Hummingbird Bakery: Business Proposal - Organic Product Line Launch

This business proposal outlines the introduction of an organic product line by the Hummingbird Bakery. It begins with the motivation behind the business idea, highlighting the increasing demand for organic baked items and the potential for customer satisfaction. The proposal details the brainstorming process, focus group analysis, and feasibility studies conducted to assess the viability of the product. The product line includes organic breads, cakes, biscuits, and other baked goods. The proposal covers product/service feasibility, organizational feasibility, and financial feasibility. It also includes a PEST analysis and marketing mix to identify potential market opportunities. Porter's Five Forces model is used to analyze the attractiveness of the industry. The vision for the business includes expansion within the UK and internationally through franchising and online delivery. The report concludes with a summary of the key findings and a reference list.

Business
proposal on:
the
hummingbird
bakery
S T U D E N T N A M E :
B U C K S I D :

Introduction
In this business proposal I will be discussing the following;
Motivation for choice of business:
The process you went through to generate this business idea
Feasibility studies conducted
Details of the product/service to be offered
Potential market opportunities
Attractiveness of the industry
Vision for your business

Motivation for choice of business
o Increasing demand for organic baked items in the food & beverage industry
oIncreasing willingness of consumers to select and pay for organic items from the food menu
oThe humming bird bakery would like to introduce this item for health conscious and environment friendly customers.
oAs per previous experiences in launching vegan items in the hummingbird bakery, there is always an untapped need that can be
aimed towards customer satisfaction.
oThe need for more natural flavors and preservatives for better shelf-life which can be achieved through organic produce and raw
materials.
oHigh demand for staple baked items like bread production using organic materials.
oIncreasing the brand equity through environment friendly approaches in the industry.
oHigh market feasibility and gaining new customer segments.
oTo gain higher profit margin through introduction of the premium segment in the organic product line (Łuczka, 2019).

Process you went through to
generate the business idea
Brainstorming
To generate the initial idea, the company has gone through brainstorming. Initially the problems in the company were identified, which
were mostly related to lower sales turnover, lack of uniqueness, potential demands for healthy food and untapped markets. The
business trends were identified and the operations of competitors and other bakeries were observed and analyzed. The issues were
determined on an individual levels and creativity was promoted for identification of business ideas of untapped markets and relevant
solutions. Various solutions were identified to counter issues and critical analysis was done : diabetic friendly baked items, premium
segment items for special occasions and a new product line made from organic products. The final business idea for introduction of
entire product line made from organic product was found to be most feasible and appropriate (Besant, 2016).
Focus groups
Focus group refer to small group of people in the identified target market who undergo a guided discussion for assessment of
prospects of the business idea, evaluation of market idea, the amount customers might be willing to pay for, revelation of potential
competitors and fine tuning of the product for better positioning. A focus group of 10 people will be selected and handed over a script
for discussion and will be recorded in order to understand the facial expression and meanings regarding the business idea of organic
baked items. The focus was more upon the customers rather than business idea and insights from the participants were gathered such
as the benefits they want from the product, the reason they would purchase it and the amount they might may for this and what they
don’t like regarding the product. All observations can be carefully recorded and noted and the idea will be carried forward.

Details of the product to be offered
The product that will launched as a part of the new product line at the hummingbird bakery is the
organic product line for baked items.
This will include organic breads, biscuits, rolls and croissants, cakes and desserts. The entire
segment will be distributed on the basis of quantity. Breads ranging from normal white bread,
brown bread, multigrain bread etc. will be offered. The cakes will be made available on the basis
of weight and will range from flavour and types such as chocolate, red velvet, caramel, vanilla,
strawberry etc. Biscuits will be offered on the basis of various flavours like chocolate, coconut,
vanilla tec.
All the products will be cooked from the organic raw materials such as Cereals and grains flours
Vital wheat gluten, Milk, non-fat milk powder, butter, Baker’s yeast Egg and egg products, Oils,
Starch, Sugar (sucrose) from beet and cane, Honey, Spices, Meat-based ingredient and dry fruits.

Feasibility studies conducted
Product/service feasibility
- As per secondary sources and environmental analysis, there is a high demand for the organic baked
items. The features that appeal most are the use of fresh and organic materials that are good for the
health and well-being of the customer ad better for the planet at the same time.
- A concept test can be conducted further to analyze the feasibility of the product development. This will
involve conducting cognitive interviewing potential faction of respondents through questionnaires. The
responses can be analyzed using qualitative methods to gain deep insights into consumer thoughts
regarding the product.
- A face to face interaction would prove beneficial in understanding the needs, issues and demands of the
potential consumers.

