The Lovely Bakers

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2.3 (A & B) Evaluating the Lovely baker’s Goals

Organizational Organizational Organizational Organizational

Goals Vision Values Culture
Specific: company Company’s vision is Companies’ core value Company believe the
is all set to deliver very clear in terms of has divided onto customers are the
better value to the business. Company several parts that are owner of the
customers in this will become the excellence. That company. Company
section so that they largest and popular means company will will focus on the
can come to this bakery chain in New deliver better products customer servings
bakery only. Zealand. Moreover, it due to its efficient and the products
Company will offer wants to compete workers. As well as enhancement. This
high quality and with the rest of the the company is also, will help the
effective products bakery companies give value to its company to grow up
to the customers. and outperform them employees and the customer centric
in few years. company will take culture in this
effective decision for organization.
the customers. As well
as company will
acknowledge the
employees so, that will
always be motivated.
Moreover company
believe in teamwork
Measurable: The Lovely baker’s By achieving the By efficient and
company has wants to become a goals, the company effective workers,
divided his goals top leader in bakery will become the leader company can able to
into long term and business in New in New Zealand produce better goods.
short-term goals, Zealand by market. It will able to This will help the
which will be developing the motivate the workers company to achieve
covered business market for of the company to success as it culture.
accordingly. the company; it is the work more efficiently.
company’s long-term So that they can
perspective that will maintain the reputation
cover in upcoming of the company and
years by becoming can deliver the product
the leader of the to the customers on
bakery industry. time.
Attainable: to To achieve the vision To achieve the goals If the Lovely bakers
become the top that is to make the and target, the will able to cut their
leader among the business popular to company will move operational cost, then
bakery business in target the customer systematically. So they can easily
New Zealand segment The there will be less provides the products
Company do not want pressure for achieving in low cost so that
to pressurize the the targets. they can impress
workers or the them.
employees.
Relevant: the Company will focus To make better The company is in
company should on the product and its relationship company food industry, which
 open few branches quality. Moreover, need to work on the is totally customer
in New Zealand company need to feedback, which the oriented. The
apart from understand the customers on online company need to
Christchurch in importance of the and offline mode will improve the food
upcoming years customer service. provide. That will be quality and the
After some time helpful for the variety of the product
company’s name will company to so that company can
become a brand, understand the grow the customer
which will be popular customers point of base. And this will
among the people. In view what to improve make the relationship
addition, company and what to not. more better as they
will open the online are addressing the
and offline store for suggestions of the
the customers. customers
Time-bound: Company will Company will work on Company will make
company will achieve the short- the plan how to the working
achieve the goals in term goals first so achieve the goals very environment
next 5 to 10 years that they go for long- precisely. Therefore, according to the
term goals they do not have to employees so that
systematically. pressurize the they can easily work
employees. without any pressure
and they can achieve
their individual goals.

2.4 (A & B) lovely Baker’s Management and Team Structure:

The organizational and the team structure of the Lovely baker’s are mentioned below in
various points:

Organizational Structure: the organizational structure of a company can be referred as a

hierarchy or in a simple word pyramid structure where the head will be in the top and rest of
the employee and their respective team members who will report to their individual reporting
boss this structure helps the organization to operate [ CITATION Dan18 \l 16393 ].

The Lovely Baker’s organizational structure should be compete and concise so that the
company can move forward in the positive way. In the starting company cannot make large
expenses. Therefore, they need to go normally and smoothly. Later on, they can do some
changes according to the need of the company.
 Figure: organizational structural

Source : [ CITATION BES18 \l 16393 ]

A proper organizational structure will help the company to develop the proper
communication system among the employees. It will help them to process the information
better and productivity of the company will increase. It will also help the company employee
to work as a team and improve the team value.
b) Management and company team structure:

In an organization, a team structure can be referred as team or many teams in the system. It
can be understood as the integral part of the following teamwork process. An accurately
structured team can be achieved through effective communication, with some leadership
skills and the mutual support[ CITATION TEA18 \l 16393 ].

If the team is properly structured, it will promote teamwork in the individual and it will
provide a leader. Moreover, it will help to ensure that all the team members will commit to
their respective individual roles in the effective teamwork.

The Lovely Baker’s will have four main departments that will be Operations, cooking, HRM
and Marketing. In the operation department, it will work as a decorators and it will
responsible for the management of the stores. Besides that, marketing department will be
handling the promotion of the store and business, it will ensure the about the profit of the
company. Kitchen department will make all the dishes, which are necessary for the shop, and
they need to fulfil the demands of the customers regarding food.

Human resource management department will be responsible for the recruitment of the
employees and the management of the employees[ CITATION How18 \l 16393 ]. Besides
that, human resource department will be looking after the performance of the employees and
developing a plan for their growth in the company.

