Bread Talk

Contents Page Page Executive Summary 1.

2.

3.

4.

5.

6. 7.

Introduction 1.1 Company Overview 1.2 Recent Developments 1.3 Industry Overview External Environment Analysis – PEST 2.1 Political 2.2 Economical 2.3 Socio-cultural 2.4 Technological 2.5 Implication of PEST Internal Analysis 3.1 Financial Analysis 3.2 Success Factors of Breadtalk Group 3.3 Value Chain 3.4 Competitors’ Analysis 3.5 Strategic Group Analysis 3.6 Porter’s Five Forces 3.7 Boston Consulting Group Matrix 3.8 TOWS Matrix Problem Definition & Objective 4.1 Problem Definition 4.1.1 Current Challenges 4.1.2 Future Challenges 4.2 Short Term Objectives 4.3 Long Term Objectives Recommended Strategies 5.1 Business Level Strategy 5.1.1 Porter’s Generic Strategies 5.2 Corporate Level Strategy 5.2.1 Related Diversification 5.3 International Strategy 5.3.1 Franchising 5.3.2 Joint Ventures Implementation Evaluation and Control

References Appendix

1 1 1 1 2 2 2 2 3 3 5 5 7 8 9 12 13 15 16 17 17 17 17 17 17 17 17 17 18 18 18 18 19 20 21

Executive Summary BreadTalk Group Limited is a lifestyle F&B group who started with the Bakery business in year 2000, and steadily developed into an enterprise consisting of 3 major business segments in Bakery, Restaurant, and Food Atrium.

This report includes a detailed analysis conducted on BreadTalk Group Limited, and the proposed strategies that will give BreadTalk a better direction into its future with the idea of sustainability.

The report consists of a brief overview of the company and the industrial outlook. It will be followed by an extensive external and internal environmental analysis conducted and its implications. Key success factors will be identified and matched to BreadTalk’s core competencies, and various Strategic Management models and tools will be use to aid analysis.

Lastly, challenges faced and both short and long-term objectives will be discussed, and proposed strategies and implementation measures will be put forward. The proposed strategies will be discussed using Porter’s Generic Strategies and The Balanced Scorecard is used for Implementation, Evaluation and Control.

BreadTalk is anticipated to continue to thrive in the industry and go from strength to strength, and become an even bigger and sustainable business.

1. Introduction 1.1 Company Overview BreadTalk Group Limited was founded in year 2000 by current Managing Director, Mr George Quek and his wife, Executive Director, Mrs Katherine Lee. The first retail outlet opened at Parco Bugis Junction in July 2000 selling freshly baked breads and buns that are visually creative and attractive. Within 5 months, the second outlet at Novena Square followed and they also ventured into the HDB heartlands (BreadTalk Group Limited, 2012). By year 2003, BreadTalk was listed on the SGX. A central kitchen and corporate headquarters was built at KA FoodLink, Kampong Ampat in September 2001 to centralise food preparation process and in preparation of franchising plans. Over the past 11 years, BreadTalk has expanded and become a distinctive F&B brand with bakery, restaurant and food atrium businesses. Their proprietary brands are BreadTalk, Toast Box, Food Republic, RamenPlay and The Icing Room. They also manage franchises in Din Tai Fung and Carl’s Jr.

1.2 Recent Developments 

10-storey International Headquarters (IHQ) due to complete in year 2013, costing approximately S$64.1 million.



The IHQ will house the Group‘s main office, retail, Research & Development, training, logistics and central kitchen facilities (BreadTalk Group Limited, 2012).



As of 2011, BreadTalk manages 81 bakery outlets, 7 food atriums and 17 restaurants in Singapore.



Presence in 16 countries, including Singapore, Mainland China, Hong Kong and Indonesia, supported by 6000 global staffs, managing over 500 F&B outlets.

