Supplier Power When looking at the Danish market of bakeries, there are 5 main competitive bakery chains that are very powerful, and then there is approx. 500 more single bakeries (see appendix 4). The biggest bakery in Denmark in terms of amount of stores is Guldbageren with 57 stores, followed by KonditorBageren with 55 stores, and then Lagkagehuset with 35. The 500 smaller bakeries aren’t as such threats to Lagkagehuset, as they often are located in the smaller cities of Denmark, whereas Lagkagehuset has a bigger focus on the bigger cities, and especially Copenhagen. Also, the customers Lagkagehuset seeks and have, are those who …show more content…
When looking at the target scope, it is also quite easy to conclude that they have a narrow target group. The narrow target group is due to the trend of the company, the prices, and the concept. Therefor the conclusion is that Lagkagehuset is using the Focus Strategy, which is also known as when the companies are differentiating themselves from competitors. By having the Focus Strategy, Lagkagehuset lets themselves focus entirely on their narrow target group, in order to create, by others, customer loyalty.
As mentioned previously in Porter’s Five Forces, the substitutes aren’t a big threat to Lagkagehuset as there are no direct substitutes in terms concept and target group. A risk of having the Focus Strategy is however, as mentioned in external SWOT analysis, that by focusing on just one narrow target group, they are more likely to become victimized by changes in trends, which may affect their narrow target