2.5 Structure and potential goals

The business will be heading by the business owners as well as these department heads. The
individual heads of each department will be corporate each other as well as they will lead
their individual department. If these four departments can, do effective work in their
individual department than the company can meet their organizational goals.

The role of the marketing department is very vital for any business organization. Marketing
department is responsible for the promotion of the company. Marketing department will
coordinate with product department so that he can get the product information better.
Therefore, that he can provide that information to the customers as well the investors and to
the local community for the business purposes[ CITATION Cre18 \l 16393 ]. There are few
works of the marketing department which it need to do for the business that is to define the
brand, marketing department advertise the product or the brand to the community or to the
business world so that people can understand this product is been made by whom. This
department starts campaigning about the product for the same purpose. As well as it manages
the social media marketing for better, reach out to the people. As the company will be
operating in Christchurch in New Zealand, the marketing department will be responsible for
developing a plan for reaching out the people and the target market.

Operational department will be responsible for the store management. That means they will
be managing the store properly. They need to understand the quires properly and manage all
the requirements of the store including the kitchen department. Operational department will
focus on to reduce the operational cost of the company. Moreover, operational department
will also look into the delivery of the products. It will be needed that the department also take
the feedback by the customers online and offline so that they can understand to improve in
the company or in the products. Items related feedback should be shared to the kitchen
department it will help them to improve the quality of the product.

Kitchen department will include every pastry chefs and the other workers related to the
department. This department will be responsible for the product making and to fulfilling the
demands of the customer. This department will also look into the new products as per the
requirements of the customers. Before sending any product to the self of the store, it should
be needed to check, as the quality is very import for a company. If the product of the
company has some issues regarding its quality then it will hamper the business in future.

Human resource management or the department will be responsible for the staffing and
recruiting of the employees. These employees should be interviewed for selection. It should
be required that the HR department should take skilled employees for the company so that
they do not have to provide a deep knowledge about the work. If they train a new trainee, it
will take a lot of money and time to train him. Apart from that, it should be understand that
the company also need to motivate the employees so that they can stay in the company and
work effectively. For that human resource department should develop a plan in which the
well perform employee should be promoted according to the needs of the company.
2.6 (A&B) Identifying Gaps in Team Structure and Management of
Organization and Providing Solutions

It is required that the company should know about its loopholes in the company and the team
structures. The gaps should be filled in process of effective outcome. There are some gaps
and its solutions that are discussed below:

a) Gaps
1. The lovely bakery has hired the staffs To reduce the cost effectiveness the company
that are having less experience.
2. Marketing of the business
3. Use of the money
b) Solutions
has hired some of fresher’s, As the company
offering less salary at the start of the
company. It will help the company to reduce
the operational cost apart from that company
will provide them high class training from
experienced employee so that they can also
work effectively.
The company has never done its marketing
before so it will be risky for the company to
decide which type of advertise they would
like to do. As the marking department is also
fresh, they will take the help of a experience
firms so that they will guide them on the
crucial business decision. It will ensure that
the business strategy will work better.
Company will do discussion with every
department before implementing any
decision. It will bring down the risk factor
The company have to spend allot of money to
set up the business and after the business start
it will required to invest more in various
department. Therefore, the company need to
set up various meeting with all departments
to list out the important things that should
required for doing business easily. Rather
than wasting money, they should plan
according to the budget.

In a business organizations there are many challenges that a company faces while the initial
start of the company. It can be related to finance or in the business strategy. These gaps
should be filled up because this can harm the company in future. Many of the gaps will
automatically fill up when the company will become financially stable. However starting
gaps should be filled immediately.

3.0 Business environment, key success factors and competitive advantage

3.1 Evaluate the of effects of external macro environment factors and judge their impact
on business

An organization cannot control the macro environmental factors. However, these factors have
huge impact on the business flow of the company[ CITATION PES18 \l 1033 ].

Using PESTLE analysis, the company can identify these factors and they can take effective
solution accordingly.

The below discussion will highlight the major environmental factors which are affecting a
business worldwide. Similarly, for Lovely Bakery also it will be applied.

