Environmental Case

Response: External environment: Porter five forces Supplier power – The supplier power is low as there are a lot of suppliers around in Singapore. Bakery shops can choose to purchase from other supplier if the current supplier decide to increase the price of the supplies. Furthermore, the qualities of the supply are similar (flour, sugar) and usually bakery shop purchases their ingredient in bulk. This will lower down the bargaining power of the supplier which stops them from increasing the price of the supplies. Buyer power – The buying power is high as there are a lot of bakery shops for the consumers to choose from. Consumers can easily switch from one bakery to another due to the similar price and products the bakery shops produce. Competitive rivalry – The competitive rivalry is high as there are a lot of similar shops all around Singapore. The price and variety of the products are similar which allows consumer to choose which bakery they want to purchase from. Threat of substitution – The threat of substitution is high as the consumers have low switching costs. Consumers are able to switch around other substitutes as and when they like due to the low price of the products. Consumers can easily opt for other alternative like snacks shop. Threat of new entry - The treat of new entry is high as the cost and time needed to set up the business is low. The cost of the ingredient and equipment use to produce the product (breads cakes) are low and does not require much capital to set up a bakery shop. On top of that, government did not create any barrier to stop people from setting up a bakery shop. Target market: The store location shows that BreadTalk wants to target the families, students and working adults. For example, BreadTalk set up stores at neighbourhood malls, malls that are near school, MRT station and city area. This shows that BreadTalk wants to get hold of all their target markets by making sure their stores are located at the area that target markets normally visit.