COMPANY BACKGROUND

Julie’s Bakeshop was intended to supply the bread need of Tita Julie’s canteen

business. The bakeshop now has 500 branches in the country and is expanding its

business overseas with over 300 varieties of bread pastries. Its cause-oriented programs

in partnership with the local government reaches out to the public and this establishes

harmonious relationships with the Filipino community and is the reason behind its

services.

The introduction of many innovations and best practices of Julies Bakeshop when it

started in 1981 ‘till now are considered standard and is being imitated by all other

bakeshops. The taste and quality of bread products that blends the varying palate of

customers is the foundation of its popularity. By having integrity, synergy, teamwork,

customer service and social responsibility to service God and her fellow countrymen. Tita

Julie puts greater importance in providing high quality product and service over its profit.

Mission

To feed people.

Vision

A leading food company in the Philippines with a strong global presence.

PESTEL ANALYSIS

Political/legal

• Train Law

The tax reform has implemented a more strict rules for business sectors. One

disadvantage of this tax reform is that the cost of production will increase. As for the

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advantage, higher take home pay of employees and because of that there will be an

increase in purchasing power.

Economic

• Inflation

Due to inflation the increase in the cost of inputs directly affects the price of outputs.

Since, there is an increase in prices of goods, customer tends to buy cheaper products

from competitors. On the other hand, Julie’s can expand its bakeshop by putting up more

branches that will open opportunities for employment.

Social

• Changes

The cultural changes with social-cultural factors influences the consumers spending

pattern. For the advantage, the increase in the population of Baguio City will increase the

potential customers of the bakeshop. Since there is a constant change in the preference of

customers, Julie’s could not cope up with it because of a snail-paced improvement of

their new product line.

Technological

• Technological Advancement

The innovation of machineries for baking such as ovens and dough mixers can be

useful to the expansion of Julie’s bakeshop. An advantage is that there will be an increase

in productions and improved quality of bread and pastries. On the other hand, it will

increase expenses for the skills training of employees who will be using the machines.

Environment

• Competitors

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 Intro. An advantage that the bakeshop can obtain from increased number of

competitors is that they can use bench marking as a way to improve their breads and

pastries, but then increase number of competitors can also cause a decrease in market

share.

SWOT ANALYSIS

Strengths

1. Consistent good quality product

2. Price-labeled products

3. Budget friendly price

4. Trusted years of service

5. Exposed location to potential customers

6. Ability to handle large amounts

7. Efficient supply of daily demand

8. Clean market area

9. Consistent sizes of servings

10. Has product promo’s and discounts

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Weakness

1. Limited dining area for customers

2. Outdated baking equipment

3. Limited amount from product line

4. Falling behind research and development

5. Some products are not freshly baked

6. Lack of advertisement

7. Speed of service

8. Poor customer service relation

9. Unclean dining area

10. Limited operating hours

Opportunities

1. New baking technique

2. Use of upgraded baking equipment

3. Expansion of dining area

4. Development of new product

5. Active presence on social media

6. Tie-ups with restaurant and super-mart

7. Wholesale distribution

8. Expansion of business

9. Offering low fat/sugar products

10. Can be open for investment opportunities

Threats

1. Nearby competitors

2. Price-wars

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 3. Effects of changes in regulation

4. Preference change in customers

5. Government policies

6. Risk of products being copied

7. Fluctuation of input prices

8. Negative word of mouth

9. Competitors can offer similar product quickly

10. Growing of substitute courses

COMPETITIVE PROFILE MATRIX

Julie's Bakeshop Cuevas Bread Mucho Pan

   
Critical Success Factor Weight Rating Score Rating Score Rating Score

Breadth of product line 0.2 4 0.8 3 0.6 1 0.2

Marketing Strategy 0.18 4 0.72 2 0.36 2 0.36
Price Competitiveness 0.17 3 0.51 3 0.51 3 0.51
Customer Service 0.09 2 0.18 4 0.36 2 0.18
Location Facility 0.08 3 0.24 4 0.32 3 0.24
Customer Loyalty 0.07 2 0.14 3 0.21 1 0.07
Product Quality 0.06 2 0.12 4 0.24 2 0.12
Market Share 0.06 2 0.12 2 0.12 2 0.12
Production Capacity 0.05 2 0.1 4 0.2 2 0.1
Technological
Advancement 0.04 1 0.04 3 0.12 1 0.04
Total 1   2.97   3.04   1.94