Factors Macro Impact on Impact on Impact on

Environment Business Opportunity Future Outlook
A) Political The regulatory The company Implemented If Lovely
bodies and has to recruit business polices Bakery always
government many employees must be follows these
play as vital who may be followed by the policies, the
role in local or company both company will
development foreigners. The for business and surely achieve a
and smooth company must related good reputation
operation of a follow genuine operations. the
business. policy all the Effective corresponding
Similarly, the time and there political business. This
Left Leaning should not be guidelines may technique will
Labour party any partiality also help the also help the
and National among company to company to gain
Party govern employees future problem political benefit
the business regarding their with employees in the long run.
sectors in New job role or [ CITATION
Zealand. These responsibilities[ Pol17 \l 1033 ].
parties check CITATION
whether the New18 \l 1033 ].
companies in
the country are
doing business
fairly and the
employees of
these
companies are
properly
treated
[ CITATION
Ove15 \l
1033 ].
B) Technological Technology is The electricity Using low cost If the company
a key factor for and various and efficient introduce more
 business in this relevant technology will technologies for
modern world technologies are help the operations and
[ CITATION considerably company to productions, the
Tec18 \l 1033 ]. cheap in New grow their company will
New Zealand Zealand. business achieve new
has developed Therefore, it effectively. It height the
many will be great will also help industry. The
successful help for the the company to technology will
technologies company. The increase profit also help to
over the year company can and thereby boost their sales.
along with use various overall revenue
cheap advanced will increase.
electricity. technologies for
With the help cake production
of advanced and customer
technology, the service with
country is also relatively low
generating bio- cost
energy. In
addition, NZ
also use
efficient
technologies to
recycle wastes.
C) Economic The New As the company Many customers Always there
Zealand has a is in initial in NZ are will be demand
stable stage, it will buy interested in of food products
economic many new plants delicious food in markets. This
condition. The for production. products. When trending
overall Therefore, a new product scenario will
revenue will overall budget comes in definitely help
reach around for operations market, more the company to
$2.64 million will increase. At people will boost sales and
dollars by the the same time, come to taste the reputation in
end of 2018. resources will product. market.
also increase. Thereby,
company will
increase their
sales.
d) Legal Various legal To develop a If the business The business
actions and pollution free promotions are need to focus on
polices were operation for done environmental
introduced by bakery, considering all sustainability to
the local company must legal factors, the deliver a
authorities of use high operation will positive rate of
to deal with performing create a positive growth in the
smooth machineries and impact in the industry. Eco
operation of infra. The local industry. friendly
business. production products will
waste should be attract more
 safely placed or customers in
reused in order future.
to avoid legal
defaults in
operations.
e) Globalization Geographical Lovely Bakery Hiring efficient Successfully
Barriers can can use cheap workers from training efficient
affect the technology for other country workers with
globalization bakery will definitely low salary will
up to certain operations as improve the definitely
extent. well as they can level of the increase
However, with buy cheap raw company. By productivity.
the help of materials from doing, so Along with
new other countries performance as proper
technologies with the help of well as profit technology,
and social Globalization. might increase these workers
media, most of Also they can to a certain might achieve
the areas invite extent. competitive
across the employees and goals in short
world is led to machineries period of time.
globalization. from other
It helps to localities where
share local cost is low. In
resources in this way, overall
global profit will
platform. increase
dramatically.

f) Socio-Cultural There are In order to After making a To deliver an

many increase strong base of excellent service
restrictions production and the company, company should
designed by operations, a more customers target on social-
new Zealand company need will come to buy cultural aspects.
government huge number of bakery foods It will also
that are employees. So and thus the increase value to
affecting the social and sales will be the company.
private cultural trends boosted.
business. must be
However, so carefully dealt.
many people This way will
and private help to
organizations strengthen the
are employee base.
encouraging At the mean it
locals to will also expand
establish their the customer
own base.
businesses.
g) Green Factors There so many The company When a By doing
green fields must follow eco- company takes environment
 across the friendly some additional friendly
country of techniques in safety guidelines operations the
New Zealand. various aspects for eco-friendly sustainable
Strict rules are of business. operations, it growth will be
followed to adds some cost ensured. It will
keep the for maintenance. also add rivalry
environment However, this advantage in the
clean and safe. step will create a industry.
In addition, positive impact
many harmful in the society.
maintenance
procedures and
waste disposal
techniques are
not allowed in
business
sectors.

3.2 Critical Analysis and Assessment of External Micro Environment Factors

The company can dominate some of the Micro factors in business. However, the overall
business operations are mostly dominated by the universal factors. These factors influence
the business in various aspects.

a)Segmentation and market objectives:

To understand the market behaviour, it can be divided into various sectors based on
population and culture. The market goal will be decided based upon the segmentation level.
The goal in marketing and segmentation are two key factors to become a successful business
professional.

In most part of the world, people likes and eat bakery products for its incredible taste.
However, the services and quality of the products must be maintained to make sustainable
business. Continuous improvement and proper pricing is essential for long run of a busienss.

b) Market structure, size, growth trends, and profit potential:

So many existing companies are present in the markets that are delivering bakery products
across the market within New Zealand. However, Lovely Bakery will be brand new company
in this industry. In this growing competitive industry, the company has to introduce some
unique services to invite customers. The expectation of the management is the company will
grow around 3% annually in first year.
In the mean time, one can say that there are many financial and social blockades in long run
of company. These barriers will distract the small level companies to enter into the target
market. However, if a small company overcome this stage, it can make a sustainable growth
and achieve significant goals.

