Menu-Craft (MC) ACCA SBL Preseen – September 2025

Introduction

The ACCA Strategic Business Leader (SBL) exam is designed to assess not only technical knowledge but also the ability to apply strategic thinking, judgement, and professional skills to real-world business scenarios. The pre-seen material is a vital resource in this process, as it provides the contextual foundation upon which the exam will build its requirements.

This deep-dive document is structured to mirror the examiners’ approach and highlight the most significant strategic issues emerging from the pre-seen. Each section follows a logical analysis using recognised frameworks (PEST, SWOT, Ansoff, Porter’s models, and Mendelow’s Matrix), ensuring students gain both familiarity with the company and confidence in linking case evidence to exam questions.

Students should use this analysis to:

• Understand Menu-Craft’s (MC) business environment, operations, and governance.
• Identify strategic issues, risks, and opportunities most likely to appear in the exam.
• Practise applying professional scepticism, critical thinking, and decision-making to case scenarios. 

Area 1 – Company Introduction

What Does the Company Do?

Menu-Craft (MC) is a meal kit business operating in Ayeland, a developed economy with a population of nearly 40 million. Established 15 years ago, MC is the second-largest meal kit company in Ayeland by revenue and customer base.

MC’s value proposition is centred on high-quality, locally sourced ingredients and Ayeland-based recipes, differentiating it from global competitors such as Fresheey. Customers subscribe to meal kit deliveries via a flexible online subscription model, allowing them to select recipes, portion sizes, and delivery frequencies.

The business serves singles, couples, and families, with families representing a growing segment of MC’s customer base.

Location of the Company

MC operates from the capital city of Ayeland, where its headquarters and main production facility are located. The factory is supported by a warehouse and a distribution partnership with GoFlow, a local logistics provider.

This central location supports efficient nationwide operations.

Ownership and Governance

• MC was listed on the Ayeland Stock Exchange three years ago.
• Ownership is divided as follows:
  • 20% retained by the two founders (10% each).
  • 80% held by institutional and retail investors.
• The founders remain active on the board:
  • One is the CEO, the other is the Chief Commercial & Marketing Officer.

This dual role of founders as executives and significant shareholders has implications for governance and strategy.

Key Stakeholders

• Shareholders/Investors – demand profitability and long-term growth.
• Customers – increasingly expect variety, convenience, health-conscious options, and sustainability.
• Suppliers – over 600 local suppliers, emphasising sustainability and organic practices.
• Employees – production staff, logistics partnerships, and in-house chefs are key to delivery and product quality.
• Regulator (AFSA) – imposes strict food safety and hygiene compliance.
• Community/CSR stakeholders – rely on MC’s donations of unused ingredients and environmental initiatives.

Capital Structure and Funding

Menu-Craft (MC) has undergone several phases of funding as it transitioned from a privately owned start-up to a listed public company:

1. Early Stage – Venture Capital Funding
   • In its initial years, MC relied heavily on Ayeland-based venture capitalists to fund its steady growth.
   • This equity funding allowed MC to expand operations beyond the capital city, invest in supplier networks, and develop its production facilities without the pressure of servicing debt.
   • The use of venture capital aligns with MC’s strategic need to prioritise customer growth and market share rather than short-term profitability.
2. Stock Exchange Listing – Equity Financing
   • Around three years ago, MC listed on the Ayeland Stock Market (ASM).
   • The listing achieved two objectives:
     • Liquidity for early investors – venture capitalists were able to exit or reduce holdings.
     • Fresh capital – MC gained significant funds to invest in production capacity, logistics technology, and digital customer platforms.
   • At present, 80% of shares are widely held by institutional and retail investors. The founders together retain 20% (10% each) and play active executive roles (CEO and Chief Commercial & Marketing Officer).
   • The listing also increased public scrutiny, governance requirements, and shareholder pressure to deliver consistent growth and dividends.
3. Debt Position
   • The pre-seen does not explicitly mention long-term borrowings or loans. This may suggest MC’s balance sheet is currently equity-heavy, which is often associated with minimisation of financial risk but also increasing exposure to shareholder demands.
   • An equity-dominated structure provides operational flexibility (no fixed interest costs) but may result in dilution of control for founders over time as institutional shareholders exert influence.
   • It also means MC may lack the leverage advantage (tax shield on debt) that some competitors might benefit from.
4. Strategic Implications of Capital Structure
   • Advantages:
     • Strong capital base from equity, enabling investments in technology, packaging innovation, and supplier partnerships.
     • Low financial gearing reduces risk exposure, particularly important in a volatile food industry with regulatory and reputational risks.
   • Disadvantages:
     • Dependence on equity financing increases pressure from shareholders to maintain rapid growth despite industry-wide challenges such as high churn.
     • Lack of debt may mean higher overall cost of capital, as equity is more expensive than debt.
     • Pressure for quarterly/annual performance reporting could push management to prioritise short-term results over long-term sustainability.
5. Future Funding Options
   • Debt financing: MC could explore moderate borrowing for expansion (e.g., new facilities, regional diversification), especially if interest rates remain competitive.
   • Strategic partnerships: Collaborations with supermarkets, celebrity chefs, or tech providers could attract joint investment while reducing sole funding responsibility.
   • Reinvestment of retained earnings: Given MC’s strong revenue trajectory, reinvested profits could fund R&D and innovation while avoiding additional shareholder dilution.

Exam Tip for Students: 

The examiner may test your ability to evaluate funding strategies for growth. Candidates should be prepared to discuss the pros and cons of equity vs debt financing for MC, particularly in the context of maintaining flexibility, controlling risk, and meeting shareholder expectations.

Performance Insights

• Strong growth: Meals delivered, revenue, and customer numbers have all risen sharply from 20X0 to 20X4.
• Customer base: Reached over 500,000 active customers by 20X4.
• Revenue growth: Peaked at 45% year-on-year, though growth slowed to 18% by 20X4, showing signs of market maturity.
• Revenue per meal: Increased modestly, from $6.00 to $6.60, reflecting tight price competition.
• Average orders per customer: Stable at around 12 per year, with slight growth.

