Developing an International Market Entry Strategy for Wenzel’s

This research report develops an international market entry strategy for the organization Wenzel -The Bakers located in UK. The major purpose of the report is to implement the international entrepreneurship strategy deriving an in-depth insight from the concept. The report focuses on two different international markets and one of the markets is located inside Europe and another is located outside the Europe.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

1MANAGEMENT
Table of Content
Introduction................................................................................................................................2
Background to the organization.................................................................................................2
Identifying markets/Europe....................................................................................................2
Bakery market in Oceania......................................................................................................5
Market environment analysis in Australia.............................................................................6
Market segmentation..............................................................................................................7
Selection and Justification of the target markets........................................................................8
Market entry strategies and implementation..............................................................................9
Marketing mix approach............................................................................................................9
References................................................................................................................................11

2MANAGEMENT
CW1: Developing an international market entry strategy for Wenzel’s
Introduction
This research report develops an international market entry strategy for the
organization Wenzel -The Bakers located in UK. The major purpose of the report is to
implement the international entrepreneurship strategy deriving an in-depth insight from the
concept. International entrepreneurship strategy has to be based on real-world facts, thereby,
the operation of Wenzel has been considered. This report is a comprehensive piece of
research and it consists of the information related to products, markets, market size and the
relation of political, cultural and economic effects on the regions. Overall, the report focuses
on two different international markets and one of the markets is located inside Europe and
another is located outside the Europe.
Background to the organization
The organization Wenzel was founded in 1975 and since its inception it has become a
favourite brand of locals in the domestic market environment of London. Overall gains of the
firm has till now been tremendous which is enabling Wenzel to expand more in other market.
Currently, the organization has more than 60 stores and overall workforce strength of the firm
is more than 500 employees (wenzels.co.uk 2019). The organization relies on long-term
objectives and to achieve the objectives the first must have to make an equal investment of
money and time alongside the significant emphasis on product development and future
design. As the operational and financial status of the organization is stable and Wenzel needs
to expand its operation into new markets.
Identifying markets/Europe
Bakery is known to be among the most dynamic food sectors in European nations
which is significantly driven by frequent innovations as well as evolving consumer

3MANAGEMENT
preferences. Lloyd et al. (2014 has particularly mentioned the fact that as Europe remains the
top admire of baked goods. In order to analyse the bakery market in the European nations, the
scenario is considered at a macro level and it is observed that European bakery market could
remain as the most vital bakery markets in the world for the coming years with € 210
turnover and forecasted growth of 3.3% till 2024. Degbey and Pelto (2013) mentioned the
fact that Germany, Italy and Poland are well established with respect to product array,
channels of distribution, scope for innovation and regulations.
Nonetheless, when it is considered from a cultural perspectives, it has been identified that it is
worth stating that market is supposed to undergo significant changes because of the
increasing heath concerns, increasing disposable income as well as high demand for
convenient food products. Serrano et al. (2015) mentioned that changing consumer lifestyle
for a healthy living tends to drive the growth of bakery products like Cake, Biscuits, bread,
pasties and other breakfast items.
The European bakery products is estimated to enhance at an estimated CAGR of 2.5%
during the forecast period between 2018 and 2028. Lee et al. (2015) mentioned that growth
of European baked products market can be driven for increasing demand for healthy instant
as well as nutritious baked products. Ghasemi-Varnamkhasti and Lozano (2016) mentioned
that conventional morning goods in Europe tend to observe the increase of glue-free,
wholegrain, ancient grain as well as addictive free products. The article confirms the fact that
pastries, bread products and other bakery products are three prominent sub-category products
with respect to value based sales throughout with respect to value based sales in European
nations like Germany, Italy and France. However, Morassi et al. (2018) mentioned that
Germany is estimated to be the market leader in European baked products with CAGR of
3.0% and UK based products market is estimated to increase at CAGR of 2.9%. Nonetheless,
when it is considered at macro level the scenario is considered the picture indicate that

