Case Analysis: Home-Style Cookies, management homework help

User Generated

gzsneeryy

Business Finance

Description

This case study focuses on the operations strategies of Home-Style Cookies baking company. First, carefully read the following information about this organization.

Company

The company is located in a small town in New York State. The bakery is run by two brothers, employs fewer than 200 people (mainly blue-collar workers), and the atmosphere is informal.

Product

The company's only product is soft cookies, of which it makes over 50 varieties. Larger companies, such as Nabisco, Sunshine, and Keebler, have traditionally produced biscuit cookies, where most of the water has been baked out, resulting in crisp cookies. The cookies have no additives or preservatives. The high quality of the cookies has enabled the company to develop a strong market niche for its product.

Customers

The cookies are sold in convenience stores and supermarkets throughout New York, Connecticut, and New Jersey. The company markets its cookies as "good food"- no additives or preservatives - which appeals to a health-conscious segment of the market. Many customers are over 45 years-of-age, and prefer a cookie that is soft and not too sweet. Parents with young children also buy the cookies.

Production Process

The company has two continuous band ovens that it uses to bake the cookies. The production process is called a batch processing system. It begins as soon as management gets orders from distributors. These orders are used to schedule production. At the start of each shift, a list of the cookies to be made that day is delivered to the person in charge of mixing. That person checks a master list, which indicates the ingredients needed for each type of cookie, and enters that information into the computer. The computer then determines the amount of each ingredient needed, according to the quantity of cookies ordered, and relays that information to storage silos located outside the plant where the main ingredients (flour, sugar, and cake flour) are stored. The ingredients are automatically sent to giant mixing machines where the ingredients are combined with proper amounts of eggs, water, and flavorings. After the ingredients have been mixed, the batter is poured into a cutting machine where it is cut into individual cookies. The cookies are then dropped onto a conveyor belt and transported through one of two ovens. Filled cookies, such as apple, date, and raspberry, require an additional step for filling and folding.

The non-filled cookies are cut on a diagonal, rather than round. The diagonal-cut cookies require less space than straight-cut cookies, and the result is a higher level of productivity. In addition, the company recently increased the length of each oven by 25 feet, which also increased the rate of production. As the cookies emerge from the ovens, they are fed onto spiral cooling racks 20 feet high and 3 feet wide. As the cookies come off the cooling racks, workers place the cookies into boxes manually, removing any broken or deformed cookies in the process. The boxes are then wrapped, sealed, and labeled automatically.

Inventory

Most cookies are loaded immediately onto trucks and shipped to distributors. A small percentage is stored temporarily in the company's warehouse, but they must be shipped shortly because of their limited shelf life. Other inventory includes individual cookie boxes, shipping boxes, labels, and cellophane for wrapping. Labels are reordered frequently, in small batches, because FDA label requirements are subject to change, and the company does not want to get stuck with labels it can't use. The bulk silos are refilled two or three times a week, depending on how quickly supplies are used.

Cookies are baked in a sequence that minimizes downtime for cleaning. For instance, light-colored cookies (e.g., chocolate chip) are baked before dark-colored cookies (e.g., fudge), and oatmeal cookies are baked before oatmeal raisin cookies. This permits the company to avoid having to clean the processing equipment every time a different type of cookie is produced.

Quality

The bakery prides itself on the quality of its cookies. A Quality Control Inspector samples cookies randomly, as they come off the line to assure that their taste and consistency are satisfactory, and that they have been baked to the proper degree. Also, workers on the line are responsible for removing defective cookies when they spot them. The company has also installed an X-ray machine on the line that can detect small bits of metal filings that may have gotten into cookies during the production process. The use of automatic equipment for transporting raw materials and mixing batter has made it easier to maintain a sterile process.

Scrap

The bakery is run very efficiently and has minimal amounts of scrap. For example, if a batch is mixed improperly, it is sold for dog food. Broken cookies are used in the oatmeal cookies. These practices reduce the cost of ingredients and save on waste disposal costs. The company also uses heat reclamation: The heat that escapes from the two ovens is captured and used to boil the water that supplies the heat to the building. Also, the use of automation in the mixing process has resulted in a reduction in waste compared with the manual methods used previously.

New Products

Ideas for new products come from customers, employees, and observations of competitors' products. New ideas are first examined to determine whether the cookies can be made with existing equipment. If so, a sample run is made to determine the cost and time requirements. If the results are satisfactory, marketing tests are conducted to see if there is a demand for the product.

Potential Improvements

There are a number of areas of potential improvement at the bakery. One possibility would be to automate packing the cookies into boxes. Although labor costs are not high, automating the process might save some money and increase efficiency. So far, the owners have resisted making this change because they feel an obligation to the community to employ the 30 women, who now do the boxing manually. Another possible improvement would be to use suppliers who are located closer to the plant. That would reduce delivery lead times and transportation costs, but the owners are not convinced that local suppliers could provide the same level of quality. Other opportunities have been proposed in recent years, but the owners rejected them because they feared that the quality of the product might suffer.

