pestle analysis chocolate industry pestle analysis chocolate industry

This lack of clarity and responsibility highlights the company's failure to take action despite having all the resources and power to reduce child labour. This can help Chocolate Hawkins in numerous decisions such as plant location, product development, and pricing strategy. Linda A. Hill, Alison Berkley Wagonfeld (2018), "Digital Chocolate Harvard Business Review Case Study. Much of this gain in retail value could be attributed to a shift of U.S. consumers toward higher priced chocolates. Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. All of this is rudimentary and basic, but playing the blame game doesnt leave a savory taste in consumers mouths. Chocolate Gourmet should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. Managers at Chocolate Hawkins need to examine three inter-related environments in order to come up with an effective strategy. With so many chocolate options and new additions for 2018, Mr. Buck seemed confident in the variety they offered, as well as the new marketing campaigns launched for the products. Free Summary Report This report contains the table contents only. Chocolate in a Bloom 6. Those that cant afford it are also a problem because well, theyre not buying the chocolate. One way to start is by closely mapping the changes in consumer buying behavior and emerging value proposition. The Industrial Organization (I/O) approach advocates that for sustainable competitive advantage external factors are as important as internal factors of the Chocolate Hawkins. Net sales ($1,751.6 million) were an increase of 5.3 percent. Opening shop in the early 19thcentury, Cadbury has emerged as a global brand with factories and offices the United Kingdom and North America, and a notable presence in Asia and Africa as well. - Influence of Climate Change How climate change will impact Chocolate Hawkins business model and supply chain. - International Trade & Other Treaties The country has a good record of adhering to international treaties it has done with various global partners. E - Economic. Published by HBR Publications. Online sales: The growth of e-commerce and online sales has encouraged many chocolate manufacturers in the UK to invest in online sales channels and digital marketing strategies. It is also imperative to use technology to create competitive advantage in the industry. The implication for Chocolate Gourmet is that it can boost sales of its product in short run but also expose Chocolate Gourmet to medium term forex and currency depreciation risks. There is consistency in both policy making and implementations of those policies. View. - Segregation of Political Responsibilities between Different Government Agencies There are numerous government agencies which reduces the risk of overwhelming pressure by one agency. Social factors such as demography trends, power structure in the society, women participation in workforce etc have immense impact over not only the country's economy but also on workforce talent availability and level of consumer demand. It is written by Glenn Carroll, Greg Powell and shed light on critical areas in field of Strategy & Execution, Entrepreneurship, Strategy that the protagonist in the case study is facing. Many US companies have incurred losses in Mexico in regular forex crisis in that country. -Recycled, recyclable and biodegradable packaging. The PEST Analysis is mainly used for tactical planning, promotion planning as well as industry and the development of manufactured goods. Employment laws and regulations, such as those related to minimum wage, working hours, and health and safety. And to also use simpler ingredients for planet sustainability. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. For example if the supply chain is not flexible it can lead to bottlenecks if shipments from one part of the world are delayed because of sudden climate shift. Learn how to, Our Mayo Clinic SWOT Analysis examines the Strengths, Weaknesses, Opportunities and Threats of one of, Technology is now taking over, and almost all fields are turning most tasks into digital., Copyright 2020 Weberience LLC. Government support: Government policies and initiatives to support the growth and development of the food industry can benefit the chocolate industry in the UK. Analyze Strengths and Weaknesses of Chocolate Hawkins. - Level of Household Income and Savings Rate Increasing consumption and stagnant household income in United States had led to credit binge consumption. Here are 7 professional tips that can, Our General Mills SWOT Analysis examines internal and external factors that impact the company's operations, What is root cause analysis, the goal, and why is it important? - Business Laws Before entering into new market Chocolate Hawkins has to assess what are the business laws and how they are different from home market. This analysis helps businesses to make informed decisions and take advantage of opportunities while mitigating potential risks. Different countries have different attitude towards health and safety so it is better for Chocolate Gourmet to conduct a thorough research before entering the market. 