c) Competition:
There are few companies in New Zealand, which are very popular for baking businesses.
These companies gain a huge amount of profit every year. Some of the competitors that will
give a strong competition in this market are Vaniye Patiserie, Ronnies Cafe and Bakery<
Hollywood Bakery and Espresso, and Vulcan Lane Bagels. Without these big bakeries, many
small scale bakeries are scattered in this market which are doing business in this market.

d) Suppliers:
The Lovely Bakery requires proper delivery services in this market to provide satisfactory
customer delight. The company can use websites or some other efficient technologies to
supply product to global customers. The company must adapt various initiatives to deliver
effective operations in the market.

e) Distribution channels:
Company need to increase clients and business partners to increase the overall business. It
can be difficult to find new customer in this vast market. However with the help of social
media and other digital platforms, customers will automatically contact with the company as
per their demand. In addition, local and global vendors can also be contacted through digital
platforms. The vendors or suppliers will help the company to increase their overall market
both in local area and global market.

f) Profit and growth potential:

The food and beverage market has a great potential in term of growth. However, the company
must deliver the products efficiently to the customers and also it must be done in time. It will
increase their market value. In this way, more customers will know about their product and
the business will grow. For sustaining the business, company need to open various branches
in different regions of New Zealand to grow their business. At the same time, profit will
increase exponentially after increasing sales.

3.3 (A&B) Key Achievement Factors and Market Possibilities:

Based on the above finding from 3.1 and 3.2, below tasks can be discussed:
 Market Possibility Aspects Purpose
Approval of Products: A strategy to analyse Strong customer base and brand value
the quality and functionalities. should be developed by Lovely Baker. In
addition, company should improve services
as per customer feedbacks. Thus company
will increase sustainability.
Capacity of Production: developing quality The prime focus should be in quality
products and maintaining the production services along with product diversity. Top
rate. class service will ensure the growth of the
bakery. In addition high production along
with good quality will lead the company to
achieve new heights in the industry.
Costing Possibilities: generating enough Working with advanced mechanisms and
revenue to pay debt to the stakeholders and training programs the bakery will get good
regular growth profits. It will help to increase resources and
facilities in the company. As a larger result
it will impact the overall performance of the
company
Table 1: Possible Market aspects

a)Validation of the of the market possibilities:

The bakery industry has a huge demand for good tasty producst and innovative food
materials. Due to good product quality, more customers will buy the products, and thereby it
is expected that the target market will increase from 3% to 10%. This kind of growth will
direct the bakery to generate high revenue. However, all the complaint must be resolved as
per customer interest and the product should be re-designed as per customer convenience to
increase target market.

Proper customer service and improved brand quality will help to grow the business.
Production quality and quantity must be maintained in order to achieve a sustainable position
in the market. Suppliers and customers are two major factors of target market.

To minimise the cost of human resources, the bakery will hire few talented employees from
other sectors or countries. They will ensure to achieve certain competitive advantages in the
industry. In addition, they will increase performance or profitability of the company.

b) Recognize and judge the key success factors in industry:

There may be various factors that are considered as key factors for success. Company must
identify all key factors in order to succeed.

For Lovely Baker, below factors can be discussed:

 Key Success Factors Identification/Description Implication

Technology Related Proficient and advanced Company has to use low

technologies should be used . cost and competent
technology to achieve high
profit in business. In the
global market, it is necessary
to decrease operation cost
for good revenue.
Market Related The products must be delivered as Demand of a product
per increasing demand in market. certainly increases the scope
of business. By serving
quality products to
customers, Lovely Baker
will gain high profit.
Compatibility and Bakery must hire dedicated and With low budget for
talent Related talented workers who work for low workers, company will
salary. gradually get more
advantage to increase other
resources that will increase
the performance of the
company.
Location Related Bakery will operate in Addington Concentrating on the target market
area of Christchurch. in the area will help to power up
the business at the start-up phase.
It will also help to develop the
image of the bakery and loyalty of
customers.

3.4 Lovely Baker’s value Proposition and Key Benefits of Target Customers

The proposed plan is used to the marketing policy or business declaration that is used to
describe the reason why the customer will use or buy the products. Lovely Baker will provide
mainly three types of services. Normal Delivery, Ordered Delivery and Special Delivery are
the key services that will be offered by the Company. Normal delivery means customer asks a
product form the menu and the company delivers it. It will be relatively low cost service ($5).
However, in case of Ordered Delivery customer can ask the product and it design as per his
requirement. Therefore, it will be a high rate service compared to normal delivery. It will start
form $8.