1.3 Industry Overview Looking at the Food & Beverage (F&B) industry in Singapore, it is a highly competitive but promising industry with steady growth rate and expanding market value. The rise in growing middle income groups, increase in visitors and the surge in disposable income are the main driving forces for the growth. The industry is predicted to grow even further where food retail currently represents 40% of the total retail spending in Singapore (Singstat, 2012). Singapore is also one of the top three eating capitals in Asia-Pacific (SPRING Singapore, 2012). 1

As a company with huge success, BreadTalk needs to continue to monitor the general and industrial environment as well as making sound strategic moves to improve their market position, gain competitive advantages and ensures a sustainable growth.

2. External Environment Analysis – PEST PEST analysis look into the political, economic, social-cultural and technological aspect of the environment that the industry is affected. It is a powerful tool to improve businesses through effective & practical scanning of the environment and making prediction and preemptive strategies to gain competitive advantages (Carruthers, 2009). A PEST analysis would be done for Breadtalk Group. 2.1 Political 

Singapore government encourages local companies to venture overseas. A “double tax deductions” scheme is introduced to allow companies to have deduction on tax income mainly for overseas business or investment (International Enterprise Singapore, 2010).



The Agri-Food & Veterinary (AVA) is the national authority entrusted to ensure a resilient supply of safe food. Under Food Regulations and the Sale of Food Act, all processed food must comply with prevailing requirement including labelling requirements.

2.2 Economical 

Companies struggled economically, particularly during the recent global financial crisis. BreadTalk has its stock prices drop significantly to S$0.25 in June 2008, down from S$0.6 per share towards the end of the year 2007.



On the positive side, by the end of 2008, BreadTalk had set up over six thousand successful food and beverage establishments in Singapore alone, and its profits are quite steady (OCBC Investment Research, 2010).



Rising costs in raw materials throughout the world and also rising fuel prices has a direct impact on the supply chain of Breadtalk

2.3 Socio-cultural 

Consumers are getting more health conscious and affluent, and inflation has an impact on consumer buying power.

2



BreadTalk came out with a wider variety of products that includes a healthier choice range, and kept prices low to attract more consumers.



Investment in R&D to create more creative products to meet consumer demands.

2.4 Technological  Advance Technology had greatly reduced the cost of labour and increase in productivity. 

Enterprise Resource Planning (ERP) was implemented to improve effective monitoring of inventory purchases and consumption.



The retail outlets are also installed with point-of-sale systems. This mean that the daily sales figures and itemised sales volumes can process at the end of day for each outlet so that management can evaluate the popularity of each item and understand trends better.

2.5 Implications of PEST 

With expansions and acquisitions, BreadTalk’s revenue increased by 27.4% in 2011, owning 448 food atriums and restaurants supported by global staff strength of 6000 employees.



BreadTalk distinguishes itself from traditional bakeries with its unique and innovative concept—focusing on hygiene, quality and brand image. It was the first in Singapore to adopt an open kitchen concept for bakeries, installing transparent glass panels to allow customers’ viewing of the whole bread-making process.



Sophisticated bread-making equipments are installed in each outlet, with bakers wearing standardized uniforms and outlet cleanliness is maintained at all times. This concept is proven to be popular, especially in China where food safety is a key concern among consumers.



Strategic locations - Outlets can be found in accessible locations with high pedestrian traffic flow. Outlets are located near public transport system and also popular departmental stores or supermarkets.



Creativity is the key selling point of BreadTalk. It has a dedicated R&D team devoted in developing new bread designs and flavours to meet the ever-changing consumer tastes and preferences



The BreadTalk brand has evolved to become one of the most recognisable local brands in Singapore. In 2002, the group won the “Singapore Promising Brand Award

3

2002” awarded by ASME and SPH and was also voted Singapore’s Most Popular Brand in a joint poll by the ASME and SPH. 

F&B industry has been hit by the inflation of rental expense and utility charges, which hurts profitability. F&B industry in Singapore is highly competitive and fragmented with low barriers to entry.

