This sample essay on Pest Analysis For Bakery reveals arguments and important aspects of this topic. Read this essay’s introduction, body paragraphs and the conclusion below.
Through the development Of brands, fresh produce and quality and continuous innovation, the Group has earned a share of market leadership in bakery products in the U. S. , Mexico, in most Latin American countries in which it operates and in Spain and Portugal. The Group operates n 19 countries including USA, Mexico, Latin America, Spain, Portugal and China.
At December 31 SST 201 2, the Group operated 154 manufacturing facilities worldwide, with a capacity to produce commercial quantities of a variety of products in their major markets. In order to ensure the freshness and quality of its products, the Group has developed an extensive direct distribution network, which has one of the largest fleets of distribution in the American continent.
At December 31st 2012, the direct distribution network of the Group included approximately 51 ,OHO distribution routes, spread over ore than 1 ,600 distribution centers and reaching over 2.
2 million outlets. The Panel finds that this distribution network is one of its main competitive advantages. Main brands in Mexico Bimbo Marines Barrel Resorcinol Mission To Nourish, delight and serve our world. Vision Vision 2015 We are a company with trustworthy leading brands for our consumers Our customers’ preferred supplier A forward looking and innovative company A financially strong and sound company An extraordinary place to work In 2015 we are the best baking company in the world and a leader in the food industry’, where people make the difference every day.
We strive to be a highly productive and deeply humane company. ” Values Passion Team Quality Effectiveness Profitability SOOT Analysis We can see in the SOOT analysis that Bimbo counts with really strong characteristics that positions it in a unique place in the market in comparison with their competitors like their global expansion, their distribution channels and all the brand equity (values, brand image and fidelity). Not everything is perfect for Bimbo as it has to take in consideration those weaknesses they have in order to grow in a faster way, nothing worry but they have to work on hat in order to not be affected by the threats and take advantage of the opportunities.
Porters Five Forces Models of Competition Rivalry among competing firms industry. There are several competitors in the baking industry. It is estimated that the top four companies account for only 1 17% of the market. The industry is characterized by many small bakeries, but there has been a recent trend towards consolidation of economy of scales. Businesses compete on price, quality, differentiation and relationships with key suppliers. Threat of new entrants. The barriers to entry into the industry are low. Economies of scale are inefficient but are not required for success in the industry. As a result small businesses can enter with a small amount of capital.
The two main determinants of the success of the new company is the leader’s ability to get enough distribution channels to cover operating costs and to build recognition and brand loyalty. Distribution channels typically include retail stores, such as supermarkets and grocery stores, and can be easier to achieve if the bakery has an established brand or marketing resources can create one. Bargaining power of buyers. Buyers of products in bakery industry such as supermarkets, grocery stores r convenience and hotel chains are able to appropriate much of the gain due to the large number of small bakeries compete to get a outlet for their products.
As a result, buyers can get low prices and quantity discounts. Only the big players like Kraft, Kellogg, Yamaha Baking and Group Bimbo have the power to level the forces and achieve a more balanced share of the profits. Bargaining power of suppliers. Providers do not have much bargaining power in this business as well developed markets for its consumer products and the nature of what they sell. Bakeries can be affected by changes in prices of raw materials, but these hinges are a result of the determinants of global supply and demand rather than the bargaining power of suppliers. Threat of substitute product. There are many substitutes for these products.
The breakfast cereals, rice and potatoes are viable alternatives and people can also bake them at home. To avoid this, bakeries trust on products and convenience. PESTLE Analysis Political It is the federal government that passes and enforces legislation concerning the entire country. Actions by the federal government affect a large number of firms and are consistent across state boundaries. Environmental analysis, over, should not overlook actions by both state and local governments. Local governments have the potential to affect business practices significantly. Some local governments may be willing to provide incentives to attract business to the area.
Some may build industrial parks, service roads, and provide low-interest bonds to encourage a desirable business to move into the community. Economic GAP (official exchange rate): $1 trillion (201 0 est.. ); $876 billion (2009); $1. 088 trillion (2008). Per capita GAP (POP method): $13,542 (2009 est.. ); $14,534 (2008). Annual real GAP growth: 4. 5% (2010 est.. ); -6. 5% (2009); 1. 3% (2008); 3. % (2007); 5. 1% (2006); 3. 2% (2005). Inflation rate: 4. 6% (2010 est.. ); 3. 57% (2009); 6. 5% (2008); 3. 8% (2007); 3. 4% (2006); 3. 3% (2005). Natural resources: Petroleum, silver, copper, gold, lead, zinc, natural gas, timber. Agriculture (4% of GAP): Products-?corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes, beef, poultry, dairy products, wood products.
Industry (31 % of GAP): Types–food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables. Services (64% of GAP): Types–commerce and tourism, financial services, transportation and communications. Trade: Exports (2009)–$230 billion f. o. B. Imports (2009)–$234 billion f. o. B. Exports to U. S. (2009)–$185 billion (80% of total). Imports from U. S. (2009)–$112 billion (48% of total). Major markets–U. S. , EX. (5% of total), Canada (3. 6% of total). Social Mexico is the most populous Spanish-speaking country in the world and the second most-populous country in Latin America after Portuguese-speaking Brazil. About 76% of the people live in urban areas.
