It can enable Chocolate Gourmet to hire skilled workforce at competitive salaries. The three inter-related environments are industry environment in which the company operates in, the geographic market or country in which company operates, and wider socio economic / macro environment. we specialize at providing professional PESTEL analysis & other strategic management MBA resources. Being a specialty retailer of home dcor and gifts, their primary products are . Chocolate ingredients are more expensive. Chocolate Gourmet can leverage this trend by expanding its product range and targeting new customers. Full-text available. 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. 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. Hersheys has experienced a fair bit of controversy. - Time Taken for Court Proceedings Even if the country has best of the laws, it doesnt mean much if they cant be enforced in a timely manner. - 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. If possible, the company plans to add this A.I technology to every one of their lines. Restructuring of the European chocolate industry and its impact on cocoa production in West Africa. 2006. One such act is called Shared Goodness; the company promises to keep communities, children, and the planet aligned with their business. 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. - Types of Immigration & Attitude towards Immigrants Given the latest developments such as Brexit and Immigrant detention on Southern border of United States. It is commonly used in desserts, confections, and as a flavouring ingredient in various foods. Chocolate Hawkins should carefully analyze the attitude towards authority before launching a marketing campaign for its products and services. - Government Regulations and Deregulations The government is adhering to all the rules and regulations under World Trade Organization norms. Competition: The level of competition in the industry can affect pricing, marketing, and innovation, which can impact the profitability of individual companies. Being run by a Quaker family, their opposition to alcohol served as the basis of running a business that sold tea, coffee, cocoa, and liquid chocolate. Theyve adapted Microsoft-powered artificial intelligence (A.I) in their Pennsylvania factory. - 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. Maybe all of these things were issues; shares were down 20 percent in that first quarter so something was definitely off. The top corporate tax rates are . It would focus on the macro-environmental factors that impact her growth and productivity. - 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. Introduction 2. Two giants dominated: Hershey's controlled 32.6% of the market and Mars had 29.6%. 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. Published by HBR Publications. According to Michael Porter organizational performance is to large extend determined by various industry forces. . 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. 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. 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 Research Methodology 4. Market Overview 2023-2028: The India chocolate market size reached US$ 2.4 Billion in 2022. This analysis is also performed to assess the potential of a new market. The retail distribution of take-home and eat-later confectionery is basically done through two groups of channels, i.e. - Intellectual Property Rights Protection Chocolate Gourmet should assess the level of protection that intellectual property rights get under the legal system of the country. Chocolate Industry Contents Titles 1. - Level of Household Income and Savings Rate Increasing consumption and stagnant household income in United States had led to credit binge consumption. Mass-market chocolatiers were defined as those selling chocolate at less than $10 per pound retail, whereas gourmet chocolatiers were defined as those selling chocolate at or more than $10 per pound retail. The UK chocolate market is the biggest in all European market. South Africa PESTLE Analysis & Macroeconomic Trends Market Research Report. 5. Economic Status. - 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. PESTLE analysis of chocolate industry in JAPAN. Much of this gain in retail value could be attributed to a shift of U.S. consumers toward higher priced chocolates. In highly hierarchical societies the power of decision making often reside at the top. In the context of the UK, the change of government from the Labour party to the Conservative/Liberal Democrat is bound to influence Cadburys operations. 1. But even then, recession did play its part as the company managed only to hit the lower end of its 4%-6% revenue for 2009, the peak of the recession. Hi, We can write an analysis or assignment on any topic of your choice, PESTLE Analysis of Chocolate Industry in Uk. Along with this, there are a few Environmental and Technological factors that contribute and influence the macro environment. 2. - Immigration Policies and Level of Immigration What are the immigration policies of the country, what is the level of immigration, and in which sectors immigration is encouraged. Analyze Strengths and Weaknesses of Chocolate Gourmet. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. PEST ANALYSIS The PEST analysis is a useful tool for understanding market growth or decline and as such the position potential and direction for a business. - Attitude towards Leisure Chocolate Hawkins should conduct an ethnographic research to understand both attitude towards leisure activities and choice of leisure activities. 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. Chocolate Gourmet should be careful about the history of forex risk before entering new market. 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. - 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. Over one hundred million residents live in Japan and are forced to live in specific locations. 4. Chocolate Gourmet can make strategies based on the stable political environment. Sep 2014. L - Legal. 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. For example, Value-added Tax rose by 2.5% in 2010 and increased chocolate prices and reduced sales. - Level of Acceptance of Technology in the Society Chocolate Hawkins has to figure out the level of technology acceptance in the society before launching new products. Today, we'll study the pestle analysis of UK. 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. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. Show . Amul 9. Brazil Chocolate Market Analysis. Chocolate Gourmet should have capabilities to navigate under this hyper sensitive environment. - Attitude towards Authority Various cultures in different part of the world have different attitude towards authority. 