Bakery Industry Analysis

Table of Content

Porter’s Five Forces analysis is utile when seeking to understand the competitory environment confronting a backery industry. It involves looking at internal competition, barriers to entry, the profit-appropriating power of both purchasers and Sellerss, every bit good as replacements to the goods produced. Applied to the bakeshop industry it shows an mean net net income that typically does non cover the cost of capital due to low barriers to entry, easiness of production and easiness of entree to ingredients. The Menace of Substitutes and Porter’s Five Forces

Internal Rivalry

This essay could be plagiarized. Get your custom essay
“Dirty Pretty Things” Acts of Desperation: The State of Being Desperate
128 writers

ready to help you now

Get original paper

Without paying upfront

There are many participants in the bakeshop industry in Kuantan, Kemaman and Pekan. The industry is characterized by many little bakeshops, but at that place has been a recent tendency towards consolidation and economic systems of graduated table. Businesses compete on monetary value, quality, distinction and relationships with cardinal providers.

Barriers to Entry

Barriers to entry in this industry are low. Economies of graduated table are good, but are non required for industry success. As a consequence, little concerns can come in the industry with a comparatively little sum of capital. The two chief determiners of a new company’s success is the leaders’ ability to get sufficient distribution channels to cover operating costs and their ability to construct up trade name acknowledgment and trueness. Distribution channels typically involve retail mercantile establishments, such as supermarkets and food market shops, and they can be more easy acquired if the bakeshop has an established trade name or the selling resources to make one.


Buyers of the bakeshop industry’s merchandises, such as supermarkets, food market shops, hotel ironss and convenience shops, are able to allow much of the industry’s net income due to the big figure of little bakeshops that are all competing to happen mercantile establishments for their merchandises. As a consequence, purchasers are able to command low monetary values and volume price reductions. This will do the net incomes are little because they want to maintain seting the merchandise together with rivals from the same industry.


Suppliers do non hold much negociating power in the bakeshop concern due to the well developed markets for their merchandises and the commoditized nature of what they are selling. Bakeries can be affected by monetary value swings of the natural inputs, but the alterations are a consequence of planetary supply and demand determiners instead than suppliers’ negociating power. Most providers of bakeshop goods on the East Coast is more expensive compared to big metropoliss such as Kuala Lumpur, Melaka and Ipoh. This causes the monetary value of the bar to be expensive because of higher natural stuff costs.


Many replacements exist for bakeshop merchandises. Breakfast cereals, rice and murphies are all feasible options and persons can besides do all of the baked goods they want at place. Bakeries rely upon monetary value and convenience to maintain persons exchanging to a replacement or baking what they need at place.

4.0 Selling Scheme4.1 Market Segmentation

Marketing Cleavage is the procedure of analysing and sorting clients in a given market to make smaller, more precise mark markets. FadRizals Cakes has identified its overall market to dwell of people who have a higher degree of discretional income to indulge in and appreciate the keen creativeness and genius to devour extraordinary bars that non merely gustatory sensation good but look good at the same clip. Geographically, their market will get down within the Kuantan country and expand to environing provinces in the following 3 old ages.

Psychographically, their focal point involves placing people who enjoy art of bar design and attention about the luxury gustatory sensation of the merchandises. Their voguish company emphasizes its selling attempts towards the Baby Boomers ( those born 1946-64 ) , Generation X ( born 1964-74 ) , Generation Y ( born 1975-95 ) and Generation Z ( born 2000-2021 ) . Among possible clients identified to be a portion of their mark market we have identified particular events that would affect those clients such as:

• Anniversary parties• Baby showers• Birthday parties• Bon Ocean trip• Bridal showers• Congratulatory jubilations• Graduations• Holidays i.e. , Hari Raya, Chinese New Year, Fathers’ Day, Mothers’ Day, Valentine’s Day, etc.

4.2 Target Market Segment StrategyTarget Market Segment Strategy is the designation of mark markets and finding of marketing mix picks that focus on those markets. FadRizal Cakes has identified the above listed markets so that they can be adaptable to different people, and the occasions they enjoy observing.

4.3 Marketing Mix1. Merchandise: Their merchandise is a high-quality, unique that is highly adaptable to both particular events. In add-on, our company will donate a per centum of its net net incomes to The Conservation Fund to assist back up our global environmental ends.

