BreadTalk Group Limited Essay Example for Free

BreadTalk multitude Limited EssayBread is one of the close popular staple in the Asian food culture. In the course of studys, BreadTalk has successfully expanded their influence and personality to 16 countries with more than 500 bakeries all around the world. BreadTalk is cognize for their see thru kitchen concept which en qualifieds their chefs a weapons platform to showcase the skills and capabilities. This as well as al embarrasseds interaction between customers and employees.A comprehensive analysis of the line of reasoning strategy of BreadTalk Group Limited for the Siameseland market revealed that its strategical objectives ar aligned to the companys vision and mission argumentation Vision Establish BreadTalk as the foremost international, trend-setting lifestyle bakery brand Mission Leading a new lifestyle culture with new, innovative repositions and creative differentiation to craft products with passion and vibrancy modern improvement and design of their p roducts increased awargonness of the brand, BreadTalk, complimented with the use of locations with elevated human traffic are change magnitude the market share of its bakery arm within the Thailand market. Lessons d tippyn from the analysis have shown that BreadTalk is consistently seek improvement and reviewing their strategies to nonplus abreast. Being in a country with cultural differences in food preferences, workings attitudes and lifestyle, BreadTalks variant and globalization strategies has proven to be impressive. Success is reflected in the confident future investment promise and wait ones in place to overcome their strategic implementation issues.IntroductionBreadTalk is aggressively expanding globally and leaves footprints in China, Indonesia and Thailand. With Singapore and China markets dominating the overall revenue for the bakery arm, a review on the business line strategy for the Thailand market carried out. Strategies and implementation issues are ident ified to increase the market share and revenue for BreadTalk Thailand employ the rational / formal precedent.BreadTalks company history and background is attached in Appendix A.With a strategic analysis on the external and natural environments using models / theories like PESTEL, Porters 5 Forces, analysis of turbulences and internal strategic competitive advantage, useful strengths and weaknesses, opportunities and threats are identified in this report. Strategic implementation and implementation issues are discussed further. Successful implementations are useful lessons for review.Strategic AnalysisExternal analysis General environmentPESTEL modelPolitical/LegalThailand has faced various political/government instabilities, such(prenominal) as the Thai takeover dtat in 2006, the elections for a new constitution in 2007, a political crisis in 2008, and crackdowns and protests which involved violence from 2009-2010. Although the ruling of the July 2011 elections belonged to the P heu Thai Party, the political situation was still shaky. There was a meshing between the red shirts (supporters of current ruling Pheu Thai Party) and yel paltry shirts (oppositions of the Pheu Thai Party), resulting in continuous tensions. on the whole the bloodshed also damaged the economy, sinking the already misfortunate consumer confidence even more.Besides this matter, Thailands also having issues with its neighboring country, Malaysia. Both countries relationships have soured dandyly because of the Pattani separatists issue, which involved the struggle of independence by the social Malays in Southern Thailand. These incidents have raised concerns among foreign investors and manufacturers regarding Thailands political stability.Thailand has strict regulations when it comes to working terms and conditions. A proper visa must be applied from a Royal Thai Embassy, with some countries asking to harbor an entry visa, which allows a stay of 15 days upon arrival in Thailand. H owever, Singapore is one of the countries that could stay for 30 days without an entry visa, but must obtain an entry stamp on their passports. The outrage of Thailands employment regulation is that it is time consuming, expensive and has a tedious amount of paperwork.EconomicFollowing the aeonian tremors in the economy in 2008 and late 2011s Euro crisis, Thailand has suffered duly in retrospect. With a staggering 41.06% debt of Thailands total GDP January this year and an additional 2 trillion baht for the beginning of next year (Good only at borrowing jibe haunts Pheu Thai Party, 2012), the country has much to recover from. The nations currency, Thai baht, has also taken a beating from the economic crisis in 2008 and 2011, falling from a blue of 43.6 baht in 2002 to 29.44 baht per 1 USD today.However, it is to be noted that Thailand has come a long counsel since its third world country days back in the 90s. It has reduced its poverty by a third, from 27% in 1997 to 9.8% in 200 2, and even has a health care policy which covers roughly 70% of its citizens (Data Thailand).Countries surrounding Thailand portray a mixed basket of economy statuses. With Myanmar slowly opening its doors to foreign investors, and Malaysia track a high risk of going into debt (Budget 2013 proof