About this module
Hurray – your business is live, what’s next? In this module, we help bakers outline a business direction that’ll help them tailor and finetune their product strategy to better suit their customers. Learn about building strong connections with customers, expanding your business presence and so much more!
Now that you have the ropes to run your baking operations, it’s time to look at the strategic side of things. In this module, we help bakers outline a business direction that’ll help them tailor and finetune their product strategy to better suit their customers. Learn about building strong connections with customers, expanding your business presence and so much more!
Narration
There are two ways to expand your business – by increasing Volume or by increasing Value. In other words, you can either sell more products, or you can sell products at a higher profit margin.
To make things simple, let’s use the Ansoff Matrix to explore these opportunities.
Let’s look at the first quadrant: Market Penetration. This is done by tapping into Existing Markets with Existing Products.
So how can you get your existing group of customers to purchase more of your products?
For example, you could offer attractive discounts and promotions to your products.
To tap into your existing customers, you may also provide benefits exclusive to loyal customers, which will boost sales.
The second quadrant, Product Development looks at appealing to your existing group of customer with new products.
For example, you could develop a new product according to the trends. Let’s say burnt cheesecake is trending, are you able to develop the product for your customers while it is still in trend?
You could also sell festive and seasonal products, when there is a demand for it. For example, Christmas season is the perfect time to sell a moist, delicious Fruit Cake.
Let’s look at the third quadrant, Market Development. Market involves entering a new market, using the existing product range that you have.
Using the same products that you usually produce, you could distribute and sell B2B, for example retail outlets like convenience stores, hypermarkets, your local cafe and even hotels.
Lastly, you could start selling to customers in new locations. You can do this via a business partner or even by using cloud kitchen services. The concept of cloud or shared central kitchens has entered the local scenes recently to assist burgeoning food entrepreneurs scale quickly without the hefty capital investment required. COOKHOUSE is one of those examples and you can explore more about cloud kitchens in the bonus track.
Let’s look at the last quadrant: Diversification. This involves tapping into new groups of customers, with new product offerings.
There are brands out there to outsource their production. This is an opportunity for you to increase your sales volume by having a fixed income over the period of your contract, if you can secure these business opportunities.
You can also venture into a new service offering. For example, you could organise baking workshops for your popular products, although your regular buyers may still prefer to buy these from you!
In Diversifying your business, you could form partnerships with other businesses to develop ‘hybrid’ products and gain access to new markets. For example, partnering with a brand of popular Ice-cream to develop products using their ice-creams.
The options for growing your business are limitless and it is a very exciting stage in a business. Now that you know some of the opportunities to expand, choose the option that is best for you and your business at this stage.
