Grupo Bimbo's Competitors and Strategic Recommendations - Essay Sample

Competitors

Despite the large market share enjoyed by Bimbo especially in Mexico, the company still experiences competition from other market players especially after its expansion into other parts of the world. Among the visible competitors in the baking industry include ARYZTA and Dawn located in Zurich, and Michigan respectively which comprise the biggest rivals to Grupo Bimbo.

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Recommendations

To increase the performance and overall market share of Grupo Bimbo, there are a variety of opportunities that it ought to grab. Among the chances is Bimbo investing more money in digital marketing instead of concentrating more on the traditional forms of advertising such as billboards and TV adverts. Additionally, the company needs to change the strategy of acquiring small players in the market but instead consider collaborating with them to reap from their expertise and knowledge in the new markets. Further, Grupo Bimbo needs to carry out frequent market researches to learn on the new consumer needs and design products that meet their needs without losing any fraction of the market to competitors.

Grupo Bimbo HistoryGrupo Bimbo was founded in the year 1945 in Mexico City and has grown to be the largest bakery company in the world with its presence in over 32 countries across the continents of America, Africa, Asia, the Middle East, and Europe. Since its inception in the year 1945, the Company has maintained steady growth with the acquisition of many outlets in the US, Canada, Mexico and countries in the Latin America before spreading to other parts of the world. The company has also invested heavily to counter the influence of other market players in the bakery industry. The first product brands by the company were cellophane-wrapped large and small white loaves of bread, rye bread, and toasted bread.

By the year 1948, there were nine Bimbo products on the market and the line has been expanding since 1952 with the production of the Donas Del Osito along with a new line of buns such as Bimbollos, Medias Noches and Colchones. As part of its expansion strategy, Grupo Bimbo acquired the fresh bakery business of Weston Foods back in the year 2009 as well as announced its acquisition of the Sara Lee's fresh bakery business in Spain and Portugal in the year 2010. The company's strategy of expanding into new markets has always highly relied on the acquisition of the existing business in the new locations as seen latest in the year 2017 when the company did several acquisitions to cement its presence in ten new countries in Asia, the Middle East and Africa. Grupo Bimbo has also been listed in the Mexican Stock Exchange since 2011.

Grupo Bimbo's Current ProfileGrupo Bimbo is the largest baking company globally with an approximated sales revenue of 14.7 billion USD as per the 2018 financial reports. Presently, the company operates in 32 countries globally with all its branches situated in America, Europe and Asia where the company boasts of providing millions of its customers with baked products such as buns, bread, salty snacks, snack cakes, and confectionary products among other baked products. The company's shares are also traded in the Mexican Stock Exchange under the ticker symbol Bimbo since the creation of the stock exchange in 2011. Moreover, the company has over 58,000 distribution routes, 196 plants, over 138,000 associates, over 3 million points of sale, over 100 brands and over 13,000 products globally. All these critical operations elements of Bimbo are spread across four continents of America, Europe, Africa and Asia where eighty-six of its 196 plants are found in North America, thirty-seven of the plants in Mexico, thirty in Latin American, nine in Europe and one of its plants.

All the plants across the world concentrate on the production of products in the categories of packed bread, sweet baked goods, cookies, salty snacks, solutions, packaged foods, confectionaries among other baked products. Among the company's key brands presently include Pullman, Arnold, Marinela, Nutrella, Supan, and Thomas.

Grupo Bimbo's Future PlansIn the coming years, Grupo Bimbo believes that through the anticipation of trends in the baking industry as well as adapting to them will place the company at a better position to shape the company's growth in the coming years. Such trends that the company anticipates will shape the company's future include the provision of premium value-added brands, snackfication on-the-go packaging and portion sizes, responsible production of products, adoption of verifiable supply chains, technological advancements as well as expansion into other continents where the company has not pursued (Spencer, 2018). Through these strategies, it is more likely for the company to increase its sales revenue, and market share as the strategies will give it a competitive advantage over other players in the industry.

SWOT Analysis

The SWOT analysis of Grupo Bimbo will aid in the analysis of the company with its strengths, weaknesses, opportunities, and threats. Being one of the leading brands in the baking industry the SWOT analysis will help in understanding the challenges that are experienced by the company as well as opportunities that the company has towards its growth. This is because there are many ventures undertaken by the company as well as its structure that make up its strengths, weaknesses as well as posing both threats and opportunities to the future operations of the company.

Strengths

Grupo Bimbo is the Leading player in the baking industry that is highly attractive and non-cyclical a factor that has aided its products to gain preference over those of its competitors all over the years. Besides, it owes its success to organic growth, conservative financial policy combined with favorable strategic acquisitions which have helped it remain profitable to finance its growth endeavors across the world. Additionally, Grupo Bimbo has its presence in over 32 countries spread in four continents where it provides over 13,000 products and with over 100 brands. Through having its presence in the many countries and quite a big portfolio of products, the company has been in a position to increase the number of its consumers thus increasing its market share and sales. Moreover, the company enjoys more than fifty-eight thousand routes, 196 plants and more than 138, 000 employees that provide the company with an exceptional and unparalleled distribution network. Its focus on deep consumer understanding, product quality, and innovation also give it an upper hand in the market as their products have stood out against those of competitors in the global market facilitated by the presence of strong brand equity and franchise.

Weaknesses

On the other side, there are various issues within the company that exposes the company to defeat by its competitors such as the existence in a highly fragmented industry where major players account for a less significant global market share. Further, the presence of lower absorption of costs as a result of volume deceleration in Latin America has also affected the profitability of the company. Finally, the existence of weak consumption environment in the US and lower average prices lead to weak volume recovery by the company as it is needed to sell more volumes of products to make a similar amount of revenue it made before with the fewer sales.

Opportunities

However, there are factors outside the company that presents chances of the organization reaping big in the future such as its integration with Sara Lee operations which is more likely to add scale, diversify the company's brand portfolio and complement its global footprint. Besides, the growth in the sweet baked products and breakfast categories in the US will raise the demand for such products that Bimbo has specialized in providing. Finally, the company's acquisition of Fargo in Argentina will strengthen its regional profile and growth strategy in Latin America as it will aid the company to reduce on its supply chain spending and thus leave more profits to be used in the growth of the organization.

Threats

Further, there are other factors outside Bimbo that posse threats to its expansion and growth such as the changing regulatory frameworks by the different authorities in the countries where its operations have been spread may hinder its spread as anticipated. This is because the company will be required to adjust its various frameworks of operations to fit into the new regulations or risk fines and expulsion from the market. Moreover, the changing global food patterns towards "Low-carb" diets by many people across the world may reduce the demand for the "high-carb" products provided by Bimbo and thus put it at the risk of losing its sales and profits. The expected dilution of its integration with Sara Lee due to the high-cost structure may pose a threat to the benef...