4

3. Internal Environment Analysis 3.1 Financial Analysis

Ratios

Implication

Current Ratio

Ability to pay current liabilities from current assets

Quick Ratio

Ability to pay current liabilities from the most liquid assets

Debtor

The period of time taken to

Collection

collect payment from debtors

Calculation 2009

2010

2011

0.97

0.90

0.98

0.68

0.91

0.93

0.2mths

1.0mths

1.5mths

1.5mths

0.9mths

0.8mths

23.2

22.5

22.4

0.62

0.63

0.67

18.2%

16.4%

14.9%

6.33%

5.51%

4.68%

54.4%

54.5%

54.7%

16.1%

22.9%

20.8%

42.8%

1.6%

2.9%

Period Creditor

The period of time taken to pay

Payment Period

creditors on credit purchases

Stock Turnover

Indicates sale ability of inventory

Gearing Ratio

The mix between owner’s funds and borrowing (determines if company has borrowed too much to finance the business)

Returns on

The amount of net income

Equity (ROE)

returned as a percentage of shareholders equity.(profit a company generates with the money shareholders have invested)

Return on Sales

Measures the percentage of profits to sales

Gross Profit to

Measures the percentage of

Sales

gross profits to sales

Revenue

Percentage of growth in

Growth

revenue

Net Earnings

Percentage of growth in net

Growth

earnings

5

Based on the liquidity ratios, it reflects that BreadTalk might not have enough cash or liquid assets to pay its current liability as their net working capital is negative. In the supplier point of view, higher liquidity ratios will be preferred as it will lower their overall risk. However, due to their reputation and size of company, BreadTalk’s buyer power will not be greatly affected. In the investor point of view, it will not be of a great concern as investors will be more concerned about growing the business using assets of the company. The debtor collection period increased from 0.2 months in 2009 to 1.5 months in 2011. This might tie down their liquid assets hence affecting their quick ratio and ability to use the money for other investment or expenses. There is a decrease in the percentage of net income returned as per shareholders’ equity. This reflects on the profitability of the company as also shown in the decreased in return on sales. The high administrative expenses incurred over the years might have contributed this.

2008

2009

2010

2011

32 061

34 198

41 872

45 038

Administrative Expenses ($’000) + 6.7%

+ 22.4%

+ 7.6%

Bakery remains the main source of revenue for BreadTalk with about half of the income coming from the bakery segment. However, it is observed that the restaurant segment is catching up on their revenue with increasing shares of income every year.

It was also in the profit earned by restaurant sales with an increase of 35% from 2010 to 2011 and an overall increase of 25% in profit over the past 4 years.

Singapore remains the main source of revenue for BreadTalk with China as the next major revenue contributor, followed by Hong Kong. However, there is a decrease in revenue earned by the two major revenue contributors in year 2011.

6

3.2 Success Factors of Breadtalk Group Success

Description

Factors Skills and



Capabilities

Range of

Factory sharing expertise and industry know-how 

60-80 items offered in stores daily



Central kitchens that ensures quality and improves consistency of

Quality Products

Joint venture with Japanese company opening a Frozen Dough

products 

Artisan bread concept using premium ingredients (eg. Bread Society)



Targeting locations with high traffic flow

Strategic



Good mixture of locations in central areas and the heartlands

Locations



Strategically placing businesses next to one another (eg. Opening ToastBox next to BreadTalk and Icing Room)



Venturing into lucrative markets such as China



Branching into related and complementary businesses (F&B

Diversification

industry) 

Going regional and international



First mover advantage in creating creative breads with innovative flavours and a trendsetter

Branding 

A strong Singapore brand name created



Brand accolades from Singapore and international platforms



Known for the open kitchen concept, and creative breads with innovative flavours

Innovation



Creating a lifestyle



Emphasis on R&D and creativity with an International Head Quarters building due to complete in 2013

7

3.3 Value Chain Value Chain

Description

Evaluation

Activities Firm

Adheres to strict Agri-Food & Veterinary Strategy is effective and BreadTalk has won

Infrastructure

(AVA) and Food Regulation requirements in numerous brand accolades and gain brand Singapore. Invests in R&D, innovation and recognition. training.