This suggests that while MC has maintained momentum, future growth will require innovation and retention strategies, as organic market expansion is slowing.

Strategic Implications

• MC’s position as a local champion against global competitors gives it brand loyalty but exposes it to scale disadvantages.
• Heavy reliance on local suppliers is both a strength (freshness, sustainability) and a risk (supply disruption, rising costs).
• The slowing revenue growth trend indicates the need for new growth strategies, possibly through product diversification, market development, or partnerships.

Business Model

1. Value Proposition

• Fresh, high-quality local produce.
• Convenience and time-saving for urban professionals and families.
• Wide menu variety (up to 30 recipes per week).
• Sustainability and CSR focus (low waste, recyclable packaging, charitable donations).

2. Operating Model

• One centralised production facility with robotics and human oversight.
• Partnerships with over 600 suppliers for ingredients.
• Third-party logistics partner (GoFlow) for refrigerated deliveries.

3. Revenue Model

• Subscription-based model with flexible options.
• Revenue growth driven by customer base expansion, not significant price increases.
• Average order value rising slightly ($33–$39 range), but competition restricts pricing power.

4. Technology and Systems

• Algorithms for demand forecasting and waste reduction.
• Data analytics for recipe performance and customer preferences.
• Partnerships with suppliers and packaging provider for sustainable solutions.

Strategic Interpretation:

MC has built a solid and reputable local brand, underpinned by sustainability, quality, and customer trust. However, competitive pressures from Fresheey, supermarkets, and “heat and eat” alternatives threaten to erode its advantage.

MC’s success in retaining customers longer than industry norms is commendable, but churn remains a systemic industry risk. Its challenge will be to leverage technology, innovation, and partnerships to expand profitably in a maturing market.

Prospects of the Company

Looking ahead, MC has:

• Opportunities in further innovation, diet-specific meal kits, and partnerships with retailers/celebrity chefs.
• Challenges in customer retention, rising regulatory scrutiny, and competitive pricing pressures.
• A strong foundation to position itself as a sustainable, customer-focused market leader in Ayeland, but future growth will depend on diversification and operational resilience.

Area 2 – Governing Body and Ownership of the Company

Board Composition and Governance Framework

Menu-Craft (MC) operates with a unitary board structure, consistent with best practice in many developed economies:

• Non-executive chair – responsible for leading the board, ensuring effective governance, and balancing the influence of executive directors.
• Chief Executive Officer (CEO) – one of the original founders, actively involved in setting and driving strategy.
• Chief Commercial & Marketing Officer (CCMO) – also a founder, with deep industry and branding knowledge.
• Chief Finance Officer (CFO) – oversees financial strategy and reporting.
• Chief Operating Officer (COO) – responsible for production and logistics.
• Chief People Officer (CPO) – manages HR, organisational culture, and talent development.
• Non-Executive Directors (NEDs) – four independent NEDs, including a Senior Independent Director (SID), who provide external oversight and challenge.

The board is supported by three main committees:

1. Audit and Risk Committee – oversees financial reporting, risk management, and internal controls.
2. Nominations Committee – responsible for succession planning and board appointments.
3. Remuneration Committee – sets executive pay and incentives, ensuring alignment with performance and shareholder interests. 

Executive Leadership Structure

The executive team has strong founder influence. While this provides vision, continuity, and industry expertise, it also risks over-reliance on founder decision-making.

The CEO and CCMO’s dual roles as founders, board members, and significant shareholders (10% each) create:

• Positive effects: Commitment to long-term success, deep knowledge of the industry, alignment of shareholder and executive interests.
• Negative effects: Potential for dominance in decision-making, reduced objectivity, and risk of founder bias where personal vision outweighs strategic balance.

Organisational Design

MC appears to adopt a functional organisational structure, where responsibilities are divided into key business functions (finance, operations, marketing, HR). This structure supports efficiency and clarity of roles but may risk silos between departments.

The integration of sustainability and CSR into supplier management, operations, and packaging suggests that MC is embedding ESG principles within its organisational processes, an increasingly important governance dimension for investors.

Assessment of Governance Effectiveness

Strengths

• Balanced board with executive and non-executive mix.
• Presence of independent NEDs and committees in line with corporate governance best practice.
• Strong focus on risk management, evidenced by regular reporting and oversight by the Audit & Risk Committee.
• Clear mission, vision, and values that embed ethics and sustainability.
• Shareholder alignment with founders due to their retained stake.

Weaknesses

• Founder dominance: Both founders hold executive roles and a combined 20% stake, potentially influencing board independence.
• Relatively young listing history: Only three years as a public company, meaning governance structures may still be maturing.
• Diversity considerations: The pre-seen does not mention board diversity (gender, skills, or international expertise), which could be an area of weakness compared to global best practices.
• Risk of short-termism: Pressure from a wide shareholder base to deliver quarterly growth could drive short-term decisions over sustainable long-term strategies.

Recommendations for Governance Enhancement

1. Strengthen Board Independence
   • Add more independent NEDs with diverse backgrounds, especially in areas such as digital transformation, food safety, and international business.
   • Rotate committee memberships to avoid concentration of influence.
2. Reduce Founder Dominance
   • Encourage succession planning for executive roles currently held by founders, to ensure smoother leadership transition in the future.
   • Maintain separation of powers between board chair and CEO.
3. Enhance Stakeholder Representation
   • Formalise stakeholder engagement, particularly with customers and suppliers, by creating advisory panels or reporting structures.
   • Link executive remuneration to long-term ESG performance metrics (e.g., carbon emissions reduction, customer retention).
4. Improve Transparency
   • Adopt integrated reporting to demonstrate value creation beyond financials, covering ESG, governance, and ethical performance.
   • Expand risk disclosures in line with international corporate governance trends.

Exam Tip for Students:

Expect questions that test your ability to assess governance effectiveness and recommend improvements. In the exam, be ready to:

• Link governance issues (e.g., founder dominance, shareholder pressure) to strategic risks and opportunities.
• Apply frameworks such as the UK Corporate Governance Code principles (leadership, effectiveness, accountability, remuneration, relations with shareholders).
• Propose practical and commercially viable improvements, not just theoretical ideals.

