Julie’s Bakeshop

Lakandula Street, Baguio City |1

COMPANY LOGO
 Julie’s Bakeshop
Lakandula Street, Baguio City |2

Company History

Owned by Mrs. Julia Gandionco, the first Julie’s Bakeshop opened its doors on January 6, 1981,
in Mandaue. The original Tita Julie or Ma’am Julie, as she prefers to be called, had been a canteen
concessionaire since 1970. The bakeshop was intended to supply the bread needs of her canteen business.
Ma’am Julie started her bakery business without baking experience. Because of her faith in God and the
support of her husband, she was able to make it work. Just three months after the opening of their
bakeshop, another branch opened in Urgello, Cebu City. Three years later, Julie’s already had 10
branches all over Cebu. The increasing number of outlets led to the formation of RJ and Sons
Commodities, led by Bobby Gandionco, Ma’am Julie’s son, which supplies baking ingredients and
supplies to Julie’s branches.

The first Julie’s branch outside Cebu opened in Iloilo in 1988. Branching out led to the secret to
Julie’s rapid growth in the food business: Franchising. The first Julie’s franchise opened in 1998 in
Mambajao, Camiguin. From there, Julie’s has been one of the most sought-after food franchising not just
in Cebu, but the whole Philippines.

From its humble beginnings, Julie’s Bakeshop continues to grow with over 300 varieties of baked
products and 500 branches in the country. The once little bakeshop grew into a big corporation, Julie’s
Franchise Corporation with three divisions: the Franchise Division, the Supply and Logistics Division and
the Corporate Shared Services Division.

The success of Julie’s Bakeshop is attributed to its commitment to establish harmonious

relationships with the Filipino community. The company reaches out to the public with its cause-oriented
programs in partnership with the local government.

Nature of the Company

Julie’s Bakeshop was a mom-and-pop type of business during 1981 by Rodrigo and Julia
Gandionco. Originally the intention was for the bakeshop to augment the bread requirements of the
family’s canteenBusiness. However, Julie’s bakeshop continued to grow, establishing branches all over
Cebu City and neighboring towns. In 1984, RJ Commodities was established as the center warehouse for
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the bakeshop. It ensured a steady supply of quality ingredients and bakery supplies of the business. This
was the start of the business shifting as a franchising type of business since there is an increasing demand
for RJ Commodities to service Metro Manila, Luzon and Mindanao Julie’s Bakeshop. On July 1, 2003,
RJ Commodities was merged with Julie’s Franchise Corporation. Julie’s Bakeshop being a franchise
corporation was organized to provide full management support to the franchisees and was manned by
professionals to provide support in marketing, operations, construction, accounting, franchise
development and human resource development. This nature of the biz was generally decentralized with
principals and partners having relative freedom in running their bakeshops.

Competitive Advantage

Julie’s Bakeshop is a value driven franchise business focusing on freshness, variety, Hourly Hot
Bread, cleanliness, sanitation and accessibility to consumers. It also corporate values, anchored on family
like Integrity and Honesty, Quality Driven, Social Responsibility, Synergy, and Customer Service
Excellence, Building shared vision, team learning, mental models (conventional wisdom), Personal
mastery, Systems thinking (must think the “larger picture”, and Entrepreneurial work ethics (creative
mindset). Julie’s Bakeshop also integrate diversification like the Lotsa pizza master franchise in vismin,
Julie’s fast foods, and Yumyum Donuts. The business believe that organizations that will truly excel in
the future will be the organizations that discover how to tap people’s commitment and capacity to learn at
all levels in organization.

Mission
Julie’s Bakeshop is a major brand established as a family-oriented business in making its
presence felt all over.
We maintain very high quality standards at each Julie’s Bakeshop offering freshly baked products
using only the finest ingredients and produced in clean environment in full view of our customers.

Vision
A Julie’s Bakeshop in every town. We will be the most sought-after Food Franchising Company
maintaining leadership in the neighborhood bakeshop market.

