Situational Analysis Of Grandmas Little Bakery

Internal Environment Analysis

Discuss about the Situational Analysis of Grandmas Little Bakery.

Grandmas Little Bakery is small company in Australia whose expertise is in offering coffee and bakery products to the customers. The shop cum restaurant offers food products for both take way and dine in. Since its establishment seven years ago, the company has been expanding around different regions of the country including Canberra, Alexandria, Rosemary, and McEvoy. The mission of the company is to provide the best tasting food and coffee possible for its customers worldwide (grandmas.com.au, 2016).

The project aims at producing a situational analysis report on the strategic marketing plan of Grandmas Little Bakery. The analysis report considers the competition and the financial details of the company including the short and long-term goals. The situational analysis would be helping in identifying and analysing the target market including the details of the products, place, price, people, promotion, physical evidence, and processes as well. The analysis report incorporates the analysis of the internal environment, external environment, customer analysis, and detailed competitor analysis of the Grandmas Little Bakery (Solomon, 2014). The main objective of the report is to provide a deep understanding of the ideas of an effective marketing pan for the company such that to develop an effective marketing strategy.

Marketing Mix

The discussion below highlights marketing mix of Grandmas Little Bakery which is an essential part of the entire business proposition.

Product: The quality of the product is critical in the bakery industry. Grandmas Little Bakery, for that reason, would have to utilize various methods for ensuring the quality of its product. All the products and items namely, homemade cookies, traditional bread, pastries, cakes, and sweets would be made from the scratch with fresh ingredients. The bread and cupcakes would also be baked in the proper amount of time, and any expired items need to be disposed of at the earliest (Mitra, 2016). Grandmas Little Bakery should focus on hygiene and cleanliness. Since the entity aims to recreate home-style cooking and baking using unique flavors and recipes inspired by Grandmas and Grandpas all over the world, innovation assumes huge important in the entire production process (Frey, 2015). Innovation is the goal of the firm. On one hand, innovations would be attained by the creation of new flavors and exotic items of traditional bread, pastries, cakes and sweets, while on the other, the company plans to introduce one unique cupcake every month and that too for a limited period. This ploy would help the business to test new items and products which would determine which products are preferred by customers. The management of Grandmas Little Bakery would be responsible for trying out new recipes for the above stated products. In the line of introducing new cupcakes each month, the firm would also offer seasonal items which would be available for a limited time. The chef at the helm and his team would develop possible flavors in the light of consumer tastes and preferences. For instance, a flavored custard pastry may be offered only during summer months . Likewise, a cake may be only available in the autumn months made of lemon flavor. The entity intends to introduce various flavors of items thereby offering consistency and giving the clients something to look forward to.

Product

Place: The business has been operating for seven years and is slowly expanding around the region. Today, the firm operates from Canberra. In present times, Grandmas Little Bakery is willing to expand and make inroads into different territories. The firm would commence as a small unit with a single bakery. Nevertheless, in due course of time, the business would attempt to expand. The expansion phase would begin at Alexandria, Rosemary, and McEvoy respectively. The consumers would be able to place their orders at a nearby outlet of Grandmas Little Bakery. And for clients who are based not nearby the unit, items and products may be shipped. Each cake, pastries, and other exotic items would be freshly baked.

Price: Needless to say, the price is a determining factor for the success of the entire organization (Rummler & Brache, 2012). Before commencement of business operations, the firm needs to make manifold investments in building, equipment, a vehicle for catering service and supplies and utilities required for the firm to operate. The bakery would have recurring costs of supplies, compensation of employees, repairs, and others. The prices at the firm are very low to attract the attention of consumers and uphold the loyalty. A small coffee would cost at USD 2.50 and large USD 3.00, while a traditional shakshuka dish would cost at USD 15 (Just & Wansink, 2014). In the aim of gaining well the return of investment and earn profits, the firm would consider these aspects before settling over the price. The management of the firm would compute the cost of manufacturing cakes, pastries by supplies used. Having done that, the firm would research the prices of comparable items and products of a similar business in the same area. The management needs to think about employee compensation and derive on the limit of income needed to ensure the healthy return of investment. The bottom line is as long as the prices are efficient enough to cover the costs calculated for this unit; Grandmas Little Bakery would select prices that are competitive in the domain.

