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LON180103005
Unfair advantages and Stream revenue

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Daniela Botezatu
LON180103005
Unfair advantages and Revenue streams

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Ioan-Paul Ploscariu

LON180108010

Overview for Cost Financial Year Ending 2019

Debtors and Creditors Accounts Overview 2019

Net Worth, Assets and Liabilities, 2019

Recommendations:

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Key activities & USP of Primrose bakery

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Elena Giorta LON180104010 Problems and Solutions

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LON180803008
Channels & Customer Segments

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Ioan-Paul Ploscariu
LON180108010

The financial statements of the company issued in December 2020 outlined its cost structure. The cost of the intangible fixed assets for the company minus the amortisation and impairment costs stood at £20,000. The land and building's tangible fixed asset costs stood at £79,117, whereas the same cost for plant and machinery remained at £130,225, bringing the total cost of tangible fixed assets to £209,342. The depreciation charged for the year was £11,443. The final total costs of tangible fixed assets were reported at £122,484. The total amount owed by debtors in 2019 was £124,442, whereas the total amount owed to creditors was £137,663. This included bank loans and overdrafts, tax creditors, corporation tax, and other taxation and social security amounts. The Director's loan amount remained at an outstanding balance of £87,821 (Companies House, 2021).

An internet search for the company showed that its net worth had fallen by 266.6%, down by £10,700. However, the company's total current assets had risen by 45.18%, and the total current liabilities had fallen by 0.2%. As the following figure shows, the company's total assets at the end of their financial year 2019 stood at £190,259. In contrast, the total liabilities stood at £201,003, creating a negative net asset value of £10,744, as stated above (Endole, 2021).

Fig.1

A comparison of the 2018 and 2019 accounts for the Bakery show that there has been a decrease in the fixed assets of the Bakery from £91,066 to £47,059. The stocks for the company have also decreased from £25,728 to £17,511. The debtors owed the company £124,422, up from £71,855 for the same corresponding period. Cash at bank and in hand has remained around £1000 for these periods. This means that the total assets of the company have risen between the two periods. However, the total assets less the company's current liabilities remain around the same figure of £52,000 for 2018 and 2019. The company's total equity is £10,744 for the year 2019, up from £6,949 for the year 2018. The company's financial statements for the year 2019 also maintained that the Director had reasonable expectations that the company would continue its operations for the foreseeable future because of the resources it currently held. The director had already made strategic decisions required for the company's profitable operation to continue, which had resulted in improved profitability in the first half of the year 2020 (Companies House, 2021).

These financials show that the company's running cost has been on an upward trend. There may be a need for the company management to look at recovering debts, cutting down costs, and looking at pricing strategies to enhance its financial viability. This could include reviewing current product prices, introducing new products and features, and marketing strategies to enhance its financial status.
FIg.1 (Excel, 2021)

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Mimi-Daniela Botezatu
Lon180103005

It is London’s most popular bakery shop that is highly enthusiastic in providing services of decorations, cakes and pastries to the people of London ( Primrose Bakery, 2021). The revenue streams are varied in the company, as it provides special classes to individual and even to groups for various ways of decorations. However, the classes and courses for baking the cakes are not provided by the company ( Primrose Bakery, 2021). The head chefs are highly oriented towards icing the ingredients all by themselves. The participants to the courses can take home all the products that they have made during the curse and they will have the opportunity to ask for tips or anything that they are concern about the baking course ( Primrose Bakery, 2021). The gifts which are sent and presented by the company are very attractive and unique. Since the target population were initially, the children, therefore, the company provides different variations of colours, tastes and presentation for the cakes and pastries (Primrose-bakery.co.uk, 2021).

From the above discussion, it can be concluded that the Primrose Bakery has the advantage of being a family-oriented business and serving the people of London with supreme quality of cakes and pastries. Besides, the revenue which is generated from the application and cookbooks are other forms of ways by which the company generates the revenue.

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Mimi-Daniela Botezatu
Lon180103005

In order to understand the strengths and opportunities available to the company, identification for the unfair advantages available to the company and the revenue stream, that is from where the revenue is generated by the organization. It will help in critically identifying the ways in which the company can increase the market share and generate revenue from the London market.