Area 3 – Ethics and Corporate Social Responsibility (CSR)

Ethical Positioning and Public Perception

Menu-Craft (MC) actively positions itself as an ethical, sustainable, and community-focused business, which is central to its brand identity:

• Mission: “To make healthy home cooking simple, affordable, and accessible to everyone.”
• Vision: Focused on “healthy and sustainable food choices for a healthier life in a healthier world.”
• Values: Honesty, respect, accountability, sustainability, and responsible leadership.

The company has cultivated a positive public perception by promoting:

• Locally sourced ingredients (supporting Ayeland’s farmers).
• High-quality food safety standards.
• Low waste and sustainability initiatives.
• Transparent communication on its website about mission, values, and ESG commitments.

However, its public reputation is fragile, given industry risks (e.g., food safety, data protection, and customer churn).

Main Ethical Threats

Food Safety & Hygiene

• Meal kits include perishable products (meat, fish, dairy). Improper packaging or storage can lead to cross-contamination and foodborne illnesses.
• A single failure could damage trust and lead to regulatory sanctions by the Ayeland Food Standards Agency (AFSA).

Data Privacy & Security

• MC collects sensitive customer and supplier data (personal details, payment information).
• Data breaches or cyber-attacks could cause financial loss, reputational harm, and legal consequences.

Marketing & Customer Retention Practices

• The industry often relies on introductory discounts and promotional offers, raising ethical concerns around misleading advertising or “subscription traps.”
• High churn rates (customers switching for discounts) risk over-promising and under-delivering.

Supplier Relationships

• With over 600 suppliers, there is a risk of inconsistent ethical standards across the supply chain.
• Exploitation of smaller suppliers, failure to verify fair labour practices, or environmental lapses could undermine MC’s ethical claims.

Environmental Impact

• Despite strong sustainability messaging, packaging and logistics still generate carbon emissions and waste.
• Any inconsistency between marketing claims and actual impact could be perceived as greenwashing.

Corporate Social Responsibility (CSR) Practices

MC integrates CSR into its core operations in several ways:

• Supplier Standards:
  • Prioritises local and sustainable farming practices.
  • Encourages suppliers to adopt biodiversity and organic farming methods.
  • Requires recyclable or biodegradable packaging from suppliers.
• Waste Management:
  • Less than 1% of ingredients purchased go to waste.
  • Edible surplus is donated to local charities.
  • Non-edible surplus is diverted to animal feed.
  • Only non-consumable waste is incinerated or landfilled.
• Sustainable Packaging:
  • Boxes are made from 100% recyclable cardboard.
  • Ice packs are reusable.
  • Ongoing innovation with packaging supplier to reduce environmental footprint.
• Community Engagement:
  • Supports local farmers by sourcing ingredients domestically.
  • Provides healthy cooking opportunities to families, contributing to social wellbeing.
• ESG Integration:
  • Explicit focus on Planet, People, Governance.
  • Public commitments demonstrate alignment with global sustainability trends.

Recommendations for Strengthening Ethics and CSR

1. Food Safety Leadership
   • Move beyond compliance with AFSA by adopting international food safety certifications (e.g., ISO 22000).
   • Communicate these standards to customers for stronger trust.
2. Transparent ESG Reporting
   • Publish annual sustainability and ethics reports, including measurable KPIs on carbon emissions, waste reduction, and social contributions.
   • Align disclosures with frameworks such as GRI (Global Reporting Initiative).
3. Data Ethics & Cybersecurity
   • Strengthen data protection systems and report on cybersecurity readiness.
   • Adopt customer-friendly communication about how data is collected, stored, and protected.
4. Responsible Marketing
   • Ensure all promotions and discounts are transparent, avoiding any suggestion of misleading pricing or “subscription traps.”
   • Introduce customer loyalty schemes that reward long-term engagement rather than one-off sign-ups.
5. Community Development Initiatives
   • Expand partnerships with schools, community kitchens, or NGOs to address food insecurity.
   • Offer educational workshops on healthy eating and sustainability.
6. Carbon Neutrality Goals
   • Set a long-term net-zero emissions target, with milestones on logistics, packaging, and production.
   • Collaborate with GoFlow logistics partner to transition to electric or hybrid vehicles.

Area 4 – PEST Analysis

Understanding the external environment is essential for Menu-Craft (MC) as it shapes both opportunities and threats in the meal kit industry. A PEST analysis evaluates the Political, Economic, Social, and Technological factors influencing MC’s strategic position in Ayeland. This framework helps identify external drivers that impact MC’s performance, growth prospects, and long-term sustainability. By examining these elements, MC can align its strategy to respond effectively to industry pressures and emerging trends.

Political Factors

Key Points:

• Strict regulation by the Ayeland Food Standards Agency (AFSA).
• Government support for local agriculture and sustainability.
• Compliance with corporate governance expectations as a listed entity.

Regulation by AFSA:

Food safety and hygiene are critical political issues for MC. The AFSA conducts external inspections every six months, and MC’s license to operate depends on successful compliance. The risks of non-compliance are severe, including potential fines, reputational damage, or closure of operations. MC must therefore prioritise investment in safety systems, staff training, and compliance monitoring.

Government support for local agriculture:

Ayeland actively supports its agricultural sector, which aligns well with MC’s strategy of sourcing from over 600 local suppliers. This not only strengthens MC’s brand positioning as a supporter of Ayeland’s farmers but may also allow MC to benefit from future subsidies or sustainability initiatives. Such policies could enhance MC’s cost competitiveness and reputation.

Listed company obligations:

Since becoming a publicly listed company, MC faces higher political and regulatory expectations in terms of governance, reporting, and transparency. Regulators and investors alike will scrutinise MC’s compliance with corporate governance codes, ESG disclosures, and financial reporting standards. This increases pressure on the board and management to demonstrate accountability and ethical leadership.

Key Considerations for MC:

MC must ensure strict compliance with AFSA’s standards to protect its license and reputation. At the same time, it should leverage government incentives to strengthen its sustainability agenda. Finally, as a listed entity, MC must continuously meet heightened expectations in governance and disclosure.

