Rogers Chocolate: Five Force Analysis Feedback
A graphic portrayal of the five-forces model for the chocolate industry is shown in below. At the end of the analysis, always state a conclusion:
Rivalry Among Competing Premium Chocolate Producers—a Moderately Strong Competitive Force In the discussion of the five competitive forces that follows, we use a + sign to indicate factors acting to strengthen rivalry and a – sign to indicate factors acting to weaken rivalry. The +/– signs are shown in parentheses.
The Canadian premium chocolate industry has been growing by about 20% annually while the chocolate industry as a whole has been relatively stagnant or falling. (–)
The gap between the growth of the premium and lower quality markets has spurred a movement by large, traditionally low quality, manufacturers into the premium market through acquisitions and upmarket launches. (+)
Product differentiation is moderate among makers of premium chocolates. While there is some differentiation with respect to the quality of the chocolate produced, the main differentiating feature is the packaging of the product which helps draw first time users to one premium brand over another. (+)
Competitors consistently pursue premium placement and packaging changes that make their product more attractive to the consumer. (+)
With large percentages of annual sales being seasonal, advertising and competitive jockeying for retail sales intensifies during the most profitable periods of the year. (+)
Switching costs to consumers is low. While the costs of switching from one brand to another are low, consumers of premium chocolates tend to be brand loyal. (–)
The industry is mostly regional with only a few large players. (neutral)
Most competitors have similar strategies, offering some customization on wholesale and online purchases and maintaining standardized retail operations. (+) Threat of Entry—A Strong Competitive Force
With the industry currently composed...
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