Promotion: Like any business, customer awareness is the primary step in promoting a new business. Grandmas Little Bakery aims to offer specials of the day and also good deals which come with coffee and cookie (grandmas.com.au, 2016). The management at the helm of branding would undertake into flyers and yellow pages activity which will help to people to know the brand. The logo of the firm would be used everywhere from uniforms to meals. The unit strives to make its presence felt through social media like Facebook, Instagram and would create a website of its own. Rosemary, where the firm is willing to set up its outlet is mainly an industrial area, where families can come and enjoy the services of the product. The business is willing to build up a reputation as a state-of-the-art bakery unit in the region (grandmas.com.au, 2016). Generation of consumer interest is important for business success. The customers would be able to taste an assortment of delicacies ranging from cakes, cookies, pastries and burgers. This would allow them to explore the items on offer. The firm also plans to make the most of the public relations for business promotions. Doing so would not only help the firm to generate more business from the locality but also increase chances of word-of-mouth in the region. The business needs to participate in community events which would be an excellent form of advertisement to the consumers, by and large. Donating baked items for philanthropic initiatives and fundraisers would go a long way to increasing consumer awareness of the firm in question. This would reveal that the company is willing to engage in meaningful social initiatives and help the community in achieving the desired goals and objectives. It is important for the firm to make sure that they do not delve into profit making activities only but also contribute effectively to the cause of the community and society in general.

Place

People: The firm would recruit its resources from the local area. The various areas of operation range from the administration, sales and marketing, production and promotion and branding (Gyrd-Jones & Kornum, 2013). The staff count may be twelve at the onset, and it would take a minimum two to three years for the business to consolidate. The management needs to impart valuable training to the employees to prepare for state-of-the-art services. Also, they need to be made aware of their brand which would attract and retain consumers.

Process: Grandmas believe in the philosophy of day in day out services. The food items are made on a daily basis at the shop. Whereas items like sweets and pastries are brought from the main unit in McEvoy. The firm intends to distribute the assorted items from McEvoy to the Rosemary outlet and finally to the customer. At present, the unit is not big enough to accommodate selling options to various supermarkets and shops. The firm uses raw materials procured from local suppliers for producing a wide range of items. The firm makes everything from the scratch (grandmas.com.au, 2016). The management plans to invest extra money in procuring the essential item that is butter. It may cost more but at the end of it, the results speak for it when the firm would produce lip-smacking delicacies. Furthermore, the entire production process is undertaken in conformity with the health and safety standards of the regulator authorities of the state.

A PEST analysis or investigation would put forth a diverse external environment that the firm is subjected to while doing business in the region.

At the outset, it is important to note that the global economic downturn had dented the firm’s profitability and hurt the customer’s purchasing power (Gupta, 2013). However, the silver lining is that the downturn has not affected much the consumption of bakery products by the consumers.

Impacts of Political factors: The main hindrance that the firm may encounter with is sourcing raw materials for the products and items. In Australia, a lot of attention is rendered in the case of safety, health and raw materials (Badland et al., 2014). The company is willing to adhere to various social norms and gives importance to fair trade practices. The firm must monitor the political stability within the nation and also other states where it sources raw materials from. Tax policy and employment laws are something that the firm needs to consider while functioning in the business sector.

Price

Economic factors: The slump in global economic condition is a significant factor for Grandmas Little Bakery. This is believed to be a threat for the firm as far as profitability is concerned. It goes without saying that the bakery industry has performed dismally over the last few years. The industry revenue is anticipated to grow at an annual rate of 1.8 percent over the timeline of 2015-16 (Lawrence et al., 2013). The revenue forecast for the entire sector is expected to rise by 1.7 percent in the same period to reach a figure of approximately USD 750 million. Thus Grandmas Little Bakery may take heart from these staggering stats and operate accordingly.

Socio-cultural factors: For organizations selling food products and items it is immensely important to know about the tastes of the consumers and effectively use those for the target demographic. Grandmas Little Bakery may offer cheaper items, but it may have to consider the quality in this regard. This is one of the important challenges that the firm may is likely to encounter with. The firm has to tap the baby boomer generation and Millennials as consumers (grandmas.com.au, 2016). Also, the firm should be abreast with changing family patterns in the region along with the shift in consumer preference. Changing values among the diverse population change in lifestyle and work pattern amongst the population deserve special mention in this case.

Technological environment: The advancement of technology has propelled Grandmas Little Bakery to enjoy certain advantages like offering discount coupons to tech-savvy consumers with its partnership with technological giant like Apple. Already, talks are going on to introduce Wi-Fi measures in its outlets. Today, almost the entire generation is living in an internet age (Wegerif, 2013). They are offered with the facility to gorge into muffin while surfing the web. The other technological aspects that the firm needs to contemplate are innovative technology, advancement in the biotechnological arena and latest developments in agriculture.

The impact of Environmental factors: Grandmas Little Bakery strives to operate in holding the trust of the consumers and take into consideration facets like environmental rules of the country it operates in. The firm should maintain environmental sustainability and environment management system to control its activities and provide guidance on food management practices. Grandmas Little Bakery would work with suppliers in an environment conscience manner for upholding of best environment practices. The management should review the policy periodically and evaluate the firm’s performance in implementation of environmental policies as per the agreeable metrics. Furthermore, prevention of pollution, reduction of wastage, energy efficiency and waste recycling are some of the measures that the firm should be considerate to.