Economic Factors

Key Points:

• Strong global and domestic growth in the meal kit sector.
• Intense competition and pricing pressures.
• Rising input costs and margin pressures.
• Slowing growth in revenue and customers for MC.

Industry growth:

The global meal kit market is expanding rapidly, expected to grow from $25 billion in 20X4 to $75 billion within the next decade. In Ayeland, demand is driven by urbanisation and busy lifestyles, giving MC an expanding customer base to target. This suggests continued opportunities for growth, provided MC can maintain differentiation.

Competition and pricing pressures:

MC operates in a highly competitive environment, with Fresheey (global player) and two strong local rivals, alongside supermarkets and “heat-and-eat” alternatives. The intense competition keeps prices low and limits MC’s ability to increase margins. Customer churn is fuelled by discount-driven promotions across the industry, making retention costly.

Rising input costs:

Logistics, packaging, and supplier costs are rising due to inflationary pressures. Although MC benefits from local sourcing, it cannot escape the global upward trend in food and transport costs. This puts pressure on profitability, particularly when customers are unwilling to absorb higher prices.

Slowing revenue growth:

MC’s revenue growth, while strong in earlier years, has decelerated from over 40% year-on-year to just 18% in 20X4. Active customer growth is also slowing, indicating market maturity in Ayeland. This trend highlights the need for MC to explore diversification, new products, or new markets to sustain growth.

Key Considerations for MC:

MC must carefully balance affordability with profitability in a price-sensitive market. Rising costs and slowing growth make innovation, efficiency, and customer retention essential. The company should explore ways to expand beyond Ayeland or diversify offerings to sustain long-term growth.

Social Factors

Key Points:

• Urban lifestyles and convenience culture.
• Demand for healthy, customised diets.
• High customer churn and retention challenges.
• Growing environmental and ethical expectations.

Urban lifestyles:

Ayeland’s population is predominantly urban, with busy professional and family lives driving demand for convenient, home-cooked solutions. This is a strong foundation for MC’s offering, as meal kits directly address these social needs.

Healthy and customised diets:

Consumers increasingly prefer meal options that align with dietary preferences such as vegan, vegetarian, gluten-free, or low-carb. This trend requires MC to keep expanding menu options and innovating regularly to remain relevant. Competitors are also focusing on this space, making differentiation essential.

Customer churn:

The meal kit industry suffers from high churn rates, with fewer than 25% of subscriptions lasting longer than six months. Although MC performs better than most, churn remains a major threat to profitability. This means retention strategies such as loyalty schemes, personalised offers, or improved customer experience are critical.

Sustainability expectations:

Consumers increasingly expect businesses to demonstrate environmental and social responsibility. MC’s recyclable packaging, food donation programmes, and low-waste operations align with these expectations, strengthening its reputation. However, any perceived inconsistency between its claims and actions could result in accusations of greenwashing.

Key Considerations for MC:

Social trends favour MC’s convenience and healthy eating proposition, but churn remains a significant challenge. To build long-term loyalty, MC must continue to innovate in menu options, demonstrate strong sustainability credentials, and communicate its social impact clearly.

Technological Factors

Key Points:

• Robotics and automation in production.
• Data analytics for forecasting and customer insights.
• Dependence on logistics technology and GoFlow partnership.
• Cybersecurity and digital reliance risks.

Robotics in production:

MC’s use of robotics in packaging and assembly has improved efficiency and reduced waste. However, the reliance on human oversight for quality checks means there are still potential bottlenecks. Scaling robotics further could enhance productivity, but requires careful investment to maintain quality.

Data analytics:

MC leverages customer feedback and order history to forecast demand and inform procurement decisions. This reduces waste and helps align menu options with customer preferences. Data-driven insights are a strategic strength that supports both operational efficiency and customer satisfaction.

Logistics technology:

Partnership with GoFlow enables advanced route planning and refrigerated deliveries. This ensures freshness and supports sustainability by reducing emissions. However, reliance on a single logistics partner creates risk, any disruption in GoFlow’s operations could significantly affect MC’s service delivery.

Cybersecurity risks:

MC’s digital subscription model depends heavily on its website and app. These systems collect personal and payment data, making them vulnerable to cyberattacks. MC’s risk report highlights this as a growing threat, with potential for reputational and financial damage if not managed effectively.

Key Considerations for MC:

MC must continue to invest in technology to maintain efficiency and customer engagement. Strengthening cybersecurity, diversifying logistics partnerships, and exploring new digital innovations such as AI-driven personalisation will be vital to future competitiveness.

Summary of PEST Analysis

Pillar	Key Points	Implications for MC
Political	-AFSA imposes strict food safety checks every 6 months. – Government support for local farming and sustainability. – Public listing increases governance and reporting expectations.	– Non-compliance could lead to suspension, fines, or reputational loss. – Opportunity to benefit from subsidies and policies favouring local produce. – Must maintain transparency and strong governance to satisfy regulators and shareholders.
Economic	– Global market projected to grow from $25bn to $75bn. – Fierce competition with Fresheey, supermarkets, and “heat-and-eat.” – Rising input costs (logistics, packaging, food). – Slowing revenue growth (down to 18% in 20X4).	– Growth opportunities exist, but MC must differentiate beyond price. – High competition squeezes margins and raises churn. – Inflationary pressures threaten profitability. – Innovation and diversification needed to sustain long-term growth.
Social	– Urban lifestyles demand convenience. – Rising demand for healthy and customised diets. – Industry-wide high churn rates. – Increasing focus on sustainability and ethics.	– Core customer base supports MC’s offering. – Must keep updating menu with diet-specific options. – Retention strategies (loyalty schemes, personalisation) are essential. – Sustainability is now a competitive necessity, not just a differentiator.
Technological	– Robotics and automation in production. – Data analytics for forecasting and insights. – Heavy reliance on GoFlow logistics partner. – Growing cybersecurity risks.	– Robotics improve efficiency but require balanced oversight. – Analytics reduce waste and improve menu relevance. – Dependence on one logistics partner is risky. – Strong cybersecurity investments are needed to protect data and trust.