Further, in special delivery, customer may order products as per their choice alongside they
will mention a deadline. Company must deliver products in the specified time to provide
satisfactory customer service. As this service is specifically designed as per customer
demand, it will cost high rate $12.
3.5 Analysis of the Unique Value and Significant value for Lovely Baker’s Target
Customers

The proposed plan helps a company

to operate their business in a way that is more successful. To achieve this, company must set
a unique business plan and it must maintain a significant value. The value proposition of
Lovely Baker can be discussed as follows (as per VRIO framework):

Factor Value Shortage Duplicity Organization Unique Value

Measure
Technology Needed The required Other Using efficient Achieved
Technologies materials and competitors or and low cost
to establish the technology customers can technology will
cake bakery will be access top- help Lovely Baker
can be used accessed from level to improve their
from different overseas technologies services. In the
locations in market. It will from various mean time, it will
New Zealand increase areas. also reduce
as well as from rarity. However, the operation costs.
other countries. resources will
not be
revealed by
Lovely Baker.
Talent and Local The company Lovely Baker Advanced training Achieved
Skills recruitment of must provide will have will improve the
employees proper lower risk of skills of the
(both locals training to all imitation as employees. It will
and the employees lead to high
immigrants) to increase productivity.
will help to productivity.
improve
efficiency in
business.
Location Lovely Baker The bakery Other Various kinds of Achieved
will focus on will introduce companies promotions will be
the local some might deliver done to create
market of innovative similar kinds reliable customer
Christchurch at products to of products base. It will help
initial stage. minimize the and services in to improve
Later it will competition. the area. competitive
increase So more However, the approach of the
business sin customers location is not bakery.
various area from a factor in
within New Christchurch duplicity.
Zealand will come to
the bakery.
Market The company There may be Other The company can Not Achieved
will deliver many other companies create a successful
bakery small bakery may replicate business if it
products and companies in the products reduces the threats
services in the Addington and business of imitation in this
local market of area. So tactics. It is a highly competitive
Christchurch. Lovely Baker high risk market.
will have low factor.
 degree of
rarity
Table No 8: Possibilities in the proposed business Plan designed to attract customers

7.2 Marketing Planning of Lovely Baker’s

Marketing Plan of Lovely Baker’s can be described as follows:

Marketing Mix:

It is the basic structure used for marketing. It identifies 4Ps namely price, place, product and
promotion.
Locating Market:

Marketing Mix Goals in Marketing Location Plan

Price: Normal delivery rate It projected 8,250 customers Company will charge
is $5, Ordered Delivery rate in 1st year and increase it up minimum $5 for services. It
is $8, Special Delivery rate is to 12,487 customers after 5th will lead the company to
$12 year generate income of
$2,510,980 in 1st year.
Place: The bakery will focus on the It will help to spread the
The company will be located local markets of Addington business in the nearby area of
in Addington, Christchurch area. Christchurch.
Product: The products of the Low cost services will be With proper leadership plan,
company are Normal provided to create better the company will reach the
delivery, Ordered Delivery, market. goal.
Special Delivery
Promotion: The business The bakery wants to achieve Online and offline strategies
will be promoted both in 10% growth within five must be followed to achieve
offline and digital years time desired success.
platform[ CITATION
Lov18 \l 1033 ]
7.3 And 7.4 Operational objectives and plan:

Definition of operational objective: operational objective can be referred as the short-term

goals whose accomplishment moves the organization in the direction of achieving its plan or
its long-term goals[ CITATION ope18 \l 16393 ].

Definition of operational Plan: it can be referred as an extremely detailed planned which the
management to accomplish calculated objectives [ CITATION ope181 \l 16393 ]

Operational Factors Operational Operational Strategies Operational

Objectives Plan
Financial The main objective The company will The company
is to improve the mainly focus on the will focus on
liquidity of accessibility of short- the structure of
financial capital. term debt resources. the plan and
company will
access its
possible
liquidity and
the investment
that can support
the
development.
Human resource The main objective To reduce the cost of the The can hire
of the company will company they will hire the candidates
be to trim down the cost effective candidate’s of the hotel
cost of the human means to hire less management
resources. experience candidates. school or pastry
They will provide school so that
training facilities to they can hire
improve their efficiency. they at low
cost.
Product and service The company will Company will take They can
development offer vegan feedbacks from the improve the
products and many customers to check the products and
other healthy satisfactory levels of the provide the
products. customer. Moreover, customers at
how they can improve very low cost
their services, So that so that the
they can target more customers can
people in New Zealand. easily have it.
utilize the Technology The company can The company will utilize Company will
reduce the cost of the technology of today’s deal with the
operation by the use world in the making of technological
of technology the products partner so that
they can
provide the
 support.
.

7.5 and 7.6 Human Resource and staffing strategies and plans:

Human Resource or Staffing Objectives: human resource strategy can be defined as the
long-term plan of the organization, which will be achieved in the field of human resource
management and growth[ CITATION Mar96 \l 16393 ].