Human

By 2013, will bring together all the diverse Recognised for providing consistent and quality

Resource

departments under one roof at their IHQ training, with in-house R&D and central kitchen

Management

facility, which will accelerate their ability to facilities adds value to the company. innovate and produce.

Technology

Sophisticated

bread-making equipment

in Positioned itself as a vibrant and innovative

Development

every outlet and will own an in-house R&D company with huge investment in improving facility by year 2013.

business efficacy and product innovation and creativity.

Procurement

Investment in IHQ and costs involved in Strategy is to keep company ahead of its streamlining businesses lead to increase in competitors and investment will bring about better operating and administrative costs.

returns and add value to company’s sustainability.

Products

& Rejuvenated the sunset industry of Bakery Creates value as BreadTalk is not only innovative

Services

with its award winning Boutique Bakery in but adapts well to international markets by year 2000 (SPRING Singapore, 2012) and is identifying local palates. constantly afloat in developing new and creative products.

Sales Marketing

& Opening outlets in high traffic areas and Successfully created a lifestyle F&B brand with a reaching into heartlands. Strategically placing strong image that can be easily differentiated. related businesses next to one another (eg. Concern is in sustainability as its strategies can be Ding Tai Fung next to BreadTalk and easily imitated. ToastBox)

Operations

Central kitchen and training facilities that will Reassessment of company standing and revising improve and enhance current operations. A standard operating procedures, keeping true to the new management structure with division heads company’s under one CEO.

vision

of

an

innovative

and

trendsetting lifestyle company.

8

3.4 Portfolio Analysis

*Refer to Appendix 1 for market data

Implications for BCG Matrix: 

Breadtalk Group’s major business segment in Bakery is a Cash Cow that is contributing to 53.2% of its total revenue



Need to maintain competitive position in this lucrative market and understand that competition is only going to get steeper



Relatively low barriers to entry, low switching costs and products are difficult to differentiate but easy to imitate



Customers are price sensitive and value product innovation



Restaurants is a Question Mark that contributes to 21% of total revenue and cannot be easily eliminated



Faces stiff competition as restaurants has the highest number of direct competitors



The existence of under-performing restaurants is affecting the overall group performance



There is extensive room for growth as Singapore is one of the top three eating capitals in Asia-Pacific (SPRING Singapore, 2012) and Breadtalk has a good brand name and has won numerous awards in the industry (Breadtalk Group Limited, 2012)



The Food Atrium business is a Star and needs to be cultivated into a Cash Cow



The industry has the least number of direct competitors and hence there is more intense competition

15



BreadTalk needs to continue focus and invest in its food atrium business in order to reap more benefits

3.5 Competitors ‘Analysis Competition and cooperation co-exist in various sub-fields of organizational strategies. It is essential for companies to analyze and perceive cognitive relations with rival partners. This process eventually aids in integrating a suitable strategy (Meng & Layton, 2011) in order to identify opportunities or threats within the industry to remain competitive, create greater innovation and competitive advantage (Pellissier, 2011). BreadTalk Group faces two type of competitor, direct and indirect competitor. Form of competition Brand

Brands

Justification 

competition – Product Range and Selling



Method 

Brand



competition – Brand Equity

  

BreadTalk Group has overcome this weakness by creating new innovations and engaging in strong differentiation strategy and marketing activities. BreadTalk Group distinguishes itself from traditional bakeries with its unique and innovative concept Food Republic invites and entices customers using unique thematic dinner concepts

Despite losing out the first mover advantage in the Bakery industry, Bread talks possess strong brand equity. Most outlets can be found in accessible location with high pedestrian traffic flow to pull in customers as they walk. Outlets located new public transports system and also near some of the popular departmental store or supermarkets. Food Republic mantra is to bring the best of local hawker and street food under one roof.

