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Bimbo Bakeries USA
– Mrs. Baird’s Bread
Strategic Business Design
Final Presentation – 03/30/07
University of Texas at DallasSchool of Management
Executive MBA Program
Team: Mike Fowler, Sidney Hopper, Srini Kaarlapudi, Dan Lawson, Renée Underwood
2
AgendaClient BackgroundEngagement
OverviewAnalysis RecommendationsQ & A
3
HistoryGrupo Bimbo first began US operations with the acquisition of
Orbit Finer Foods in Oklahoma in 1994. Major US expansion
came about in 1998 when Grupo Bimbo purchased Mrs
Bairds Baking Company- the premier baking company in
Texas. Then in 2002, Bimbo purchased the Western US
operations from George Weston Ltd. The Weston purchase
included the exclusive ownership/distribution rights for top
selling brands including Oroweat, Thomas, Entenmann’s, and
Francisco.
Basic Geographic split with George Weston.
Financial and Operating Highlights For Bimbo Bakeries USA
Annual Revenue for 2005 = $1.23 Billion
Number of Routes = 3140 (+/-due to seasonality)
Number of Employees = Over 7300
Bimbo Bakeries USA represents 24% of Grupo Bimbo’s total sales.
Bimbo Bakeries USA - History
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US Product Portfolio- BreadOroweat – Bread Perfected
Oroweat is the number one selling brand of bread in the West. Oroweat participates in the Variety Sliced, Traditional Sliced, Rolls, Buns, and English Muffin segments of the Bread Category. (Oroweat represents 27.3% of total BBU sales)
Francisco International – Make Everyday a Little Special.
Francisco is the number one selling French bread brand in the United States. Francisco has representation in French Bread, French Rolls, and Buns. (4.7% of sales)
Mrs Baird’s – Baked with Pride Since 1908.
Mrs Bairds is the number one selling brand of bread in Texas. Centered in Texas but with distribution to many Southern states; Mrs Bairds produces Traditional Sliced bread, Rolls, and Buns. (13.0% of sales)
Thomas – the Original “Nooks and Crannies” English Muffin.
Thomas is the number one selling brand of bread products in the United States. Thomas is number one in English Muffin sales and number two in Bagel sales in the Western portion of the US. (7.7% of sales)
Other Notable BBU-distributed bread brands:
5
Engagement Team Mrs. Baird’s
Bryant Bradanini: Category Manager-Texas
Jack French: VP – Sales Operations (Texas)
Pete Guido: Director of Customer Development –
Texas
Don Perkins: Director of Independent Operator
Services
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Engagement Overview – Objectives Analysis Phase:
Identify Mrs. Baird’s current, strategic business design; and Evaluate this design in terms of the Profit Zone’s “Dimensions of
Business Design”: Customer selection Value capture Differentiation/Strategic Control Scope
Recommendation Phase: Complete further analysis, interviewing, and creative thinking Develop a set of logical, defendable, and feasible recommendations for
Mrs. Baird’s to maximize profit zone impact.
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Engagement Overview – Scope Bimbo Bakeries USA
Mrs. Baird’s Bread Retail Channels Texas
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Engagement Overview – Methodology Profit Zone Identification – Facilitated Working Session Analysis Phase
Interviews Surveys Site Visits
Recommendations Brainstorming Research
Governance Task Register Client Meetings Status Reporting
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Active Tasks
Work in process, no delays expected, deadline is committed Green Red Work on hold pending resolution of barriers; Deadline missed
Work in process, delays encountered, deadline is questionable Yellow Blue Task completed
No. Task Ow ner(s) Target Status Comments & Actions Taken
1 Confirm client and set up engagement kick-off SH 2-Nov-06 Blue
2 Develop and f inalize engagement plan DL 10-Nov-06 Blue Review ed on 11/08/06 Team Call
3 Set up w orking session w ith MBB SH 14-Nov-06 Blue Meeting booked for 11/30; postponed to 12/06 due to w eather
4 Develop and submit status report to Jasper DL 25-Nov-06 Blue Complete 11/21
