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Competitors of chocolate industry
Importance of consumer behaviour
Importance of consumer behaviour
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The market for chocolate bars is a highly competitive field within the fast moving consumer goods sector. Also in the Fairtrade market the number of producers is rising and competition and demand increase. The attractiveness of an industry influences a firm’s profitability effectively and competition within the industry can be described by conducting a five forces analysis as suggested by Porter (1985). This framework addresses the following fundamental factors: Threat of New Entrants, Threat of Substitute Products, Determinants of Buyer Power, Determinants of Supplier Power and the Rivalry among Existing Firms. (Porter, 1985) Analysis of these forces shows that the retail market for standard chocolate bars is rather static and highly competitive. Although the threat of new entrants and supplier power are both really low, the power of buyers, threat of substitution and rivalry are major difficulties for firms active in this industry. In the Fairtrade market nevertheless, the picture looks a bit different. Due to the relative small volume of the Fairtrade chocolate market compared with standard chocolate bars, new competitors can easily enter the market and establish new product lines, etc. Many producers, long established in the standard chocolate market, e.g. Néstle’s KitKat, can easily enter the Fairtrade market because they possess the financial and knowledge resources. Such brands are able to offer Fairtrade products at a much lower price due to large economies of scale and an established customer base. Additionally, as the number of private label Fairtrade products increases, this increases competition on the one hand, but also brings new opportunities for Business to Business sales for chocolate producers as Divine on the o... ... middle of paper ... ...vailable from: http://www.fairtrade.org.uk/press_office/press_releases_and_statements/february_2012/responsible_capitalism.aspx [Accessed 29 February 2012] DIVINE CHOCOLATE LTD., 2012. Annual Report 2009/10 [online]. Divine Chocolate Ltd. Available from: http://www.divinechocolate.com/sites/www.divinechocolate.com/assets/1703.pdf [Accessed 29 February 2012] IDEALO.DE, 2012, Milka Süßigkeiten & Schokolade. Available from: http://www.idealo.de/preisvergleich/ProductCategory/12452F913341.html [Accessed 3 March 2012] GEPA – THE FAIRTRADE COMPANY. 2012, Kakao & Schokolade – Verführerische Vielfalt aus Schokolade [online]. Available from: http://www.gepa.de/p/cms/media/pdf/aktuelles/GEPA_Schokobroschuere.pdf [Accessed 3 March 2012] TONY’S CHOCOLONELY. 2012, Available from: http://webshop.tonyschocolonely.com/product/chocoladerepen?product_id=72 [Accessed 3 March 2012]
During Valentine’s week alone, millions of pounds of chocolate candies alone are sold (“Who consumes the most chocolate,” 2012, para 8). This naturally creates a demand for product, which in turns causes a need for ingredients. The main component in chocolate, of course, is cocoa. Since Côte d’Ivoire provides 40 percent of the world’s supply of this crucial ingredient (Losch, 2002, p. 206), it merits investigation i...
Earlier on this paper, the industry five forces analysis has been discussed generally. In this part, the paper analyzes Walgreens ' actions based on industry five forces model and suggests the next actions that Walgreens would rather do to maintain and improve its power in each five areas. This section will go into each force of five forces model in the order of priority, including bargaining power of buyers, the threat of substitutes, the degree of rivalry within the industry, the threat of new entrants, and bargaining power of suppliers.
The biggest challenge that Costco may face is that its main benefit, offering low-price items through bulk purchases, may no longer attract consumers as before. Furthermore, there are other substitutes to most of Costco’s goods, particularly food products and similar commodities that are easily accessible and can satisfy consumer’s expectations, thereby this is a threat that could be classified as high. Based on this threat of the Five Forces model, the external factors leading to a high threat must be considered one of the company’s most important challenges.
University of North Carolina, 2010. Web. 16 Oct. 2013. <http://www.learnnc.org/lp/pages/1866> Coe, Sophie D., and Michael D. Coe. The True History of Chocolate.
This company is known to be a monopolistically competitive, because there are still many firms and consumers, just as in perfect competition, but they still have control over what price they charge in their company, because Ben and Jerry's ice cream is differentiated from the other ice cream companies and they provide a lot of non price competition which will be mentioned later in the paper.
Market research and information about the industry is very important to the organization because it will allow the organization to position itself well in terms of sourcing chocolate raw materials and in identifying the market for its products. For example, understanding that some chocolate product purchases are seasonal, e.g., at Christmas; around Mother’s Day; and, on Valentine’s Day, allows the organization to have more product on hand and to create displays, in store, that will increase purchases and attract more customers when existing customers tell their friends about the availability of high end products, at reasonable prices, in their store.
"Food: The History of Chocolate." Birmingham Post 11 Dec. 2004, First ed., Features sec.: 46. Print
It is the force which has to act on stock material in order to cut out the blank or slug. It determines the capacity of the press to be used for the particular tool.
Fryer, Peter, and Kerstin Pinschower. "The Material Science of Chocolate." Mrs Bulletin December 2000: 1-5.
Direct competitors are the only type of business that sells products and services aimed at the same group. The new competitors, healthy bakery business as new competitors enter the market is not difficult due to the cost of the operation is not very high and the switching cost is low. However, the key factor is that entry barriers into this market is skillful in making bakery, how to make them fit with consumers’ taste and the choice of low fat materials. Although the competitors will be able to compete easily, but due to difficulties in this business, out of business
Fair trade products are sold in many stores and outlets of companies in developed countries. The recognition for Fair trade products increases daily and thus the demand for it. ‘Go eat’ outlet in the University of Wolverhampton is an excellent example for Fair trade; the University also hosts Fairtrade Fortnight, creating awareness about fair trade amongst the students. (The University of Wolverhampton, 2011)
The recent product, liquor filled chocolates, is a viable business that can sell if it is implemented professionally. This recent innovation should be able to acquire attention from the market owing to its combination of selling products. Put simply, the liquor-filled chocolates are chocolates that contain alcohol. According to Novellino (2011), chocolate-candy sales summed up to $16 billion in 2008 in the U.S. Furthermore, the statistics on alcohol reveals that liquor sales hit $19.9 billion in 2011.
• The Use of Force is about a girl who may have Diphtheria, but refuses to open her mouth to let the doctor look at her throat. After much struggle, emotional and physical, the doctor forces her to open her mouth and it turns out she does indeed have the disease.
For assessing the industry profitability, Porter 5 Forces analysis tools were used to analyze one organization evaluation. In this case, the technique were used to analyze 7-Eleven Convenience Store specifically in Malaysia. Porter 5 Forces consists of 5 important area which is Threat of New Entrants, Bargaining Power of customers, Threat of substitute Products and services, Bargaining Power of suppliers, and competitive rivalry within the industry. Theoretically, the more powerful these forces in an industry, the lower its profit potential. The strength of each force differs by industry and changes over time. The competitive advantage that 7-Eleven has using these five forces is it has raised the barrier of entry for other competitors to enter the convenience store market as new competitors will require a huge capital investment in order to implement the information technology in their business in order to be competitive. Also, hypothetically being the first in the market, 7-Eleven could have made contracts with the Malaysia government to not allow other 24-hour convenience stores in the market for a certain time period, such as Astro had done, thus having a monopoly market in the beginning of their operations which will allow them to target a bigger market share.