Form of

Brands

competition

Justification 

Industry competition





Form

Cakes



competition (substitutes)  Coffee shop/Food court

BreadTalk has created a unique selling preposition in order to prevent competitors from any direct attacking strategy. Focusing on hygiene, quality and brand image. Adopted an open kitchen concept for bakeries, installing transparent glass panels to allow customers viewing of the whole bread-making process. Recreation of bygone eras or the charming retrospective styles of 60s ad 70s or an old Chinese village.

BreadTalk Group not only focuses on the Bread but also providing cakes. BreadktTalk Group has been aware of the competing to satisfy the need. BreadTalk Group may need to look on both attack and defense strategy to make effective solutions to counter various type off threat imposed by the substitutes to sustain in the industry.

10

Players in the Industry

Strength

Weakness

•Over 30 Years of experience in

•Lack of strategic and

cakes and pastries •Offering traditional and "innovative-traditional" premium quality kueh, cakes, cookies and various seasonal products for all festivities

accessible locations to attract potential customers •Not constantly introducing new products to cater to customers' changing tastes

•First movers advantage that open the ‘La Mian Xiao Long Bao” restaurant

•Among the first in Singapore to operate and manage food courts with a themed concept and serve a mix of local fare and international cuisine to give customers greater variety •Food Junction Privilege Card Member to enjoy discount and promotion at their premises

•Lack of new products to cater to customers' changing tastes

•Did not bring in the best of local hawker and street food under one roof

11

3.6 Strategic Group Analysis A strategic group is a cluster of firm which has similar strategies and rivalry would tend to be greater within such firms (Dess, Lumpkin & Eisner, 2010). A strategic group analysis was conducted for Breadtalk Group against its competitors, based on the perceived price/ quality and geographical coverage.

Implications: 

Bengawan Solo, Four Leaves and Prima Deli are emerging threats that can challenge BreadTalk in the Regional market in the near future



Delifrance and Crystal Jade are strong competitors in the Regional market that possess capabilities of going global



Product and brand differentiation to attract a younger and more affluent crowd and distinguish itself from its competitors

Recommendations: 

BreadTalk to identify their target group and continue to build on the brand image for the specific target group



To expand and reach into the global market in terms of joint venture or franchise



Needs to stay as a leader in innovation and creativity

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3.7 Porter’s Five Forces Porter’s Five Forces is a useful tool which focuses on the forces which shapes the industry structure which drives competition and profitability (Porter, 2008). The five forces which impact the industry are threat of new entrants; bargaining power of buyer; bargaining power of supplier; threat of substitution and rivalry among competitors.

Bargaining Power of Buyer   

High bargaining power Low switching cost Many substitute and similar product in the market Buyer are price sensitive



Threat of New Entrants    



 



Threat of new entrants is high Low barrier to entry Capital requirement is relatively low Weak product differentiation, easily imitated New entrants can climb the experience curve quickly Customer incur low switching cost Low government policy on setting up of F&B store in Singapore Breadtalk enjoy economies of scale

Intensity of Rivalry      

High rivalry, intense competition Numerous competitor in the market Certain competitor in the market are of similar size and capacity High industry growth Low level of differentiation and switching cost Exit barriers are low

Threat of Substitution     

High threat of substitution Low switching cost Numerous substitute available Cheaper alternative option available Lower cost and better product available in the market (hawker center)

Bargaining Power of Supplier     

Low bargaining power Breadtalk has the ability to integrate backward Supplier’s product are common and largely available Numerous suppliers providing similar products Breadtalk is considered a large customer of the supplier, however there are also many other buyer in the market

13

Implication Based on the Porter’s Five Forces analysis, the F&B industry in Singapore is highly competitive with many competitors offering similar products at a competitive price. Competitors are able to imitate the winning strategy of their competitors easily and hence BreadTalk will have pressure to compete on low cost but high quality products. This is especially so when the consumers are highly price sensitive. BreadTalk will have to work on the R&D to ensure that their products are innovative, premium, and yet value for money.