Then, through a case analysis, compare or contrast the Home-Style Cookies baking company with the Yamazaki Baking Co., Ltd. Use the following article: [Attached] (2012). Bread & Rolls Industry Profile: Japan, 1-32. You will find Yamazaki Baking Co., Ltd. on page 24.

A case study is a short description of a real business situation. Analyzing case studies gives you the opportunity to apply those concepts to real business problems. Cases are generally written for several types of analysis. Usually, there is not a "right or wrong" answer. Rather, cases provide a vehicle for you to demonstrate your understanding and ability to apply course concepts. You must use appropriate sources (properly cited) to support your position. Check your analysis by assessing how well it demonstrates your subject knowledge. If your answer relies on your impressions of the topic prior to taking this course, it is likely that the analysis is not your best effort. Simply answering the questions which are part of the case is not enough; consider the questions to be clues to the important concepts and facts. You are strongly encouraged to use the following outline, so that your analysis is organized appropriately:

  • Identify both the key issues and the underlying issues. In identifying the issues, you should be able to connect them to the business principles which apply to this situation.
  • Discuss the facts which affect these issues. The case may have too much information. In your discussion, you should filter the information and discuss those facts which are pertinent to the issues identified above.
  • Discuss your tentative solution to the problem and how you would implement your solution. What actions would you propose to correct the situation, based on the knowledge you have gained in this course? Be sure to support your recommendation by citing references in the text and in the supplementary readings. You should also draw on other references such as business periodicals and relevant journals. Remember that an ANALYSIS is more than simply a SUMMARY of the Case Study.
  • Discuss follow-up and contingency plans. How will the organization know that your proposed solution is working? What should they do if it does not work?

It may be helpful for you to "role-play" this assignment. Your presentation should cover the points listed above. By "role-playing" the situation, using the questions at the end of the case as hints, and by using this guide, you should be able to develop an action-oriented analysis with a recommended course of action.

Your case analysis should be 2-3 pages in length, not including the title and reference pages. Include at least two articles/materials (not including your course textbook) to support your analysis. All citations should be in APA 6th edition format. Double space your paper, use Times New Roman, 12-point font, with one inch margins. Be concise and present your materials in a clear manner. Include any calculations, spreadsheets, etc. that help to support your analysis of the case.