4. If the legal system is not strong then Chocolate Gourmet can face numerous challenges from consumer petitions to shakedowns from authorities. Looking forward, IMARC Group expects the market to reach US$ 4.1 Billion by 2028, exhibiting a growth rate (CAGR) of 8.8% during 2023-2028. - Securities Law What are the securities law in the country and what are the conditions to list the company on national or regional stock exchange. - E-Commerce & Related Infrastructure Development As E-Commerce is critical for Chocolate Hawkins business model. Its installed specifically for their Twizzler candies. And although theyre doing better financially in 2018 compared to the disastrous year of 2015, the company is not on the hunt to increase expenses just yet. In this section, we present a brief analysis of each element in relation to the . Chocolate Gourmet should do a primary research regarding how much time it often takes to conclude a court case in the country given the sort of legal challenges Chocolate Gourmet can face. Chocolate Gourmet can leverage such a situation to hire the best people in business. - Recycle Policies What are the recycle policies in prospective market and how Chocolate Gourmet can adhere to those policies. This is where the PESTEL analysis comes in handy as a useful tool for identifying the external factors that could affect the chocolate industry in the UK. - Technology transfer and licensing issues for Chocolate Hawkins laws and culture of licensing of IPR and other digital assets should be analyzed carefully so that Chocolate Hawkins can avoid shakedowns and IPR thefts. But this strategy entails risks when interest rate will go up. Like with most food products, the major multiples have substantial buying power, and often buy directly from chocolate manufacturers. It is commonly used in desserts, confections, and as a flavouring ingredient in various foods. - Intellectual Property Rights Protection Chocolate Hawkins should assess the level of protection that intellectual property rights get under the legal system of the country. Business do face problem when the conflict is between public interest and proprietary technology similar to ruling in South Africa where government & judiciary allowed generic AIDS drug irrespective of patents of global companies. According to Michael Porter organizational performance is to large extend determined by various industry forces. The bond rating of national government is investment grade. - Attitude towards Health & Safety The attitude towards health and safety is often reflected in the quality of the products and cost structures of manufacturing processes. Lindt PESTLE Analysis By last estimates, the 8 Cadbury factories in the UK had employed 3,000 workers. Hersheys also adopted technology to move people further down the grocery aisle. Many US companies have incurred losses in Mexico in regular forex crisis in that country. Our Twitter PESTLE analysis highlights the external factors, like political, economic, social, and technological ones, Cybersecurity is an increasingly important field of work. Brexit: The UKs departure from the European Union may have an impact on the chocolate industry, such as changes in trade agreements and regulations. The full-year net sales increased by 1 percent, even though the four-quarter net sales dropped by 1.6 percent. - Corporate Social Responsibilities Culture Are Chocolate Hawkins present CSR efforts applicable in the new market or does it needs to have new initiative to cater to the prospective market. Chocolate Hawkins should carefully analyze the attitude towards authority before launching a marketing campaign for its products and services. Legal factors often govern conditions to enter the market, laws to operate in the market, and procedure to resolve any dispute with other stakeholders. The Hershey's Company is the largest chocolate manufacturer in North America and yet they've hit major setbacks both politically and economically. According to Jose Lopez, Nestle's Vice . In one respect, Cadbury was born as a result of social factors. - Employment Laws What are the employment laws in the country and are they consistent with the business model of Chocolate Gourmet. - Cost of Production and Trends Chocolate Hawkins should assess - What are the cost of production trends in the economy and level of automatization. Cadbury is identical with the consumption of chocolate on a universal basis. Introduction PESTLE ANALYSIS and 5 FORCES ANALYSIS CHOCOLATE CONFECTIONERY PESTLE Analysis Although it has been nearly 4 years since the destruction of the twin towers in the US, terrorism remains a very real threat in much of the world, and a powerful political and economic influence on business. operates in a complex and dynamic environment characterized by regulatory changes, growing environmental activism . Packaging: There is a growing demand for sustainable and eco-friendly packaging solutions, which has led to the development of new technology for biodegradable or compostable packaging materials. On the other hand, Nestle has a better record of recycling. In 2000, 81% of U.S. adults consumed chocolate. We at EMBA Pro believe that in near future the sector most disrupted by technological innovation is manufacturing and production. In fact, Cadbury was able to gain a 30% increase in its annual profits, predominantly from the sales of Dairy Milk and Trident. Rocky Mountain Chocolate Factory, Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. Although the company is clearly attempting to bring social good into the world, it doesnt stop them from blaming consumers when sales are declining. - Size of Government Budgets both Local Governments and National Government The government at both national level and local levels are running deficit budgets which is boosting growth in the short term but may lead to increase in inflation over medium term. PESTLE (sometimes PEST) is a framework for analyzing the external macro environment of a business or industry, usually specific to a particular country. Objective 3. -Efforts