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MANAGERIAL ECONOMICS (ECO404)
GOURMET is leading retail seller of bakery products in Lahore. It was established in 1987 as a small shop of confectioner. Chaudhary Muhammad Nawaz who is founder and chairman of Gourmet was having broader vision of business when he started this business from a small shop. At initial stage Gourmet was only doing business of bakery items while with the passage of time business was expanded and other than bakery items, products were manufactured like Gourmet water, juices, soft drinks, magazines and restaurants. Now Gourmet has shops in Faisalabad as well. The strategy behind the expansion of business was to increase the profit by diversification as well as to use same shops to sell magazines, juices and soft drinks etc. Gourmet’s expansion of business not only decreased the average cost but also increased the profit by providing complementary goods in the same shops. Due to high ratio of total fixed costs to total variable costs, Gourmet has become more leveraged.
Being a student of economics identify which concept of economics is applied to raise profit by providing complementary goods in the same shops. You are also required to explain what will happen to the breakeven output level of the Gourmet if it becomes more leveraged.
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ECO404 GDB Idea Solution fall – 2017
Gourmet bakers and sweets is the top food retail chain of Lahore. Lahore is the second largest city of Pakistan fabled for its customer aliment and amorousness for eating. Gourmet is the number one brand in the market of bakers and sweets due to its quality and valuable services. Before 1984, Mr. Nawaz Chattha was the employee of the Shezan bakers at the post of manager. While he was doing his job, he decided to start his own business separately because he was proficient dealer, a technical supporter and maintained check and balance in every branch. Mr. Nawaz Chattha started his business from one out let in Muslim Town with bakers in 1987. After seeing the profitable result he decided to introduce new product like sweets, milk, and ice-cream and gourmet cola. In continuous success of gourmet in providing quality service and products for the health and happiness of all family, Gourmet also started a family restaurant.Since the emergence of Gourmet bakers, it has shown explosive annual growth of more than25% in its business. It has 1700 employees working in its all departments. It has around 95 branches and will enhance its coverage to One hundred branches making it The Largest Bakersand Confectionaries of the city as well as the country.
Company Name- Gourmet Bakers & Sweets (PVT) limited.
Gourmet is a private limited liability company and the information regarding its share is asfollows:Registered office address: 9/D Faisal Town Lahore.Authorized Capital: 20,000,000.Paid up Capital: 50,000.CEO name: Ch. Muhammad Nawaz Chattha.CEO Address: 9/D Faisal Town Lahore.Incorporation Date: January 9, 1996.Authorized Capital Share: 200,000.Paid up Share Capital: 500
Authorized PER Value: 100Paid up PER Value: 100
We are a bakery company with one goal in mind to meet the needs of our customers we focuson our customers as our clients
To provide delicious, wholesome baked foods without sacrificing health and well-being
Objectives are the guidelines which direct toward the chosen destiny. The objectives of theGourmet are marketing objectives which are as under:
1. To build profitable customer relationship by delivering superior value.2. To provide such products those can increase targeted markets.3. To become a leader in the bakery and confectionary industry.4. To provide the quality products to the target market