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.
Chocolate was previously considered a “delectable symbol of luxury, wealth, and power” (Klein) in the 1500s. Using modern technology, it is now easily produced. While
The premium chocolate industry is a large market in the United States and continues to grow around 10% annually. It is also populated with very strong
One of the most popular food in the world. Chocolate! This delicious food is made from cocoa beans which are grown in pods on tree trunks.The production of cocoa beans have expanded over the years, from South America to the Europeans to the U.S. They originally were grown only in South America until Columbus brought them back from his last voyage. Since then cocoa has only grown in popularity. (Background Essay) The production of chocolate is poor for the Ivory Coast. First, the Ivory Coast isn’t earning enough money from the total income from exporting the cocoa beans for chocolate bars. Second, the agriculture on the Ivory Coast is terrible. Lastly, the cocoa production is affecting the existence of animals on the Ivory Coast.
Clare’s Chocolate Cafes has always used good quality cocoa to make their chocolate products. This is, in itself, an amazing marketing product because customers know that while they may be paying a little bit more, the product is worth it. As well, the organization makes a wise customer draw when each hot beverage is served with a high quality chocolate product. The early practice of making chocolate products by hand and providing individual or pre-packaged products, of all sizes, for the customer to select, was
Hershey’s and Cadburys are moving towards the premium chocolate market through the acquisition or upmarket launches (Zietsma, 2007). The profit potential present in this sector supported by its 20% annual growth rate make it very attractive for large organizations to come forward and avail this opportunity. There is a low threat of new entrants prevailing in this chocolate industry because of the high capital requirements and expected retaliation by current manufacturers. Current players in the industry also possess some barriers to entry for new entrants by maintaining economies of scales with their large production capacity and keeping their product differentiation with their specialized and novelty chocolate products. Even though there are low switching costs and easy access to distribution channels, but still the brand loyalty of the customers including the Rogers’ Chocolate itself make it harder for new firms to come into the competition.
While Europe and the United States account for most chocolate consumption, the confection is growing in popularity in Asia and market forecasts are optimistic about the prospects in China and India (Nieburg, 2013, para 9). According to the CNN Freedom Project, the chocolate industry rakes in $83 billion a year, surpassing the Gross Domestic Product of over a hundred nations (“Who consumes the most chocolate,” 2012, para 3).
(Transition: The history of Hershey’s chocolate laid the foundation for the many different types of chocolate eaten today.
The Hershey Company is the leading North American manufacturer of quality chocolate, non-chocolate confectionery, and chocolate-related grocery products. The company is also a leader in the gum and mint manufacturer category as well. In this paper, I will discuss the history of the Hershey Company and the impact it has on the United States and the rest of the world.
Candy is not yet a “mature” industry in the United States. The compound annual growth rate for candy in the past ten years has been close to 6% a year, a very solid gain in an industry that is supposedly mature. In fact, within the chocolate confectionery subcategory, the United States ranks 11th in the world in per capita consumption and fifth in the world in growth since 1980. Based on current demographics, many analysts believe that there will be further growth for confectioneries. A “baby-boomlet” is on the way, significantly increasing the teenage population. By the time the population bulge peaks in the year 2010, it will top the baby boom in the 1960s in both size and duration. According to government statistics, the percentage of children between the age of 5 and 14 will rise during the 1990s, increasing from 14.2 percent of the population in the 1990 to 14.5 percent in the year 2000. This trend will serve as a strong foundation for increasing consumption of confectionery products through the end of the century. Nevertheless, spending for food and drink as a percentage of all personal consumption is declining in the United States, and most manufacturers recognize that future opportunities lie in using profits from domestic
Moreover, consumers and employees are also demanding chocolate companies to follow good corporate social responsibility practices in addressing the environmental concerns in terms of how to design its packaging, procurement and operational decisions. Human rights concerns are also high in terms of consumer expectations of chocolate companies with respect of forced child labour in West Africa. All of these driving forces - societal concerns, attitudes and change in lifestyles, are strong enough to shape up the competition and impose the constraint on chocolate industry profitability and competitive survival.
The premium chocolate market has been growing at 20% annually, showing that buyers are willing to pay more for a better tasting and better quality chocolate. The declining growth of the overall chocolate market and rapid growth of the premium chocolate market is positive for current producers of premium chocolates in that the decline
Allison, M. (2013). Fair-trade theo chocolate fairly booming. The Seattle Times, par. 4. Retrieved from http://seattletimes.com/html/businesstechnology/2020664110_theochocolatexml.html(2013). Fair-trade theo chocolate fairly booming. The Seattle Times, par.25. Retrieved from http://seattletimes.com/html/businesstechnology/2020664110_theochocolatexml.htmlBrake, L. (2011). Theo chocolate - the ultimate in green chocolate. Earth Times, par. 2. Retrieved from http://www.earthtimes.org/green-
Using the 5 Forces Model, analyze Mrs. Fields’ Cooks. What challenges does Mrs. Fields’ Cookies, Inc. face in the next five
The social demand for chocolate varies for several reasons. One of which is a change in the level of the population. The population of the UK is aging, people are living longer and there are a lower percentage of children. This would indicate that although the population is increasing because of people living longer there are fewer children, which is the main consumer for the chocolate industry resulting in less demand for the product.
The Hershey Company, known until April 2005 as the Hershey Foods Corporation and commonly called Hershey 's, is the largest chocolate manufacturer in North America. Its headquarters are in Hershey, Pennsylvania, which is also home to Hershey 's Chocolate World. It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate Company, a subsidiary of his Lancaster Caramel Company. Hershey 's products are sold in about sixty countries worldwide. In addition, Hershey is a member of the World Cocoa Foundation. The company has been topped to 384, compared with the previous rank 404, in 2013 (CNN, 2013). This paper is going to show the company’s international environment,