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Dieter

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Submitted By rangasam
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Small time baker, as well as business man Dieter Bachembesser was a successful baker for fine hotels amongst the Toronto area. He later went on to create Dieters Delicacies, small bakery with everything produced through Browne’s bakery to his standard, although this was a part time job for dieter. In nineteen-ninety-nine, Dieter decided to start his own business calling it Dieters Delectables Ltd. Naming himself president and gm. Extremely profitable the business’ were, he decided to make a proposal for expansion to Mr. Smith (owner of Browne’s bakery), but Smith is adamant on investing, so he looked in other communities he planned to expand into for financial aids.
Dieter knows that there is tremendous wealth to be made by opening up his own plant. Gaining a potential 10.1% of the market by 2010, Dieter knows by building his own plant he can succeed.
Right now Dieter is currently purchasing his baked goods from Browne’s bakery, he sees more potential for his business if he sets out on his own and builds his own plant. This business is extremely attractive, as shown by his history as a baker from inception of his part time Dieters Delicacies, all the way up to Dieters Delicatbles Ltd. SWOT analysis for this company:
Strengths:
* potential 10.1% of market within next 5 years * cuts out the middle man Brownes, maximize profits * Expands into new communities, building new relationships * Releasing new products in the years to come.
Weaknesses
* Ruining a relationship with a friend * He is only getting 75% of the size of plant he originally planned * Plant will not be fully functional until 2009.
Opportunities
* More grocers buying his products, and labelling privately * Retail stores * Further expansion upon 5 year expectations met
Threats
* Brownes Bakery

Porters 5 forces.

Threat of New Entrants: Low
Expensive for New entrants, Experience is necessary, Recognition also necessary
Supplier Power: High
Low amount of suppliers, Unable to substitute, unable to change, Similar Products
Buyer Power: Moderate
Grocery store clients, Large orders, ability to substitute
Threat of substitution: Moderate
Ability to substitute,
Competitive Rivalry: Low
Low amount of competitors, High customer loyalty, quality products

Identification of alternatives
Open up small retail stores in different areas. People are already a fan of his desserts, by opening up small shops with display cases in different communities, he can serve more customers and evidently profit.
Another alternative is to Partner up with a beverage maker, what goes well with dessert? Hot chocolate, coffee, milk shakes, etc etc.
Another great alternative is releasing health conscious desserts. By marketing his new line of desserts as healthy yet delicious, he can deem the competition obsolete.

Analysis:
By Dieter opening up smaller shops in other cities, he can build a bigger reputation. Like before with his part time venture, it was “financially successful” if he keeps it up in different cities, they can all be financially successful. Since all cities have young kids, as well as youth and elders, and almost everyone has a sweet tooth, by opening up a store with a display case in the heart of these cities, he gains the attention of children, when the entire family comes in and tries his desserts, and they like it, they tell their friends and family and just like that word of mouth, he builds a reputation in another city for making good desserts and treats. Cons of this approach would be the high capital costs, equipment isn’t cheap. Now he has overhead costs, before he never did.
When you’re eating a heavenly slice of cheese cake, what would you like to wash it down with? Usually a hot beverage. Coffee seems to work best because it balances out the how rich the cheese cake is, hot chocolate, latte’s, even espresso. Dieter can partner up with a beverage maker and market his beverages as a match made in heaven and start selling hot beverages to go along with his desserts. Cons of this alternative is that now he’s gained another expense by paying someone else to manufacture his beverage mix for him, and also once again he’s getting middle manned.
Healthy living is a rapidly growing trend. Dieting and exercise are becoming integral parts of the consumers day, and at the end of your hard week of work, the gym, and eating clean, you want to reward yourself with a dessert. By dieter switching to heathy yet delicious recipes, he caters to the “health nut” demographic. Not only can he have returning customers because they know the recipes are healthy it won’t have to be a once a week thing, it can possibly be a three times a week thing. With the growing health conscious crowds, he can be one of the first dessert business’ to set this trend. The profits here are exponential. The cons of this alternative are retweaking recipes, a time consuming task to get a perfect healthy dessert. Another con would is that healthy ingredients usually cost a bit more than your basic ingredients, such as; non-organic apples vs organic apples.

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