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Operational Management
TABLE OF CONTENTS
1.0 EXECUTIVE SUMMARY
PAGE(S)
1.1 Introduction.2
1.2 Owner and Cake Decorator.2
1.3 Companys Goals and Objectives.3
Business Goals.3
Strategic Goals..3
1.4 Vision.3
1.5 Mission Statement.....3
1.6 The Market3
2.0 INDUSTRY ANALYSIS
2.1 SWOT Analysis4
2.2 Fadrizal Cakes SWOT Analysis 4
2.3 Porters Five Forces Analysis .6
3.0 PRODUCTS AND CORRESPONDING IDEAL CUSTOMER
3.1 Fadrizals Cakes Product.10
3.2 Fadrizals Customers11
4.0 MARKETING STRATEGY
4.1 Market Segmentation .12
4.2 Target Market Segment Strategy 12
4.3 Marketing Plan..13
4.4 Market Trends / Growth .15
5.0 MEASUREMENT ..16
REFERENCESS ..17
FadRizals Cakes is brand name that brought to live by Puan Fadzilah Musa, a baker, cake
decorator/designer. FadRizals Cakes is a homemade and customade bakery & baking class
located in Pelindung, Kuantan. FadRizals Cakes is owned by Puan Fadzilah Musa under
company name of FadRizals (CA0167732-H).
FadRizals Cakes aim to be the next Halal brand in cake and pastries in Malaysia. Their aims
are to give the best, delicious, beautiful and halal cake to all.
Beside cakes, cupcakes, desert and many others, FadRizals Cakes also conduct cake class
and tutor for beginners to get a hand on the baking process. Their students are mainly locals
and there are students from Sabah, Sarawak and neighbouring countries such as Singapore
and Brunei.
Puan Fadzilah Musa skill and the popularity of FadRizals Cakes have eye the media for
another interviews and coverage in line. FadRizals Cakes featured in Pesona Pengantin
Magazine in March 2013 as recommended cake decorator.
1.4 Vision
Their vision is to ride on the success of homemade cakes and engrave a good brand
impression in the hearts of Kuantan population. They strive to adhere to strict self regulation
and control on the food and service standards and quality that they provide to customers.
Opportunities - external factors the project can capitalize on or use to its advantage.
Once the SWOT factors are identified, decision makers should be able to better ascertain if
the project or goal is worth pursuing and what is required to make it successful. Often
expressed in a two-by-two matrix, the analysis aims to help an organization match its
resources to the competitive environment in which it operates.
2.2 FadRizals Cakes SWOT Analysis
Strengths
market needs.
Using Halal ingredients resulting in high quality product.
Minimal, but experienced staff to start business and save money.
Cakes made by orders and its made from home (no preservative to make cake last)
The uniqueness of each cake has been made by Fadrizals Cakes because it
Weaknesses
Start-up costs are only estimates and funding a small business could be difficult
(bank loan).
Potentially could be understaffed if their product demand increases drastically.
Experience in marketing our product is minimal.
Location is not in the commercial area. The current premise is not suitable if
Opportunities
Threats
Figure 1.1
Porters Five Forces Model of competitive analysis is a widely used approach for developing
strategies in many industries. The intensity of competition among firms varies across
industries. According to Porter, the nature of competitiveness in a given industry can be
viewed as composite of five forces;
Rivalry among competing firms
Potential entry of new competitors
Potential development of substitute products
Bargaining power of suppliers
Bargaining power of consumers
The following three steps for using Porters Five Forces Model can indicate whether petition in
a given industry is such that the firm can make an acceptable profit:
Identify key aspects or elements of each competitive force that impact the firm.
Evaluate how strong and important each element is for the firm.
Decide whether the collective strength of the elements is worth the firm
entering or staying in the industry.
profit that typically does not cover the cost of capital due to low barriers to entry, ease of
production and ease of access to ingredients.
Rivalry Among Competitig Firms
There are many players in the home-made cake business in Kuantan, Kemaman and
Pekan. The industry is characterized by many homemade cake businesses, but there has
been a recent trend towards consolidation and economies of scale. Businesses compete
on price, quality, differentiation and relationships with key suppliers.
There are a lot of people that makes celebration cakes in Kuantan area. However, only a
few of them have the level of skills that Fadrizal Cakes has, so rivalry is low when it comes
to achieving the quality of cakes that they create and the level of personal service their
offers. For example, assembling wedding cakes at wedding reception.
Potential Entry of New Competitors
Barriers to entry in this industry are low. Economies of scale are beneficial, but are not
required for industry success. As a result, small businesses can enter the industry with a
relatively small amount of capital. The two main determinants of a new companys
success is the leaders' ability to acquire sufficient distribution channels to cover operating
costs and their ability to build up brand recognition and loyalty. Distribution channels
typically involve retail outlets, such as supermarkets and grocery stores, and they can be
more easily acquired if the bakery has an established brand or the marketing resources to
create one.