Values
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• Joy. We create moments and memories through joyful experiences that discover and celebrate
goodness in everyone.
• Understanding. We unlock insight to always follow our customers and consumers, and give
them the widest range of what they need and want, for less.
• Loyalty. We build commitment in relationships and connections to make a difference and create
sustainable value.
• Inspiration. We put our heart and soul into baking the most delightful products to deliver an
inspiring experience.
• Entrepreneurship. We are the bakeshop that helps families, franchisees and communities grow
and live fuller lives.
• Satisfaction. We leave a lasting impression that makes everyone wanting for more, and sharing
goodness with everyone, everyday.

SWOT ANALYSIS

A SWOT analysis is a technique used to determine and define your Strengths, Weaknesses,
Opportunities, and Threats – SWOT. SWOT analysis can be applied to an entire company or
organization, or individual projects within a single department. Most commonly, SWOT analysis are used
at the organizational level to determine how closely a business is aligned with its growth trajectories and
success benchmarks.

The four elements above are common to all SWOT analysis. However, many companies further
compartmentalize these elements into two distinct subgroups: Internal and External. SWOT analysis are
often presented as a grid-like matrix with four distinct quadrants – one representing each individual
element. This presentation offers several benefits, such as identifying which elements are internal versus
external, and displaying a wide range of data in an easy-to-read, predominantly visual format.

Conducting a comprehensive SWOT analysis provides a unique opportunity to gain greater

insight into how your business operates. It also allows you to take a broader, bird’s eye view of the
business and the position it occupies in the industry. And this technique can be applied to a wide range of
scenarios, not just as an overview of the business.

Obviously, it almost goes without saying that conducting a SWOT analysis allows you to identify
what your company does well, where it could improve, and the opportunities and threats facing your
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Lakandula Street, Baguio City |5

business. However, conducting a SWOT analysis provides you with the opportunity to not only identify
these factors, but also develop and implement tangible road maps and timelines for potential solutions.
This can be beneficial in the creation of budgetary plans, identifying hiring needs, and other mid- to long-
term strategic planning.

SWOT Matrix

STRENGTHS

1. Variety of offered products

2. Familiarity of the bakeshop
3. Geographical Advantage Location
4. Well-trained employees
5. Filipino Taste

WEAKNESSES

1. Limited Services
2. Marketing Skills
3. Store size
4. Conventional
5. Falling behind Research & Development

OPPORTUNITIES

1. Diversification of source of income

2. Online Market
3. More locations (Branch expansion)
4. Acquiring latest technology
5. Innovation

THREATS

1. Increasing number of baking companies

2. Best Advertisement Strategies of Competitors
3. Bigger Competition in the Market
4. Experience of competitors in the market
5. Changing taste preference
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SWOT Matching

SWOT (threats, opportunities, weaknesses, strengths) matrix is a two-cell by two-cell matrix that
assists companies in determining strategic alternatives by examining external opportunities and threats
and how they compare to a company’s existing strengths and weaknesses. All the threats, opportunities,
weaknesses and strengths are listed on the outside of the matrix and compared within each cell.

Table 1 SWOT MATRIX

SO Strategies WO Strategies
W1, O1- The company’s opportunity of
S1, O1- The variety of products offered by Julie’s diversifying their source of income will aid their
Bakeshop is the main driving force for the limited services.
company to have the opportunity of diversifying W2, O2- Low marketing skills can be improved
its source of income. through online marketing.
S2, O2- Julie’s familiarity to customers entice the W3, O3- Creating more branches to different
opportunity of an online market. locations will pave the way for the construction of
S3, O3- Advantage on its geographical location a bigger store size.
will open the opportunity to build more branches W4, O4- Altering its conventional nature by
to different locations. converting their process more on the
S5, 05- The ‘Filipino taste’ title of Julie’s technological aspect.
Bakeshop will create the opportunity to modify W5, O5- Innovation or modification of their
their products by innovating new ones. products to strengthen their Research and
Development.

