Company Background
The bakery Sweet Delicacies is to operate in Warwick town at a store in Cape Industrial Estate. The Sweet Delicacies Company’s mission is to be the best in Warwick town. The bakery’s primary focus will be producing exceptional cakes and bread with distinct flavors. Delivering outstanding service to clients is essential, as is stated company’s vision statement. When competing with the three nearby bakeries, Sweet Delicacies plans to hire more than fifty people to meet its target goal. Sweet Delicacies intends to provide its employees with a respectful work environment to improve their work satisfaction. The company’s strategy for competing is to provide cheap pricing and widespread advertising.
PESTLE Analysis of the Sweet Delicacies
Political Analysis
Rishi Sunak, the new prime minister of the United Kingdom, has made improving the country’s improving economy a top priority. To meet the demands of businesses like bakeries, the UK coalition government has started developing a sustainable economy (Bourne & Brown, 2022). Among the many variables contributing to political stability are a well-established legal framework, open financial records, and effective policymaking (Office for National Statistics, 2019). All of these promise well for the future of Sweet Delicacies Company in the city of Warwick.
Economic Analysis
The growth of the British economy may be directly attributed to its diverse population. A wide range of customers provides a success of the business in Warwick town. UK’s economy attracts attention worldwide, making people invest in many cities (UK Government, 2022). The government is committed to lowering taxes across the board, making the United Kingdom a more competitive and desirable location to begin, invest, and grow a business (UK Government, 2022). Consequently, the decreased taxes will guarantee market success for Sweet Delicacies as it will pay less.
Social-cultural Factors
The prospects for Sweet Delicacies in Warwick Town are excellent. Statistics show that British citizens profoundly prefer baked products (Statista, 2022). British families spent a disproportionate amount of money on baked products weekly between 2006 and 2019/2020. (Statista, 2022). Averagely, each Briton consumed more than 160 grams of baked goods weekly in 2019/2020. (Statista, 2022). As a result of these cultural trends, it seems that the bakery business in Warwick town will prosper.
Technological Factors
Research institutions in this nation are among the best in the world, making steady progress toward new realms in almost every area of study. The economy benefits from every discovery and innovation (Amar, 2021). In recent years, improved transportation in Warwick town has made it easier for the bakery industry to prosper as the products can easily reach the markets. These technological factors ensure the prosperity of Sweet Delicacies in the competitive market.
Legal Analysis
In the United Kingdom, doing business is regulated by several laws. As a result, companies in the UK must follow the Employment Act 1996. (Lewis, 2017). Their legal rights to a basic income, medical leave, and parental leave have been protected. The Equality Act of 2010 prohibits discrimination based on race, religion, gender, and sexual orientation (Brooks et al., 2018). So, for the best results, Sweet Delicacies must follow these rules.
Environment Analysis
Recycling, minimizing plastic waste, and ecologically friendly products and services are all themes that have garnered greater attention from government agencies, businesses, and non-governmental organizations (NGOs). The bakery sector is exceptional in meeting its societal duties of environmental protection (Dweiri et al., 2021). It does this by conforming to the corporate governance standards and restrictions stated in UK law on manufacturing products. Sweet Delicacies will serve as an example of ecological sustainability. The firm plans to promote a variety of environmental protection activities.
SWOT Analysis of the Bakery Industry
Strength
Successful bakery businesses in the UK often attribute their achievements to their well-trained and educated employees. It aids the manufacturing of consumables of superior quality and flavor (Lockyer & Spiro, 2020). Keeping the same standard with diversity, the client always would the baked items. Sweet Delicacies intends to produce a variety of baked products, which will attract more customers. The company plans to employ well-educated staff that will help in the production of quality baked products.
Weakness
Essential commodities have become more expensive due to the worldwide spread of the COVID-19 epidemic, the growing cost of gasoline, and the ensuing supply shortage. The only choice left for the bakeries is to increase retail pricing (Nakat & Bou-Mitri, 2020). Since Sweet Delicacies is brand new to the industry, intensive marketing is required to win regular consumers. Due to this, the owner will need to spend a lot of money on advertisements across a variety of channels.
