A growth strategy for Fifers Bakery - Essay Example

A Growth Strategy for Fifers Bakery A Growth Strategy for Fifers Bakery A Research Proposal A GrowthStrategy for Fifers Bakery Introduction Fifers bakery is a large scale bakery supplying retailers with breads, cakes and other baked products. At present the company has no strategic plans for the next five year. To be able to develop a strategic plan the company should be aware of the key innovation trends and new product and category opportunities. A Growth Strategy should be planned to enable the company to anticipate the changes in the internal environment caused by the external environment in time. To start the process of selecting a market-dominating business and marketing strategy we must take the first four steps: Setting the vision for Fifers Bakery, gathering environmental and competitive intelligence, and identifying the strengths and weaknesses of the company. Fifers Bakery vision is to create business opportunities for both business owners and their employees to upgrade operations and increase both profits and wages. The company should be focusing on innovation that will lead the company into major growth. It is also the company's focus to develop and produce new products that are not available in in-store bakeries and offer good customer service that has a personal touch in order to have customers coming back. The knowledge in information technology will be given importance since this will help the company to shorten its work from years to hours, minutes or seconds. Overall the vision of the company is to provide services that will benefit not only the company but its customers as well. To develop the best Growth Strategy for Fifers Bakery we must first understand the world outside the organization. Our focus will be our competitors, technology, market size and trends, our clients, availability of key resources (people and materials) and others that includes customer request and suggestions. Aside from the above mentioned external environment it also includes strategic implications for baking industry, category opportunities, new product opportunities and retailer and distribution drivers. Identifying the strength and weaknesses of Fifers Bakery includes the internal environment of the company. This includes the ability of the company to get new clients products and services, research and development , automation and equipments, knowledge and skills, employee diversity, capacity, training, company structure and culture, total Quality Management Systems, finance including cash flow, ROI leadership and others. From the above listed focus we will be able to start working on our Growth Strategy that will help Fifers Bakery survive or even lead the baking industry in the next five years. Topic The objective of this study is to be able to create a Growth Strategy for Fifers Bakery. The baking industry is complex, extremely competitive and fractious. The need for change and the focus for innovation are important. A Growth Strategy for Fifers Bakery will start at defining the company's goals. The attainment of such goal will mean that the vision has become a reality. It is best to identify first what markets we will do business. Since Fifers Bakery is a supplier for a retailer, then we will need to focus on those retailers who can cope up with the demand of the customers. We should not be only focusing on the orders; we should also overview the services being given to the customers. Baking industry has becoming very stiff that you need to improved or change some items in order to attract customers. We will be able to choose from being a marginal player with a small percentage or a big player with a significant portion of the market or we will dominate the market and crush all competition. It is important to identify which market we will focus. Customers play a vital role in the success of the organization. Fifers' bakery can make and bake the best cakes and bread in the world but if it is not what they need it would be a waste of time, effort and money. We can easily identify which factors or environment would greatly affect the company's success. We must rank and rate the strength, weaknesses; opportunities and threats (SWOT) of the company. We can start evaluating the internal factors by identifying the strengths and evaluate whether this can be capitalize upon or weaknesses which must be bolstered or outsourced. The strength of Fifers Bakery is that it focuses on innovation. Any new trends in baking industry, Fifers Bakery will adopt itself easily. By this the company can adopt easily to its environment without making any major changes in its organization. One of the weaknesses of Fifers' is that the company is sometimes focusing its attention to other matters instead of focusing on what the customer need. Even though the company can bake extraordinary breads and cakes if it is not the customer's need then it will be a waste of time, effort, and money. By evaluating the external factors we will be able to know whether it is an opportunity to be taken advantage of, a threat to be defended against, or simply something neutral that the company can ignore. To be able to achieve the needed growth of Fifers' we need to choose the best strategy that will suite the organization. In order to do this it is best to group the critical factors into internal and external and rating each factor depending on its importance to the business.. Based on the performance of Fifers' the following internal factors are the most important: Research and Development, Equipment, Automation, knowledge and Skills and Total quality management systems. Background of the Problem Fifers view their stakeholder as part of an environment that must be managed in order to assure revenues, profits and ultimately, returns to shareholders. Stakeholder relationships and a firm strategy will help the company to have a firm financial performance. Fifers' stakeholders are their customers, employees and suppliers. Identifying the issues around the problem will help the company to unfold an effective growth strategy. Upon analyzing the present situation of Fifers Bakery we have found out that focus should be given on adopting a new information technology. In order to cope up with the new trends Fifers Bakery should respond very quickly to changes. Change is an accepted consequence of modern life. Fifers' is involved in evolutionary change wherein a sudden innovation occurred. Keeping focused to innovation is important. In order to achieve the desired goal the company should be able to identify the drivers that will influenced innovation. In