Sift Cupcake and Dessert Bar

Sift Cupcake and Dessert Bar

1. What are the dominant economic characteristics of the specialty baking market? Does it appear that the industry’s prospects for growth and attractive profits are good?

The dominant economic characteristic of the specialty baking market goes as follows,

Specialty bakery market is a part of the larger retail bakery industry, which includes bread, buns, cakes and cupcakes, pastries, and etc. Competitive rivalry, growth, and profitability vary from segment to segment.

Sellers of specialty bakery products may compete on a national, regional, or local level. While some specialty bakers as Hostess Brands compete on a national basis, most competition is among rivals operating locally or within a small geographic region.

Market size and growth rate:

In 2009, the U.S. annual per capita consumer spending on bakery products was $303.75. Per capita annual spending on bakery products in the U.S. was expected to increase to $351.50 by 2014—see case Exhibit 1.

Prior to the onset of the recession, the retail bakery industry had been expected to grow by 8.1 percent annually through 2014. However, the cakes and cupcakes segment of the industry was the only segment of the industry to achieve growth in 2009. The sales of cakes and cupcakes was expected to increase by 20 percent between 2009 and 2014.

2. How strong are the competitive forces confronting Sift and other specialty bakers? Which one of the five competitive forces is the strongest? Prepare a five-forces analysis to support your answer.

3. What key factors will determine a company’s success in the specialty baking market in the next 3-5 years?

The identification of key success factors for online jewelry retailers is a pretty easy task. The list that students come up with should include most all of the following:

 High quality and tasty baked goods

 A retail location convenient to consumers with incomes over $50,000

 A sufficiently broad product line to...