Unformatted Attachment Preview

MarketLine Industry Profile Bread & Rolls in Japan November 2012 Reference Code: 0104-0020 Publication Date: November 2012 WWW.MARKETLINE.COM MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 1 EXECUTIVE SUMMARY Market value The Japanese bread & rolls market grew by 1.7% in 2011 to reach a value of $4,198.6 million. Market value forecast In 2016, the Japanese bread & rolls market is forecast to have a value of $4,960.4 million, an increase of 18.1% since 2011. Market volume The Japanese bread & rolls market shrank by 0.2% in 2011 to reach a volume of 829.7 million kg. Market volume forecast In 2016, the Japanese bread & rolls market is forecast to have a volume of 816.4 million kg, a decrease of 1.6% since 2011. Category segmentation Industrial bread and rolls is the largest segment of the bread & rolls market in Japan, accounting for 71.5% of the market's total value. Geography segmentation Japan accounts for 24.4% of the Asia-Pacific bread & rolls market value. Market share Yamazaki Baking Co., Ltd. is the leading player in the Japanese bread & rolls market, generating a 20.4% share of the market's value. Market rivalry The Japanese bread & rolls market is relatively concentrated, with top four players holding 54.8% of the total market value. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 2 TABLE OF CONTENTS Executive Summary ....................................................................................................................................................... 2 Market value............................................................................................................................................................... 2 Market value forecast ................................................................................................................................................. 2 Market volume............................................................................................................................................................ 2 Market volume forecast .............................................................................................................................................. 2 Category segmentation .............................................................................................................................................. 2 Geography segmentation ........................................................................................................................................... 2 Market share .............................................................................................................................................................. 2 Market rivalry.............................................................................................................................................................. 2 Market Overview ............................................................................................................................................................ 7 Market definition ......................................................................................................................................................... 7 Market analysis .......................................................................................................................................................... 7 Market Data ................................................................................................................................................................... 8 Market value............................................................................................................................................................... 8 Market volume............................................................................................................................................................ 9 Market Segmentation ................................................................................................................................................... 10 Category segmentation ............................................................................................................................................ 10 Geography segmentation ......................................................................................................................................... 12 Market share ............................................................................................................................................................ 13 Market distribution .................................................................................................................................................... 14 Market Outlook ............................................................................................................................................................. 15 Market value forecast ............................................................................................................................................... 15 Market volume forecast ............................................................................................................................................ 16 Five Forces Analysis .................................................................................................................................................... 17 Summary .................................................................................................................................................................. 17 Buyer power ............................................................................................................................................................. 18 Supplier power ......................................................................................................................................................... 19 New entrants ............................................................................................................................................................ 20 Threat of substitutes................................................................................................................................................. 21 Degree of rivalry ....................................................................................................................................................... 22 Leading Companies ..................................................................................................................................................... 