Case 2: Biddy\'s Bakery (BB) 1 marks Biddy\'s Bakery was founded by Elizabeth Mc

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Case 2: Biddy's Bakery (BB) 1 marks Biddy's Bakery was founded by Elizabeth McDoogle in 1984. Nicknamed "Biddy." Elizabeth started the home-style bakery in Cincinnati, Ohio, as an altemative to commercially available baked goods. The mission of Biddy's Bakery was to produce a variety of baked goods with old- fashioned style and taste. The goods produced included a variety of pies and cakes and were sold to the general public and local restaurants. The operation was initially started as a hobby by Elizabeth and a group of her friends. Many of the recipes they used had been passed down for generations in their families. The small production and sales facility was housed in a mixed commercial and residential area on the first floor of "Biddy's" home. Elizabeth (Biddy) and three of her friends worked in the facility from 6 a.m. to 2 p.m. making and selling the pies. The operation was arranged as a job shop with workstations set up to perform a variety of tasks as needed. Most of the customers placed advanced orders, and Biddy's Bakery took pride in accepting special requests. The bakery's specialty was the McDoogle pie, a rich chocolate confection in a cookie crust Meeting Capacity Needs Initially sales were slow, and there were periods when the business operated at a loss. However, after a few years Biddy's Bakery began to attract a loyal customer following. Sales continued to grow slowly but steadily. In 1994 a first floor storage area was expanded to accommodate the growing business. However, Biddy's Bakery quickly outgrew its current capacity. In May 2000 Elizabeth decided to purchase the adjacent building and move the entire operation into the much larger facility. The new facility had considerably more capacity than needed, but the expectation was that business would continue to grow. Unfortunately, by the end of 2000 Elizabeth found that her sales expectations had not been met, and she was paying for a facility with unused space. Getting Management Advice Elizabeth knew that her operations methods, though traditional. were sound. A few years ago she had called upon a team of business students from a local university for advice as part of their course project. They had offered some suggestions but were most impressed with the efficient manner with which she ran her operation. Recalling this experience, she decided to contact the same university for another team of business students to help her with her predicament. After considerable analysis the team of business students came up with their plan: Biddy's Bakery should primarily focus on production of the McDoogle pie in large volumes, with major sales to go to a local grocery store. The team of business students discussed this option with a local grocery store chain that was pleased with the prospect. Under the agreement Biddy's Bakery would focus its production on the McDoogle pie, which would be Page 4 of5 delivered in set quantities to one store location twice a week. The volume of pies required would use up all of the current excess capacity and take away most of the capacity from production of other pies. Elizabeth was confused. The altermative being offered would solve her capacity problems, but it seemed that the business would be completely different, though she did not understand how or why. For the first time in managing her business she did not know what to do.

Explanation / Answer

1.The challenge that Elizabeth faced in meeting her capacity needs was that as the sales of her Bakery for growing consistently because of which she needed more capacity in order to meet the sales demand. But the existing facility had extra space and extended capacity but still she accepted to purchase the adjacent building with extended capacity with Expectations that the sales would continue to grow in future.

2. The proposal made by the team of business student was to sell only The McDoogal Pie in the local grocery store which would be delivered to the store location in fixed quantity twice a week. But the existing business model of Elizabeth was not in synchronization with the business plan provided by student for utilisation of extended capacity.

3. The bakeries current operation involve supplying cakes to general public and local restaurants while the business students suggested that the majority of sale would go to local grocery store. The Bakery currently provided variety of cake and Pie but the business students suggested that more Emphasis should be laid on McDoogal Pie.

4. The business plan provided by students would differ from the existing operation in the ways of variety of products offered by the Bakery along with the difference in target customer.

5. I would suggest Elizabeth to add more variety of product to the existing product line which would help in utilising the facility and also there would not be significant changes in the existing operations.
Also upgrading the existing product with additional flavours would attract more customers.

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