Cherry Lady Case Study Essays

1791 Words Oct 14th, 2014 8 Pages
Case Study Questions

1. Name two macro environmental forces affecting the chocolate industry in the early 2000's to 2012 and explain how they are impacting the industry. State which of the five types of forces your answer falls under. See Figure 2.7 in the textbook.

Two macro environmental forces affecting the chocolate industry in the early 2000’s to 2012 are economic and social.

The social force falls under the social category. Social forces impact the chocolate industry tremendously. In the U.S. more than 80% of all candy is bought on impulse, but 57% of American women and 46% of men stated that chocolate was their favorite snack/dessert. Even though there are recent trends that suggest that consumers decrease their dietary
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The premium chocolate segment had a differentiation advantage over the mass market of the chocolate industry. The premium chocolate industry had a positional advantage because many consumers were becoming more sophisticated in their taste for chocolate, this industry has a quality competitive advantage. Consumers now preferred a richer “mouth feel” of premium chocolate once they became more experienced. (Hill, 2015, pp. C-17) The premium chocolate segment had utilized its resources to create superior value and demand for a richer chocolate. With richer chocolate would be higher prices but as Tinka Gordon stated, “as people age their taste buds mature. Premium chocolate fits perfectly with the increased sophistication and higher income of baby boomers.” (Hill, 2015, pp. C-17)You are not describing the industry structure. The mass market is consolidated and the premium is fragmented. Gordon was right, demand for premium chocolate rose and consumers were willing to pay the extra money for quality. People started to consume lower numbers of premium chocolate than a higher number of low quality mass market confectionery because it lacked the rich taste of the high quality chocolate.You have this backward. The trend in premium chocolate picked up, manufacturers noticed that consumers were not price sensitive and there began an increasing number of premium chocolate business sprouting throughout North America.

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