5 Complete status review call w ith Jasper Team 5-Dec-06 Blue
6 Prep materials for MBB on-site meeting DL 6-Dec-06 Blue
7 Meet w ith MBB to review plan and analyze profit zones Team 6-Dec-06 Blue
8 Schedule w orking session follow ing MBB meeting DL 14-Dec-06 Blue
9 Update Task Register follow ing review w ith MBB DL 14-Dec-06 Blue
10 Complete Analysis using the "Four Elements" templates Team 27-Jan-07 Blue Assignments:
11 - Develop tailored analysis questions Team 2-Jan-07 Blue - Grocery Analysis (RU / SH)
12 - Identify and contact Key Account Managers Team - DL 2-Jan-07 Blue - Club Analysis (MF / SK)
13 - Complete Analysis Team 22-Jan-07 Blue - Convenience Analysis (SK / MF)
14 - Review Analysis results Team 23-Jan-07 Blue - Segment Analysis (Hispanic, Health Focused) - (RU / DL)
15 Analysis Status Review Team 9-Jan-07 Blue Review on Jan 9 and 16 team calls
16 Book Analysis Review Session at MBB DL 10-Jan-07 Blue Target 02/01/07 (Thursday preceding class w eekend)
17 Finalize Analysis results and prep for review session Team - DL 27-Jan-07 Blue
18 Analysis Review Session at MBB w ith Plant Tour Team 1-Feb-07 Blue Prep on 01/30/07 Team call
19 - Review Analysis and capture feedback Team
20 - Brainstorm recommendations Team
21 - Define requirements, actions and assign task ow ners Team
22 Recommendations Status Review Team 13-Feb-07 Blue Via telephone - could also cover on Feb 6 Team call
23 Book Recommendations Review Session & Presentation DL 20-Feb-06 Blue At MBB or via conference call
24 Recommendations Working Session Team 15-Feb-06 Blue Thursday preceding class
25 Complete development of recommendations Team 25-Feb-07 Blue Review on Tuesday 2/27 Call
26 Recommendations Review Session w ith MBB Team 1-Mar-07 Blue Conference Call?
27 Complete any additional w ork on recommendations Team 8-Mar-07 Blue
28 Develop Final Presentation DL - Team 10-Mar-07 Blue
29 Dry Run Final Presentation Team 13-Mar-07 Blue
30 Presentation meeting at MBB Team 15-Mar-07 Blue Thursday preceding class w eekend
31 Update Presentation for class DL 24-Mar-07 Blue
32 Dry Run Final Presentation for class Team 29-Mar-07 Blue Thursday preceding class w eekend
33 Present to class Team 30-Mar-07 Blue
Task Status Legend
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Profit Model Strong Moderate Marginal None
1. Customer Solutions Profit
2. Product Pyramid Profit
3. Multi-component Profit
4. Switchboard Profit
5. Time Profit
6. Blockbuster Profit
7. Profit-Multiplier Model
8. Entrepreneurial Profit
Fit / Alignment with Mrs. Baird's Today
17. Cycle Profit
18. After-Sale Profit
19. New Product Profit
20. Relative Market Share Profit
21. Experience Curve Profit
22. Low-Cost Business Design Profit
12
22 Profit-centric Business Designs: Explain How Profits Happen
1. Customer Solutions Profit 12. Brand Profit
2. Product Pyramid Profit 13. Specialty Product Profit
3. Multi-component Profit 14. Local Leadership Profit
4. Switchboard Profit 15. Transaction Scale Profit
5. Time Profit 16. Value Chain Position Profit
6. Blockbuster Profit 17. Cycle Profit
7. Profit-Multiplier Model 18. After-Sale Profit
8. Entrepreneurial Profit 19. New Product Profit
9. Specialization Profit 20. Relative Market Share Profit
10. Installed Base Profit 21. Experience Curve Profit
11. De Facto Standard Profit 22. Low-Cost Business Design Profit
= Strong Alignment = Moderate = Marginal
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AnalysisDimension Key Issue Key Questions
1. Customer Selection
Which customers do I want to serve?
• To which customers can I add real value?• Which customers will allow me to profit?• Which customers do I not want to serve?
2. Value Capture How do I make a profit?
• How do I capture, as profit, a portion of the value I created for customers?
• What is my profit model?
3. Differentiation / Strategic Control
How do I protect my profit stream?
• Why do my chosen customers buy from me?• What makes my value proposition unique/differentiated vs.
other competitors'?• What strategic control points can counter-balance
customer or competitor power?
