Question

Soft Breads Ltd., a bread manufacturer from South India entered into the business of bread manufacturing in the Northern India in the year 2005 by acquiring brand name 'Delicious' from a local baker 'Kuldeep Sodhi' in Chandigarh known for his quality breads. The baker kept on preparing and selling breads, however, now with a different name 'healthy' in changed package. Soft Breads Ltd. invested heavily in the machinery and equipment. In fact, it invested a sum of Rs.35 crores over a period of five years. It got immediate acceptance from market as 'delicious', a household name, was well known for its quality. Gradually it captured major markets in adjoining cities of Haryana and Panjab. In the year 2010 its total turnover was Rs.10 crores per annum with 50% market share in Chandigarh. Meantime, 'healthy' also got some recognition and was able to grow. Some of its loyal customers also shifted back to him realising that the baker has changed the name of the product. Its market share, in 2010 stood at 15% in Chandigarh city. Inspired by the success of 'Delicious' the baker joined with his two rich friends to form a partnership by the name of 'Healthy Foods' in the year 2012. They acquired an automatic modern plant to manufacture breads. The plant was better than that of Soft Bread Ltd. They were able to reduce their costs and started selling breads at one rupee cheaper than the competitors. They also introduced new product such as whole wheat bread, bread enriched with vitamins, bread for kids in chocolate flavour. Within one year their market share grew to 35% in Chandigarh. In the year 2013 their turnover was Rs.12 crores against Rs.20 crores of Soft Bread Ltd. Now they plan to enter into business of cake and biscuits on large scale. Read the above case and answer the following questions: (a) Discuss the strategy of 'Soft Breads Ltd'. (b) Discuss the strategy of 'Healthy Foods'. (c) Perform a SWOT analysis for Soft Breads Ltd. (d) What are the alternatives before the Soft Breads Ltd. ?

Answer 1

The strategy of 'Soft Breads Ltd' and 'Healthy Foods'

Explanation:

a) The strategy of 'Soft Breads Ltd' is to sell quality products with good brand name.

b) The strategy of 'Healthy Foods' is to manufacture goods at a lesser price than the competitors.

• c) The strength of Soft Breads Ltd is acquiring the brand name 'delicious' and attracting the market.

•      The weakness is 'Delicious' is not their own brand.
•      The opportunity is to expand the business and compete with the competitors.
•      The threat is heavy investment in the machinery and equipment.

d)  The alternatives before the Soft Breads Ltd. is the baker selling quality goods and having loyal customers.

To know more:

Perform a SWOT analysis for Soft Breads Ltd

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