Entrepreneurship: Key Strategies and Values for Success

This report highlights key strategies and values of successful businesses or entrepreneurship that has supported it in attaining the success heights in the market. It compares a real-life business with a dummy business plan and provides market analysis for the United States bakery industry.

Running head: ENTREPRENUERSHIP
Entrepreneurship
April 15
201
9

ENTREPRENUERSHIP 1
Table of Contents
Introduction................................................................................................................................2
Introduction of Real Business (Alvarado Street Bakery).......................................................2
Introduction of Dummy Business (Jolly's Java and Bakery).................................................3
Comparison of Alvarado Street Bakery and Jolly's Java and Bakery....................................3
Market analysis of United States Bakery Industry.............................................................4
Market analysis for Jolly's Java and Bakery......................................................................5
Macro Market Analysis..........................................................................................................5
Scope of Competition in the Industry................................................................................5
Customers...........................................................................................................................6
Degree of Vertical Integration...........................................................................................7
Technology and Innovation................................................................................................7
Product Characteristics.......................................................................................................8
Key Business Plan Strategies supported Alvarado Street Bakery in its Success...................9
Recommendations....................................................................................................................10
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
Entrepreneurs are very important for a free market because they are the one who supports the
market in reacting to the altering preferences of the customers and prices. For instance, with
the increase in internet use, an entrepreneur may consider the potential to establish a new
service of home delivery which makes use of an application for the customers to buy
(Westhead and Wright, 2013). Without entrepreneurs, the market can be static and slow to
the alterations in trends and technology. An entrepreneur is not always thinking about profit
and price. An entrepreneur can be encouraged to take entry in the industry to provide ethical
services to society (Thérin, 2014). The intent of this report is to highlight some of the key
strategies and values of successful businesses or entrepreneurship that has supported it in
attaining the success heights in the market. With this, the report is also comparing the real-
life business with a dummy business plan presented in the bplan website.
Introduction of Real Business (Alvarado Street Bakery)
Alvarado Street Bakery is one of the known local worker-owned bakeries placed in
California that produces specialized organic whole grain bread and bagels. Alvarado was also
highlighted in the documentary of Michael Moore in 2009 with title, Capitalism: A Love
Story (Alvarado Street Bakery, 2019a).
Alvarado is established as a worker cooperative and every worker gets one share in the
business. The shares provide every worker an equal right of the vote on the matters of the
business, comprising salaries, reinvestment of profits, and employee benefits. As per the
reports of 2009, half of the workers of the business were attached with the business for over
15 years and average employees earn between $65,000 and $70,000 yearly (Alvarado Street
Bakery, 2019a).

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Introduction of Dummy Business (Jolly's Java and Bakery)
JJB is a coffee shop and a bakery handled by two main partners. The business is located in
Southwest Washington. The motive of the business is to get the attention of the regular local
consumers with its range of pastry products and coffee. According to the planning of the
company, it is focused on building a strong position in the market, with the support of
experienced partners of the industry and trivial competitive climate in the region. The aim of
the JJB is to provide its services and products at very competitive prices in order to fulfill the
demand of the middle and higher class income market (B-Plans, 2019).
Comparison of Alvarado Street Bakery and Jolly's Java and Bakery
Alvarado Street Bakery is generally said one of a kind. The business is involved in making
organic bread from the time period of the 70s when the word organic was not even well
known in the market (Alvarado Street bakery, 2019b). The bakery is moving ahead from the
time in order to manufacture all the products free from GMO ingredients. On the other side,
JJB provides espresso and coffee products along with bakery provides manufactured with
high quality of Columbian grown imported beans of coffee. JJB offers its products to every
consumer by serving espresso and coffee products made according to the preference of the
consumer. The bakery offers fresh pastry and bakery products to the customers at business
operations time. The business produces around eight batches of pastry and bakery products in
one day in order to ensure the freshness and quality of the goods.
Objectives of Alvarado Street Bakery
The key objective of Alvarado Street Bakery is to make use of high-quality ingredients in the
manufacturing procedure of a variety of bakery products in order to ensure the safety and
health of the customers who are placed at the major priority of the business (Salniker, 2015).

