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The Organizational Strategy And Leadership

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Discuss about the Organizational Strategy and Leadership ?
 
 

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Introduction

In the sales of food processing market, frozen bakery market contributes a major portion of the globe. The prime reason for the consumers to opt for these products is that they can be reserved for a long period. Mithwani (2015) states that among all the frozen baked material, pizza crust is the most sold product and it contributes the maximum share of the profitability that the frozen bakery industry acquired. The concerned frozen products hold around 8% of the total frozen food market and people consume this project as part of their daily meal (Nguyen 2013). In addition to that, after pizza crust, selling of bread and cookies are in leads that are consumed by a majority of people (Nayak and Waterson 2016).

                                                                   Image 1: Percentage of consumption of frozen baked products

                                                                               (Source: Nayak and Waterson 2016)

Nguyen (2013) argues that though these foods tastes good but they have some pitfalls. People face health problems like indigestion and obesity. Thus, in order to make the business of this industry profitable, frozen bakery companies should focus on evolving food technology and use of modern machinery. The prime objective of the assessment is to analyze the external environmental factors of the frozen bakery industry. Thus, porter’s five forces will be carried out along with the current trend of the frozen bakery industry and their performance in retails and also evaluate their catering-and-industrial along with the analysis of their distribution channel (Jeong et al. 2013). The future of frozen bakery industry and their market drivers will also be discussed in the assessment.

Porter’s Five Forces Analyses of Frozen Bakery Industry 

Porter’s Five Forces

Analysis of the Factors

Bargaining power of suppliers

The bargaining power of the supplier is high

The demand of these foods is high in the market and there are several manufacturers, which produces same products. Some of the manufactures also produce diversified products range that is served with customized solutions (Sekon and Rahman 2014). Thus, the presence of various local and international brand, supplier have high bargaining product.

Bargaining power of buyers

The bargaining power of the buyer is high

People can easily get these frozen bakery products from small retail stores at lesser prices than in the established supermarkets and thus they can compare these price and bargain for the best possible prices (Litvinova et al. 2015).

Rivalry among companies

The rivalry among companies is medium

In the small region, there is few frozen bakery organization and thus no significant competition cam be noticed. However, in the regional level, these industries create an oligopolistic situation.

Threat of new entrants

The treat of new employees is low

The high demand of the frozen bakery products that comply with the required food requirement like the use of high quality materials that affects less to the health needs perfect planning and R&D setup (Lim et al. 2014). Thus, for new entrants investing such a huge amount of money is difficult and thus there is less chance for competition.

Threat of substitute products

The threat of substitute is high

Frozen bakery food products are good in taste; however, there are several organization who delivers fresh food products that are full of nutrients and health-conscious people prefer to consume this food more than the other products (Zerrillo et al. 2016).

Table 1: Porter’s Five Forces analysis of Frozen Bakery Industry

(Source: Created by author)

 

Analysis of frozen bakery industry

International Cold Chains

Kiumarsi et al. (2014) depict that a supply chain through the temperature-controlled storage process is termed as a cold chain. The frozen products like the pastry, bread and pizza crust have to be stored in the refrigerator so that these products can be used as per as the convenience of the users. All the products should not exceed the temperature of 4ºC while refrigeration (Martinez-Monzo et al. 2013).  The cold chain logistics also plays a crucial role in the managing the demands of this food in the market.

                                                                                      Image 2: Cold chain management setup

                                                                                            (Source: Kiumarsi et al. 2014)

The concept of cold chain logistic management is beneficial when it comes to supplying this baked food to distant places in the hot climate. People can use the products easily and this will provide a good competitive advantage to the selected industry.

International Frozen Food Market 

It can be seen from the statistics that global frozen food market size exceeded to $250 billion by the year 2015, and proper technology is used so that the nutrients materials like vitamins and minerals can be preserved (Martínez-Monzo et al. 2013). It is also expected that the positive influence on the overall industry can be estimated over the next eight years. Famous industries like Pizza Hut, McDonald's and Burger King also uses inventory in frozen media that their food products can be preserved for a longer time. Pinto et al. (2014) also depict that number of supermarket, fast-food chains are developing rapidly, and hence the preservation of the baked frozen food becomes an obligation.

Current Frozen Bakery Industry

Frozen Bakery Industry – Retail 

In this section, the different retail store will be considered like the convenience/artisan bakery store and in-stores bakers:

Convenience/artisan bakery store

Bakers Maison is one of the leading frozen bakery food retailers in Australia having a diverse range of baked products like Gourmet Mixed Rolls, Gourmet Catering White, Mini Hamburger Bun (Sliders), Baguette White and others (Bakersmaison.com.au 2016). The factors that drive customer towards this store are their wide range of frozen food and temperature-controlled facilities.