4MANAGEMENT
revenue in Bakery items segment could amount to US$128,822 million in 2019 and the
market is expected to increase by 2.3% on annual basis. In addition, when the comparison is
done on a globally, the most revenue is generated in United States
As European nations remains the top admirer of baked goods, bread and biscuits
continue to collect tractions because of highest consumptions and this is followed by other
bakery products such as cakes, cookies, pastries and pizza. In this context, Melikoglu and
Webb (2013) mentioned that while European markets manufacturers are presently paying
attention to experimentation, innovation and new product launching an emerging level of
baled products containing whole wheat and gluten free high-fibre and sugar green items,
conventional bakery sector in the European nations are still experiencing significant sales in
the core European markets.
It has been identified that top 10 bakery markets in the world, five are already from
European nations and Germany has till now been at the top of the list of bakery markets in
Europe and the country ranks with USD16.5bn with respect to values of sales. Huchet et al.
(2013) mentioned that many emerging opportunities are coming from German bakery
products with the inclusion of health bread substitutes and package. It has also been identified
that Germany in the coming days could continue to be a highly competitive markets owing to
strong domestic production as well as economic food pricing. It has been identified that while
Germany holds the top positions in the bakery sector in Europe, Italy, Netherlands and
Poland could collectively account for almost 43% of Germany’s imported products.
Italy is observed to be having registered around USD billion in retail sales and the
country is known to be having the sixth position in the European market with respect to
market share, sales and revenue. Banterle, Cavaliere and De Marchi (2016) mentioned about
two different organizations namely Mondelez International Inc and Kellogg Co sold their

5MANAGEMENT
products to Italy and when it is combined, almost 60% of the overall estimated market share
has been accounted for these three nations. Wijnands and Verhoog (2016) mentioned that
Italy’s top bakery competitor in EU include Germany, France, Turkey and UK. With respect
to overall sales of bakery products by value Germany and France are observed to outweigh
Italy by the end of 2020. The data facts indicate that Germany and France are two significant
emerging markets for bakery product.
Industry characteristics
It has been learnt that almost 80% of all products consumed in European Nation are
based on bread and between 2015 to 2018, the bakery production of the sector reach 66% to
69% of which nearly 32% was accounted by pre-packed bakery, whereas finished and bake-
off product contribute almost 19% and 15% respectively to the overall revenue but the
identification of bread as pre-packed or bake off or fresh depends on what part of the
European regions are referred to, because there is a significant variation in the bakery market
of Easter as well as Western Europe and separate consumer behaviour (Martins, Pinho and
Ferreira 2017).
Bakery market in Oceania
When it comes to Oceania, Australia first comes in the list, Juliano and Clarke (2013)
mentioned that baking sector in Sydney of Australia consists of three sectors namely bread,
biscuits and pastries and the author has also mentioned the fact that operators in each sector
can be broadly classified as manufacturing for wholesale or combined manufacturing and
retailing but in the future case, manufacturing activities could be simple. This means it could
involve baking of pre-prepared dough. Pathak et al. (2015) mentioned that Australia’s baking
sector is operating particularly in mature market and turnover in the manufacturing sector is

6MANAGEMENT
estimated at almost 7.9 billion which particular represents 8.9% real growth from the
previous year.
Market environment analysis in Australia
Characteristics of the bread sector
It has been identified that bread sector in Sydney, Australia is dynamic and bas been
constant flux for a number of decades. Barsode et al. (2015) mentioned that the sector is
divided into four groups by business models- corporate plant bakeries, conventional hot bread
shops, franchisee hot bread shops and super-market in store bakeries. Serrano et al. (2015)
mentioned the fact that corporate plant bakeries tend to produce bread for wholesale
distribution, exporting and account for majority of bread production. The article also states
the fact that franchise hot bread shops tend to represent a growing area of the bread sector
with the on-site manufacturing and retailing. Likewise, supermarkets have diversified into in
–store bakeries to enhance purchase across super- market and compete with the franchisee
hot shops.
Sector performance
(Lloyd-Williams et al. (2014) mentioned that the overall turnover in bread manufacturing is
estimated at $3.9 billion in 2013-2017 and this increases a 5.4% increases from previous year
and turnover for bread manufacturing increased by 4.9% for the period 2016 to 2018.
Degbey, and Pelto (2013) mentioned that the major growth in the industry with respect to
volume and value of bread, is the onsite operations. Moreover, the turnover for these outlet
were estimated at $1.0 billion in 2017. When the market data is considered at the macro level,
it is observed that traditional hot bread shops recorded the strongest growth over the coming
five years.
Production and Product Segmentation

