Mandarin Oriental Hotel Group

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  • Topic: BreadTalk
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  • Published : February 16, 2013
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1. Background Information
BreadTalk Pte Ltd is the principal subsidiary of BreadTalk Group and was founded by Chairman and Deputy Chairman, Dr. George Quek and Katherine Lee."BreadTalk" was first conceptualized in April 2000 when an opportunity arose to start a bakery selling freshly baked breads and buns that are visually creative and attractive (BreadTalk Group Limited 2012). The first BreadTalk retail outlet commenced business on 1 July 2000 at Parco Bugis Junction. To date, BreadTalk Group has left their mark across 16 countries, with more than 400 boutique bakeries, 40 food atriums and restaurants, supported by global strength of 6000 employees. BreadTalk’s franchise network continued to grow, especially in the PRC and Indonesia. Over the last two years, more than 100 bakery items were launched, turning BreadTalk into an award-winning boutique with over 1000 different kinds of breads, buns, cakes and pastries (BreadTalk 2012). Recently, BreadTalk had also collaborated with Sky Aviation, taking care of the refreshments on-board the flights and offering passengers a new level of enjoyment (Sky Aviation 2012). In addition, BreadTalk Group also commenced the construction of their International Headquarters in Singapore, bringing diverse departments together to optimize operations and is expected to complete in year 2013. Since business commencement, BreadTalk Group had been making increasing profit and in year 2011, a sum of $17.1 million before tax was made. (BreadTalk Group Limited 2012).

2. PESTEL Analysis
In order to conduct a macro-environment analysis for BreadTalk, the PESTEL analysis framework is used to audit BreadTalk’s environmental influences. The information gathered from this analysis will be utilized to guide BreadTalk in its strategic decision-making. 2.1 Political

In year 2008, BreadTalk was about to be expanded extensively in Thailand as part of its organization strategy but due to the political crisis and uncertainty, BreadTalk halted this expansion project (BreadTalk Group Limited 2010). With the help from government agencies in Singapore such as Economic Development Board (EDB) and International Enterprise Singapore (IE Singapore), Singapore-based companies such as BreadTalk are able to grow and expand their domestic and overseas businesses (Foo Kon Tan Grant Thorton LLP 2012). 2.2 Economic

As BreadTalk have foreign investments and operations in countries such as China and Thailand, they are exposed to foreign currency risk if these investments are not properly hedged. As foreign currencies are not freely convertible, this may lead to losing revenue from currency exchange (BreadTalk Group Limited 2012). Correspondingly, due to inflation of rental expenses and utility charges in Singapore, the profitability of BreadTalk will be affected (Michelle Tan 2009). Therefore, the prices of their products must be adjusted to maintain profit margins. 2.3 Social

With the occurrence of ageing population in Singapore, the effective workforce available for hire will decline and BreadTalk may turn to employing foreigners (National Population and Talent Division 2012). Another social factor that affects BreadTalk will be the fast-paced lifestyle in Singapore. People with this lifestyle favor finger food like bread for their daily meals. 2.4 Technological

At least three cameras are being installed in each BreadTalk outlets to help management monitor them and rectify any problems spotted from the cameras. The BreadTalk outlets are also installed with point-of-sale systems that facilitate BreadTalk to keep track on their daily sales record and this allows them to better understand their customer trends and preferences (Michelle Tan 2009). 2.5 Legal

BreadTalk also adopted the Insider Trading (Prevention Policy) to ensure that the company’s director, officers, employees as well as consultants or contractors are aware of their legal obligations in relation to the dealings of securities in the company...
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