Pan Boricua Inc Case Study

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