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Business Challenges Faced By Cake Shop Company And Strategic Solutions Case Study

Introduction: Business Challenges Faced By Cake Shop Company And Strategic Solutions

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Business consultants are an important part that enables the organization to get expertise and a key objective eye for guiding the business. Perhaps, business consultants offer a “bird’s eye view” of the existing business. The report sheds light on the need for business consultants to manage the struggle of the “Cake shop Company” established in the year 1986 and having its sub-divisions in Banbury and Oxford. The client needs a consultant who will help in the assistance of both the internal and external issues influencing the business and find an optimal solution to manage them adequately.

1. Identification of the potential clients and the problems faced by them

Potential business problem

Figure 1: Potential business problem

The potential client of the “Cake shop Company” is the owner who is preoccupied with plenty of internal and external hindrances and finding suggestions for them. Recently the price of sugary products has been marked with a hike that affects the service gains, manufacturing cost, and the cost of incurring the business (Hartwell and Devinney, 2021). Therefore, the inflationary issues have forcibly instructed them to raise the prices of their products in order to streamline with the expected profit margins. The owner has decided to increase the prices of the sugary products and other expenses that are held within the business. These are the reasons of which the demand for cake and delicacies products in the current year has been lowered down to a significant level. On top of that, the increase in the competitor's availability of “paradise cakes” and “Sugary & confectionaries” in the market and offering versatility to the customers at premium prices have held owners face severe issues. Moreover, it is that the existence of substitute products and business are creating problems for the stability business in the current times. Along with that, the environmental concerns that surround the modern business have also demanded to use of eco-friendly production methods for the products and services offered by the Cake shop. Customers are highly conscious of environmental awareness and purchase products even at higher rates from the business that follows it ritually.

The increasing concern of governmental and political regulation has always been one of the prominent concerns for most industries. These have added to the complexities in the business decisions for prominently most of the businesses at the present date. These involve tax, guidelines, political barriers, ordinances, and many more. All these circumstances have had a direct impact on the profitability and sales vision of the business lately. Apart from this, the rising craze of people over social media marketing and purchases dominates offline stores after the pandemic period. With the pace of technological advent running exponentially at a rapid rate and there has been evidence of capital investments in the technology by most entities. Thus, this has been a problem for the “Cake Shop Company” in the current years, which has declined the sales valuation largely.

The business is becoming more complex day by day with its tasks and activities and the “pace of change quickening” with the preferences of the customers changing rapidly. The proliferation of newly developed products in the bakery vertical is the emerging trend with customized and personalized items coming into the market (Szakonyi, 2020). Every single time there is a sudden need for changes and customization as per the market trend. That is eye-catching for the customers and their expectations. Going ahead with the analysis it has been even observed that the supply chain disruptions after the expansion of the sub-divisions of the business in the market have created extreme pressure on the owner to maximize their productivity and satisfy the needs and requirements of the customer promptly. Since there are some disruptions that are unavoidable and require being proactive in order to be dealt with utter contingencies.

2. Critical analysis of the problem and presenting areas of importance for the client

Customer satisfaction has always been the top priority for the Cake shop ever since its existence and expansion. Besides that, the intriguing sales revenue is at a level where it enjoys maximum profit and tops the market. As per the analysis, it has been identified that the challenges faced by the company and has affected its financial conditions to an extreme level (Rondi et al. 2021). Thus, the owner needs to take necessary care of the following and prepare the business valuation ahead.