4. Scope What activities do I perform?
• What products, services, & solutions do I want to sell? • Which activities or functions do I want to perform in-house? • Which ones do I want to subcontract, outsource, or work
with a business partner to provide?
These must be aligned with the customers’ most important priorities.
14
Analysis – Approach Grocery
Key Account Manager Interviews – United Supermarkets, Basha’s, Brookshire Brothers
Club Site Visit Internet Research
Convenience Site Visit Interviews with
Managers
Consumer Consumer Survey –
SurveyMonkey.com Convenience Store
Customer Interviews
…four, face-to-face client visits
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Grocery – Key Account Managers Interview Questions:
In what areas does BBU excel? In what areas does it need to improve? What ideas from other suppliers in the bread and
snack cake categories should BBU adopt? What ideas from suppliers in other categories should
BBU adopt? In what ways can the relationships with independent
operators be improved to meet your needs? Is BBU’s product portfolio meeting your needs?
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Market Feedback – Grocery: Strengths Brand Name Recipe Integrity Professionalism Commitment to the retailer and the category Product Knowledge Product Variety Quality of managing a retailer’s private label
program
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Market Feedback – Grocery: Weaknesses Independent Operator /
Operational myopia Communication disconnects
between HQ reps to Field reps Tactically focused Missed sales due to Out of
Stocks Lack competitive tools Competitive disparity Sales rep turnover Incongruent linking / unlinking
of products Too many SKUs
Product management disconnects Response to slow moving
products Product gaps Other CPGs are more
aggressive (promotions) and proactive (weekly sales plan)
Slow to innovate Decision making New product introduction
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Market Feedback – Grocery: Opportunities Scan based trading Alliances with other product lines, health organizations To be more promotion oriented
Cross promotions involving discounts on fresh deli or packaged meats, or jams or spreads
More large-scale promotional activities More promotions on more products e.g. Oroweat, white bread,
Boboli, Entenmann’s, Snack cakes Co-op funding and promotional signage for in-store deli and food
service operations that promote sandwiches or breakfast items featuring BBU products.
Co-op participation in retailer magazines, such as “Fresh is Best.” Region specific product mix
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Market Feedback – Grocery: Opportunities continued Product innovations
Whole grain white bread Healthier snack items (no
trans fats, sugar free, 100 calorie packs, etc.). The focus has been on providing a 3/$1 snack as opposed to innovating with Smart Snacks.
Gluten Free Bread under the Oroweat label
Line extension – frozen bread items
Product innovations (continued) Ability for retailers to receive
specialty lines, such as Weight Watchers breads, through regular BBU channels.
Packaging innovations They don’t refresh or update
their labels often enough. Frito-Lay is a good example of a brand that does.
Eye appeal of their packaging gets boring and stale.
20
Consumer Preference Survey
In January and February 2007, an online SurveyMonkey survey was completed by 78 respondents to assess their willingness to purchase product lines that are more profitable for BBU. The following slides recap those responses.
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Grocery Shopping Habits
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Size of Household
23
Type of Household
24
Level of Education
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How I purchase Bread
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Frequency of Purchase
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Brand Purchased Most Often
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Consumer Preference SurveyPotential Products That Mrs. Baird’s Might Offer and Their Appeal To Consumers
Definitely would
buy
Probably would
buy
Might or might not
buy
Definitely would
not buyResponse
Total
Oroweat gluten free bread 1 10 24 34 69
Mrs. Baird's frozen dinner or breakfast rolls 5 17 31 16 69
Thaw and bake Mrs. Baird's white or wheat yeast bread 5 20 26 19 70
Weight Watchers brand bread baked in a plant close to my home 6 15 18 33 72
Mrs. Baird's snack items with reduced sugar or fat 3 15 28 25 71
Sandwiches in delis or restaurants made with Oroweat bread 5 26 30 8 69
Discounted or free bread when I purchase deli meat or cheese items 14 22 23 10 69
Discounted or free bread when I purchase jams or jellies 8 17 28 17 70
Item score > = 16 Bold Red = High scores in column
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Consumer Preference Survey Takeaways from the Consumer Study
Clearly consumers are shifting to healthier product options and are more concerned about quality and ingredients than price in those items.