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To be known as the best organic bakery across the nation with increasing customer loyalty
and reputation of the business in the market.
Key to Success
Organic bakery products
Objectives of Jolly's Java and Bakery
The objective of Jolly's Java and Bakery is to provide high-quality espresso, pastry, and
coffee products at competitive prices in order to fulfill the demand of the customers (B-Plans,
2019).
Key to Success
Offering high-quality products with personal customer service (B-Plans, 2019)
Market analysis of United States Bakery Industry
In the United States, the same as the entire world, the baked products demand is relatively
reducing due to the bend of the customers towards gluten-free, high fiber, and low-carb
options (IBIS World, 2019). Customers are continuously switching to healthy, convenient,
and natural baked items and goods with fruit, yogurt, and nut bars. According to the
American Bakers Association, the bakery industry of the United States is one of the huge
businesses, which are made up of around 2.1% of the GDP (Statista, 2018). This industry is
extremely fragmented, fundamentally comprised of around 3,000 independent bakeries. From
this 65% of the bakers possess less than 10 workers that combine make up a yearly revenue
of around $30m (Hyslop, 2018). The increasing demand for healthy bakery products is
offering high opportunities to Alvarado Street Bakery to develop in the market and offer an
increased variety of health products. However, on the other side, it is raising a number of
competitors in the direction of Alvarado Street Bakery, because with the changing demand of

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the customer's different businesses are changing their offerings and trying to retain their
customers.
Market analysis for Jolly's Java and Bakery
The industry of coffee retailing in the United States has presently practiced quick growth.
The cool climate in Southwest Washington excites the consumption of the hot beverage
during the year. JJB desires to introduce a huge steady customer base, and hence it will focus
on its business and market the products to the local residents, which will be taken as the
prevailing target market (B-Plans, 2019). This will support business in introducing a healthy,
reliable base of the revenue in order to confirm business stability. Additionally, an increasing
number of tourist is predicted to be comprised of approx. 35% of the total revenues. High
perceptibility and competitive products are critical to cover this market segment (Roe, 2019).
Macro Market Analysis
Scope of Competition in the Industry
The United States' bakery industry is very competitive due to the presence of a number of
small to medium size bakers. The rivalry between the main businesses in the industry is due
to the quality, nutritional value, differentiation, and price. The key players of the industry are
Grupo Bimbo and Flowers Foods Inc. (Doolittle, 2013)
Source [(Doolittle, 2013)]
In combination, these two businesses are comprised of 26.9% of the industry of bakery. Some
of the small and medium successful businesses in the industry comprise of Hostess Brands

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LLC, Campbell Soup Co., Krispy Kreme Doughnuts Inc., and Alvarado Street Bakery
(Doolittle, 2013). The most important determinant of competition in the industry is price.
Customers in the market have a high power of purchasing and most of the small players are
not able to compete with the lowest prices. Differentiation and innovation is the key to
survive in the strongly competitive market, and this is the key for Alvarado Street Bakery to
survive in the market by offering different nutritional and healthy bakery products to the
customers in the market. In spite of being a small business, Alvarado is a successful business
due to its competitive strategies to deal with the competitors in the market (Alvarado Street
Bakery, 2019d).
On the other side, Jolly's Java and Bakery can experience intense competition in the industry
due to the nature of the business, as there are a number of player in the market, who are
making use of quality ingredients in the manufacturing procedure of coffee and bakery
products. Hence, in order to survive in the market JJB have to be innovative and offer
differentiated products in the market. The industry of baking is homogeneous and
differentiation in the product is important to separate from the rivals. Marketing initiatives
should be the priority in order to increase the demand, as brand recognition is considered to
be another major factor of competition (American Bakers Association, 2018). Additionally,
an established brand is able to gain the trust of the customers and they are inclined to receive
more money from them.
Customers
99% of the United States households take baked products which result in the diversified and
giant base of the customer (Doolittle, 2013). The demand of the customers is also changing
with the increasing awareness of the healthy and nutritional products in the market offered by
producers making use of organic ingredients. This is resulting in increasing the demand for
organic bakery products and offering increasing sales opportunities for Alvarado Street