23 Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 3 Shikishima Baking Co., Ltd. ..................................................................................................................................... 23 Yamazaki Baking Co., Ltd. ....................................................................................................................................... 24 Fuji Baking Group .................................................................................................................................................... 27 Takaki Bakery Co., Ltd. ............................................................................................................................................ 28 Macroeconomic Indicators ........................................................................................................................................... 29 Country Data ............................................................................................................................................................ 29 Appendix ...................................................................................................................................................................... 31 Methodology............................................................................................................................................................. 31 Industry associations ................................................................................................................................................ 32 Related MarketLine research ................................................................................................................................... 32 Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 4 LIST OF TABLES Table 1: Japan bread & rolls market value: $ million, 2007–11 ...................................................................................... 8 Table 2: Japan bread & rolls market volume: million kg, 2007–11 ................................................................................. 9 Table 3: Japan bread & rolls market category segmentation: % share, by value, 2007–2011 ..................................... 10 Table 4: Japan bread & rolls market category segmentation: $ million, 2007-2011 ..................................................... 10 Table 5: Japan bread & rolls market geography segmentation: $ million, 2011 ........................................................... 12 Table 6: Japan bread & rolls market share: % share, by value, 2011 .......................................................................... 13 Table 7: Japan bread & rolls market distribution: % share, by value, 2011 .................................................................. 14 Table 8: Japan bread & rolls market value forecast: $ million, 2011–16 ...................................................................... 15 Table 9: Japan bread & rolls market volume forecast: million kg, 2011–16 ................................................................. 16 Table 10: Shikishima Baking Co., Ltd.: key facts ......................................................................................................... 23 Table 11: Yamazaki Baking Co., Ltd.: key facts ........................................................................................................... 24 Table 12: Yamazaki Baking Co., Ltd.: key financials ($) .............................................................................................. 25 Table 13: Yamazaki Baking Co., Ltd.: key financials (¥) .............................................................................................. 25 Table 14: Yamazaki Baking Co., Ltd.: key financial ratios ............................................................................................ 25 Table 15: Fuji Baking Group: key facts ........................................................................................................................ 27 Table 16: Takaki Bakery Co., Ltd.: key facts ................................................................................................................ 28 Table 17: Japan size of population (million), 2007–11 ................................................................................................. 29 Table 18: Japan gdp (constant 2000 prices, $ billion), 2007–11 .................................................................................. 29 Table 19: Japan gdp (current prices, $ billion), 2007–11 ............................................................................................. 29 Table 20: Japan inflation, 2007–11 .............................................................................................................................. 30 Table 21: Japan consumer price index (absolute), 2007–11 ........................................................................................ 30 Table 22: Japan exchange rate, 2007–11 .................................................................................................................... 30 Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 5 LIST OF FIGURES Figure 1: Japan bread & rolls market value: $ million, 2007–11 ..................................................................................... 8 Figure 2: Japan bread & rolls market volume: million kg, 2007–11 ................................................................................ 9 Figure 3: Japan bread & rolls market category segmentation: $ million, 2007-2011 .................................................... 11 Figure 4: Japan bread & rolls market geography segmentation: % share, by value, 2011........................................... 12 Figure 5: Japan bread & rolls market share: % share, by value, 2011 ......................................................................... 13 Figure 6: Japan bread & rolls market distribution: % share, by value, 2011 ................................................................. 14 Figure 7: Japan bread & rolls market value forecast: $ million, 2011–16 ..................................................................... 15 Figure 8: Japan bread & rolls market volume forecast: million kg, 2011–16 ................................................................ 16 Figure 9: Forces driving competition in the bread & rolls market in Japan, 2011 ......................................................... 17 Figure 10: Drivers of buyer power in the bread & rolls market in Japan, 2011 ............................................................. 18 Figure 11: Drivers of supplier power in the bread & rolls market in Japan, 2011 ......................................................... 