Cakes and Buns Business Model

This assignment requires an analysis of Cakes and Buns' existing business model and its adaptation for an online expansion. Students must conduct a SWOT analysis to identify internal strengths and weaknesses, as well as external threats and opportunities. Furthermore, a Porter's Five Forces analysis is needed to evaluate the competitive landscape of the online bakery market. The goal is to determine the viability of Cakes and Buns' online venture and suggest strategies for success.

Cakes and Buns : A Business Analysis Report
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Cakes and Buns
Executive Summary
The report gives a detailed analysis of the business report for Cakes and Buns, a baking
company started by Jillian and Rosie, from Melbourne, Australia. Beginning as a small time
baking unit, the company grew slowly to be one of the finest sellers of tasty savouries
competing with other bigger baking units. The report gives a comprehensive look into the
business, and analyses the different business activities of the company. The report elucidates
a detailed outlook of the history, the business model, the business environment, the trends
and future scope for Cakes and Buns. The document emphasizes the importance of a detailed
analytical report for Cakes and Buns, as the management plans to extend its operations
globally, with the help of a website to increase sales and expand its boundaries.
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Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................4
Industry Background.............................................................................................................................4
Business Model and Target Audience....................................................................................................5
Value Proposition..................................................................................................................................6
Swot Analysis.........................................................................................................................................7
Strengths..............................................................................................................................................7
Weakness.............................................................................................................................................7
Opportunities.......................................................................................................................................7
Threats.................................................................................................................................................8
Porter’s 5 force analysis........................................................................................................................8
Trends based on datasets......................................................................................................................9
Prototype pages for the user interface................................................................................................10
Main page of Cakes and Buns...........................................................................................................10
The different sections in the page......................................................................................................10
Simulated output showing the product catalogue..............................................................................11
Conclusion...........................................................................................................................................12
References...........................................................................................................................................13
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Cakes and Buns
Cakes and Buns: A Business Analysis Report
Introduction
Norman and Kohl would never have dreamt that their small time baking unit called “Cakes
and Buns” would grow to become a company that would someday cater to international
consumers. Overcoming the initial hardships, Cakes and Buns had slowly but surely moved
forward with a loyal set of customers, who enjoyed the savouries, which had been attracting
them for long. Taking advantage of the trust and goodwill the company was able to garner
over the past 30 years, Cakes and Buns plans to extend their operations even further. The
company and its owners have been a perfect example of dedication and commitment, making
visions and goals to reality, through structured planning and proper strategizing.
Industry Background
As early as 600 BC, there had been evidences of baking bread in Greece. The history of
baking is believed to have started during ancient Egyptians use of yeast, for brewing beer.
The same was experimented with baking bread to make it soft. Starting from the 15th century
onwards, there have been records of baking as an industry (Burnett, 2013). Using ingredients
like sweet dough, cream, butter, raisins and minced meat items like Wigg, Ryvita and Ginger
bread were made and sold on a commercial basis.
Currently, the Baking industry has been engaging in line production instead of traditional
baking (Hüttner and Arendt, 2010). The emphasis on hygiene has led to the creation of
baking equipments apt for wet cleaning, which reduces the time for cleaning. Continuous
Kneading is another process which has been introduced for kneading dough in line
production which ensures its consistency. The industry has recovered itself from this recent
economic crunch by emphasising on natural and organic components that promote healthy
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eating. Growing concerns over health and diet has encouraged the industry to transform itself
from early baking practices (Martinez, 2013). The industry has gradually moved itself away
from the use of trans-fats and gluten-free products. The safety of the workers in the industry
is of high priority now and new equipment such as pouring trays have been adopted for safe
guarding the hands of bakers.
The future of baking lies in catering to consumers who look specifically for healthy options
to practice. A few of the products that the industry may promote in the immediate future are
bread loaves that are rich in protein, flavoured by fruits and nuts (Ureta, 2014). Gluten, free,
fortified and multi grain loaves have seen a rise on demand and are believed to be the trend in
the coming years (Della et al., 2014).
Business Model and Target Audience
Cakes and Buns is an already established brand, and plans to extend itself towards having an
online presence soon. Since their local products are in high demand, a business model should
be adopted such that that their products could have the same demand abroad too (Johnson et
al.,2008) . A Bricks and Clicks model, as the name suggests, is a business model through
which a company plans to demonstrate its presence by a combination of physical stores and
online sites.
