The instability which is sensed nowadays in the French biscuits and cakes market is mainly a consequence of the economical context. The current crisis carried a strong recession and its impacts are difficult to foresee.
We noted from 2005 to 2007 a period of rising prices concerning the biscuit market: a rise of 5.5% of the alimental products' prices in Europe has been conceded by a rising price concerning all the raw materials, with for example a jump of 142% of the global wheat in 2007.
In 2008 and 2009, consumption is likely to lower, and the wheat harvests of these two years are excellent. This explains why we assist to a stability of the prices in the biscuit market for the short and middle term. However, this won't be enough to thwart the increased demand, which is indivisible of the increased demography.
The production costs won't be deeply affected by the crisis, as only a substitution of the fixed capital could carry high spending for the biscuit and cakes' firms. The main problem concerns the distribution of these products. Indeed, in these times, distributors are not very confident with expensive products, which they think are not easily effusable. Moreover, distributors' brands and hard-discount are likely to gain market shares.
Many elements make us think that this business line is deeply touched by the current crisis. Though, in spite of this difficult economical context, the biscuit and cakes market remains stable thanks to a better penetration of the products, more precisely towards the consumers who eat biscuits occasionally, and those who don't consume biscuits at all. This business line is composed of some very innovative firms which try by many ways to entice the potential-consumers. The biscuits and cakes manufacturers launch on average, 70 new references per year, even - or rather mostly - during a crisis period. In fact, consumers need to feel that the biscuit and cakes brands are innovative, and that they can bring an easy pleasure to them during these hard days.
[...] Then, a second set of investment has been deployed with new subcontractors to face and cope with the dramatic increase in the volume handled by the company (100% of the original subcontractor and manufacturing partners have been changed) and to reinforce the internal organisation of Michel & Augustin (for instance IT equipment and software) to ‘manage and monitor' the growth of the company. Furthermore, resource allocation has also been important in product innovation and is favoured by the two previous initiatives (see above), with for instance, the 1 litre yogurt offer and the flexible packaging for biscuits; in short, more than 12 new major launches are planned for the coming 12 months which should result in the doubling of the turnover. [...]
[...] They are all unique in their own ways; they differ from the others not with their products but more with the creation of a universe, of characters The steady increase in their market shares is due to their good results in their marketing strategies and also with the attractiveness of ‘healthy and natural products'. The other team in the yogurt drinks market is the famous ‘Yop' from Yoplait. It is known worldwide, it works well and has faithful clients. It was a difficult market for competiting with the ten flavors already sold by the Yoplait group. [...]
[...] But it also wants to keep the same USP (unique selling point) of the brand and the products, that is to say: - Premium products and targeted customers - Funny and easy to understand products - Non-conventional marketing campaign and product launches - Eco-friendly In fact, these points represent an important part of its brand image and which is one of its most advantageous ways to face other competitors. Investment by BU Even if the business units are linked by a common strategy, they still are different by their characteristics and also by the investment that they need. [...]
[...] It also extended its distribution to Switzerland and Belgium SWOT analysis Nowadays, in order to evaluate the situation of a company in the market we can use the SWOT analysis to indentify its current position. So as to understand the brand on the whole, it is more accurate to look at its internal factors first (Strengths and Weaknesses) and then see which are the external ones (Opportunities and threats). In Michel & Augustin's situation, we can say that its strengths are linked to the values and the ideas it wants to communicate. [...]
[...] The company wants to focus more precisely on the young urban people, from 15 years old to 25 years old, and the part of this segment of age represents approximately 20% of the total population, or about 12.4 million inhabitants. Technological: In France, between 200000 and 250000 tons of flour is used each year for the manufacturing of biscuits and cakes. The means used in the production of biscuits and cakes are rather simple. Each technology of biscuit needs a specific butterfat, but the main structure can remain the same for different items. [...]
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