SG12 Team 4 Strategic Audit - BreadTalk
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Transcript of SG12 Team 4 Strategic Audit - BreadTalk
AB3601STRATEGIC AUDIT
Benedict Lim U1221025FLi Shili U1210073FMahalim U1211190ENg Song Yang U1211040BTeo Kok Hien U1121448E
AGENDA
• Background
• Competitive Analysis
• Value Chain Analysis
• Business Strategy
• Competitive Advantages
• SWOT
• Rumelt’s criteria
• Recommendations
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
1
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
2
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
3
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
4
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
5
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
6
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%
7
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
8
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
9
VALUE CHAIN ACTIVITIES
Distribution
Marketing and Sales
Human Resource
BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS
10
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
11
VALUE CHAIN ACTIVITIES
MARKETING & SALES
DIFFERENTIATION DRIVER• Brand management• Strong marketing presence
BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS
12
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
13
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
14
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
15
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
16
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
19
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
17
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
18
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
20
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
21
SWOT ANALYSISStrengths
Weaknesses
Opportunities Threats
Highest PriorityDiversification Strategy
2nd PriorityDefensive Strategy
BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS
22
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
23
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
RUMELT’S CRITERIAINTEGRATED COST STRATEGY AND DIFFERENTIATIONConsistency
Consonance
Competitive Advantage
Feasibility
BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS
25
RECOMMENDATIONS
Unrelated Diversification
Focus on differentiation
BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELT’S CRITERIA | RECOMMENDATIONS
26
END OF PRESENTATION
REFERENCE SLIDES
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
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