Analysis of Bakers Delight's Business Expansion in India

This report provides a comprehensive analysis of the business expansion of Bakers Delight, an Australian bakery chain, into the Indian market. It begins with an executive summary and an overview of both Bakers Delight and the Indian market, including its economic, social, and political landscapes. The report then delves into the opportunities and challenges of expansion, followed by a detailed PESTEL analysis to assess the political, economic, social, technological, environmental, and legal factors influencing the business environment in India. A SWOT analysis is also conducted to evaluate Bakers Delight's strengths, weaknesses, opportunities, and threats in the context of the Indian market. The report also touches upon Hofstede’s Cultural Dimensions. Finally, the report concludes with recommendations for Bakers Delight's market entry strategy and overall business expansion plan for India, based on the findings of the analyses.

Running head: BUSINESS EXPANSION OF BAKERS DELIGHT
Business expansion of Bakers Delight
Name of the Student
Name of the University
Author Note

1BUSINESS EXPANSION OF BAKERS DELIGHT
Executive Summary
The aim of the paper is to portray the business expansion of an Australian company to
India. The company chosen for this assignment is Bakers Delight. The paper talks about the
overview of the company and of India. It also talks about the opportunities and threats the
company is going to face after its business expansion to India. The political, social,
economical, technological, legal and environmental conditions of the country are also
discussed in order to help Bakers Delight know the market trend in India. Bakers Delight has
huge opportunities to expand its business to India keeping in mind the culture and bacjground
of the country.

2BUSINESS EXPANSION OF BAKERS DELIGHT
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Company overview................................................................................................................2
Overview of India..................................................................................................................3
Expansion in India..................................................................................................................4
PESTEL analysis....................................................................................................................5
Political aspect of India......................................................................................................5
Economic Factor................................................................................................................5
Social factors......................................................................................................................6
Technological factor...........................................................................................................6
Environmental factor..........................................................................................................7
Legal factors.......................................................................................................................7
Bakers Delight SWOT Analysis............................................................................................7
Strengths of Bakers Delight- Internal factors.....................................................................7
Weaknesses of Bakers Delight...........................................................................................8
Opportunities of Bakers Delight........................................................................................9
Threats of Bakers Delight................................................................................................10
Hofstede’s Cultural Dimensions..........................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

3BUSINESS EXPANSION OF BAKERS DELIGHT
Introduction
International business has rapidly grown in the recent years. Diversification and
penetration in the new market benefits the company. International business expansion thus
provides a stability and safety to the company (Shenkar, Luo & Chi 2014). This paper will
talk about the international business expansion of an Australian company Bakers Delight to
the market of India. The company will expand based on the potentiality of the Indian market.
This paper will discuss the scope of opportunities, challenges, strengths and weaknesses of
the company Bakers Delight in order to analyze the market trend and develop its strategies to
expand its business to India. The political, social, economical, technological and legal aspects
of India are discussed in the paper in order to analyze the market trend of India (Cavusgil,
2014).
Discussion
Company overview
Bakers Delight is one of the most successful bakeries in Australia. They are situated
in 700 different locations across Canada, Australia, New Zealand and USA. Lesley and Roger
opened the Bakers Delight in the year 1980 in Hawthorn, Melbourne along with their friend
Gary Stephenson. Years later Roger and Lesley handed over the store to their daughter and
her husband. They were appointed as the joint CEOs. They serve the customers with freshly
baked delicious breads. They follow traditional recipes and use real ingredients to satisfy
their customers. During the time of Easter, 20 million cross buns are baked and served. The
brand of Bakers Delight has a mission to deliver quality products to the customers. The vision
statement of the company is to create an environment for promoting the stakeholders’ growth

4BUSINESS EXPANSION OF BAKERS DELIGHT
in learning, personal development and wealth creation. The stakeholders of the business
include customers, suppliers, employees and the society.
Overview of India
India with a population of 1.3 billion is the seventh largest country in the region of
South Asia. It is the second populated country of the world and has the most populated
democracy of the world. India is bounded by Pakistan in the north-west, Nepal, China and
Bhutan in the northern part, Myanmar to the east. The country of Sri Lanka is located 65
kilometers away from India across the Gulf of Mannar and the Palk Strait (Paramasivan &
Ganeshkumar 2013). The Indian land along with Pakistan and Bangladesh forms a sub-
continent. It is surrounded by Arabian Sea and the Bay of Bengal. India has a rapid GDP
Growth that leads to rise in the per capita income and rapid reduction in poverty level. Per
capita income of India is 1/20th of that of UK, which has doubled in the last 12 years. India’s
one-third population lives below the poverty line. 44% of the total children are malnourished
and life expectancy is 65 years. The rate of literacy in the country is 63% for 15 years and
more. India exports services and good from other countries on the account of 15% GDP and
trying to be an open economy. The growth rate of India has slowed down and high rate of
inflation acts as a barrier in growth and competition. Foreign investments by the Indian
businesspersons show a major growth in the economy of India. It has developed advanced
and innovative technologies and technology spaces in order to improve the economy of the
country (Bakers Delight, 2019). In India, wage cost is usually low in comparison to other
countries, which has increased in the past years to close the productivity gap between India
and other neighboring countries. India has a very critical infrastructure. The infrastructure of
roads, power, basic sanitation and railway is inadequate. India has a plan to build an
infrastructure worth 1 trillion dollar in the coming years. The agriculture has been
considerably low in India and hence people move from the rural areas to the cities and town.

