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Contents Page
Page
Executive Summary
1. Introduction
1.1 Company Overview
1.2 Recent Developments1.3 Industry Overview
2. External Environment Analysis – PEST
2.1 Political
2.2 Economical
2.3 Socio-cultural
2.4 Technological
2.5 Implication of PEST
3. Internal Analysis
3.1 Financial Analysis
3.2 Success Factors of Breadtalk Group
3.3 Value Chain
3.4 Competitors’ Analysis
3.5 Strategic Group Analysis
3.6 Porter’s Five Forces
3.7 Boston Consulting Group Matrix
3.8 TOWS Matrix
4. Problem Definition & Objective
4.1 Problem Definition
4.1.1 Current Challenges
4.1.2 Future Challenges
4.2 Short Term Objectives
4.3 Long Term Objectives
5. Recommended Strategies
5.1 Business Level Strategy
5.1.1 Porter’s Generic Strategies
5.2 Corporate Level Strategy
5.2.1 Related Diversification
5.3 International Strategy
5.3.1 Franchising
5.3.2 Joint Ventures
6. Implementation
7. Evaluation and Control
References
Appendix
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Executive Summary
BreadTalk Group Limited is a lifestyle F&B group who started with the Bakery
business in year 2000, and steadily developed into an enterprise consisting of 3 major
business segments in Bakery, Restaurant, and Food Atrium.
This report includes a detailed analysis conducted on BreadTalk Group Limited, and
the proposed strategies that will give BreadTalk a better direction into its future with
the idea of sustainability.
The report consists of a brief overview of the company and the industrial outlook. It
will be followed by an extensive external and internal environmental analysis
conducted and its implications. Key success factors will be identified and matched toBreadTalk’s core competencies, and various Strategic Management models and tools
will be use to aid analysis.
Lastly, challenges faced and both short and long-term objectives will be discussed,
and proposed strategies and implementation measures will be put forward. The
proposed strategies will be discussed using Porter’s Generic Strategies and The
Balanced Scorecard is used for Implementation, Evaluation and Control.
BreadTalk is anticipated to continue to thrive in the industry and go from strength to
strength, and become an even bigger and sustainable business.
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1. Introduction
1.1 Company Overview
BreadTalk Group Limited was founded in year 2000 by current Managing Director, Mr
George Quek and his wife, Executive Director, Mrs Katherine Lee. The first retail outlet
opened at Parco Bugis Junction in July 2000 selling freshly baked breads and buns that are
visually creative and attractive. Within 5 months, the second outlet at Novena Square
followed and they also ventured into the HDB heartlands (BreadTalk Group Limited, 2012).
By year 2003, BreadTalk was listed on the SGX.
A central kitchen and corporate headquarters was built at KA FoodLink, Kampong Ampat in
September 2001 to centralise food preparation process and in preparation of franchising plans.
Over the past 11 years, BreadTalk has expanded and become a distinctive F&B brand with
bakery, restaurant and food atrium businesses. Their proprietary brands are BreadTalk, Toast
Box, Food Republic, RamenPlay and The Icing Room. They also manage franchises in Din
Tai Fung and Carl’s Jr.
1.2 Recent Developments
10-storey International Headquarters (IHQ) due to complete in year 2013, costingapproximately S$64.1 million.
The IHQ will house the Grou p‘s main office, retail, Research & Development,
training, logistics and central kitchen facilities (BreadTalk Group Limited, 2012).
As of 2011, BreadTalk manages 81 bakery outlets, 7 food atriums and 17 restaurants
in Singapore.
Presence in 16 countries, including Singapore, Mainland China, Hong Kong and
Indonesia, supported by 6000 global staffs, managing over 500 F&B outlets.
1.3 Industry Overview
Looking at the Food & Beverage (F&B) industry in Singapore, it is a highly competitive but
promising industry with steady growth rate and expanding market value. The rise in growing
middle income groups, increase in visitors and the surge in disposable income are the main
driving forces for the growth. The industry is predicted to grow even further where food retail
currently represents 40% of the total retail spending in Singapore (Singstat, 2012). Singapore
is also one of the top three eating capitals in Asia-Pacific (SPRING Singapore, 2012).