Malaysia falling into debt crisis as income slows, says MP, 2012), Thailand has to weigh its opportunities and costs with great consideration in order to maximize its potential in this crisis-stricken economy.Social/CulturalBuddhism is the main holiness in Thailand (about 85%) and it greatly influences the Thais working attitude such as lever and politeness, for large and thoughtfulness. abide by is also reflected in the countrys monarchy system with military-dominated hierarchy present in both the company and workplace (Bi, 2012). In addition to their religious beliefs, modern Thais also display patience and hospitality at work emphasizing positive outlook. Thais prefer to work in a group, with ample time for closure in social environment isolating them will lead to stress and discomfort. They have great respect for age and authority, preferring obedience and tolerance to conflict (Gross, 2001).Thai cooking is under the influence from the Chinese from southerly China, Indians nearby and Malays from the south the main dietary staple is rice. Due to the social nature and friendliness of Thai people, dishes are shared and enjoyed together. They love to eat in groups and eating alone is considered bad luck. Thais are known to take 7 meals a day besides breakfast, lunch and dinner, they snack a lot, savouring snacks along roadside or marketplaces anytime. Bread is be access popular due its convenience. Baked products are expecting an annual developing of 5-6% (Jitpleecheep, 2012).TechnologyAccording to Internet World Stats, Thailand is ranked 9th in 2011 amongst countries in Asia, in terms of be of Internet users. Currently the population of Thailand is at 66.7 million the country has an Internet penetration rate of approximately 31%, which amounts to 20.7 million in 2011 (Singapore Management University, 2012). There is a growing percentage of advertising give-up the ghost with more large firms diverting a proportion of their advertising budgets to online advertising (Appendix B).Amongst the Asia-peaceable countries, businesses in Thailand are comparatively active on social media channels (Kemp, 2012). As enterprises tap on social media for their business, they play on the personal touch factor that social media is able to achieve. Social media inspires and influence the behavior of Internet users, such as acquire a product, by stimulating and attracting them to participate in online activities (New Media Trend Watch, 2012). This participation solves the purchasing process more personalized, hence increases sales.Thus, if BreadTalk intend to increase their sales in the FB effort in Thailand, they could make use of the developing soci al media platforms to aid in publicising the brand and its products (MVF GLOBAL, 2012). In this case, it would be more effective and they can reach to a wider audience too, bringing BreadTalk to greater heights.EnvironmentThe Thai Government has been charge on the social and economic development for the past 35 years. Nevertheless, over the past decade Thailand has been more and more threatened by the problems of industrial waste, hazardous wastes, natural resources degradation and water pollution (Thailand Info Economy, 2008).Thailand has been suffering the threat of floods in the recent years. This has caused a dip in their production of rice-their staple and in their touristry sedulousness. During the times of floods, there was a scarcity of food supplies. According to the Ministry of Natural Resources and Environment of Thailand (MNRE), since 1992 the Government has make protecting the environment one of its top priorities.Thailand can be described as a equatorial and humi d country throughout the year. They claim to have only two seasons, the wet and dry. The summer extends from environ to June with a temperature of 320 C to 360 C and monsoon extends from July to October with temperatures averaging around 290 C (The Global Climate Change Regime, 2012).This climate is fitting for BreadTalk. The process of fermentation and baking of various types of breads needs a tropical environment. Extreme weathers would change the uniformness of the raising process for the bread and its fermentation process.External analysis Industry RelatedPorters 5 forcesThreat of new entrants (HIGH)The threat of new entrants is high as barriers of entry are low due to the little regulations from the government, the low capital outlay as compared to other industries, low Research and festering costs, and it is likely a highly profitable market. Also, because food has incessantly been popular with people, and people are always looking for something new and fresh, umteen food joints have been opening, resulting in high amount of entry candidates. What attracts consumers is the regeneration of food being offered, therefore BreadTalk can consider widening their variety of breads, or by coming up with new flavors seasonally so as to stay competitive with the new entrants. bargain power of customers (HIGH)Customers have a generally strong bargaining power due to the high competition in the Food Beverage (FB) industry. Should customers not be satisfied with BreadTalks provision of goods and services, they have the power to ostracize and purchase from a different provider, causing huge losses to the