19 Figure 12: Factors influencing the likelihood of new entrants in the bread & rolls market in Japan, 2011 .................... 20 Figure 13: Factors influencing the threat of substitutes in the bread & rolls market in Japan, 2011 ............................. 21 Figure 14: Drivers of degree of rivalry in the bread & rolls market in Japan, 2011 ....................................................... 22 Figure 15: Yamazaki Baking Co., Ltd.: revenues & profitability .................................................................................... 26 Figure 16: Yamazaki Baking Co., Ltd.: assets & liabilities ............................................................................................ 26 Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 6 MARKET OVERVIEW Market definition The bread & rolls market consists of retail sales of artisanal bread & rolls, in-store bakery bread & rolls and industrial bread & rolls. The market is valued according to retail selling rice (RSP) and includes any applicable taxes. Any currency conversions used in the creation of this report have been calculated using 2011 annual average exchange rates. For the purposes of this report, Asia-Pacific comprises Australia, China, India, Indonesia, Japan, New Zealand, Singapore, South Korea, Taiwan, and Thailand. Market analysis The Japanese bread & rolls market experienced low but fluctuating levels of growth for the 2007-2011 period. The market is expected to achieve an acceleration in growth from 2012 through to the end of the forecast period in 2016. The Japanese bread & rolls market had total revenues of $4,198.6 million in 2011, representing a compound annual growth rate (CAGR) of 0.8% between 2007 and 2011. In comparison, the Chinese and Indian markets grew with CAGRs of 11.1% and 8.2% respectively, over the same period, to reach respective values of $3,135.5 million and $3,823.6 million in 2011. Market consumption volumes decreased with a compound annual rate of change (CARC) of -0.1% between 2007-2011, to reach a total of 829.7 million kg in 2011. The market's volume is expected to fall to 816.4 million kg by the end of 2016, representing a CARC of -0.3% for the 2011-2016 period. The industrial bread and rolls segment was the market's most lucrative in 2011, with total revenues of $3,001.3 million, equivalent to 71.5% of the market's overall value. The artisanal bread & rolls segment contributed revenues of $825.4 million in 2011, equating to 19.7% of the market's aggregate value. The performance of the market is forecast to accelerate, with an anticipated CAGR of 3.4% for the five-year period 2011 - 2016, which is expected to drive the market to a value of $4,960.4 million by the end of 2016. Comparatively, the Chinese and Indian markets will grow with CAGRs of 9.8% and 7.2% respectively, over the same period, to reach respective values of $5,008.8 million and $5,408.8 million in 2016. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 7 MARKET DATA Market value The Japanese bread & rolls market grew by 1.7% in 2011 to reach a value of $4,198.6 million. The compound annual growth rate of the market in the period 2007–11 was 0.8%. Table 1: Japan bread & rolls market value: $ million, 2007–11 Year $ million ¥ million € million 2007 4,07 .2 324,554.3 2,926.5 2008 4,091.2 326,068.6 2,940.2 0.5% 2009 4,109.0 327,487.3 2,953.0 0.4% 2010 4,129.3 329,105.2 2,967.6 0.5% 2011 4,198.6 334,628.4 3,017.4 1.7% CAGR: 2007–11 SOURCE: MARKETLINE % Growth 0.8% MARKETLINE Figure 1: Japan bread & rolls market value: $ million, 2007–11 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 8 Market volume The Japanese bread & rolls market shrank by 0.2% in 2011 to reach a volume of 829.7 million kg. The compound annual rate of change of the market in the period 2007–11 was -0.1%. Table 2: Japan bread & rolls market volume: million kg, 2007–11 Year million kg 2007 834.3 2008 833.8 (0.1%) 2009 832.7 (0.1%) 2010 831.4 (0.2%) 2011 829.7 (0.2%) CAGR: 2007–11 SOURCE: MARKETLINE % Growth (0.1%) MARKETLINE Figure 2: Japan bread & rolls market volume: million kg, 2007–11 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 9 MARKET SEGMENTATION Category segmentation Industrial bread and rolls is the largest segment of the bread & rolls market in Japan, accounting for 71.5% of the market's total value. The Artisanal bread & rolls segment accounts for a further 19.7% of the market. Table 3: Japan bread & rolls market category segmentation: % share, by value, 2007–2011 Category Industrial bread and rolls Artisanal bread & rolls In-store bakery Tortilla Total 2007 2008 2009 2010 2011 2007-11 CAGR(%) 71.7% 71.6% 71.6% 71.6% 71.5% 0.4% 19.6% 19.7% 19.7% 19.6% 19.7% 0.5% 7.4% 7.4% 7.4% 7.4% 7.4% 0.4% 1.3% 1.4% 1.4% 1.4% 1.5% 3.1% 100% 100% 100% 100% 100% 4% SOURCE: MARKETLINE MARKETLINE Table 4: Japan bread & rolls market category segmentation: $ million, 2007-2011 Category Industrial bread and rolls Artisanal bread & rolls In-store bakery Tortilla Total 2007 2008 2009 2010 2011 2,923.5 2,923.5 2,936.0 2,961.1 3,001.3 800.5 803.0 806.8 810.5 825.4 301.1 302.4 302.4 304.9 308.8 52.4 56.8 58.0 59.1 63.1 4,077.5 4,085.7 4,103.2 4,135.6 4,198.6 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 10 Figure 3: Japan bread & rolls market category segmentation: $ million, 2007-2011 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 11 Geography segmentation Japan accounts for 24.4% of the Asia-Pacific bread & rolls market value. India accounts for a further 22.2% of the Asia-Pacific market. Table 5: Japan bread & rolls market geography segmentation: $ million, 2011 Geography 2011 % Japan 4,198.6 24.4 India 3,823.6 22.2 China 3,135.5 18.2 293.5 1.7 5,788.7 33.6 17,239.9 100% South Korea Rest of Asia-Pacific Total SOURCE: MARKETLINE MARKETLINE Figure 4: Japan bread & rolls market geography segmentation: % share, by value, 2011 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 12 Market share Yamazaki Baking Co., Ltd. is the leading player in the Japanese bread & rolls market, generating a 20.4% share of the market's value. Shikishima Baking Co. Ltd. accounts for a further 15% of the market. Table 6: Japan bread & rolls market share: % share, by value, 2011 Company % Share Yamazaki Baking Co., Ltd. 20.4% Shikishima Baking Co. Ltd. 15.0% Fuji Baking Group Co., Ltd. 14.0% Takaki Bakery Co., Ltd. 5.4% Other 45.2% Total 100% SOURCE: MARKETLINE MARKETLINE Figure 5: Japan bread & rolls market share: % share, by value, 2011 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 13 Market distribution Independent Retailers form the leading distribution channel in the Japanese bread & rolls market, accounting