Opportunities
Once the entrepreneur discovers the missing wanted product on the market, they must provide the same product. Bakery foods are heavy in sugar and fat, which significantly contribute to health problems, including diabetes, hypertension, heart disease, and being overweight (Cauvain & Clark, 2019). Sweet Delicacies intends to produce healthy baked products with unique tastes and designs. Doing so may capture the attention of the growing population of the health-conscious generation.
Threats
Many individuals have lost their jobs and have less money due to the worldwide spread of COVID-19. When facing financial hardship, people sacrifice their spending habits (Nakat & Bou-Mitri, 2020). As a result, this has impacted the global bakery industry. It may be challenging to run a new bakery business in Warwick town owing to the presence of established bakeries in the area, which may bring stiff competition.
Porter Five Forces Analysis
Competition in the Industry
An analysis of Porter’s Five Forces is crucial when trying to gauge the intensity of competition in a given market. This analysis considers the market’s competitiveness, barriers to entry, consumers’ purchasing and selling power, and the availability of substitutes for manufactured goods (Habibi & Habibi, 2017). Warwick town is home to three other bakeries and a wedding planner, all of which provide stiff rivalry to Sweet Delicacies.
Potential of New Entrants into the Industry
There still exists the threat of new potential investors wishing to invest in the bakery industry in Warwick town. New investors in the industry may even create stiffer competition and reduce potential profits (Habibi & Habibi, 2017). More companies compete in the market by offering lower prices, higher quality products, more unique offerings, and stronger ties to critical suppliers. The new entrants may challenge Sweet Delicacies in marketing its brand.
Power of Suppliers
Price changes in bakery ingredients are not due to suppliers’ negotiating power but rather to global supply and demand dynamics. Many commodities, including primary resources, saw price changes due to the COVID-19 epidemic (Nakat & Bou-Mitri, 2020). Since the situation has normalized, there will no longer be a lack of raw materials for Sweet Delicacies. The company will efficiently operate in Warwick town.
Power of Customers
The bread industry’s success or failure is entirely up to the consumers. An increase in purchases will lead to a rise in profitability. Many individuals lost their employment of COVID-19, which had a chilling effect on consumer spending (Nakat & Bou-Mitri, 2020). Several industries, notably baking, saw their profits decline due to the pandemic. More people will buy from Sweet Delicacies due to the company’s new, lower prices.
The Threat of Substitute Products
Many substitutes available for bakery items exist internationally. Individuals may substitute these items with potatoes, breakfast cereals, and rice and bake as many delicacies as they desire at home (Habibi & Habibi, 2017). Bakeries must compete on price and convenience to prevent customers from buying cheaper alternatives or making baked goods at home. Customers preferring baked items will reduce the profitability of Sweet Delicacies.
Segmentation-Targeting and Position (STP) Analysis
Segmentation
Warwick is a popular tourist destination due to its many restaurants and bars. Consequently, this affords investors various avenues to choose their product’s intended demographic (Visit Warwick, 2022). Products from Sweet Delicacies’ bakery may be sold in stores, hotels, and individuals. There are a lot of potential customers for baked goods since there are so many families in Warwick; thus, the company’s success in the town.
Targeting
The designated population for the baked items is the citizens of Warwick town. Families with children are the target demographic for baked items. The baked items may be consumed for breakfast or birthdays, and weddings. The second targeted audience is the employed since they have better buying power for the baked items. The firm is guaranteeing that it attracts these consumer bases would boost profitability.
Positioning
Sweet Delicacies will be an entry into the sector; consequently, it must identify suitable strategies to contact its target consumers. The corporation aims to spend considerably to market its brand in Warwick town. Giant banners will be raised throughout the town to advertise the distinctiveness of the baked items (Ferrell et al., 2021). (Ferrell et al., 2021). The corporation will market the brand on television and other social media channels such as Facebook and Twitter.