ST Strategies WT Strategies
S1, T1- Using the advantage of having a variety W1, T1- The increasing number of baking
of products to keep up with the increasing number companies will trigger the business’ limited
of bakery shops. services to diversify.
S2, T2- Familiarity of the business to the public W2, T2- Competitor’s best advertising strategies
(spirit level) will keep Julie’s running in the will drive company’s organization to improve on
industry despite the competitors advertisements. their marketing skills.
S3, T3- Advantage on geographical location will W3, T3- Growing competition in the market will
keep the company’s name in the level of bigger motivate Julie’s bakeshop to extend its store to
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competitors. accommodate larger number of customers.

S4, T4- Well trained, knowledgeable, and W4, T4- Competitors’ in the market which are
trustworthy employees which is a keystroke operating for a longer time and have upgraded
strategy of the company in advancing from the processes will knock the company’s conventional
experienced competitors. process.
S5, T5- Julie’s products which reflect the spirit of W5, T5- Due to the customer’s nature of
Filipino taste will satisfy customers’ changing changing their preferred taste, the bakeshop will
preference taste. be moved to invest on their product development.

Competitive Performance Matrix (CPM)

The Competitive Profile Matrix (CPM) is a strategic analysis that allows you to compare your
company to your competitors, in such a way as to reveal your relative strengths and weaknesses.

In a similar fashion to a Competitive Analysis Template, a Competitive Profile Matrix, once

completed will give you the insight you need to inform your strategic decision making, highlight potential
opportunities in the market, help you articulate your value proposition, as well as highlighting the value
proposition of your competitors. A Competitive Profile Matrix scores you against and your competitors in
each are of competitive performance (called critical success factors).

In order to better understand the external environment and the competition in a particular
industry, firms often use CPM. The matrix identifies a firm’s key competitors and compares them using
industry’s critical success factors. The analysis also reveals company’s relative strengths and weaknesses
against its competitors, so a company would know, which areas it should improve and, which areas to
protect.

Table 2 Competitive Performance Matrix (CPM)

Weight Julies Bakeshop Panadero Danes Bakeshop

Rating Weighted Rating Weighted Rating Weighted
Score Score Score
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1. Breadth 0.06 3 0.18 4 0.24 3 0.18

of product
line
2. Effectiveness/ 0.05 3 0.15 3 0.15 2 0.10
Sales
Distribution
3. Patent Advantage 0.05 3 0.15 3 0.15 2 0.10
4. Location 0.07 3 0.21 2 0.14 3 0.21
of facilities/
business
5. Union Relations 0.03 4 0.12 2 0.06 2 0.06
6. Product Capacity 0.06 1 0.06 3 0.18 2 0.12
7. Technological 0.08 2 0.16 2 0.16 2 0.16
Advantage
8. E-commerce 0.05 2 0.10 2 0.10 2 0.10
Facilities
9. Market Share 0.05 2 0.10 2 0.10 2 0.10
Experience
10. Global 0.02 2 0.04 2 0.04 1 0.02
Expansion
11. Inventory System 0.05 3 0.15 3 0.15 2 0.10
12. Financial 0.05 2 0.10 2 0.10 2 0.10
Position
13. Management 0.10 3 0.30 3 0.30 2 0.20
14. Customer 0.12 3 0.36 3 0.36 2 0.24
Loyalty
15. Product Quality 0.10 3 0.30 3 0.30 2 0.20
16. Customer 0.06 3 0.18 3 0.18 2 0.12
Service
TOTAL 1.0 2.66 2.71 2.11

Scale:

4-Major Strength
3-Minor Strength
2-Minor Weakness
1-Major Weakness

BOSTON CONSULTING GROUP

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BCG Matrix is known as Boston Consulting Group useful tool to evaluate products offering and
which brands the firm should invest in and which one should be divested, this can be a guide for decision
making and efficient allocation of resources to these products to serve better the customers and maximize
their profits. The matrix is divided into four areas namely: Stars wherein high market share and high
market growth have, they are considered well established and have high opportunities. Cash cows on the
other hand have high market share and low market growth. They are the most profitable brands and
should be “milked” to provide cash as possible. Products under question marks have high market growth
but low market share in fast growing markets consuming large amount of cash and incurring losses. Do
not always succeed and ever after large amounts of investments they struggle to gain market share. Dogs,
however, are products that have low market share and low market growth. These are often ignored and
not patronized by customers.