In-stores bakers

Moudon et al. (2013) depict that mostly in North American and European regions the demand for frozen baked food is more and due to the same reason, the retails store have their own in-store bakeries.

Frozen Bakery Industry – Catering & Industrial 

As mentioned earlier, the solely authorized frozen food bakers face challenges due to the development of many restaurants, fast food centers, and coffee shops. Thus, the current bakery industry also includes these food hubs. Moreover, as international cuisines and recipes use frozen food and its variants, thus, these food hubs needs to care about the high quality of the product. These segments comprises a large share of the market through the following sectors

 

Food Services

The business of the frozen bakery products is rising due to the development of hotel and hospitality industries. In Australia, Australian and New Zealand Standard Industrial Classification (ANZSIC) classify the activities and the working procedure of the bakery ingredients that can be used by the hotel industry (Abs.gov.au 2016).

Catering

The frozen bakery industry also supports the catering organizations, as people now prefer fast food due to its taste. Thus, by collaborating with various catering agencies

Other services

The baker's organization also have the opportunity for their growth by associating with many small and emerging food agencies so that they can attain more profitability.

Frozen Bakery Industry – Distribution Channel 

                                                                         Image 3: Supply chain of the frozen bakery food

                                                                                    (Source: Costa et al. 2013)

Costa et al. (2013) also define that the baker's industries have different distribution channels that are discussed in this section:

Direct Marketing

This is the conventional way of marketing, where the bakery industry directly supplies their products to the retail shop, hospitality industry and the local food hubs. Li and Wang (2014) define the positive aspect of this approach, that is the quality, and the quantity can be assured at the time of purchasing.

commerce

 The considered industry can use this new technology in order to target more consumers. They can formulate an official online shopping website, Facebook Fan page, YouTube or Twitter account where they can broadcast their recent initiatives and innovations to users present across the globe and provide their service for effective market expansion (Tuten and Solomon 2014).

5.3.3 Export Opportunities

The frozen bakery industry can make export their products either to their subsidiary companies that are present in other nations or in order to fulfill the order of the customer who makes demands of their products through online websites. This, not only provide the opportunity to expand their services being the nation’s barrier about it will also help in attaining brand recognition.

Frozen Bakery Industry Market Drivers

Some of the market drivers are:

 

Consistency of safety and taste

Kenijz and Sokol (2013) states that the health and trend in wellness must have it be considered bu the organization who are selling these packaged frozen baked products. They must be aware of the expiry dates and the composition of the food. The good quality and the nutritious products that are offered to the people should possess greater taste.

Economic growth

High population leads to the high demands of the food and the since the frozen baked food is easy to attain and cook in homes and hotel industry they have the opportunity to grow their business not for their profitability but also for the economic growth of the nation. 

High demands of the frozen products

As the demand of these food items is high in busy markets like Australia, food manufacturers must provide improved nutritional frozen products. This high demand should fulfill by the concerned industry for their future market expansion. 

Innovation techniques

There is various machines and technology developed in the market through which the bakery items can be developed. Moreover, these industries can also attract the users by making new shapes and incorporating new flavors in the baked products. In this way, the frozen bakery industry can attain high profitability. 

Efficient bakers

Some people are there who are interested in bakery industry and desires to take it as their professional career. Waddington (2014) also depicts that there are many institutions for bakery classes. Thus, the frozen bakery can associate with these institutions so that efficient bakers can be employed for a significant performance in the bakery industry.   

Future of Frozen Bakery Industry

Expansion of the business

The bakeries can associate with the hospitability and catering industries so that they can expand their business through several business connections. Moreover, adopting the recent business trend of an online business method, more customers can be attracted. In this way, both the domestic and international market can be targeted.

New Product Launches

Gimenez-Bastida et al. (2015) explain that not only the new design of the bakery products is essential but also launching new products is crucial. Every frozen bakery organization should research about the recent market demands and innovate products in order to satisfy the consumer’s demand.

Mergers and acquisitions of firms

By means of merging and acquisition, many frozen bakery industries can gain the opportunity of carrying out a competitive strategy to offer their products to a significant group of customers. Taken an example of Aryzta and Klemme, which is a company of Switzerland and Germany respectively (aryzta 2016; Klemme-ag.com 2016). The former company acquired the latter one in manufacturing and distribution of the frozen bakery products and thus in this way; they expand their business.

 

Conclusion

Thus, it is concluded from the entire discussion that the demand of the food products is increasing and hence the frozen foods are increasing. In Australia, where people are busy with their professional life, they have the tendency to purchase products that are easy to cook and good to taste. This provides an opportunity to the frozen bakery industry to expand their business. Thus, the future trend is to utilize the new technology not only to enhance the quality of the food also abut to innovate food products that can match with the recent trend of the community. Moreover, Increasing number of consumers in the frozen bakery industry also results in proper business expansion. The consistency of safety and taste, economic growth, high demands of the frozen products along with the innovation techniques and recruitment of efficient bakers are some of the key drivers that can help to define the future trend of the frozen bakery industry. New product launches, mergers and acquisitions of firms are also some of the ways through which the frozen bakery industry can expand their business.

