What French Bakeries Get Right About Strategy

Researchers studied 177 bakeries in the city of Lyon to see what happens when you can’t compete on cost.

March 14, 2024

HBR Staff/Pexels/Unsplash

Post

Annotate

Save

One would think that if you run a traditional consumer business that can’t compete on costs with more efficient competitors, you would want to avoid them like the plague. But a study of boulangeries in Lyon, France, found that by locating next to more efficient “modernist” rivals, “traditionalists” were able to better highlight their traditions and value.

France’s traditionalist bakers, or boulangeries, should be out of business. Bread prices are competitive, leaving little room for pricing gambits. Ingredients are regulated (by law, the baguette traditionnelle can contain only flour, water, salt, and yeast). If you’re a self-proclaimed “traditionalist” the limitations are even more challenging, as traditionalists don’t permit themselves a variety of time- and cost-saving practices (such as the use of mixes and frozen dough), which are more or less invisible to consumers. Yet despite these disadvantages, traditionalists have maintained a strong majority share of the French bread market despite modernist competitors using more efficient production techniques.

New!

HBR Learning

Strategy Planning and Execution Course

Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategy Planning and Execution. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.

How to develop a winning strategy—and put it to work.

Start Course

Learn More & See All Courses

Laura Dupin is an assistant professor in the Entrepreneurship and Innovation Department at the University of Amsterdam.