for a 35.7% share of the total market's value. Supermarkets / hypermarkets accounts for a further 27.1% of the market. Table 7: Japan bread & rolls market distribution: % share, by value, 2011 Channel % Share Independent Retailers 35.7% Supermarkets / hypermarkets 27.1% Specialist Retailers 19.9% Convenience Stores 14.4% Other 2.9% Total 100% SOURCE: MARKETLINE MARKETLINE Figure 6: Japan bread & rolls market distribution: % share, by value, 2011 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 14 MARKET OUTLOOK Market value forecast In 2016, the Japanese bread & rolls market is forecast to have a value of $4,960.4 million, an increase of 18.1% since 2011. The compound annual growth rate of the market in the period 2011–16 is predicted to be 3.4%. Table 8: Japan bread & rolls market value forecast: $ million, 2011–16 Year $ million ¥ million € million % Growth 2011 4,198.6 334,628.4 3,017.4 1.7% 2012 4,322.1 344,471.4 3,106.1 2.9% 2013 4,461.9 355,613.4 3,206.6 3.2% 2014 4,619.4 368,166.2 3,319.8 3.5% 2015 4,796.4 382,273.1 3,447.0 3.8% 2016 4,960.4 395,343.9 3,56 .9 3.4% CAGR: 2011–16 SOURCE: MARKETLINE 3.4% MARKETLINE Figure 7: Japan bread & rolls market value forecast: $ million, 2011–16 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 15 Market volume forecast In 2016, the Japanese bread & rolls market is forecast to have a volume of 816.4 million kg, a decrease of 1.6% since 2011. The compound annual rate of change of the market in the period 2011–16 is predicted to be -0.3%. Table 9: Japan bread & rolls market volume forecast: million kg, 2011–16 Year million kg % Growth 2011 829.7 (0.2%) 2012 827.6 (0.3%) 2013 825.2 (0.3%) 2014 822.4 (0.3%) 2015 819.3 (0.4%) 2016 816.4 (0.4%) CAGR: 2011–16 SOURCE: MARKETLINE (0.3%) MARKETLINE Figure 8: Japan bread & rolls market volume forecast: million kg, 2011–16 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 16 FIVE FORCES ANALYSIS The bread & rolls market will be analyzed taking manufacturers of breads and rolls as players. The key buyers will be taken as retailers and consumers, and food ingredient producers as the key suppliers. Summary Figure 9: Forces driving competition in the bread & rolls market in Japan, 2011 SOURCE: MARKETLINE MARKETLINE The Japanese bread & rolls market is relatively concentrated, with top four players holding 54.8% of the total market value. The market is mature with industry-produced bread dominating sales. Independent retailers are the main buyers accounting for almost 35.7% of total market value. Market players source from a wide number of suppliers, weakening supplier power. However, they are highly reliant on the quality and efficient supply of ingredients such as wheat. This market may be entered successfully on a small scale. However, entry barriers are raised by the high capital outlay required for industrial bread making, stringent food regulations, and well known existing brands. Overall, rivalry in this market is strong, intensified by high exit barriers and high fixed costs. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 17 Buyer power Figure 10: Drivers of buyer power in the bread & rolls market in Japan, 2011 SOURCE: MARKETLINE MARKETLINE In Japan, the main distribution channels for the bread & rolls market are independent retailers, which account for 35.7% of the total market value. Independent retailers are becoming more vertically integrated, and can pose a threat to market players through their private label offerings. However, small bakeries can sell and produce their bread in-store. Some larger companies often manufacture bread and operate extensive retail networks, although forward integration is unusual for large players. Switching costs can be high for buyers in terms of big brand names, which is diminished by the presence of the large number of different varieties of bread available. Innovation through specialty loaf launches allows players to differentiate their product. Overall, buyer power in this market is assessed as moderate. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 18 Supplier power Figure 11: Drivers of supplier power in the bread & rolls market in Japan, 2011 SOURCE: MARKETLINE MARKETLINE Suppliers include those entities providing ingredients such as wheat flour, yeast and eggs. There are two main ways for players to obtain these inputs. They may purchase them on the open market, in which case they have little control over prices, and often use techniques such as hedging to mitigate the impact of price fluctuations. Alternatively, they may negotiate supply contracts with suppliers. Furthermore, fixed-term contracts with periodically negotiated prices are common. Quality of the raw materials is essential if players are to maintain their image and a strong position in the market. This is diluted to some extent by the fact that the raw material lacks differentiation and there are numerous suppliers. Overall, supplier power is assessed as weak. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 19 New entrants Figure 12: Factors influencing the likelihood of new entrants in the bread & rolls market in Japan, 2011 SOURCE: MARKETLINE MARKETLINE This market may be entered successfully on a small scale and through niche products, despite competition from large players. However when selling to larger retailers such as supermarkets, scale economies do become more important. Growth in the market has been very low, which discourages new entrants. However there is growth in the healthy and organic segment of the market, allowing new entrants to enter the market by targeting this niche area. Shelf space is finite and new companies may find it difficult to display their product on shelves when competing with well-known brands. This necessitates the need for investment in production facilities and brand building before entry to the market is undertaken. Overall, the likelihood of new entrants is moderate. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 20 Threat of substitutes Figure 13: Factors influencing the threat of substitutes in the bread & rolls market in Japan, 2011 SOURCE: MARKETLINE MARKETLINE Most end-users purchase bread as a staple carbohydrate foodstuff, while retailers aim to buy just enough from the market players to satisfy consumer demand. Key substitutes in this market are other foods fulfilling the same nutritional role for the consumer: rice or noodles for example. These may have advantages to the retailers: for example, noodles and rice have longer shelf lives, and therefore lower storage/wastage costs. Switching costs are low, which increases the threat of substitutes. Per capita bread consumption in Japan is lower than in the west, which suggests a preference among consumers for traditional foods with similar nutritional content, which may indicate a stronger threat from substitutes. Bread manufacturers have been quick to capitalize on these health concerns by launching health-oriented products, such as bread fortified with vitamins and minerals. Overall, the threat from substitutes is assessed as moderate. