Market and competition Essay
Finsbury Food operates in relatively similar markets in the larger food industry market. These are the bread and bakery market and the cakes and biscuits market with more leaning towards the cakes and biscuits market. The bread and bakery industry is the largest in the food industry with an approximated total worth of ? 2. 9 billion. Major players in this industry are Allied Bakeries, British Bakeries and Warburtons enjoying an 80% combined share of the market by value. http://www. bakersfederation. org. uk/market_snapshot. aspx.
Finsbury plays its role in this market by supplying organic breads which falls under the category of other breads with an under 10% market share by value. The UK market for biscuits and cakes is projected to register continuous growth though at a decreasing rate due to the high prices in energy and raw material that has overwhelmingly raised the costs in production. As such, the earlier anticipated growth of 5. 1% in 2008/2009 was revised to 2. 1% with slight improvements expected between 2011/2012 at 2. 5% growth. Despite these worrying facts the market is expected to be worth more than ?
3. 66bn at retail selling prices in 2012. This drop is however not attributable to
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Conventionally, there are two types of stakeholders to a given company; internal and external. External stakeholders are the majority consisting of the community, government, suppliers, and customers/market. The internal stakeholders are generally employees, shareholders and the management. Through consumers and general awareness campaigns carried out by the government and other non government organisations, Finsbury Foods and the market in general is facing serious concerns though market analysts are projecting continued growth up to 2012.
However, this concern is challenging the sustainable growth of the industry and the players involved. As such, players are shifting to organic breads like in the case of Finsbury in order to suit consumer needs and comply with government regulations. According to former Group CEO, Dave Brooks, the cakes and biscuits industry is being wrongly targeted by the heath regulatory bodies that have imposed “bad for business” rules. He feels that the regulatory bodies should facilitate the players in the industry to self regulate but not themselves regulate the players.
As such, it is obvious that the rules and regulations aspect in the case of Finsbury is hurting business and does not support the company’s strategy in position itself as a responsible provider of products that border on indulgence and treats that meets the customers description for value fro money though quality and health. Unfortunately, there arises a philosophical question on when to label healthy as healthy as the company through its former CEO, Dave brooks admitted that even low fat cakes will never be healthy. http://www. finsburyfoods.
co. uk/industry. php? p=The+Health+Issue%2C+and+Food+Labelling Once again, the company has to contend with the requirements of Ofcom which is concerned over the targeting of young children by marketers as a lucrative market segment. http://www. finsburyfoods. co. uk/industry. php? p=Ofcom+and+Advertising The management of the company is overly complicated due to the involvement of its subsidiary units with other entities which were in existence before acquisition. For instance the case of Lightbody has a very significant role in the company.
Martin Lightbody who formerly owned the Lightbody subsidiary retains a high stake in the ownership of Finsbury at 28. 09% shareholding and still is Chief Executive Officer but also held a director position before he took up his new role on 28th September 2008. With this being only one case, there is bound to be conflict in management styles in the different subsidiaries even though they operate independently. This would be expected from the fact that the companies are under competition between themselves though they operate in different locations. This results to wasted resources and opportunity in serving another market better.