Strategic Implications

• Compliance Focus: AFSA oversight makes investment in food safety and supplier monitoring critical to protect MC’s license and reputation.
• Differentiation Needed: Slowing growth and price competition mean MC must stand out through quality, sustainability, and tailored dietary options.
• Retention Priority: High churn demands loyalty schemes, personalised offers, and better digital engagement to stabilise revenues.
• Efficiency & Innovation: Rising costs require greater use of robotics, analytics, and sustainable logistics to maintain margins.
• Governance Pressure: As a listed company, MC must show transparency and ESG leadership to satisfy investors and regulators.

Area 5 – Ansoff’s Matrix

The Ansoff Matrix provides four strategic options for business growth:

1. Market Penetration – Existing products, existing markets
2. Product Development – New products, existing markets
3. Market Development – Existing products, new markets
4. Diversification – New products, new markets

For MC, this model is useful in identifying how the company can sustain growth in a competitive and maturing meal kit industry.

1. Market Penetration (Existing Products, Existing Markets)

Key Points:

• Strengthen customer retention in Ayeland.
• Increase order frequency per customer.
• Compete more effectively with Fresheey and supermarkets.

MC could deepen its share in Ayeland by focusing on customer retention and loyalty. High churn rates across the industry mean that even modest improvements in retention could significantly boost revenues. Strategies may include loyalty programmes, referral schemes, or personalised offers to reward long-term customers.

Another opportunity is to increase order frequency among existing customers. With the current average of around 12 orders per customer per year, MC could encourage more frequent use by promoting flexible subscriptions, discounts for additional orders, or seasonal promotions.

Finally, MC must maintain competitiveness against rivals. Fresheey’s global scale and supermarkets’ in-store meal kit offerings mean MC should strengthen its local brand identity, emphasising quality, authenticity, and sustainability.

2. Product Development (New Products, Existing Markets)

Key Points:

• Expand dietary-specific offerings (vegan, gluten-free, low-carb).
• Introduce “ready-to-cook” or hybrid products.
• Collaborate with celebrity chefs or nutritionists.

Product innovation is a natural next step for MC. Consumers increasingly demand tailored options such as vegan, gluten-free, or health-focused kits. Expanding these ranges could attract new customers and improve retention among existing ones.

MC could also explore ready-to-cook or hybrid products, bridging the gap between meal kits and heat-and-eat meals. For example, partially prepared ingredients or time-saving add-ons could appeal to families and professionals who want convenience without compromising on freshness.

Celebrity chef partnerships or co-branded recipes could differentiate MC’s offering, enhance customer excitement, and reinforce its premium image in Ayeland.

3. Market Development (Existing Products, New Markets)

Key Points:

• Expand into neighbouring countries.
• Partner with supermarkets to sell kits in-store.
• Target corporate clients and institutions.

With a strong brand in Ayeland, MC could explore regional expansion into nearby countries with similar demographics and urbanisation trends. This would spread risk beyond Ayeland’s maturing market but would require significant investment in logistics and compliance with new regulations.

Partnerships with supermarkets could offer in-store visibility and tap into the growing consumer interest in meal kits without the commitment of subscriptions. This strategy also hedges against the threat of supermarkets developing their own competing lines.

Another avenue is to target corporate clients, such as offering meal kit subscriptions for employee wellness programmes, or partnering with schools and institutions to provide healthy meal solutions.

4. Diversification (New Products, New Markets)

Key Points:

• Develop adjacent food products (e.g., healthy snacks, sauces).
• Enter the heat-and-eat meal market.
• Explore digital services (e.g., nutrition apps).

Diversification carries the highest risk but also the potential for significant returns. MC could branch into adjacent food categories, such as branded sauces, condiments, or healthy snacks, which could be sold alongside kits or through retail partners.

A logical diversification step is entry into the heat-and-eat market, which is already popular in Ayeland. Offering high-quality, locally inspired ready meals would allow MC to reach a wider customer base, particularly those unwilling to commit to cooking from scratch.

Finally, MC could consider digital diversification, such as nutrition and meal-planning apps, or integrating health tracking with kit subscriptions. This would strengthen customer engagement and differentiate MC from traditional competitors.

Strategic Insights and Recommendations

MC has strong opportunities across all four Ansoff quadrants, but priorities should be carefully chosen.

• Short term: Focus on market penetration through retention strategies and customer loyalty schemes. Even small improvements here could yield significant results.
• Medium term: Invest in product development, especially dietary-specific and convenience-driven innovations, to remain relevant in a health-conscious, time-pressured society.
• Long term: Explore market development via supermarket partnerships and potential regional expansion, while cautiously considering diversification into heat-and-eat meals and digital services.

By balancing these approaches, MC can sustain growth despite slowing revenue trends in Ayeland’s meal kit market.

Summary

Strategy	Key Options for MC	Implications
Market Penetration (Existing Products, Existing Markets)	– Loyalty schemes and referral programmes.- Increase order frequency through promotions.- Strengthen local brand against Fresheey and supermarkets.	Builds deeper customer relationships, reduces churn, and maximises share in Ayeland’s maturing market.
Product Development (New Products, Existing Markets)	– Expand vegan, gluten-free, low-carb menus.- Offer ready-to-cook or hybrid products.- Partner with celebrity chefs/nutritionists.	Attracts health-conscious customers, strengthens differentiation, and increases retention.
Market Development (Existing Products, New Markets)	– Expand into neighbouring countries.- Sell kits through supermarket channels.- Target corporate wellness and institutional markets.	Spreads risk beyond Ayeland, taps new customer segments, but requires investment in logistics and compliance.
Diversification (New Products, New Markets)	– Launch adjacent products (snacks, sauces).- Enter heat-and-eat meals market.- Explore digital services (nutrition/meal-planning apps).	High risk but high reward; opens new revenue streams and builds brand beyond core meal kits.

Area 6 – Porter’s Diamond Analysis

Porter’s Diamond model helps assess the national competitive advantage of Ayeland as a location for MC. It examines how factor conditions, demand conditions, related industries, and firm strategy shape MC’s competitiveness. 

1. Factor Conditions

Key Points:

• Strong local agricultural base.
• Skilled chefs and food expertise.
• Investment in logistics and digital infrastructure.