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 21 Degree of rivalry Figure 14: Drivers of degree of rivalry in the bread & rolls market in Japan, 2011 SOURCE: MARKETLINE MARKETLINE The Japanese bread & rolls market is relatively concentrated, with top four players holding 54.8% of the total market value. Large companies present in the market include Yamazaki Baking Company and Shikishima Baking. These firms are typically diversified into the manufacture of other food products. Smaller artisanal bread companies are more likely to be focused on the production of bakery products and are more numerous which increases rivalry in this market. Even though retailers are the buyers, there is a strong pull through of end user demand upon manufacturers. Bread is a product that has high penetration levels in most countries, which leads to strong rivalry between players. Exit barriers are high, since leaving the market would require divestment of substantial assets. Fixed costs and storage costs are also likely to be high, which tends to intensify rivalry. Overall, rivalry is strong in this market. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 22 LEADING COMPANIES Shikishima Baking Co., Ltd. Table 10: Shikishima Baking Co., Ltd.: key facts Head office: 5-3 Shirakabe, Higashi-ku, Nagoya-shi, Aichi 461-721, JPN Telephone: 81 52 933 2111 Website: www.pasconet.co.jp SOURCE: COMPANY WEBSITE MARKETLINE Shikishima Baking Company is one of the leading bread and confectionery manufacturers in Japan. The company is mainly engaged in wholesale bread and cake; and frozen foods business. The company owns 16 manufacturing facilities (15 in Japan and 1 in the US) and employs around 4,046 people as of August 31, 2011. The company’s business is mainly organized into three divisions: wholesale bread and cake business; frozen foods; and overseas projects. The company carries out wholesale bread business through the brand Chojuku. It also offers specialty Japanese style cakes, prepared using bean jam and sponge, through wholesale cake business. In addition to wholesale business, the company operates bakery store chains in Japan under the brand PAUL. The frozen foods division of the company offers frozen dough and pastry products to commercial and retail customers. It also offers its products online through Pasco. Further, it offers a range of healthy products including rye, whole wheat, vegetable, and fruit breads. Overseas projects division of the company manages the bakeries and plants of the company in countries such as the US, Hong Kong, Korea, Taiwan, China and Indonesia. It also comprises bakery store chains in Hong Kong under the brand name Panash; and in Taiwan (in joint venture with Great Wall Group) under the brand name Gino Pasco. The company also offers other food products such as sushi and rice balls. The company also assists local bread manufacturers with their technology in Indonesia and South Korea. Key Metrics As a privately held company Shikishima Baking Co., Ltd. is not obliged to release its financial information, Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 23 Yamazaki Baking Co., Ltd. Table 11: Yamazaki Baking Co., Ltd.: key facts Head office: 10-1 Iwamotocho 3-chome, Chiyoda-ku, Tokyo 101-8585, JPN Telephone: 81 3 3864 3111 Website: www.yamazakipan.co.jp Financial year-end: December Ticker: 2212, 2212 Stock exchange: Tokyo, Osaka SOURCE: COMPANY WEBSITE MARKETLINE Yamazaki Baking, through its subsidiaries, manufactures and sells bread, sweet buns, Japanese and Western-style confectionery, processed bread, prepared rice and side dishes, and other products such as desserts, jam, and ready to eat food products. The company operates in Asia, North America and Europe. The company operates through three business segments which include: food, retail, and others. The food business segment is involved in the manufacturing and marketing of bread and sweet buns; Japanese-style confectionery and Western-style confectionery; processed bread and prepared rice and side dishes. It provides breads including loaf bread, sweet buns, donuts, hard rolls and Danish pastries. The company offers Japanese-style confectionery products such as kirian, sweet bean paste; castellan, sponge cake; yokan, sweet bean jelly; dango, skewered rice dumplings; daifuku, sweet bean filled rice cakes; yaki-gashi, pancake style sweets; and mushipan, steamed cakes. Yamazaki Baking produces Western-style confectionery products including fresh cake products such as Swiss rolls, cream puffs, and pound cakes. The company's processed bread and prepared rice and side dishes sell approximately 100 products such as boxed lunches, rice balls and sandwiches through Daily Yamazaki and Yamazaki Shop stores and convenience store chains. The company's retail business segment operates more than 99,000 stores including Daily Yamazaki stores, Yamazaki Shop, Sun Etoile, other licensed stores, supermarkets, convenience stores and other stores. The others business segment is engaged in manufacturing and distribution of various products such as jams, dessert products, and ready-toeat food products. Some of the company's subsidiaries include Vie de France Yamazaki, Yamazaki California, Yamazaki France, Hong Kong Yamazaki Baking, Thai Yamazaki, Taiwan Yamazaki, Sunmoulin Yamazaki, Sunmoulin Yamazaki (Singapore), Shanghai Yamazaki Baking, Four Leaves and others. Key Metrics The company recorded revenues of $11,704 million in the fiscal year ending December 2011, an increase of .5% compared to fiscal 2010. Its net income was $101 million in fiscal 2011, compared to a net income of $160 million in the preceding year. