Understanding the Business
Business Model
Baby Bunting Group Limited is a company that specializes in selling infant products for newborn babies and children up to 3 years. The company developed from a family-owned business in nursery retail and now operates a network of more than 60 retail stores in Australia, an online store, and a distribution center (2021 Annual Report, p.5). The company prioritizes the excellence of customers’ experience, which is why all baby bunting stores are equipped with parenting rooms designed to fulfill all needs of infants and ensure parents’ comfortable shopping experiences. The stores also provide gift registry services and car seat fittings services.
Brands, Products and Services
The company cooperates with nearly three hundred brands of infant products, including clothing, toys, furniture, car accessories, and feeding products. The most popular brands in the stores across the product range are Bugaboo, Ergobaby, Oricom, Bonds, Huggies, ELC, and Medela (Baby Bunting website). The stores also provide gift registry services and fitting services for child car seats. Furthermore, the company’s promotions are mostly targeted at purchases of products in a more expensive segment, such as strollers, car seats, and high chairs.
Production Facilities, Offices, or Stores
Baby Bunting company primarily operates in Australia’s local market, and its distribution facility is located in Melbourne. However, recently the company’s online store started shipping orders to New Zealand and plans further expansion to the region (Inside Retail, 11 February 2022). Most of the company’s offices are also located in Melbourne, while the headquarters office is located in Dandenong South, a suburb of Melbourne.
Competitors
In the local market, Baby Bunting is the largest retailer specializing in baby products. Therefore, even though there are no direct competitors for baby bunting, large department stores like Target also offer a range of adjacent products. In the online market space, Baby Bunting’s competitors are large marketplaces such as Amazon.
Industry Analysis
Considering the influence of Porter’s Five Forces that shape industry competition, the two forces that impact the Baby Bunting company and its industry are the bargaining power of suppliers and buyers. As the company’s activity primarily focuses on retail sales, there are limited ways in which the company can be affected by other forces besides rivalry between existing competitors. However, as there is no direct competition for Baby Bunting and the company does not create products itself, the company is not subjected to the influence of new industry entrants and the threat of substitutes.
However, the company’s activity is significantly dependent on the suppliers, and the overall industry is substantially influenced by the bargaining power of buyers such as Baby Bunting company. While the company can freely choose different suppliers of nursery products and replace a part of the products’ range, changing the key suppliers of popular products can negatively affect customer loyalty. Furthermore, in the baby products industry, powerful buyers such as Baby Bunting can significantly influence the suppliers by increasing or lowering sales and conducting promotions to increase the popularity of products.
Therefore, the company will most likely work closely with suppliers whose products are already widely popular among buyers. Moreover, some manufacturers develop products exclusive to the Baby Bunting stores (IBISWorld 431035). Furthermore, if the Baby Bunting company decides to change suppliers, losing a significant sales channel and source of product exposure in a wide network of Baby Bunting stores will negatively impact the supplier. Lastly, the Baby Bunting company itself presents a significant threat to suppliers in case the company decides to integrate backward and start producing more baby products under its brand.
Reference List
Baby Bunting. (no date) All the Best Brands at Low Prices. Web.
Baby Bunting 2021 Annual Report.
IBISWorld AU & NZ Enterprise Profiles 431035, “ Baby Bunting Group Limited – Australian Company Profile”.
Inside Retail, 11 February 2022, “Baby Bunting records higher profits, plans expansion into New Zealand”. Web.