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As a company with huge success, BreadTalk needs to continue to monitor the general and
industrial environment as well as making sound strategic moves to improve their market
position, gain competitive advantages and ensures a sustainable growth.
2. External Environment Analysis – PESTPEST analysis look into the political, economic, social-cultural and technological aspect of
the environment that the industry is affected. It is a powerful tool to improve businesses
through effective & practical scanning of the environment and making prediction and
preemptive strategies to gain competitive advantages (Carruthers, 2009). A PEST analysis
would be done for Breadtalk Group.
2.1 Political
Singapore government encourages local companies to venture overseas. A “double
tax deductions” scheme is introduced to allow companies to have deduction on tax
income mainly for overseas business or investment (International Enterprise
Singapore, 2010).
The Agri-Food & Veterinary (AVA) is the national authority entrusted to ensure a
resilient supply of safe food. Under Food Regulations and the Sale of Food Act, all
processed food must comply with prevailing requirement including labelling
requirements.
2.2 Economical
Companies struggled economically, particularly during the recent global financial
crisis. BreadTalk has its stock prices drop significantly to S$0.25 in June 2008, down
from S$0.6 per share towards the end of the year 2007.
On the positive side, by the end of 2008, BreadTalk had set up over six thousand
successful food and beverage establishments in Singapore alone, and its profits are
quite steady (OCBC Investment Research, 2010).
Rising costs in raw materials throughout the world and also rising fuel prices has a
direct impact on the supply chain of Breadtalk
2.3 Socio-cultural
Consumers are getting more health conscious and affluent, and inflation has an impact
on consumer buying power.
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BreadTalk came out with a wider variety of products that includes a healthier choice
range, and kept prices low to attract more consumers.
Investment in R&D to create more creative products to meet consumer demands.
2.4 Technological Advance Technology had greatly reduced the cost of labour and increase in
productivity.
Enterprise Resource Planning (ERP) was implemented to improve effective
monitoring of inventory purchases and consumption.
The retail outlets are also installed with point-of-sale systems. This mean that the
daily sales figures and itemised sales volumes can process at the end of day for each
outlet so that management can evaluate the popularity of each item and understand
trends better.
2.5 Implications of PEST
With expansions and acquisitions, BreadTalk’s revenue increased by 27.4% in 2011,
owning 448 food atriums and restaurants supported by global staff strength of 6000
employees.
BreadTalk distinguishes itself from traditional bakeries with its unique and innovative
concept — focusing on hygiene, quality and brand image. It was the first in Singapore
to adopt an open kitchen concept for bakeries, installing transparent glass panels to
allow customers’ viewing of the whole bread-making process.
Sophisticated bread-making equipments are installed in each outlet, with bakers
wearing standardized uniforms and outlet cleanliness is maintained at all times. This
concept is proven to be popular, especially in China where food safety is a key
concern among consumers.
Strategic locations - Outlets can be found in accessible locations with high pedestrian
traffic flow. Outlets are located near public transport system and also popular
departmental stores or supermarkets.
Creativity is the key selling point of BreadTalk. It has a dedicated R&D team devoted
in developing new bread designs and flavours to meet the ever-changing consumer
tastes and preferences
The BreadTalk brand has evolved to become one of the most recognisable local
brands in Singapore. In 2002, the group won the “Singapore Promising Brand Award
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2002” awarded by ASME and SPH and was also voted Singapore’s Most Popular
Brand in a joint poll by the ASME and SPH.
F&B industry has been hit by the inflation of rental expense and utility charges, which
hurts profitability. F&B industry in Singapore is highly competitive and fragmented
with low barriers to entry.