Its relatively easy for someone to set up on their own if their know how to bake and
decorate cakes, have done and photographed them for friends and family and have lots of
happy customers who are willing to recommend them. Also a lot of people set up this type
of business from home and in their spare time and there are courses available to learn
extra skills needed. All in all, the treat of new is high, show Fadrizals Cakes needs to find a
way to differentiate and maintain loyalty from happy customers.
Bargaining Power of Consumers
Buyers of the home made cake industrys products, such as future bridal, parents to
celebrate childrens birthday, other event management company and corporate client are
able to appropriate much of the industrys profit due to the large number of homemade
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cake businesses that are all trying to find outlets for their products. As a result, buyers are
able to command low prices and volume discounts. This will cause the profits are small
because they want to keep putting the product together with competitors from the same
industry.
Because of substitutes available, customers may believe they have the power to drive
down price. However, if Fadrizals Cakes concentrators on adding value and letting people
know while they are the best option, then the perceived value goes up and people will
happily to pay more.
Fadrizals Cakes dedicates itself to creating specialty cakes and cupcakes for all occasions
that fit the individual needs of their diversified target market. Fadrizal Cakes can adapt its
product to provide a high level of satisfaction to all potential customers across Kuantan,
Pekan and Kemaman and deliver their product within 24-48 hours of receipt of order
obtainable on-line or via phone. Fadrizals Cakes can adapt to our customers taste needs
by providing a variety of different product creating flavored cakes, frostings, designs, colors
and presentation styles that would make any event a stand-out extravaganza
Product of Fadrizals Cakes can be categorised by several product line;
a. Flavoured Cake
Under flavoured cake product line, Fadrizals Cakes can divided into cheese cake,
carrot walnut, Chocolate Indulgence, Rainbow Cake, Nutty Caramel, Red Velvet Cake,
Pecan Butterscotch Cake and many more
b. Decorating Cake
Under decorating cake also can divided into several product type by its finishing of
cake decoration, such as, Fondant cake, buttercream cake and 3D cake. This product
type also can be divided into wedding, birthday, and anniversary, celebration. Fadrizals
Cake also received order from corporate customer such as Fraser and Neaves (F&N).
c. Cupcakes
Also can divide into several types of product such as, fondant cupcake and
buttercream cupcake.
d. Favours / Door Gift Wedding and birthday- Customer can choose whether want to
give their guest favours. Selection of product under this product lines are cake in jar,
cupcakes, cookies.
e. Cookies
This type of product only offers during two months before Hari Raya. The cookies
flavours are Black Chocolate Drop, Mint Chocolate Drop, Untai Untaian, Almond
f.
towel.
g. Baking supplies Fadrizals Cakes also selling their signature homemade buttercream
(smooth and shining textiure), homemade fondant and Choc mud cake mix.
3.2 FADRIZALS CUSTOMER
FadRizals Cakes can adapt to a diversified market, including people of all ages in the
Kuantan area engaged in special events that require a tasty dessert to impress their
guests for all occasions. Their target market specifically includes people who have a
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medium and higher level of discretionary income and willing to buy in luxury and premium
products.
Birthday parties
Bon Voyage
Bridal showers
Congratulatory celebrations
Graduations
Holidays i.e.,Hari Raya, Chinese New Year, Fathers Day, Mothers Day,
Valentines Day, etc.
Database programming
Internet marketing FadRizals Cakes
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Place
They have chosen a residential area as a business location in Taman Pelindung Damai 5,
Kuantan. The rental of the premise is RM600 per month. The location was selected because it
is near to the house owner. The population in the area alone is 18,000 residents.
Pricing
FadRizals Cakes use a price lining strategy on certain categories of products. This is to simplify
the choices of the customers by introducing same pricing for cakes of the same type. They
markup of 100% based on cost to produce that particular of cake to cover up the overheads
generated to operate the business. However, customers are simply willing to pay more for
beautiful and unique design, good taste and the cakes are made in a clean, and pleasant
environment. Their pricing objective is to be as reasonable as possible for the average
household income. Raw materials prices that they obtained from Kuala Lumpur and Melaka are
cheaper, about 20% from the Kuantan market price and thus leaving them with more space for
their profit margins.
4.4 Market Trends/Growth
Throughout the last few years, the market for homemade cakes has greatly expanded. No
longer are they only a fun birthday party treats or weeding cakes that can be purchased at any
grocery store or bakery. They have expanded with specialty designs to adapt to any occasion
and specialty events and also expect to grow tremendously over the next few years due to their
adaptability to clients needs.
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5.0 MEASUREMENT
The successful of marketing strategies of FadRizals Cakes can be measured trough:
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Reference
http://www.fadrizals-cakes.com/
https://ms-my.facebook.com/FadrizalsCakes
http://www.mindtools.com/pages/article/newTMC_05.htm
http://www.tutor2u.net/business/strategy/porter_five_forces.htm
http://www.bplans.com/marketing_strategy_business_plan/executive_summary_fc.php
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