Strategic Position Statement
The business strategy of Sweeet Delicacies is to exploit the current market potential to manufacture baked items with distinctive flavors and looks. The company wants to give consumers the advantage of consuming baked delicacies of several tastes. Creating baked goods with exciting flavors is a great way to promote the company’s name. The product will rival the competitors in the business in that it has excellent taste and is available at a lower cost. Alternative approaches to selling the baked goods would be via proactive advertising
The 4Ps Market Analysis
Place
There is a plan to open a new bakery in Warwick town. The bakery will be known as Sweet Delicacies as the entrepreneurs intend to attract more customers. A mega building has been identified near Cape Industrial Estate, offering a strategic position for Sweet Delicacies to market its products. The area is secure and has an excellent market to sustain the operations of Sweet Delicacies.
Product
Sweet Delicacies will mainly specialize in baked products: cakes, biscuits, and bread. The products will have a unique flavor and design, which will be appealing to the customers’ eyes. It intends to make the company’s products stand out so that Sweet Delicacies can compete with the existing three bakeries in the area. Attracting many customers will improve the business profitability and growth of the brand.
Price
The products of Sweet Delicacies will retail at a lower price than its business rivals. It is one of the business strategies the company intends to adopt to compete with its competitors in the market efficiently. Despite the lower retail prices, Sweet Delicacies wants to maintain the quality of its prices. Higher quality and lower prices of baked products will attract customers leading to more profits.
Promotion
Sweet Delicacies intends to invest heavily in advertising to market its products. Giant banners will be erected on many streets in Warwick town. Social media platforms such as Twitter, Facebook, and YouTube will be used to advertise the company’s products. Sweet Delicacies intends to bring fierce competition to the existing rivals in the market. The company understands that it is new in the market, and advertisement is one way it can reach more customers. Capital is an essential resource that Sweet Delicacies have, and this will significantly help in the marketing plans that the company has.
Impact of Generic Company Objectives on Competitiveness
Generic companies require strategies to survive in a competitive market since the population does not well recognize their products. The dominant companies that have been in the market for a long adversely affect these generic companies’ profitability. The efficiency and effectiveness of operations are crucial to the company’s ability to compete on price and quality (Ferrell et al., 2021). Whether or not a company can meet its sales goals depends on how well it manages its available resources. Therefore, generic companies must adopt strategies where their available resources are well utilized.
To stay competitive, generic companies should cultivate a similarly optimistic culture. A customer-focused company always comes up with new ideas to satisfy their wants and needs (Ferrell et al., 2021). However, managers in a production-focused environment risk setting marketing goals that are unachievable or irrelevant. For efficient services and goods production, the employees’ quality and capability are critical to determining marketing goals. Gaining a marketing edge requires a highly productive and satisfied team. Therefore, generic companies must treat their staff correctly to maintain a competitive advantage in the market. They should pay their workers and provide the necessary incentives to make them spread a positive message about the company.
Industry size, expansion, and specialization are the most critical drivers in the market today. Any change in these will significantly impact the marketing plan (Ferrell et al., 2021). Generic companies understanding their industry size will help them target their market appropriately. It enables them to target the appropriate size to supply their goods efficiently. Additionally, it allows them to specialize in the products, giving them a competitive edge in the market.
Markets for consumer goods and other commodities are feeling the effects of the current rate of technological advancement, which is decreasing product life cycles yet opening up exciting new possibilities for innovation. When planning marketing initiatives, these factors must be considered (Ferrell et al., 2021). Generic companies must adopt new technology to produce products that will attract many customers. Product prices are a critical component that determines the purchasing power of the customers. Therefore, generic firms must offer their products at lower prices than well-established ones. This will helps increase the purchasing power of the customers and thus help in the growth of the new brand. Generic companies can adopt proactive advertisements of the products. It will enable easier recognition of the brand to the customers and thus help the company survive in the competitive market.
References
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