International Management Report: Four Leaves Bakery Business Analysis

This report provides a comprehensive analysis of the international management strategies employed by Four Leaves Bakery, a Singapore-based bakery with multiple stores. It delves into various aspects of the business, starting with an introduction to international management and its relevance. The report then explores the company's business strategy, including product/service positioning, pricing strategies, distribution and logistics, promotion and advertising, estimated sales mix, and production strategies. Furthermore, it examines the financial planning aspects, such as cost analysis, cash flow statements, and projected profit and loss statements. The report also considers management considerations, including personnel/sales force factors, business advisors, and contingency plans. The report concludes with a summary of the key findings and recommendations for the company's international management approach, providing a holistic view of the business operations and strategic planning of Four Leaves Bakery.

INTERNATIONAL
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Business strategy..............................................................................................................................1
6.1Product/ Service positioning..................................................................................................1
6.2 Pricing strategy......................................................................................................................1
6.3 Distribution and logistics......................................................................................................2
6.4 Promotion and advertising....................................................................................................3
6.5 Estimated sales mix...............................................................................................................3
6.6 Production strategy................................................................................................................4
FINANCIAL PLANNING...............................................................................................................4
7.1 Cost analysis and cash flow statements................................................................................4
7.2 Projected profit and loss statement.......................................................................................8
Management considerations.............................................................................................................9
8.1 Personnel/sales force factor...................................................................................................9
8.2 Business advisers ...............................................................................................................10
8.3 Contingency plans...............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
International management refers to an activity which includes operating businesses by
crossing national boundaries. It has a large scope and works at a global level. Various aspects of
culture, language, political and economic differences exist in such business. The present report is
focussed on same topic in context of Four leaves bakery based in Singapore. It has a number of
stores in various parts of country serving different products. The report will discuss different
strategies of marketing, financing and contingency plans.
Business strategy
6.1Product/ Service positioning
The Four leaves bakery has a wide option to select a target market as it supplies product
which is for everyone. It can have wide positioning of products by making its services customer
centred. For giving a good positioning to the firm, it has to analyse its competitors as well. The
bakery industry has a growth of about 8% per annum in world market (Scullion & Collings,
2011). The main raw material in making of cakes and bakery products is bread and biscuits
which covers almost 78% of this business. It is recommended that before positioning the brand it
is necessary to identify the uniqueness of product along with a detailed research on customers.
Besides this a company should also research on its competitors for getting information of their
probable moves to gain market share. In context of Four leaves bakery, company should focus on
its logo and tag-lines that can attract the customers. It will also help in creating an image in
customer's mind so that they can identify the brand easily (De la Mothe, & Paquet, 2012).
Moreover, its distribution should be done from stores that are easily accessible for consumers.
Home delivery option will work as an added advantage in this field. So, it can be said that for a
single function of positioning of product, the organisation will have to focus on whole market in
all aspects.
6.2 Pricing strategy
The pricing strategies for any product or service is a crucial work that should be done
according to a systematic plan. The wrong strategy of pricing can affect the business a lot
(Bakery Marketing Strategies, 2016). In case of bakery business, it is recommended that price
should always be such that can be affordable for every class of customers. Cited company can
use different pricing strategies to attract more number of customers. The major competitors of
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mentioned firm are Bread-talk and polar. Both use to give services in the field of bakery items.
The Four leaves bakery can adopt a pricing strategy in which a different kind of discount can be
given. For instance, it can first fix the price of all different flavoured pastries, cupcakes etc. to
almost same. After that a strategy of incremental discount can be applied in which more number
of pastries will offer more discount (Hill, Cronk & Wickramasekera, 2013). It means if 3 pastries
are bought 5% discount can be given likewise it number increases to 6, 10% of discount should
be given. Besides this, it should be taken in consideration that the price fixed by company should
match with market cost of product. If the initial price will be equal to market cost then even in
case of less numbers of purchase, firm will be in position of break even (Ruigrok & Van Tulder,
2013).
6.3 Distribution and logistics
The distribution strategy has an important factor that has an impact on customer's mind.
Some companies use to manufacture the product by their own and then sell it to consumers
directly. While some have a long chain of distribution in which various middlemen are included
to supply the final product to consumers. Decision about distribution channels is a difficult task
as it contains a huge amount of expenses. This management is also affected by public views
because it includes a large number of people in distribution chain (Harzing & Pinnington, 2010).