Many Mexicans emigrate from rural areas that lack job opportunities-?such as the underdeveloped southern states and the crowded central plateau–to the industrialized urban enters and the developing areas along the U. S. -Mexico border The coloratura dimensions of the environment consist of customs, lifestyles, and values that characterize the society in which the firm operates. Socio-cultural components of the environment influence the ability of the firm to obtain resources, make its goods and services, and function within the society. Technological Cooperation between the United States and Mexico along the 2,000-mile common border includes state and local problem-solving mechanisms; transportation planning and institutions to address resource, environment, ND health issues.
Another technology, the electric razor, has yet to totally replace the blade for shaving purposes. Perhaps the difference is that the manufacturers of blades have innovated by adding new features to retain customers. Manufacturers of fountain pens did not attempt to innovate until the ballpoint pen was well established. Environmental Mexico have a history of cooperation on environmental and natural resource issues, particularly in the border area, where there are serious environmental problems caused by rapid population growth, arbitration, and industrialization. There have been several studies of the relationships between environmental factors, particularly air pollution, and attacks of asthma.
Legal The legal environment facing organizations is becoming more complex and affecting businesses more directly. It has become increasingly difficult for businesses to take action without encountering a law, regulation, or legal problem. A very brief listing of significant laws that affect business would include legislation in the areas of consumerism, employee relations, the environment, and competitive practices. Analysis Mexico is a country with opportunities for a sustainable development, as its economy is growing so fast and it has been attracting foreign industries for promoting the FED. Its legal and political system is flexible and it has De bases to promote business all over the county.
Mexico has to focus into develop environmental and tech analogical issues, as it has been failing in these two aspects and in consequence their economic growth has been running slowly. External Factors Evaluation (FEE) 2 Bimbo shows a high strong score for external factors, as they can explode and take advantages of what they are actually doing and have preventive actions for future threats Internal Factors Evaluation (FIFE) 2 Bimbo shows a good internal profile but they must be focusing into solve internal management and financial aspects in order to explode their potential. The total score, considering both evaluations, is 6. 55 which it means that Bimbo has a good profile that makes its position unique in the Mexican market.
Competitive Profile Matrix According to the results Of the CPM analysis We can notice that Group Bimbo has big advantage in comparison with their competitors, especially in Financial Position and Brand name. Bimbo could use this information to expand the business in news countries where their competitors have not en positioned yet and use their experience as well to develop new products and brands to create presence in new markets where there are different kinds of needs. Matching TOWS Matrix 2 Considering the results seen in FIFE and FEE tables, we have analyzed that “Group Bimbo” should be focusing in Grow and Build tactical strategies; it means that their strategies should be aggressive and intensive.
Research and development play an important role in theirs strategies, due they have to impulse their attractiveness in the market and as well gaining new markets through launching new products. FIFE= 2. 95 SPACE Matrix Group Bimbo is located in the aggressive side due it is the principal company in the bakery industry, so they possess a lot of benefits like good financial strengths mostly in liquidity and cash flows, it doesn’t has problems with the quality of their products and its product life cycle is big therefore this could let them invest in growth in the global market and in technological innovation as well to adapt their production to the news changes and still on the top of their industry.
Bimbo has a big presence in the market and a great consumer loyalty, maybe this is the reason they don’t depend too much of the demand elasticity to establish the prices of their products and they don’t have too much pressure from the competitors. Boston Consulting Group Matrix 12 Bimbo counts with several brands in many countries, but in Mexico, the top 4 leader brands are: Bimbo bread, Marines, Resorcinol and Barrel, and they are being ranked by revenue. We can notice that the first 2 brands have similarity percentage in the corporate revenue and they have similar market share so it means that these two brands are performing well. Bimbo is competing in Mexico with Hostess Brands and Marines with Games an important impetigo that is gaining market.
Resorcinol is competing with Son RISC that represents the same threat that Games. At the end we have Barrel that is weak if we compare the brand with the largest competitor, and its losing market, so it means that Bimbo should focus their efforts into position Barrel in the market. In this graphic we can notice that the 3 top brands are positioned in the market as stars products, so it means that Bimbo is doing a good job with these brands and should be focusing their efforts into strategies for market growth. Regarding Barrel, the fourth one, is considered as a dog product, so t means that they should divest this product or find a new market abroad for this brand, as we can see in Mexico is not performing well.
The General Electric Business Screen Matrix Bimbo is ranked as Medium in market attractiveness as it has 90% in the market, so it means is really well positioned in the consumer mind, so the companies and the brand are creating relationship, experience and fidelity among the population. In competitive position, it has been ranked as strong due their competitors have a low percentage in the market, and it counts with a large full range of brands that makes it stronger than their competitors. Grand Strategy Matrix Bimbo is in the second quadrant because has an excellent strategic position as it is the principal company in the bakery sector, has a powerful advantage to have a complex and great chain distribution and well knowledge about its consumers. When it is necessary also Bimbo could take big risks to compete in the market like low its prices even when the inputs costs are increasing.