Critical Success Factors are variables that can significantly affect the overall

competitive positions of a company in a particular industry. The factors vary from one

industry to another depending upon their economic and technological characteristics. In

the baking industry, the following are some of the success factors determined:

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Breadth of product line is the most influential factor that will affect any baking shops

because this is where the life of the bakery lies. Julies bakeshop takes the highest score

for it has a product differentiation that sets it apart from other bakeshops where they

adopt products already out in the market. The marketing strategy of a baking industry

depends on how well they put their brand into the eyes of their potential customers and

Julies has been successful on these compared to Mucho Pan and Cuevas for it has

advertisement in Iwantv, DZWT, Facebook and others but Julie’s still lacks on this factor

to truly be competitive in the baking industry. Price competitiveness is a major factor that

will also determine potential customers’ attitude towards buying your product and for the

three (3) bakeshops, we rated them the same because thy all provide budget-friendly

products, customer service and location facility goes hand in hand. How you position

your facility and how effective and efficient your facility layout is of great importance on

how you conduct your business and how you cater to your customer’s need, and Cuevas

have top the other two in this category as they know how to approach their customers.

The poor technological advancement of Julie’s and Mucho Pan affect their

production capacity in a way that their daily production is limited wherein they produce

breads and pastries that are not enough for their customers demand. Also, their product

quality is affected because most breads are prepared using manual method only and not

on electrical machine based resulting to coarse grain products. The three (3) bakeshops

doesn’t vary on market share since they cater almost the same number of customers and

they have sales ranging from P62,000-P72,000 monthly. Customers loyalty is an

advantage of Cuevas bread due to brand recognition since Cuevas is a sister company of

one popular bakeshop (Danes).

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 INTERNAL FACTOR EVALUATION MATRIX

Weighted
Weight Rating
Key Internal Factor Score
Strengths
Consistent good quality products .10 2 .20

Price-labelled Products .03 2 .06

Budget-friendly Price (Competitive Price) .08 4 .32

Trusted years of Service .02 1 .02

Exposed location to potential customers .04 3 .12

Ability to handle large amounts .03 2 .06

Efficient supply of daily demand .04 2 .08

Clean market area (location) .08 1 .08

Consistent sizes of servings .05 3 .15

Has product promos and discounts .05 4 .20

Weaknesses
Limited dining area for customers .02 2 .04
Outdated baking equipment .05 2 .10
Limited amount from product line .06 3 .18
Falling behind research and Development .06 4 .24
Some products are not freshly baked .04 2 .08
Lack of Advertisement .03 3 .09
Speed of service .04 2 .08
Poor customer Service relation .06 3 .18
Unclean dining area .10 4 .40
Limited operating hours .02 2 .04
Total 2.72

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 INTERNAL FACTOR EVALUATION

The strengths and weaknesses of Julie’s Bakeshop plays a big role as to how the

bakeshop can improve its current operation for them to be able to attract more customers

and increase their sales. The biggest strength of Julie’s is their budget-friendly price(0.32)

because their products are more affordable and results to greater number of customers,

since customers prefer to buy breads with lower price so that they can get higher quantity

compared to breads with higher prices. The highest weighted score reflects in Julie’s can

be found in its weaknesses which is their unclean dining area (0.40). Given that they are

located near the public market, they can’t maintain the cleanliness of their dining area.

Customers re attracted to buy goods especially in a place that are properly sanitized

because the market area reflects the cleanliness of their products.

One of the strengths of Julie’s is their trusted years of service (0.02) but it has the

lowest weighted score because it is not a big factor when it comes to their current

operation. Brand recognition is not anymore applicable since there are lots of new

bakeshops that are already in the market. Another strength is price-labelled products but

it doesn’t affect much Julie’s (0.06). It only helps customers know whether they have

enough money to buy a certain product. By adding the weighted scores of the strengths

and weaknesses of Julie’s Bakeshop, we came up to the total weighted score of 2.72

which is considered as above average. This means that Julie’s Bakeshop is effective in

improving their strengths and weaknesses and transforming their weaknesses into their

strength.

