Sample Essay

1475 Words Apr 12th, 2015 6 Pages
Q.1: What are the advantages and disadvantages to Kraft Foods (Cadbury) of producing new lower-calorie versions of their existing chocolate bars?
Kraft Foods is one of the leading producers of chocolate bars in a number of different countries around the world, especially the UK. With inclining rates of obesity in countries like France, South Korea, USA, England, Greece and Italy, a decision to produce low-calorie versions of their chocolate bars could be a healthier alternative to the country. There are a number of advantages and disadvantages to Kraft Foods while producing these.

Advantages : a) They attract a new and major segment of the market which is more health conscious. This new segment of the market includes people who are
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The new healthier and alternative ingredients are costlier, and therefore add to their total cost and possibly lower their profits for a certain amount of time. b) Their opportunity cost to producing the new chocolate bars is high. The same amount of money could have been used to produce a new type of chocolate for example. The money could have been invested in other alternatives to the new chocolate bars . c) Research and development costs are also brought upon Kraft Foods while producing the new chocolate bars. For example, taking surveys, feedback forms, etc. Research and development costs are usually incurred when a company sets out to sell a new product or before producing one. d) The quality of taste may drop as in the UK only 12% of those over 16 year olds consider lower calorie options. The rest stick to the original fatty chocolate bars, and they may begin disliking the new chocolate bars and in turn Kraft Food could lose a good number of customers.

Q.2: How likely do you think it is that the UK government will bring in legislation to tax high-fat food products like chocolate? Why do you think that?
One could say that the UK government would be very likely to bring in legislation to tax high-fat food products like chocolate due to various reasons such as using the fat tax as a corrective measure in an attempt to reduce the obesity rate of the country and to prevent the youth of the country from incurring various diseases and illnesses such as

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