Bakery Industry Analysis - 2365 Words

An Analysis of Yuxi Bakery Industry Professor, Ed Bukszar, Ph.D. Yee Chen September 27, 2010 Introduction The Chinese bakery industry, being in the growth period of its life cycle, has been developing at a high speed these years. There are more and more foreign chain brands such as Breadtalk and 21cake, coming into the Chinese bakery market; and at the same time, many Chinese local brands such as Holiland, Daoxiangcun, and Jiahua, are accelerating to enlarge their scale. Furthermore, innumerous small-scale cake shops have flourish, which is a strong force that cannot be ignored, occupying a large proportion of market. The†¦show more content†¦Bakery industry could adjust itself by the market discipline. On the other hand, rivalry is strong among existing competitors. At first, more and more new competitors entered in this potential market, leading to the fragment of the competition. As showing in the chart 2(2009)[ii] below, the competitive concentration was very high in 2004; the top five bakeries took the most proportion of the bakery market. After the following 4 years, more bakeries grew up into comparable competitors, sharing the market shares with former top five. Competitive concentration becomes lower. Moreover, all bakeries provide homogeneous products and services, with low switching cost. For instant, main products of Xinying and Jiahua, two large bakeries in Yuxi, are almost the same cakes, bread and Chinese pastry. They not only the same products with little difference, but always locate near by each other; accordingly, customers have little switching cost. In addition, lacking of unique core competence makes it easy for competitors to imitate; no matter if it is a new kind of product or the new business model. Huangguan had its second franchise opened in 2009, which combined fashion and leisure, operating in the western bakery model and mainly selling cakes and western pastry. At the same year, Xinying set up a franchise under a new subsidiary brand, Moxi, in same operation idea and model.Show MoreRelatedBakery Industry Analysis 5 Porters1497 Words   |  6 Pagesï » ¿Bakery Industry Analysis Porter’s Five Forces analysis is useful when trying to understand the competitive environment facing a backery industry. It involves looking at internal competition, barriers to entry, the profit-appropriating power of both buyers and sellers, as well as substitutes to the goods produced. Applied to the bakery industry it shows an average net profit that typically does not cover the cost of capital due to low barriers to entry, ease of production and ease of access to ingredientsRead MoreSWOT Analysis : Swot Analysis Of The Indian Bakery Industry1011 Words   |  5 Pagesd. Swot Analysis i. 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