Table 3 BOSTON CONSULTING GROUP

Relative Market Share Position

27% Market
High 1.0 Medium .50 Share Low 0.0

High 1.0

STAR QUESTION MARK

 Bucchi  Chicken Oriental

8.5%  Siopao  Egg Pie
 Cupcakes
Industry Sales Growth Rate
Medium 0.50
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 Longjan
 Custard Cake
 Donut

CASH COW
DOGS

 Pandesal  Spanish Bread

 Pandecoco  Yoyo

Having an industry growth rate of 8.5% and a market share of 27%, Julie’s bakeshop falls on
Question Marks, which means:

-Low relative market share- compete in high growth industry

-Cash needs are high
-Cash generation is low
-Decision to strengthen intensive strategies

BCG MATRIX EVALUATION

For star we included buchi and siopao. These products consume a large amount of cash because
these are made in a larger quantity but also generates high cash that can help the company to be
profitable. These are the products that customer wants to try in the shop and even if for others, these
products are not familiar, they always order it to feel the spirit of a true Filipino taste.

Under question mark we included chicken oriental, egg pie, cupcakes, longjan, custard cake, and
crinkles because making these products consumes a large amount of cash but has a low market share.
These products are not familiar to other customers and from this, they become anxious to buy and try
especially that these are displayed in the store front which is an effective strategy in marketing company
products. These may lead to a low market share since these are considered part of the company’s
introductory stage where they aim at introducing these products to customers. However as time passes by,
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the company may transform these products into Stars that can generate profit to the company with a high
market share but also may fall under the Dogs that has low market share at the same time low industry
growth.

Pandesal and pandecoco are the products that fall under cash cow in which the consumption of
cash is low and result to a high market share. These products are the best seller in which customers from
other places or locals always order it for it satisfies the customer wants. These products always generate
profit for the company with a less cost and it is in maturity or development stage of the products.

Lastly is the cluster Dogs wherein under this, we included Spanish bread and Yoyo because even
it consumes low cash at the same time has also low market share. These products are being clustered in
dogs because it became a company’s problem in which for Spanish bread it is already very common,
wherein all of the bakeshops offers it and the other bakeshops even have better taste in their Spanish
bread. In the case of yoyo, it is a product wherein only few customers tend to buy it and sometimes result
to a spoilage which in turn is an additional expense for Julie’s Bakeshop. These products are for disposal
or to be innovated.

Space Matrix Analysis

The SPACE Matrix is a management tool used to analyze a company. It is used to determine
what type of a strategy a company should undertake. The Strategic Position and Action Evaluation matrix
focuses on strategy formulation especially as related to the competitive position of the organization.

The SPACE matrix is broken down into four quadrants (Aggressive, Conservative, Defensive,
and Competitive.) where each quadrant suggests a different type or a nature of a strategy.

Table 4 SPACE MATRIX

Internal Strategic Position External Strategic Position

Competitive (CA) Industry (IS)
(-6 worst, -1 best) (6 best, -1 worst)
-2 Market Share 4 Growth potential
X -2 Brand Image 4 Resource Utilization
A -3 Technological know-how 3 Financial Stability
X -2 Customer Loyalty 4 Consolidation
I -2 Product life cycle 4 Profit Potential
S -3 Control over supplier 4 Ease of Entry
Average -2.33 Average 3.83
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Total axis X score: -6.16

Financial (FS) Environment (ES)
(6 best, 1 worst) (-6 worst, -1 best)
4 Working Capital -5 Technological Changes
4 Return on Investment -3 Competitive Pressure
Y 3 Return on Assets -2 Inflation Rates
A 2 Leverage -3 Barriers to entry
X 3 Liquidity -2 Price elasticity of demand
I 4 Net Income -2 Demand Variability
S 3 Inventory Turnover

Average 3.29 Average -2.83

Total axis Y score: -6.12
Y=FS-ES X=IS-CA
Y=3.29+(-3.83) X=2.83+(-2.33)
Y= 0.46 X= 1.5