Coupled with feedback from grocery retailers, there appear to be opportunities for Easy-to-understand packaging Product innovations in gluten-free, sugar free, whole grain white
bread Taking the lead in helping consumers understand whole grain,
how many grains are enough, etc. More healthy innovations in the frequently purchased tortilla
category Healthier snack options for kids
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Convenience Stores Consumer Interview Details:
2 Stores: Addison and Denton Total number of people
Interviewed: 53 Female: 27 Male: 26
Interview Questions: How often do you shop at a
convenience store? What brand of bread do you buy?
Why? What type of bread do you buy? Is the brand of bread important? Where do you purchase bread? What other bakery items do you
buy?
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Convenience Stores – Findings Convenience shoppers prefer healthier and lower calorie bread Very small percentage (4.2%) of people interviewed shop for bread at
convenience stores Usually only a single brand is carried at the convenience stores, which
means no competition. The majority are not aware about the availability of bread at convenience
stores. Bread is not displayed in highly visible areas of the store. Convenience channel shoppers preferred salty snacks over bakery items,
including donuts and cupcakes. Majority have no brand preference for bread Consumers are willing to pay more for bread at convenience stores;
however, not a lot more. Team identified many opportunities for increasing sales in this channel
(signs at fuel pumps, incremental displays near checkout and signs promoting bread and snack products.)
32
Site Visit – Sam’s ClubThe prices on BBU items were
better than Sara Lee products.Racks of both brands appeared
about equally stocked / shopped.Snack items: Cloverhill, Duchess
and Otis Spunkmeyer seemed to have the lion’s share of presence with club packs of muffins (assorted flavors), honey buns, powdered donuts etc. We saw no BBU snack cake items. No fruit pies from any brand – is
this an opportunity for Mrs. Baird’s?
34
Recommendations
Customer Selection
Value Capture Differentiation / Strategic
Control
Scope
Independent Operators
Product
Promotion
35
22 Profit-centric Business Designs: Explain How Profits Happen
1. Customer Solutions Profit 12. Brand Profit
2. Product Pyramid Profit 13. Specialty Product Profit
3. Multi-component Profit 14. Local Leadership Profit
4. Switchboard Profit 15. Transaction Scale Profit
5. Time Profit 16. Value Chain Position Profit
6. Blockbuster Profit 17. Cycle Profit
7. Profit-Multiplier Model 18. After-Sale Profit
8. Entrepreneurial Profit 19. New Product Profit
9. Specialization Profit 20. Relative Market Share Profit
10. Installed Base Profit 21. Experience Curve Profit
11. De Facto Standard Profit 22. Low-Cost Business Design Profit
= Strong Alignment = Moderate = Marginal
36
Independent Operators (IO) Recommendation:
Re-institute a formal IO Training Program e.g. Mrs. Baird’s University Solution:
4 Phases Phase 1: Initial Orientation – At launch Phase 2: Business Economics – Launch plus 6 months Phase 3: Advanced Merchandising – Launch plus 12 months Phase 4: Annual Conference – Ongoing
On-line forum for information exchange, communications on best practices, FAQ Benefits:
Strengthens brand by providing a proactive, managed approach to establish and communicate performance expectations Provides gestation period to balance learning with application in the field Provides a regular forum to monitor IO behaviors and the resulting business impact Regular forum to communicate new developments, award performance and
reinforce the importance of IOs to Mrs. Baird’s Profit Zone Potential for increased sales and bottom line profits.
Profit Zone Impact: Product Pyramid and Relative Market Share
37
Independent Operators (IO) Recommendation:
Implement a balanced scorecard mechanism to identify and measure IO performance in key areas
Solution: Define key performance indicators, criteria and goals Identify and, or develop tools to generate performance data Develop performance dashboard / scorecard which displays KPI along
with the targets and actual results achieved with Red – Yellow – Green indicators showing performance status
Form an ongoing working group to examine problem areas and trends Establish a formal communication channel to share results and follow-up
on variations Benefits:
Tangible mechanism to measure, monitor and manage performance “You get what you measure”
Profit Zone Impact: Product Pyramid and Relative Market Share
38
Dashboard Example
Legend:
At or above quarter goal
<1% below quarter goal
Below quarter goal
• Status of programs and initiatives focused on improving operational excellence
• Status of employee specific initiatives
Employees
Division SummaryTrade P&L BusinessTrade Delivery CostsCommercial Warranty Corporate ITOperations
Customer Loyalty H1 H2Segment 1 x% x%Segment 2 x% x%Segment 3 x%x% x%
Customer sat. HTD Mo. Mo.