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Bakery. This business can survive in the market for the longer-time duration in the market
with its future vision of offering organic bakery products to the customers.
Considering the increasing demand for bakery products in the United States, Jolly's Java and
Bakery can survive in the market with the use of high-quality ingredients in the
manufacturing procedure of coffee and bakery products.
Degree of Vertical Integration
Business in the bakery industry makes use of forwarding vertical integration because
manufacturers have to depend on the suppliers of different ingredients like sugar, flour, and
other dairy products. It is very essential to have control of the supply and delivery of raw
material and their manufacturing procedures. Vertical integration possesses a number of
benefits as well as drawbacks for the bakery industry (Kamat, 2011). Adopting vertical
integration enhances the coordination of the supply chain for large as well as small
businesses. Both the businesses Alvarado Street Bakery and JJB can involve in the vertical
integration in order to improve its control over the supply chain and the quality of the
ingredients used in the manufacturing procedure of the business. However, in order to get
involved in the vertical integration business requires funds and strong financial stability that
could support the business even in the losses. But, in order to deal with the intense
competition in the industry businesses have to take the risk.
Technology and Innovation
Innovation and technology are radically altering the bakery industry of the United States.
New techniques used for production, product development, and e-commerce have formed the
present processes of the businesses in the industry. Production units at small-scale are
adopting the same type of functions that are being adopted by the large scale production units
(O'Loughlin, 2013). This results in making the retail bakers more viable with commercial

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bakeries because they could professionally create specialized products of bread with the help
of an automated system. Though, this results in decreasing the cost of labor for the small
business and also results in decreasing employment rate.
Alvarado Street Bakery has adopted advanced technology in order to produce nutritional
bread for the customers that are good for the health of the customers. This is one of the key
aspects of the success of the bakery in the market. Alvarado is regularly adopting different
innovation and technologies that could support it in enhancing its position in the market
(Alvarado Street Bakery, 2019c).
JBB need to get involved in the high investment in the technology in order to survive for
longer time duration and growth in the United States market.
Product Characteristics
Different segments of the product in the industry of bakery comprises rolls, doughnuts, bread,
and desserts. Innovation is the major element of the industry because the preferences of the
customer have altered in the last five years (Bakery Academy, 2018). Customers are
becoming more concerned as well as knowledgeable regarding nutrition and their health. Due
to this, businesses are getting involved in producing new and healthier baked products in
order to attract customers. Industry producers are investing in expensive ingredients in order
to manufacture low calories and fat products. This has also resulted in increasing the product
line in the business. Bakeries have initiated to offer gluten-free and organic dessert options
for the customers.
The product line of Alvarado Street Bakery is comprised of sprouted grain, flourless baked
products comprising 30 diverse items, with around 15 types of bread, buns, tortillas, bagels,
rolls, and pizza bread. Unlike many of the baked products, Alvarado makes use of dry flour,
primarily whole, sprouted grains, which helps in producing a moist, easy to digest and soft

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bread that can also freeze well. Many of the used ingredients are certified organic and no
preservatives are used in the manufacturing procedure (Alvarado Street Bakery, 2019c).
In order to survive for a longer time duration, Jolly's Java and Bakery need to get involved in
adding more product options for the customers. Besides this, it needs to change its product
line with the changing customer preferences for healthy and nutritional products as it will
meet the demand of the customers and will help the company in expanding its operations
across the nation.
Key Business Plan Strategies supported Alvarado Street Bakery in its Success
Business Structure - Alvarado Street initiated the business as a collective, with a small
working group and make use of principally consensus procedure for decision making. With
the growth of the business, it became unreasonable to include every group in all the decisions
and today cooperative of around 117 workers make use of hierarchical governance
components and representative democracy, with every worker, permitted to give their vote.
The worker-owners select board of directors which is comprised of some of the fellow
worker-owners (Innovative Business Model, 2019). The board is responsible for hiring CEO,
who is accountable to hire other employees and managers who can be regarded as worker-
owner.
Use of Organic Ingredients – The aim of Alvarado Street Bakery is to offer superior service
in providing and highest quality baked products to the consumers in the nation by making use
of managed cooperative and worker-owned structure of the business. Besides this, business is
known for using organic ingredients and whole grain in the manufacturing procedure that
supports business in encouraging healthy living and sustainable agricultural practices.