Promotion

Demographics

From the analysis of the demographics of the customers of Grandmas little bakery, it can be evident that the shop has three main types of customers (grandmas.com.au, 2016). The first type is the regular customers who are working in other companies and are living around in the area along with their respective families. These customers are residing and are working in the building around the shop and hence, the shop needs to open its door early in the morning at 6.30 am every day. As the shop needs to open early in the morning, it has to fulfill the daily requirements of the regular habits of the customers including the coffee and quick bites. Moreover, theses customers are also the first to arrive during the lunch break and thus, the staff of the shop is required to be patient and cooperative with them.

The second type of customers is the people who work around in companies at some distance from the shop. These customers tend to come at 9.00 am for coffee and take away products. These customers tend to enjoy more time in the shop for small meetings or just to socialize. Thus, the staff needs to maintain a healthier relationship with these customers.

The third type of customers are the people who come around the shop on weekends with their families in order to enjoy a space to socialize and hang out for a picnic being attracted by the ambience and friendly mature of the staff.

Customer types	Demographics	Implications for staff and the shop
1st type	working in the building around the shop	be patient and cooperative
2nd type	work around in companies at some distance from the shop	maintain a healthier relationship
3rd type	Come around the shop on weekends with their families	Maintain hygiene of the premises and quality of food as well

Table 1: Demographics of customers of Grandmas little bakery

Source: Created by author

The main competitors of the Grandmas Little Bakery include The Grounds, Meats and Cheese, and Sub Station café. These three competitors have been conducting their food businesses in the same area near the Grandmas Little Bakery. The companies have been competitive with the shop by proving similar bakery products at the similar price as offered by the Grandmas Little Bakery.

	The Grounds	Salt, Meat and Cheese	Sub Station cafe	Grandmas Little Bakery
Features	Food products includes salads, sandwiches, and other bakery products	Meat and cheeses products	Food products includes salads, sandwiches, and other bakery products	Specializes in fresh bakery products including coffee
Benefits	Provide variety of food products to its customers	popular among the customers	Provide variety of food products to its customers	Cheap price attracting customers

Table 2: Competitor analysis of Grandmas little bakery

Source: Created by author

Strengths: The prices at the firm are very low to attract the attention of consumers and uphold the loyalty. The food items are made on a daily basis at the shop (grandmas.com.au, 2016). The firm uses raw materials procured from local suppliers for producing a wide range of items. Besides, the entire production process is undertaken in conformity with the health and safety standards of the regulator authorities of the state. The entity also recreates home-style cooking and baking using unique flavors and recipes inspired by Grandmas and Grandpas all over the world. This provision of healthy and fresh baked food at an affordable price is the main source of attraction of the customers worldwide.

People

Weaknesses: The bakery shop is very small as compared to the other competitors like Starbucks (grandmas.com.au, 2016). Thus, it lacks adequate capital to invest on the innovations that could help the company in the creation of new flavors and exotic items of traditional bread, pastries, cakes, and sweets for its customers. This would make the customers of the shop to get bored of the same food lacking creativity in dishes. Moreover, the promotion of the shop would also be requiring money, which the shop is currently lacking.

Opportunities: Owing to the quality of food products and cheap prices, the shop has been able to attract huge number of customers worldwide. Thus, the company needs to implement appropriate policies for retaining its loyal customers by providing them with discounts and offers. Moreover, the expansion strategy of the firm would enable it to enter into new market, which would ensure its growth of business profitability in the future.

Threats: The threats from the competitors of the shop around the area could be hampering with the profitability of the company (Hsu et al, 2013). Moreover, the limited menu of their shop as compared top the list of food times as provided by its competitors could, make the customers to opt for other bakery shops.

Strengths ·         prices at the firm are very low ·         raw materials procured from local suppliers ·         conformity with the health and safety standards of the regulator authorities of the state ·         home-style cooking and baking	Weaknesses ·         shop is very small as compared to the other competitors ·         lacks adequate capital to invest on the innovations and brand awareness
Opportunities ·         shop has been able to attract huge number of customers worldwide ·         expansion strategy of the firm would enable it to enter into new market	Threats ·         competitors of the shop around the area ·         limited food menu

Table 3: SWOT analysis of the Grandmas Little Bakery

Source: Created by author

Conclusion

The project deals in constructing a situational analysis report on the strategic marketing plan of Grandmas little bakery. The report also deals in considering the competition and the financial details of the company including the short and long-term goals. The situational analysis report would be helping in identifying and analysing the target market including the details of the products, place, price, people, promotion, physical evidence, and processes as well. The analysis report incorporates the analysis of the internal environment, external environment, customer analysis, and detailed competitor analyses of the Grandmas Little Bakery. The report is would be helping the company in providing a deep understating of the ides of an effective marketing pan such that to develop an effective marketing strategy.

References

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