PPT presentation

Dolce Mamma Bakery

The paper explores a bakery business located in San Diego. The business name of the company is Dolce Mamma Bakery. The paper will explore the bakery in terms of functions and location. It will investigate the best price discrimination technique to acquire more clients while enabling the firm to make more profit. The study will calculate the Economic Order Quantity to examine the optimal order quantity to maintain for soft drinks. Also, it will analyze other aspects of business, such as bribery, false advertising, and protecting the company from copycats.

The Business

The name of the bakery is Dolce Mamma. Dolce Mamma will provide the best qualities and variety of fresh bakes, cakes, sweets, beverages, and homemade juices. The bakery located at San Diego-CA, specifically in the Pacific Beach area, where it has the most significant number of Brazilian who miss an excellent Brazilian fresh bake, sweets, salty and taste of Brazilian cuisine. Dolce Mamma bakery opened to the public to all ages, and social classes, mainly for people who enjoy a fresh-baked. The main products sold in the bakery include cakes, pies, bread, and pastries. The business will have their orders packed so that they can eat at home or any other convenient place. However, we shall have coffee, tea, milk, fresh juice, and soft drinks for the majority of the clients who would like to consume baked food at the beach. Dolce Mamma will employ qualified staff to cook delicious products. It will use a skilled bread-baker and a talented cake decorator for efficient products. Customer care is also an area of great concern and the employees will be efficiently trained to handle consumers complaints.

Price Discrimination

The best price discrimination to engage in a bakery is third-degree price discrimination (Allain, Chambolle, & Turolla, 2019). It entails charging a diverse price to different groups of clients. Dolce Mamma should put such discounts on bakery offers so that people get to know that the business cares about the particular groups. The company should give special discounts to members of a given group such as seniors, disabled, and students. The third-degree price discrimination helps to expand the market by selling the product to a group that wouldn’t buy if there were no such discounts such as the students. The action should not cause a bad feeling among clients who don’t fit in the discounted group because it doesn’t add the price of a good. Also, Dolce Mamma can split its market into off-peak and peak seasons. For example, the demand for cakes can be high during holidays when people are doing weddings. Thus, the bakery should find a way of charging high prices during peak time and charge low prices during off-peak.

The third-degree price discrimination is efficient for a bakery business because it helps it to understand the extensive characteristics of clients. It is easy to understand the traits of a group of clients as opposed to comprehending the buying preferences of a single buyer. Such discrimination can group their customers according to features such as location, sex, age, and economic status. Also, it aids the bakery to lessen its surplus by fulfilling the price elasticity of demand for specific client subsets. Thus, if cookies are eaten more, the business is able to know how much to bake for a day. By doing so, it fulfills the needs of the clients effectively. Additionally, if they rarely consume cakes, the bakeries can advise people to make bookings to avoid excess baking units that can lead to wastage and loss of income.

Economic Order Quantity (EOQ)

The company selects soft drinks that the business sells to its clients and seeks to examine the EOQ or optimal order quantity. The optimal size should balance the ordering and carrying cost so that the company doesn’t hold much than the required (Öztürk, Eroglu & Lee, 2015). Also, it should ensure that it meets the demands of the people touting the Pacific Beach area.

Calculations:

EOQ = √2RD/H

Order Cost = R

Carrying Cost = H

Annual Units Demanded = D

Total Cost= Purchase Cost+ Ordering Cost+ Carrying Cost

EOQ= √ (2x 6,000 x$50) /$2

EOQ = 548

The daily consumption of Soft Drinks can be approximately 20 units. The annual demand in about 300 days is 6,000 units. The study approximates 300 days in a year after removing the weekends, and any other day, the bakery may close its operations. The optimal order quantity for the bakery is 548. If the company holds 548 units, it will have sufficient soft drinks to meet the demand and not excess to make the cost of ordering and carrying to increase.

Bribing Allegations and its Consequences

The business operates in the United States of America. It is a nation that has stringent laws on bribery. In 1977, the country passed the FCPA law that banned firms and people from bribing government officials to influence their decision making. People who infringe on this law can face lawsuits that can result in jail or hefty fines. After its enactment, the law wasn’t very effective. However, in the last five years, it is one feared regulation in the board rooms of the nation. The era of the implementation of the rules referred to as the post-Watergate period.

Dolce Mamma should be aware of the events that occurred or what is known as the Watergate scandal. The political scandal occurred during President Nixon’s time. The scandal that entailed bribing and other uncouth actions resulted in 69 government personnel charged where 48 were found guilty. John Mitchell, who was America’s Attorney General, was found guilty of the offense. If an Attorney General can face charges, then it means that the country doesn’t support any bribery actions that make other citizens get undue advantages over the others.

