Cupcake Desire Case Study

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Recommended: Chapter 6 strategy formulation: business strategy

Cupcake Desire; a bakery that produces cupcakes, cakes, and on special occasions, pies. The use of wholesome ingredients, unique flavours, and vegan recipes is what sets Cupcake Desire apart from other bakeries. Gastown has been the headquarters to your locally owned and operated bakery Cupcake Desire for 3 years now. Business has been going well in the trendy neighbourhood, and you are now looking to expand business into one of three possible locations; Yaletown, North Vancouver, or West Vancouver. To make the decision of which location is the best choice we analyzed each individual neighbourhood, and now offer our recommendation to you based on a number of criteria which include profitability, location and space/rent. Cupcake Desire is …show more content…

The population in Yaletown is generally younger than normal with a median age of 37. The average income in Yaletown is $71,000, which is similar to West Vancouver. Yaletown is home to a number of fashion and design shops, and on weekends the area turns to a place for shoppers, entertainment seekers, and food connoisseur’s. Yaletown is located 2.5km southwest of Gastown. The closeness in proximity of the Gastown and Yaletown location could potentially cause the customer base from Gastown to move to Yaletown. This would not be the most profitable option as you are not expanding to a new customer base, but instead making the cupcakes more accessible for existing customers. Cupcakes would also be produced at the Gastown location. This would force your business to invest money into transportation/delivery systems for Cupcake Desire to properly function.
There is a 600 square foot retail store available for rent that would be split on a 90/10 basis with a decorative and accessory items shop. However, if this part of the shop suffers in sales, your business could suffer. The small space will not allow for a seating area within the shop. The Yaletown location would cost $25 per square foot a year which equates to $13,500, and has the potential to make $55,000 after start up

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