Dieters Case - Class Discussion
Dieters Case – Class Discussion/Example
Case Synopsis:
Who & what? Supplier? Buyers? Immediate Past?
Example: Dieters, a successful pastry chef, owns DD a b______ in the design and distribution of baked goods. He outsources all production to Browne’s Bakery, where he accounts 21% of sales. Dieters sells to caterers/hotels/ grocers under DD label. DB wants to expand -> by having BB expand production. BB doesn’t want to finance a risky venture with debt/30% dependence on DD. DD could also built their own plant, but would need external s/h and loans.
Problem Statement:
1) How can DD grow in the future?
Summary:
Industry (What/Attractive/Why): Design and distributor of baked goods, high buyer and supplier power, lots of subs (Bad)
Strength Vs. Weaknesses: Strength outweighs Weakness, good finds and rep’n however sole supplier, lack of management expertise.
Opportunities Vs. Threat: Opportunity outweighs threats, continued growth.
Threats outweigh opportunities, highly competition, big brands, healthy eating, subs
Porter’s Analysis (“EXISTING INDUSTRY”):
Buyers:
Who? Grocery, caterers, hotels.
Power? Buyers.
Why? Relative size, lots of producers
Suppliers:
Why? Contract baker
Power? Buyers (easy to switch)
Why? Easy to switch
Substitutes:
What are they? Ice cream, chocolate bars, baked goods at home
O, some, lots? LOTS
Threats of Entrants:
Easy/Med/Hard? Easy
Why? Low $$, hard to grow
Competition:
Low/Med/High? Low: High? Low profit
Why?
Alternatives:
1) Stay with Browne’s, expand slower
2) Build Plant (reduced size)
3) DB investors expand Browne’s plant
4) Set another supplier (some/all)
Analysis of Alternatives:
1) Stay with Browne’s, expand slower
Pros: Less risk, D continues to build experience/capabilities, D could save $ to build in future, B doesn’t need to borrow
Cons: Slows growth, D gets pissed off, Doesn’t solve problem, reduces neg power, 100% dependence on B, less profit
2) Build Plant
Pros: More freedom/no reliance on Browne’s Bakery,
Case Synopsis:
Who & what? Supplier? Buyers? Immediate Past?
Example: Dieters, a successful pastry chef, owns DD a b______ in the design and distribution of baked goods. He outsources all production to Browne’s Bakery, where he accounts 21% of sales. Dieters sells to caterers/hotels/ grocers under DD label. DB wants to expand -> by having BB expand production. BB doesn’t want to finance a risky venture with debt/30% dependence on DD. DD could also built their own plant, but would need external s/h and loans.
Problem Statement:
1) How can DD grow in the future?
Summary:
Industry (What/Attractive/Why): Design and distributor of baked goods, high buyer and supplier power, lots of subs (Bad)
Strength Vs. Weaknesses: Strength outweighs Weakness, good finds and rep’n however sole supplier, lack of management expertise.
Opportunities Vs. Threat: Opportunity outweighs threats, continued growth.
Threats outweigh opportunities, highly competition, big brands, healthy eating, subs
Porter’s Analysis (“EXISTING INDUSTRY”):
Buyers:
Who? Grocery, caterers, hotels.
Power? Buyers.
Why? Relative size, lots of producers
Suppliers:
Why? Contract baker
Power? Buyers (easy to switch)
Why? Easy to switch
Substitutes:
What are they? Ice cream, chocolate bars, baked goods at home
O, some, lots? LOTS
Threats of Entrants:
Easy/Med/Hard? Easy
Why? Low $$, hard to grow
Competition:
Low/Med/High? Low: High? Low profit
Why?
Alternatives:
1) Stay with Browne’s, expand slower
2) Build Plant (reduced size)
3) DB investors expand Browne’s plant
4) Set another supplier (some/all)
Analysis of Alternatives:
1) Stay with Browne’s, expand slower
Pros: Less risk, D continues to build experience/capabilities, D could save $ to build in future, B doesn’t need to borrow
Cons: Slows growth, D gets pissed off, Doesn’t solve problem, reduces neg power, 100% dependence on B, less profit
2) Build Plant
Pros: More freedom/no reliance on Browne’s Bakery,