Harvard Case - Our Daily Bread Co.
"Our Daily Bread Co." Harvard business case study is written by Kamalini Ramdas. It deals with the challenges in the field of Economics. The case study is 20 page(s) long and it was first published on : Jul 25, 2002
At Fern Fort University, we recommend Our Daily Bread Co. (ODBC) pursue a strategic expansion plan focused on leveraging their existing strengths in operations strategy, supply and demand, and family business to enter new emerging markets. This expansion will be driven by a combination of organic growth through new bakery locations and strategic partnerships with local businesses and non-profit organizations. This approach will allow ODBC to capitalize on the growing demand for fresh, affordable bread in these markets while simultaneously contributing to economic growth and poverty reduction.
2. Background
Our Daily Bread Co. is a family-owned bakery business operating in the United States. Founded in 1978, ODBC has built a strong reputation for its high-quality, affordable bread products. The company operates 15 bakeries in the Midwest and employs over 500 people. ODBC faces increasing competition from large-scale industrial bakeries and is looking for ways to expand its reach and market share.
The case study focuses on the company's CEO, John Baker, who is considering several options for growth, including:
- Expanding into new geographic markets: This could involve opening new bakeries in existing regions or entering new markets altogether.
- Developing new product lines: This could involve introducing new bread varieties or expanding into other baked goods.
- Acquiring existing bakeries: This could provide ODBC with a faster path to market expansion.
3. Analysis of the Case Study
The case study presents a complex situation with multiple factors to consider. To analyze the situation effectively, we can utilize a SWOT analysis to identify ODBC's strengths, weaknesses, opportunities, and threats.
Strengths:
- Strong brand reputation: ODBC has built a strong reputation for quality and affordability.
- Experienced management team: The Baker family has a long history of successful leadership in the baking industry.
- Efficient operations: ODBC has developed a highly efficient manufacturing process that allows them to produce high-quality bread at a competitive price.
- Strong customer loyalty: ODBC enjoys strong customer loyalty, particularly in its existing markets.
Weaknesses:
- Limited geographic reach: ODBC's operations are primarily concentrated in the Midwest.
- Lack of marketing expertise: ODBC has limited resources dedicated to marketing and brand building.
- Limited financial resources: ODBC is a family-owned business with limited access to external capital.
Opportunities:
- Growing demand for fresh, affordable bread: Consumers are increasingly seeking out fresh, high-quality bread products.
- Emerging markets: Many developing countries offer significant growth potential for the baking industry.
- Strategic partnerships: ODBC can leverage partnerships with local businesses and NGOs to expand its reach and impact.
Threats:
- Increased competition: ODBC faces competition from both large-scale industrial bakeries and smaller artisanal bakeries.
- Economic downturn: A recession could negatively impact consumer spending on non-essential items like bread.
- Rising input costs: The cost of raw materials and labor is increasing, putting pressure on ODBC's profit margins.
4. Recommendations
ODBC should pursue a strategic expansion plan that leverages their existing strengths and capitalizes on the opportunities presented by emerging markets. This plan should include the following key elements:
- Targeted market selection: ODBC should focus on entering emerging markets with a strong demand for fresh, affordable bread and a growing middle class.
- Strategic partnerships: ODBC should seek out partnerships with local businesses, NGOs, and government agencies to facilitate market entry and build local relationships.
- Local adaptation: ODBC should adapt its products and marketing strategies to meet the specific needs and preferences of the local market.
- Focus on social impact: ODBC should prioritize corporate social responsibility by creating jobs, supporting local farmers, and contributing to poverty reduction.
5. Basis of Recommendations
This recommendation is based on the following considerations:
- Core competencies and consistency with mission: ODBC's core competencies in operations strategy and supply and demand are directly transferable to emerging markets. The company's mission of providing affordable, high-quality bread aligns with the needs of these markets.
- External customers and internal clients: The recommendation considers the needs of both external customers and internal clients, including employees, suppliers, and investors.
- Competitors: The recommendation acknowledges the competitive landscape in emerging markets and proposes strategies to differentiate ODBC from competitors.
- Attractiveness: The recommendation is based on the potential for significant economic growth and profitability in emerging markets.
6. Conclusion
ODBC has a strong foundation and a clear opportunity to expand its reach and impact by entering emerging markets. By leveraging its existing strengths, forging strategic partnerships, and adapting its business model to local conditions, ODBC can achieve sustainable growth and contribute to the development of these markets.
7. Discussion
Other alternatives considered include:
- Acquiring existing bakeries: This option would provide ODBC with a faster path to market entry but could also lead to integration challenges and cultural clashes.
- Developing new product lines: This option could diversify ODBC's product portfolio but could also require significant investment in research and development.
The recommendation to enter emerging markets through organic growth and partnerships is based on the following key assumptions:
- Continued demand for fresh, affordable bread: This assumption is supported by global trends in consumer preferences and the growth of the middle class in emerging markets.
- Favorable regulatory environment: ODBC will need to navigate the regulatory landscape in each target market to ensure compliance with local laws and regulations.
- Availability of skilled labor: ODBC will need to find and train skilled workers to operate its bakeries in emerging markets.
8. Next Steps
To implement the recommended expansion plan, ODBC should take the following steps:
- Conduct market research: Identify potential target markets and assess the demand for fresh, affordable bread.
- Develop a strategic partnership plan: Identify potential partners in each target market and develop a strategy for collaboration.
- Adapt products and marketing strategies: Tailor products and marketing messages to meet the specific needs and preferences of each local market.
- Secure funding: Obtain the necessary financial resources to support expansion activities.
- Develop a training program: Train employees on local regulations, cultural sensitivities, and best practices for operating in emerging markets.
By taking these steps, ODBC can successfully expand its operations into emerging markets and achieve sustainable growth while contributing to economic development and social progress.
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Case Description
Our Daily Bread was a small boutique bakery, producing a variety of daily and specialty breads. The company had excess capacity and was considering several options to increase revenues by entering the wholesale bread production business. The case allows students to perform process analysis in a multi-product setting with seasonal demand and evaluate the impact on capacity--as well as the profitability of--potential wholesale orders. The case also enables analysis of the option to purchase new equipment.
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