of franchises. Keeping a good opinion of the company in terms of franchising is important, as the company was in the courts disputing claims that it abused the rights of franchisees. While the company was cleared of all accusations, public opinion was still adversely affected by the process. Associated Risks for Bakers Delight Risks for Bakers Delight were identified using a SWOT analysis, through which the challenges that faced the business were evaluated in terms of the market surrounding them. Other bread companies and risks that face them were also considered to determine which of these applied to Bakers Delight. Risks Competition From other bakeries From fast food outlets Through substitute products being available at supermarkets and convenience stores Buyers looking for more environmentally friendly stores and products Increases in price from suppliers Price pressure from buyers that look for lower priced products especially due to lower incomes Injuries in the workplace and subsequent OHS issues Likelihood, Consequences and Levels of Risk Factor Analysis Likelihood Impact Ranking 1 (lowest threat) -7 Competition from other bakeries Bakers Delight has a large hold on the market, with many branches at each of its locations It expands its exposure through the use of mass media, competitions and advertising The business has to be constantly aware of competitors, as changes in consumer behavior can occur. High High 7 Competition from fast food outlets Consumers look for low price, and Bakers Delight cannot compete with fast food outlets in terms of price Bakers Delight offers healthy, fresh products at reasonable prices, ensuring it will always have a target audience that prefers to pay for quality High Low 4 Substitute Products As disposable income decreases through downturns in the market, substitute products become more appealing for consumers that have little money to spend The high quality of Bakers Delight bread itself becomes a substitute product for consumers who previously went out for meals, but can no longer afford to, instead looking for little luxuries High Medium 5 Increased price from suppliers Bakers Delight has used the same suppliers for a number of years and it is unlikely that these would jeopardize the relationship by unreasonably increasing prices Bakers delight has a number of suppliers it can choose from Low Low 2 Buyers looking for more environmentally friendly stores and products This is not very common, and less so with the global market downturn Bakers Delight has a healthy image, so it is likely not to suffer much from this Low Low 1 Consumers looking for lower prices Bakers Delight offers a reasonable price for the quality it offers However, there are many direct competitors offering alternative types of eating as well as supermarkets and other stores High High 6 Workplace injuries The business has already been in operation for a number of years and has procedures in place to deal with workplace injuries through things such as chemicals, burns, spills and slips High Low 3 Risk Treatment Plan and Schedule Options Make sure that there are always both low and high cost options on the menu Introduce a ‘budget’ line, that is perhaps lower in quality than the standard lines, but still high quality compared to other establishments (such as supermarkets) Look at having at least one unique product that is not offered by competitors (such as Chia bread) Keep employees informed of potential risks around the workplace, and up to date with safety protocols Option Evaluation Ranking 1 (highest)- 4 Low and High cost items Easy to implement Not much work involved in managing Doesn’t contradict any values of the company 1 ‘Budget line’ May compromise the promise of quality Involves creating a new line 4 Risk informing Should be occurring at some level in the business already Easy to implement Involves production of material to be distributed across franchisees 2 Unique product(s) Involves the production of an entire new product, including recipe, advertising and distribution of information among the franchisees More difficult to implement than other suggestions, but also has a bigger effect on gaining customer interest 3 As a consequence of the risk assessment, the author recommends the Bakers Delight considers providing a range of both high and low priced items on their menu to cater for the financial limitation of many consumers, and the desire for luxury items. A part of this is also to market the lower cost line separately, retaining the outlook of Bakers Delight as producing high quality goods, but also making them more reachable to those on low incomes. Creating the products (many may already exist) and marketing the line should take no more than six months, as many of the procedures and processes are already in place, such as mass marketing through Facebook and Twitter that the business has already set up, as well as being well known in the bread market. Implementation of the Risk Assessment Plan Implementing this plan will involve working with franchisees, communicating the desires and aims with them and looking at ways of enhancing advertising for the lower priced line. Bakers will need to be briefed on any changes with their processes, particularly if new lines are introduced. Sales staff will also need to be trained and briefed on ways to improve customer’s knowledge of the differences between the lower priced line and other lines. Monitoring and Evaluation Third party audits would be the primary method of monitoring the effectiveness of distinguishing the lines. Enquiries would be made every two months of random samples of the franchisees to determine how far they and the business as a whole was towards establishing advertising for the differentiation in the lines. After a year auditing of accounts would be undertaken to determine whether the changes had resulted in increase of sales, where popularity lay and what differences the changes had made in different locations and on the business as a whole. Work Cited Bakers Delight. "Bakers Delight". 2010. August 20 2011. . Energy Efficiency Best Practice. Bakers Delight Energy Efficient Showcase Bakery, 2003. Print. National Packaging Covenant. Bakers Delight Action Plan Report, 2008. Print. Read More