EXTERNAL FACTOR EVALUATION MATRIX

Key External Factors Weight Rati Weighted Score

ng
Opportunities
New baking techniques .05 2 .10

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Use of upgraded baking techniques .05 2 .10

Expansion of Dining area .04 2 .08

Development of New Products .06 2 .12

Active presence on Social media .06 3 .18

Tie-ups with Restaurant and .06 2 .12
Supermarkets
Wholesale Distribution .04 2 .08
Expansion of Business .05 3 .15

Offering low fat sugar products .02 1 .02

Can be open for Investment 06 3 .18
opportunities
Threats
Nearby Competitors .10 4 .40
Price wars .06 3 .18
Changes in Regulations (effects) .03 2 .06
Preference change in taste of customers .04 2 .08
Government Policies .03 2 .06
Risk of product being copied .04 3 .12
Fluctuation of Input prices .06 3 .18
Negative word of mouth .04 2 .08
Competitors can offer similar product .04 3 .12
quickly
Growing of substitute courses .07 4 .28
Total 2.69

EXTERNAL FACTOR EVALUATION

The key external factors of Julie’s also plays a big role as to what should Julie’s

Bakeshop do to take the opportunities available for them to be able to stay competitive in

the market and what should they do to overcome or sway threats away. There are lots of

opportunities available for Julie’s Bakeshop for them to improve the current state of their

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bakeshop, one thing is that they can improve their sales through active presence on social

media (.18). It is because every people nowadays has their own smartphones and social

media accounts, they can take this opportunity to inform their customers regarding their

products that’s why the use of social media can be a great help. Another opportunity is

the expansion wherein Julie’s can open its door for investments. Just like tie-ups with

different restaurants and supermarkets so that they can increase market shares as well as

profit because it is not always that people will go to a bakeshop to buy breads. Sometimes

what is available in the grocery is already enough for them. Offering low fat sugar

products (.02) is another opportunity for Julie’s because people nowadays become more

conscious on their health and thy prefer to buy low fat sugar breads but Julie’s at the

moment doesn’t have innovations like this.

As opportunities are available for Julie’s, there are also threats that may

negatively affect their business. One of the biggest threats to Julie’s Bakeshop is their

nearby competitors (.40). Since there are many bakeshops today in the market, customers

has lots of choices as to where are they going to buy. This is why Julie’s should improve

their product for them to increase their market share. Another threat is the growing

substitute courses (.28), wherein there are new products entering the market that can be a

substitute to Julie’s breads and pastries and in here the only way to overcome this threat

is to innovate their product where they should make more varieties of breads.

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 SPACE MATRIX

Internal Strategic Position External Strategic Position

Competitive Advantage (CA) Industry Strength (IS)
(-6 worst; -1 best) (+1 worst; +6 best)
-4 Product Quality +5 Growth Potential
X- AXIS

-2 Brand Image +4 Financial Stability

-2 Customer Loyalty +4 Profit Potential
-2 Market Share +6 Ease of Entry-Market
Average: -2.5 Average: +4.75
Total Axis X Score: 2.25
Financial Strength (FS) Environmental Stability (ES)
(+1 worst; +6 best) (-6 worst; -1 best)
+5 Working Capital -3 Inflation
Y- AXIS

+4 Liquidity -4 Technology
+4 Return on Investment -3 Taxation
+3 Leverage -2 Demand Elasticity
Average: +4 Average: -3
Total Axis Y Score: 1

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Considering the Internal Strategic Position and External Strategic Position, Julie’s

Bakeshop falls under the aggressive position which indicates a strong competitive

position. But every business needs to innovate to stay ahead of the competition. No

business can continue to offer the same unchanged product; otherwise sales would

decrease and profits reduced. And this is why Julie’s needs to develop new product.

However, the challenge is determining the product of service that will help Julie’s to

meet its objectives. This is because the product that a business chooses must be able to

meet the overall objectives of the business, earn the company desired profit, meet the

company’s strategic positioning goals, and conform to the operational requirements of the

business. This means that every good product idea is not always visible. It is therefore

important that Julie’s does thorough research of the new product idea before it begins to

mass-produce the product so to avoid new product failure.

In conclusion, Julie’s should not fall behind research and development of new products or

existing products to satisfy customers’ changing preferences. This, in turn, will help

Julie’s survive in its market area.

