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Explain the challenge Elizabeth faced in meeting her capacity needs. What should she have considered before moving into the larger facility

Initially, the business operated at a loss. But with time, the business was able to attract new and loyal customers. This growth in itself was a challenge because Elizabeth over-estimated the growth capacity of her business. This in turn cost her heavily since she ended paying for unused space in the new facility. Elizabeth could have avoided this additional operating cost by analyzing the growth trends and potential of her business before relocating to a new facility. It is through such business growth potentials analysis that one is able to make strategic management decisions (Stokes & Wilson, 2010). She could have also considered inviting business experts who could have advised her correctly after doing the study on the Biddy’s bakery for sometimes.

What is wrong with the proposal made by the team of business students? Why?

The Biddy’s Bakery’s mission was to produce different kinds of baked goods (pies, cakes, bread, pastries, tarts, quiches, cookies and crackers) using the traditional method and selling them to general public and local restaurants. But the team of business students proposed that the business should deal with the production of McDoogle pies and selling them twice to a local grocery chain store. This proposal is totally different from the mission of Elizabeth’s business hence changing the business completely. Therefore the proposal of the students is wrong since it implied changing the original mission of the business.

What type of operation does Biddy's Bakery currently have in place? What type of operation is needed to meet the proposal made by the team of business students? Explain the differences between these two operations.

The current operation focuses on the traditional business style involving sale of products to the general public and the local restaurants. However, to fulfill the new proposal, the Biddy’s Bakery should change this old way and begin producing McDoogle pies in large scale and be able to do the supply twice a week to the local grocery chain store. This can only be effective if the mission of the business is also reviewed in line with this new proposal.

The differences between the new proposal and the current operation structures are worth considering. To start with, the current structure focuses on the traditional pie and cake production mechanisms. The proposal advocates for new approaches in the production of McDoogle pies in large volume. Further, the current approach aims at selling the products to the public and the local restaurants while the new proposal will involve delivery of McDoogle pies twice a week to a local grocery chain store. Another distinction is that the current approach involves specialization in the production of cakes and pies of different kinds. On the contrary, the proposed approach would strictly specialize in the production and distribution of McDoogle pies.

Elizabeth senses that the business would be different if she accepts the proposal but does not know how and why. Explain how it would be different.

First of all, the business will change its outlook since instead of doing the production of the variety of pies and cakes; the business will focus on the production of McDoogle pies in large scale. This large scale production will take away most of the capacity from production of other pies. This will in turn help Elizabeth to avoid paying for unused space. In fact, this space will be under use if the proposal was to be implemented.

According to Elizabeth, the founder of Biddy’s Bakery business was concerned with selling her products to general public and restaurants and even taking orders and working hard to deliver in time. However, now she is to concentrate on delivering the rich chocolate confection in a cookie crust (McDoogle pies) to a local shop concerned in selling of foods (grocery). This is to be done twice in a week. She will also produce and distribute her products on other days most probably to people around the area of operation. Further, the Biddy’s Bakery will not have direct contact with the customers and instead the grocery chain store will do the selling on her behalf more so, at a higher price since in business a profit is always the target. The bakery will also turn from the home-style bakery to an alternative commercial available bakery where all chains of business are practiced. This would include both the manufacturers, wholesalers, retailers and consumers

What would you advise Elizabeth?

I would advise Elizabeth that in business we must expect both losses and gains and make prior arrangements on how to counteract losses. In addition to this, I must inform her that is good to change with time. We are not living in a constant world and as hours are turning so are the taste and preferences of the customers (Mckeever, n.d.).  A good business person must therefore move with time to be able to flourish in the business world, unless you want to make serious losses.

I would lastly advise her that she should accept that the business has grown and has moved just from being a hobby to serious business production sector. In fact, the fact that Elizabeth has taken the initiative to invite a team of business students from a local university to study her business and perhaps propose the way forward, she has made it far more than being a hobby.

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