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Belloubuona Case Study

884 words - 4 pages

Q1. Do you think it’s a good idea to go right into your own venture after school, or work and get experience?
According to me, starting your own venture right after school or getting an MBA degree seems like a great idea but should be avoided at all costs. The reasons for this are:
1. You will not get time to learn from your mistakes- One of the great parts about working for a larger company is that you have time to get proper training. Early mistakes are expected, and you usually have a supervisor. While you can't mess up too bad, there's a cushion for you to get up to speed. When you start your own company, you have to make game changing decisions every day. The room for error is ...view middle of the document...

Analyze the Bagelz income statement on page 270. How could they improve performance?
By analyzing Bagelz income statement we can see that their COGS is pretty high. It takes away 60% of their revenue, leaving just 40% for gross profit. The 2 major components of this cost are the wages (25%) and Food costs (21%). Their gross margins are very less when compared to the bakery industry in general. My recommendations would be:
1. Increase the prices of their bagels so that they can get more revenue and increase their gross margins.
2. Reduce the cost of Raw materials, either by finding new suppliers or buying in bulk to better negotiate the prices.
3. Opening more stores so that the fixed administrative costs can be spread more evenly. This will also help them to buy in bulk and negotiate the prices.
Q4. What are the two main strategies that the partners agreed on? Which one do you think they should pursue, and why.
The partners were evaluating 2 strategies. The first was to make Fred DeLuca a partner and start franchising and the other strategy was to expand rapidly throughout Connecticut. I think that franchising would be a better option for them. The reasons are as follows:
1. Lower capital needed: if they franchise, they can shift the cost of operations, wages, and finding the new locations to the franchisee. This will...

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