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Sift Cupcake Case Study Questions

In: Business and Management

Submitted By ksfuchs2
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sift cupcake Questions 1. What are the dominant economic characteristics of the specialty baking market? Does it appear that the industry’s prospects for growth and attractive profits are good?
According to statistics 63 percent of consumers had purchases a specialty food in the last six months and it is projected that cupcake sales were to rise another 20 percent between 2009 and 2014. This makes it appear that the industry’s prospects for growth and profits are great for the future.

2. How strong are the competitive forces confronting Sift and other specialty bakers? Which one of the five competitive forces is the strongest? Prepare a five-forces analysis to support your answer.
There are significant competitors in their marketplace when looking at numbers given by Yelp. However, they feel as if they only have one main competitor that has six locations, but they also have Sprinkles as a national chain to be opening an additional store in their market to go with the current location in Palo Alto. New entrants to the market I believe is the strongest competitive force as the initial investment into the industry is affordable compared to many other industries, and the statistics show an increase in buyers and spend over the next several years too.
Force 1: Rivalry among Competing Sellers

Who are the direct competitors? Kara’s Cupcakes, Sprinkles, and other bakeries

Causes of Strong Rivalry – Similar amount of locations in similar territories

Use of Common Weapons- Not sure.

Is the Force strong, moderate or weak? Moderate

Force 2: New Entrants

Are there any potential new entrants into this industry? Yes. Who are they? Other national retailers, caterers, and anyone wanting to commercially sell cupcakes.

How hard would it be to enter? What are the barriers? Not very hard to enter. Just need to have some capital to…...

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