5BUSINESS EXPANSION OF BAKERS DELIGHT
India being a diverse country has varied range of people with different culture and climate.
The culture of India has a vast geography. People dress differently, speak in various
languages, follow various religions and eat a variety of food. Indian food is much different
from other countries around the globe. It portrays the blends of different ages and culture.
Indian food is known for its spices.
Expansion in India
International Business is rapidly growing in India. The growth rate of India in
international business sector is 7% and above. If the relationship with the neighboring
countries stabilize there will major improvement in the international business sector. The
diverse culture gives a great scope of opportunity to set up new business in the Indian market.
The population of 350 million middle class people and the burgeoning growth of 8% to 9%
annually motivate the Australian companies to invest in India. The middle class people of
India have an affordable purchasing power to buy a wide range of services and products that
is not found in Australia. Researches show that India will possess the third largest economy
in the world by the end of 2025 (Aggarwal, 2014). Due to the common language of India and
Australia, Australian company Bakers Delight has a great scope of expansion in the Indian
Market. The incentives from the Government of India provide a great scope for the
Australian food industry to expand in the markets of India. Food manufactured in Australia
has a reputation of ‘clean and green’ and are of good quality. Indian market will encourage
such initiative of Australian food industry to expand in India. Due to the high population in
the country, India provides an opportunity for Bakers Delight to grow its business in India as
Australia can use the maximum of the resources of India. Foreign Direct investment is
recently allowed in the food sector, which will lead to the expansion of business to India
(Malhotra, 2014).

6BUSINESS EXPANSION OF BAKERS DELIGHT
PESTEL analysis
PESTEL analysis helps to address the economic, political, social, technological,
environmental and legal aspects of the country. It will be beneficial for Australia to know the
current situation of India in order to set up its business in India. The following aspects are as
follows-
Political aspect of India
India is the top most powerful countries of the world. The country has a stable
political condition. India has two powerful neighboring countries that are Pakistan and China.
Other countries include Bangladesh, Bhutan, Nepal, Sri Lanka and Myanmar. The culture of
tolerance in politics maintains a stable political environment for Bakers Delight to expand its
business in India. However, irregular unrest in politics is very common in India. The political
climate is highly influenced by government policies, interests of the politicians and ideas of
various political parties (Chakrabarti & Cullenberg, 2013). The business environment is
affected because of these factors. The system of taxation is strong and Government Union
imposes taxes like service tax, sales tax and income tax. The local parties look after Octroi
and utility taxes. As privatization is evolving, government allows free business in the country.
Thus, the political factors will help Bakers Delight to set up its business operations in
different parts of India (Export.gov., 2019).
Economic Factor
The Indian economy is stable from the time of introduction of the policies of
Industrial reforms, 1991. Thus, India will give stability to Bakers Delight to start its bakery
business in the country (Hiro, 2013). The tax rate in India is 30%. It is considered because of
the frequent changes in the tax rate in the country over the past years. For Example: In 2010,
the rate of tax was 33.99% while the tax rate was 38.95% in the year 2001. India tops the

7BUSINESS EXPANSION OF BAKERS DELIGHT
rank in various industries. The country’s main import includes gold, silver, pearls, electronic
goods, crude petroleum and precious stones. The business partners are UAE, Switzerland,
USA, Saudi Arabia and Qatar.
Social factors
The social aspects talk about the trend change that would affect the business
environment. For Example: The increase in the aged population of the country raises the cost
of pension and increases the employment of these workers. Therefore proper structures
provide flexibility, work attitudes, income distribution and in education. India has a huge
consumer market because of its huge population. Huge markets provide opportunities for big
companies to set up their business (Forrester, 2017). India offers cheap cost of labor. India is
multi-ethnic, multi-religious and multi-lingual country that experiences communal harmony.
Living standards are steadily increasing and the affordability of the middle class provides a
huge platform for Bakers Delight (Vijayakumar & Jayachitra, 2013).
Technological factor
India is technological stronger than many other countries of the world. India is
considered the 3rd most country advancing in technology around the globe. Tech giants like
Face book, Microsoft and Apple have also invested in the market of India. India outsources
its IT work from various places. Technology influences the development of products and
introduces the processes of cutting the cost. India has 4G and 3G technology, which can
facilitate various projects. With high skilled work force and advanced infrastructure of IT
India offers huge opportunities for Bakers Delight to embark upon new project settlement in
India.