to reduce consumption of water and energy and optimize transport routes. Know More Egypt SWOT Analysis This market research report covers SWOT (strengths, weaknesses, opportunities and threats) analysis for Egypt. Market Overview 2023-2028: The India chocolate market size reached US$ 2.4 Billion in 2022. If possible, the company plans to add this A.I technology to every one of their lines. This is why theyre using A.I to improve their products and encourage more sales. In this PEST analysis of Cadbury, we saw how this leading chocolate company has dealt with external factors in the UK and in many other countries as well. Note on the U.S. Chocolate Market case study PESTEL analysis includes macro environment factors that impact the overall business environment Political, Economic, Social, Technological, Environmental, and Legal factors. The A.I transmits data to the cloud. Some of the technology trends that are impacting the macro environment are developments in artificial intelligence, use of machine learning and big data analytics to predict consumer behavior, growing importance of platforms over service providers etc. - Inflation Rate The inflation rate can impact the demand of Chocolate Hawkins products. Political environment and other factors not only impact the cost of doing business but also long term sustainability. For example as the population of USA and EU is growing old the demand for products mostly catering to this segment will grow. This technology could be adopted for Hersheys other products, particularly with chocolate. Chocolate Gourmet has stringent norms for health and safety norms so in emerging economies it may have to compete with players who dont have high cost structures that of Chocolate Gourmet. Today, Kirkland's main sales support center is located in Brentwood, Tennessee which supports 337 stores in 35 states. Since then, chocolate and Cadbury have been part of the same sentence. First with the consumer pushback against their usage of the Ivory Coast (and potentially child labor). - Likelihood of Entering into an Armed Conflict From the information in the Note on the U.S. Chocolate Market case study, I dont think there is a likelihood of country entering into an armed conflict with a neighboring country. In Asia authority is respected while in west it is something to rebel against. - Price Fluctuations in both Local and International Markets Compare to the level of quantitative easing in last decade the prices of Chocolate Gourmet products and prices of overall products have remained sticky in the US market. Some of the political factors are governance system, democracy & institutions, military coup chances, probability of armed conflict, law and order in market etc. Chocolate harvested from cocoa trees is susceptible to pests, diseases, and pesticide use. The remaining 35% of the chocolate industry was divided among Bourbon Corporation, Nestle S.A., Morinaga & Co, Fujiya, Kabaya Foods Corporation, and Cadbury. However, the GDP is expected to slow down in both 2020 and 2021 and bounce back in 2022. In this essay, we will conduct a PESTEL analysis of the chocolate industry in the UK to identify the key external factors that could affect its future prospects. For example if the supply chain is not flexible it can lead to bottlenecks if shipments from one part of the world are delayed because of sudden climate shift. - Role Local Governments Play Local governments are highly influential in the policy making process and implementation as most of the policies and regulations are implemented by the local government as enforcement agencies mostly report to local government in their own states regarding various laws. The next element to address in the PESTEL analysis of Switzerland is the economic environment. We will make special emphasis on Cadbury UK, as this is where the company originally began. Out of which, her per capita income was 50,844 US dollars and it's 10th highest in the world. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. Required fields are marked *. Chocolate Hawkins needs to be careful about building marketing strategy that is dependent on Purchase on Credit consumer behavior. 3. Research Methodology 4. Developing strategies that can capitalize on Chocolate Gourmet strengths and help mitigate weaknesses and impact of threats of macro-environment. This means less error in product development and packaging, possibly saving the company millions in expenses and product waste. The chocolate market was impacted by low sales volume due to the COVID-19 pandemic, including supply-side issues linked to quality and certification. And while Dairy Milk chocolate and Trident Gum sold well, other brands like Halls also saw a rise in their annual sales. Strategy planning process often requires five steps South Africa, officially the Republic of South Africa, is a country located at the southern tip of Africa, with over 1,739 miles of coastline that stretches along the South Atlantic and Indian oceans. Skip to main content Other CIPD Websites CIPD UK CIPD Middle East CIPD Ireland People Profession CIPD Learning Hub People ManagementPM jobs Log in / Register Go to the home page -Kew raw materials are sourced from local suppliers. INTRODUCTION * Indian chocolates industry is growing at a rapidly18-20% per annum. Conducting a PESTLE analysis of the confectionery industry can help businesses operating in this sector to identify potential opportunities and threats, and to develop strategies to mitigate risks and capitalize on opportunities. Chocolate Hawkins should be careful about the history of forex risk before entering new market. For