Taking the Cake
Background: Southland Baking Company (SBC) is engaged in the production of baked food and instant breakfast food. One of its item named Chizzlewits is crumbly, full of saturated fat, and delicious. The other item is Mellobar which was introduce in 1975 and was best selling product. Thus the company has a solid foothold in the market. But the products like Chizzlewits have turned out to health hazard, hampering the health of the people. So, there is a protest going on from consumer activist and hungry litigators against companies producing unhealthy baked food items. The company similar to Southland Baking Company was sued by a New York based lawyer for making unhealthy food and selling it to the society. This has given a warning bell to Peter Schmidt, Southland's vice-president and general counsel. Below are the problems and solution with rationale for SBC:
Problems: 1. A grandstanding New York lawyer sued a company for making its client fat which is similar to Southland Baking Co (SBC) and is engaged in making packaged foods.
2. Mothers Opposed to Obesity in Kids (MOOK), a consumer activist was stridently against these companies.
3. Fred’s new improved Chizzlewits didn’t work as it didn’t taste good and wasn’t tasting like Chizzlewits.
4. SBC has to come up with modified or improved product with alternative ingredients.
5. Sweetena, a rival company, is starting to roll out line extensions with half the fat of the original product which is one of the big concerns for SBC.
6. There has been an 11% increase in sales revenue for SBC but few new brands are emerging which are using honey in lieu of sugar or corn syrup and canola or palm oil instead of hydrogenated oil. So the company is loosing its market share slowly against its competitors.
7. Margins are squeezed as the slotting fees for good placement is rising up by 17%.
8. There has been worrying signs of increasing regulatory interest in snacks,
Problems: 1. A grandstanding New York lawyer sued a company for making its client fat which is similar to Southland Baking Co (SBC) and is engaged in making packaged foods.
2. Mothers Opposed to Obesity in Kids (MOOK), a consumer activist was stridently against these companies.
3. Fred’s new improved Chizzlewits didn’t work as it didn’t taste good and wasn’t tasting like Chizzlewits.
4. SBC has to come up with modified or improved product with alternative ingredients.
5. Sweetena, a rival company, is starting to roll out line extensions with half the fat of the original product which is one of the big concerns for SBC.
6. There has been an 11% increase in sales revenue for SBC but few new brands are emerging which are using honey in lieu of sugar or corn syrup and canola or palm oil instead of hydrogenated oil. So the company is loosing its market share slowly against its competitors.
7. Margins are squeezed as the slotting fees for good placement is rising up by 17%.
8. There has been worrying signs of increasing regulatory interest in snacks,