SG12 Team 4 Strategic Audit - BreadTalk

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AB3601 STRATEGIC AUDIT Benedict Lim U1221025F Li Shili U1210073F Mahalim U1211190E Ng Song Yang U1211040B Teo Kok Hien U1121448E

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breadtalk

Transcript of SG12 Team 4 Strategic Audit - BreadTalk

Page 1: SG12 Team 4 Strategic Audit - BreadTalk

AB3601STRATEGIC AUDIT

Benedict Lim U1221025FLi Shili U1210073FMahalim U1211190ENg Song Yang U1211040BTeo Kok Hien U1121448E

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AGENDA

• Background

• Competitive Analysis

• Value Chain Analysis

• Business Strategy

• Competitive Advantages

• SWOT

• Rumelt’s criteria

• Recommendations

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TIMELINEBreadTalk Pte Ltd founded

Pork floss bun Listed on SGX Expands into China

First overseas outlet in Jakarta

Expands into Malaysia

Launches Toast Box

Launches Food Republic

Expands into Philippines

Brings in Ding Tai Fung

Expands into Korean and Oman

Launches The Icing Room

Launches Bread Society

Obtains franchise for Carl’s Jr.

Launches RamenPlay

2000

800 outlets across 8 brands

Launches Thye Moh Chan confectionary

16 territories around the world

2003

200420052007

2008 2009

2014 2012“Establish BreadTalk as the foremost international, trend-setting lifestyle bakery brand”

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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BCG MATRIXBu

sine

ss G

row

th R

ate

Relative Position

StarsQuestion Mark

Dogs Cash Cow

Restaurant Food Atrium

Bakery

22.8%

26.6%

50.6%

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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PESTLEGG

Political/Legal

• Stable• Emphasis on

Guanxi

Economic

• High GDP• Rising income• Pro-domestic

policies

Social-Cultural

• High literacy• Preference for

baked goods

Technological

• Large investments

32.2%

• Costly relationship management

• Higher taxes • Nil • Nil

Liability of Foreignness

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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INTERNATIONAL STRATEGY

• Wholly-owned outlets• Franchised outlets• Joint venture for Carl’s Jr.

China

• Halal menu• FranchisingMiddle East

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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BUSINESS MODEL

Industry: Artisan bakery business

Geographic: Singapore

Business: Wholly-owned

Future positioning: Operational efficiency & Sit-downcafes

Year: 2000 TO 2014

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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COMPETITIVE DYNAMICS ANALYSIS

Resource Proxy:• Outlets (reach)• Strategic location

(convenience)• Variety (innovation)

•Behavioral•Demographic

(Pricing)

Mar

ket C

omm

onal

ity

Resource Similarity43 outlets

36 strategic

1000 variety

38 outlets 17 strategic

600 variety

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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STRATEGIC GROUP MAP

Key Success Factors Convenience Variety Location

SYMBOL BAKERY

B BreadTalk P PrimaDeli

C Crystal Jade My Kitchen S Bengawan Solo

D Delifrance T Baker Talent

F Four Leaves

5%

StrategicLocation

Conv

enie

nce

FD

B

C

PS

High

Low

Low High

8%

74%

13%

T

5%

StrategicLocation

Varie

ty

F

D

B

C

P

S

High

Low

Low High

8%

54%

13%

20%

T

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

20%

5%

Variety

Conv

enie

nce P

D

B

C

SHigh

Low

Low High

8%

40%

13%

T

F

14%

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COMPETITIVE RIVALRY: PRIMADELI

• Awareness: Yes• Motivation: High Market Commonality, Resource Similarity• Ability: Strong financials & good store locations

Drivers of competitive behavior

• Private, non-listed organisation, small inertia• Quality: Superbrand status

Likelihood of attack:

• Strong reputation and rich historyLikelihood of response:

High

High

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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PRIMADELI

• Halal certification

• Low sugar cakes

• Online/phone purchase

Attack

• Strategic store location

• Enhancing innovation

• Being fun & trendy

Response

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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VALUE CHAIN ACTIVITIES

Distribution

Marketing and Sales

Human Resource

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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VALUE CHAIN ACTIVITIES

DISTRIBUTION

DIFFERENTIATION DRIVER

• Outlets in high traffic areas such as CBD and heartlands

• Improved store design

COST DRIVER

• 4-in-1 retail concept

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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VALUE CHAIN ACTIVITIES

MARKETING & SALES

DIFFERENTIATION DRIVER• Brand management• Strong marketing presence

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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VALUE CHAIN ACTIVITIES

HUMAN RESOURCE

DIFFERENTIATION DRIVER• Management expertise and leadership• Department consolidation at IHQ• Innovation

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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PORTER’S GENERIC STRATEGY

Broad Target

Narrow Target

Competitive Scope

Cost Advantage

Competitive Advantage Uniqueness

Cost Leadership

Focused Cost Leadership

Differentiation

Focused Differentiation

INTEGRATED COST LEADERSHIP & DIFFERENTIATION

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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INTEGRATED COST LEADERSHIP & DIFFERENTIATIONLOW COSTS

