Environment Analysis: Creative Confections

Environment Analysis: Creative Confections

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Environment Analysis: Creative Confections
"I've always liked to be adventurous with food, especially desserts," said Lavonne Temple, founder of Creative Confections (CC), a small and emerging specialty bakery in Jacksonville, Florida. Starting with cake and candy recipe experimentation in 2002, Temple developed a tidy little business selling scrumptious specialty cakes and candies from a home-based operation. Increasing demand for Temple's upscale homemade confections recently poised CC on the brink of major expansion. In the next decade, CC can expect to encounter changing trends within the baking industry, each impacting the company's long-term environmental objectives in remote, industry, and operational contexts.
Remote environment
Labeling – Anticipated changes in food labeling legislation will determine the manner CC labels its cakes' nutritional content. Expanded labeling information requirements are expected in the future (Seiz, 2005). Strategic objective: CC must increase its knowledge of ingredient composition and related derivatives to provide improved labeling and to protect any allergy-prone customers from harm.
Nutritional issues - Consumer demand for reduced-fat, sugar-free, and nutritionally-fortified foods is not a fad, with 54% of consumers ranking nutrition as the primary factor that influences their food purchases (BakeryOnline.com, 2003). As attention to these attributes is expected to continue, building healthful elements into bakery products is a lucrative market. Offering tasty, nutritionally worthy cakes in CC's product line will attract health-conscious customers, which brings recipe adjustments into the realm of food science (BakeryOnline.com, 2004). Strategic objective: CC must incorporate ongoing nutritional research and development data gathering into its strategic plan.
Globalization - Globalization of specialty desserts is growing steadily due to Internet marketing (Global Monitoring, 2004). By marketing its business on the Internet, CC will reach and please a growing customer base. But first, CC must design an appropriate Web site, offering colorful, high-resolution photographs of the specialty cakes it produces so consumers can see how the cakes are designed (Global Monitoring). Leveraging emerging Web technology to its advantage, CC's Web site could offer an interactive feature, in which customers design a custom-made cake to suit a particular occasion by clicking a few buttons to visualize the design of the finished cake. Strategic objective: Add a range of cakes to CC's product line that can be distributed fresh or frozen, which will build an Internet customer niche based on CC's mission of quality and freshness.
Industry environment
Sweet tooth factor – Market research indicates indulgence will always factor into bakery purchases, regardless of diet or health awareness, i.

