Gaining Brand Loyalty as a Start-up Company
Fit Sweets Inc. is a new up and coming bakery located in Knoxville, TN, which places a new twist and a healthy edge to sweet lovers all around. This company has diverted from the original bakery scene holding mounds of frosting, donuts dripping with sprinkles, and towering cakes. The owners of Fit Sweets Inc. have created a completely new line for deserts that are gluten free, sugar free, low calorie, and protein packed and still yet great tasting. Holding an unbelievable nutritional rating, anyone can eat these sweets regret-free. The co-founders of the organization hold no business background and started Fit Sweets with a trial and error approach to baking. These instances certainly pose a problem to attracting customers, maintaining a loyal customer base, and succeeding heavily in the key business aspects. Thus, the objective of this case study is to analyze the Fit Sweets corporation on all levels in order to recommend some options that will improve the business in terms of revenue, customer value, management style, and profitability. According to Guga (2013) one of the initial goals for a start-up company is to break even (p. 41). However, for Fit Sweets this is proving to be somewhat difficult in a company without a low-cost strategy and a scattered customer base.
This business is relying on their differential strategy of "impossibly healthy sweets" to attract a health/fitness crowd they hope will not stray away. In alignment with their strategy, the location of Fit Sweets has served as a key factor in their success thus far. Choosing a property in a chained business/shopping center on a heavy traffic highway known as Kingston Pike in Knoxville was a great decision. Still yet the chief advantage of this low-cost rental space were the two fitness centers in good proximity to Fit Sweets. Co-Founders Sergio Sanchez and Brandon Blancherd hand picked this property directly next to Knoxville Cross Fit and diagonally across from Planet Fitness. These gyms serve as a high customer base for Fit Sweets. After a hard work-out it is easy for these individuals to walk to the bakery and select a delicious treat in which they feel will aid their workout, due to the protein, instead of destroying it. These two fitness centers as well as a few others across Knoxville serve as another outreach source for the store. This is another great idea the two owners have used to advertise as well as sell and make a good profit from. Gym coolers are packed each day with a variety of the menu options from the bakery and then distributed 5 local gyms. These products are sold at wholesale price and the gyms add margin to keep any other profit for their own. In turn these fitness center partnerships compile to form an advancing sixty percent of the organization's income (Blancherd, B. and Sanchez, S., personal communication, March 15, 2014).
Other aspects for uniqueness of the organization are encompassed by a mall cart and advertising and selling at race and fitness events locally. The owners decided to purchase a store cart in the West Town Mall approximately 4 miles from the store location. The cost of the cart was $800 a month, but when analyzing from a customer point profits will be made. On a daily basis if twenty customers will visit the store, Fit Sweets will earn an estimated $200. However, the mall cart will gain much more attention than twenty people, especially if placed tactfully at the food court center. Sergio and Brandon are also hitting the health/fitness world with their organization at local events. They recently set up a booth at the Barley's St. Patrick's Day 5K race and attracted several customers as well as advertising through word of mouth to a great audience of fitness generated individuals (Blancherd, B. and Sanchez, S., personal communication, March 15, 2014).
Stated from a presentation for the foundations of business strategy, "If everyone can do it, it's difficult to create and capture value from it" (Analyzing firm capabilities, 2014). This is a definite fundamental principle for business strategy and every company must look from the inside in order to see if they are truly creating value for their customers. In terms of the core competencies for Fit Sweets Inc., as previous stated location, business routines, and the taste factor are the major sources for uniqueness and originality. These are the compilations that will stand as the key driving forces for the company. Obviously everyone cannot do what Brandon and Sergio are doing or else there would be many other competitors in Knoxville, Tennessee, and around the globe. However, this is a unique company altogether which has amazing potential for success. On a capability analysis the processes, people, and systems for each core competency must be aligned in order to reinforce and build the capabilities. In terms of the location, unique business routines, and great-tasting healthy snacks the organization is succeeding in all levels.
In a competitor analysis Fit Sweets was compared to local bakeries on price and nutritional value. Gigi's Cupcakes, Crumb's Bakeshop, and Sprinkles Cupcakes were the companies used for comparison. One each one Fit Sweets came out on top for the best overall nutritional value, which is the concept for the company mission. For calories Fit Sweets was the lowest by 400, fat by 29 grams, carbohydrates by 80 grams, sugars by 45 grams, and highest protein content by 10 grams. However, Fit Sweets had some of the highest prices for their products (Impossibly healthy, 2013).
Through this case study and various other analysis tools, several observations were made to conduct certain findings in the right directions. A few things that fell out of the various analysis tools used were the high prices, menu options, customer base, and advertisement. Thus, in response to these findings, recommendations were to follow. A few recommendations that will aid in initial success and potentially gain Fit Sweets brand loyalty in Knoxville and other areas is to lower the prices of the desserts, expand menu options, and conduct more low-cost advertisement. Following a slow, but steady implementation plan for these recommendations will expand their customer base and advance Fit Sweets to a new reputation for a successful business in impossibly healthy sweets.
References
Analyzing firm capabilities. (2014). [powerpoint slides]. Retrieved from https://lmunet.blackboard.com/bbcswebdav/pid-59842-dt-content-rid-158542_1/courses/2014SP_MBA-630-K1/Analyzing Firm Capabilities-1-27-14.pdf
Guga, L. (2013). Breakeven calculation of the company when starting a business. Bulletin of the Transilvania University of Brasov. Series V: Economic Sciences. Vol 6 Issue 1, p. 41-46.
Impossibly healthy. (2013). Fit Sweets. Retrieved from fitsweets.com.
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