Tavazo CO

Topics: U.S. state, United States, Puerto Rico Pages: 8 (2095 words) Published: September 24, 2013


Pan Boricua: Developing a Market Strategy For

The Hispanic Market in the United States

PAN BORICUA INC: A BRIEF OVERVIEW

Pan Boricua Inc. was formed back in 2001 when Auriel Rivera and Franco came up with a plan to export Puerto Rican bread to the United States. Their major product was pan sobao which is bread that is known for its unique flavor and texture; and it’s made in Puerto Rico. An opportunity was identified when several Puerto Rican residents would take several pounds of pan sabao from local bakeries to the United States. The program included the export of frozen bread dough along with branded bread-loaf paper cover and merchandising at the point of sale. The initiative was aimed at cities in the United States with large Puerto Rican and Hispanic populations.

The partners established their first commercial link with a resident in the city of Orlando at the end of 2002. However, they did not have much luck with these business relationships, until 2006 when the company acquired exclusive rights to export frozen pan sabao to any destination in the United States. These rights were obtained from “Panificadora (Bakery) Los Cidrines” which was one of the leaders in the production of bread in Puerto Rico. (See Exhibit (a) in the Appendix section for logistics summary). The partners got into various agreements with retailers who agreed to stock their bread; and managed to expand their horizons.

SCOPE OF THE REPORT:

The main objective of this report is to put into view a new plan for expansion that will examine current market indicators within the market for specialty breads in the United States and match them to current business strengths. Ultimately, diverse strategic market entry vehicles will be analyzed and one will appropriately be recommended to maximize market potential and corporate profits. Questions that we seek to answer within the scope of this report include: Should the partners expand where they are already doing well? Should they stay in markets where they are weak?

Should they distribute to new states and cities in the United States?

KEY ISSUES

Brand positioning
target market insufficient
Increased competition at the wholesale and retail levels
Need to differentiate brand
Unreliable business relationships
Pressure on profit margins due to increased costs of fuel and key ingredients The company has entered few ventures without much planning

CASE ANALYSIS

SWOT ANALYSIS – PAN BORICUA INC.

STRENGTHS:
Unique product that serves a niche market – unique flavor and texture Product is already well known amongst the Puerto Rican community Exclusive rights to export pan sabao to any destination in the United States from a market leader – ``Panificadora Los Cidrines`` Partners have a good education in the field of Business

WEAKNESSES:
Weak ties with retailers/distributors in the United States
Brand positioning
Limited knowledge of the US bread industry environment
Poor planning, lack of strategic vision; in some cases that has led to business transactions that are not feasible without any initial contracts. Poor negotiation skills.
Little diversification on their product offering.
Product offerings do not appeal to the communities at large. Hispanics only account for 9% of the total Hispanic population. This may also act as a hurdle to gaining more market share.

OPPORTUNITIES:
Consumer tastes shifting towards specialty breads and are willing to pay higher prices General characteristics of Hispanics such as they spend more on food than non-Hispanics; supermarkets are the places of food purchase most visited; traditional food is considered important etc Steady growth of the Hispanic population in the United States that is associated to constant immigration and high birth rates. Further strengthen business relationships with the existing distributors. Incomes are expected to rise which would consequently increase purchasing power

THREATS:...
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