 

Reference List

Abs.gov.au., 2016. 1292.0 - Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0). [online] Available at: https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/1292.02006%20(Revision%202.0)?OpenDocument [Accessed 19 Dec. 2016].

aryzta., 2016. aryzta. [online] Available at: https://www.aryzta.com/ [Accessed 19 Dec. 2016].

Bakersmaison.com.au., 2016. Home. [online] Available at: https://www.bakersmaison.com.au/ [Accessed 19 Dec. 2016].

Costa, C., Antonucci, F., Pallottino, F., Aguzzi, J., Sarriá, D. and Menesatti, P., 2013. A review on agri-food supply chain traceability by means of RFID technology. Food and Bioprocess Technology, 6(2), pp.353-366.

Giménez-Bastida, J.A., Pisku?a, M.K. and Zieli?ski, H., 2015. Recent advances in processing and development of buckwheat derived bakery and non-bakery products–a review. Pol. J. Food Nutr.Sci, 65, pp.9-20.

Jeong, J.S., Jeong, H.N., Ko, K.H., Moon, J.H. and Kang, H.G., 2013. Success Factors of Paris Baguettes Bakery Franchise Business. Asia Marketing Journal, 15(2), pp.1-27.

Kenijz, N.V. and Sokol, N.V., 2013. Pectic substances and their functional role in bread-making from frozen semi-finished products. European Online Journal of Natural and Social Sciences, 2(2), p.253.

Kiumarsi, S., Jayaraman, K., Mohd Isa, S. and Varastegani, A., 2014. Marketing strategies to improve the sales of bakery products of small-medium enterprise (SMEs) in Malaysia. International Food Research Journal, 21(6), pp.2101-2107.

Klemme-ag.com., 2016. Klemme AG - Frozen Bakery Products: Neuigkeiten. [online] Available at: https://www.klemme-ag.com/89.0.html?&no_cache=1 [Accessed 19 Dec. 2016].

Li, C.H. and Wang, H.B., 2014. Exploring the Relations between Service Quality and Consumer Behaviors-A case study of 85 C Bakery Café from Taiwan. International Journal of Organizational Innovation (Online), 6(3), p.31.

Lim, S.A.H., Antony, J. and Albliwi, S., 2014. Statistical Process Control (SPC) in the food industry–A systematic review and future research agenda. Trends in food science & technology, 37(2), pp.137-151.

Litvinova, T., Morozova, I. and Yatsechko, S., 2015. Experiential Marketing as a Tool of Improvement of Competitiveness of Enterprises in the Market of Bread and Bakery Products. Mediterranean Journal of Social Sciences, 6(3 S6), p.11.

Martínez-Monzó, J., García-Segovia, P. and Albors-Garrigos, J., 2013.Trends and innovations in bread, bakery, and pastry. Journal of Culinary Science & Technology, 11(1), pp.56-65.

Mithwani, A.M.O., 2015. Factors Influencing Strategy Implementation in the Bakery Industry in Mombasa County. The International Journal of Business & Management, 3(8), p.185.

Moudon, A.V., Drewnowski, A., Duncan, G.E., Hurvitz, P.M., Saelens, B.E. and Scharnhorst, E., 2013. Characterizing the food environment: pitfalls and future directions. Public health nutrition, 16(07), pp.1238-1243.

Nayak, R. and Waterson, P., 2016. The Assessment of Food Safety Culture: An investigation of current challenges, barriers and future opportunities within the food industry. Food Control.

Nguyen, K.T., 2013. The Corner Market-Connecting the Past and Future Neighborhood (Doctoral dissertation, Virginia Tech).

Pinto, D., Castro, I., Vicente, A., Bourbon, A.I. and Cerqueira, M.Â., 2014. Functional Bakery Products: An Overview and Future Perspectives. Bakery Products Science and Technology, p.431.

Sekon, K.K. and Rahman, P.K., 2014. Rhamnolipidbiosurfactants–Past, Present and future scenario of global market. Frontiers in microbiology.

Tuten, T.L. and Solomon, M.R., 2014. Social media marketing. Sage.

Waddington, D.J. ed., 2014. Education, Industry and Technology: Science and Technology Education and Future Human Needs (Vol. 3). Elsevier.

Zerrillo, P.C., Mathur, S., Lee, M. and Lim, C., 2016.BreadTalk: Continuous Innovation to Keep the Brand Fresh.

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