Redhawks Consulting

Key Concern

Pan Boricua must decide whether to expand, stay in markets where they are weak, and/or expand to other

markets in the United States.

Supplier Power

Buyer PowerCompetitive Rivalry

Threat of Substitution

Threat of New Entry

-High differentiation of inputs-Low supplier power-Moderate supplier concentration-Low costs to total purchases in industry

-High volume-High buyer power-High concentration (niche market)-High price sensitivity-High product differences

-High threat of substitution-High variety of substitutes-Low switching costs

-High access to inputs-Moderate threat of new entry-Low capital requirements-Moderate regulation-Moderate brand identity

-Low profit margins-High variety of product-High competitive rivalry-High concentration of competitors-High amount of distributors

External Analysis

Five Forces

Analysis

Socioeconomic Factors Potential Growth

2010 2015 2020 2025

Hispanic Population (million)

49,872 56,836 64,203. 72,142

Hispanic Consumer Spending(billion)

1,038 1,495 2,155 3,060

Average Annual Growth of Hispanic Consumer Spending

7.7% 7.6% 7.6% 7.3%

PESTLE

Analysis

Socioeconomic Factors

Hispanics spend 43% more on food than non-Hispanics

Hispanics spend more than 30% of food money on specialty shops such as bakeries

Hispanics take and average of 26 trips to the store a month

Food plays a large part in family traditions

PESTLE

Analysis

Strengths

• Exclusive exportation rights with a leading producer*

• Quality product• No competition agreement

with Mi Pueblo supermarkets• Already established in large

market

*distinctive competence in this area

Weaknesses

• Weak brand image• Dependent on distributors• Limited exposure in the

United States

Opportunities

• Expansion of offerings• Increase in Hispanic

population• Specialized product

Threats

• New entrants into the market

• Rising transportation costs• Growth in Hispanic bakeries• Niche market

SWOT AnalysisSW - Internal …. OT - External

Analysis

Alternatives

1. Stay in current markets (weak and strong)

2. Explore new markets while revamping current market

3. Merger with Mi Pan4. Replicate Mi Pan business plan

Alternatives

Stay in Current Markets

Positives Already Established▪ Distributors▪ Brand Image

Low Cost

Negatives Little growth

potential Weak markets

consume resources with low margins

Competitors reach other markets

Analysis

Expand and Revamp

Positives High Growth

Potential Spread Brand

Recognition

Negatives Costly Chance of failure in

New Markets No change in weak

markets

Analysis

Merger with Mi Pan

Positives Uses each

companies distinctive core competency

Eliminates competition in low margin business

Negatives Give up some

control Potential for

Rejection and/or Failure of New Company

Analysis

Replicate Mi Pan Business Model Positive

Proven Business Model

Expansion into new markets

Negative Reactive Followers Failure to replicate

success More direct

competition drives margins ever lower

Analysis

Weighted Competitive Strength Analysis

Key Success Factor

RATING

WEIGHTRank Total Rank Total Rank Total Rank Total

Growth Potential

0.3 1* .3 4 1.2 5 1.5 3 .9

Strategic Fit 0.2 2 .4 3 .6 4 .8 3 .6

Follow mission

0.25 2 .5 4 1.0 4 1.0 4 1.0

Financially Feasible

0.25 5 1.25 3 .75 4 1.0 2* .5

Total 1.00 1.45 3.55 4.30 3.00

ALTERNATIVES:

1 2 3 4

Alternatives1. Stay in current markets (weak

and strong)2. Explore new markets while

revamping current market3. Merger with Mi Pan4. Replicate Mi Pan business plan

Ranking Scale 1: The alternative does not effectively address this criterion. 2: The alternative may contribute to addressing this criterion. 3: The alternative provides an average solutions to this criterion. 4: The alternative provides an above-average solution for this criterion.

5: The alternative effectively addresses this criterion. Analysis

Recommendation

Alternative 3 - Merger with Mi Pan (I added this)

Recommendation

Implementation: Short-

term??? 3 months 6 months 9 months 12 months

Develop Merger Proposal

Negotiations

Implement Merger

Finalize Agreement for NY

Enter NY Market

Implementation

Short-term - Implementation

Activity Details

Develop Merger Proposal • Company Executives• Highlight distribution incentives and

benefits of merger

Negotiations • Company Executives• Approach Mi Pan with proposal• Negotiate Details

Implement Merger

(Milestone Review)

• Company Executives• Consolidate companies & establish

efficient means of conversion

Finalize Agreement for NY • Finalize distribution agreements from previous plans that were developed through each company

Enter NY Market

(Milestone Review)

• Begin distribution

Implementation

Implementation: Long-

term??? 24 months 30 months 36 months 48 months

Research Miami Market

Finalize Agreement for Miami

Enter Miami Market

Evaluate Expansion Plan

Implementation

Long-Term - Implementation

Activity Details

Research Miami Market • Management Team• Begin research and evaluation of entry

Finalize Agreements for Miami

(Milestone Review)

• Company Executives• Finalize distribution and location

agreements

Enter Miami Market • Begin distribution

Evaluate Expansion Plan • Company Executives• Evaluate Success of merger & potential

for future expansion

Implementation

Risks, Mitigations (?) and Contingencies

Joint venture into New York Expand into other markets and

revamp current market hold

Risks Probability

Mitigation Contingency

Mi Pan resists plan to merge

Low Offer employment opportunities to displaced workers

Explore alternate sources of funding to replicate Mi Pan business plan

Implementation