Final Assignment on Strategic Management

Course: MGT489, Spring 2021, Section: 15

Faculty: Dr. Zulkarin Jahangir,

Professor,
North South University.

Assignment Submission on Just Cake Things

Submitted by: Mahmudul Hasan

ID: 1711968030

Submission Date: 25th, May 2021.

Company Overview
Just 1.5 years ago, Just Cake Things began its journey to provide cake and cookie lovers with pure

and freshly baked cake and cookies. Maksudur Rahman, the company's managing director, had a

vision to bring individuality to an otherwise homogeneous industry, which sparked the idea. The

owner hired his sisters and persuaded them to take baking lessons from experts. He also worked

with two of his friends to investigate the front-end aspects of the company and brand "Just Cake

Things." They summoned the courage to launch their online presence. The company currently

serves cakes, cupcakes, and cookies and is working to expand their product range to include more

variations. They are now partnered with many online food distribution firms and often sell through

their own delivery personnel, allowing them to serve a larger customer base.
Industry Life Cycle
It is the evolution of an industry over time. There are five stages in the life cycle of an industry,

and "Just Cake Things" was in the embryonic stage at first because it was a completely new online

bakery for customers. However, as the market for the products grows, as the profit and sales

increase, and as the distribution and output of the products grow, the industry is currently in a

growth period.

External Analysis
An external review investigates the broader business environment that affects a company. External

analysis is the study of a company's industry landscape, including competitive structure,

competitive role, trends, and history. External analysis encompasses large-scale macroeconomic,

environmental, political, social, demographic, and technical analysis. The primary aim of external

research is to identify the opportunities and challenges that drive profitability, development, and

variability in any industry or segment.

PEST

The PEST analysis is a business approach that analyzes key factors that affect an outside entity,

such as political, economic, socioeconomic, and technical factors. This provides insight into the

external factors influencing your market. The following is the report for the immobilization

industry:

Political

The most serious issues in our world today are political instability and insecurity. This impedes

the smooth distribution of products and can also create problems for delivery personnel.

Furthermore, uncertainty can disrupt the supply chain, raising raw material prices or making raw

materials unavailable. This has the potential to discourage companies from meeting their

obligations and to reduce the reputation of the industry's brand.

Economic

Bangladesh's present economy is in a state of chaos as the pandemic continues. It has affected the

buying power of citizens and limited the forecast GDP growth by more than 8%. Although these

statistics may have a negative impact on the market, the prolonged embargo reduces distrust of

online purchases and incites individuals to try out from various companies. People are now using

online sites more than ever and will be more likely to stick to companies if they offer proper

services.
Social

In order to promote healthy diet and sugar reduction, consumer tastes change into healthier

choices. This reversal will hinder the bakery industry's growth path because the industry relies on

sugar to produce saccharine products.

Technological
The growth of social media in Bangladesh has allowed customers to engage and to do so on various

platforms. The increased penetration of smartphones and the digitalization of Bangladesh will

increase connectivity and commitment with customers and will allow the market to become more

and more personalized.

Internal Analysis
Vision Statement

To be the leading name in catering to Bangladesh's bakery product needs.

Mission Statement

To be a reliable bakery brand by offering high-quality bakery products.

SWOT

SWOT analysis is a strategic strategy tool used to determine a company's internal and external

environment to take appropriate actions. Below is the analysis: The following:

Strengths

• Have professional workers who share the company's vision. Since all of the core staff are

paid on a percentage basis, they are able to have the highest level of customer service.
 • Customization options abound, with nearly 24-hour delivery available.

• Customer-centric approach to product line updates based on customer demand.

• Profitable Financial Margin (approximately 42% Gross Profit)

• Dedicated distribution personnel to reach a larger regional audience

Weakness

• Machinery lack hinders manufacturing performance and increases the time period between

demand and distribution to the client.

• Lack of staff to meet the growing client base.

Opportunities

• Product line diversification

• Since the company is primarily guided by events, Bangladesh's growing population

provides a ray of hope just Cake Things.

Threats

• Consumer preferences are shifting away from sugar-based goods.

• Customers can be drawn to big brands because of their cheaper prices due to economies of

scale.
Corporate Level Strategies
Long term decisions by the CEO, the CFO, COO, the group managers and managers are corporate-

level strategies. These decisions impact a company as a whole and the company's strategy seeks,

in its current business or in the new business or market that it prefers, to encourage and maintain

profitability and competitiveness. The company strategy includes the decision to expand or reform

its business.

Horizontal Integration

In order to gain a competitive advantage, the acquisition or merger with a corporation from the

same sector would favor the larger business. Just Cake stuff is a startup with a growing demand

and a few markets. The best option is to merge with a business from the same industries after they

are opening their outlets across Bangladesh. For example, COCO LAB is a new brand of chocolate

in Bangladesh that will allow them to benefit from economies of scale and also distinguish their

products. Just Cake Things' revenue will rise as the number of goods increases, and the company

will gain a large market share in the industry.

Expansion by newer markets

Currently, Dhaka serves Just Cake Things. With the time to expand its development, the cities of

Chittagong, Sylhet, Rajshahi, Rangpur, Barishal and Khulna can spread their operation only in

cake stores. Disseminating operations in Bangladesh would expand and increase customers' base.
Vertical integration

One of the company's major costs is packaging. It will cause the company to benefit if this expense

is reduced. Integration with the packaging industry vertically reduces company costs and benefits

from strategic advantages over others and high profits.

Business Level Strategies

Three elements are the business level tactics, namely the customer market the organization is

willing to represent. Secondly, it identifies what the consumer wants or wishes and, thirdly, how

the organization determines to meet certain requirements or wishes. In order to benefit a company,

implementing company-level strategies is very necessary. There are 4 market strategies on a

general basis, with businesses typically use a combination of these strategies depending on their

product/service. Just Cake Things somehow use all four techniques to do business.