2. Monetary value: The monetary value of our cupcakes is $ 4.00 each which includes the merchandise, the seeds and bringing of merchandise to consumers within Connecticut. 3. ( Topographic point ) : Peace of Cake will market its products’ adaptability and its public-service corporation adaptability in a locale of different online and offline attacks which include:

[ Online ] ….electronic imperativeness releases, web site, e-mail selling run, web picture ad, message boards, on-line catalogs, etc.[ Offline ] …press release, booklets, bill of fares, direct mail, telecasting topographic point, wireless ads, concern cards.4. ( Promotion ) : Our current promotional programs include but are non limited to:

• Guerilla poster to blogs integrating company message with signature file• Create online and offline imperativeness releases to present new concern• Radio commercials• Television featured narrative on Good Morning ConnecticutPeace of Cake, LLC 114. Marketing Mix ( Promotion….continued )

• Displaying ware at CT espousal shows• Facebook, Twitter, Blogger, Delicious, Digg, GoogleBuzz, Linked In, Reddit, StumbleUpon• Ads on Google, and sites like• Coupon offers, both online and offline• Premiums, giveaways, inducements, competitions• Samples ( offline )• Magazine and newspaper ads• Mall booths• Direct mail

4.4 Market Trends/GrowthThroughout the last few old ages, the market for cupcakes has greatly expanded. No longer are they merely a merriment birthday party dainty that can be purchased at any food market shop or bakeshop. They have expanded to go a multi-million dollar industry with forte designs to accommodate to any juncture. Peace of Cake joins this forte market with something new and different to offer its clients. Not merely is our merchandise adaptable to a broad assortment of occasions and forte events, but we expect to turn enormously over the following few old ages due to our adaptability to our clients’ dietetic demands.

4.5 Competition ResearchIn a competitory market, there are already some concerns that have a house clasp in the market topographic point. One of our top rivals is Nora Cupcake Company, located nearby in Middletown, CT. They have an established Facebook page with several positive reappraisal posters. Fortunately, their client base is local to merely Middletown. They do make a vegan and gluten free cupcake, but merely do one of each. There is no bringing and you can non order online. Another rival is Manta Cupcakes. They excessively are based out of Connecticut, but are less good known than Nora Cupcake Company. This makes them less of a menace when compared to our Company and its strong selling schemes. Peace of Cake, LLC 1

2Neither company delivers nor has any particular trades for measure purchases. The 3rd rival is The Cupcake Truck located and presenting in the Greater New Haven country. They deliver Merely in New Haven and are available on a limited footing depending on the truck stop agenda. Their cupcake offerings are limited to day-to-day specials. Our 5th biggest rival is Sweet Maria’s Bakery in Waterbury. Their cupcakes go for $ 5.50 each and there is a 2 twenty-four hours advanced notice for single bars and multiple cupcake orders up to 2 twelve. They have limited hours and do non present. Online telling is non available. Frosted Couture located in Southington is an upscale bakeshop that caters to high-end clients. They call themselves a prime cupcake dress shop and transport a broad assortment of forte cupcakes similar to Peace of Cake.

Their monetary values are a spot higher than ours, but the merchandise is comparable. Orders can be placed on line and they deliver, but merely to the Greater Hartford country. However, they do non suit those with particular dietetic demands like vegan, gluten-free, or sugar free. Frosted Couture seems to be our biggest rival, nevertheless they are limited in their bringing country every bit good as their adaptability to suit those with particular dietetic demands. It is of import to besides observe that they are NOT a nut-free bakeshop, whereas Peace of Cake differentiates itself by holding a nut-free homework kitchen country. This of import factor besides helps us to accommodate to those clients who have nut allergic reactions.

4.6 Sustainable Competitive AdvantagesBased on our chief competition mentioned above, Peace of Cake really has rather a few competitory advantages which include ADAPTABILITY:1. Our monetary value construction remains competitory2. Our choice of cupcake designs is much more diverse3. We are adaptable to our customers’ dietetic demands offeringa ) Vegan cupcakesB ) Gluten-free cupcakesdegree Celsiuss ) Sugar-free cupcakesvitamin D ) Nut free cupcakes4. We can accommodate any cupcake design to any specific juncture5. We deliver6. Our cupcakes come with seeds to nurture the Earth7. In an attempt to assist salvage the environment a per centum of our cyberspace net incomes go to The Conservation Fund.

Cite this page

Bakery Industry Analysis. (2017, Aug 06). Retrieved from

Remember! This essay was written by a student

You can get a custom paper by one of our expert writers

Order custom paper Without paying upfront