Important areas of concern
Target market The target market for the cake business includes people of every age from kids to old age. Apart from this, the requirement of cakes and sugary products is mostly demanded on special occasions. Customers are particular about each deliverable such as the supply chains, prices, location, ability, and the methods of production deployed by the company. The Company can target the market by expanding its operations where the demand for the cakes is higher depending on the population and residential areas nearby. Fulfilling the demands of the customers with unique price proposals and facilities integrated with social media can bring the attention of the customers towards it (Hofmann and Jaeger?Erben, 2020). The reputation of the Company matters the most for the customers as the product is highly sensitive and attached to the health conscious. Therefore they are keen on the making their purchase from a reliable source of vendors.
Competitors' Excellence over the strategies of the competitors can be one of the premium solutions to hit the market. Knowing exactly what the customers and clients of the business expect and hope from its competitors can encourage the growth of the Company in the market. Researching the internal and external management and tactics of the competitors can be helpful in getting a clear picture of their offerings and attracting customers to the Company (Kim and Park, 2022). On top of that, the price of the products is always the top priority of the customers before any purchase. Therefore, the Company needs to devise a solution where it can maximize its profits and retain customer satisfaction at the top of the league. Creating a budgetary plan will be a tentative solution for attracting customers.
Internal and external issues The impact of the external component on the Cake business has a deep impact as per the estimations. The rising prices of the ingredients and energy costs were deemed to be highly pressurizing for the Company. The concern of the environmental concerns in which the Company is located tends to influence the financial position of the Company highly. In addition to that, production function, and increasing impact of the political and governmental scenarios are previously mentioned to be taken proper control over.

Table 1: Areas of concern

3. Identification of the top three vital issues

The issues of the Cake shop Company have to seem to be creating maximum delays in the business success and a decline in the rate of sales growth. Knowing exactly what are the expectations of the customers are from the Company will help in reaching the success point (Ivan?i? et al. 2019). Moreover, as per the diagnosis, it has been evaluated that the impact of the rise in prices of the products is highly risky as it affects the entirety of the Company’s mission to emerge out to be a top-quality brand. Thus, the cost of making the products is becoming tough to be handled for the company along with its offerings to the customers and needs to be devised properly. Second, the changes in the customers' preferences are likely to affect the business to provide them with maximum satisfaction and retention (Indriyarti and Christian, 2020). Apart from that, the rising strategies of the competitors to allure maximum customers towards it are a challenge for Cake Shop. The featuring of the political issues is identified to be affecting the business and operations in the market for the long term. Trade restrictions can simply affect the ability of the business climate over a region. Nevertheless, the satisfaction of the customers with the enhancement in the marketing strategies is quite challenging. However, Cake Shop Company needs to pinpoint diversified marketing tactics that can bring positive sales valuation and increase its valuation. The external environment and the consequences that are faced by the Company to maintain its stability are important.


The entire conclusion has been drawn based on the assessment of the internal and external factors that are deemed to be affecting the performance of the “Cake Shop Company”. The need for hiring the business consultant is further guidance and recommendation. In addition to that it is important for bringing a culture of growth in the business and its entirety. As per the evaluation, there have been various internal and external issues that have been pinpointed based on the operations and market research. These issues have been projected and have been provided with an optimal solution to solve them and bring in forth stability to the key objectives of the Company. The present state of the organization is diagnosed and consultants are meant to provide optimal solutions and strategies to be carried out henceforth. The impact of customer satisfaction, political issues, and inflation has tended to impact business operations and performances severely.


Hartwell, C.A. and Devinney, T., 2021. Populism, political risk, and pandemics: The challenges of political leadership for business in a post-COVID world. Journal of World Business56(4), p.101225.

Hofmann, F. and Jaeger?Erben, M., 2020. Organizational transition management of circular business model innovations. Business strategy and the environment29(6), pp.2770-2788.

Indriyarti, E.R. and Christian, M., 2020. The impact of internal and external factors on taxpayer compliance. Journal of Business & Applied Management13(1), pp.033-048.

Ivan?i?, L., Vukši?, V.B. and Spremi?, M., 2019. Mastering the digital transformation process: Business practices and lessons learned. Technology Innovation Management Review9(2).

Kim, E. and Park, S.E., 2022. The determinants of supporting crowdfunding sites: Understanding internal and external factors from public relations’ perspectives. International Review on Public and Nonprofit Marketing, pp.1-19.

Rondi, E., De Massis, A. and Kotlar, J., 2019. Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system. Journal of family business strategy10(4), p.100236.

Szakonyi, D., 2020. Politics for profit: Business, elections, and policymaking in Russia. Cambridge University Press.

think-beyond.co.uk (2022) Business problems are mounting but there are options for troubleshooting Available at: https://www.think-beyond.co.uk/business-problems-are-mounting-but-there-are-options-for-troubleshooting/ [Accessed on 01st January 2022]

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