Unfair advantages

Primrose Bakery is a bakery shop, based in London, which was initially founded in October 2004. The company was initially started by Martha Swift and Lisa Thomas for baking cakes, especially for the birthday parties of children (Primrose Bakery, 2021). The unfair advantage of the company is that the bakery delivers products all across the London (Primrose-bakery.co.uk, 2021). Besides, within a span of 15 years only, the sole owner of the business Martha has laid the company to own five bestselling cookbooks. In order to make the delivery process easier, an application has also been developed. In the local markets where the company operates, the maximum delivery timing is half an hour ( Primrose Bakery, 2021). Therefore, the efficiency of the organization to keep the productivity integrated during the peak seasons, the production process is effectively maintained along with the delivery and supply chain management. Even during the late phases of Covid-19 pandemic, the company has delivered birthday cakes and pastries to the local places in London. The people also like the products, because the company is still family owned and everything which is used as ingredients is hand iced and baked. Therefore, the essence of simple and old fashioned cooking strategy is persistent in the company ( Primrose Bakery, 2021).

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Elena Giorta
Lon180104010

Primrose started planning strategically to overcome all these problems and to generate more income. They started with a then holistic view to limit the energy cost.  The quality of the bread is determined by the mixing and processing and a lot of costs are involved in this process.  By paying greater attention to the basics, the marginal gains were showing good results by combing the innovation and enhanced process control. The bakery conducted a thorough market analysis and came up with the idea of making gluten-free bread. Primrose bakery even started baking a cake with milk alternative and thus understanding the demands of the consumers. Primrose took the challenge of sugar reduction by 20 % and began to use sugar alternatives, and using more natural fruit and sweeteners derived from them( primerose-bakery, 2021).

Primrose bakery handled the Brexit situation by producing imported raw material in the home state (primrose-bakery, 2021).  This approach was profitable and offered customers assured high quality of food products. This not only started to attract more customers but their popularity increased. A bakery serving gluten-free bread, cakes with no sugar and added preservation was a big hit in the market. They even constantly kept promoting their business online to engage customers a lot more. Primrose bakery were successful in limiting the use of colour, artificial flavour, humectant and sugar content. Instead, they used natural products, fruits, flavours with nutritional benefits. Primrose proved that having a vision, being bold and staying committed to the plans surely brings success to the company  (primrose-bakery, 2021).

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Elena Giorta
Lon180104010

Primrose bakery is a cake shop in the UK trying to give the essence of the old fashion cooking to the consumers. During their course of actions, they faced some problem that was hindering their growth and sales. The rising costs of the raw material and the distribution cost and at the same time the process of the final products were rising (Widhiasthini et al., 2020). With the rise in the prices of cakes and cupcakes, the customer of Primrose bakery was shifting to other shops. The maximum cost of a budget was spent in the process of converting the dough to the bread and other items. Primrose bakery makes delicious cupcakes and cakes that have a high content of gluten and milk. The customer food behaviour was changing day by day, so the customer demanding gluten-free bread and those who were lactose intolerance were not able to buy the cakes from this bakery. This was hampering the sales of Primrose bakery as they were not able to understand the customer demands and the current market trends. Cakes mean sugar and the sugar reduction news was threatening for any bakery(Primerose Bakery, 2021).

The backlash they were facing for the processed food was hampering their reputation and revenue generation. The customer was avoiding bakery items for high sugar content which was actually becoming a health concern for the UK citizens. Another problem that Primrose was facing unavoidable circumstances due to the Brexit situation as the UK imports over £2bn baker products from the EU (Gasiorek et al., 2019). With the new legalities, the bakeries such as Primrose bakery were facing problem getting hands-on their key ingredients. All the combination of situations were greatly hampering Primrose bakery to function effectively.

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Anamaria Udrea
Lon180104012

The bakery is  counting many famous faces in their client's list because they are on the list of the best bakery and deliveries,  the following are proof of this :
- https://www.countryandtownhouse.co.uk/food-and-drink/best-bakeries-london/
- https://underthedoormat.com/explore-london/10-of-londons-best-bakeries

Why is Primrose Bakery different?

This bakery is using only fresh seasonal ingredients of high quality, free-range eggs and organic products.

Cake decorations - everything is hand-iced to really give the essence of simple old-fashioned cooking (Primrose Bakery, 2021). Primrose Bakery also has several books on the market where cupcakes lovers can find various recipes and discover secrets:

The Primrose Bakery book contains over 100 inspirational recipes and easy to follow for cupcakes, layered cakes, cookies, bread, and more tips like the perfect icing.

- Primrose Bakery Celebration book – 3rd book sharing new flavours.

