Chapter 5 Industry and Marketplace 5. This all started inthe owner if the McAviney Candy Company. They made boiled hard candies that were stirred with a stick, and at the end of the day, the owner brought the sticks that covered with candy home for his kids to enjoy.
Hi everyone, In order to better understand the candies industry, I propose here-below an analysis of Porter five forces.
This analysis is based on the worldwide market and is made to see if this market is attractive or not. Thanks a lot for your commitment and you attention!
Have a good one! There are four of them, including: Sugar is a very fluctuating industry. A rise in sugar prices will automatically impacts the candy companies margin, unless they decide to rise prices on the customer side.
It is also the case for any raw materials used in the candy industrial process. This supplier pressure is of course one of the biggest threat of the candy industry, this threat being even bigger in times of crisis as companies have to deal with higher customer expectancies in terms of prices.
There are a lot of sugar suppliers in Europe, located in developing countries such as Caribbean Pacific Africa etc. Then, we could think they have a low bargaining power but as we explained it before, there are sugar prices which prevent firms from having an efficient negociation with suppliers.
However there are not fluctuating prices concerning the other ingredients, and there are a lot of suppliers. Those reasons lead to a low bargaining power. Then, candies industries can easily switch from one supplier to an other due to low switching cost.
Finally, there are not that many candy companies on the market. There are few leaders on this market: Cadbury, Haribo, Lamy-Lutti, and Solinest. Indeed, we are not talking about the same customers and the same amount of candies bought.
Moreover, their bargaining power is lower because candies consumption is not affected by crisis. And, on a B2B side, we realize this bargaining power is really high with an order size much larger, many suppliers to choose from and many substitutes available.
Then the switching cost is low. Moreover, due to the anti obesity campaigns all over the world, we can notice a change in candies consumption and then in candies offers. For instance with the arrival of non-sugar candies like Chupa Chups and their pro-dental range or its non sugar lolly pop Cremosa… Even if we still eat a lot of candies as a reward, the healthy concern is more and more present in people minds and most of all in adults ones.
Adults will prefer non-sugar and fresh candies such as Wrigley ones: Some brands now diversify their range of products like Chupa Chups, first specialized in lolly-pops, now produce jelly-based candies.
Threat of new entrants: Furthermore, there is no need for special know-how and low switching costs for buyers.
Then we can consider the confectionery market as a concentrated one, which means it would be hard for a new company to enter it and prosper in it.
In addition, there are strong capital requirements for starting up production and a real difficult access to distribution channel.Chupa chups strategic management analysis. Essay. Company background Eric Aberrant Is the Inventor of Chap Scups. In , Aberrant proposed the conversationally of his Idea, the first sweet with a simple ball and a stick of wood and the success was immediate, in spite of the high price.
External Analysis An external analysis will be done. Chupa Chups ad analysis The advertisement is simple but it tells it all especially the message that the company would want to convey about Chupa Chups products.
As we can see in the ad, the ants are there and it is in fact very much related to the concept and nature of the product itself. Chupa chups strategic management analysis. Essay. Company background Eric Aberrant Is the Inventor of Chap Scups.
In , Aberrant proposed the conversationally of his Idea, the first sweet with a simple ball and a stick of wood and the success was immediate, in spite of the high price. External Analysis An external analysis will be done.
Finally, the new tendency is the frizzing candies (+13,3% in ) such as Croco Pik (Haribo) or Mini Chupa Chups Kipik. Some brands now diversify their range of products like Chupa Chups, first specialized in lolly-pops, now produce jelly-based candies.
For a PEST analysis to truly be valuable, it should be used in conjunction with SWOT (strengths, weaknesses, opportunities and threats), MOST (mission, objective, strategies, tactics) or SCRS.
Jun 13, · Chupa Chups is a lollipop company founded by Spanish native Enric Bernat in , and currently owned by the Dutch-Italian multinational corporation Perfetti Van Melle.