Segment 1 x.x% x.x% x.x%Segment 2 x.x% x.x%x.x% x.x%Segment 3 x.x% x.x%x.x%
Financial
Customers
Current Qtr.
Next Qtr. F/C Business Component
Operational Excellence
39
Independent Operators (IO) Recommendation:
Implement Scan Based Trading in Texas
Solution: BBU currently makes this available in other states Expand SBT to include Texas
Benefits: Allows IO time to better manage their business instead of losing
the extensive amount of time it takes to individually check each item in
Puts IO focus on merchandising and customer service
Profit Zone Impact: Relative Market Share
40
Go-To-Market Strategy Recommendation:
Strategically evaluate if current distribution model will effectively work in the future Solution:
Many factors such as workforce capabilities, operating costs, areas of declining population, government regulations and consumer trends that are contributing to the challenges facing the current BBU distribution model
Strategically it will make sense to look at each distribution channel separately Consider partnerships with other logistical options to distribute product Identify the most productive distribution model for each retailer and location
individually Benefits:
By evaluating options now, BBU will be prepared to implement alternative distribution strategies as needed
Efficient utilization of all resources Increased focus in areas that will promote the “Brand” Opportunity to improve both top line performance and bottom line profits
Profit Zone Impact: Relative Market Share
41
Product Innovation Recommendation:
Execute a comprehensive review of product portfolio with a view to rationalize and reduce the high number of SKUs
Solution: Utilize effective category management in all product groups
based on consumer needs and wants Benefits:
Will allow adequate shelf space for high turning items by eliminating slow movers or items not unique to the category
Provides more neighborhood specific merchandising requested by retailers
Increases profitability Profit Zone Impact: Product Pyramid
42
Product Innovation Recommendation:
Enter co-packing agreements to bring to market more higher margin product lines
Solutions: Weight Watchers bread line (baked in BBU plants and distributed by
BBU) Oroweat gluten-free bread (baked in gluten-free bakeries, but
distributed by BBU) Benefits:
Brings another strong brand – Weight Watchers – into the product portfolio and makes the highly desired line available to more consumers in the US
Further identifies Oroweat as a leader in healthy offerings Makes BBU a single source provider for retailers
Profit Zone Impact: Product Pyramid, Brand Profit and Relative Market Share and, strengthens two “marginal” profit zones: Profit Multiplier and New Product Profit
43
Product Innovation Recommendation:
Enter licensing agreements to reap profit from BBU’s strong brand names
Solutions: License Oroweat name to producers of frozen dinner rolls
and yeast rolls – such as Rhodes or Sister Schubert’s for their whole wheat/whole grain offerings
Benefits: Affords BBU the opportunity to gain profits in other rapidly
growing departments inside retailers without substantially changing its business model
Gain additional space that is at a premium Creates new customers for the brand and builds brand
awareness Profit Zone Impact: Brand Profit and strengthens three
“marginal” profit zones: Multi-Component System Profit, Profit Multiplier and New Product Profit
44
Product Innovation Recommendation:
Develop healthy snack alternatives Solution:
Partner with a recognized leader in health, such as Cooper Clinic, to develop healthier snacks (lower in calories and sugar, no trans fats and including more whole grains)
Introduce “100 Calorie Packs” of donuts and other snack items to target those focused on portion control
Benefits: Attract health conscious moms back to a category that has struggled to
remain viable with changing consumers desires and needs Positions BBU as a leader in health products Pulls market share from salty snack category
Profit Zone Impact: Product Pyramid
45
Marketing – Promotion Recommendation:
Take credit for the products BBU already has on the market by implementing more aggressive marketing promotions Many of the products consumers requested in the survey are already in the BBU
portfolio Retailers from all channels asked for more promotional support of BBU product
lines Solution:
More aggressive marketing promotions for Oroweat line, Entenmann’s Little Bites, whole wheat buns and other differentiating brands. Phase One: Major Brand Campaign – using national mass media – for Oroweat;
Regional Mass Media Campaign in Texas – for Mrs. Baird’s Phase Two: For Oroweat, National Sponsorships of Major Sporting Events, Health
& Wellness Expos Phase Three: Product Specific Promotions with Retailers
Benefits: Strengthens brand leadership position, generates more profitable sales Allows for the opportunity to gain additional space in perimeter departments
Profit Zone Impact: Brand Profit, Relative Market Share
46
Marketing – Promotion Recommendation:
Gain market share through cross-promotions Solutions:
Negotiate with other CPG accounts for promotions like “Buy Smucker’s Jelly, Get Mrs. Baird’s Bread Free” or “Buy Oroweat Bread, Get $1 Off Oscar Mayer Lunchmeats”
Provide co-op funds for foodservice operations to promote the fact that they exclusively use Oroweat breads for their sandwich offerings. Provide signs for foodservice operations.
