Paul in Brazil
They have a little girl named Suzanne. Suzanne Mayot married Julien Holder after what they open their own bakery in Lille. Francis Holder began working with parents who have taken a famous bakery in Lille that belonged to the family “PAUL”, in the Place de Strasbourg. The name is preserved. Julien Holder died in 1958, and Francis, his son took over the family bakery with her mother and then open a second bakery opened in 1963. Francis Holder radically transforms the family store by installing the bakehouse and oven directly to the customer view and uses old recipes, which is revolutionary at the time.
He also develops PAUL network based on the development of shopping centers that are being built at the time. In 1985 Paul opened the first bakery outside France, in Barcelona. This was the beginning of the international brand development. Two years later, the brand inaugurate it’s teahouse and offer on-site dining. In 1990, Paul continued its expansion and opened a shop in Nagoya, Japan, their first franchise. Other franchises are then developed abroad: Turkey (1994), Morocco (1998), The Netherlands (1999), UK (2000), Lebanon, UAE, Kuwait, Qatar, Bahrain, Oman (2002-2003), China (2007)…
Bakeries with black fronts make their appearance in 1993 for a new style and a new concept. Finally, Maxime Holder (Francis’ son) becomes president Paul International in 2007. CURRENT POSITION Besides a wide variety of breads, the company also offers “French ” fast food products, such as sweet or salted pies, sandwiches, simple dishes , pancakes, salads. In 2013, the PAUL network counted more than 500 stores and 10,000 employees. The network also covers a total of 26 countries in America, Africa, Europe, Middle East, Asia.
Paul belongs to the agribusiness group “Group Holder”, also owner of Laduree. REVENUE The revenue of the company was about 586 millions Euros in 2011 while it was 431 millions en 2010 and 456 millions in 2008, so we can see that because of the crisis, the annual revenue was stable or in a little decrease, but it increased in 2011 by more than 150 millions euros. WHY GO ABROAD ? Why go adroad at this time? Actually, PAUL is one of the well known franchise in France. The company understood that their French image is an important tool to sell abroad.
Moreover there is a growth in the fact that people eat outside of their place. The idea of going abroad now is essential for the growth of the benefits of the company. The franchise is an opportunity for us because we are protected by the reputation of the brand. So going abroad is the best way to create revenue for us and Brazil is onE of the best country for it. INTERNAL COMPETITION STUDY SWOT POMME DE PAIN Pomme de pain is a French fast food chain. The company has 30 years and has recently started an internalization process, opening restaurants in Morocco and Tunisia.
Pomme de pain is selling sandwiches and pastries. The Chief Marketing Officer declared in an interview that the company is really solicited; he has received opening requests from countries like United States or Brazil. This internal and external analysis gives a clear overview of the Pomme de pain current situation. The quality, the diversity and originality of the products are good points that constitute the identity of the fast food. However, this kind of fast food restaurants will be more and more present in the next few years.
Besides, the external threats such as the economic situation or the government and fiscal changes can be really prejudicial to the company. SWOT MAISON KAYSER Maison Kayser is a French chain bakery. It produces bread and specialities of the country and few imitated French dishes as croissants or petits four. Maison Kayser is open in Paris and in various countries. Today, there are over 80 Maison Kayser locations worldwide, with 18 in Paris alone, more locations have opened throughout Greece, Portugal, Russia, Japan, Ukraine, Morocco, Senegal, South Korea, Lebanon, the UAE, Singapore, Hong Kong and Taiwan.
The products and services in the bakeries vary from country to country, each adapting to the local tastes and flavors. This dynamic touch has helped the growth of Maison Kayser throughout the world. Each Maison Kayser location produces its products on-site daily. PESTEL ANALYSIS SWOT THE BAKERS The Baker is the most famous Brazilian bakery in Rio located in Copacabana. It produces bread and specialities of the country and few imitated French dishes as croissants or petits four.
To conclude this Internal and external analysis, THE BAKERS has a strong position in Rio because it is considered as a traditional Brazilian Bakery with qualitative products that often change. But the growth of the life style of Brazilian people makes them want new products coming from abroad and more bakeries will open in the next years. SWOT GUERIN Guerin is the only French Bakery located in Rio at Copacabana that opened in 2012. The French Baker just opened an other bakery in the city this year. The concept of the store is to sell French dishes really qualitative as a luxury product. The baguette here costs 5€ which is 5 time more than in France.
To Conclude, Guerin is our more direct competitor in the Market, it has a really good reputation in Rio. The price of the dishes is really expensive but it doesn’t affect the clients because they can afford it. The Baker has already opened 2 shops in Rio and would like to create others bakeries in the country. PORTER’S 5 FORCES INDUSTRY LIFE CYCLE The industry of French Bakery aboard and especially in developing country as Brazil has a very high growth because the purchasing power of people is increasing a lot and French product are still perceived as very qualitative and trendy.