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e., people will still reward themselves with desserts, even if they are dieting (Fullen & Brown, 2002). Strategic objective: Continue to produce a standard line of nutritionally unaltered cakes to appeal to consumers who desire culinary indulgences.
Co-branding – Rising bakery sales are also attributable, in part, to co-branding trends, a popular tactic expected to continue among bakeries linked with cafes, restaurants, and independent retail stores, etc. (Fuller & Brown, 2002). In fact, local cafes (Biscotti's, European Street Café), upscale restaurants (Plantains, Aqua Grille, Ruth's Chris Steakhouse), and various caterers (RSVP, Café Winterbourne, Tableside for Two) often rely on out-of-town commercial bakeries to provide their respective menu offerings of unique desserts. Each places a premium on desserts with superlative taste, quality, presentation, and freshness (Personal communication, entity management, 2005). As a local bakery with identical taste and quality standards, CC is an ideal co-branding fit. The relative exclusivity of CC in Jacksonville, especially in the Southside, Beaches, and Mandarin areas makes co-branding with CC even more attractive Strategic objective: Acquire future co-branding opportunities with discerning local cafes, restaurants, and bistros, in Jacksonville, St. Augustine, and Fernandina.
Marketing innovation – Seeking future market differentiation via a unique kiosk-fresh operational format is an intriguing approach. The kiosk plan involves baking standard cakes in a self-contained, multi-purpose program in a maximum of 100 square feet of production/sales space, installed in shopping malls and other retail outlets that wish to profit from high-margin, fresh-from-the oven impulse food products (CAIMA, 2003). Strategic objective: Eventually acquire kiosk-fresh partnering opportunities with The Avenues, St. Johns Square, and Orange Park Mall. The tantalizing aroma of a freshly-baked cake, prepared delectably in full view of customers, will communicate an image of quality, freshness, and better taste, giving CC a chance to network for corporate and private orders (CAIMA).
Operations environment
Corporate contacts – Tapping into the corporate gift market is a lucrative operational trend, suggested to continue in the future (Retail Bakers Association). Local business behemoths, such as Blue Cross-Blue Shield, CSX Transportation, and Vistakon, confirm this trend, as each send upscale food and gift items to clients as appreciation gifts (Personal communication, entity HR departments, 2005). Intriguing corporate baking opportunities also beckon CC to contract in the future with the Jacksonville Jaguars, ATP Tennis Tour, and the Tournament Players Club to prepare specialty cakes on site for large parties of two hundred and up. Strategic objective: Market scaled down versions of CC's specialty cakes as an ideal corporate bakery gift. Send miniaturized cakes packaged in a small gift basket to local corporate contacts to generate interest in CC.
Controlling costs – CC's strategic initiatives hinge on expansion and planned growth, which, in turn, means more infrastructure costs. Strategic objectives: Operational cost controlling strategies are key, as follows.
 Expanding CC's operations requires securing larger production space, additional equipment and supplies, and an expanded staff. Lease-purchasing production space and additional equipment is financially prudent, as payments will be easier to manage through the future, plus provide relocation flexibility (Fullen & Brown).
 Augmenting bakery staff in the future could be achieved by employing seasoned apprentices or interns from a culinary school (e.g., Florida Community College at Jacksonville's Culinary Arts program), which will help contain labor costs (Retail Bakers Association, 2003).
 Limiting future advertising to strategic visual modes (e.g., well-placed television commercials, newsprint ads, and product brochures) is a smarter marketing and budgetary choice, over radio announcements and direct mail pieces (Retail Bakers Association).
 Moving away from purchasing baking ingredients and supplies at local discount warehouses, such as Sam's and Costco. Exclusive wholesale bakery suppliers offer more sophisticated, commercially rated products than are locally available, at much better prices (Bakery Equipment Sales Worldwide, 2004).
Further, as CC reacts to future changes, instead of itemizing costs and hoping profits will flow, CC must project the profit that will make its continued environmental changes worthwhile. Strategic objective: Fiscally analyze backward to determine what is necessary for CC to do to turn a profit by using a reverse-income statement as a tool (Required profits = Necessary revenues minus Allowable costs). This reverse analysis will help establish a financial structure necessary to guide CC toward its desired profit goals (Kuryllowicz, 2001).
In summary, to meet expectations in future environments, CC's long-term strategic objectives include: making nutritional recipe adjustments, providing greater detail in ingredient labeling, capitalizing on innovative retailing and co-branding opportunities, and embracing cost controlling measures through suppliers, employment options, and lease-purchase strategies and profit projections via a reverse-income analysis.

References
Allen, A. (2004). The value of public relations. Retrieved November 4, 2004, from http://www.chef2chef.net/news/foodservice.htm
Bakery Equipment Sales Worldwide (2004). Customer service FAQs. Retrieved November 14, 2005, from http://www.bakeryequip.com/bakery-equipment/customer-service/start-up-quote.htm
BakeryOnline.com (2003, October). MGP ingredients delivers low-carb, high-protein solutions for bakery products. Retrieved November 13, 2004, from http://www.bakeryonline.com/content/news
CAIMA (2003). Stone mill introduces bakery kiosk. Retrieved November 13, 2004, from http://www.caima.net/stonemill.htm
Johnson, S. (2000). Cake walk. Retrieved November 2, 2004, from http://www.bakingbusiness.com/bs/channel.asp
Lane, J., Moss, P., Salzman, H., Tilly, C. (2004). Too many cooks. Retrieved November 1, 2004, from http://www.bos.frb.org/economic/nerr/rr2004/q1403104.pdf
Fullen, S., & Brown, D. (2004). How to open a financially successful bakery. Ocala, FL: Atlantic Publishing Company.
Global Monitoring (2004, February). The world market for bakery products. Retrieved November 12, 2004, from http://www.the-infoshop.com/study
Kuryllowicz, K. (2001). Building a strategic plan: assume nothing. Retrieved November 11, 2004, from http://www.profitguide.com/startups/article.jsp?content=530
Neal, V. (2000). Catch the craze: learning how to take advantage of trends. Retrieved November 9, 2004, from http://www.entrepreneur.com
Retail Bakers Association (2004, October). Issues facing small businesses. Retrieved November 10, 2004, from http://www.rbanet.com/pdfs/insightjune03.pdf
Restaurant (2004). Dual branding makes its mark. Retrieved October 29, 2004, from http://www.restaurant.org/rusa/magArticle.cfm/ArticleID=499
Seiz, K. (2005, February). Food allergens take center stage. Retrieved November 7, 2004, from http://www.bakingmanagement.bakery-net.com/article.7991
Kennedy, D., Way, B., and Ryan, B. (2004). Restaurant industry trends. Retrieved November 2, 2004, from http://wwwuwex.edu/ces/cced/lets/0803ltb.html
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