14

3.8 TOWS Matrix (O) External Opportunities

(T) External Threats

 Overseas Ventures and Expansions  Target premium F&B market  Increase in Tourist dollars  Merger or Acquisition of other food businesses

 Feedback on Publicity may cause bad image for the brand  Intense Competition in F&B industry  Over-saturation in Singapore market

(S) Internal Strength

SO – Aggressive Strategy

ST – Diversification Strategy

 Well-known Brand in F&B industry  Strong brand Equity  Innovative Products  Strategic Retail Locations  Wide Products offering

 Well-known branding create good opportunities for diversification into other F&B business

 Create Differentiation with distinctive competencies

(W)Internal Weaknesses

WO – Turnaround Strategy

WT – Defensive Strategy

 Low Barriers to entry for F&B industry  Cost increasing on Raw materials  Easy imitation of products

 Promote awareness of new and innovative products

 Maintain current position and streamline all businesses

 Expansion by integration of Cafés with bakery business

 Training and Development for employees

 Strengthen and differentiate the existing product core competencies

 Develop intangible and reputable core competencies

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4. Problem Definition & Objective 4.1 Problem Definition 4.1.1 Current Challenges 

Making sound decisions in expanding its business by acquiring new restaurants, expanding its food atrium business, and venturing into more regional markets



The increase in costs in streamlining and coordination of its businesses

4.1.2 Future Challenges 

To ensure sustainable growth



Having the capacity to venture into the global market



Keeping up with the ever-changing consumer tastes

4.2 Short Term Objectives 

Strengthen market position by enhancing existing products within the next 5 years



To increase profit margin by 50% within 5 years



To streamline the value chain, reducing the cost of administration



To increase food atrium sales by 50% by 2017

4.3 Long Term Objectives 

Expansion into new markets (e.g. delivery service/catering/training hub)



Research & Development in new and improved technology, reducing the cost of production

5. Recommended Strategies 5.1 Business Level Strategy 5.1.1. Porter’s Generic Strategies Using the Porter’s Generic strategies, it is recommended that BreadTalk Group adopt an overall cost leadership strategy & differentiation strategy. Suggested low cost strategies include the following: 

Effective training programs to improve productivity



Use of automated technology to reduce labor cost and wastage



Good working relationship with suppliers to ensure low-cost in raw materials

17



Shared purchasing operation within the business units to increase bargaining power and lower cost

BreadTalk Group can also go into differentiation strategy by focusing on producing high quality products, which are value for money. This can be done so by investing in R&D to improve on the quality of end products. Through experiences gained, they will be able to move down the experience curve and hence lowering the cost of production. With its low pricing and wide selection of high quality products, power of buyer will be reduced, as there are few competitors who can offer the same quality at a comparable price.

5.2 Corporate Level Strategy 5.2.1

Related Diversification

Diversification enables an organization to expand their operations by venturing into new businesses. In order to increase their revenue and profit, BreadTalk Group can go into a related diversification where they can benefit from economies of scope, leveraging on their core competencies and sharing their value chain activities (Dess, Lumpkin & Eisner, 2010), hence improving their market position in the F&B industry. As the restaurant segment has a growing potential, BreadTalk Group can diversify into other cuisines such as Japanese or Korean, and have restaurants that has such strong market demand and appeal to the younger generation.

5.3 International Strategy 5.3.1

Franchising Franchising is an agreement between both parties where the parent company receives royalty or an amount of fee in exchange for the rights to use their intellectual property (Dess, Lumpkin & Eisner, 2010). BreadTalk Group can continue to issue franchise rights for business operations in the foreign market. This will increase their brand awareness and expand their revenue base across other regions while limiting the risk exposure. They will need to continue selecting their franchisee carefully by setting high criteria and control measures to ensure consistency and quality of their products. However, receiving only a portion of the revenue in the form of franchise fee will be one of the set-back of franchising.

