P22996 - Strategic Management: Key Lime Key Pie Company Case

This case study delves into the Key West Key Lime Pie Company, examining its strengths, weaknesses, and strategic challenges. It assesses the company's value chain, cost structure, and key success factors, identifying areas for improvement in personnel management, resource allocation, and operational efficiency. The analysis uses Porter's Five Forces to evaluate the competitive landscape and highlights potential strategic, financial, regulatory, and operational risks associated with proposed changes. The study emphasizes the importance of a robust management accounting system to enhance overall operations and ensure the company's long-term success, with the provided solution available for review and download on Desklib, along with other solved assignments and study resources.

Running head: KEY LIME KEY PIE CASE STUDY
KEY LIME KEY PIE CASE STUDY
Name of the Student
Name of the University
Author Note

1KEY LIME KEY PIE CASE STUDY
Table of Contents
Answer to Question 1......................................................................................................................2
Answer to Question 2......................................................................................................................4
Answer to Question 3......................................................................................................................7
Answer to Question 4......................................................................................................................7
Answer to Question 5......................................................................................................................8
References........................................................................................................................................9

2KEY LIME KEY PIE CASE STUDY
Answer to Question 1
The Key West Key Lime Pie Company (KWKLP) is a company which has been able to
attain long term success and has been successfully able to perform well in the dynamic business
environment. The Pies of the company have become considerably popular around the globe and
in line of this,
It can be largely understood that, the company has adequate resources at its disposal and
has a considerable potential for its growth as well as popularity. The reason why it is believed
that the firm has scope for expansion is because, the organization has been successfully able to
win a leading price in the last few years and moreover, has more than 10 years of experience. In
line of this, the employees of the firm are greatly dedicated to the overall purpose of the firm. In
order to ensure that the firm is able to come up with a strategic value proposition, the
organization would be required to have a Management Accounting System which will enhance
the overall operations of the firm in terms of the following:
Personnel
When a particular employee joins the organization, he will be required to ensure that, he
brings about new skills and creativity into the firm (Google.com 2019). The case of Tammy can
be taken and it can be understood that she is quite talented and a multi tasker who is able to
manage the inventory as well as has been able to engage in purchasing and manage the different
customers of the organization. However, she is not being provided adequate incentives for the
same and it is in line of this, that the firm is required to ensure that it is being able to provide
adequate resources to the firm which will not only assist it in gaining success but also ensure
employee engagement. From the video, it was reflected that as the person Marcus Lemons
placed adequate importance on the employee welfare and understood that, the incentives should
be built on the Accounting systems of the company.
Resources
Although the company has relevant resources for itself, however, it is not being able to
utilise these resources to improve the overall offerings of the firm and in line of this, it is crucial
to understand that, adequate financial resources shall be required for this, which is not present
with the firm at present (Moutinho and Vargas-Sanchez 2018). However, if the organization

3KEY LIME KEY PIE CASE STUDY
applies the Management accounting system, it will be able to ensure that, the firm is being able
to provide relevant data for the allocation of the overall resources.
Activities
The activities which the firm is involved in can be stated to be complex and diverse in
nature. For example, the production of the pie, packaging and shipping and hence, this requires
time as well as attention.
In order to understand the overall operations and value proposition of the firm in a better
manner, the Porters shall be used:
Figure 1: The Porters Five forces
(Source: David and David 2016).
Although the firm can be understood to be relatively very small in size, however, the
operations of the firm can be understood to be approximately $1.4 million and deals in huge
numbers. However, the overall results of the five forces can be understood to be as follows:
 Rivalry: Considerably high

4KEY LIME KEY PIE CASE STUDY
 Customers: Power is high
 Suppliers: Power is moderate
 Substitutes: Threat is moderate
 New entry: Threat is low
The Strengths of the business
The strengths of the business are as follows:
 A good brand name
 Committed staff
 Demographics demand
The weakness of the business:
 Poor operations
 No floor space
 Lack of revenue and lack of profits.
Answer to Question 2
Value chain of the firm

5KEY LIME KEY PIE CASE STUDY
Figure 2: The general value chain of any firm
(Source: Ansoff et al. 2019)
Support
Activities
Firm infrastructure
The overall infrastructure of the firm can be understood to be fairly
unique in nature with respect to the fact that the firm has access to
adequate resources.
Profit
Human resource management
The human resource management of the firm ca be stated to be creative
and motivated however, they are not being paid as per the required
standard.
Technology Development