Since English is not the primary language in countries like Japan, the websites should be
localized, and should have a unique look and feel if they plan to extend it to those countries.
While following a Bricks and Clicks business model, the important thing to be taken care of
is the establishment of a strong logistics and supply chain. The timely delivery of the
products is as important for the success of an online store as much as the taste they provide.
(Baden and Morgan, 2010). Especially when it comes to food products, the packing, quality
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and freshness of the items should be maintained (Frow and Payne, 2011). The Bricks and
Clicks business model would be ideal for a company like that of Cakes and Buns as they are
already a well established name by their physical presence in Australia for the past 3 decades.
Value Proposition
Cakes and Buns: A mix of taste, trust and artistry.
At Cakes and Buns we believe in healthy eating, and make sure our products retain their
traditional savour, without preservatives or any unhealthy additives. Ours are the freshest
choice of breads and each of our loaves is made with the same flavour, texture and quality.
Few of our highlights at Cakes and Buns are
 Marvellous Muffins : These fluffy, aromatic balls of richness are the perfect foil for
your busy schedule. Grab a couple of these while you rush to office and enjoy each of
our fruity flavours every new day.
 Tasty Tarts: These fruity delicacies would be an accompaniment to any meal, and
would appeal to the ones who have a sweet tooth. Sprinkled with a dash of vegetables
or fruits these colourful tarts appeal to the eyes as much to your palate.
 Zesty Pies: A delicious pie from Cakes and Buns is just what you need when you are
hit by those unanticipated food cravings.
Swot Analysis
The Swot analysis of Cakes and Buns gives a clear picture about the structured planning
required for its growth and success. It gives a detailed analysis of the objectives that the
company plans to achieve, and the different factors that could influence in attaining these
objectives.
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Strengths
 An already strong customer base at Melbourne.
 Well experienced in the field of baking for almost 30 years.
 Flexibility in catering to the number of customers served. Ideal for large groups as
well as individuals.
 Economical and pocket friendly.
Weakness
 The company does not have the skills or enough employees to extend its planned
operations.
 The owners are not very computer savvy and this may be a hindrance while trying to
achieve an online presence.
 Having a global presence requires brand awareness and advertising to a large extent.
Currently, the aspect of advertising has not been looked into.
Opportunities
 An increase in the existing customer base by introduction of the online portal.
 A presence in new countries and introduction to new markets.
 New personnel and new technologies to meet with the global and local customers.
Threats
 By being global, Cakes and Buns would have to face stiff competition from other
global giants that are already in the market.
 The items would have to be more diverse and cater to the individual tastes of the
people of different countries.
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Cakes and Buns
 Each country would have strict regulations about their international trade policies and
the company would have to abide by these regulation. (Helmes and Nixon, 2010).
Porter’s 5 force analysis
Porter’s five force analysis lists out the possible threats that Cakes and Buns would have to
face during their extension to new domains (Porter, 2008). Here the main analysis is the
competitiveness in the market for Cakes and Buns. An in depth study is also made, as to
whether it will be viable for them to proceed with their expansion plans. The five forces and
their level of intensity is listed out as follows:
1. Competitive rivalry (strong force)
2. Bargaining power of the customers (weak force)
3. Bargaining power of the suppliers (weak force)
4. Substitute Products (strong force)
5. Chances of new entrants (moderate force)
Their main rivals, the likes of Brumby’s, have a strong hold on local and international
markets. Breaking into their domain would initially be very crucial.
The catch phrase for the business is to provide good quality food at affordable rates. So the
affordability of the products would be attractive to the consumer and would not be such a
leveraging factor.
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The company has been operative for the past 30 years and the food items are manufactured in
house. The longevity of the business and the good will they have had over time does not pose
much threat for the company in terms of suppliers.
The main factor to be considered while taking into account this factor is the availability of
substitute products. Unlike their local customer base, since Cakes and Buns products are yet
to be acknowledged by an international audience, the threat of switching to substitute
products is very relevant.