Promote bread and snack cake sales on pump toppers at convenience stores Use cross merchandising in all channels to gain incremental sales
Benefits: Generates brand awareness outside the traditional bread aisle Satisfies retailer and end-user customer needs
Profit Zone Impact: Brand Profit and strengthens a “marginal” profit zone: Multi-Component System Profit
47
Marketing – Promotion Recommendation:
Own the “whole grains” and health-conscious market with the Oroweat line
Solution: Develop public relations strategies to use with media, schools and health
organizations to promote consumption of whole grains Design easy-to-understand packaging – including the use of a color
coding system – to allow consumers to quickly identify products that are sugar free, whole wheat, whole grain, etc.
Benefits: Coupled with the aggressive brand awareness strategy noted previously,
this will generate increased sales and profits Satisfies retailer and end-user customer needs
Profit Zone Impact: Brand Profit
50
Bimbo Bakeries USA – Revenue Generation
Bimbo Bakeries USA generates sales through 3 main channels:
Retail ChannelRetail ChannelGrocery Stores
Club Stores
Mass Merchandisers
Supercenters
Mercado's/Mom & Pop's
Convenience Stores
Military
Restaurant & InstitutionsRestaurant & InstitutionsRestaurants
Schools
Hospitals
Prisons
Food Service
Recovery ChannelRecovery ChannelCompany Thrift Stores
Grocery Outlet Stores
Dollar Stores
BBU has partnerships with key distributors in areas where company operations are not available, including: Salt Lake City, Boise, New Orleans, and the states of Alaska and Hawaii.
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2. Product Pyramid Profit The base of the pyramid consists of low-
priced, high-volume products, while the apex is made up of high-priced, low-volume products.
Bulk of profitability is concentrated at the top of the product pyramid Base plays a strategic role -- often
through a "firewall" brand -- in protecting the profitability at the top.
Example: Gap Inc.'s tier of retail apparel chains, Banana Republic is the high-profit, low-volume apex, while Old Navy serves as the low-profit, high-volume firewall brand at the bottom.
= Strong Alignment = Moderate = Marginal
52
12. Brand Profit The intangibles associate
with brand are reinforced by
the customer’s experience
with the service or product
Brand becomes tangible in
the price premium that
customers are happy to pay
Example: Sony
= Strong Alignment = Moderate = Marginal
53
20. Relative Market Share Companies with high market shares tend to be more profitable
because large companies have pricing advantages and cost
economies due to greater manufacturing experience and
volume purchasing ability
Advertising and fixed costs are also reduced with more sales
dollars.
The greater the relative market share in comparison with
competitors, the greater the profitability
= Strong Alignment = Moderate = Marginal
54
3. Multi-component System Profit Businesses in this category have either multiple products and/or
sales channels, and only some of these represent the bulk of profitability. But, in order to maximize sales in the high-profitability components, it's necessary to have full presence in the less-profitable components as well.
Examples: The variation in Coca-Cola's channel profitability Starbucks has found it lucrative to sell its beans by the pound in low-
profit groceries through a distribution agreement with Kraft. Starbucks doesn't recognize much profit from grocery sales, but the company deepens its customers' addiction and loyalty in via the home coffee market.
= Strong Alignment = Moderate = Marginal
55
7. Profit-Multiplier Model Reaps gains from the same product, character, trademark or
service, over and over again. Powerful engine for strong consumer brands Care required to weigh the risks of taking the brand to places
where it doesn’t have authority with the customer
Example: Disney
= Strong Alignment = Moderate = Marginal
56
14. Local Leadership Profit What matters is local leadership, not national scale
In Grocery business, the economics are almost entirely local. A review of the company’s cost structure indicates that the great majority of elements in the cost structure are local in nature.