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3. Internal Environment Analysis
3.1 Financial Analysis
Ratios ImplicationCalculation
2009 2010 2011
Current Ratio Ability to pay current liabilitiesfrom current assets
0.97 0.90 0.98
Quick Ratio Ability to pay current liabilities
from the most liquid assets0.68 0.91 0.93
Debtor
Collection
Period
The period of time taken to
collect payment from debtors 0.2mths 1.0mths 1.5mths
Creditor
Payment Period
The period of time taken to pay
creditors on credit purchases1.5mths 0.9mths 0.8mths
Stock Turnover Indicates sale ability of
inventory23.2 22.5 22.4
Gearing Ratio The mix between owner’s funds
and borrowing (determines if
company has borrowed too
much to finance the business)
0.62 0.63 0.67
Returns on
Equity (ROE)
The amount of net income
returned as a percentage of
shareholders equity.(profit a
company generates with the
money shareholders have
invested)
18.2% 16.4% 14.9%
Return on Sales Measures the percentage of
profits to sales 6.33% 5.51% 4.68%
Gross Profit to
Sales
Measures the percentage of
gross profits to sales54.4% 54.5% 54.7%
Revenue
Growth
Percentage of growth in
revenue16.1% 22.9% 20.8%
Net Earnings
Growth
Percentage of growth in net
earnings42.8% 1.6% 2.9%
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Based on the liquidity ratios, it reflects that BreadTalk might not have enough cash or liquid
assets to pay its current liability as their net working capital is negative. In the supplier point
of view, higher liquidity ratios will be preferred as it will lower their overall risk. However,
due to their reputation and size of company, BreadTalk’s buyer power will not be greatly
affected. In the investor point of view, it will not be of a great concern as investors will be
more concerned about growing the business using assets of the company.
The debtor collection period increased from 0.2 months in 2009 to 1.5 months in 2011. This
might tie down their liquid assets hence affecting their quick ratio and ability to use the
money for other investment or expenses.
There is a decrease in the percentage of net income returned as per shareholders’ equity. This
reflects on the profitability of the company as also shown in the decreased in return on sales.
The high administrative expenses incurred over the years might have contributed this.
2008 2009 2010 2011
Administrative
Expenses
($’000)
32 061 34 198 41 872 45 038
Bakery remains the main source of revenue for BreadTalk with about half of the income
coming from the bakery segment. However, it is observed that the restaurant segment is
catching up on their revenue with increasing shares of income every year.
It was also in the profit earned by restaurant sales with an increase of 35% from 2010 to 2011
and an overall increase of 25% in profit over the past 4 years.
Singapore remains the main source of revenue for BreadTalk with China as the next major
revenue contributor, followed by Hong Kong. However, there is a decrease in revenue earned
by the two major revenue contributors in year 2011.
+ 6.7% + 22.4% + 7.6%
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3.2 Success Factors of Breadtalk Group
Success
FactorsDescription
Skills and
Capabilities
Joint venture with Japanese company opening a Frozen Dough
Factory sharing expertise and industry know-how
Range of
Quality
Products
60-80 items offered in stores daily
Central kitchens that ensures quality and improves consistency of
products
Artisan bread concept using premium ingredients (eg. Bread
Society)
Strategic
Locations
Targeting locations with high traffic flow Good mixture of locations in central areas and the heartlands
Strategically placing businesses next to one another (eg. Opening
ToastBox next to BreadTalk and Icing Room)
Venturing into lucrative markets such as China
Diversification
Branching into related and complementary businesses (F&B
industry)
Going regional and international
Branding
First mover advantage in creating creative breads with innovative
flavours and a trendsetter
A strong Singapore brand name created
Brand accolades from Singapore and international platforms
Innovation
Known for the open kitchen concept, and creative breads with
innovative flavours
Creating a lifestyle
Emphasis on R&D and creativity with an International Head
Quarters building due to complete in 2013
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3.3 Value Chain
Value Chain
Activities
Description Evaluation
Firm
Infrastructure
Adheres to strict Agri-Food & Veterinary
(AVA) and Food Regulation requirements in
Singapore. Invests in R&D, innovation and
training.
Strategy is effective and BreadTalk has won
numerous brand accolades and gain brand
recognition.
Human
Resource
Management
By 2013, will bring together all the diverse
departments under one roof at their IHQ
facility, which will accelerate their ability to
innovate and produce.
Recognised for providing consistent and quality
training, with in-house R&D and central kitchen
facilities adds value to the company.
