Description

After significant growth in 2013 when Hostess Baking, a major competitor, declared bankruptcy, Carolina Foods, Inc.’s CEO, Paul Scarborough, wanted to develop a strategy to maintain that level of growth for his family’s 80-year-old commercial bakery and its Duchess brand. Hostess brands were purchased by various other commercial bakeries, and the Twinkie, an iconic American snack cake, was back on the market. CFI’s Duchess family brand of baked sweet goods included honey buns, donuts and pies manufactured in the original factory in Charlotte, NC, and distributed to markets across the USA, Canada, Mexico and Puerto Rico. Consumer tastes were changing: Snacking in general was increasing and consumers were increasingly focused on healthy, or at least healthier, snacks. Social media was changing the marketing landscape: Could honey buns, donuts and pies be sold on line? Baked sweet goods firms were steadily consolidating across the nation. At CFI, no new products had been introduced over the past twenty years, the company did not have any dedicated marketing personnel, and no marketing budget was allocated (a sales budget did exist). Students can apply numerous basic marketing principles and tools to analyze and choose a viable marketing strategy for CFI. What strategy should CFI pursue for growth? Students may consider new product development, branding, market penetration, and market development, including changes in distribution strategies.

Learning objective:

After analyzing this case, students should be able to: 1. Understand the commercial bakery industry well enough to participate in strategic thinking for CFI’s future growth. 2. Develop a SWOT analysis in the commercial bakery industry for a privately held commercial baker, CFI. 3. Use Ansoff’s growth matrix with a SWOT analysis to identify an appropriate quadrant and strategies for CFI to pursue. 4. Recommend a strategic choice based on the quadrant identified. 5. Defend a strategic choice. 6. Develop an implementation plan for the strategic choice.

Subjects Covered:

Advertising; Branding; Business to business marketing; Consumer marketing; Distribution; Manufacturing; Market segmentation; Marketing management; Marketing methods; Pricing; Socially responsible marketing

Setting:

• Geographic: North Carolina
• Industry: Doughnut industry
• Industry: Snack food