company.BreadTalk has to constantly update itself on customers tastes and preferences to go against cater to their needs. It should also focus on hearing what consumers have to say, to be able to meet consumers expectations.Bargaining power of supplier (LOW)The overall bargaining power of suppliers for the FB industry is usually low due to the interchangeabl e quality of the products. Bulk purchases lead to economies of scale, further bring down the prices of the supplies. Suppliers of these FB ingredients are in abundance many in the market that lead to price competition. However, the bargaining power of the suppliers may escalate due to climatic influence that may cause shortages in the supplies the supplier may then choose to work with companies who are willing to pay more. BreadTalk has its advantage over the suppliers, as the ingredients and packaging material are normal goods that are available from many suppliers.Threat of substitutes (HIGH)The Food and Beverage market has a big industry intersect and goes a long way back into history, therefore the risk of substitutes for food is actually very high (Aswe Travel, 2011). The food vendors must take note of mutual substitution. Congruently for bread-wise, there is no need for customers to consume them, specially in Thailand where its unique food culture provides various alternativ es like rice and noodles that can fulfill the comparable purpose altogether (Aswe Travel, 2011). Thus, there is a certain level of risk for BreadTalks expansion and they need to tackle into the eating habits of the population, in order to win them over.Overall, there is a high threat of substitutes in Thailand for BreadTalk.Competitive rivalry price war, elasticity within the bread industry (HIGH)The Food and Beverage industry normally experiences intense competition. The bakery market in Thailand is increasingly growing since bread can be favored as substitute for rice. In the meantime, competitors may want to get advantage of this growing trend.With growing urbanization in Thailand, now comprising of 33% of the total population have been observed to move onward from traditional open air markets to retail stores (Exporter melt THAILAND FOOD BEVERAGE Market Profile, 2011). The competitors in this industry for BreadTalk can be roughly categorized into Cafs Coffee shops, in-stor e shops in restaurants and hotels and open-air wet/flea markets. latterly over the past 5 years, there is an emergence of regional caf come bakery concept (Exporter Guide THAILAND FOOD BEVERAGE Market Profile, 2011).The main competitors of BreadTalk in Thailand are Ka-nom, U-Bake, Pee Pee Bakery and The benignant Bakery.An analysis of the Porters 5 Forces reflected that despite the overall competition for BreadTalk within the industry being strong, BreadTalk is still able to sustain and achieve above average profitability due to the future(a)TurbulencesComplexityBreadTalk is positioned at the slightly Complex Environment due to the wide range of products and competitive substitutes available but low interconnectedness among the products, markets and competitors the bakery market in Thailand is relatively small (Appendix C).DynamismFB industry in Thailand is generally low dynamism and is said to be in a static environment the intensity and frequency of change is minimal and not drastic for this industry (Appendix D).PredictabilityBesides the normal business cycle, other influences such as natural disaster eg flood and drought caused the environment to be unpredictable. Despite this influence, tourism is still pickaxe up (ranking 39 in 2009 and 42 in 2008 (Blanke Chiesa, 2009)) and growth of private investment is healthy (East Asia Pacific Economic Update Navigating Turbulence, Sustaining Growth, 2011). Internal analysis BreadTalk Strategic Competitive Advantage Consistent with the company business strategy, BreadTalk continues to seek competitive advantages (Loh, 2011) based on their uniqueBreadTalk is consistently pushing out new products and upgrading of retail space to enhance customers experience. Their innovative achievement is strongly supported from top management to front-liners, starting from strategic planning by the top management, support from staff and feedback from customers, high quality control baking process and release of new products frequently.SWOT AnalysisWith the above analysis on the external and internal environment, the following SWOT is identified and a summary attached in Appendix EStrengthsBreadTalk has the capacity of preparing the raw material (dough) for all the outlets ensuring strict quality control and a team of innovative designer winning care of new product design and customer experience. Its unique branding and concept attract customers giving them new snacking experience at convenient locations.WeaknessesThere is limited sales and marketing effort in place for BreadTalk leading to low brand awareness and no loyal customer base. Allocating 20% adaptation to local food culture may not be sufficient for the Thailand. OpportunitiesIncrease in tourism business boost the growth of FB sector and Thailand being ranked no. 13 out of 133 countries who are like foreign visitors, is adjusting to accommodate the foreign visitors likes and dislikes (Blanke Chiesa, 2009).