7MANAGEMENT
It is observed that plant bread bakeries in Australian bakery sector accounted for 60%
of the overall bread production. Plant bread volume is under the slow decline for almost 3
decades and it is expected to decreases in real time per capita over coming 5 years to increase
market share from the franchisee. Serrano et al. (2015) mentioned that white bread is still
maximum selling product, which accounts for almost 62% of total bread sales in 2016. This
means in spite of the growing awareness of health advantages of high fibre diets, wholemeal
as well as gains bread account for 15%.
Figure 1: Product Segmentation
(Source: Serrano et al. 2015)
Market segmentation
The cake and pastry sector in Oceania supplies two major markets in which one is the
grocery wholesalers which distribute to supermarkets and other medium size retailers and
overall it accounts for 70% of the total sales in the sector. McCarthy (2015) mentioned that
cake and bakery sector in Australia and New Zealand also has a significant dominance over
the hospitality sector and the catering sectors and overall it accounts for 25% of sales. On the
other side, domestic consumer purchase for cake and pastry products were estimated to be

8MANAGEMENT
around $1.14 billion and almost 75% of the retail trade is through supermarkets (Juliano and
Clarke 2013).
Geographical spread
It has been identified that three major hot breads franchises, Bakers’ delight, Brumby’s and
Banjo’s have over 886 outlets across Australia. Pathak et al. (2015) mentioned that Bakers’
delight holds the majority of the market share, it accounts for 67% of the outlet. It is also
identified that more than 60% of the outlets located in Victoria and New South Wales.
Identifying products
Selection and Justification of the target markets
The above presented analysis of global bakery sector helps to conclude that Berlin in
Germany and Sydney in Australia could be choice for the expansion of Wenzel Bakery
because, Berlin in Germany is an emerging market with sales of USD16.5 billion and the
market has multiple emerging opportunities including healthy bread substitutes, packaged
bakery and other new product launches. Moreover, Wenzel is popular for its diverse category
of products in UK and the bakery manufacturers in selected nation Germany is constantly
looking to innovate and expand their product portfolio. Thus, this is one of the reason,
selection of Germany is justified. In addition to this, it can also be mentioned that Germany
leads the majority of global bakery market; especially, the morning foods is the leading
segment as people in Germany prefer convenient as well as grab and go products. Wenzel
Bakery is master at its invention of bakery products. It has been identified that development
and innovation are more favourable towards the innovation and healthy ingredients and in
Germany, developments and innovation are geared towards the inclusion of both health as
well as speciality items. Sales volumes of Wenzel could go up because in Germany people
tend to prefer natural and allergy free-additives in their staple food.

9MANAGEMENT
Likewise, the analysis also helps to select the nation Australia, because the
organization Wenzel in the recent time paid a significant attention to fresh bread and pastry
items and the firm wants these to be its primary product items. So, Sydney is the best choice
for selection because in Australia Bread and Bakery product markets fundamentally includes
fresh bread rolls and similar baked goods. The organization Wenzel is best known for its
tendency of influencing consumers’ taste and habits and in Australia Baker goods market is
fundamentally characterized by downward trend with respect to volumes, demand and in
most of market because of the changes in eating habits and food trends. Australian Bakery
sector, in spite of the increasing concentration of manufacturer, is still dominated by a long
range of more regionally significant small size organizations. Thus, the entry of Wenzel is
most likely to make a significant difference in Australia.
Market entry strategies and implementation
It has been identified that the analysis indicates that both Berlin and Sydney are suitable
markets for entry but both the markets are large in size and Wenzel is a large UK bakery
brand; thereby, Wenzel needs to choose franchising as the market entry strategy because
franchising could help to facilitate the rapid expansion of the business. Wenzel is in the need
of a rapid expansion because the demand of its products is rapidly increasing. Moreover,
strategy of franchising is effective for the brand because all of the existing operations indicate
a repeatable business model which are easily transferable into other markets. Moreover,
international franchising is a kind of strategy which would help to minimize dependence on
domestic demand and increase future revenue and profits centre across the world. So, as the
demand of bakery products are rapidly increasing in the international market, it is highly
important for Wenzel to pay attention to international demand.

10MANAGEMENT
Marketing mix approach
Price- As Wenzel is supposed to enter two broad international markets- Berlin and Sydney,
it must pay attention to industry price range. Moreover, Wenzel is broadly known for its high
quality products due to fresh bread and other innovative items. So, for new product items in a
new market, the organization should focus on premium pricing strategy and this strategy
could be little higher than the industry averaged price strategy. This strategy is effective for
Wenzel because the quality of products is higher than all small and medium size firms in
Berlin and Sydney. Moreover, as the demand of bakery products is higher in both the
markets and customers will intend to pay for their desired items.
Products: the brand should pay attention to demands of products and market scope.
The fundamental emphasis is on fresh bread and bread rolls, pastry and other bakery goods.
Place: Wenzel focuses on a broad market, it should focus on downtown of the cities,
air-port, railway platforms and shopping malls, and where the regular visits of crowd is huge.
Promotion: In order to promote the brand and its products, the organization needs to
use technology and conventional techniques partially. For example, the brand can hire the
social media channels such as Facebook, YouTube and Food delivery applications because
platforms have an enormous audiences and they remain active on a regular basis. Moreover,
packaging is another significant technique the brand could apply. For example, in every paper
box of pastry items, name and details of prime pastry items should be printed.

