Essay regarding Sift Cupcake and Delicacy Bar Circumstance

Sift Cupcake and Treat Bar Circumstance


Sector and Competitive Analysis

Show 1: Dominating Economic Features

Market Size and Progress Rate

Country wide cupcake product sales projected to rise another 20% between 2009 and 2014 Retail food handling business sales likely to grow 8. 1% each year on average through 2014 106 cupcakeries in the bay location

Sift quotes net product sales of around $961, 000 in 2010

Volume of Rivals

Since November 1, 2010, there are 106 cupcakeries in the these types of area Hundreds of additional bakeries, dessert pubs, and other commercial venues likewise selling cookies Grocery stores and big box in-store bakeries

Range of Competitive Rivalry

Most companies compete locally and regionally

Few businesses like Sprinkles compete country wide

Number of Purchasers

In 2009, customers between 35-54 years old spent the most in bakery items Largest percentage of Sift's customers are ages 25-34

Largest percentage of Sift's customers have got total family income of over $100, 000 Largest percentage of Sift's clients are people with no children followed by parents with kids under a decade old Customers buying cookies for themselves as dessert treats

Parents shopping for for children

Shoppers buying to get events such as birthday get-togethers

Consumer Spending on Bakery Goods by Age Group

Sift's Consumers by Child-rearing Group

Amount of Product Differentiation

Products happen to be relatively undifferentiated among competition

Rivals are responsible for specialty cupcakes to separate

Merchandise Innovation

Tiny new advancement in the preparing industry

Little costs associated with R& D in the baking sector

Businesses must analysis different quality recipes and the types of food handling business products clients prefer Demand-Supply Conditions

Market is vast majority small businesses competitive locally

Demand for bakery products raising represented by 8. 1% that food handling business sales are expected to increase per year through 2014 Cupcake sales projected to rise 20% between 2009 and 2014 in the U. S. Rate of Technological Change

Raising number of customers using the internet intended for everything which includes bakery buying Must have useful website for customers

Up and down Integration

Many competitors happen to be fully bundled running every part of their small enterprise Bigger competition such as food markets are only partly integrated Financial systems of Range

Baking Market is characterized by economies of scale especially in advertising and buying Bigger firms like Sprinkles can afford to get a larger volume of materials to supply more options to customers Larger companies may also spend even more on marketing to increase brand awareness More compact companies just like Sift will be profitable tend to be struggling to expand as a result of less capital Sprinkles, countrywide leader in specialty cupcakes, plans to spread out 15 more locations this year

Learning/Experience Cure Results

High learning curve included in being impressive and innovative to attract customers Experience is required to handle and satisfy client's needs Encounter is needed with baking products and other supplies Employees must learn tested recipes for different food handling business products

Exhibit 2: The Five Forces Version

Competition Amongst Rivals – Moderate

Many competitors giving bakery items

Weakly differentiated products

Purchasers costs of switching companies are low

Competitors face low exit obstacles

Market growth

Potential New Entrants – Moderate

Client demand keeps growing and newbies can expect to earn profits Existing market members would like to expand all their market reach by coming into product sectors or geographic regions where they do not possess a presence Entry obstacles are relatively low

Competition from Substitutes – Good

Acceptable alternatives for cupcakes and other food handling business products can easily be bought Competitive prices for substitutes

Low client costs to change to substitutes

Power of Suppliers – Weak

Large number of suppliers with fairly small industry shares Industry member's turning costs...