The modern concept of e-retailing has been a major contributor in improving supply chain
management. The bakery product's distribution should always be fast and have smaller chain.
This is necessary as it comes in category of perishable products. Bread is the main staple food for
most of the Singaporeans so, mentioned company has always been successful through its
products in market of Singapore. Through use of e-retailing or managing supply through
electronic medium company can have various benefits which are as follows:
 Reduction in cost
 Increased number of sales
 Better order processing
 Increase in profits
 Faster delivery
 Better information management (Madura, 2011)
 Improvement in inventory management
 Sound relation with suppliers
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Thus, this idea of supply will help the aforesaid company in making itself competitive in
market.
6.4 Promotion and advertising
The promotion and advertising of bakery products has a lots of options. The major focus
while promoting the product should be on identifying self, identifying major work that company
does and finally what is the main attraction of the business that it wants to offer. The cited
business keep in mind a easy formula in mind that is KISS- Keep it short and simple (Boussebaa,
Morgan & Sturdy, 2012). The idea behind this strategy is to make every tool of promotions
simple but conveying the main message in detail. A person can be hired for this work who can
make various good punch lines for company. Besides this, colour of logo should be attractive
and rich that can draw attention of customers whether it is a child or adult. Nowadays, companies
use to take help of mascots that can advertise their products well. Company is also active through
e-commerce sites, hence it should pay attention on good web designing that can be based on
some themes (Dellinger & et.al., 2013).
Products of bakery are sold more on some occasions like Christmas, valentines day,
marriages, birthdays etc. so aforesaid organisation can plan some different offers to attract
customers. As for instance, it can give small greeting cards along with cakes, or it can offer some
pancakes and cupcakes free of cost on any big orders. Moreover, to promote and advertise
products it can take help of media like newspapers, magazines, billboards, mascots on streets,
digital media etc.
6.5 Estimated sales mix
Sales mix of the company includes different strategies that are employed for its several
categories of products (Lauring & Tange, 2010). Every company that use to supply different
range of goods have a various kinds of demand and sales. In mentioned organisation, it use to
sell cakes, buns, sandwiches and many other confectionery items. So, it has to focus on making
different strategies for various categories of products. Cited organisation use to give less focus
on goods that are already demand as it does not need any promotion strategy. On other hand, if
any item is in less demand or a launch of new product is planned by firm, then plans for
marketing, promotion etc. have to be made (Mudambi & Swift, 2011). For instance, company
has planned to launch a new flavour of cookies, so aforesaid venture will have to make strategies
to establish the product in market. To make a demand among customers, it can go for various
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kinds of sales mix that include personal selling, online selling etc. These sales mix will help in
gaining more number of customers and building a communication with them. On other hand,
major items like cakes, and breads that are already in demand and cover large share of market
and profits can be continued with regular strategies (Collings, Scullion & Vaiman, 2011).
6.6 Production strategy
To decide about production strategy, it is necessary to conduct a market survey that can
tell about current trend and demand in market. On the basis of this research, cited company can
decide that which commodity should be produced and in what quantity. It is not necessary to
produce a large volume of goods, rather organisation should focus on producing different tastes
of a product. For instance, buns or sandwiches that can be produced in large quantity with
different flavours will help more in increasing sales than producing a single flavour of product
(Tanaka & et.al., 2012). It should be kept in mind that taste of product should be such which can
make customers attracted towards it. Moreover company can use the idea of making
differentiation in its all products that can make it able to gain large market share. Differentiation
can not necessarily be connected with taste, it can be related with any service as well. Production
should be done on a large scale after doing a market survey so that it can attain economies of
scale and minimise its cost of production.
FINANCIAL PLANNING
7.1 Cost analysis and cash flow statements
Major concern for an enterprise owner in their business is the cost element which needs
to be taken into considerations as determination of cost is essential for the business. It is that
systematic method which helps in estimating all the strengths and weaknesses of different
alternatives held with an entity which can be utilised in their business in order to produce the
best suitable future outcomes to increase the business efficiency. Cost benefit analysis is used in
the business which helps an entity in ascertaining the internal business proceedings by taking
essential decisions regarding the costs which can be incurred by an entity in normal course of
action. In the given situation the business of four leaves bakery are required to ascertain their
current financial situation to act according to the framed government policies and procedures
which will uplift the existing business entity rather affecting the performance of the business.
