Question

1. While full-service bakeries can prepare all sorts of delicacies, Donut shops do not sell cakes, pies, or even pan dulce.

a. Why do Donut shops specialize and not offer more menu items?

b. Would you expect more full-service bakeries per capita in large cities or small towns?

c. Would you expect full-service bakeries in large cities to sell donuts?

Answer 1

Donuts majorly focus in Specialisation as it helps them position differently than competitors and be regarded as Donut seller with variety and taste and quality. It helps them in economies of scale and comparative advantage and brand awareness.

Full service bakeries would be visible in large cities as there is higher probability of sales and penetration and has larger diaspora or target segments.

Full service bakeries in large cities can definitely sell donuts to differntiate and lower their risk of failure and diversify to cater to various target groups and thus increase revenues.

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