6KEY LIME KEY PIE CASE STUDY
The firm has not been making use of adequate technology to ensure that
it will successfully be able to meet the needs of the business.
Procurement
The procurement activities of the firm are carried out with the help of
other firms.
Inbound Logistics
The inbound logistics of
the firm tends to come
from the other companies
like the retail products, the
base of the pie and the
powder of the mix.
Operations
The
operations of
the firm can
be understood
to be rather in
effective in
nature
(Google.com
2019).
Outbound
Logistics
The firm
just sells the
pies over the
counters but
is not
following
the
conventional
selling
process
Marketing
and sales
Although
the sales can
be
understood
to be
considerably
high, the
firm has not
been able to
earn a
considerable
profit
Service
The service
of the firm
can be
mentioned
to be
adequate in
nature.
Primary activities
Table 1: The Value Chain Analysis of the Pie company
Therefore, from the value chain analysis of the firm, it can be stated that, the overall
operations of the Key Lime Key pie company can be understood to be a failure in the sense that,
it was failing to bring about adequate profit for the firm and that the organization was in deep
debt. Moreover, the firm had no authenticity about it and could be replaced easily. The
employees could be understood to be relatively experienced in nature, however, it has to be
understood that, they were not being utilised up to their overall capacity and that, the products

7KEY LIME KEY PIE CASE STUDY
which had a larger margin were not being sold and the ones with the lower margin, held the
larger floor space. With the new idea being implemented, the operations can improve.
Answer to Question 3
The firm can be understood to be following a mix of the fixed and variable cost structure.
This means that, the different costs as incurred by the firm can be stated to be divided into the
following dimensions:
Fixed
The fixed costs of the firm were the costs incurred on various rents, staff pay, bills, store
electricity and maintenance the other taxes and the retail purchase was made by the firm.
Variable costs
The variable costs of the firm can be understood to be the inventory costs, the cost of the
pie base, the ingredients and other related raw materials. As observed by the case study, the
orders in the inventory were all hay wire because, instead of making use of a forecasting
technique and ordering the inventory at one go, the firm ordered the inventory on a daily basis,
majorly because they were undergoing a loss.
Answer to Question 4
Key success factors
In order to ensure that the firm is successfully being able to perform adequately, it
becomes considerably crucial for the organization to ensure that, they are being able to identify
the different key success factors which are present with the business as this will then help in
measuring the overall success of the firm and help in identifying what factors are to be improved
upon. The key success factors are as follows:
1. People: The people of the organisation can be understood to be one of the most important
factors which can lead to an overall organization success. In line pf this, it can be
understood that, if the people are capable, the firm shall prosper.
2. Process: The process also forms another key success factor because it brings about
overall efficiency as present in the firm and ensures that all the functions of the
organization are being held adequately.

8KEY LIME KEY PIE CASE STUDY
3. Product: The product or the offering being made by the firm also acts as a key success
factor for the firm as the product is the point of interaction between the firm and the
customers (Google.com 2019).
4. Pricing: The pricing of the firm is also crucial as it attracts customers. Hence, the policy
of competitive pricing is required to be followed.
5. Service: The service of the staff in the store can also be understood to be a key success
factor. Currently the overall service of the firm is not up to the mark as the organization is
not being able to provide the adequate service to the customers.
6. Quality and Brand name: The quality of the products and the brand name of the
organization also tends to act as a crucial key success factor.
Answer to Question 5
The risk factors can be understood to be a common part of the organization and with
respect to the case study, the given risk factors can be identified:
Strategic risk: The idea of an eat-out place which Marcus carried out in the organization might
not be able to find success in the long run and hence, in line of this, the firm may fail to perform
well.
Financial risk: The financial risk which is understood to be associated with the firm can be
contributed to the risk of no returns. Marcus and the new team has invested a great amount in the
firm by first offering the owner with $4500000 and then offering the employees with adequate
shares as well hence, if the firm does not get its returns, the firm can suffer a great loss.
Moreover, the motto –Don’t sell what you don’t make, may turn out to be expensive for the firm.
Regulatory risk: The change in the format of the firm may bring about a regulatory risk for the
firm. This can be stated because, previously, the firm was functioning as a store with retail
layout. The retail layout covered 60% of the store space whereas the pie covered just 40%.
However, as pie was a product with a greater margin, the retail goods were sold out and then, the
retail space was reduced. This can lead to a regulatory risk as it turns the format of the store to a
restaurant and café themed business (Lasserre 2017).

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Operational risk: The operational risks associated with the business can be stated to be the lack
of efficiency in the kitchen and the kitchen disasters which may take place in the long run due to
the use of fresh dough, baking and other operations (Google.com 2019).

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References
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting
strategic management. Springer.
David, F.R. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson.
Google.com 2019. Key Lime Key Pie Case study [online]. Available at:
https://drive.google.com/file/d/18HA7EBuA2qFKH16ROOVwndqGIbjb8fa8/view (Retrieved
on: 25 May. 2019).
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.