Objective: Prepare an analysis showing whether or not a product line or other business segment should be added or dropped.

Scenario: You are a business consultant tasked with helping a family$-$owned bakery named "Sweet Delights" make an informed decision regarding its product offerings. Sweet Delights specializes in baked goods, including cakes, cookies, and pastries, but is considering changes to its product line to enhance profitability.

Instructions:

$1.$ Analyze Existing Product Line: Begin by thoroughly examining the current product line of Sweet Delights, which includes cakes, cookies, and pastries. Evaluate the performance of each product category in terms of sales, production costs, and profit margins. Use the data below for this analysis, considering pricing, production efficiency, and customer demand.

Financial Performance Data for January $2024$

Cakes

Sales Revenue: $$20,000$

Production Costs: $$12,000$

Gross Profit: $$8,000$

Profit Margin: $40\%$

Cookies Sales Revenue: $$15,000$

Production Costs: $$7,500$

Gross Profit: $$7,500$

Profit Margin: $50\%$

Pastries Sales Revenue: $$10,000$

Production Costs: $$6,000$

Gross Profit: $$4,000$

Profit Margin: $40\%$

$2.$ Market Research: Conduct hypothetical market research to understand consumer preferences and trends in the bakery industry. Explore what types of baked goods are in high demand and identify potential gaps or opportunities in the market.

$3.$ Consideration of Factors: Consider various factors that could influence the decision to add or drop a product line. These factors may include:

Customer Preferences: What do customers in your hypothetical bakery's location prefer?

Production Capacity: Can the bakery efficiently produce a new product line?

Competition: What are other bakeries offering, and how can Sweet Delights differentiate itself?

Profitability: Analyze the potential profitability of each product category based on your hypothetical data.

Growth Potential: Consider which product line has the most growth potential.

$4.$ Recommendation: Based on your analysis and considerations, make a clear recommendation to the owners of Sweet Delights on whether to add a new product line $($e$.$g$.,$ gourmet chocolates$)$ or discontinue an existing one. Justify your recommendation by explaining the reasoning behind it$.$ Provide insights into how your recommendation aligns with the bakery's goals and market conditions.

$5.$ Presentation: Prepare a concise report summarizing your analysis and recommendation from steps $1-4.$ Include relevant tables or charts to illustrate key points. Use clear and professional language.