This analysis of local market helps you to choose the following: Which customers to invest in Which cities it should concentrate to invest
Sam Walton’s fundamental economics of Wal-Mart Local leadership, to the point of absolute dominance, mattered above all else. Local leadership reduced logistic costs, advertising costs, recruiting costs, etc. Before he spread to other counties he achieved leadership in the existing county. This grasp of the primacy of local economics for his business, and highly
disciplined execution in accordance with the terms of that model, gave Walton several points of margin advantage over competitors.
Using this approach Wal-Mart achieved 20% growth rate over three decades. Wal-Mart clearly demonstrates that profitability supports growth, not the other way
around.
= Strong Alignment = Moderate = Marginal
57
19. New Product Profit New product profits are a function of newness and growth
Example: HDTV
As they mature, profits fall The key to winning is being prepared to shift investment to
create undisputed leadership in the next generation product – the one that most closely matches the customer's most important current priorities
= Strong Alignment = Moderate = Marginal
58
Consumer Preference Survey General Comments / Healthy Products
I am not overly concerned with the producer of bread products I purchase. I am more interested in healthy products and freshness of the product. Also, I am limiting the amount of bread my family and I eat....we eat too many bread products each week. Therefore bread snack related products would not be a big a "gotta have" product in my home.
High fiber, low fat and nutritious bread which would taste close to white bread.
Rarely eat snacks other than fruit or veggies. Most snack foods are very unhealthy.
Carb Free Bread Low Carb/Low Fat
59
Consumer Preference Survey General Comments / Healthy Products (cont.)
I look for the highest fiber and protein products I'm interested in European style breads I prefer things high in fiber and low in calories. I purchase multi-grain bread that is preservative-free, which limits
my choices to health-store bread. I would be attracted to a bread of this type from Mrs. Baird's.
I would like some multi-grain breads, not just whole wheat, that are 100% whole grain. I would like some of the interesting breads, such as wheatberry, to be 100% whole grain and, if they are, to be labeled that way. I feel confined to whole wheat because it's the only one that says "100% whole."
100% whole wheat hot dog buns 100% whole wheat tortillas Would like to see more of the health breads.
60
Consumer Preference Survey General Comments / Packaging – Shelf Life
“Tamper-resistant" packaging, and freshness of the product. How can I preserve the shelf life of bread without it molding? I want to know for sure that the bread that I am buying is 100%
wheat bread. I don't like having to read the small print to find out for sure.
The labeling and ingredient listings are still confusing to me. Anything to help simplify is appreciated
I would like breads labeled "multi-grain" to make it very clear, without my having to read ingredients, whether it's 100% whole grain.
61
Consumer Preference Survey General Comments / Tortillas
Everyone here raves over red tacos. I find they taste the same. Maybe a little attractive.
Whole wheat tortilla, no trans fat I would like to see the Guerrero brand of tortillas in white and corn. I find
this in south Texas and they are the best. More options for tortillas....more flavors, low carb, fat-free. I know some
of these are available but not in great variety where I shop. I would like to see Mission Tortillas and Rosita's Corn Tortillas. I try to buy United brand items. However, I have had trouble with the
United-label tortillas sticking together, so I now purchase name brand tortillas.
I would like to see more plain (white flour, white corn) tortilla products with reduced calories and no trans fat. Most of the products come in different flavors that my kids do not like.
62
Consumer Preference Survey General Comments / Product Innovation
What happened to Mrs. Baird French Rolls with sesame seeds? They were the ready to bake in the bread section.
I would like to be able to find a high quality bread like the fresh baked bread from bakeries in NYC. Chewy crust, dense middle...substantial and satisfying with quality ingredients. If bakeries in NYC and California can make bread like the Europeans, why can't we in the "breadbasket of America" be able to purchase high quality bread? I am tired of the same old "sandwich" bread, boring...give me something better and I will pay for it!
Develop a whole grain dough for bread machines (It may exist, but I'm unaware) as this would be purchased.
Frozen wheat rolls, ready to thaw and bake. Hearth of Texas white bread is always good. If some other bread products were
sampled at the store, I might consider buying them if I could taste them first or let my children try them.
I really enjoy snack cakes, but they are frequently dry tasting. Make sure whatever you look at is moist.
