Super Bakery What Strategies Did the Management Essay

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Super Bakery

What strategies did the management of Super Bakery, Inc. use?

Realizing that they were in a highly competitive, and at times commoditized business, Super Bakery Inc., relied on a series of strategies to differentiate themselves from their competitors while also concentrating on key accounts. The bakery wisely concentrated on high-value segments and strategies that could drive greater profitability on an account basis. These strategies included concentrating on the school system segment of the institutional food market for schools, whom the company believed was poorly served with existing bakery products. Super Bakery also pioneered low calorie, vitamin enriched donuts that met USDA guidelines and strived to taste good too. This strategy proved prescient for the bakery as high-fat donuts began to decline due to the public's concern over healthy snacks and eating (Davis, Darling, 1996). The second strategy the Super Bakery relied on was avoiding the local market restriction of most fresh baked goods by refrigerating the product, vacuum-sealing it and distributing it nationally (Davis, Darling, 1996). This gave Super Bakery the opportunity expand distribution and gain market share in a highly fragmented market. Third, Super Bakery chose to collaborate with suppliers, distributors and key members of their value chain to further drive down costs for customers through the use of government-supported commodities (Davis, Darling, 1996). Finally, and what forms the basis of this case study is the decision by Super Bakery to become a virtual corporation by drastically reducing capital investment over time, leading to higher levels of profitability (Davis, Darling, 1996).

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Super Bakery manages its brand and marketing, yet does not manufacture, sell or distribute its products (Davis, Darling, 1996). All of these factors taken together have led to Super Bakery to become very competitive in their served markets, often gaining market share in key institutional and school markets.

Why did Super Bakery's management think it was necessary to install an ABC system? Do you agree with their reasoning? If you disagree, identify your recommended costing system, including your rationale, to management.

The Super Bakery management decided to install an ABC system so it could track profitability by accounts, and also it would give contractors greater flexibility in tracking outside contractors more effectively as well (Davis, Darling, 1996). The ABC system also provided the company with the ability to use a distributed order management system, which is critical to supporting their virtual organization. This would allow the company to also mange its costs across the entire value chain of the business with greater accuracy and precision. ABC Systems are commonly used for managing distributed manufacturing and distribution centers as they provide a high level of costing and pricing precision (Latshaw, Cortese-Danile, 2002).

Would a job order cost system or a process order cost system work for Super Bakery. Why or why not?

A job order cost system would not be able to provide the full functionality and cost traceability that the ABC system is. And it would also force the….....

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