Technology
Development
Sophisticated bread-making equipment in
every outlet and will own an in-house R&D
facility by year 2013.
Positioned itself as a vibrant and innovative
company with huge investment in improving
business efficacy and product innovation and
creativity.
Procurement Investment in IHQ and costs involved in
streamlining businesses lead to increase in
operating and administrative costs.
Strategy is to keep company ahead of its
competitors and investment will bring about better
returns and add value to company’s sustainability.
Products &
Services
Rejuvenated the sunset industry of Bakery
with its award winning Boutique Bakery in
year 2000 (SPRING Singapore, 2012) and is
constantly afloat in developing new and
creative products.
Creates value as BreadTalk is not only innovative
but adapts well to international markets by
identifying local palates.
Sales &
Marketing
Opening outlets in high traffic areas and
reaching into heartlands. Strategically placing
related businesses next to one another (eg.
Ding Tai Fung next to BreadTalk and
ToastBox)
Successfully created a lifestyle F&B brand with a
strong image that can be easily differentiated.
Concern is in sustainability as its strategies can be
easily imitated.
Operations Central kitchen and training facilities that will
improve and enhance current operations. A
new management structure with division heads
under one CEO.
Reassessment of company standing and revising
standard operating procedures, keeping true to the
company’s vision of an innovative and
trendsetting lifestyle company.
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3.4 Portfolio Analysis
Implications for BCG Matrix:
Breadtalk Group’s major business segment in Bakery is a Cash Cow that is
contributing to 53.2% of its total revenue
Need to maintain competitive position in this lucrative market and understand that
competition is only going to get steeper
Relatively low barriers to entry, low switching costs and products are difficult to
differentiate but easy to imitate
Customers are price sensitive and value product innovation
Restaurants is a Question Mark that contributes to 21% of total revenue and cannot be
easily eliminated
Faces stiff competition as restaurants has the highest number of direct competitors
The existence of under-performing restaurants is affecting the overall group
performance
There is extensive room for growth as Singapore is one of the top three eating capitals
in Asia-Pacific (SPRING Singapore, 2012) and Breadtalk has a good brand name and
has won numerous awards in the industry (Breadtalk Group Limited, 2012)
The Food Atrium business is a Star and needs to be cultivated into a Cash Cow
The industry has the least number of direct competitors and hence there is more
intense competition
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*Refer to Appendix 1 for market data
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BreadTalk needs to continue focus and invest in its food atrium business in order to
reap more benefits
3.5 Competitors ‘Analysis
Competition and cooperation co-exist in various sub-fields of organizational strategies. It is
essential for companies to analyze and perceive cognitive relations with rival partners. This
process eventually aids in integrating a suitable strategy (Meng & Layton, 2011) in order to
identify opportunities or threats within the industry to remain competitive, create greater
innovation and competitive advantage (Pellissier, 2011).
BreadTalk Group faces two type of competitor, direct and indirect competitor.
Form of
competitionBrands Justification
Brand
competition –
Product Range
and Selling
Method
BreadTalk Group has overcome thisweakness by creating new innovations andengaging in strong differentiation strategyand marketing activities.
BreadTalk Group distinguishes itself fromtraditional bakeries with its unique andinnovative concept
Food Republic invites and enticescustomers using unique thematic dinner
concepts
Brand
competition –
Brand Equity
Despite losing out the first mover advantage in the Bakery industry, Breadtalks possess strong brand equity.
Most outlets can be found in accessiblelocation with high pedestrian traffic flowto pull in customers as they walk.
Outlets located new public transportssystem and also near some of the popular departmental store or supermarkets.
Food Republic mantra is to bring the bestof local hawker and street food under oneroof.
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Form of
competitionBrands Justification
Industry
competition
BreadTalk has created a unique selling preposition in order to prevent competitorsfrom any direct attacking strategy.
Focusing on hygiene, quality and brand
image. Adopted an open kitchen conceptfor bakeries, installing transparent glass
panels to allow customers viewing of thewhole bread-making process.
Recreation of bygone eras or the charmingretrospective styles of 60s ad 70s or an oldChinese village.