- Primrose Bakery every day – the 5th recipe book divided into 4 seasons.

They do offer classes -  all the participants receive tea, coffees, cold drinks also a Primrose Bakery tote bag and a voucher for a free delicious Primrose cupcake to redeem next time coming in. Participants can learn and discover secrets and how to customise their own cakes from the best Chefs: Standard classes, Special classes, Private classes, Corporate events/classes, each class has a different price.

Contact us page - FAQ - they have a special section on the website with the most general questions to make the purchasing process easier. They can also create their own account plus and cake emergency contact telephone number (Primrose Bakery, 2011).

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Anamaria Udrea
Lon180104012

For more than 17 years, Primrose Bakery is known as a family business that bakes in small batches handmade cupcakes and decorates everything by hand, which brings joy to children and adults; they have 3 shops located in: Primrose bakery Hill, Covent Garden and Kensington, (Primrose Bakery, 2021).

Primrose Bakery has a very professional website where all products and services are exposed in the product catalogue for customers who prefer to order online.
Primrose bakery products (delivery cost) - delivered within London area or collection in-store, customers can order online, phone, in-store, email or WhatsApp.
Primrose activities - they do serve breakfast every day of the week; for weddings, the bakery offers rental set up services with a full delivery, customise any cakes on clients requests and on top of that, complimentary consultation with wedding consultants.
They have an online gift shop; mugs, greeting cards, plastic cups, candles, vouchers of £10, £20, £30 and recipe books.

3 DIY baking kits - launched during the lockdown great for everyone, available across London a few items throughout the UK.
Location hire – the location is valid for rent for various occasions (Primerose Bakery, 2021).

Those sales such as location hire, weddings, classes, serving breakfast, gift shop, and selling books are the most important activities that help generate income.

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Keren Gisela
LON180803008

Primrose Bakery offer different products and classes that targeted different customers segments who are based in London area only which is a good area as London is the capital of UK and is a busy city, this will allow them to reach a lot of customers. (Primrose Bakery, 2021)

With families and children, they may look for different events or celebrations such as birthday, Mother’s Day, easter, or simply just want to treat the family members or their children, also with the sweet and beautiful decoration, they are able to lure the children to make their parents to buy it. With couples or adults, they may look for engagement or wedding cakes, or any celebrations, which allow them to choose different types of cakes or desserts for the guests or other half. (Primrose Bakery, 2021)

Students and sweet eater customers would be looking for their favourite flavour or based on the decoration which can attract them to buy or try new desserts. Corporate also will look at the class service for their staff for bonding exercise or simply just to treat their staff for their hard work. (Primrose Bakery, 2021) Free from range will lure people who have specific dietary requirements such as vegan, gluten free or naturally sweetened desserts, in which not many bakeries have to offer. (Primrose Bakery, 2021) People who love baking would take classes or buy cakes to recreate it at home. However, through lockdown, they have launched DIY kit who are available to the customers throughout UK. This allows them to bake their own dessert at home. (Primrose Bakery, 2021)

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Keren Gisela
LON180803008

Primrose bakery has a bakery in Primrose Hill, London which allow local to come in and make a purchase. They also have different channels where they can reach their customer segments just outside the area. (Primrose Bakery, 2021) Advertising with digital marketing through online articles, official website providing any information customers may want or need to know, as well as the product catalogue, classes and making an order and social media platforms with large number of followers which allows them to reach a wider target market, such as Instagram (129K), Twitter (17.6K) and Facebook (29K). (Primrose Bakery, 2021) These are known to be more cost efficient and work best; most people have a social media account, as it cost nothing to join, and it allows them to share posts with their family and friends and Through social media insights also allow them to check on their customer segments, audience; age, gender, best time to post when its most active, and location and potential customers from other cities or countries would know about them and make a visit when they’re around the area.

