2 Helen Bradshaw, a recent graduate with a degree in catering management, has spotted a market opportunity during
her first job with a large supermarket chain. She knows there is a growing market for distinctive, quality cakes in the
bakery sections of the supermarket chains, as well as in supplying independent individual premium cake shops, and
also for catering wholesalers supplying restaurants and hotels.
Helen is very determined to set up her own business under the brand name of ‘Helen’s cakes’, and has bought some
equipment – industrial food mixers, ovens, cake moulds – and also rented a small industrial unit to make the cakes.
Helen has created three sets of recipes – one for the premium cake shop market, one for the supermarkets and one
for the catering wholesalers but is uncertain which market to enter first. Each channel of distribution offers a different
set of challenges. The premium cake shop market consists of a large number of independent cake shops spread
through the region, each looking for daily deliveries, a wide product range and low volumes. The supermarkets are
demanding good quality, competitive prices and early development of a product range under their own brand name.
The catering wholesalers require large volumes, medium quality and low prices.
Helen has learnt that you are a consultant specialising in start-up enterprises and is looking to you for advice.
Required:
(a) Acting as a consultant, prepare a short report for Helen advising her on the advantages and disadvantages
each channel offers and the implications for a successful start-up. (12 marks)