Figure 1 Strategic Position and Action Matrix (SPACE)

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AGGRESSIVE
6

5 QUADRANT 1

(1.5, 0.46)
1

0
-7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7

-1

-2

-3

-4

QUADRANT 3 QUADRANT 4
-5

-6
DEFENSIVE COMPETITIVE
-7

SPACE MATRIX EVALUATION

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Formulation:

Competitive Advantage + Industrial Strengths

=Y=FS-ES

Y=3.29+(-2.83)

Y= 0.46

Financial Strengths + Environmental Strengths

=X=IS-CA

X=3.83+(-2.33)

X= 1.5

Base on the graph the firm fall into the aggressive quadrant of the SPACE matrix. It is located at
the coordinates of +1.5 for x-component and y-component of 0.46. The result signifies that the bakeshop
is aggressive to compete in the market and has made its own name without the help of other companies.
Also, it has an admirable position to use its Internal Strengths in order to take advantage of external
opportunities, overcome internal weaknesses, and avoid or minimize external threats. The firm has a set
of strategies such as Market Penetration and Market Development.

Since Julie’s Bakeshop is not new already and been producing breads that are within the taste of
most of the Filipinos, we suggest that they choose the aggressive strategy because the bakeshop industry
is considered attractive due to its familiarity and the company has that competitive advantage over its
rivals. The competitive advantage that we can name is that Julie’s Bakeshop made their products
considering the taste of the Filipinos wherein from here, they became successful and is continuously
innovating products that helps them be on top of their rivals.

Julie’s Bakeshop is on the aggressive board where they are trying to innovate new products or
develop their current products on what to add so that they can maintain their advantage against their rivals
and finding ways to give back to the community.
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IFE and EFE Matrix

Internal Factor Evaluation

IFE (Internal factor evaluation) matrix is one of the best strategic tools to perform internal audit
of any firm. IFE is use for internal analysis of different functional areas of business such as finance,
marketing, IT, operations, accounts, Human Resources and others depend upon the nature of business and
its size.

An internal audit consists of condition and forces within the company. These must be evaluated
and strengthened because these factors will lead to the company’s success. Internal factors are the
outcome of detailed internal audit of a firm obviously, every company have some weak and strong points.
Strengths are the strong areas or attribute of the company, which are used to overcome weakness and
capitalize to take advantage of the external opportunities available in the industry. The strengths could be
tangible or intangible; such as brand image, financial position, income, human resource. Weaknesses are
the risky area which needs to be addressed on priority to minimize its impact. Competitors always search
for the loop holes in your company and put their best effort to capitalize on the identified weaknesses.

Table 5 INTERNAL FACTOR EVALUATION MATRIX (IFE)

Weight Rate Total Weight

STRENGTH
1 Variety of offered products .10 3 0.30
2 Familiarity of the bakeshop .12 3 0.36
3 Geographical Advantage Location .09 3 0.27
4 Well-trained employees .10 3 0.30
5 Filipino Taste .12 4 0.48
WEAKNESS
1 Limited Services .09 3 0.27
2 Marketing Skills .09 2 0.18
3 Store size .10 3 0.30
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4 Conventional .10 4 0.40

5 Falling behind Research & Development .09 3 0.27
1.00 3.13
Ratings: 1 as a major weakness 2 as a minor weakness 3 as a minor strength 4 as major
strength

INTERNAL FACTOR EVALUATION ANALYSIS

Weight: the composition of 1.0 (weight) from the factors of strengths and weaknesses signifies
the importance of each factor mentioned. Zero signifies that the factors are not important.

Ratings:
1 as a major weakness
2 as a minor weakness
3 as a minor strength
4 as major strength

The IFE matrix result is 3.13 which means that its internal factors are strong in maximization of
strengths and overcoming its weaknesses.

Julie’s Bakeshop strength is that its products have a variety and the spirit of Filipino taste; the
bakeshop itself is familiar; and it also have a geographical advantage location (Luzon, Visayas, and
Mindanao). These strengths are strong enough to cover its weaknesses such as their limited services, low
marketing skills, research and development which is falling behind which includes being conventional
and lastly, small store size.

