Swinburne University

Market analysis

by

Sandra Gaessler

Table of Content:

Executive summary 5

1 Introduction 5

2 Environment analysis 6
2.1 Macro environment 6
2.1.1 Economy 7
2.1.2 Demographic, sociological, and cultural influences 8
2.1.2.1 Urbanization 8
2.1.2.2 Convenience 8
2.1.2.3 Food consumption trends 8
2.1.3 Political and legal 9
2.1.4 Technological 9
2.1.5 Natural environment 11

3 Industry analysis 11
3.1 Industry review 12
3.1.1 Major players 12
3.1.2 Geographic segmentation 12
3.1.3 Industry size 12
3.1.4 Product life cycle 13
3.2 Customer Identification 14
3.2.1.1 Customer Profile 14
3.2.1.2 Costumer needs 15
3.2.2 Supplier relationship and distribution channel 16
3.2.3 Supply chain 16
3.2.4 Selling chain 17

4 Competition analysis 17
4.1 Direct competition 17
4.2 Indirect competition 18
4.3 Opportunities and Threats 18

5 Critical success factors 19

6 Summary 19

7 Conclusion 20

8 References 21

9 Appendixes 23
Appendix 1: Type of business: 23
Appendix 2: Customer profile of online grocery shoppers 24
Appendix 3: Selling chain - process of acquiring orders 24
Appendix 4: Partner network 25

List of Figures:
Figure 2.1: External forces
Figure 3.1: Product life cycle
Figure 5.1: Porter′s five forces

List of tables:
Table 3.1: Costumer segments
Table 3.1: Differentiation from Competitors
Table 4.1: Opportunities and Threats

Executive summary

This market analysis is prepared to learn about the specific methodologies required to conduct a sound market analysis for a self-selected market segment. For this purpose, a hypothetical virtual business that serves as a gathering place for Australian breakfast or fresh bread lovers and bakeries has been created. To prove the profitably of this potential opportunity, influencing factors within the Australian baking industry as well as the ecommerce industry are researched.

According to Cravens (2000), it is essential to gain an understanding of the market to become market driven. Therefore, the first part of this analysis is often referred to as the PEST analysis, which identifies the external factors that influence the baking and ecommerce industry and thus change the size and composition of the market overtime.

The second part is concerned with obtaining internal information about the baking and ecommerce industry, its customers, suppliers, and direct and indirect competitors. The assessment of both the internal and external forces that drive the market, lead to the definition of the critical success factors for this virtual venture. A summary of the findings is then given through Porter′s model of market profitability to potentially serve as the basis for developing a market driven strategy for the virtual opportunity. Despite the high thread of substitute products, it is believed that the trend towards more convenience will make this business successful. With respect to the analysis provided and given that business partners are willing to cooperate, this business concept is considered a sound investment.

1 Introduction

This market analysis is prepared to research relevant aspects of the Australian baking industry as well as its online shopping environment to justify the profitability of an individually created hypothetical eBusiness model. A simple customer focused eBusiness model design will serve as the reference point to analyse a specific market segment. Although all industries are subject to external trends that affect their businesses over time, the rapid rise of the Internet unlocked innovation that created even new market spaces. Without analysing and sensing markets and competition, companies are faced with a future disadvantage (Cravens 2000). Many of the emerging businesses in this new market environment started without having taken the necessary market research to justify that there actually is a market and therefore often failed. Therefore, before pursuing the opportunity to challenge the traditional retail model of a bakery, this report will serve to develop the necessary market knowledge to become market oriented and to then stay in business.

Starting with the description of the environmental influences like government actions, social change, economic shifts, technology, and other factors that alter buyers′ needs and wants for baked goods, a detailed research on Australia′s baking industry including its size, growth, and composition, its typical marketing practices as well as the anticipated industry changes will be provided. To identify the business′ strengths & weaknesses, a study of direct and indirect competition will then be followed by the reflection on critical success factors for the hypothetical virtual business to respond to the so far unsatisfied customer desire to have fresh bread daily delivered for breakfast. A description of the background of this emodel idea as well as its type and purpose is given in Appendix 1 and serves as a reference throughout the report.

2 Environment analysis

According to Reed (1999) market analysis and synthesis are a vital part in the logical flow of the strategic marketing planning process. To determine the capabilities required of an organization to compete within its underlying external environment, it is important to consider both its macro as well as its industry environment. The ultimate aim is to provide a broad situation analysis also known as SWOT analysis.

2.1 Macro environment 

Due to the rate of change that takes place in the market, trends in the following can present a number of opportunities and threats:

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