American University of Beirut Suliman S. Olayan School of Business Wooden Bakery industry assessment Professor Hagop Panossian Buss 249 – Strategic Management Fall 2016-2017 By Anwar Abi Abdallah Tarek Hoteit Alaaeddine Ghabris Danny Shahouri
Application of PESTEL Framework in Lebanon: P olitical: The political situation in Syria has presented the Lebanese bakery industry with great growth opportunities as there are millions of Syrian refugees coming in causing the demand of pita bread and baked goods in general to increase. Competitors are focused on capturing part of that larger pie rather than taking market share and profitability away from one another. E conomic: the political situation in Syria enhanced the economic conditions of this industry with demand as a whole growing. Moreover, wheat prices have significantly fell in the past 2 years. Since June 2015, wheat prices have fallen 34% YTD. This surely had a positive implication on the raw materials cost of the bread manufacturing line. S ociocultural/demographic: Lebanese pita bread was and still is the chief staple of the world-famous Lebanese cuisine. Pita bread is usually served as a complement to several main dishes. The interesting part about pita bread it is usually consumed during all three daily meals. It has been estimated that a Lebanese family of four to five members on average consumed a pack of bread per day. It is also important to note that bread is broadly consumed across the country, irrespective of residential area or income level. No Demographic trends, but the population distribution in Lebanon resulted in regional and territorial strongholds for different companies, even in the bread industry. For example, Wooden Bakery’s stronghold was the Mount Lebanon governorate, where 25 of its 32 branches were located, while one of its main competitors, Chamsine, had a stronger presence in South Lebanon and the Beqaa Valley, two other large governorates. T echnology: The automated pita bread production-line equipment are made locally, they are not purchased from abroad as they require a different kind of technology. E cological: NO MENTIONS L egal: Since pita bread is an absolute necessity in the Lebanese diet, its production was regulated by the government. Regulations apply to the number of
loaves in a pack, the weight, and the price of a pack. Bare in mind that the regulations are relevant only to traditional white pita bread. Application of Porter’s 6 Forces Framework in Lebanon: 1- Bargaining power of buyers: Bread: bread is a necessity in Lebanon as it is a somewhat cultural norm. We also have low switching costs in this specific part of the industry, the only factor that affects buying from a different brand/bakery is the geographic location. The industry rates high on
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- Fall '15
- Middle Eastern cuisine, pita bread, Wooden Bakery, Governorates of Lebanon