Hasan Bakery is a bakery business located in Atlanta,Georgia. When the

owner, Hasan, purchased the business three years ago, it consisted of a

single site with baking facilities and a retail store and cafe. Based on market

research with the bakery's retail and cafe clientele, Hasan began to change and

expand the product offerings to increase the volume of sales and margins. He also

began a new line of business, wholesaling to local restaurants and high-end grocery

stores within a 20-kilometer radius of the bakery.

Based on the success over the past three years (see Exhibit 31.1), Hasan has made a

strategic decision to expand his wholesale business, with the goal of tripling profits

over the next three years (see Exhibit 31.2). He expects to accomplish this by: (1)

covering a larger territory (i.e., expanding to a 120 km radius) for wholesaling to

local restaurants and independent grocery stores across the entire Greater Atlanta

Area, and (2) introducing a new business line, white label products that he can

supply to major supermarket chains.

To realize this strategy, Hasan has leased and outfitted a separate baking facility

to be primarily dedicated to supplying the wholesale business. Hasan also hired a

full-time vice president of sales and marketing (see Exhibit 31.3 for a summary of

the Hasan Bakery management team) to take over from him on the wholesale

side. Finally, he purchased a second previously owned delivery truck and hired a

full-time distribution manager.

Growth in the first three years is attributable to enhancement of product offerings

and continual drive to find efficiencies in operations. In year 4, the new baking

facility will open. It is expected that it will take several years to add new wholesale

customers and wholesale products. Therefore, there will be unutilized capacity

in the new facility. It is anticipated that expanding the wholesale business will, at

least initially, require an increased level of product development, marketing, sales,

and distribution.