Through newsletter they can advertise or send any updates about new cakes, gifts, services, etc. to their customers who has subscribed. (Primrose Bakery, 2021) When customers have good experience, they can share these experiences to potential customers through online reviews and word of mouth to family, friends and colleagues. (Primrose Bakery Tripadvisor, 2021) They also advertise using traditional marketing such as press features on newspapers and magazines, which allows them to reach customers offline who has no social media or internet. (Primrose Bakery, 2021)

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- Primrose-bakery.co.uk. 2021. Cake Shop London | Best Cupcakes in London | Covent Garden Cafe. [online] Available at: <https://www.primrose-bakery.co.uk> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose-bakery.co.uk. 2021. Press Features | Primrose Bakery. [online] Available at: <https://www.primrose-bakery.co.uk/our-stores/press> [Accessed 18 March 2021]. (K.G : LON180803008)

- Find-and-update.company-information.service.gov.uk. 2021. PRIMROSE BAKERY LIMITED - Overview (free company information from Companies House). [online] Available at: <https://find-and-update.company-information.service.gov.uk/company/06774788> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose Bakery Instagram 2021. [online] Available at: <https://www.instagram.com/primrosebakery/> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose Bakery Facebook. 2021. Log in to Facebook | Facebook. [online] Available at: <https://www.facebook.com/primrosebakerylondon/> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose Bakery Twitter 2021. [online] Available at: <https://twitter.com/primrosebakery?lang=en> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose-bakery.co.uk. 2021. Newsletter | Cupcakes To Order London | Primrose Bakery. [online] Available at: <https://www.primrose-bakery.co.uk/newsletter> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose Hill. 2021. Primrose Bakery Everyday. [online] Available at: <https://www.primrose-bakery.co.uk/shop/primrose-bakery-everyday> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose-bakery.co.uk. 2021. Primrose Bakery Gift Shop | Cake Delivery London | Cupcakes to Order. [online] Available at: <https://www.primrose-bakery.co.uk/shop/gift-shop> [Accessed 18 March 2021]. (K.G : LON180803008)

- Tripadvisor. 2021. PRIMROSE BAKERY PRIMROSE HILL, London - Updated 2021 Restaurant Reviews, Menu, Prices & Restaurant Reviews - Food Delivery & Takeaway - Tripadvisor. [online] Available at: <https://www.tripadvisor.co.uk/Restaurant_Review-g186338-d6945315-Reviews-Primrose_Bakery_Primrose_Hill-London_England.html> [Accessed 18 March 2021]. (K.G : LON180803008)

- Facebook.com. 2021. Primrose Bakery. [online] Available at: <https://www.facebook.com/pg/primrosebakerylondon/reviews/?post_id=10207279935009152&referrer=page_recommendations_home_card> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose-bakery.co.uk. 2021. NATIONWIDE DELIVERY. [online] Available at: <https://www.primrose-bakery.co.uk/shop/diy-baking-kits-nationwide-delivery> [Accessed 18 March 2021]. (K.G : LON180803008)

- Primrose-bakery.co.uk. 2021. Frequently Asked Questions | Primrose Bakery. [online] Available at: <https://www.primrose-bakery.co.uk/order-online/faq> [Accessed 18 March 2021]. (K.G : LON180803008)

- Gasiorek, M., Serwicka, I. and Smith, A., 2019. Which manufacturing industries and sectors are most vulnerable to Brexit?. The World Economy, 42(1), pp.21-56.

- primrose-bakery, 2021 Our Story [Online] Available at : https://www.primrose-bakery.co.uk/our-stor [ Accessed on 21.3.21]

- Widhiasthini, N.W., Suryawati, P.I. and Pika, P.A.T.P., 2020. Bakery product choices and behavior change for different generations. International Research Journal of Management, IT and Social Sciences, 7(5), pp.188-195.

- Primrose-bakery (2021).  Cupcakes from the Primrose Bakery : Cupcakes from the Primrose Bakery. Book Depository [online]. Available from: https://www.bookdepository.com/Cupcakes-from-Primrose-Bakery-Martha-Swift/9781856268479 [ Accessed on 22/03/2021].

- Primrose-bakery.co.uk (2021). Cupcake Baking Courses London | Primrose Bakery. [online] Primrose-bakery.co.uk. Available at: <https://www.primrose-bakery.co.uk/shop/classes> [Accessed 24 March 2021].
Primrose-bakery.co.uk (2021)  Special Classes [online] Available from: https://www.primrose-bakery.co.uk/shop/themed-classes [ Accessed on 29/03/2021].

- Primrose-bakery.co.uk (2021). Primrose bakery [online]. Available at : https://www.primrose-bakery.co.uk/ .Accessed [29.03.2021].

- Virgin start up (2020) Martha Swift: Think Big but start small when you start a business. Virgin start up [ online].Available at:https://www.virginstartup.org/how-to/martha-swift-think-big-start-small-when-launching-business .Accessed [29.01.2021].