Form
competition
(substitutes)
Cakes
Coffee shop/Food court
BreadTalk Group not only focuses on the
Bread but also providing cakes.BreadktTalk Group has been aware of thecompeting to satisfy the need.
BreadTalk Group may need to look on both attack and defense strategy to makeeffective solutions to counter various typeoff threat imposed by the substitutes tosustain in the industry.
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Players in the
IndustryStrength Weakness
•Over 30 Years of experience incakes and pastries
•Offering traditional and"innovative-traditional" premium
quality kueh, cakes, cookies andvarious seasonal products for allfestivities
•Lack of strategic andaccessible locations toattract potential customers
•Not constantly introducing
new products to cater tocustomers' changing tastes
•First movers advantage thatopen the ‘La Mian Xiao LongBao” restaurant
•Lack of new products tocater to customers'changing tastes
• Among the first in Singapore tooperate and manage food courtswith a themed concept and serve amix of local fare and internationalcuisine to give customers greater variety
•Food Junction Privilege CardMember to enjoy discount andpromotion at their premises
•Did not bring in the best of local hawker and street foodunder one roof
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3.6 Strategic Group Analysis
A strategic group is a cluster of firm which has similar strategies and rivalry would tend to be
greater within such firms (Dess, Lumpkin & Eisner, 2010). A strategic group analysis was
conducted for Breadtalk Group against its competitors, based on the perceived price/ quality
and geographical coverage.
Implications:
Bengawan Solo, Four Leaves and Prima Deli are emerging threats that can challenge
BreadTalk in the Regional market in the near future
Delifrance and Crystal Jade are strong competitors in the Regional market that
possess capabilities of going global
Product and brand differentiation to attract a younger and more affluent crowd and
distinguish itself from its competitors
Recommendations:
BreadTalk to identify their target group and continue to build on the brand image for
the specific target group
To expand and reach into the global market in terms of joint venture or franchise
Needs to stay as a leader in innovation and creativity
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3.7 Porter’s Five Forces
Porter’s Five Forces is a useful tool which focuses on the forces which shapes the industry
structure which drives competition and profitability (Porter, 2008). The five forces which
impact the industry are threat of new entrants; bargaining power of buyer; bargaining power
of supplier; threat of substitution and rivalry among competitors.
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Threat of New Entrants
Threat of new entrants
is high
Low barrier to entry
Capital requirement is
relatively low
Weak product
differentiation, easily
imitated
New entrants can
climb the experience
curve quickly
Customer incur low
switching cost
Low government policy
on setting up of F&Bstore in Singapore
Breadtalk enjoy
economies of scale
Bargaining Power of Buyer
High bargaining power
Low switching cost
Many substitute and similar product in the
market
Buyer are price sensitive
Bargaining Power of Supplier
Low bargaining power
Breadtalk has the ability to integrate
backward
Supplier’s product are common and
largely available
Numerous suppliers providing similar
products
Breadtalk is considered a large
customer of the supplier, however
there are also many other buyer inthe market
Threat of Substitution
High threat of
substitution
Low switching cost
Numerous substitute
available
Cheaper alternative
option available
Lower cost and
better product
available in the
market (hawker
center)
Intensity of Rivalry
High rivalry, intense competition
Numerous competitor in the market
Certain competitor in the market are
of similar size and capacity
High industry growth
Low level of differentiation and
switching cost
Exit barriers are low
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Implication
Based on the Porter’s Five Forces analysis, the F&B industry in Singapore is highly
competitive with many competitors offering similar products at a competitive price.
Competitors are able to imitate the winning strategy of their competitors easily and hence
BreadTalk will have pressure to compete on low cost but high quality products. This is
especially so when the consumers are highly price sensitive. BreadTalk will have to work on
the R&D to ensure that their products are innovative, premium, and yet value for money.
