Cookie man- Exploring New Frontiers Case Study Solution
Abstract
The case illustrates the growth strategy of the Cookie-Man, a fresh baked cookie offering company, catering the upper tier market in India.The company came as a joint venture of Australian Cookie Company in Indian market. Overthe period of time, under the leadership of Anil Pathak, the company grew in size and revenues by catering the customer demand and by expanding the product portfolio.While expanding the brand, the company faced the issue referring to external factors, such included supply of electricity and resources, and the increasing prices of the raw material to prepare the cookies.This effected the sales of the company for a certain period.
Though the ride to cater the Indian sweet tooth customers has been bumpy, the company has been successful in attracting the high end customers especially the cooperate clients and House wife. In addition to this, the company selected the high footfall locations, mainly malls to open up the outlet, though this offered the company a great flux of customers how ever created a great dependency on the malls for the sale of its products.
Lastly, it opted the strategy of promotions in malls to display its product and to increase the brand awareness and brand value in the market.This though helped the company in making substantial links with the clients and the customers however,posited a continuous challenge for the company in maintaining the high position in the market and attracting the uniform and continuous sales growth.
Keywords: Growth, Brand Value, Market awareness, SWOT Analysis
Statement of Problem
Anil Pathak, the managing director of the Cookie Man has to decide on the growth strategy of the company.The challenges posited are the increasing cost of resources and the cost of the mall constrictions along with the high increasingcompetition, the company has to decide either to adoptthe market penetrationstrategy in the existing market or adopt the market developmentstrategy in other region to sustain the sales and to grow the revenues in the long term.
Situational Analysis
Cookie Man an Australian brand started its operations in India through a joint venture.Company offers the freshly baked cookies to the high end consumers in mostly tier-II and tier-III markets.Over the period of time, the company grew in size and revenue stremendously because of the emerging market trends of India.
With the passage of time and after the wrath of financial crisis, the Indian economy has sustained its growth and has increased the economic cycle, leading to more disposable income and spending on goods and services. This has become the supporting factor for the growth of baking industry in the Indian market. Also, with the passing time and the estimated population growth, there are clear facts that about 56% of the total population in India will become the part of working class, and among those the majority will age between 20 years to 25 years.This is a great opportunity for the company since it will have a direct impact on the increase in sales of the food consumption and spending on luxury items. (Donald L. Laurie, 2006)
Moreover, the Indian economy is a high growing economy with an estimated 14 percent increase in market growth in 201l .Though the market is growing and the business is expanding in the Indian market, however, the biscuit and baking industry is highly dependent on raw materials. This greatly hinders the company’s strategy to grow sales margin and revenues.
For instance, the price of sugar and flour is continually on rise and fluctuates greatly, along with the availability of electricity and other energy resources like gas for baking purpose.Moreover, since the company offers the product targeting niche markets through malls, the high construction costs and lease agreements with the malls greatly hinders the sales and expansion of the Cookie Man in the market. In addition to this, there is continuous entry into the niche market, over the last few years the new entrants and the existing entrants are continually targeting the niche customers by offering the premium biscuits or cookies, this has become a threat for the company since it may limit the sale and also the brand value in the market, restricting the expansion of sales portfolio of the company in the market. (Adolph, 2016)
Moreover, there is high competition in the market, competitors like Parle, ITC and Britannia are elevating their product offerings by adopting the Omni channel strategy andincorporating internet to distribute their productswidelyalong with the access in the premium biscuit industry. Though such increasedpenetrationmight not have direct impact on the fresh baking industry and on the sales of Cookie Man, however, it may undercutthe customer base of the company by offering additional products like cakes and dry fruits. (Martin Reeves, 2011)
Cookie man- Exploring New Frontiers Harvard Case Solution & Analysis
Regardless of the market competition, the company is exposed to greatopportunity since the Indian market is becoming technologically adaptiveand urbanized with highdisposable income and use of the ecommerce portal for shopping, the increase in debit cards and credit cards spending have been witnessed. Suchchange in market, is a great opportunity for the Cookie Man, as it can incorporate the technology in its model and can offerthe products and services to the prospective clients through online channel with least hassle and resistance in channel.The rise in debit card and credit card users is mainly due to the rising social factors that are shaping the behaviors of the customers and the spring through virtual payment system. This also depicts the high number of population entering into the ecommerce market, ultimately depicting high entry in the working industry.....................
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