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SWOT MATRIX

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Opportunities-Strengths O6-S1, S6, S7

With consistent good quality products and the bakeshops ability to handle large

amounts of demand they can cater to different restaurants and super-marts. It is a good

opportunity to take order to increase their market share and have more potential

customers. Its efficient supply of daily demand will ensure that Julie’s bakeshop will be

able to provide enough to meet the demands of customers on a daily basis.

Opportunities-Weakness O6-W6, W10

Since the bakeshops operating hours is limited and that they do not advertise their

products, with the tie-ups to different restaurants and super-marts those weakness can be

mitigated. By letting restaurants and super-marts sell their products the public would

familiarize themselves of the bakeshop and this would eventually help the products be

known.

Threats-Strengths T1-S1, S3

Although the bakeshop have nearby competitors its budget friendly price and it’s

consistency of providing good quality products to its customers will ensure that it’s

patrons would still stick to Julie’s bakeshop. Customers prefer to buy breads and pastries

with lower price for them to be able to have more quantity.

Threats-Weakness T8- W5, W7, W8, W9

Negative comment about Julie’s bakeshop itself or its products might spread since,

some products are not freshly baked, the speed of service of its employee is slow, and

there is poor customer service relation and its unclean dining area.

A training on its personnel about customer service might help its employees on how

they should treat their customers. The bakeshop should also make sure that the dining

area is always clean.

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 Quantitative Strategic Planning Matrix

Personnel Training Product Development

Weight Attractiven Total Attractivene Total

ess Weight ss Weight
Strengths
1. Consistent good .10 1 .10 4 .40
quality products
2. Price labeled .03 0 0 2 .06
products
3. Budget friendly .08 0 0 4 .32
price

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Trusted years of .02 1 .02 2 .04
service
5. Exposed location to .04 0 0 3 .12
potential customers

6. Ability to handle .03 4 .12 0 0

large amounts
7. Efficient supply of .04 4 .16 0 0
demand
8. Clean market area .08 4 .32 0 0

9. Consistent sizes of .05 2 .10 4 .20

servings
10. Has product .05 0 0 4 .20
promo’s and discounts

Weakness
1. Limited dining area .02 0 0 3 .06
for customers
2. Outdated baking .05 2 .10 4 .20
equipment
3. Limited amount .06 0 0 4 .24
from product line
4. Falling behind .0 1 .06 4 .24
research and
development
5. Some products are .04 0 0 4 .16
not freshly baked

6. Lack of .03 0 0 4 .12

advertisement
7. Speed of service .04 4 .16 0 0
8. Poor customer .06 4 .24 0 0
service relation
9. Unclean dining area .10 4 .40 0 0

10. Limited operating .02 4 .08 0 0

hours
1.86 2.36

Personnel Training Product Development

Weight Attractivenes Total Attractivenes Total
s Weight s Weigh
t
Opportunities
1. New baking technique .05 2 .10 4 .20
2. Use of upgraded baking .05 2 .10 4 .20
equipment
3. Expansion of dining .04 0 0 2 .08
area
Development of new .06 2 .12 4 .24
product
5. Active presence on .06 1 .06 3 .18
social media
6. Tie-ups with restaurant .06 0 0 4 .24
and super-marts

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7. Wholesale distribution .04 0 0 3 .12
8. Expansion of business .05 0 0 4 .20
9. Offering low fat/sugar .02 0 0 4 .08
products
10. can be open for .06 0 0 4 .24
investment opportunities

Threats
1. nearby competitors .10 2 .20 4 .40
2. price-wars .06 0 0 3 .18
3. effects of changes in .03 2 .06 0 0
regulation
4. preference change in .04 1 .04 4 .16
taste of customers
5. government policies .03 2 .06 0 0
6. risk of products being .04 4 .16 2 .08
copied
7. fluctuation of input .06 0 0 3 .18
prices
8. negative word of mouth .04 1 .04 3 .12
9. competitor can offer .04 0 0 4 .16
similar products quickly
10. growing of substitute .07 0 0 4 .28
courses
.94 3.34

Strength and Opportunities and Total

Weaknesses Threats
Personnel Training 1.86 2.36 4.22
Product Development .94 3.34 4.28

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