unknow

Powerful Essays
Topics: Chocolate
CPA 117 GLOBAL STRATEGY AND LEADERSHIP
Sweet Indulgences

TEMPLES
Technology

Economy
*Sales of chocolate experience little fluctuation and are consistent with broader food sales in general;

Markets
* high quality chocolates are more price-inelastic
* Sales via direct distribution channel is growing;
* convenience stores have grown in number and is expected to be large enough to move into the direct distribution channel in the future

Politics

Law

Environment

Sociocultural
* increase sales on high quality chocolate; consumers may not be eating chocolate as often as they used to, but they are spending more on premium varieties as an indulgence;

Porter’s five forces
Threat of new entrants - high
*Chocolate making industry is the largest category in the Australian confectionery market;
* Economies of scale is important for large chocolate manufacturers however specialised chocolate-makers can survive through low quantity but high quality chocolate production;
* Large manufacturers are spending heavily to gain strong distribution relationships with major retailers and convenience stores to secure shelf space, however chocolate has one of the widest distribution networks of any consumer product because of its impulse-purchase nature. Possible distribution channel for small manufacturer could be confectionery stores or own established retail stores;
* very easy for customers to switch between competitors in the industry due to the impulse purchase nature;

Power of suppliers – Medium
* Cocoa, which represents about 40% of raw material costs, must be imported;
* Australia has an abundant supply of all the other ingredients;

Power of buyers – Medium
* Buyers are not concentrated;
* 56% sold via direct distribution channel where large retailers are aiming to lower costs by establishing relationships with fewer, large scale manufacturers;
* Buyers have the ability to control the placement which is a key success factors for the

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