18

5.3.2. Joint Ventures BreadTalk Group can consider working closely with other firms in the foreign market through joint ventures to increase revenue. A joint venture is an association of two or more companies engaged in a solitary business enterprise for profit without the need of actual partnership or incorporation. It reduces costs and enhances learning of the organisation through knowledge sharing. Innovation is one of the key success factors and BreadTalk Group can collaborate with other related companies to improve on their current research and development team. Through the collaboration with other companies, BreadTalk Group will be able to leverage and develop on the core competencies and technology of their partners to gain competitive advantage and strengthen their market position. By working with the foreign companies, BreadTalk will also be able to gain information on the local market preferences, competitive conditions and other relevant information. Before entering into a joint venture, BreadTalk Group will have to determine their main purpose and goals to ensure that their partner companies are capable of assisting them in achieving the goals and objectives.

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6. Implementation Below highlights the proposed activities for the different strategies and their estimated cost of implementation. Activities will be implemented over the next 10 years to spread out the cost to prevent a sudden surge in expenses due to the changes and to allow monitoring of the new changes to ensure its sustainability. Proposed Budget Proposed Activities

2012

2014

2016

2018

2020

2022

(S$ million)

Business Level Strategy – Cost Leadership & Differentiation Regular Market research and

1

survey Develop and update training

1

schedule for all employee Develop / source for new 3

technology to improve productivity Streamline Breadtalk Group

1

value chain activities Corporate Level Strategy - Diversification Develop diversification plan 1

into other cuisine in the restaurant segment Setting up of restaurant outlet

3

in Singapore Setting up of restaurant outlet

4

overseas International Strategy – Franchising & Joint Venture Market and company research

0.5

Development of joint venture

0.5

plan, objective and goal R&D of new technologies and

5

work process improvement Total

20

20

7. Evaluations and Control The balance scorecard will be used to assist Breadtalk Group to identify the strategic objectives and control from the financial, customer, internal and learning & growth perspective. This will help to achieve sustainability of the business and gain competitive advantage over their competitors through well managed and integrated planning and control (Dess, Lumpkin & Eisner, 2010). Strategic Objectives Financial

Customer

Strategic Control

F1: To increase profit rate by 50% and improve 

Return on Capital Employed (ROCE)

market position by 2017



Gross profit to sales

F2: To lower operational expenses by 2017



Net margin



Cash flow



Volume growth rate vs F&B Industry

C1: To continually delight the customers with 

Mystery shopper rating

new innovative product which are value for 

Customer survey to understand the

money

demand of the market

C2: To improve Customer



Loyalty program

Relationship Management and obtaining feedbacks for continuous improvement Internal

I1: To be the market leader in the F&B industry 

To monitor competitors and adjust

by 2022

business level strategies to gain

I2: To market their products through social media

competitive advantage

and other various means to reach out to target 

Sales revenue

consumers



Profitability index

I3: To lower production cost and operational cost



Staff turnover rate and incident report

I4: To improve health, safety and environmental  performance 

Staff sick leave rate

I5: To ensure high quality product delivered to

test

Quality control and random sample

consumer at all time Learning

L1: Continuous training and upgrading courses 

& Growth

for staff to improve on skills and service standard



L2: Create a innovative and positive working  environment

Employee’s performance appraisal Training records Employee survey

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Appendix 1: Selected SBU Market Data

2011 Sales ($m)

Number of direct competitors

Sales of the 3 largest firms in the sector ($m)

Forecast Annual Growth Rate (%)

Relative Market Share (RMS)

Bakery

101.8

110

101.8*, 92.8, 89.2

5.4

1.10

Restaurant

40.2

850

40.2*, 39.7, 10.2 27.8

0.96

37

52.3, 49.4*, 11 22.9

1.01

Food Atrium 49.4

Notes: Figures asterisked represent Breadtalk’s sales within sector

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