Factors Human Resource Human Resource Plan

and Staffing Strategy
objective
Motivation for the Company will set his Company will The company will
employee target of 65% provide good salary make a growth,
satisfaction among and provide the incentives plan for
the employees in first salary on time the employees, and
year. the incentives will be
provided to those
who perform well in
the job.
Recruitment of the The first year goal of Company will hire The company will
employees the company will be the less experience hire culinary school
to achieve 75% rate candidates candidates and
of employee’s provide them training
retention. and good salary. So
that they can remain
in the company for
the longer period of
time.
Culture The company will To improve the unity The company will
promote the will hire different hire the supervisor.
culturally diverse people from different These supervisors
employees. cultural backgrounds will ensure about the
rules and regulations
of the company as
well as the general
labour law.
Performance The company will The company will The company will
introduce the find the internal hire experts in the
performance plan so talents by various future so that they
that each employee talent hunt into the can provide training
can do according to company so that in to the young talents
the plan to improve future they can which will increase
performance perform better the productivity.
Staffing plan of the Lovely baker’s:

The company will make a systematic process to recruit a good number of people with good
knowledgeable skills to fulfil the different post in the company:

[D] Staffing Inputs Year 1 Year 2 Year 3 Year 4 Year 5

Number of staff required 4 4 4 5 5
Average Salary per staff member $21,000 $21,000 $22,200 $23,100 $24,200
Projected cost of salaries/wages $86,000 $86,000 $87,500 $95,400 $1,15,200
Percentage On-Costs of Staff (ACC, Kiwi Saver,
10% 10% 12% 12% 14%
training, uniforms etc)
Projected value of On-Costs of Staff $8,900 $8,900 $11,100 $12,100 $17,100
$1,15,5
$94,900 $84,000 $88,800 $1,21,000
Projected Cost of Staff 00
Table no. 44: Staffing plan (“All Monetary Figures are in NZD”)

7.7 Financial strategies and plan of The Lovely baker’s:

Financial Strategy: financial strategy refers to a set of plan, which an organizational uses to
manage the financial resources to achieve its objective. It is a plan to utilize the financial
resources in a systematic manner.
Objective 1: To reach the breakeven point in year 1

[G] Cash flow Analysis (Profit/Loss) Year 1 Year 2 Year 3 Year 4 Year 5
Profit (loss) per annum (Revenue - $34,91,1 $45,30,2 $52,83,6 $71,71,13
Costs) $24,85,360 15 28 31 1
Start Up Costs per $ Revenue $0.01 $0.00 $0.00 $0.00 $0.00
Fixed Costs (inc Staff Costs) per $
Revenue $0.04 $0.03 $0.02 $0.03 $0.02
Variable Costs per $ Revenue $0.01 $0.01 $0.00 $0.00 $0.00
Total Costs per $ Revenue $0.06 $0.03 $0.03 $0.03 $0.02
$1,20,32 $1,27,25 $1,58,12
Break Even (Revenue) Y1-Y5 $1,54,640 2 2 5 $1,71,460
$1,10,52,8
NPV (Discount Rate Assumed 25%) 40        
           
Table 45: Break Even point analysis (“All Monetary Figures are in NZD”)

The company identifies that it will reach the breakeven revenue of $ 1,54,640 in the first
year. It will be possible if the company can set the customer target of 8,250 in the first year.
Therefore, it will be require investing in the marketing of the company. The company can get
the customers as required.

Objective 2: the company can reach the target revenue of 20 million in next five year.

[B] Revenue/Sales Inputs Year 1 Year 2 Year 3 Year 4 Year 5

Average spend per customer $80 $85 $87 $95 $98
Average number of units/sales
to each customer per year 4 5 5 5 6
Other income $0 $0 $0 $0 $0
$26,40,00 $36,11,43 $46,57,48 $73,42,59
Projected Revenue/Income 0 8 0 $54,41,757 1
Table 46: Revenue/Sales Inputs (“All Monetary Figures are in NZD”)

If the company successfully hold the financial structure and the formation of revenue
generation, the company can improve its revenue. The financial structure shows a positive
sign that the company will reach their objective easily and effectively.
Objective 3: the fixed cost should not surpass $20,232.00 over five years.

[E] Fixed Cost Inputs Year 1 Year 2 Year 3 Year 4 Year 5

Equipment and Uniforms $3,250 $3,250 $3,500 $5,400 $5,500
Rent/Mortgage on premises $2,650 $2,900 $2,900 $2,900 $3,200
Insurance $2,700 $2,800 $2,800 $2,900 $3,600
Utilities (e.g. power, phones, water, gas, internet,
rates etc) $2,600 $2,600 $2,900 $2,900 $3,450
Licensing, royalties or commission (e.g. software) $1,800 $2,100 $2,400 $2,600 $3,120
Accountant and legal fees $2,310 $2,310 $2,310 $2,400 $3,050
Maintenance of database (expert contractor) $2,230 $2,230 $2,300 $2,300 $3,000
$17,54 $18,19 $19,11 $21,40 $24,92
Projected Fixed Costs 0 0 0 0 0
Table 47: Fixed Cost Inputs (“All Monetary Figures are in NZD”)

The above table shows the generation of the low amount of fixed cost in the period of five
years. If the company can maintain this fixed cost then the company can meet the Objective 3
easily.