EXTERNAL FACTOR EVALUATION

EFE matrix method is a strategic-management tool often used for assessment of current business
condition. EFE is a good tool to visualize and prioritize the opportunities and threats that a business is
facing. The EFE and IFE is very similar, the major different between the EFE and IFE is the type of
factor that are included in the model. External factor such as opportunities should be maximized and be
well maintained to lessen or maximize the threats for the company. This can bring possible high
assurance to the success of the firm on the long run. External factor assessed in the EFE matrix are the
ones that are subjected to will of economic, social, political, legal and other external factors.
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Table 6. EXTERNAL FACTOR EVALUATION MATRIX

Weight Rate Total Weight

OPPORTUNITIES
1 Diversification of source of income .12 3 0.36
2 Online Market .12 3 0.36
3 More locations (Branch expansion) .09 3 0.27
4 Acquiring latest technology .09 3 0.27
5 Innovation .09 3 0.27
THREATS
1 Increasing number of baking companies .10 3 0.30
2 Best Advertisement Strategies of .10 2 0.20
Competitors
3 Bigger Competition in the Market .10 3 0.30
4 Experience of competitors in the market .10 3 0.30
5 Changing taste preference .09 2 0.18
1.00 2.81
Ratings: 1 as a major weakness 2 as a minor weakness 3 as a minor strength 4 as major
strength

EXTERNAL FACTOR EVALUATION ANALYSIS

Weight: The composition of 1.0 (weight) from the factors of opportunities and threats signifies
the importance of each factor mentioned. Zero signifies that the factors are not important.
Ratings:
1 as poor
2 as average
3 as above average and
4 as superior
The EFE matrix result is 2.42 which mean that Julie’s Bakeshop is excellent in managing and
grabbing opportunities for the firm and in reducing and avoiding possible threats that may arise.
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Opportunities include Diversification of source of income, Online Market, More locations

(Branch expansion), Acquiring latest technology, and Innovation. These opportunities will likely lessen
these threats for the company such as the Increasing number of baking companies, Best Advertisement
4 1
Strategies of Competitors, Bigger Competition in the Market, Experience of competitors in the market,
Changing taste preference

Internal and External Matrix

The IE matrix belongs to the group of strategic portfolio management tools. In a similar manner like the
BCG matrix, the IE matrix positions an organization into a nine-cell matrix.

This IE matrix tells us that our company should hold and maintain its position. The company should
pursue strategies focused on increasing market penetration and product development.

Cells I, II, and III suggest grow and build strategy. This means intensive and aggressive tactical strategies.
Your strategies should focus on market penetration, market development, and product development. From
the operational perspective, a backward integration, forward integration, and horizontal integration should
also be considered.

Cells IV, V, and VI suggest the hold and maintain strategy. In this case, your tactical strategies should
focus on market penetration and product development.

Cells VII, VIII, and IX are characterized with the harvest or exit strategy. If costs for rejuvenating the
business are low, then it should be attempted to revitalize the business. In other cases, aggressive cost
management is a way to play the end game.

Figure 2. INTERNAL EXTERNAL MATRIX SCORE

Internal Factor Evaluation (IFE)

STRONG AVERAGE WEAK

2

HIGH 3

External Factor Evaluation (EFE)

MEDIUM
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3

Cell I Cell 2 Cell 3

Cell IV Cell V Cell VI

HOLD AND MAINTAIN

Cell VII Cell VIII Cell IX

INTERNAL EXTERNAL MATRIX EVALUATION

The result of the IFE score which is 3.13 and the EFE score which is 2.81 has an intersection to
the “Grow and Build strategy”.

Grow and Build Strategy means that the use of tactical strategies should focus on market
penetration, product development, and market development. From the operational perspective, a
backward integration, forward integration, and horizontal integration should also be considered.
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Market penetration seeks to increase market share for present products or services in present
market through greater marketing effort. Product development is the process of modification of existing
products or the creation of new but related products that can be marketed to current customers through
established markets and upgraded production process. Market development is a strategy that involves
introducing present products or services into new geographical areas using different mediums such as the
social media where the business can engage in online marketing.

