Question

Upon entering the executive conference room in early 2021, Amanda Spangler had to pinch herself to be sure that she was really in an executive meeting at headquarters. After completing an MBA degree, Spangler had landed her dream job as a lead manager at one of the premier brands in the American food industry, Bob’s Baloney (Bob’s).

Spangler’s first months on the job had been all that she had hoped. She had wrestled with important business decisions, experienced the genius of some favorite foody legends, witnessed the drama of marketing a true premium brand, and even hobnobbed with several celebrities. It had been truly amazing. But her biggest surprise was what was going on right then in the conference room. It was clear that things were not well at Bob’s.

The Company

Since its founding in Philadelphia in the 1920s, Bob’s had grown to dominate the world market for ultrapremium bologna. Bob’s market share of the high-end market was greater than 50%, and was particularly strong among high-end restaurants where it was the de facto bologna brand used by elite chefs. World- renowned French chef Bruno Saucisson had recently waxed poetic in his expressions of esteem for the Bob’s product.

The esteem Bob’s drew was not isolated to its customers. It also had a long history of community awards, including being a perennial winner in polls for best meat-processing employer. The company was also well known as a strong corporate advocate for animal rights, which still did not discourage suppliers from competing aggressively to do business with Bob’s. Its merchandise (e.g., t-shirts) was popular among young people because Bob’s was known as a company that cared deeply about its community.

Bob Klobase had launched the company in the mid-1920s after his family had immigrated to the United States from Slovenia. Klobase had a long family heritage in the bologna industry, so it was a natural business for him to build—but Klobase had outdone his family heritage. From the beginning, he had created bologna at the very highest level. Those in meat production circles often observed that to Klobase, “Holy Baloney” was not just an interjection but an abiding product aspiration.

The current management team continued to maintain the same commitment to quality. Company buyers were uncompromising in their demands from suppliers for quality source ingredients, including the spice blends and cures, the nonmeat fillers, and particularly the nuggets of free-range, humanely vivisected, organic beef. Inventory levels were managed carefully to ensure freshness while maintaining sufficient product to quickly meet customer needs. Despite the demanding nature of Bob’s premium customer clientele, it was very rare for the company to receive negative customer feedback. In fact, customer delight had seemingly been uncontained since the company’s 2018 investment in a completely redesigned production facility. The new facility housed a host of cutting-edge food production achievements that permeated the entire production process, including grinding, smoking, slicing, and packaging.

Finally, the Bob’s brand was supported by a creative marketing team. The team was highly regarded for its well-executed advertising campaigns. If anything, brand-building investments at Bob’s were on the rise.

The Meeting

Given that Bob’s was a poster child for corporate success, Spangler was astonished at the negative tone of the meeting. Bob’s CEO Prateek Gupta, sweat accumulating on his forehead, had gotten straight to the point. Diaz, the Argentine food conglomerate and owner of 30% of the equity shares in Bob’s, had recently made public its great displeasure with the current management team. Veronica Mino, the chair of Diaz, had openly decried Bob’s management:

[Sure, everyone says that the team at Bob’s has built a fantastic company, but for the love of chorizo, doesn’t financial performance matter anymore? Shouldn’t a powerhouse brand make money? If the team can’t generate a decent return, they’re as good as dead bologna.]

Bob’s Baloney Case Questions

1.       Why do you believe that the management team at Diaz is so displeased with management performance at Bob’s?

2. What should Spangler say to the committee?

Answer 1

Part -1: Why I belive that the management team at Diaz is so displeased with management performance at Bob'2. Following are the points of displeased:

• Company ( Bob's) is dealing in ultra premium Blogona , which is a Key product of Bob's.However in a speech of Diaz, he is using a product name which is ''Chorizo'', its seems with his speech that the company have also engaged in the supply of this product and Diaz is not satisfy with the performance of management on this product.
• Since Diaz , holding 30% of Equity shares in the Company it's means that they had a substantial interest in the company and right to review the performance of the Company.
• Diaz is disappointed with the management performance on Financial area , It;s Seems that management is not getting much more return on it's investments.
• After Redesigning the Manufacturing process, Management were focused on establishing a Brand, if any thing rises is Brand Building. On this matter it seems that Mr. Diaz is disappointed because brand building is required but for those who are new in the market and this Company is form Mid -20 so now they do not required to , too much Focused on establishing brand , they should Focused on that How market share should increase by maintaining the same quality and most important have a profit , decent Cash Flow from the sale of products, Which seems here that management is not able to generate.

Part -2:What Should Spangler say to Committee:

• She is a Lead manage in the Company , and having a much more experience in the Company marketing and operation area. She is a witness of drama for making the premium brand.
• She should have a plan to get the good financial return , she should speak about how branding of the company gives positive Results to the company.
• Explained about the plan for gaining the good returns from Chorizo, What they achieved and what activities on ground level.
• Gives some projected data of sales , profits and market share.