You are on page 1of 8

INTRODUCTION (purpose, your company of choice, industry

)

MACRO ENVIRONMENT http://www.scribd.com/doc/27614539/Starbucks-a-Strategic-Report-by-James-Heavey
PESTLE Analysis: PESTLE analysis is a tool that can aid organisations making strategies by helping them understand the external environment in which they operate now and will operate in the future. It is a method of examining the many different external factors affecting an organization - the outside influences on success or failure.

PESTLE stands for: Political - The current and potential influences from political pressures Economic - The local, national and world economy impact Social - The ways in which changes in society affect us Technological - How new and emerging technology affects our business Legal - How local, national and world legislation affects us Environmental - The local, national and world environmental issues

The PESTLE analysis will be used to identify and understand the important factors Starbucks must consider in all areas of the business. Political: * Taxation policy - high taxation imposed on farmers in those countries producing the meat will usually mean Bee Cheng Hiang has to pay higher price for the meat they purchase. Any fluctuations in taxation levels in the industry are almost certainly ultimately passed on to the consumer. * International trade regulations/tariffs - Trade issues will affect Bee Cheng Hiang when exporting and importing goods. When another country's government imposes a tariff it not only results in an efficiency loss for Bee Cheng Hiang but large income transfers can become inconsistent with equity.

* Government stability ± Bee Cheng Hiang should thoroughly investigate the political stability of any country they plan to expand to. Changes in government can lead to changes in

Competitive pricing from competitors can start a price war for Bee Cheng Hiang that can drive down profits and profit margins as they attempt to increase.: The elections may have an effect on BCH as new legislation or new or existing government may bring in taxes. This saving would in turn be passed on to the purchaser/consumer. those countries in political turmoil or civil war should be approached with great caution when considering new ventures) * Employment law . Bakkwa is a popular choice as gift item during festive season.g. (E. in laws. especially when it comes to nutrition and hygiene. siblings.If growth is low in the nation of location of Bee Cheng Hiang then sales may also fall. * Health consciousness . * Location . Business costs will rise for Bee Cheng Hiang through inflation. Easy access is vital to ensure there is no excuse for staff to arrive late or for customers not to visit. Economic: * Economic Growth . their share of the market.Transport needs to the stores must be considered for both staff and customers.Inflation is a condition of increasing prices.taxation and legislation. relatives or friends. * Choice as Gift . Technological: . or at least maintain.Being a delicacy. * Competitors pricing . Consumer incomes tend to fall in periods of negative growth and having less disposable income to spend.Good health and foodstuffs associated with healthy living are important in today's market place. Bee Cheng Hiang can use this as an opportunity when deciding the additional products to sell to those who are health conscious. Social: * Quality ± The quality assurance plays a big role to ensure customer have faith on the product.A reduction in licensing and permit costs in those countries producing the meat for Bee Cheng Hiang would lower production costs for farmers. Consumers would present them to their parents. Also. Consumer confidence in products can also fall if the economic 'mood' is low * Inflation rates .

1.harbott. MICRO ENVIRONMENT http://www. Environmental: * Natural Disaster ± Flood & Disease causes both shortage in raw materials and increase fears of the customers.. LEGAL: * Trade and product restrictions ± Bee Cheng Hiang needs to be aware of the trade laws in the various countries they occupy and do business with.* 4.assessing the relative strength and number of sellers.* IT development ± Bee Cheng Hiang has launched e-commerce Web site. Rivalry among the existing players . Bargaining power of suppliers . 3. Threat of substitutes . stand alone. 2. Bargaining power of buyers .assessing the relative competitive strength of rival firms. certain countries impose a tariff that has to be paid when goods are imported / exported so this must be taken into considerations.* .assessing the relative strength and number of buyers. It helps the marketer to contrast a competitive environment.g. religious laws.assessing the ability of new products with superior characteristics to replace existing product(s) or service(s). * Health and Safety regulations ±It would be wise though to enforce a universally high standard of health and safety throughout all its stores to maintain a good image and ensure all laws are abided by. Also. Entry of competitors . business or SBU (Strategic Business Unit) rather than a single product or range of products. They need to ensure they are not in violation of e. It tends to focus on the single.assessing the ability of new entrants to start operations and the structural barriers they must overcome.com/2011/01/29/porters-five-forces-industry-analysis-for-krispy-kreme/ Porter's Five Forces analysis: Porter's five forces analysis is an important tool for analyzing an organizations industry structure in strategic processes. and they are able to deliver new features to the market in the shortest time possible.* 5.