Agricultural base:

Ayeland has a rich agricultural environment, providing MC with access to high-quality, fresh produce. The company sources from over 600 suppliers, many of whom use organic and sustainable farming practices. This gives MC a strong foundation to differentiate itself through freshness and sustainability.

Skilled chefs and expertise:

MC employs talented chefs to design up to 30 recipes each week, drawing on Ayeland’s food culture. This culinary expertise is a unique resource that global rivals like Fresheey may struggle to replicate locally.

Infrastructure:

Ayeland has reliable logistics and digital infrastructure, which supports MC’s subscription model and distribution network. Partnerships with GoFlow for refrigerated logistics further strengthen MC’s ability to deliver high-quality kits.

Key Considerations for MC:

MC should leverage Ayeland’s strong agricultural and culinary base as a core differentiator. Continued investment in supplier relationships and technology is essential to maintain efficiency and competitiveness.

2. Demand Conditions

Key Points:

• Urbanised population with busy lifestyles.
• Growing preference for healthy and customised diets.
• Cultural pride in local cuisine.

Urban lifestyles:

With 75% of Ayeland’s population living in urban areas, demand for convenient, healthy food solutions is strong. This environment supports steady demand for MC’s meal kits.

Health and customisation:

Consumers increasingly want vegan, vegetarian, gluten-free, and diet-specific options. This pushes MC to innovate and adapt menus continually to meet rising expectations.

Cultural pride:

Ayeland’s people value local traditions and cuisine. MC’s focus on Ayeland-inspired recipes gives it a strong cultural resonance, setting it apart from global competitors.

Key Considerations for MC:

MC must continue to innovate menus to align with health and dietary trends, while maintaining its local identity to reinforce brand loyalty in Ayeland.

3. Related and Supporting Industries

Key Points:

• Partnerships with suppliers and packaging provider.
• Advanced logistics through GoFlow.
• Growing technology ecosystem.

Supplier and packaging partnerships:

MC works closely with local suppliers and a packaging company located just 20km from its production site. These strong partnerships enable efficiency, sustainability, and responsiveness to customer needs.

Logistics partnership:

GoFlow provides refrigerated transport and route optimisation, which is vital for maintaining product quality. This collaboration reduces carbon emissions and strengthens MC’s sustainability claims.

Technology ecosystem:

Ayeland’s well-developed digital environment supports MC’s use of data analytics and demand forecasting. This helps MC to refine recipes, reduce waste, and enhance customer satisfaction.

Key Considerations for MC:

MC’s local partnerships are a competitive strength. However, reliance on a single logistics provider poses risks, contingency planning or diversification of logistics partners may be necessary.

4. Firm Strategy, Structure and Rivalry

Key Points:

• Strong local brand identity.
• Competition from Fresheey, supermarkets, and “heat-and-eat.”
• Governance and investor pressures as a listed company.

Local brand:

MC is well-positioned as Ayeland’s local champion. Its strategy of using local recipes and suppliers has created strong cultural and brand loyalty.

Competition:

Fresheey’s global scale, supermarket offerings, and the popularity of heat-and-eat meals intensify rivalry. MC must compete on quality, trust, and differentiation rather than price.

Governance pressures:

As a listed company, MC faces constant scrutiny from investors and regulators. It must deliver consistent growth while maintaining high governance and ethical standards.

Key Considerations for MC:

To stay competitive, MC must reinforce its local identity, improve customer retention, and balance short-term performance with long-term sustainability.

Conclusion and Summary 

Ayeland provides MC with strong factor conditions (agriculture, expertise, infrastructure) and favourable demand (urban, health-conscious consumers). Its supplier ecosystem and cultural positioning strengthen competitiveness. However, rivalry remains intense, particularly from global players and supermarkets. MC’s ability to sustain competitive advantage depends on leveraging its local strengths, innovating in dietary and convenience products, and carefully managing governance and investor pressures.

Element	Key Points	Implications for MC
Factor Conditions	Rich agriculture, skilled chefs, strong logistics/digital infrastructure.	Leverage local produce and expertise; invest in tech and supplier relationships.
Demand Conditions	Urban lifestyles, health-conscious diets, pride in local cuisine.	Innovate menus to meet dietary needs; reinforce cultural identity.
Related & Supporting Industries	Strong supplier and packaging partnerships, advanced logistics, digital tools.	Partnerships are strengths; mitigate risk of dependence on one logistics provider.
Firm Strategy & Rivalry	Local brand, strong governance, intense competition from Fresheey and supermarkets.	Differentiate on quality and sustainability; manage investor and regulatory expectations.

Area 7 – Porter’s Generic Strategies

Porter’s Generic Strategies framework helps evaluate how an organisation positions itself competitively, choosing between cost leadership, differentiation, or focus. For MC, which operates in Ayeland’s highly competitive meal kit market, understanding its current position and strategic options is crucial.

Company’s Current Strategic Position

Key Points:

• Differentiation through quality and sustainability.
• Premium pricing relative to some competitors.
• Focus on local identity and cultural alignment.

Differentiation through quality:

MC has positioned itself as a high-quality provider, emphasising fresh, locally sourced ingredients and traditional Ayeland recipes. This differentiates it from global rivals like Fresheey and supermarkets that often emphasise scale or convenience over cultural authenticity.

Premium pricing:

MC’s average revenue per meal has risen slightly (to around $6.60), but it remains sensitive to pricing pressures. Its strategy is not cost leadership; instead, it focuses on delivering perceived added value (quality, sustainability, choice). Customers pay a fair but slightly premium price compared to generic alternatives.

Cultural and sustainability focus:

MC leverages Ayeland’s cultural pride by embedding local cuisine into its menus, while also reinforcing its ESG credentials through low food waste, recyclable packaging, and charitable donations. This strengthens brand loyalty and aligns with consumer social expectations.

Strategic Evaluation

Cost Leadership:

Unlikely for MC to pursue successfully. Fresheey’s global scale and supermarkets’ efficiency mean MC cannot sustainably compete on cost. Trying to do so could erode its quality and brand identity.