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3.8 TOWS Matrix
(O) External Opportunities
Overseas Ventures and
Expansions Target premium F&B market
Increase in Tourist dollars
Merger or Acquisition of
other food businesses
(T) External Threats
Feedback on Publicity may
cause bad image for the brand
Intense Competition in
F&B industry
Over-saturation in
Singapore market
(S) Internal Strength
Well-known Brand inF&B industry
Strong brand Equity
Innovative Products
Strategic Retail
Locations
Wide Products offering
SO – Aggressive Strategy
Well-known branding creategood opportunities for
diversification into other
F&B business
Expansion by integration of
Cafés with bakery business
ST – Diversification Strategy
Create Differentiation withdistinctive competencies
Strengthen and differentiate
the existing product core
competencies
(W)Internal Weaknesses
Low Barriers to entry for
F&B industry
Cost increasing on Raw
materials
Easy imitation of
products
WO – Turnaround Strategy
Promote awareness of new
and innovative products
Training and Development
for employees
WT – Defensive Strategy
Maintain current position
and streamline all
businesses
Develop intangible and
reputable core
competencies
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4. Problem Definition & Objective
4.1 Problem Definition
4.1.1 Current Challenges
Making sound decisions in expanding its business by acquiring new
restaurants, expanding its food atrium business, and venturing into moreregional markets
The increase in costs in streamlining and coordination of its businesses
4.1.2 Future Challenges
To ensure sustainable growth
Having the capacity to venture into the global market
Keeping up with the ever-changing consumer tastes
4.2 Short Term Objectives
Strengthen market position by enhancing existing products within the next 5 years
To increase profit margin by 50% within 5 years
To streamline the value chain, reducing the cost of administration
To increase food atrium sales by 50% by 2017
4.3 Long Term Objectives
Expansion into new markets (e.g. delivery service/catering/training hub)
Research & Development in new and improved technology, reducing the cost of
production
5. Recommended Strategies
5.1 Business Level Strategy5.1.1. Porter’s Generic Strategies
Using the Porter’s Generic strategies, it is recommended that BreadTalk
Group adopt an overall cost leadership strategy & differentiation strategy.
Suggested low cost strategies include the following:
Effective training programs to improve productivity
Use of automated technology to reduce labor cost and wastage
Good working relationship with suppliers to ensure low-cost in rawmaterials
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Shared purchasing operation within the business units to increase
bargaining power and lower cost
BreadTalk Group can also go into differentiation strategy by focusing on
producing high quality products, which are value for money. This can be done
so by investing in R&D to improve on the quality of end products. Through
experiences gained, they will be able to move down the experience curve and
hence lowering the cost of production. With its low pricing and wide selection
of high quality products, power of buyer will be reduced, as there are few
competitors who can offer the same quality at a comparable price.
5.2 Corporate Level Strategy
5.2.1 Related Diversification
Diversification enables an organization to expand their operations by
venturing into new businesses. In order to increase their revenue and profit,
BreadTalk Group can go into a related diversification where they can benefit
from economies of scope, leveraging on their core competencies and sharing
their value chain activities (Dess, Lumpkin & Eisner, 2010), hence improving
their market position in the F&B industry.
As the restaurant segment has a growing potential, BreadTalk Group candiversify into other cuisines such as Japanese or Korean, and have restaurants
that has such strong market demand and appeal to the younger generation.
5.3 International Strategy
5.3.1 Franchising
Franchising is an agreement between both parties where the parent company
receives royalty or an amount of fee in exchange for the rights to use their intellectual property (Dess, Lumpkin & Eisner, 2010).
BreadTalk Group can continue to issue franchise rights for business operations
in the foreign market. This will increase their brand awareness and expand
their revenue base across other regions while limiting the risk exposure.
They will need to continue selecting their franchisee carefully by setting high
criteria and control measures to ensure consistency and quality of their
products. However, receiving only a portion of the revenue in the form of
franchise fee will be one of the set-back of franchising.
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5.3.2. Joint Ventures
BreadTalk Group can consider working closely with other firms in the foreign
market through joint ventures to increase revenue. A joint venture is an
association of two or more companies engaged in a solitary business enterprise
for profit without the need of actual partnership or incorporation.
It reduces costs and enhances learning of the organisation through knowledge
sharing. Innovation is one of the key success factors and BreadTalk Group can
collaborate with other related companies to improve on their current research
and development team. Through the collaboration with other companies,
BreadTalk Group will be able to leverage and develop on the core competencies
and technology of their partners to gain competitive advantage and strengthen
their market position. By working with the foreign companies, BreadTalk will
also be able to gain information on the local market preferences, competitive
conditions and other relevant information.