example it has been extremely difficult for US companies to enter UK health market as UK health system is a nationalized system and everything goes through contracts at national level. Some of the political factors are governance system, democracy & institutions, military coup chances, probability of armed conflict, law and order in market etc. In PESTEL analysis, you develop a detailed description of a company's macro-environment in terms of political, economic, socio-cultural, technological, environmental and legal factors as well as their effects. - Intellectual Property Rights Protection Chocolate Gourmet should assess the level of protection that intellectual property rights get under the legal system of the country. It can enable Chocolate Hawkins to hire skilled workforce at competitive salaries. Since then, the PESTLE analysis has become a popular strategic tool to assess the macro environment of organisations . Thus, disruption in the supply chain of raw materials . Some political factors that can affect the chocolate industry in the UK include: Trade policies: Changes in trade policies and tariffs can affect the cost and availability of raw materials, as well as the export and import of finished chocolate products. The revenue in the chocolate market is projected to reach 340243.54 tons in 2022 and the market is expected to register a CAGR of 5.90% in terms of volume. 2006. The total retail value of the U.S. market for chocolate was estimated at $13.7 billion in 2002, a 10.2% increase from 1998. 5. Journal of Economic Geography, 1 (4), pp.405 Norton, Marcy. It would focus on the macro-environmental factors that impact her growth and productivity. Table two below presents a PESTLE analysis for the industry Nestl are present . * Cadbury 's occupy about 72% of the chocolate /confectionery market with Dairy Milk Five Star Perk Gems * The organized sector in chocolates constitutes 40%. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. But on the flip side it does increases both time and cost of doing business and getting certifications and clearances. PESTLE analysis of chocolate industry in JAPAN. But its cheaper to use than organic chocolate, which is pesticide-free, GMO-free, and synthetic fertilizers-free. If the legal system is not strong then Chocolate Hawkins can face numerous challenges from consumer petitions to shakedowns from authorities. For example it has been extremely difficult for US companies to enter UK health market as UK health system is a nationalized system and everything goes through contracts at national level. Maybe all of these things were issues; shares were down 20 percent in that first quarter so something was definitely off. INDUSTRY ANALYSIS PESTEL Analysis Economic Factors The Philippine economy is progressively increasing according to the World Bank Org. - Attitude towards Authority Various cultures in different part of the world have different attitude towards authority. Full-text available. PESTLE Analysis of Nestle in light of Industry 4.0 Political and Economic Forces Politcal Factor Sustainable Politics: PESTLE Analysis Industry-4.0 efforts in UK are politically driven, commitment from the top is a motivating factor for companies to adopt new practices. - Work Force Productivity Work force productivity in US has grown by 25-30 % in last two decades even though the salaries are not reflecting those gains. Brazil Chocolate Market Analysis. It has decimated the culture of savings as people dont have enough to save. U.S. retail chocolate sales were forecast to grow to $14.5 billion in 2007. Experience economy is one of the fastest growing segments both among millennials and among baby-boomers. The American, Brazilian and Chinese dollars. The imposition of taxes is yet another political factor that will determine how Cadbury manages its investment and payment to shareholders. - Corporate Social Responsibilities Culture Are Chocolate Gourmet present CSR efforts applicable in the new market or does it needs to have new initiative to cater to the prospective market. - Democracy & Other Democratic Institutions According to Linda A. Hill, Alison Berkley Wagonfeld the democratic institutions are needed to be strengthened further so that business such as Chocolate Hawkins can thrive in an open, transparent and stable political environment. The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as Chocolate Hawkins. Macroeconomics is the study of large-scale economic elements, often relating to countries as a whole.The factors this analysis represents are political, economic, social, technological, legal and environmental. - Attitude towards Authority Various cultures in different part of the world have different attitude towards authority. - Laws regarding Monopoly and Restrictive Trade Practices As a new player Chocolate Hawkins shouldnt be worried about the monopoly and restrictive trade practices law. - Intellectual Property Rights and Patents Protection Before entering new market Chocolate Gourmet should focus on the environment for intellectual property rights. - Mobile Phone & Internet Penetration Chocolate Gourmet should assess the level of internet and mobile phone penetration in the country as it will it in building a requisite business model based on local needs and realities. Business Analysis: Kirkland. This PEST analysis of the Hershey Company examines these issues, as well as their relationship with consumers and the use of cutting-edge technology. Cadbury is a well-known producer and distributor of chocolate and milk-based products. Finally, technology has changed Cadburys production and packing process over