Kim Hwa Guan. Premium locations in Singapore are scarce and command high prices with most of the favorable locations within town. distribution channels. Bakkwa chains (e. Static market growth High fixed costs . Lim Chee Guan. Fragrance Foodstuff. airport and MRT stations already being occupied. etc. Rivalry among existing competitors (High) y y y y High concentration of rivals e.locations Perishable products . . there is fierce differentiation by product range.g.Threat of new entrants (Medium) y y y Large capital requirements required to build chain of stores Favorable locations are already occupied Product and brand differentiation Capital requirements for individual stores are low. While product differentiation is limited.food The competitors in the industry are all competing for the same customers. Fragrance Foodstuff) are all competing to be number one in the market. Bee Hock Guan. brand equity development and advertising. however new entrants wishing to compete on a like basis with national store networks. brand and store ambience. face large capital requirements to gain market share.g.

For a consumer this becomes a competitive choice rather than a substitute choice (e.Market growth is static. which is concentrated around such as MRT stations.g. the stores/chain compete based on convenience and opportunity. desserts. . and there is saturation of competition due to the limited number of prime locations available for outlets.g. This is evidenced by the location of the store. which promotes fierce fighting for market share. pastries). and shopping centers. do I buy the Bakkwa from Fragrance Foodstuff or Lim Chee Guan). Most people buy when they are travelling. Bee Cheng Hiang has more than 160 retail outlets located across 6 countries. Power of suppliers (High) y Few suppliers to choose from and high switching costs within the industry Power of buyers (High) y y Buyers have low switching costs Buyers can postpone to purchase at a later date INTERNAL ENVIRONMENT Physical resources: The physical resources of Bee Cheng Hiang are the shops and the factories they own. Threat of substitutes (Medium) y y Large choice of alternatives with similar products No switching costs Although a consumer can choose from multiple substitutes (e. Today. shopping or meeting people.

storage and distribution of Bakkwa. . They do have their own R&D.com/personalbanking/promotion/CNY09. The Management & staff are inculcated with core values of hardworking & honesty. the customer actually purchasing the Bakkwa from the store. Bee Cheng Hiang has uses technology to enable customers to order their products over the internet and provide delivery service. Technology development.Human Resource Management: Bee Cheng Hiang believes that employees are the greatest assets. http://www. Bee Cheng Hiang brand is recognized all over Singapore. Operations. Marketing and Sales This is how consumers become aware of Bee Cheng Hiang and purchase it. It participates in Food Festival and liaises with local bank for promotion. This is the stage where Bee Cheng Hiang grills the Bakkwa in the store and packages it. own food technologists to carry out regular checks to ascertain that their quality standards are maintained when it comes to nutrition and hygiene. Outbound logistics This is collection.ocbc.shtm Bee Cheng Hiang is also one of the first to make use of mobile advertisements by placing advertisements on lorry and trucks SWOT Analysis STRENGTH: y The Bee Cheng Hiang outlets open concept design allows customers and shoppers to view the workers at work.

etc Economic Downturn situation is a threat due to the desire to save money. Has catered the Halal Bakkwa to Muslim customers. Bee Cheng Hiang was recognized as one of the most recognizable brands in Singapore with the awarding of the Singapore promising brand award . Production process has been awarded the ISO9001 certificate and we are HACCP certified. Korea. Indonesia.y y y y y y y y y Strong/reputation brand name. It has 30 outlets in Singapore and almost 105 outlets abroad spreading across China. Taiwan.to Europe country Making a reward cards for discount purposes Sponsor more town events to increase recognition THREATS: y y y y intense competition Lim Chee Guan. Fragrance Foodstuff. Phillipines. OPPORTUNITY: y y y International expansion . E-Commerce/E-shopping Has an account with Facebook as a marketing strategy WEAKNESS: y y Some outlets are inaccessible due to the location. . The new product development and creativity remain vulnerable to the possibility that their innovation may falter over time. Quality standards are maintained when it comes to nutrition and hygiene by food technologist Has the slogan: FOR EVERYONE.Malaysia. FOR ANY OCCASION. Continued to innovate and to introduce new products. Disease may frighten consumers spending power. HK. Any changes in government regulations on Meat product would impact consumers spending even further. Wide range of products From 2002 to 2005.

y y y Who knows if the market for Bakkwa will grow and stay in favor with customers. or whether another type of snacks or leisure activity will replace Bakkwa in the future? are exposed to rises in the cost of meat and meat products Bee Cheng Hiang' success has lead to the market entry of many competitors and copy cat brands that pose potential threats. .