Alcasid, Vladimir 0917 476 1045 FIN
Olivan, Albert 0922 766 6578 MKT
Pangan, Emmanuel 0925 839 0864 MGT
Purugganan, Kisha 0917 922 9775 CAMMKT
Tui, Camille 0917 817 0789 FIN
CASE 3 Sift Cupcake and Dessert Bar
Written Case Analysis
A. Case Background
Sift Cupcake and Dessert Bar had its third successful cupcake shop in Santa Rosa, California. The owners and managers, which is composed of family members and best friend, are now in a dilemma on preparing a business and strategic plan for their application for a Small Business Administration (SBA) Loan. The loan will be used for rebranding and expansion.
In 2006, Andrea Ballus had an obsession with cupcakes and wanted to share her enthusiasm with the world. Started as a sales representative for Nestle Waters, she found that cupcakes provided the perfect “wow” factor when she was in Las Vegas and then decided to open a cupcake shop.
Together with her husband Jeff and her mother as shareholders, they invested a total of $49,000 as a start up money for Sift A Cupcakery in 2008. With her best friend Corey Fanfa, she managed the first store in Cotati, California. During their second year of operations, they opened a new store in Napa. And on 2010, opened its third fullservice bakery with a party room in downtown Santa Rosa, California. As they reflect on their past successes, a muchneeded $340,000 Small Business Administration (SBA) Loan would be necessary to realize Andrea’s dream of becoming the premier cupcake shop in the San Francisco Bay Area. To reach this, 3 options are presented for growth of the business:
1. Maintain current locations
2. Rapid expansion with retailonly stores / commissary 3. Expansion with retail / baking stores
B. Problem Analysis
Sift’s line of credit was maxed out and Sift had burned through the money that it had saved to pay income taxes. Their loan officer instead recommended to float their cash flow shortages. Despite the fact that Sift had been profitable from its opening year, store managers were still expected to control their costs and payroll. Daytoday financial monitoring seldom took place, negatively impacting their profitability.
Consumers are starting to focus on healthy food choices that may pose a risk to specialty cupcake bakeries. However, National Association for the Specialty Food Trade (NASFT) suggests that benefits of cupcakes include relatively small portions of sugar fix our body needed.
With disappointing results from print advertising and radio advertising sales, Sift has used social media platforms as communication and promotional tools to drive traffic to the stores. Also, Sift participated in large local community events and wedding expos, and donated to local school fundraisers and nonprofit organizations
Most of Sift’s employees were high school and college students with an average of 20 years old. Chain of command and effective communication about processes and their implementation are also problematic because of individual staff members do not possess necessary skills to get the job done.
C. Core Ideology and Envisioned Future
Sift Cupcake and Dessert Bar (2010)
To be able to give the “OMG” experience
to every customer who visits everyday.
Become the premier cupcake shop in the
San Francisco Bay Area and be able to ...
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