AB3601

STRATEGIC AUDIT

Benedict Lim U1221025F

Li Shili
U1210073F
Mahalim
U1211190E
Ng Song Yang U1211040B
Teo Kok Hien U1121448E

AGENDA
Background
Competitive Analysis
Value Chain Analysis
Business Strategy
Competitive Advantages
SWOT
Rumelts criteria
Recommendations

TIMELINE
2000
BreadTalk Pte Pork floss
Ltd founded
bun

2007

2003
Listed on
SGX

First overseas Expands into

outlet in
China
Jakarta

2005

Expands into
Malaysia

Launches
Toast Box

2004

Launches
Food
Republic

Brings in
Ding Tai Fung

2008
Expands into
Korean and
Oman

2009

Launches The Launches

Bread Society
Icing Room

Launches
RamenPlay

2014

Establish BreadTalk as
the
foremost
international,
trendsetting lifestyle bakery
brand

Expands into
Philippines

800 outlets
across 8
brands

16 territories
around the
world

Obtains
franchise for
Carls Jr.

2012
Launches
Thye Moh
Chan
confectionary

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 1|

BCG MATRIX
Business Growth Rate

Question Mark

22.8%

Dogs

Stars
26.6%

Food
Atrium

Restaur
ant

Cash Cow

Bakery

50.6
%

Relative Position
BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 2|

PESTLEGG

Political/L
egal
Stable
Emphasis on
Guanxi

32.2%

Economic
High GDP
Rising
income
Pro-domestic
policies

SocialCultural
High literacy
Preference
for baked
goods

Technologi
cal
Large
investments

Liability of
Foreignness
Costly
relationship
management

Higher taxes

Nil

Nil

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 3|

INTERNATIONAL
STRATEGY
China

Middle
East

Wholly-owned outlets
Franchised outlets
Joint venture for Carls Jr.

Halal menu
Franchising

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 4|

BUSINESS MODEL
Industry: Artisan bakery
business
Geographic: Singapore
Business: Wholly-owned

Future positioning: Operational efficiency & S

down
cafes
Year: 2000 TO
2014

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 5|

 Behavioral
Demograph
ic (Pricing)

Market Commonality

COMPETITIVE DYNAMICS
ANALYSIS

43 outlets
36 strategic
1000 variety

38 outlets
17 strategic

600 variety

Resource Similarity
Resource Proxy:
Outlets (reach)
Strategic location
(convenience)
Variety (innovation)

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 6|

STRATEGIC GROUP MAP

Convenience

High

Low

20%

13%

P
F
14%

C
T

40%

5%

8%
Low

Variety

High

P
13%

SB
F

8%

C
T

High

SYMB
OL

BAKERY

BreadTalk

PrimaDeli

Crystal Jade My
Kitchen

Bengawan Solo

Delifrance

Baker Talent

High

54%

13%

5%

74%

5%

20%
8%

Low

Low

Variety

Locatio
n

Variety

Convenien
ce
Convenience

Key Success
Factors

Low

Strategic
Location

High

Low

Strategic
Location

High

BACKGROUND
|
F
Four Leaves| COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 7

COMPETITIVE RIVALRY:
PRIMADELI
Drivers of
competitive
behavior
Likelihood of attack:
High
Likelihood of
response:
High

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

Private, non-listed organisation, small inertia

Quality: Superbrand status

Strong reputation and rich history

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 8|

PRIMADELI
Halal certification

Strategic store location

Low sugar cakes

Enhancing innovation

Online/phone purchase

Being fun & trendy

Attack

Respon
se

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA 9|

VALUE CHAIN ACTIVITIES

Distribution
Marketing and Sales
Human Resource

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

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

1

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

VALUE CHAIN ACTIVITIES

MARKETING &
SALES

DIFFERENTIATION DRIVER

Brand management
Strong marketing
presence
1

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

VALUE CHAIN ACTIVITIES

HUMAN RESOURCE

DIFFERENTIATION DRIVER

Management expertise and

leadership
Department consolidation at
IHQ
Innovation
BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

PORTERS GENERIC
Competitive
STRATEGY
Advantage

Broa
d
Targ
et
Competiti
ve Scope
Narrow
Target

Cost Advantage

Uniquenes
s

Cost Leadership

Differentiati
on

INTEGRATED COST
LEADERSHIP &
DIFFERENTIATION
Focused Cost
Focused
Leadership
Differentiatio
n