Grand Strategy Matrix

A Grand Strategy Matrix (GSM) is a tool when it comes to formulating feasible strategies. Grand
Strategy Matrix has grown into a powerful tool for coming up with alternative strategies. The model is
based on two dimensions plotted along a vertical and a horizontal axis; the vertical axis represents the
market growth, varying from slow to fast growth. The horizontal axis represents the organization’s
competitive position, which may range from weak to very strong. These data combine to create four
quadrants, in which organizations can be positioned so that selecting suitable strategies can be easily
researched. Both a company’s growth and its competitive status count as important factors. The model
also allows businesses that are split into multiple divisions to formulate a best strategy for each of those
divisions (product groups).

This matrix has become the standard for businesses small and large to develop a grand strategy
matrix by examining their ability to grow rapidly or slowly while evaluating your competitive strengths
and weaknesses. The first quadrant represents strong competitive position and fast market growth; second
quadrants means weak competitive position and fast market growth; third quadrant represents weak
interpreted as in the strong competitive position and slow market growth.

Figure 3. GRAND STRATEGY MATRIX

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7
(8.5, 2.66)
6

0
-7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7

-1

-2

-3

-4

-5

-6

-7

Grand Strategy Matrix Evaluation

Quadrant 1 – Strong competitive position & Fast market growth

Julies’ Bakeshop is located in the first quadrant of the Grand Strategy Matrix which means they
are in an excellent strategic position. Apart from active and fast growth in the market, they also have a
strong position relative to the competition.
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The perfect strategies are market penetration, market development, and product development.
Being in the quadrant 1, they can afford to take advantage of external opportunities in several areas. They
can take risk aggressively when necessary.

Market penetration is about using expansion to position oneself even better on the market. For
example, by opening new subsidiaries with the same assortment. Using market development, the
company will be able to aim at other markets and/or target audiences, increasing their reach. Product
development should not be left out either; a new assortment provides more customers and more returns.

In addition, strategies such as forward, backward, or related integration fit into this quadrant.
Forward integration involves a company taking over the activities of a customer; backward integration
involves taking over the activities of a supplier from the production chain, and related integration is about
taking over the activities from a fellow company from the same industry. Even diversification is an
option, which involves taking over the activities from a fellow company from a different industry.

The integration strategies, however, should never come at the expense of the company’s own core
business. It’s wise to keep thinking about the current competitive advantage, which is why companies
should prevent losing focus of the competitive advantage they have built painstakingly over time.

Quantitative Strategic Planning Matrix

Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management

approach for evaluating possible strategies. Quantitative Strategic Planning Matrix or a QSPM provides
an analytical method for comparing feasible alternative actions. The QSPM method falls within so-called
stage 3 of the strategy formulation analytical framework.

The Quantitative Strategic Planning Matrix or a QSPM approach attempts to objectively select

the best strategy using input from other management techniques and some easy computations. In other
words, the QSPM method uses inputs from stage 1 analyses, matches them with results from stage 2
analyses, and then decides objectively among alternative strategies.

The first step in the overall strategic management analysis is used to identify key strategic
factors. This can be done using, for example, the EFE matrix and IFE matrix.

After we identify and analyze key strategic factors as inputs for QSPM, we can
formulate the type of the strategy we would like to pursue. This can be done using the stage 2 strategic
management tools, for example the SWOT analysis (or
TOWS), SPACE matrix analysis, BCG matrix model, or the IE matrix model.
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The stage 1 strategic management methods provided us with key strategic factors. Based on their
analysis, we formulated possible strategies in stage 2. Now, the task is to compare in QSPM alternative
strategies and decide which one is the most suitable for our goals.

The stage 2 strategic tools provide the needed information for setting up the Quantitative
Strategic Planning Matrix - QSPM. The QSPM method allows us to evaluate alternative strategies
objectively.