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Recommendations
One of the key challenges for the Alvarado Street Bakery is the increasing competition for
the established brand in the market like Grupo Bimbo and Flowers Foods Inc. In order to deal
with the intense competition Alvarado Street Bakery have to get involve ineffective
marketing strategies by informing customers regarding the products offered by the business
and encouraging them to consume healthy products.
In case of Jolly's Java and Bakery, business needs to get involved in manufacturing of highly
nutritional products in order to meet the changing demand of the customers in the market
because customers are regularly in the demand of products like gluten free, high fiber, and
low-carb options. Besides this, to grow the business, the company needs to implement
different advanced technology that could support in reducing the overall cost of the business.
Conclusion
The above report is discussing the strategies and objectives of two business plan to operate
successfully in the United State. The business plan of Alvarado Street Bakery is making
organic bread from the time period of the 70s when the word organic was not even well
known in the market. On the other side, Jolly's Java and Bakery is focused towards offering
espresso and coffee products along with bakery provides manufactured with high quality of
Columbian grown imported beans of coffee. From the above analysis, it has been analyzed
that Alvarado Street Bakery is successfully operating its business in the United States due to
adding organic products into its product portfolio, whose demand is regularly increasing in
the market. However, in the case of Jolly's Java and Bakery, it has been noticed that business
is making use of quality ingredients but is not focusing towards changing demand of the
customers about healthy and organic intakes. Therefore, the report has suggested Jolly's Java
and Bakery get involved in the manufacturing of highly nutritional products.

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References
Alvarado Street Bakery (2019a) An Exemplary Cooperative Since 1981 [online]. Available
from https://www.alvaradostreetbakery.com/bread/coop [accessed 15 April 2019]
Alvarado Street bakery (2019b) Discover Alvarado Street Bakery [online]. Available from
https://www.alvaradostreetbakery.com/ [accessed 15 April 2019]
Alvarado Street Bakery (2019c) Nutritional Product Information [online]. Available from
https://www.alvaradostreetbakery.com/products/breads [accessed 15 April 2019]
Alvarado Street Bakery (2019d) About Alvarado Street Bakery [online]. Available from
https://www.alvaradostreetbakery.com/about [accessed 15 April 2019]
American Bakers Association (2018) Baking Industry Overview [online]. Available from
https://www.americanbakers.org/industry-data/ [accessed 15 April 2019]
Bakery Academy (2018) Bakery Innovation as a service [online]. Available from
https://www.bakeryacademy.com/bakery-product-development [accessed 15 April 2019]
B-Plans (2019) Bakery Business Plan [online]. Available from
https://www.bplans.com/bakery_business_plan/executive_summary_fc.php [accessed 15
April 2019]
Doolittle, A. (2013) Industry Analysis [online]. Available from
https://www.csus.edu/indiv/h/hattonl/documents/BakeryIndustry.pdf [accessed 15 April
2019]

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Hyslop, G. (2018) Industry Insight into US Bakery market [online]. Available from
https://www.bakeryandsnacks.com/Article/2018/10/31/Industry-insight-into-US-bakery-
market [accessed 15 April 2019]
IBIS World (2019) Bakery Cafes Industry in the US [online]. Available from
https://www.ibisworld.com/industry-trends/specialized-market-research-reports/consumer-
goods-services/food-service-drinking-places/bakery-cafes.html [accessed 15 April 2019]
Innovative Business Model (2019) Alvarado Street bakery [online]. Available from
https://casfs.ucsc.edu/documents/business-models/CaseStudy_no1_Alvarado.pdf [accessed
15 April 2019]
Kamat, S. (2011) Beyond The Mba Hype 1st ed. India: HarperCollins Publishers.
O'Loughlin, J. (2013) The Importance of Technology to the Transcendental Future 1st ed.
U.S: Centretruths Digital Media.
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5234246-bakery-industry-analysis.html [accessed 15 April 2019]
Salniker, F. (2015) Friends in Knead at Alvarado Street Bakery [online]. Available from
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op-model-thrives [accessed 15 April 2019]
Statista (2018) Bread & Bakery Products [online]. Available from
https://www.statista.com/outlook/40050000/109/bread-bakery-products/united-states
[accessed 15 April 2019]
Thérin, F. (2014) Handbook of Research on Techno-Entrepreneurship 2nd ed. U.K: Edward
Elgar Publishing.

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Westhead, P., and Wright, M. (2013) Entrepreneurship: A Very Short Introduction 1st ed.
U.K: OUP Oxford.