Fifers Bakery, the company is not aware of the drivers that influencing innovation and new product development in the company. As a result of this the numbers of customer is greatly affected. The company was not able to identify what the customer really wants. Fifers should be much focused on what the customer really wants, the customer is an important stakeholder in this business. Problem Review and Objectives The objective of Fifers Bakery is to be able to have strategic plans in place for the next five years. The said plan will be based innovation. The company's innovation is influenced by the following drivers: Consumers -new trends, preferences, other manufacturers or competition and retailers. The company should be focused on the drivers that are influencing the innovation and the new product development in the company. Fifers need to make strategic decisions relating to their external environment that causes changes in the internal environment. The strategy must address issues such as customers, competitors and market trends. The Growth Strategy of Fifers Bakery should involve marketing strategy. Marketing aims to transform corporate objectives and business strategy into a competitive market position. Essentially the main concern of Fifers is to differentiate the products by meeting customer needs more effectively than competitors. Therefore the growth strategy should address the following elements - customers, competitors and internal corporate issues. Focus your research not only on the mentioned factors but also in the quality, quantity and products. The company's need for a growth strategy is important. The analysis of the company's situation has revealed several problems that need attention. The internal and external factors will be the focus of the study. We have stated that Fifer's should pay attention not only on the manufacturing of breads and others but we need also to consider and understand our customer need. How to do this will be answered by the marketing manager who will be assigned in selling the services of the company. The objective of the company is to be able to provide the customer the bread and cakes that they need. The Growth Strategy will focus mainly on the stakeholder and other factors that are affecting the company's growth. As mentioned above the internal factors and the external factors have been influencing the performance of the company. Like any other business the organization is after the profit. Every company is doing everything to increase it and to become a leader in their field. One of the best possible ways to do this is by listening to your customers. You are not really selling products or services; you are selling customer satisfaction. Satisfied customers return to spend more money and are likely to refer new customers to you. One of the reasons why the company is having some changes is because they wanted to stay and become a leader in the business and to be strong after 3 to 5 years. And the best possible way to achieve this is to satisfy the most important stakeholder which is the customer. The company's financial situation will also play an important role in the growth strategy. Every business should operate from a budget. The last year's financial reports will serve as an excellent guide to setting budget of the coming years. Since it is designed with the best information you have available at the outset, the variances from the budget figures may give you valuable information in preparing the game plan. Benchmarking is a tool that will allow the retailer to understand category performance (this includes sales, volume, profits, and shrinks) across the instore bakery department and understand the impact of decisions or tactics on performance ( such as promotional effectiveness, pricing strategies and assortment) as well as gain fact based, measurable recommendations that drive sales and profits. This knowledge will help Fifers bakery to increase consumer satisfaction with fresh item through better product sourcing decision, product assortment, in-stock position and effective merchandising. The Growth Strategy was proposed because of the problems the Fifers Bakery is having. For the company, the said growth strategy will help them in achieving the goal and objectives of the company. The main focus will be on how it will be implemented. The marketing manager leadership is important in this matter. The success of the growth strategy will depend on how good the plan will be and the implementation of it. An important change that will greatly affect the company's output is the adaptation of the technology. A new technology will increase the performance of the company. It will help increase the number of products produce in a day as well as increase the numbers of customers. The new machines or equipment should be handle by experts or training for employees in handling the equipment will be done. It is one of the company's objective to increase its output but with quality. The best way to solve the problem is thru the proper analysis and understanding of the situation. Growth strategy may or may not be successful; the reason for this depends on the proper planning and choosing appropriate steps to success. The company's focus will be on the following: innovation, customers, profits and a good strategy. A good strategic plan for the next 5 years should be very well coordinate with the persons involved in the business. The company will survive the stiff competition if the strategic plan will be implemented as soon as possible. However a thorough and deeper analysis is needed so that the strategic plan will not cause any damage to other factors. The literature review presented in this study will help the company understand the need for change and the acceptance of innovation. Literature Review Because of the stiff competition in the baking business, companies are having their own strategy in order to lead the growing industry of bakery. In Dallas Corner Bakery has announces its new approach in baking business, the franchising. As part of its franchising growth strategy Corner Bakery announced that New Jersey Corner Foods LLC will be their newest partner in bringing quality fresh food to Central New Jersey area residents in the fast-casual segment.