Conceptually, the QSPM in stage 3 determines the relative attractiveness of various strategies
based on the extent to which key external and internal critical success factors are capitalized upon or
improved. The relative attractiveness of each strategy is computed by determining the cumulative impact
of each external and internal critical success factor.

Table 7. Quantitative Strategic Planning Matrix

Strategic Alternatives Alternative 1 Alternative 2

Product Development Market Development
Weight AS TAS AS TAS
OPPORTUNITIES
1 Diversification of source of 0.12 3 0.36 3 0.36
income
2 Online Market 0.12 3 0.36
3 More locations (Branch 0.09 4 0.36
expansion)
4 Acquiring latest technology 0.09 4 0.36
5 Innovation 0.09 3 0.27
THREATS
1 Increasing number of 0.10 4 0.40
baking companies
2 Best Advertisement 0.10 3 0.30 4 0.40
Strategies of Competitors
3 Bigger Competition in the 0.10 2 0.20 3 0.30
Market
4 Experience of competitors 0.10 2 0.20
in the market
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5 Changing taste preference 0.09 4 0.36

Subtotal 1.00 1.85 2.38

Weight AS TAS AS TAS

STRENGTH
1 Variety of offered products 0.10 4 0.40
2 Familiarity of the bakeshop 0.12 3 0.36
3 Geographical Advantage 0.09 4 0.36
Location
4 Well-trained employees 0.10 3 0.30 4 0.40
5 Filipino Taste 0.12 4 0.48
WEAKNESS
1 Limited Services 0.09 3 0.27 3 0.27
2 Marketing Skills 0.09 4 0.36
3 Store size 0.10 4 0.40
4 Conventional 0.10 3 0.30
5 Falling behind Research & 0.09 3 0.27
Development
Subtotal 1.00 2.02 2.15
TOTAL 3.87 4.53

Quantitative Strategic Planning Matrix Evaluation

Julie’s Bakeshop as a baking company should expand its business. Its key competitors like Danes
and Panadero are starting to expand and are located almost everywhere except in the rural parts of the
country. Julie’s Bakeshop should also build stores near schools or Universities and even inside the malls.
With these, they can be able to gain their competitive advantage among its competitors.

Managers should take actions like targeting promotion through employees marketing skills or
through online marketing, opening sales offices and creating alliances to vitalize market development
strategy. They also need to improve its franchising programs and assistance so they could expand stores
to different places.

Product Development
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Julie’s Bakeshop as one of the oldest in Philippine Baking market should innovate its pastry
products to cope with consumers’ rapid change on taste and to the competition among its key competitors,
through new-product development and company’s sown research and development department. These
new product may mean improvement on the original products or modifications and or new ones that the
company developed on their own.

Market Penetration
Operational Plan
The best and advisable strategy recommended for Julie’s Bakeshop based on the result of the
above total attractiveness is Market Development. For the Product Development which has a total of 3.87,
it is obviously less than the Market Development which has a total of 4.53. Julie’s Bakeshop is part of the
baking industry, which we know is a very competitive field since it deals on producing at the same time
supplying bread and pastries which Filipinos often take as a substitute for rice. From this, they need to
keep up with their competitors which stayed in the industry for a long run already and also those that have
a really influential brand names and are advertised on television most of the time. Given that the market
followers have almost the same position, Julie’s Bakeshop can still best succeed if it can keep up or even
advance from its rivals in the following years.

We, researchers, established specific business strategies for Julie’s Bakeshop which are both
strategic and financial in nature. These includes improving employees’ marketing skills which may be
applied on an online marketing of the products; improve franchising assistance; expanding stores by
building wider store size to different places even malls; increasing its distribution and promotion of
products and services.

Table 8. OPERATIONAL PLAN TABLE

Key areas in Objectives Department or Budget Operation

Operation Profile Involved
Advertisement Improving Market Marketing 5,000 Daily
Awareness Department
Opening online
websites, pages
etc.
Operation Reinforcing Human Resource 20,000 Annually, Every
Employee Skills Management employment of
Employee training and Efficiency new employees
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