Differentiation:

This is MC’s current and most viable strategy. By emphasising freshness, cultural authenticity, sustainability, and customer trust, MC can retain and attract customers despite industry churn. Differentiation also supports premium pricing, offsetting cost pressures.

Focus Strategy:

MC partially follows a focused differentiation strategy, targeting health-conscious urban families and professionals in Ayeland who value convenience and quality. However, if it wishes to expand regionally, it must carefully evaluate whether its localised cultural positioning will resonate outside Ayeland.

Recommendations: Strengthening Strategic Focus

1. Deepen Differentiation: Continue to innovate in diet-specific options (vegan, gluten-free, low-carb) and strengthen sustainability initiatives to maintain distinctiveness.
2. Leverage Brand Identity: Build marketing campaigns around MC as Ayeland’s trusted local champion, to counter global competitors’ dominance.
3. Avoid Cost Leadership Pitfalls: Resist competing solely on price, as this would undermine MC’s premium, sustainable positioning. Instead, ensure operational efficiencies support profitability without diluting value.
4. Selective Focus: Retain its primary focus on health-conscious families and professionals, while cautiously exploring adjacent segments (corporates, retail partnerships).

Conclusion

MC’s best path forward lies in strengthening its differentiation strategy, anchored in quality, sustainability, and cultural authenticity. Competing on cost is neither viable nor aligned with its brand, while a focused differentiation approach enables it to deepen loyalty among its core customer base. By reinforcing its unique value rather than chasing price competition, MC can protect margins, reduce churn, and sustain long-term competitiveness.

Area 8 – Porter’s Five Forces Analysis

Porter’s Five Forces framework helps assess the competitive intensity and attractiveness of an industry by evaluating five key forces:

1. Competitive Rivalry
2. Threat of New Entrants
3. Bargaining Power of Suppliers
4. Bargaining Power of Customers
5. Threat of Substitutes

For MC, operating in Ayeland’s meal kit industry, the forces are significant and highlight the challenges of sustaining growth.

1. Competitive Rivalry – High

The meal kit market in Ayeland is highly competitive, with four main players (MC, Fresheey, Ayemeals, and Food Dropper) plus several niche providers. Fresheey, with 35% market share, is a global powerhouse with deep resources, while supermarkets and “heat-and-eat” alternatives provide indirect competition. Rivalry is intensified by low switching costs, as customers frequently change providers to take advantage of discounts. High churn rates (with fewer than 25% of subscriptions lasting more than six months) illustrate the competitive intensity.

Key Consideration: MC must focus on differentiation and loyalty strategies to withstand rivalry and maintain its customer base.

2. Threat of New Entrants – Moderate

Barriers to entry are not particularly high in this sector. A new entrant can establish an online platform and partner with suppliers and logistics firms. However, achieving scale, brand recognition, and customer trust is more difficult. Existing players like MC and Fresheey have established reputations, supplier networks, and operational efficiencies that create a moderate barrier. Nevertheless, niche entrants offering vegan-only or specialist diets remain a credible threat.

Key Consideration: MC should continue investing in its brand identity, supplier relationships, and technology to protect against new challengers.

3. Bargaining Power of Suppliers – Moderate to High

MC relies on over 600 suppliers, most of whom are local farmers and producers. While this wide base reduces dependence on any single supplier, the emphasis on high-quality, organic, and sustainable produce gives suppliers a degree of leverage. Moreover, MC depends on a single packaging provider and a single logistics partner (GoFlow), both of which represent points of vulnerability. Supplier power is therefore significant in some areas, particularly logistics and packaging.

Key Consideration: MC needs to diversify critical partnerships (packaging and logistics) and strengthen supplier collaboration to reduce dependence and maintain cost control.

4. Bargaining Power of Customers – High

Customers in Ayeland have a wide range of choices, both within the meal kit sector and in alternative food solutions. Switching costs are negligible, and promotional discounts encourage frequent movement between providers. Customers are also increasingly demanding, expecting variety, dietary-specific options, and sustainable packaging at a reasonable price. This high bargaining power keeps downward pressure on prices and makes customer retention difficult.

Key Consideration: MC must focus on delivering superior customer experience, offering personalised services, loyalty rewards, and continuous innovation in recipes and dietary options.

5. Threat of Substitutes – Moderate

The main substitutes for meal kits are heat-and-eat meals, supermarket-prepared kits, and traditional grocery shopping combined with recipe apps. Heat-and-eat meals, in particular, are gaining popularity due to convenience, and supermarkets are using their scale to push lower-cost options. While meal kits provide fresher, healthier, and more engaging experiences, substitutes appeal strongly to time-pressed or price-sensitive customers.

Key Consideration: MC must strengthen its value proposition by highlighting freshness, sustainability, and local authenticity to differentiate meal kits from substitutes.

Summary of Competitive Forces

The meal kit industry in Ayeland is shaped by high rivalry, strong customer bargaining power, and growing substitute threats. Supplier dependency adds further pressure, while the risk of new entrants is moderate. Overall, the forces suggest that the industry is intensely competitive and margins are under threat, making differentiation and loyalty crucial for survival.

Force	Level	Implications for MC
Competitive Rivalry	High	Differentiation and loyalty are essential to compete with Fresheey, supermarkets, and churn-driven rivalry.
Threat of New Entrants	Moderate	Niche entrants can emerge; MC must protect its position with brand strength, scale, and supplier relationships.
Supplier Power	Moderate–High	Wide supplier base helps, but reliance on single logistics and packaging partners increases vulnerability.
Customer Power	High	Switching costs are low; retention requires superior service, loyalty programmes, and constant innovation.
Threat of Substitutes	Moderate	Heat-and-eat meals and supermarket kits are strong alternatives; MC must emphasise freshness and authenticity.

MC operates in a challenging and margin-constrained environment where customers and competitors hold significant power. To thrive, MC must double down on customer retention, supplier diversification, and brand-led differentiation, ensuring it remains the trusted choice for quality and sustainability in Ayeland.

Area 9 – SWOT Analysis

SWOT analysis brings together MC’s internal strengths and weaknesses with external opportunities and threats. This provides a clear picture of MC’s current position and the strategic options available.