There is a reason to be concerned about the bribery allegations. A joint venture will create different ways of doing things to gain an added advantage over the competitors. The foreign company bribing government staff to obtain economic gain over other firms is a serious offense. Thus, the option of buying back the business in three years only transfers the liability of the crime to the founder of the Dolce Mamma. The investigators can find out that the business was engaging in bribery and corruption. Such conduct can result in the closure of the bakery. Further, it can result in a lawsuit that can be expensive for the business and its owner. After the investigation, there is a possibility that the owner of the business jailed or fined a lot of money.

Consequences of False Advertising in America

In America, false advertisement has severe consequences on a business. According to Yin & Liu (2017), the Federal Trade Commission is responsible for illegal advertising. Also, other states and federal groups monitor businesses that infringe advertising regulations. They include the consumer protection agency, state attorney general, and the local district attorney.

A misleading advert can be investigated by FTC to examine if it violates any regulations. The commission will investigate the case and check if the advertisement is false and what action needs to be taken to rectify the deceit. The agency can send the business owner to stop running a sham advertisement. If the owner amends the ad to meet the FTC standards, then they can be allowed to continue advertising. Such action includes correcting and dishonesty in the advert, including a disclaimer, and informs the clients who had used the goods and services that they relied on false information to make a choice.

False advertising can result in the company incurring a financial loss. FTC can make a firm to lose a significant amount of money. Pulling an ad means that the firm loses all the money it had used in developing it. Also, FTC can charge a fine for false advertising. In case the agency sues the business, the company will incur legal fees and settle the cost of the case.

The company can avoid false advertisement. Dolce Mamma should be accurate in their presentation of facts. For example, the quantities advertised and the pricing of an item should be reasonable. The company should obtain permission from outside sources used in the advert. It should treat rivals fairly and be careful while using cliché, such as 100% organic or free juice when a client buys certain units. The company should ensure that everything advertised mirrors the original product.

Protecting the Business Idea from being copied

The procedure for safeguarding a business idea is often lengthy and costly. However, the protection offered by a patent business is unmatched. The act of patenting an idea prevents any probable copycats making it hard for any person to steal a concept. Also, if a person doesn’t patent the plan, a competitor can patent it first and force the owner to exit the market. Additionally, patenting a thought increases the market position of a firm by preventing other firms from competing in a particular niche. Thus, the company can achieve a good return on investment by patenting its ideas.

Dolce Mamma may want to patent the various processes of baking their foods to avoid competition. However, the idea doesn’t qualify for a patent. The owner can protect it under the trade secrets regulation. The secret law offers a competitive advantage over rivals in the market. For example, Coca-Cola has a trade secret for its recipe that has closely guarded for years. Thus, the company should ensure that it protects its processes to achieve a competitive gain in the market.

The reason why it is essential to have a trade secret in commercial events is due to the unlikely events in the business environment (Klasa, Ortiz-Molina, Serfling & Srinivasan, 2018). For example, the employees and partners can leak the secrets to competitors hurting the business. Thus, it is necessary to protect the firm against such illegal conduct that can make Dolce Mamma face challenges in the specific niche. Also, it will take the effort of the business person to guard the information it avails to its employees.

Conclusion

Dolce Mamma is a bakery in San Diego that focuses on producing Brazilian baked cuisine. Its best price discrimination technique to acquire more clients while enabling the firm to make more profit is third price discrimination. It helps to fragment the clients depending on their features and help satisfy their needs while making a profit from the sales. The study has examined the Economic Order Quantity for soft drinks. The optimal quantity for soft drinks is 548. Also, it has analyzed other aspects of business, such as bribery, false advertising, and protecting the company from copycats.

References

Allain, M. L., Chambolle, C., & Turolla, S. (2019). The Effect of Input Price Discrimination on Retail Prices: Theory and Evidence from France.

Klasa, S., Ortiz-Molina, H., Serfling, M., & Srinivasan, S. (2018). Protection of trade secrets and capital structure decisions. Journal of Financial Economics, 128(2), 266-286.

Öztürk, H., Eroglu, A., & Lee, G. M. (2015). AN ECONOMIC ORDER QUANTITY MODEL FOR LOTS CONTAINING DEFECTIVE ITEMS WITH REWORK OPTION. International Journal of Industrial Engineering, 22(6).

Yin, J., & Liu, X. (2017). Defining the Scope of Crime of False Advertisement.