Case study Cakes R Us operates a series of bakeries in Canberra that specializes in supplying the range of cakes to restaurants and coffee shops. Major production includes lamingtons, scones, clair and custard tarts. Until last year sales levels were fairly stable. However, sales have been decreasing for the last 18 months. Ralph Slick the marketing manager of Cakes R Us is worried and has visited major customers to find out the reasons for their decreasing sales order. The comments of the owner of one of the most popular Canberra Coffee Shop sums up the general response. Ralph, your style of cake is old fashioned. They are not what people want anymore. Our customer preferred lighter taste your food. They want variety and are willing to pay more for high quality innovative creations. At a recent meeting, Slick stated that the company should expand its product offerings or there may be no future for the company. Specifically, he believes that there is untapped market for the gourmet pies. The Managing Director is uncertain, he states; I really dont think that we can afford to invest time and money into fads. We sell cakes, we are not a gourmet caterer. Slick points out that it is these new items that customers are asking for, so it makes sense from a strategy point of you to develop these products. However, the Managing Director is still Page 2 of 2 Case study assignment : MAC007 A Strategic Management Accounting uncertain. I have no idea whether were going to make a profit this year and cash is always tight. We dont need strategies, I prefer to just sell good products. Slick understands why the Managing Director is resisting his plea to be more innovative with the products-the bakery has been producing the same line of cakes for 30 years. Slick also knows that there has never been any formal planning undertaken within the company or consideration of objectives or strategies.

Required: Ralph Slick has asked for your help. As the new management accountant prepare a report for the managing director conducting strategic analysis of the organisation in the light of comments made by Ralph Slick. Also based on the strategic analysis advice what type(s) of strategy(ies) help in achieving business goals and objectives. (10 marks)