8BUSINESS EXPANSION OF BAKERS DELIGHT
Environmental factor
Industrialization and urbanization affects the quality of air in India leading to different
health issues. Due to which various environmental pressure teams, noise control teams, rules,
and regulations are established in order to control waste and disposal. Thus, a lot of progress
has been noticed over the past years. The improvement in the environment provides a healthy
environment for Bakers Delight to expand its business in India.
Legal factors
In the recent years, various legal changes like recycling, disability discrimination and
increase in minimum wages have taken place in India, which has affected the businesses in
India. Depending on the needs of business, foreign investors can set up their business in
India. Companies Act, 2013 governs the companies in India (Hossain, 2013). Various labor
laws like ‘State Insurance Act’, ‘Industrial Dispute Act’ and ‘Maternity benefit Act’ regulate
the employment relationship in India. After 1992 the International Trade Regulations has
began to put rule and regulations, which has increased export and import in India. Foreign
trade and Central government collaborated and established foreign trade
(Archive.india.gov.in, 2019)
Bakers Delight SWOT Analysis
Bakers Delight is the top most firm in its industry. It maintains its position in the
market by reviewing and analyzing the strength, weakness, opportunity and threats of the
company. This analysis requires interactions with various departments in order to build an
effective coordination to grow the business.

9BUSINESS EXPANSION OF BAKERS DELIGHT
Strengths of Bakers Delight- Internal factors
Bakers Delight has various strengths that enable the company to survive in the
market. These strengths help to increase the market share and market penetration in new
markets. Strengths of Bakers Delight are-
 Bakers Delight has high skilled labors and employees. This organization is investing
its resources in development and training because of which Bakers Delight has only
skilled and trained workforce.
 Brand portfolio- Bakers Delight has built a very strong brand portfolio over the past
years of its business. The portfolio of its brand is very useful when the company
wants to introduce new category of product.
 Bakers Delight has been successful in implementing different revenue streams to
execute new projects.
 Suppliers- Bakers Delight has a very strong base of suppliers who are reliable. They
help the company overcome any hurdles of supply chain.
 Dealer community- The Company has a culture among the dealers and distributors
where the dealers promote the products of the company and train the sales team in
order to give the correct knowledge to the customers about the product of the
companies.
 Automating the activities has made the Bakers Delight produce quality products and
has increased the revenue generation of the company.
 Bakers Delight is expert in penetrating new markets and becoming successful. The
growth diversifies the economic risk in the new market.

10BUSINESS EXPANSION OF BAKERS DELIGHT
Weaknesses of Bakers Delight
Bakers Delight has a chance of improving its weaknesses. Company makes choices
and the organization can improve on its weaknesses using the SWOT analysis. The
weaknesses are as follows-
 Competitions from various sectors reduce the margins and the market share of
the company.
 Low awareness of brand due to lack of existence in various markets creates a
negative impact in the minds of the customers.
 Gaps are there in the ranges of products sold by the organization. This may
give rise to a new competition in the market.
 The organization is not good at forecasting the demand of the products, which
leads to demand loss compared to the competitors.
 The organization is not good at tackling its challenges and risks of new
entrants and thus has lost market share. Bakers Delight needs to build a
feedback methodology from its customers to overcome these challenges.
 The marketing of the products are not sufficient to create a brand image of the
products. Although the products have huge success based on sales, its selling
proposition and positioning are not well defined which leads to strengthening
of the competitors.
 Bakers Delight is the top most brands in Australia for its retail stores. It still
finds difficulty in moving to other segments of products with its existing
culture.

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Opportunities of Bakers Delight
 Bakers Delight has adopted free trade agreement and new technologies to
meet the demands of its customers with improved services and product
quality.
 Green drive of the government also provides an opportunity for procuring the
products of Bakers Delight by the contractors of federal government and the
state.
 The organization has invested huge money for its online platform. The new
investment has given opportunity to open new sales for Bakers Delight. In the
coming years Bakers Delight can know its customers better and fulfill their
needs using data analytics (Grants, 2014).
 Bakers Delight follow the new trend of the customer demand and thus, it
provides a great opportunity to for the company to construct revenue streams
also diversify into different categories of products.
 Due to lower shipping prices, cost of transportation decreases which in turn
reduces the product prices of Bakers Delight.
 Uptick in the economy after many years of recession and slower rate of
growth provides a huge opportunity to the company to increase the market
share and the customer base.
 Bakers Delight has tied-up with various restaurants and hotel chains.
 The development in the market dilutes the advantages of the competitors and
helps Bakers Delight in gaining the competitive advantage over its
competitors.