Strengths

1. Strong Local Brand Identity: MC has differentiated itself as Ayeland’s trusted meal kit provider, with recipes based on local traditions and produce. This cultural alignment creates customer loyalty and sets MC apart from global competitors like Fresheey.

2. Sustainability and Low Waste Model: Less than 1% of ingredients are wasted, with surplus donated to charities or used for animal feed. Packaging is 100% recyclable. This strengthens MC’s ESG credentials and appeals to socially conscious consumers.

3. Supplier Network and Quality Standards: With over 600 local suppliers, many practising organic and sustainable farming, MC can guarantee freshness and quality while supporting the national agricultural base. This enhances resilience and reinforces its brand values.

4. Data Analytics and Operational Efficiency: MC’s use of forecasting algorithms and robotics in production reduces waste, increases efficiency, and supports menu innovation based on customer preferences.

Weaknesses

1. High Customer Churn: Despite strong retention compared to competitors, churn remains significant. Less than 25% of industry subscriptions last beyond six months, and this trend affects MC’s profitability and marketing costs.

2. Dependence on Key Partners: Reliance on a single logistics partner (GoFlow) and one packaging provider exposes MC to operational risks if these partners face disruption.

3. Limited Geographic Scope: MC currently operates only in Ayeland. This limits growth potential compared to rivals like Fresheey, which operate internationally.

4. Equity-Heavy Capital Structure: With little evidence of debt financing, MC may have a higher cost of capital. Shareholder pressure for short-term performance could constrain long-term strategic investments.

Opportunities

1. Growing Demand for Health-Focused Options: Rising popularity of vegan, vegetarian, gluten-free, and low-carb diets provides opportunities for product expansion.

2. Market Expansion: Potential to enter neighbouring countries or collaborate with supermarkets to distribute meal kits in-store, reaching customers who prefer not to subscribe.

3. Diversification into Adjacent Markets: Entry into “heat-and-eat” meals or branded condiments/snacks could capture additional market share and appeal to convenience-driven consumers.

4. Technological Innovation: Greater use of AI and personalisation in digital platforms could enhance customer experience, improve loyalty, and reduce churn.

Threats

1. Intense Competition: Fresheey’s global scale, supermarkets’ in-house kits, and heat-and-eat alternatives create relentless competitive pressure.

2. Food Safety Risks: A single contamination or food safety incident could severely damage MC’s reputation and lead to regulatory action by AFSA.

3. Rising Costs: Inflation in logistics, packaging, and fresh produce could erode margins in an already price-sensitive market.

4. Cybersecurity Risks: MC’s digital platform stores customer data and payment details. A cyber breach would harm trust and invite regulatory penalties.

Strategic Alignment Summary

• Strength–Opportunity (SO): MC can leverage its strong brand, supplier base, and sustainability credentials to expand into health-focused products and new distribution channels.
• Weakness–Threat (WT): MC must address its churn problem and dependence on key partners to remain competitive in a cost-sensitive, high-risk industry.

Conclusion

MC’s strengths in brand, sustainability, and supplier relationships give it a strong foundation to grow. However, high churn, dependency on key partners, and intense rivalry remain major risks. To succeed, MC must pursue innovation in dietary-specific products, strengthen customer retention, and cautiously expand into new markets or adjacent products, while reinforcing governance, safety, and resilience.

Area 10 – Mendelow’s Matrix

Mendelow’s Matrix is a strategic tool used to prioritise stakeholders based on their power (ability to influence organisational decisions) and interest (level of concern or involvement in company activities). For this company, applying Mendelow’s Matrix helps identify where to focus engagement efforts, manage risks, and build stronger relationships.

Mendelow’s Matrix for the Company 

Quadrant	Stakeholders (MC context)	Engagement Strategy
High Power – High Interest (Key Players)	Regulators, Major Shareholders, Strategic Partners	Manage closely, maintain transparency, frequent updates
High Power – Low Interest (Keep Satisfied)	Government agencies (beyond regulators), Industry associations, Large institutional investors	Keep satisfied with compliance and periodic updates
Low Power – High Interest (Keep Informed)	Employees, Local communities, Customers (retail base)	Engage regularly, use communication and CSR initiatives
Low Power – Low Interest (Minimal Effort)	Smaller suppliers, General public, Competitors (indirectly)	Monitor with minimal direct effort

Strategic Implications

The stakeholder map highlights the groups that MC must prioritise as it navigates expansion, digitalisation, and sustainability pressures. High power–high interest stakeholders (regulators, major customers, lenders) will heavily shape MC’s ability to execute strategy, requiring proactive engagement and transparent communication. High power–low interest stakeholders (e.g. government policymakers) may need targeted updates to ensure their latent influence does not turn negative if expectations are unmet. Meanwhile, low power–high interest groups such as employees and local communities can act as enablers of change, particularly in sustainability initiatives, and provide reputational support if engaged effectively. Finally, low power–low interest groups should not be ignored; maintaining minimum standards prevents them from escalating into higher-risk categories.

For MC, this mapping suggests that:

• Expansion strategies must be communicated carefully to regulators and lenders to secure approval and financing.
• Digitalisation requires staff buy-in (low power–high interest) to ensure smooth adoption and efficiency gains.
• Sustainability pressures will intensify from customers and regulators, meaning MC’s reporting, ESG initiatives, and supply chain management must be aligned with stakeholder expectations.

In short, MC’s future strategy must balance compliance with high-power stakeholders while harnessing the enthusiasm of lower-power, high-interest groups to build legitimacy and long-term resilience.

Conclusion 

MC’s journey highlights the realities many businesses face in today’s competitive and regulated environment. From balancing stakeholder interests to managing operational challenges, the pre-seen gives us plenty to think about in terms of strategy, governance, and risk. For SBL students, this isn’t just about learning the facts, it’s about connecting the dots, anticipating examiner angles, and sharpening your ability to apply professional judgment.

The more you immerse yourself in MC’s story, the easier it will be to recognise patterns, apply frameworks, and respond with confidence in the exam. Think of this pre-seen not as a hurdle, but as an opportunity to step into the shoes of a board-level professional and demonstrate your ability to think strategically.