Feasibility studies continued ..
Organizational feasibility
- The undertaken business idea has sufficient expertise in management in terms of management prowess and resources. The
entrepreneur is highly skilled in terms of networking, communication and expertise in food & beverage industry. The resources and
funding are obtained from investors. The major employees involve skilled chefs and operational staff with updated knowledge about
benefits of organic products.
Financial feasibility
- Major components of the financial feasibility analysis are :
- Overall project cost and cash and cash equivalents needed
- Analysis of budget for the project development
- Predicted sales growth
- Break event point
- Return on investment (Berry and Shabana, 2020)

Feasibility studies continued ..
Financial feasibility
- The total cash needed for the startup will be around: £100,000
- The sources of funding will be investors, creditors and shareholders.
- The financial attractiveness includes higher profit margin and better cash flows that can be generated
through on-time break even by sale of premium segment organic products.
- The first screen tool will be adopted which will include analysis of over potential through strength of the
business idea, industry related issues, target market and customer related issues, founder related issues,
financial issues
- Financial issues: High capital investment, Break even: 2 years

First Screen test Balance sheet of Humming bird Bakery
Source: companies house

Potential market opportunities
Ways in which business opportunities can be identified are Marketing mix and PEST analysis.
PEST ANALYSIS: Assessment of macro economic factors to identify opportunities and threats:
Political factors: Impact of Brexit on supply chain, logistics for import of raw materials from
organic farms.
Economic factors: Increase in the level of income of people in UK, which ca improve the sale of
premium segment products
Social factors: Higher needs for health based eatables in daily consumption, which can increase
the demand for organic breads.
Technological factors: Rise in social media trends for organic products and celebrity influences
can improve the marketing of the baked items (Alava and Mu, 2018).

Potential market opportunities
continued
Marketing Mix
◦ Product: Organic baked segment which would include products like
organic breads, rolls, desserts, croissants, biscuits, cakes etc.
◦ Place: The sale will occur through bricks and mortar outlets and also
delivered through online website .
◦ Price: The policy of penetration pricing will be adopted, where the initial
price will be low. Once enough consumers try and consume the products,
the prices will be set to premium prices.
◦ Promotion: Social media marketing through food bloggers and
influencers, content marketing, print marketing and referrals, data base
marketing, direct marketing etc.

Attractiveness of the industry
- Porters Five force model:
- Threat of new entrants: This is a moderate level threat as the sale of baked items would need major equipment
and infrastructural investment, and there are limited entries in the food and beverage industry due to tax
regulations.
- Bargaining power of buyers: This threat is high as the availability of multiple stores that sell health based baked
items and consumers can easily switch to others in cases od dissatisfaction or high pricing. Company will counter
it by uniqueness and customer service.
- Bargaining power of suppliers: This threat level is high as there are limited suppliers for organic produces. If they
maintain high prices, cost reduction would become difficult. To counter this long-term relations with loyal
suppliers have to be made.
- Threat of substitution: This treat is low as there are very less substitute products for organic baked items.
- Industrial rivalry: The overall industrial rivalry is high as there are multiple bakeries that presently operate across
UK which deliver organic and health friendly food items like Home organic bakery, Artisan bread organic, Celtic
bakers, Everfresh Natural foods etc. and many small and local bakeries. To counter this company will use
economies of scale, intense promotions and advertisements etc. (ÖNEREN, ARAR and YURDAKUL, 2017).

Vision of your business
oThe company can expand into the local areas of UK and gain a foothold in the
food and beverage industry. The focus of sustainability and health choices in
daily staple food items can lead company to new heights and gain new
customer segments.
oThe company can open multiple branches through franchising and licensing.
Also the company will expand its online delivery system to reach untapped
markets.
oAfter attaining high net cash flows, the company can be expanded
internationally through franchising and online delivery.

Conclusion
oOrganic baked items are in high demand and the market for this segment is highly attractive and feasible for the
hummingbird bakery.
oOpportunity to gain higher profit margin through introduction of the premium segment in the organic product line.
oProcess undertaken for generation of business idea: brainstorming and focus groups
oProduct line includes organic breads, biscuits, rolls and croissants, cakes and desserts.
oFor product feasibility, concept test will be conducted. For financial feasibility evaluation of return on investment and
overall cost and expenditure is conducted along with first screen test. Organisational feasibility is high due to experience
and resources in management team.
oMarketing mix analysis and pestle analysis were conducted which resulted in major market opportunities for the humming
bird bakery.
oIn competitive analysis, the industrial rivalry remain high. Need for intensive promotional activities, and economies of scale.
oThe vision of the company is aimed at global expansion and online delivery of the baked items.

Reference list
Books and Journals
1. Alava, R.P. and Mu, J.M., 2018. PEST Analysis Based on A Case Study for. Neutrosophic Sets and Systems, p.84.
2. Berry, G. and Shabana, K.M., 2020. Adding a strategic lens to feasibility analysis. New England Journal of Entrepreneurship.
3. Besant, H., 2016. The journey of brainstorming. Journal of Transformational Innovation, 2(1), pp.1-7.
4. Łuczka, W., 2019. Demand Factors Of Development Of The Organic Food Market–A Review Of Polish Research. Roczniki
(Annals), 2019(1230-2020-755).
5. ÖNEREN, M., ARAR, T. and YURDAKUL, G., 2017. Developing competitive strategies based on SWOT analysis in Porter’s five forces model
by DANP. Journal Of Business Research-Turk, 9(2), pp.511-528.
Online
6. Balance sheet, The hummingbird bakery, 2015, available through: <
https://find-and-update.company-information.service.gov.uk/company/04436474/filing-history>