Merger with Mi Pan

Report
Pan Boricua must decide whether to expand,
stay in markets where they are weak, and/or
expand to other markets in the United States.
Supplier Power
-High differentiation of
inputs
-Low supplier power
-Moderate supplier concentration
-Low costs to total purchases in
industry
Buyer Power
-High volume
-High buyer power
-High concentration
(niche market)
-High price sensitivity
-High product differences
Competitive Rivalry
-Low profit margins
-High variety of product
-High competitive rivalry
-High concentration of
competitors
-High amount of distributors
Threat of Substitution
-High threat of
substitution
-High variety of substitutes
-Low switching costs
Threat of New Entry
-High access to inputs
-Moderate threat of new
entry
-Low capital requirements
-Moderate regulation
-Moderate brand identity
Analysis
PESTLE

Potential Growth
Hispanic
Population
2010
2015
2020
2025
49,872
56,836
64,203.
72,142
1,038
1,495
2,155
3,060
7.7%
7.6%
7.6%
7.3%
(million)
Hispanic
Consumer
Spending
(billion)
Average
Annual
Growth of
Hispanic
Consumer
Spending
Analysis
PESTLE
Hispanics spend 43% more on food than nonHispanics
 Hispanics spend more than 30% of food money on
specialty shops such as bakeries
 Hispanics take and average of 26 trips to the store a
month
 Food plays a large part in family traditions

Analysis
Strengths
Weaknesses
• Exclusive exportation rights with a
leading producer*
• Quality product
• No competition agreement with Mi
Pueblo supermarkets
• Already established in large market
• Weak brand image
• Dependent on distributors
• Limited exposure in the United
States
*distinctive competence in this area
Opportunities
Threats
• Expansion of offerings
• Increase in Hispanic population
• Specialized product
•
•
•
•
New entrants into the market
Rising transportation costs
Growth in Hispanic bakeries
Niche market
Analysis
1.
2.
3.
4.
Stay in current markets (weak and strong)
Explore new markets while revamping
current market
Merger with Mi Pan
Replicate Mi Pan business plan
Alternatives

Positives
 Already Established
▪ Distributors
▪ Brand Image
 Low Cost

Negatives
 Little growth potential
 Weak markets consume
resources with low
margins
 Competitors reach other
markets
Analysis

Positives

Negatives
 High Growth Potential
 Costly
 Spread Brand
 Chance of failure in New
Recognition
Markets
 No change in weak
markets
Analysis

Positives

Negatives
 Uses each companies
 Give up some control
distinctive core
competency
 Eliminates competition
in low margin business
 Potential for Rejection
and/or Failure of New
Company
Analysis

Positive

Negative
 Proven Business Model
 Reactive Followers
 Expansion into new
 Failure to replicate
markets
success
 More direct competition
drives margins ever
lower
Analysis
ALTERNATIVES:
1
Key Success
Factor
RATING
Growth
Potential
2
4
3
Rank
Total
Rank
Total
Rank
Total
Rank
Total
0.3
1*
.3
4
1.2
5
1.5
3
.9
Strategic Fit
0.2
2
.4
3
.6
4
.8
3
.6
Follow mission
0.25
2
.5
4
1.0
4
1.0
4
1.0
Financially
Feasible
0.25
5
1.25
3
.75
4
1.0
2*
.5
Total
1.00
WEIGHT
Alternatives
1.
Stay in current markets (weak and
strong)
2.
Explore new markets while revamping
current market
3.
Merger with Mi Pan
4.
Replicate Mi Pan business plan
1.45
3.55
4.30
3.00
Ranking Scale
1: The alternative does not effectively address this criterion.
2: The alternative may contribute to addressing this criterion.
3: The alternative provides an average solutions to this criterion.
4: The alternative provides an above-average solution for this criterion.
5: The alternative effectively addresses this criterion.
Analysis
Alternative 3 - Merger with Mi Pan
(I added this)
Recommendation
3 months
6 months
9 months
12 months
Develop Merger
Proposal
Negotiations
Implement Merger
Finalize Agreement for
NY
Enter NY Market
Implementation
Activity
Details
Develop Merger Proposal
•
•
Company Executives
Highlight distribution incentives and benefits of
merger
Negotiations
•
•
•
Company Executives
Approach Mi Pan with proposal
Negotiate Details
Implement Merger
•
•
Company Executives
Consolidate companies & establish efficient means
of conversion
Finalize Agreement for NY
•
Finalize distribution agreements from previous
plans that were developed through each company
Enter NY Market
•
Begin distribution
(Milestone Review)
(Milestone Review)
Implementation
24 months
30 months
36 months
48 months
Research Miami Market
Finalize Agreement for
Miami
Enter Miami Market
Evaluate Expansion Plan
Implementation
Long-Term - Implementation
Activity
Details
Research Miami Market
•
•
Management Team
Begin research and evaluation of entry
Finalize Agreements for Miami
•
•
Company Executives
Finalize distribution and location agreements
Enter Miami Market
•
Begin distribution
Evaluate Expansion Plan
•
•
Company Executives
Evaluate Success of merger & potential for future
expansion
(Milestone Review)
Implementation


Joint venture into New York
Expand into other markets and revamp
current market hold
Risks
Probability
Mitigation
Contingency
Mi Pan resists
plan to merge
Low
Offer employment
opportunities to
displaced workers
Explore alternate
sources of funding to
replicate Mi Pan
business plan
Implementation

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