Grupo Bimbo Case

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Norbert Guery

Gupo Bimbo Case

Summary: Bimbo is one of the world's leading baking companies. Founded in Mexico, Bimbo is a house-hold name in its native country. Today, the company's wide product range includes sliced breads, buns, cookies, snack cakes, pre-packaged foods, tortillas, salted snacks and confectionery products. Profitability in Mexico is optimal, partly due to its vending distribution through small, independent mom-and-pop stores. In addition, its product development and incorporation of a wrapping system that’s allows consumers to see and feel the freshness of the product has created a competitive advantage in comparison to its consumers which had used wax materials for years. A broad portfolio of products enables Bimbo to attract new customers along with retaining the existing ones, and also allows it to enhance revenues by offering volume discounts to retailers. However, across the northern border, although the market and Hispanic population are large, profitability has been difficult to attain.

Issues: In the United States, the growing of popularity of grocery store usage has made it difficult for Bimbo to attain profitability as these wholesalers are able to dictate lower. Furthermore, although various brands had been successful for Grupo Bimbo, the success of these brands was not enough to carry the weight of all the other unprofitable brands it owned in the United-States. The naming of the company also disturbed brand recognition. Although the name Bimbo is positively viewed by Hispanic consumers, Americans found it awkward. In the meantime, delivery trucks carried the local brand name on them instead of publicizing Bimbo’s name. States with unionized contracts for truckers also interfered with the satisfaction of its customers. These contracts scheduled deliveries on weekday mornings, however the trend had evolved and wholesalers had increasingly asked for shelves to be restocked later during the day or even during the weekend....
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