Before entering into a joint venture, BreadTalk Group will have to determine
their main purpose and goals to ensure that their partner companies are capable
of assisting them in achieving the goals and objectives.
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6. Implementation
Below highlights the proposed activities for the different strategies and their estimated cost of
implementation. Activities will be implemented over the next 10 years to spread out the cost
to prevent a sudden surge in expenses due to the changes and to allow monitoring of the new
changes to ensure its sustainability.
Proposed Activities 2012 2014 2016 2018 2020 2022
Proposed Budget
(S$ million)
Business Level Strategy – Cost Leadership & Differentiation
Regular Market research and
survey
1
Develop and update training
schedule for all employee
1
Develop / source for new
technology to improve
productivity
3
Streamline Breadtalk Group
value chain activities
1
Corporate Level Strategy - Diversification
Develop diversification plan
into other cuisine in the
restaurant segment
1
Setting up of restaurant outlet
in Singapore
3
Setting up of restaurant outlet
overseas
4
International Strategy – Franchising & Joint Venture
Market and company research 0.5
Development of joint venture
plan, objective and goal
0.5
R&D of new technologies and
work process improvement
5
Total 20
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7. Evaluations and Control
The balance scorecard will be used to assist Breadtalk Group to identify the strategic
objectives and control from the financial, customer, internal and learning & growth
perspective. This will help to achieve sustainability of the business and gain competitive
advantage over their competitors through well managed and integrated planning and
control (Dess, Lumpkin & Eisner, 2010).
Strategic Objectives Strategic Control
Financial F1: To increase profit rate by 50% and improve
market position by 2017
F2: To lower operational expenses by 2017
Return on Capital Employed (ROCE)
Gross profit to sales
Net margin
Cash flow
Volume growth rate vs F&B Industry
Customer C1: To continually delight the customers with
new innovative product which are value for
money
C2: To improve Customer
Relationship Management and
obtaining feedbacks for
continuous improvement
Mystery shopper rating
Customer survey to understand the
demand of the market
Loyalty program
Internal I1: To be the market leader in the F&B industry
by 2022
I2: To market their products through social media
and other various means to reach out to target
consumers
I3: To lower production cost and operational cost
I4: To improve health, safety and environmental
performance
I5: To ensure high quality product delivered to
consumer at all time
To monitor competitors and adjust
business level strategies to gain
competitive advantage
Sales revenue
Profitability index
Staff turnover rate and incident report
Staff sick leave rate
Quality control and random sampletest
Learning
& Growth
L1: Continuous training and upgrading courses
for staff to improve on skills and service standard
L2: Create a innovative and positive working
environment
Employee’s performance appraisal
Training records
Employee survey
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Appendix 1: Selected SBU Market Data
Notes: Figures asterisked represent Breadtalk’s sales within sector
2011 Sales
($m)
Number of
direct
competitors
Sales of the
3 largest
firms in thesector ($m)
Forecast
Annual
GrowthRate (%)
Relative
Market
Share(RMS)
Bakery 101.8 110 101.8*,
92.8, 89.2
5.4 1.10
Restaurant 40.2 850 40.2*, 39.7,
27.8
10.2 0.96
Food Atrium 49.4 37 52.3, 49.4*,
22.9
11 1.01
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References
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Dess.G, Lumpkin.G & Eisner.A. (2010). Strategic Management – Creating Competitive
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International Enterprise Singapore. (2010). Double Tax Deduction for Internationalisation.
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Meng, J. & Layton, R. (2011). Understanding Managers' Marketing Strategy Choice in a
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OCBC Investment Research. (2010). Breadtalk Group Ltd: Company Report. Retrieved from:
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Pellissier, R. (2011). A Study of Strategic Intelligences: A Strategic management Tool in the
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Porter, M. (2008). The Five Competitive Forces That Shape Strategy. Harvard Business
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SPRING Singapore. (2012). BreadTalk Group Limited. Retrieved from:
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