1. 4-in-1 retail concept

DIFFERENTIATION1. Outlets in high traffic areas 2. Brand management3. Management expertise and leadership4. Innovation

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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CAPABILITIESOutlet Location Management• High consumer traffic• Outlets side-by-side

Brand Management• Strong and well-executed• Constant brand-building initiatives

Talent Management• Capable executive management• Creative and innovative personnel• Influential procurement employees

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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Outlet Location Management

Competitive Advantage

• Increases sales• Allows cross-outlet collaborationValuable

• PrimaDeli’s stores are not at prime locationsRare

• Requires huge rental costsCostly to Imitate

• Strategic location management benefits cannot be replaced

Non-Substitutable

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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BRAND MANAGEMENT

Competitive Advantage

• Higher consumer brand awarenessValuable

• PrimaDeli’s brand management is not as strongRare

• Requires significant marketing expenditure

Costly to Imitate

• No asset can replace brand influenceNon-Substitutable

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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TALENT MANAGEMENT

Competitive Advantage

• Crucial for company to achieve successValuable

• PrimaDeli does not have personnel of BreadTalk’s calibreRare

• Requires expensive compensation package

Costly to Imitate

• A company is only as good as its people

Non-Substitutable

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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COMPETITVE ADVANTAGE

Capability Valuable Rare Costly to Imitate

Non-Substitutable

Competitive Advantage

Outlet Location Management

Brand Management

Talent Management

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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SWOT ANALYSIS

Strengths• Significant brand management• Innovative R&D team• Strategic location of store outlets• Economies of scale

Weaknesses• Significant dependency on executive

creativity• Huge investment on brand expansion

Opportunities• Artisan bread industry is highly fragmented• Rising household income in Singapore• Cross-outlet collaboration of bakeries

Threats• Competitive and saturated bakery industry• Food safety concerns• New concepts may not appeal to customers• Susceptible to rental hikes and upward wage

pressure

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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SWOT ANALYSISStrengths

Weaknesses

Opportunities Threats

Highest PriorityDiversification Strategy

2nd PriorityDefensive Strategy

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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RUMELT’S CRITERIAINTEGRATED COST STRATEGY AND DIFFERENTIATIONConsistency

• Low costs vs differentiation• BCG Matrix vs low costs

Consonance• Competitors in external environment

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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RUMELT’S CRITERIAINTEGRATED COST STRATEGY AND DIFFERENTIATIONCompetitive Advantage

• Brand management• Talent management• Operations technology

Feasibility• Trade-offs between low cost and

differentiationBACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA |

RECOMMENDATIONS24

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RUMELT’S CRITERIAINTEGRATED COST STRATEGY AND DIFFERENTIATIONConsistency

Consonance

Competitive Advantage

Feasibility

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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RECOMMENDATIONS

Unrelated Diversification

Focus on differentiation

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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END OF PRESENTATION

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REFERENCE SLIDES

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COMPETITIVE DYNAMICS ANALYSISCompany No. of

North outlets

No. of South

outlets

No. of East

outlets

No. of West

outlets

No. of Central outlets

Total no. of

outlets

No. of strategic outlets

Bakery variety

Bakery items price

Market Common

ality

Resource Similarity

BreadTalk 6 7 9 6 15 43 36 High Medium - -

Bengawan Solo

14 1 9 10 6 40 28 Medium High Low Medium

Delifrance 4 3 4 3 14 27 16 Medium High Medium Low

Four Leaves 8 0 4 10 7 29 24 High Low Medium High

PrimaDeli Bakery

10 3 9 10 6 38 17 High Medium High High

Crystal Jade Bakery

2 1 5 2 7 17 15 Low Medium Medium Medium

Baker Talent 4 0 1 5 1 11 5 Medium Low Low Low

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS

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REFERENCES• http://breadtalk.listedcompany.com/misc/ar2013.pdf• http://

www.slideshare.net/SrikiranCRai1/a-cultural-economic-analysis-of-singapore-for-making-market-entry-decisions

• https://www.scribd.com/doc/3699043/BreadTalk-FinalReport• http://prezi.com/ccpw3b7bjil0/untitled-prezi/• https://brokingrfs.cimb.com/cFUZTDhgKnGWw2tTGfSdI6AdYk0Rxn3mlcqK

pzFSuV9umJAvmQRhs4KyfkVUKko1IQGEfspCHmg1.pdf• http://

www.ukessays.com/essays/marketing/breadtalk-group-limited-in-the-singapore-food-and-beverage-industry-marketingessay.php

• http://www.fool.sg/2013/10/22/5-things-you-should-know-about-breadtalk/

• http://www.breadtalk.com/board-of-directors.html• http://

www.ukessays.com/essays/marketing/analysis-of-food-processing-industry-marketing-essay.php