Five forces model in bakery industry

In terms of customer styles, there are two main kinds of the customer of the bakery industry, and their bargaining powers differ from each other.

retail bakery industry analysis

Alternatively, it is easy for new entrants to come into the bakery market, because regulatory encourages individuals to start small businesses, and no retaliation from existing bakeries. However, with the threat of new entrants will be rather low in the Raleigh area. Smaller chains have to pay a premium for prime sites or settle for less desirable locations.

bakery industry analysis

Forth, there were still no substitutes of the basic materials of the baked products. There are very few bakery brands that could get a country-wide scale. References Hoovers for an overview of bakeries About the Author Jonathan Roe enjoyed a liberal arts education at Miami University where he studied philosophy and business.

Five forces model in bakery industry

A large number of competitors in the industry are all competing for the same customers. Most people buy from speciality eateries when travelling, shopping or meeting people. Moreover, all bakeries provide homogeneous products and services, with low switching cost. The key success factor for bakery industry is differentiation, differentiations in products, services and operation modes. Though bakery industries exit barriers are low, it does not weaken the competition between existing rivals. Their customer service is not going to measure up to the service we will provide to our customers. It is important to point out that the bakery industry is fragmented with regional companies while the market has specific local features that every participant has to take into consideration. If bakeries want to change the suppliers, they have to try to find the best substitute of the former supplier, which would take them a long time to do so. Though competition between big-scale bakery chain brands gets to be more intensive, there still are many spaces for the small bakeries, because the bakery market itself is a fragment, too. Customers often seek discounts and offerings on established products so if Panera Bread Company keep on coming up with new products then it can limit the bargaining power of buyers. Suppliers in dominant position can decrease the margins Panera Bread Company can earn in the market. By building economies of scale so that it can lower the fixed cost per unit. Blissfully Sweet will rely on their customer service and environment, along with the price and the ease of purchasing at our bakery.

Market growth is static, which promotes fierce fighting for market share, and there is saturation of competition due to the limited number of prime locations available for outlets. As a result, buyers are able to command low prices and volume discounts.

The UK commercial property market is landlord-driven and controlled; premium locations in the UK are scarce and command high prices with most of the favourable locations within town centres, airports and train stations already being occupied by existing competitors.

panera bread five forces analysis
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Porters 5 Force Model