the years, starting with the introduction of new brew machines to blend coffee and cocoa gains. Over one hundred million residents live in Japan and are forced to live in specific locations. Chocolate Gourmet should carefully analyze the attitude towards authority before launching a marketing campaign for its products and services. Hawkins wondered how to guide his company into this new area of social gaming without losing any of the tremendous creative momentum the team had built over the previous years. Learn how to, Our Mayo Clinic SWOT Analysis examines the Strengths, Weaknesses, Opportunities and Threats of one of, Technology is now taking over, and almost all fields are turning most tasks into digital., Copyright 2020 Weberience LLC. Nestle 10. Perhaps it was also the consumers, who (according to Hershey) werent going to stores. Glenn Carroll, Greg Powell (2018), "Note on the U.S. Chocolate Market Harvard Business Review Case Study. The gender composition of labor market is a good indicator of disposal income of household, priorities of the households, and related needs. Hersheys has experienced a fair bit of controversy. PEST analysis is used to control the external factors of what happens outside the . SWOT analysis of Amul Chocolates. Solutions. This is a decrease, compared to the growth of about 10.84% per year, registered in 2015-2019. Mostly the unusual macroeconomic winds and generic challenges caused sales problems. Major Players 8. Australia is one of the world's most advanced developed countries mainly because of the economical strengths. Some of the economic factors that Chocolate Hawkins should evaluate both in the present market and one in which it wants to enter are inflation rate, GDP growth rate, disposable income level etc. - Per Capita and National Carbon Emission What is the per capita carbon emission of the country and what is the overall level of carbon emissions of the country. For example Trump not standing by US commitments created an environment of uncertainty. Introduction 2. Luckily for the company, things turned around in the first two quarters of 2018. As an experiment, the company used a kiosk powered by Affectivas technology to encourage consumers to smile into the machine for a free sample. Much of this gain in retail value could be attributed to a shift of U.S. consumers toward higher priced chocolates. Sample Complete Report This is the sample complete report which will give you a glimpse of what your complete report will cover after purchase. The rest of the billions of bottles end up polluting the ocean and endangering sea life. They're advanced in telecommunications yet follow a patriarchal family system. Feel free to connect with us if you need business research. According to Michael Porter organizational performance is to large extend determined by various industry forces. - Role Local Governments Play Local governments are highly influential in the policy making process and implementation as most of the policies and regulations are implemented by the local government as enforcement agencies mostly report to local government in their own states regarding various laws. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. - Employment Rate If the employment rate is high then it will impact Chocolate Gourmet strategies in two ways it will provide enough customers for Chocolate Gourmet products, and secondly it will make it expensive for Chocolate Gourmet to hire talented & skillful employees. 1. Mars Incorporated. Some of the technology trends that are impacting the macro environment are developments in artificial intelligence, use of machine learning and big data analytics to predict consumer behavior, growing importance of platforms over service providers etc. Ethical and sustainable sourcing: There is increasing concern among consumers about the environmental and social impact of chocolate production, including issues related to child labor, deforestation, and fair trade. - Judiciary Independence In the matter of commercial and business decisions, judiciary of the country is independent to a large extent. Digital Chocolate case study (referred as Chocolate Hawkins for purpose of this article) is a Harvard Business School (HBR) case study covering topics such as Organizational Development and strategic management. It will help Chocolate Gourmet in both developing environmentally friendly products and thwarting PR stumble blocks. The retail distribution of take-home and eat-later confectionery is basically done through two groups of channels, i.e. In addition, there are also concerns in the western world owing to rising cases of obesity, especially among children. Political Factors: " These factors determine the extent to which government and government policies can affect an organisation or a particular industry. Definition of PESTEL / PEST / STEP Analysis. Strategy planning process often requires five steps Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. The market size for Switzerland Chocolate in 2021 was estimated at around USD 1.63 Bn. This analysis helps businesses to make informed decisions and take advantage of opportunities while mitigating potential risks. E - Environmental. U.S. retail chocolate sales were forecast to grow to $14.5 billion in 2007. The Brazilian chocolate market is projected to witness a CAGR of 4.12% during the forecast period 2022-2027. The Chocolate Confections Corporation PESTEL Analysis will look at the external factors - political, economic, social, technological, environmental, and legal. The first step in conducting a PESTEL analysis is to gain an understanding of the brand.