• Concordia University

• ACCO 433

INTRODUCTION CookieCupCake, a small bakery located in Winnipeg owned by Susanne and Jennie, specializes in hand-decorated pastries and baked goods. The bakery is recognized for their highquality products, customization, and nut-free offerings. They are looking to grow their bakery by offering the best quality products possible and adding authentic hand-decorated customizable touches to their products to offer their customers a unique experience. Ever since moving to their new location in 2011, they have failed to achieve profitability despite the increasing revenues year over year. Sales have increased so much that they have had to turn down orders due to the lack of capacity. In addition, due to Susanne and Jennie’s high involvement in the day-to-day operations of the bakery, they lack the time to take care of the management side of the business. They are thus faced with two main issues, a lack of profitability and a lack of management. The following report will present an analysis of CookieCupCake’s current situation and environment, followed by a few strategic alternatives available to them and finally recommendations that will help the bakery reach profitability and allow the owners to properly manage their business going forward. SITUATION ANALYSIS QUALITATIVE COMPONENT (INTERNAL) SWOT Analysis Strengths – One big strength of the company is the fact that it is 100% nut-free. This allows them to not only cater to people with allergies, but also keeps their products open to those who do not have a nut allergy but still wish to buy their products. Furthermore, the bakery is a very diversified business given its extensive product line. Not only does the bakery offer a variety of baked goods, it also offers decorating classes and birthday parties. Another major strength is CookieCupCake’s customization feature. This attracts customers and adds value because clients will be more willing to pay for something unique and personal to them. In addition, their highquality product has built a positive reputation for them. Their customers are willing to pay the price for their product since there is no other quality like it in this area. 2 Weaknesses – In terms of strategy, CookieCupCake based their product prices on either competitors’ offerings or they were market-driven. Not taking into account full product costs leads to wrong pricing causing the business to be unprofitable. Additionally, they have high labor costs and use a fixed-price range for all work that is customized. Due to this and the increase in fixed costs, they have had a net loss every year since they switched locations in 2011. Opportunities – One opportunity for the company is to move buildings and go to a location with lower rental fees. This would allow the business to reduce their expenses while maintaining their ability to serve customers in a big enough space. Another opportunity for CookieCupCake would be to sell more wedding cakes in order to maximize profits and offset the net losses they have been incurring since 2011. Finally, there is an opportunity for the business to increase their prices as their customers are willing to pay for the high-quality products CookieCupCake offers. Threats – One threat would be CookieCupCake’s inability to take on additional orders due to labour capacity constraints. With an increase in sales, the company has struggled to complete orders. This could result in customers turning to competitors going forward and losing sales. In terms of choosing to focus on selling more wedding cakes, the threat to this would be that these products are considered seasonal thus, choosing to focus on them may not be as rewarding as the company would want. Core Competencies and VRIO Framework 100% Nut-Free Bakery – CookieCupCake is one of few 100% nut-free bakeries. This is extremely valuable because most people who have allergies will be more likely to visit their shop and buy their goods due to the fact that they accommodate their restrictions. Additionally, when dealing with different food products, it is very hard