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

INTEGRATED COST
LEADERSHIP &
DIFFERENTIATION
LOW COSTS
1. 4-in-1 retail concept

DIFFERENTIATIO
N
1. Outlets in high traffic areas
2. Brand management
3. Management expertise and
leadership
4. Innovation
1

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

CAPABILITIES
Outlet 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 | RUMELTS CRITERIA |

Outlet Location
Management
Increases sales
Valuable
Rare
Costly to
Imitate
NonSubstituta
ble

Allows cross-outlet collaboration

PrimaDelis stores are not at
prime locations

Requires huge rental costs

Strategic location management

benefits cannot be replaced

Competitive
Advantage

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

BRAND MANAGEMENT
Valuable
Rare
Costly to
Imitate
NonSubstituta
ble

Higher consumer brand

awareness
PrimaDelis brand management
is not as strong
Requires significant marketing
expenditure
No asset can replace brand
influence

Competitive
Advantage

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

TALENT MANAGEMENT
Valuable

Crucial for company to achieve

success

Rare

PrimaDeli does not have

personnel of BreadTalks calibre

Costly to
Imitate
NonSubstituta
ble

Requires expensive
compensation package
A company is only as good as its
people

Competitive
Advantage

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

COMPETITVE ADVANTAGE
Capability

Valuable

Rare

Costly to
Imitate

NonSubstituta
ble

Competitiv
e
Advantage

Outlet
Location
Manageme
nt
Brand
Manageme
nt
Talent
Manageme
nt

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

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 | RUMELTS CRITERIA |

SWOT ANALYSIS
Strengths

Highest Priority

Diversification
Strategy

Opportuniti
es

Threats

2nd Priority

Defensive Strategy

Weaknesse
s

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

RUMELTS CRITERIA
INTEGRATED COST
STRATEGY AND
DIFFERENTIATION
Consistency
Low costs vs differentiation
BCG Matrix vs low costs

Consonance
Competitors in external
environment
2

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

RUMELTS CRITERIA
INTEGRATED COST
STRATEGY AND
DIFFERENTIATION
Competitive Advantage
Brand management
Talent management
Operations technology

Feasibility
Trade-offs between low cost and
differentiation
2

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

RUMELTS CRITERIA
INTEGRATED COST
STRATEGY AND
DIFFERENTIATION
Consistency
Consonance
Competitive Advantage
Feasibility
2

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

RECOMMENDATIONS
Unrelated
Diversification

Focus on
differentiation

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

END OF PRESENTATION

REFERENCE SLIDES

COMPETITIVE DYNAMICS
ANALYSIS
Company

No. of
North
outlet
s

No. of
South
outlet
s

No. of
East
outlet
s

No. of
West
outlet
s

No. of
Centr
al
outlet
s

Total
no. of
outlet
s

No. of
strate
gic
outlet
s

Baker
y
variet
y

Baker
y
items
price

Market
Comm
onality

Resour
ce
Similar
ity

BreadTalk

15

43

36

High

Mediu
m

Bengawan
Solo

14

10

40

28

Mediu
m

High

Low

Medium

Delifrance

14

27

16

Mediu
m

High

Medium

Low

Four
Leaves

10

29

24

High

Low

Medium

High

PrimaDeli
Bakery

10

10

38

17

High

Mediu
m

High

High

Crystal
Jade Bakery

17

15

Low

Mediu
m

Medium

Medium

Baker
Talent

11

Mediu
m

Low

Low

Low

BACKGROUND | COMPETITION | VALUE-CHAIN | GENERIC STRATEGY | VRIN | SWOT | RUMELTS CRITERIA |

REFERENCES

http://breadtalk.listedcompany.com/misc/ar2013.pdf
http://
www.slideshare.net/SrikiranCRai1/a-cultural-economic-analy
sis-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/cFUZTDhgKnGWw2tTGfSdI6
AdYk0Rxn3mlcqKpzFSuV9umJAvmQRhs4KyfkVUKko1IQGEfspC
Hmg1.pdf
http://
www.ukessays.com/essays/marketing/breadtalk-group-limite
d-in-the-singapore-food-and-beverage-industry-marketinge
ssay.php
http://www.fool.sg/2013/10/22/5-things-you-should-know-ab
out-breadtalk/
http://www.breadtalk.com/board-of-directors.html
http://
www.ukessays.com/essays/marketing/analysis-of-food-proce