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For these situations break even analysis has used which further helps an entity to
ascertained the break even sales mentioned below in the figure as it is that point in which the
business enterprise will no profit or loss at this status.
Break even sales= Average fixed cost/%contribution
Average fixed cost= 45000
Contribution= 50%
Revenue Contribution Fixed Cost Profit
45000 22500 45000 -22500
90000 45000 45000 0
112500 56250 45000 11250
135000 67500 45000 22500
40000 60000 80000 100000 120000 140000
-40000
-20000
0
20000
40000
60000
80000
C on trib u ti
on
F ix ed
C ost
Cash flow forecasting
Particulars
0(All
values in
$)
1(All
values in
$)
2(All
values in
$)
3(All
values
in $)
4(All
values
in $)
5(All
values
in $)
(a) CAPITAL
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FUNDING 150,000.00
Loan payments 100,000.00
(b) SALES FORECAST
Sales Value 150,000 165,000 181,500 199,650 219,615
(c) COST OF GOODS 52,500 57,750 63,525 69,878 76,865
(d) EXPENSES
Premises 50,000 20,000 20,000 20,000 20,000
Wages 50,000 51,500 53,045 54,636 56,275
General Expenses 60,000 61,800 63,654 65,564 67,531
Interest @3.68% 44,160 44,160 44,160 44,160 44,160
Market survey 2,000
Preliminary expenses 10,000
Marketing expenses 7,000 7,000 7,000 7,000
Cash balance
£181,000.0
0 -76660 -70210 -62884
-
54587.4
7
-
25216.2
190999
999
Interpretations
Cash flow forecasting is important aspect of the overall financial plan as it will reveal the
true status of the business by identifying the cash balance available with an enterprise after
meeting all kind of expenses from the sales and the revenue generated by an entity by offering
their wide variety of products or services. The cash balance shows positive figuters in initial stge
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slowly and gradually gets negative fuel to heavy burden of various expenses as all these required
by the business fob their smooth business operation.
Cash flow statements
Year
0(All values
in $)
1(All
values in
$)
2(All
values in
$)
3(All
values in
$)
4(All
values in
$)
5(All
values in
$)
(a) Sales Value 250,000 150,000 165,000 181,500 199,650 219,615
TOTAL CASH
INFLOW 250,000 150,000 165,000 181,500 199,650 219,615
CASH OUTFLOWS
Payments for materials 52,500 57,750 63,525 69,878 76,865
operating expenses 0
Premises (rent, rates) 20,000 5,000 5,000 5,000 5,000 5,000
Wages and salaries @30
per hour(for 8 hours in
5days a week) 0 2,057 2,194 2,331 2,469 2,606
Interest and bank
charges payable 0 44,160 44,160 44,160 44,160 44,160
Marketing costs 7,000 0 7,000 7,000 7,000
Market survey costs 2,000 3,000 3,000 5,000 5,000
Other preliminary
expenses 10,000 5,000 8,000 11,000 13,000
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financing repayments
Loan repayments 20,000 20,000 20,000 20,000 20,000
TOTAL CASH
OUTFLOWS 39,000 123,717 144,104 153,016 164,506 166,631
Cash flow summary
NET CASHFLOW FOR
PERIOD 211,000 26,283 20,896 28,484 35,144 52,984
OPENING CASH
BALANCE 0 211,000 237,283 258,179 286,662 321,806
CLOSING CASH
BALANCE 211,000 237,283 258,179 286,662 321,806 374,790
Interpretations
The cash flow statement will cover all the three aspects of the business in order to reveal
the true business performance by considering all the categories that is operating, financing and
investing categories which needs to be taken into considerations. It is prepared in order to make
business decision regarding the business efficiency or talking a new project or proposal. It is
prepared to know the exact balance of the business by identifying all the cash outflows and cash
inflows as their main motive is to reduce all cash outflow that is all kinds of expenses and cash
inflow which is sales and revenue produces by an entity throughout the business.
From the table given above the cash flow statements reveals the efficiency of the business in
terms of increasing total cash flow from one period top the another period. This cash flow
statement has based on different assumptions such as expenses such as wages and the salaries are
taken as national wage rate of 30 per hour for normal 8 hours in a day for 5 days a week paid to
all the employees working in a bakery. The per hour wage rate has increases on a constant $2 per
hour rate from one year to the another year. The total bank loan taken for operating this kind of
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business is of $100,000 on a simple rate of interest of 3.68% in Hong Kong asap the current
entity will be operated in this country.
