Question: Question 1 Read the case study and answer the questions follows. Priyas Cakes Three years ago, Priya decided to pursue a profession that combined her

Question 1

Read the case study and answer the questions follows.

Priyas Cakes

Three years ago, Priya decided to pursue a profession that combined her passion for baking and her unique artistic ability. She opened a cake shop in the heart of city. She focused on using the best and latest technology in the field of baking and confectionary. Soon, her talent and dedication to provide quality products made her shop, Priyas Cakes, one of the most popular local cake shops. In the first two years of operations, she focused primarily on make-to-stock standard cake orders. She also supplied her friends and family with uniquely designed cakes on special occasions such as baby showers, wedding ceremonies, anniversaries, and birthdays. This triggered positive word-of-mouth advertising for her business, resulting in frequent requests for custom cakes. In the third year, she finally introduced make-to-order custom cakes as a formal product offering. Since then, her business has grown substantially, and revenue from custom cakes now makes half of her total revenue. But introducing custom cakes has also brought numerous unanticipated challenges for her business. She pondered over how to deal with these challenges, intending to take the necessary actions immediately in order to be ready for an upcoming busy wedding season. The following are some of the major issues she wanted to discuss with her business consultant in the next meeting.

(a) Business strategy: All cakes were prepared by focusing on make-to-stock arrangements, with minor decorations and a message or name added at the time of purchase. As this segment appealed to her creative and artistic abilities and had higher profit margins, she started offering make-to-order custom cake too. However, the growth in her business also caused several difficulties due to the following business characteristics: Customers in the make-to-order business segment started forcing her to move away from her core competency. The consideration to have a separate website, providing midnight deliveries and onsite setup assistance, will definitely pull her away from her central business focus. Besides, demand for premium cakes (3D presentations and hand-made figures and pictures on the cakes) was uncertain and having additional full-time artist could mean an increase in fixed labor cost. She also tried hiring some part-time skilled artist during rush orders. Furthermore, the pricing of custom cake cakes is not standard. As these cakes required more time to be made and were labor intensive, the prices were highly variable. Scheduling and appointment with customers had also become an issue due to their busy schedule.

Assume that you are a business consultant for Priyas Cakes and answer the following questions.

Identify key issues in the given case. How do these issues affect each other?

(30 Marks)

What would be the order qualifiers and order winners for standard and custom cake segments? Which segment do you think is more important for her business? (20 Marks)