Bake Me a Cake Harvard Case Solution & Analysis

Bake Me a Cake Case Solution

Introduction

Amy Bourgon, who is a passionate cook and had been working in food industry for several years, started her own business of baking in 2009 and it was named as “Bake Me a Cake (BMAC)”. She started the business with the thought that she could spend time with her family and pursue her career therefore the BMAC could only serve people near Sarnia, Ontario. She started baking cakes for her family and friends, the business got successful as she later started preparing orders for larger occasions or parties. The main reason for her success was the unique designs that she offered which excite her customers and created a lot of direct advertising amongst customers. During the initial years, the company became very successful and was able to attract a large enough customer. The company was operated from home and orders were received at telephone.

Amy was however not convinced with the performance of the company as she believed that she was not earning enough to maintain herself. Therefore wanted to expand the company and therefore considered the opportunities that were available in the industry.

Industry Background

The industry in which, BMAC operates is baking industry of Canada which is not much developed as compared to developed markets of the world. There are following two types of companies in the industry;

The Commercial Companies

The commercial companies comprise of large chains of grocery stores or large incorporated food companies, they usually provide packed products with a longer shelf life. They mostly dominate the industry as more than 90% of the revenue of the market is achieved by commercial companies. These companies usually cakes that are pre-made before order and custom cake design are usually not provided but some designing can be done on the cake as per customer requirements such as writing name or message and etc.

The Retail Businesses

The retail businesses comprises of small in-house bakeries which usually have a small customer base as compared to commercial companies therefore these business have a very small share of the market. These businesses are more in number as compared to commercial companies but due to their small customer base they are able to earn less. The retail businesses are usually more labor intensive as compared to commercial companies and therefore earn lesser revenue per employee. These businesses usually have specialty or provide customer defined cakes and therefore proffered in such orders.

Competition for BMAC

BMAC is facing fierce competition as there are about 7 independent bakeries and several store in the market that provided baked products. All competitors provide similar products with little exceptions to attract customers.
The main competitor for BMAC in local market is Junior Bakers as they also provide unique design but there unique designs were not as appealing to customers as BMAC’s cake are. Therefore custom cake orders were preferably given to BMAC. Also BMAC’s prices for cakes were relatively lesser than Junior Bakers..................

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