Profitable Brand for Hostess Brands Inc Assignment - 6

Profitable Brand for Hostess Brands Inc - Assignment Example The Hostess brand Inc. plunging into bankruptcy is due to the expensive business model that they use to operate. The company owns a large network of buildings, trucks; employees, Teamsters and the bakers union. After identifying the weakness of the Hostess Brands, Inc. Pepperidge farm Bread Company would restructure the business model and the brand would be profitable to the company. The shortcomings of Hostess Company are due to the expensive business model that it adopted. The model that Pepperidge farm Bread Company has will be able to sustain the brand. Buying the brand will not be a waste of resources but vale to the company. Pepperidge farm Bread Company business model does not allow the company to own all the assets that in the bread making the industry, but only the crucial part is handled with the company. The company, however, monitors all the proceedings that involve the sale of its products. The company has the right to terminate the contract that it might have entered in to with a distributor or any business party. The company would not distribute the brand once acquired, but use independent distributors to do the work. This would ensure that even if the workers paralyze the normal distribution, the distribution would still go on as usual. The company has set some guidelines for the awarding of contracts to distributors to protect its interests. The company uses the strategy of the distributor paying for the bread and earning from his sells. This ensures that the distributors work hard and sell the product. These will ensure that the distributors look for more customers to get more sells and earn more. These also reduce the company’s losses compared to when it is the company’s workers distributing the bread. The company has also reduced the cost of operation. The distributors are required to buy their own truck. This reduces the maintenance costs of the trucks. The strategy also ensures that only financially able distributors get the c ontracts to distribute the bread brand. Since the brand is popular within the population. The production would be in mass to satisfy the market. However, the number of bakeries required to achieve this will depend on factors as the route that the distributors are able to cover efficiently. The new establishment will only be set up in places that have a high market and the supply is insufficient to certify the market. Research is conducted before setting up new bakeries. In the meantime, Pepperidge farm Bread Company will use the bakeries accrued with the brand as it continues to study the market. The Pepperidge farm Bread Company will maintain the sole right to the formulae of making the bread and packaging. The company will also maintain the proprietorship rights but release as the distribution rights of the bread. The routes that the Pepperidge farm Bread Company own will go for bids. These routes will be sold to the highest able birder. The bidder will have to demonstrate that he can handle the route. The selling of the routes will help avoid unnecessary competition in the routes amongst the distributors. The act will also ensure that each distributor works hard in his designated route to achieve more sells.