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 24 Table 12: Yamazaki Baking Co., Ltd.: key financials ($) $ million 2007 2008 2009 2010 2011 9,701.9 10,184.9 11,112.7 11,646.7 11,703.8 81.3 75.1 108.4 159.6 100.7 Total assets 6,836.2 7,708.9 7,651.0 8,009.4 7,953.0 Total liabilities 4,154.9 4,806.4 4,698.5 4,908.6 4,786.3 Revenues Net income (loss) SOURCE: COMPANY FILINGS MARKETLINE Table 13: Yamazaki Baking Co., Ltd.: key financials (¥) ¥ million 2007 2008 2009 2010 2011 773,245.0 811,738.0 885,683.0 928,242.0 932,794.0 6,479.0 5,987.0 8,640.0 12,724.0 8,023.0 Total assets 544,849.0 614,399.0 609,781.0 638,348.0 633,858.0 Total liabilities 331,143.0 383,067.0 374,467.0 391,213.0 381,471.0 Revenues Net income (loss) SOURCE: COMPANY FILINGS MARKETLINE Table 14: Yamazaki Baking Co., Ltd.: key financial ratios Ratio 2007 2008 2009 2010 2011 Profit margin 0.8% 0.7% 1.0% 1.4% 0.9% Revenue growth 3.2% 5.0% 9.1% 4.8% 0.5% Asset growth 1.5% 12.8% (0.8%) 4.7% (0.7%) Liabilities growth 2.0% 15.7% (2.2%) 4.5% (2.5%) Debt/asset ratio 60.8% 62.3% 61.4% 61.3% 60.2% Return on assets 1.2% 1.0% 1.4% 2.0% 1.3% SOURCE: COMPANY FILINGS Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 25 Figure 15: Yamazaki Baking Co., Ltd.: revenues & profitability SOURCE: COMPANY FILINGS MARKETLINE Figure 16: Yamazaki Baking Co., Ltd.: assets & liabilities SOURCE: COMPANY FILINGS Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 26 Fuji Baking Group Table 15: Fuji Baking Group: key facts Head office: 1-50 Matsuzono-cho, Mizuho-ku, Nagoya, JPN Telephone: 81 52 831 51 51 Website: www.fujipan.co.jp SOURCE: COMPANY WEBSITE MARKETLINE Fuji Baking Group is one of the leading bread, cakes and confectionery makers in Japan. The company employs about 18,000 people and is headquartered in Nagoya, Japan. Fuji Baking Group is also engaged in logistics, manufacturing and sale of lunchboxes, noodles and daily foods business consultancy, and insurance business. The Fuji Baking group operations are mainly organized into five divisions: wholesale; retail bakery; delicatessen, logistics and other enterprise. Fuji Baking Co. Ltd., a subsidiary of the group, owns eight plants in Kanto, Chubu and Kansai districts; seven sales departments in Chugoku, Shikoku, Kyushu; and over 33,000 distributors all over Japan. The subsidiary carries out the baking operations of the group. Key Metrics No financial information available. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 27 Takaki Bakery Co., Ltd. Table 16: Takaki Bakery Co., Ltd.: key facts Head office: 3-7-1, Nakano-higashi, Aki-ku, Hiroshima, JPN Website: www.takaki-bakery.co.jp SOURCE: COMPANY WEBSITE MARKETLINE Takaki Bakery Co., Ltd. owns and operates bakeries in Japan. The company offers European breads, pastries, cakes, and other related products. The company offers these products to wholesale, supermarkets, restaurants, cafes, and convenience stores. The company was founded in 1948 and is based in Hiroshima, Japan. Takaki Bakery Co., Ltd. operates as a subsidiary of Andersen Group. Key Metrics No financial information available. Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 28 MACROECONOMIC INDICATORS Country Data Table 17: Japan size of population (million), 2007–11 Year Population (million) % Growth 2007 127.8 0.0% 2008 127.7 (0.1%) 2009 127.5 (0.1%) 2010 128.1 0.4% 2011 127.9 (0.1%) SOURCE: MARKETLINE MARKETLINE Table 18: Japan gdp (constant 2000 prices, $ billion), 2007–11 Year Constant 2000 Prices, $ billion % Growth 2007 4,751.4 2.2% 2008 4,702.6 (1.0%) 2009 4,443.1 (5.5%) 2010 4,639.6 4.4% 2011 4,607.1 (0.7%) SOURCE: MARKETLINE MARKETLINE Table 19: Japan gdp (current prices, $ billion), 2007–11 Year Current Prices, $ billion 2007 4,356.3 0.0% 2008 4,849.2 11.3% 2009 5,035.1 3.8% 2010 5,488.5 9.0% 2011 5,868.4 6.9% SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED % Growth MARKETLINE 0104 - 0020 - 2011 Page | 29 Table 20: Japan inflation, 2007–11 Year Inflation Rate (%) 2007 0.1% 2008 1.4% 2009 (1.4%) 2010 (0.7%) 2011 (0.3%) SOURCE: MARKETLINE MARKETLINE Table 21: Japan consumer price index (absolute), 2007–11 Year Consumer Price Index (2000 = 100) 2007 100.3 2008 101.7 2009 100.3 2010 99.6 2011 99.3 SOURCE: MARKETLINE MARKETLINE Table 22: Japan exchange rate, 2007–11 Year Exchange rate ($/¥) Exchange rate (€/¥) 2007 117.8145 161.2087 2008 103.4662 151.3969 2009 93.6167 130.1751 2010 87.8289 116.5760 2011 79.7000 110.9000 SOURCE: MARKETLINE Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MARKETLINE 0104 - 0020 - 2011 Page | 30 APPENDIX Methodology MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, crosschecked and presented in a consistent and accessible style. Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases provide the foundation for all related industry profiles Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends MarketLine aggregates and analyzes a number of secondary information sources, including: - National/Governmental statistics - International data (official international sources) - National and International trade associations - Broker and analyst reports - Company Annual Reports - Business information libraries and databases Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 31 Industry associations International Dairy·Deli·Bakery Association 313 Price Place, Suite 202 PO Box 5528, Madison, WI 53705-0528 USA Tel.: 1 608 238 7908 Fax: 1 608 238 6330 www.iddba.org International Union of Bakers and Bakers-Confectioners Seilerstrasse 9 PO Box 3001, Berne, CHE Tel.: 41 31 388 1414 Fax: 41 31 388 1424 www.bakeruib.org Related MarketLine research Industry Profile Global Bread & Rolls Bread & Rolls in Europe Bread & Rolls in Asia-Pacific Bread & Rolls in the United States Bread & Rolls in China Japan - Bread & Rolls © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0104 - 0020 - 2011 Page | 32 Copyright of Bread & Rolls Industry Profile: Japan is the property of MarketLine, a Datamonitor business and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

find the answer attached herein
find the answer attached herein

Running head: OPERATION STRATEGIES

Operation Strategies
Name
Institution Affiliation

1

OPERATION STRATEGIES

2

A Case Study of Home-style Cookies
Strategies adopted that aim to quicker output rate and consequently increase
productivity:
Home-style cookie has embraced two courses, to wind up more effective in expanding
productivity: 1) to cut the cooks slantingly, as opposed to round; and 2) increment in the
length of every stove by twenty-five feet.
Decision for not systematizing the packing as a responsibility to community, and
workers:
I believe that the organization is settling on the right choice, by utilizing 30 ladies to
do the containers physically, and not computerizing the pressing of cookies. Despite the fact
that robotizing the pressing procedure may spare some cash, and increment productivity, yet
proprietors have opposed rolling out this improvement since they feel a commitment to the
group, to utilize women for manual pressing, as though their work expenses are not high, in
this manner organization is indicating dependability to one's group, and reliability to their
workers.
In a few regards, the organization has an ethical commitment towards the g...


Anonymous
Awesome! Perfect study aid.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags