This case illustrates how a company Hlebny Dom, a bread-making company located in the City of St. Petersburg, was solving the problem of limited production facilities of all divisions of the company. Hlebny Dom, with around 2500 employees, produces 400 ton of bakery products daily and holds the leading position in St. Petersburg market. It achieved considerable competitive advantages and occupied the leading position in the bakery market. This increased its attractiveness as an acquisition target for a potential strategic investor. Since 1997, Fazer Bakeries, the bread-making division of Finland-based multinational corporation Fazer Group, is the main shareholder, investor and strategic partner of Hlebny Dom. In 2002, Hlebny Dom (initially together with Fazer Bakeries) acquired two bakeries in St. Petersburg: Murinsky Bakery and Vasileostrovsky District Bakery. Since 2003, Hlebny Dom owns control shares in both.
For solving the key problem were invited five experts. Each of them is a top-class manager who has already succeeded in his or her company and after analyzing the company situation they formulated the tasks to solve in the future. The first "full-scale" meeting of the team members took place on January 10, 2007. They have formed a clear vision of what Hlebny Dom is like today. The immediate step was to understand the company's strategy and to list the areas for more detailed analysis. Hlebny Dom is a company with several subsidiaries is itself a subsidiary of a famous Fazer Group of Finland (or, more exactly, a subsidiary of Fazer Bakeries). The Finns own 78 percent of Hlebny Dom. That is why it seems to me that Hlebny Dom strategy has to be defined as a business unit strategy that supports overall corporate strategy. The Second Consultants' Meeting was devoted to results of Hlebny Dom financial analysis and strategic analysis of the bread-making industry. The Third Consultants' Meeting started with report on the market statement. The Fourth Consultants' Meeting the team made its final choice between acquisition and (more likely) construction of a new factory. The Fifth Consultants' Meeting was devoted to discussion the preliminary feasibility study of a new bakery plant construction in St. Petersburg bakeries.
Author: Andrey Medvedev
Institution: International Management Institute of St Petersburg (IMISP)
Number of pages: 16
Language: English
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