New entrants would be finding it difficult to live up to the good will that the company has
created for itself over the past 30 years. It could be thus considered as a negligible factor that
may influence the success of Cakes and Buns business outcomes. (Dobbs, 2014).
Trends based on datasets
 The dataset shows that the individual products offered are very reasonably priced.
 The different flavours for the items like muffins and tarts could be made more
diverse.
 Gluten free products are mentioned separately, and similarly products with no trans-
fat could be explicitly listed out.
 The product catalogue could be diversified even more once they start their online
operations.
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Cakes and Buns
Prototype pages for the user interface
Main page of Cakes and Buns
The different sections in the page
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Simulated output showing the product catalogue
The three main webpages for Cakes and Buns are listed above. The first page shows the
initial screen that the users see once they login. The second page emphasizes the services
offered by Cakes and Buns. The product catalog page shows a sample where their highlighted
products are listed out. The given data set shows the different products that would be sold at
Cakes and Buns. The items listed out in the dataset can be added on the Product Catalog. As
the prices for the flavoured products may vary, the price field could be added at a later stage.
For increasing its competitiveness, Cakes and Buns can promote different combo meals and
food packages at special occasions and on weekends. The website can use a banner to inform
the customers on discounts or free offers on occasions like Christmas Eve.
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A login option can be given for the client, and if the customer is a regular one, the company
can offer the customer special deals or surprise packages to the customer by giving an inbox
facility and the option to send mails to the company. Search engine optimization techniques
could be used to promote the website further, so that online customers can be redirected to
the official website if they search for any specific items like “chocolate muffin”.
The webpage can be designed in such a way that there is enough dynamism for populating
the fields in the product catalog or the special offers section. Web analytics could be used to
identify the top trending search terms pertaining to baking, and these search terms can be
populated in the websites special offers section. A specific page could be dedicated for health
related articles or tasty recipes and these sections could be updated on a daily basis with
interesting tips which could also work effectively as a marketing tool.
Conclusion
The business report gives a detailed analysis of the different operations carried out at Cakes
and Buns, a baking unit, established 30 years ago. The company has immediate plans to
expand its operations online. As the expansion is a long and cumbersome process, a business
document would be helpful in identifying the different opportunities as well as the risks
involved during the entire process (Chesbrough 2010). Different studies such as the SWOT
analysis and Porters 5 force analysis are done to identify the possible threats and revert them
in a timely fashion. Already being an established brand, Cakes and Buns expects to replicate
their success in the baking business with their online web portal.
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References
Baden-Fuller, C. and Morgan, M.S., 2010. Business models as models. Long range
planning, 43(2), pp.156-171.
Burnett, J., 2013. Plenty and Want: a social history of food in England from 1815 to the
Helms, M.M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review
of academic research from the last decade. Journal of strategy and management, 3(3),
pp.215-251.
present day. Routledge.
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long range
planning, 43(2), pp.354-363.
Della Valle, G., Chiron, H., Cicerelli, L., Kansou, K., Katina, K., Ndiaye, A., Whitworth, M.
and Poutanen, K., 2014. Basic knowledge models for the design of bread texture. Trends in
Food Science & Technology, 36(1), pp.5-14.
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Frow, P. and Payne, A., 2011. A stakeholder perspective of the value proposition
concept. European journal of marketing, 45(1/2), pp.223-240.
Hüttner, E.K. and Arendt, E.K., 2010. Recent advances in gluten-free baking and the current
status of oats. Trends in Food Science & Technology, 21(6), pp.303-312.
Johnson, M.W., Christensen, C.M. and Kagermann, H., 2008. Reinventing your business
model. Harvard business review, 86(12), pp.57-68.
Martínez-Monzó, J., García-Segovia, P. and Albors-Garrigos, J., 2013. Trends and
innovations in bread, bakery, and pastry. Journal of culinary science & technology, 11(1),
pp.56-65.
Porter, M.E., 2008. The five competitive forces that shape strategy. Harvard business
review, 86(1), pp.25-40.
Rubel, W., 2011. Bread: A global history. Reaktion Books.
Ureta, M.M., Olivera, D.F. and Salvadori, V.O., 2014. Baking of muffins: Kinetics of crust
color development and optimal baking time. Food and bioprocess technology, 7(11),
pp.3208-3216.
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