Strategically Reposition of Sugar & Spice

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6 tells us the price for the customized mix products is $9.83 per dozen. Assuming Sparkles is the same size as Sugar & Spice, its customized product will be $6.55 per dozen (9.83/1.5=6.55), which is $0.35 cheaper (6.90-6.55=0.35) per dozen. Assuming the scale is going to go up and selling 400 cupcakes a day, that is 11 dollars saves. And as the preparation ingredients steps turn into prepare the bulk mix. Then the time for prepare 4 dozen ingredient will be shortened to 8.5 hours, and the total throughput time will be 146 hours. Thus, you probably want to move into purchasing and storing semi-finished products. It doesn’t mean these products will replace all the parts of your customized cupcakes but only a part. For example, if you decided to replace all the raw materials that make batter into pre-mixed products, you could at least gain 5% off and construct a long-term relationship with the supplier. By cutting the costs off you could improve the profit from the other perspective.

Operational Aspect:

Beside the key promotions, there’s also space to improve from the operational aspect. The major point is to sustain a group of long-term and trustworthy workforce. According to the plan above, the selling point for Sugar and Spice is innovation and design. Even though your artistic background and aesthetic sensitivity are strong, there’s still difficulty for you to make the demanded cupcakes as you wish. If the 400 cupcakes per month’s goal has been reached. That will take 973.33 (400/60*146) hours approximately. Assuming each full-time worker works 9 hours a day, 4 workers include you are needed (973.33/9/30=3.6). Therefore, you should hire at least one professionals and two baking assistants who are able to design cupcake and turn that design into reality. The plan also mentioned that there should be someone who could drive the truck to the customer’s event. So, the other employee to hire is a part-time truck driver. And as soon as Sugar and Spice takes an order, the driver’s schedule will be reserved.

Conclusion:

In all, although your business catches the current trend, the company still encounters some strategic and operational issues. From one hand your strategy doesn’t match your competitive advantages; from the operational side your indifference with building long-term relationships would costs you extra money. Thus, I’m highly recommending you to take part in the customize market; build long-term relationship with pre-mix product suppliers and hire some skilled labors. By both cutting the cost and increasing the revenue, you are going to develop a strong business soon.