7.8 Financial planning of the Lovely Baker’s:

The financial planning of the lovely Baker’s is mentioned below:

Capital Requirements: the project start-up cost will be $25,620.00. The owner will invest most of
the cost from his part. However, the total cost of the business will be around $1,54,640. To meet the
mentioned target the company will take temporary loans for the business.

Financial Assumptions:

The important financial assumption for the Lovely Baker’s business is that the bank will provide the
loan after watching the project income statement, balance sheet and cash flow statement. The
company will make the products for the market. Market will understand the need for the services
provided by the company. The consumers have the purchasing power to buy the products of the
company.

Profit and loss Forecast:

[G] Cash flow Analysis (Profit/Loss) Year 1 Year 2 Year 3 Year 4 Year 5
Profit (loss) per annum (Revenue - $24,85,3 $34,91,11 $45,30,2 $52,83,6 $71,71,13
Costs) 60 5 28 31 1
Table 48: Profit and loss forecast
(“All Monetary Figures are in NZD”)
It can be expected that the company will able to make the profit from the first year of its operation
starts. It can be understand that the company can make high profit for the business if the company
can generate its proposed number of customers.

Cash Flow Forecast:

[G] Cash flow Analysis (Profit/Loss) Year 1 Year 2 Year 3 Year 4 Year 5
Profit (loss) per annum (Revenue - $34,91,1 $45,30,2 $52,83,6 $71,71,1
Costs) $24,85,360 15 28 31 31
Start Up Costs per $ Revenue $0.01 $0.00 $0.00 $0.00 $0.00
Fixed Costs (inc Staff Costs) per $
Revenue $0.04 $0.03 $0.02 $0.03 $0.02
Variable Costs per $ Revenue $0.01 $0.01 $0.00 $0.00 $0.00
Total Costs per $ Revenue $0.06 $0.03 $0.03 $0.03 $0.02
$1,20,32 $1,27,25 $1,58,12 $1,71,46
Break Even (Revenue) Y1-Y5 $1,54,640 2 2 5 0
$1,10,52,8
NPV (Discount Rate Assumed 25%) 40        
Table 49: Cash flow forecast(“All Monetary Figures are in NZD”)

The operations can generate the high amount of cash inflow from the operation if the company can
reduce the fixed cost of the business. However, it is the projected revenue shows that company can
make profit will increasing the cost of business operations.

Balance sheet Forecast:

Capital Expenditure Budget

2018 2019 2020 2021 2022

Projected $26,40,000 $36,11,438 $46,57,480 $54,41,757 $73,42,591
Income
Capital expenditure budget

(“All Monetary Figures are in NZD”)

The partners of the business will borne the cost of the business in order to finance the
business, however, later on the cost of the business will be finance by the profit which is
generated from the business.

Breakeven analysis
 [G] Cashflow Analysis (Profit/Loss) Year 1 Year 2 Year 3 Year 4 Year 5
Profit (loss) per annum (Revenue - $34,91,1 $45,30,2 $52,83,6 $71,71,1
Costs) $24,85,360 15 28 31 31
Start Up Costs per $ Revenue $0.01 $0.00 $0.00 $0.00 $0.00
Fixed Costs (inc Staff Costs) per $
Revenue $0.04 $0.03 $0.02 $0.03 $0.02
Variable Costs per $ Revenue $0.01 $0.01 $0.00 $0.00 $0.00
Total Costs per $ Revenue $0.06 $0.03 $0.03 $0.03 $0.02
$1,20,32 $1,27,25 $1,58,12 $1,71,46
Break Even (Revenue) Y1-Y5 $1,54,640 2 2 5 0
$1,10,52,8
NPV (Discount Rate Assumed 25%) 40        
Breakeven analysis
(“All Monetary Figures are in NZD”)

As per the table above, it can be understood that the company will reach the breakeven point
from the starting few years. By this, the business will become profitable.