7.2 Projected profit and loss statement
Year
0(All values
in $)
1(All
values in
$)
2(All
values in
$)
3(All
values in
$)
4(All
values in
$)
5(All
values in
$)
Revenue 0 150,000 165,000 181,500 199,650 219,615
Cost of sales 0 52,500 57,750 63,525 69,878 76,865
Gross profit 0 97,500 107,250 117,975 129,773 142,750
Expenses/overheads
Premises (rent, rates) 20,000 5,000 5,000 5,000 5,000
Wages and salaries 2,057 2,194 2,331 2,469 2,606
Interest and bank
charges payable 44,160 44,160 44,160 44,160 44,160
Lease payments 7,000 0 7,000 7,000 7,000
Total
expenses/overheads 0 73,217 51,354 58,491 58,629 58,766
Profit before tax 0 24,283 55,896 59,484 71,144 83,984
Tax @16.5% 4,007 9,223 9,815 11,739 13,857
Profit after tax 20,276 46,673 49,669 59,405 70,127
Transfer to reserves 20,276 46,673 49,669 59,405 70,127
Interpretations
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Profit and loss statements are prepared to ascertain the future profitability by operating
this kind of business. It considers all kind of expenses which is to be deductible from the raw
sales figure which will arrived after meeting ball kinds of expenses such as all daily nature
expenses, interest expenses for taking bank loan and the most important expense is tax amount.
In the above statements corporate rate of tax in Hong Kong is 16.5% is taken into consideration
to ascertain the true figure. The above mentioned statements reveals that the profit of this
organisation has continuously showing increasing trend.
Management considerations
8.1 Personnel/sales force factor
The sales force of an organisation is managed by a human resource department (Kotton &
et.al., 2010). In bakery business the recruitments can be done on the basis of some particular
qualifications. Here, personality and presentation skills are more important than any professional
degree for sales executives. While for bakery chefs they should have the ability to make different
bakery products with new experiments. They should have knowledge of tastes, flavours,
identifying fresh products etc. Besides this, it is necessary to train the staff of Four leaves bakery.
The training will help in making employees presentable before customers. Advertisement of
vacancies can be arranged by HR department on the basis of requirement at local level or as per
the needs (Flack & et.al., 2010).
8.2 Business advisers
The business advisers are important for organisations so that they can discuss about their
strategies with them and seek any guidance in their plans. Business advisers are experts of their
relative fields and can give useful suggestions related to marketing laws, finance and so on. The
aforesaid firm can also take help of these advisers in various kinds of planning and strategy
making. They may suggest different pros and cons of plans so that effective strategies with less
flaws can be made (Kolk & Van Tulder, 2010). Moreover, they can also help in complying with
compulsory legal formalities that a firm should follow. Besides this, they can help in making
marketing strategies which can be helpful according to size and capacity of business.
8.3 Contingency plans
The bakery business are exposed with many kinds of risks that are direct or indirect.
Some of those risks and their solutions are discussed down:
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 Property loss: In context of present company which is a bakery shop is more in risk due
to fire. Many instruments and methods used to make bakery items can catch fire easily
(Harzing, Reiche & Pudelko, 2013).
Solution: Company may contact to waste management organisations that clear the rubbish
resulted from fire, and firm can be set up at some other temporary place.
 Liability risk: Another major risk is liability risk in which a firm may have losses due to
any injury or harm caused by consumption of firm's product. The consumer may file a
legal suit as well in this condition.
Solution: In such case, company should always import their raw materials from suppliers that
can give fresh goods (Tarique & Schuler, 2010). Besides this, chefs should take a good care of
hygiene as well so that no food can be maintained according to safety standards.
 Indirect loss to property: The properties of company may get damage due to
transportation service or may have loss due to theft.
Solution: to remain safe from such kind of losses, organisation should have insurance of all its
properties so that any loss can be covered through insurance claim (Gold, Seuring & Beske,
2010).
CONCLUSION
The report on international management has focussed on strategies that four leaves
bakery has applied in different fields of HR, marketing finance etc. Report has concluded that to
make success in market, focus on single department will not help hence more focus should be
emphasised on overall strategies.
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Online
Bakery Marketing Strategies.(2016). [Online]. Available through:
<http://www.startupbizhub.com/bakery-marketing-strategies.htm>. [Accessed on 4th November
2016].
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