Future outlook and trends
For its outlook, BreadTalk planned for the China and regional market and rising food cost. This is the largest challenge for the Bakery business. BreadTalk is going to shorten the supply chain and buying in bulk globally for economies of scale. Shanghai is one of the example that BreadTalk have successfully piloted using frozen dough to arrest rising labour and rental costs while maintaining the quality of our products. This is to encourage that BreadTalk will explore the possibility of extending this initiative beyond Shanghai. The BreadTalk Transit model has also proven to be an efficient model for swift expansion and its potential we will be harnessed to expedite growth. For Market Trends, KFC, McDonald's, Long John Silver's and Pizza Hut were dominating most of the chains in the past in Singapore. However, trends have been changed for decades. Local Brands were replaced. BreadTalk controls 55% of Indonesia’s bakery market and it becomes giant franchises dominate the Southeast Asia region. (Fresin Fries,2012)
Analysis of competitors
BreadTalk operates in the highly competitive F&B industry which has close to no barriers to entry. Some of its competitors are established players in the bakery and confectionery industries and may have greater financial and marketing resources. The entry of new competitors into the same F&B segments or into the immediate areas around the group’s retail outlets may affect its earnings (CIMB Research Report,2009). Focusing on main competitors, the direct competitors of BreadTalk outlets are local names such as Four Leaves and My Bread (CIMB Research Report,2009).
BreadTalk divides itself into three segments: bakery, food court and restaurant. The bakery segment is not only bakery products but it includes the business of manufacturing and retailing of all kinds of food also franchising. For the management and operation of food , drinks and drinks outlets are in the segment of food court. For operating food and drinks outlets, eating houses and restaurants are in restaurant segment (CorporateInformation.com, 2012).
According to CIMB Research Report in 2009, BreadTalk expected its revenue to grow at 10-15% over from the year 2009-2011. It is no longer part of the group after the disposal of its 70%-owned Twin Peak Venture Singapore Pte Ltd. BreadTalk expected profit growth to pick up to around 31% this year from the opening of new outlets in 2009 and lower raw material costs. Its net profit was forecasted CAGR of 29.3% for 2009-2011.
Description of Venture
Products and Services
BreadTalk® Group Limited runs 7 sections of products and service. BreadTalk, the first section, keys as the bakery chain that has over 1,000 different types of bakery. While the Icing Room, second, sells a wide range of cakes, pastries and cookies and brings with it a unique proposition of allowing customers to decorate their own cakes. Third, Toast Box was developed in 2005 as the coffee shops in the 1960s and 70s generation. It serves traditional favorites such as peanut butter thick toast, mee siam, kaya toast and soft boiled eggs. Coffee and other hot beverages are also prepared in the traditional “pulled” style. Food Republic , fourth, offers a wide spread of local hawker and street food under one roof and in an air-conditioned environment. Fifth, Din Tai Fung Din is known for the healthy house specialties such as its ‘Xiao Long Bao’ (steamed pork dumplings). Sixth, Carl’s Junior which is a fast-food chain offering juicy, premium-quality charbroiled burgers in western US. The last one, The Station Kitchen which is the group’s integrated F&B concept for diners, one of Singapore’s latest clubbing hot spots (BreadTalk,2012).
Size of business
BreadTalk was founded as F&B operator in Singapore in 2000 and listed on the SGX in 2003 and became BreadTalk® Group Limited with global staff strength...