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 Porters 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
Porters 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

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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
BreadTalks 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 Porters 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 Carls 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 Groups 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.

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, BreadTalks 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
conceptfocusing 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

2002 awarded by ASME and SPH and was also voted Singapores 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.

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 owners 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

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, BreadTalks 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.

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

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 companys 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 companys
under one CEO.

vision

of

an

innovative

and

trendsetting lifestyle company.

3.4 Portfolio Analysis

*Refer to Appendix 1 for market data

Implications for BCG Matrix:

Breadtalk Groups 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

12

3.7 Porters Five Forces

Porters 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
Suppliers 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 Porters 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
Cafs with bakery business

Training and Development

for employees

Strengthen and differentiate

the existing product core
competencies

Develop intangible and

reputable
core
competencies

16

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. Porters Generic Strategies
Using the Porters 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.

19

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

survey
Develop and update training

schedule for all employee

Develop / source for new
3

technology to improve
productivity
Streamline Breadtalk Group

value chain activities

Corporate Level Strategy - Diversification
Develop diversification plan
1

into other cuisine in the

restaurant segment
Setting up of restaurant outlet

in Singapore
Setting up of restaurant outlet

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

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

Employees performance appraisal

Training records
Employee survey

21

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 Breadtalks sales within sector

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