8.1 Testing primary hypothesis used for the business model

a) Probable risks in the business

There are many risks involved in a start-up business. If the company fails to make a way into
the market with 3% rate, it will fail to create its projected revenue and customer base. This
will affect the revenue significantly. Similarly, if the bakery fails to provide satisfactory
service the overall performance and profitability rate will fall considerably[ CITATION
Lov18 \l 1033 ].

b) Threat Management and Control plan

The Threat management plan can be discussed as follows:

Tasks Threats and Control Procedure Plan

Planning A effective business plan must be The plan will focus on the
developed before starting business projected budgets and sales for
business operations.
Organize The company need to design a The company will create business
standard Organizational structure. It with the help of three key
will assist the bakery to meet market department namely Human
demand successfully Resource, marketing and
Operations
Leading The company must provide reasonable The organisation must provide
salary to workers along with proper reasonable salary to employees to
training and development services to keep them motivated. In addition,
 improve performance. incentives should be provide based
on thir individual services.
Control All the risk factors should be The company can take help from
controlled with proper contingency external auditors to analyse
plan to increase productivity and performance. In addition,
maintain market demand management can guide all
department heads to work as per
plan.
Table 53: Threat Control and Management

9.0 Assessing Performance and tactical steps

Performance Evaluation:
It helps to identify negative and positive aspects that are affecting performance of a company.
9.1 Analysis of each of the performance related factors for the proposed business:

Balance scorecard:
It is a tactical management tool used to monitor and calculate the progress of the company.
Management can take effective decision depending on the results.
KPAs: It is the short form of Key Performance Area. It is focused to identify Key
Performance Area (KPA): Areas within the Business and Key Result Area (KRA): A group
or an individual who is responsible.

KIAs: It is the acronym of Key Information Area. It is used to find the different divisions
within the business that provides information for a selected Key Result Area (KRA) and KPA
(Key Performance Area).

KPA KIA Goal Actual Objective

Performance
Customer Total number of The bakery Company only Company will
customers projected 8,250 got 4950 decrease the
customers every customers service rate to
year. attract more
customers
Financial Turnover Profit targeted It achieved More investment
$2,510,980 per $2,640,000 per will be dome on
year year advertisement o
increase sales
Internal Process Must follow all All the Employees New polices
rules and employees are follow the 70% should be
regulations expected to rules identified and
follow these implemented to
rules bridge the gap
Study and Employee The company Company might Contracts can be
 Development retention rate expect to retain retain only 50% made to bind the
all the employees in employees with
employees in reality. the company
next 5years

9.2 Following strategies are made based on the above analysis:

a) Monitoring, Performance Evaluation and control procedures

Control procedure and plan for Lovely Bakers will be implemented to handle the mentioned
KPIs. It can be described as below:

Evaluation of Performance Monitoring and Control Strategies

Procedures
Customer - Number of Company will deliver quality
Customers service will minimum rate to
attract more customers
Financial - Turnover The Company will observe
and valuate the profitability
in monthly and yearly basis
Company will invest for
marketing and promotions to
increase customers
The company will reduce the
funding of operations, if they
failed to do produce
sufficient profit.

Internal Process – abide by The managers and the CEO If any problem raised in KPI,
rules of the company will check The management will speak
KPI on daily basis. with
Study and Development - Human Resource team will KPI will be monitored trice
Employee retention rate manage the KPI in a year. It will be done
because the company has a
few employees.
Table 55: Control Procedure

b) Plans for Strategic Exit:

The strategic exit plan identifies the possibilities that can a business towards failure. It can be
done due to poor management, lack of money, bankruptcy, insolvency and various other
factors.
The management must take will take necessary steps to ensure liquidation of its business
process. Nevertheless, company must focus to improve KPIs efficiently. It will help the
company to make sustainable growth.
10. Conclusion

From this project, it can be understood that the business of the Lovely Baker’s will be
profitable in the upcoming years. The lovely baker’s is not alone in the field of the bakery
there are some competitors who can be a tough competitors, but the range of products and the
uniqueness of the company will make the company more powerful than the other
competitors.

In this report all the merits and demerits were clearly mentioned, which will come into
existence while starting a business for an example the number of customers approaching the
store, price, range of the product, different cost that which need to run the company,
generation of the revenue and profit.

The project also discussed about some internal and external environmental factors that can
affect the lovely bakers. By this study, it is also observed that the company is also meeting
the KPI effectively if the company can implement its strategic plans correctly.

The management of the Lovely Baker’s will have the correct management of the assets run
the business. The management can even expand their business in New Zealand. Moreover,
they have the ability to transform the business and to become the top leader in bakery
products. If required the company also have the exits plan if the business is not worked out
properly.

11. Recommendations:

After analysing the project, it is recommended that company required to reduced the cost of
the business. They can use the technology into the operations to get desire outcomes. The
company also need to improve the business capacity. They should invest in the online and
offline promotional channels so that they can get more exposure. It will be suitable if the
company can promote them on social media, so that they can get connect with New Zealand
Community, by this the company can increase the target area. Social media promotion can
help the company to generate the revenue even more as it will attract more customers apart
from the addington.

In general, the Lovely Baker’s is a good enterprise to start in addington, Christchurch.

Several changes can help the business to grow more in the particular area. Like, they can start
the business with fewer employees if the business runs good then can add more employees
later on. If they can reduce the staffing cost, it will help the company to get more profit. It
will be better if the company can leave this business at early to avoid losses if it is not
working properly.