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Essay / Research Paper Abstract
This 4-page paper focuses on Nagrom's, a bakery that is having trouble competing against larger companies. The paper analyzes several cost accounting and marketing issues faced by this company.
Page Count:
4 pages (~225 words per page)
File: D0_MTnagrom.rtf
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Unformatted sample text from the term paper:
of $10 million. The company was started in 1942 by the Nagroms family as a small bakery that sold pastries, cookies and special order cakes to customers -- as
well as fresh breads to local grocers. Although early growth during the 1950s was strong, problems began occurring in the 1960s.
Central problem. The main problem faced by Nagroms is a problem that is similar to many independent companies that suddenly find themselves face-to-face with national companies. In
short, larger companies began cutting into Nagroms market share by undercutting Nagroms selling price. As a result, bread sales declined, leading Nagroms to consider other alternatives.
Strategies adopted to maintain position. One alternative Nagroms adopted was the marketing of ready-to-bake frozen bread dough, an idea that proved to be
quite successful. It was so successful, the company eventually abandoned the fresh bread line to concentrate resources on frozen dough production. However, by the mid-1980s, sales and frozen
bread had stagnated. Rising materials and labor costs, as well as, once again, competition from national bakers who could undercut prices, meant a very low gross margin on frozen
bread. In response to this, the Companys management shifted gears once again, focusing efforts and resources on a specialty pastry line that
seem to offer a higher gross margin percentage. But while the specialty pastries sold well, the net income dropped on its products.
Why sales of pastries increased and income dropped. As indicated above, management decided to dedicate more resources to the pastry line, based on the accounting departments data,
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