(www.cornerbakery.com). From 1991 Corner Bakery is operating as a single proprietor not until it make its move for growth that it opens the company for franchising in 2006. Although the company has become the leader in baking, it still has to make a move to cope up with the new trends and innovation. Corner Bakery Cafe is a fast-casual concept serving breakfast, lunch and dinner to guests in Chicago, Denver, Southern California, Dallas, Houston, Washington D.C., Atlanta and Philadelphia. In an article in Businesswire.com the growth strategy in bakery and cereals should be done in order to maintain and develop the market share. The bakery and cereals manufacturers have been forced to address the 'staple' image of their products. In doing so, manufacturers have innovated by reformulating to make products more indulgent, fortifying products with functional ingredients to make them healthier and developing innovative delivery methods. Key trends and future product opportunities' is a new management report that analyzes the drivers and major trends currently influencing the bakery and cereals market including health,premiumization, guilt-free indulgence, convenience and ethical consumerism. This report provides detailed market insights at global, regional and category level to forecast trends accurately to 2009. The Key trends and future product management report also enables to target new and emerging market opportunities by extensive analysis of the most innovative new product launches, trends in NPD and convergence. (www.reportlinker.com). the above mentioned ideas from the report will help the Fifes Bakery to formulate its own growth strategy. In the situation of the Marvelous Market Bakery owned by Mark Furtensberg the business collapses because the company was not able to foresee the situation. The company was so focus with the high demand of breads and cakes and he added capacity and additional retail stores were opened. He even added new delivery trucks and increase the number of manpower. Because of preoccupation and high demands of their product Futernsberg have no time to visit the other stores and customer. Finally, with links to loyal customers strained, quality slipping and a severe icy winter keeping customers away, cash ran out. Less than four years after opening, Marvelous Market filed for bankruptcy protection. Understanding what is behind this failure can provide good clues about what is needed to sustain growth. The company has come up with several definitions of success in a growing business. For Rule Breakers, growth is measured in revenue increases from new products. These businesses take an "us against them" approach to their markets, with success frequently defined as how big a mark they leave, how much new demand they create. Positive cash flow bears heavily on the minds of some, while all should be equally concerned about their performance in learning and generating new insights about rapidly changing customer needs. (Tomasko, 2002). According to Tomasko growth slows when a company's outside world changes in ways that what the business is especially good at no longer provides significant advantage. A company's inner world, its organization, looses its sharp external focus. (2002). the result of lost of focus of Marvelous market is the main reason why this company has failed. The lack of strategic ideas and not able to plan for the future, has resulted in the failure of the company. It is important to focus not only on the product on sale but also in the structure and factors that may somehow affect the company's future. Fazer Group has grown into a significant bakery company in Russia in ten years. Fazer is one of Russia's leading bakery companies. During the past three years, Fazer's bakery operations in Russia have grown at an average rate of ca 40 per cent annually, and today they constitute 14 per cent of the Group's turnover. According to the Fazer group, the will to understand customer needs, quality consciousness, care for the well-being of personnel, and know-how in the fields of production technology, logistics and marketing are all among Fazer's success factors. Considerable investments have made it possible to modernise operations, logistics and distribution. Apart from finances, the Group has invested a lot in Russia also in the form of know-how, time and experience. 'For Fazer group the success of the company is because of their committed and hard-working personnel are an important success factor. The company has a successful strategy as well as created a wide variety of cooperation and open dialogue. This has leaded the Fazer Group to be able to open its branch in St. Petersburg. Over the years, Fazer frequently visited each other's companies in order to strengthen a common Fazer culture and to learn from each other. The results of the cooperation are visible also in production, although most of the bread baked in Russia still is traditional Russian bread. Discussion In the above review of literature, the factors that are important in the success of the company are its internal and external environment. Identifying the stakeholders also plays an important role in the growth of the company. Benchmarking should be done to evaluate the situation not only for today but for the future of the company. Fifers Bakery realizes the need to oversee the future of the company. In the experience of Marvelous Market the owner was not able to focus. The owner focuses on the wrong factor. The number of bread was his concern and forgot other factors including its connection with the customer. This resulted on the failure of the company; the good thing is that they were able to survive the bankruptcy of the company by having a good strategy. Like in any other business the manpower plays an important role in the success of the company. Fazer group considered its employee as the secret of success. The strategy of Fifers Bakery should be focusing on all the factors that have been mentioned by the three companies including the key trends reports. The key to success is to understand the need of others and consider the factors that maybe influencing the company a lot. Cooperation and a good strategy will be able to give Fifers Bakery a good profit and an increased in number of customers. References Tomasko, R. (2002) Keeping focus on Growth, http://www.roberttomasko.com/Growth.Ch9.htm October 2,2007. Corner Bakery Caf Announces Strategic Partnership with New Jersey Corner Fod LLC http://www.cornerbakerycafe.com/press/index.aspx October 2, 2007 Growth Straegies in Bakery and cereals : key trends and future products opportunity.(2007) http://www.reportlinker.com/p048996/bakery-cereals.html October 1, 2007 Fazer Group, 2007, Fazer Aims to Doble Bakery Turnover in Russia http://www.flexnews.com/pages/11130/Bakery/fazer_aims_double_bakery_turnover_russia.html October 5, 2007 Porters Five Forces, A Model for Industry Analysis, 1999-2007 http://www.quickmba.com/strategy/porter.shtml September 29, 2007. Read More