Broad Low-Cost Strategy

It involves reducing costs to win a large part of the market, compared to the rivals, to similar goods.

The daily cakes are comparatively priced in Just Cake Things above the usual online cake shops,

but Just Cake Things stands as premium pastry shops that use imported ingredients such as Punizz

Kitchen, The Baking Pit, Banee's Creation, etc. Thus, though prices are higher than normal ones,

Just Cake Things offers a lower price in comparison with their prices on the market.
 Picture: The well-known Mud Cake from Just Cake Things (Best Seller)

Broad Differentiation Strategy

In this technique businesses aim to differentiate their product or product line in order to please a

large number of individuals. Only coke stuff, they sell a large variety of products, unlike other

online cake shops. They serve all of it and all with a lot of choice from cupcakes, cookies, brownies

and truffles. There are, for example, three varieties of fudge, caramel and peanut butter for

brownies. There are several flavors in the cupcakes, too. Just Cake Things extended its vision and

reached a broader customer base by deviating from becoming a pastry cake store.
Focused Low-Cost Strategy

Concentrating on a small consumer segment and giving them a

comparatively lower price as a product / service. In Just Cake
Things, traditional cakes are relatively much more expensive
than the rivals, although the fondant cakes are typically cheaper
(the Niche Segment). As most pages charge 5.000 BDT for a
fondant cake of 1 kg, the price of Just Cake thing begins from
2500 and rises according to designs. The key reasons why cakes
are higher are imported to produce the cake because they
concentrate on customer retention and quality.

Picture: Fondant Cake from Just Cake Things

Focused Differentiation Strategy

Focusing on a niche market segment and providing them with more attributes, benefits, and

customization than the competition. Just Cake

Things has done extremely well by employing

this strategy effectively. To begin, they

customize the product with whatever designs

their clients desire, while maintaining the

overall quality of the cake. Many online cake

shops employ this strategy, but the quality of the

cake suffers as a result. Just Cake Things not

only offers cake customization and maintains

quality, but they also offer the cakes at a lower

price, undercutting competitors in the process.

Secondly, many customers seldom choose to order cakes and deliver them, typically at midnight,

in special occasions such as birthdays, birthdays,

etc. However, it cannot be fulfilled because of the

lack of dedicated service to this needs. Just Cake

Things have this special service known as delivery

11.59 pm. The cake is delivered at 11.59 pm

exactly, and people can surprise their loved ones

easily. This was a crucial factor in the success of

Just Cake Things, as the engaged delivery team has

always been able to deliver without complaint.

Functional Level Strategies

Marketing

Just Cake Things' primary goal as a newcomer to the market is to gain new customers. To do this,

the company is heavily investing in marketing and branding strategies. The company is attempting

to add value to its service by providing goods at a reasonable price and providing timely delivery

service with after-sales customer reviews. The company has been using relationship marketing and

try to build and sustain a close relationship with its consumers through its most popular service,

personalized cakes.
Research & Development

Dhaka's bakery industry is highly competitive. Massive competition arose as a result of easy access

to this market. Just Cake Things, with its limited resources, is finding it difficult to understand its

customers' demands in the face of intense market competition. In this day and age, every

organization, large and small, places a premium on research and data.

Data collection is much simpler these days than it was previously. Just Cake Things can collect

input from current customers to learn where they can change, as well as conduct ongoing online

surveys to learn about the needs of its customers. When it comes to bakery items, customers' tastes

and desires change all the time. Research will assist the company in determining the market trend,

which will allow them to set their prices in order to compete and lead the market.

Human Resource Strategy

Just Cake Things currently employs three bakers, two delivery men, and two marketing officers

due to its limited size. Since the company does not have any stores or a separate warehouse, it does

not need to employ many employees.

Just Cake Things, on the other hand, pays the delivery man weekly and the marketing officers and

bakers on a per-order basis.

The company pays for the training and workshops needed for the bakers' skill development in

order to improve the productivity and quality of its goods.

Finance

Just Cake Things has struggled with financing. As a startup, the company is experiencing

difficulties because it must meet several fixed monthly expenses. The company is struggling to

meet its working capital requirements. The company's variable expenses could only be maintained

with continued sales. Access to large amounts of capital has become difficult, posing a barrier to

development. Currently, no formal profits or financial statements are held by the company.

However, it is recommended that a proper financial system be maintained to enable the company

to track growth and monitor business expenses. This will also benefit in the future when applying

for grants since these records will serve as proof of the business's viability.

Conclusion

Just Cake Things is willing to go the extra mile in order to create a high-quality in-house bakery

and recruit effective and loyal employees. In terms of hygiene, they have implemented plans,

procedures, and systems to improve the hygiene aspect. They were able to obtain permits from all

relevant departments in this regard. Just Cake Things is poised to reshape the way community-

based bakery businesses operate not only in Dhaka, but across Bangladesh.
References
Bakers & Bakeries. (2016). Retrieved from IDLC Finance Monthly Business Review:
https://idlc.com/public/documents/mbr/16/Monthly%20Business%20Review%20-
%20May%202016.pdf
GDP growth rate reaches 5.24% in FY20: BBS. (2020). Retrieved from The Daily Star:
https://www.thedailystar.net/business/news/gdp-growth-rate-reaches-524-fy20-bbs-
1943229#:~:text=The%20GDP%20growth%20rate%20of,Bureau%20of%20Statistics%2
0(BBS).
Sakib, N. S. (2018). Baking business booms. Retrieved from The Financial Express:
https://today.thefinancialexpress.com.bd/print/baking-business-booms-1523554764