PAUL have been created in France in 1889 and started to expand little by little. The first shop abroad has been created in 1985 in Barcelona, and now this shop still have good results and have an increase in its revenue. There are now lots of Boulangeries abroad, for example in USA they know a lot of success. In Rio the main competitor that we will face is Guerin, a French “patisier” that opened a shop 5 years ago which is very profitable as he will open a new one this year.
In result we can say that the industry life cycle is in growth actually and might stay for a couple of years because the country will know a constant growth during the years coming. To conclude on our Porter’s 5 forces study, we can say that opening a PAUL bouangerie in Rio can be very profitable. First there is not a lot of direct competition yet with only 2 famous boulangeries in the city which are actually making lot of profit (price of the bread is 5 time higher than France). Paul is also a French cafe and there are no competitors yet.
Brazilian people are keen on French products that they see as luxury, so we can drive up the prices and also, the Buying power of Brazilian customers increased a lot so we can drive up the prices of our products. There are a lot of competitors for snacks in the street in Brazil but those are not specialised in French products that diferenciates us. To finish, there might be some new entrants in the coming years because lots of French people are thinking about start a business in this country but the barrier of the language and the high investment necessary slows them down.
Here is the life cycle of our business: The introduction might take between 3 and 6 month, time to open the shop and to be known in the city. There will be lot of promotion and street marketing during this phase and we will adapt little by little our products with the results of what we sell. The growth might be really high because when people in Rio will know us, by words of mouth we will have more and more customers and the brand fidelity that is common of every PAUL shops might affect our growth.
Our maturity might come after 3 years, once most people know us, the brand fidelity will still attract clients but we will have to continue creating special products for them to continue buying those to have new experience. After this period we will have to face a lot of competition because if people in France see that our business is profitable, they will try to enter the market with similar ideas so the competition will be higher and they will take some of our market shares. KEY DRIVERS FOR OUR PRODUCT
As PAUL is a franchise, we will have to produce the same main products than in France but we will also have to adapt some products to the Brazilian market to reach more customers. The key driver will be to get the fidelity of our customers that will bring us new customers. It is also important to adapt to Brazilian’s habits as eating in the street, so we will have to serve cafe and food on the terrace because clients like to seat outside to consume. The main driver for the success of our product will be the French touch, so the clients will have to feel being in a real French bakery in our shop.
This will be our main competitive advantage, the image that holds PAUL in the world, real qualitative French products. MARKETING STRATEGIES ENTERING THE MARKET EXPORT STRATEGY As PAUL is already a franchiser with 468 shops including 326 in France and 142 in the rest of the world as in America, Africa, Europe, Middle-Orient and Asia. Franchising works well for firms that have a repeatable business model (for the food industry for example) that can be easily transferred into other markets. The price to open a PAUL is 60 000 for rights and then the royalty is 5% of your turnover. ENTRY MODE
Licencing, it allows foreign firms either exclusively or non-exclusively to manufacture a proprietor’s product for a fixed term in a specific market, in or case Brazil. The licensor in the home country (France) makes limited rights or resources available to the licensee in the host country. DISTRIBUTION CHANEL The only distribution channel will be thru our bakery, where we will make the bread and the food and serve. We can also prepare special cakes with pre order. LOGISTICS We need our proper investment for the franchise and for the place to be able to start our business in Brazil.
We will apply the same rules for every PAUL and choose a central place in Rio to sell our products. The main ingredients as the flour and the baker’s yeast will be imported from France because there is a special one to make Paul’s bread and the one in Brazil is not the same. The rest of the ingredients as the eggs, the meat or vegetables will be provided in Brazil to reduce the costs. We will have to promote or shop; first by giving some of our products for free in the street (street marketing) and then we will distribute flyers on the city.
It is also important to promote on Internet, especially true French expatriate websites that can be very happy to be able t buy a baguette in Rio. Legal regulatory cultural issues First of all, in Brazil and especially in Rio, the social life occurs in the street. People use to walk around and meet each other outside. Due to that the way PAUL function is already adapted. It means that either you can buy your bread or something else and just goes where you want or you can eat on the terrace.
From the website Ubifrance, it is noticed that the price of the food in Brazil inflated for 5,91 % in 2013, but it stays lower than in France so it is more interesting to take the most ingredients directly in Brazil. The price of the coffee in Brazil is very cheap and we saw before that Brazilian people are really keen on coffee so we will try to be sawn as a “cafe a la Francaise” where people can take a coffee and eat something at each time of the day. The bio sector is also exploding in Brazil so we will make a range of bio products with some local producers that will be equally redistributed.