11MANAGEMENT
References
Banterle, A., Cavaliere, A. and De Marchi, E., 2016. The Italian food industry in the era of
the TTIP negotiate. British Food Journal, 118(8), pp.1930-1945.
Barsode, M.V., Bhokare, A.N., Hire, P.K. and Bairagi, V.K., 2015. Bakery automation
system. Development, 2(4).
Degbey, W. and Pelto, E., 2013. Cross-border M&A as a trigger for network change in the
Russian bakery industry. Journal of Business & Industrial Marketing, 28(3), pp.178-189.
Ghasemi-Varnamkhasti, M. and Lozano, J., 2016. Electronic nose as an innovative
measurement system for the quality assurance and control of bakery products: a
review. Engineering in Agriculture, Environment and Food, 9(4), pp.365-374.
Huchet, V., Pavan, S., Lochardet, A., Divanac'h, M.L., Postollec, F. and Thuault, D., 2013.
Development and application of a predictive model of Aspergillus candidus growth as a tool
to improve shelf life of bakery products. Food microbiology, 36(2), pp.254-259.
Juliano, P. and Clarke, P., 2013, August. Whey utilisation in Australia. In AusAID PSLP.
Workshop (Vol. 1, pp. 26-31).
Lee, D., Moon, J., Cho, J., Kang, H.G. and Jeong, J., 2014. From corporate social
responsibility to creating shared value with suppliers through mutual firm foundation in the
Korean bakery industry: a case study of the SPC Group. Asia Pacific Business Review, 20(3),
pp.461-483.
Lloyd-Williams, F., Bromley, H., Orton, L., Hawkes, C., Taylor-Robinson, D., O’Flaherty,
M., McGill, R., Anwar, E., Hyseni, L., Moonan, M. and Rayner, M., 2014. Smorgasbord or
symphony? Assessing public health nutrition policies across 30 European countries using a
novel framework. BMC public health, 14(1), p.1195.

12MANAGEMENT
Martins, Z.E., Pinho, O. and Ferreira, I.M.P.L.V.O., 2017. Food industry by-products used as
functional ingredients of bakery products. Trends in Food Science & Technology, 67, pp.106-
128.
McCarthy, B.L., 2015. Trends in organic and green food consumption in China:
Opportunities and challenges for regional Australian exporters. Journal of Economic &
Social Policy, 17(1), p.6.
Melikoglu, M. and Webb, C., 2013. Food Industry Wastes: Chapter 4. Use of Waste Bread to
Produce Fermentation Products. Elsevier Inc. Chapters.
Morassi, L.L., Bernardi, A.O., Amaral, A.L., Chaves, R.D., Santos, J.L., Copetti, M.V. and
Sant'Ana, A.S., 2018. Fungi in cake production chain: Occurrence and evaluation of growth
potential in different cake formulations during storage. Food research international, 106,
pp.141-148.
Pathak, N., Hagare, P., Guo, W. and Ngo, H.H., 2015. Australian food processing industry
and environmental aspect–a review. In International conference on biological civil and
engineering (BCEE-2015) Feb (pp. 3-4).
Serrano, R., García-Casarejos, N., Gil-Pareja, S., Llorca-Vivero, R. and Pinilla, V., 2015. The
Internationalisation of the Spanish Food Industry, 1970–2012: The Home Market Effect and
European Market Integration. spanish Journal of Agricultural research, 13(3).
Serrano, R., Gil-Pareja, S., Llorca-Vivero, R., García-Casarejos, N. and Pinilla, V., 2015. The
internationalisation of the Spanish food industry: the home market effect and European
market integration (No. ART-2015-93348).

13MANAGEMENT
wenzels.co.uk (2019). Wenzel's the Bakers. Fresh Bread & Cakes | Independent Bakery
London | Wenzel's. [online] Available at: https://www.wenzels.co.uk/ [Accessed 28 Feb.
2019].
Wijnands, J.H. and Verhoog, A.D., 2016. Competitiveness of the EU food industry (No.
2016-018). LEI Wageningen UR.