2012). T - Technological. The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as Chocolate Hawkins. To them, Americans have the luxury of buying several premium chocolates. - 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. Available to download is a free sample file of the Chocolate Market report PDF. A SWOT analysis is a tool used to evaluate the strengths, weaknesses, opportunities, and threats of a business or product. - Foreign Exchange Rate Number of companies have incurred losses in past few years because of forex risk in Venezuela, Brazil, and Argentina. PESTLE ANALYSIS TECHNOLOGICAL ANALYSIS The Goya chocolate has a global supply chain. In this section, we present a brief analysis of each element in relation to the . Definition of PESTEL / PEST / STEP Analysis. Cadbury made diverse sorts of chocolates and different items which are sold in a few nations around the globe. Published by HBR Publications. This means less error in product development and packaging, possibly saving the company millions in expenses and product waste. - Intellectual Property Rights and Patents Protection Before entering new market Chocolate Hawkins should focus on the environment for intellectual property rights. The chocolate industry has to anticipate the outcomes of their business operations in such a way that are in abidance with the rules and regulations made by the government of the country. The Hersheys Company is the largest chocolate manufacturer in North America and yet theyve hit major setbacks both politically and economically. - 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. Chocolate harvested from cocoa trees is susceptible to pests, diseases, and pesticide use. Although the company is clearly attempting to bring social good into the world, it doesnt stop them from blaming consumers when sales are declining. 1. A PESTEL analysis is used as a strategic tool to measure industry dynamics through recognition of the core political, economic, social, technological, legal and environmental forces/changes having influence on the industry (Henry, 2007, p.23). In doing so, the companys machinery learned to adjust itself throughout the day. Employment laws and regulations, such as those related to minimum wage, working hours, and health and safety. But on the flip side it does increases both time and cost of doing business and getting certifications and clearances. Chocolate consumption in India is low per capita consumption in urban India is estimated We will make special emphasis on Cadbury UK, as this is where the company originally began. Save my name, email, and website in this browser for the next time I comment. Hersheys also adopted technology to move people further down the grocery aisle. - Nature of Social Contract between Government & Society Before entering into a market Chocolate Hawkins needs to understand the nature of social contract between government and society. The leading chocolate producers in Japan are Lotto Group, Meiji Seika Kaisha Ltd, and Ezaki Glico which, in 2008, had market shares of 22%, 22% and 21%, respectively. This technology could be adopted for Hersheys other products, particularly with chocolate. The gourmet category was expected to grow as consumers incorporated more expensive gourmet foods into their diets, a trend beginning with the beer, wine, coffee, cheese, and ice cream industries. The Hershey's Company is the largest chocolate manufacturer in North America and yet they've hit major setbacks both politically and economically. Tax rates were also terrible, according to Mr. Bilbrey. - Environmental Regulation Impacting Absolute Cost Advantage Dynamics in the Industry. This is why theyre using A.I to improve their products and encourage more sales. In fact, Cadbury was able to gain a 30% increase in its annual profits, predominantly from the sales of Dairy Milk and Trident. All Rights Reserved, Political factors: The politics and policies of chocolate, Economic factors: All problems, all the time, Social factors: A dedication to social responsibility and favor, then poor sales are obviously their fault, adopting new technology to create better treats, add this A.I technology to every one of their lines, the consumer pushback against their usage of the Ivory Coast (and potentially child labor), Twitter PESTLE Analysis: 6 Notable Factors Affecting the Social Network, How to Pursue a Career in Cybersecurity: 7 Professional Tips to Follow, General Mills SWOT Analysis: 3 Opportunities to Gain Competitive Advantage, Root Cause Analysis: An Easy 6-Step Complete Guide, Mayo Clinic SWOT Analysis 2023: Healthcare Business Checkup, 3 Top Tech Tools for the Modern Commercial Contractor. Political environment and other factors not only impact the cost of doing business but also long term sustainability. Demographics: The UK has an aging population, which may impact chocolate consumption patterns as older consumers may be less likely to consume chocolate or may have different preferences than younger consumers. Lindt PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. 3. This will enable the Chocolate Gourmet to determine if required can it hire talent globally to work in that particular market. Chocolate Gourmet can leverage such a situation to hire the best people in business. 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. Opening shop in the early 19 th century, 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. Strengthening of democratic institution will foster greater transparency and reduce the level of corruption in the country. - Laws regarding Monopoly and Restrictive Trade Practices As a new player Chocolate Gourmet shouldnt be worried about the monopoly and restrictive trade practices law. - Focus & Spending on Renewable Technologies How much of the budget is spend on renewable energy sources and how Chocolate Gourmet can make this investment as part of its competitive strategy. 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. Developing strategies that can capitalize on Chocolate Gourmet strengths and help mitigate weaknesses and impact of threats of macro-environment. The Hershey Company is adopting new technology to create better treats. A SWOT analysis of handbags, A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a strategic planning tool used to evaluate the internal and external factors that can impact the success, Your email address will not be published. In one respect, Cadbury was born as a result of social factors. PESTEL Analysis & Environment Analysis The PESTEL analysis is a tool devised by Harvard professor Francis Aguilar to conduct a thorough external analysis of the business environment of any industry for which data is available. Many US companies have incurred losses in Mexico in regular forex crisis in that country. It is important to note that the Chocolate Confections Corporation PESTEL Analysis will be market specific, and the implications of the factors change for a company when the market . It has decimated the culture of savings as people dont have enough to save. Product Positioning 15. The gender composition of labor market is a good indicator of disposal income of household, priorities of the households, and related needs. - Societal Norms and Hierarchy What sort of hierarchy and norms are acceptable in society also influence the types and level of consumption in a society. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. 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. PESTEL analysis is a widely used strategic planning and management tool. - 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. 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. - Intellectual Property Rights Protection Chocolate Hawkins should assess the level of protection that intellectual property rights get under the legal system of the country. 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. This PEST analysis of the Hershey Company examines these issues, as well as their relationship with consumers and the use of cutting-edge technology. Japan is a small, but articulate, country. Strategy planning process often requires five steps Even though the global economic downturn did affect Cadburys expansion plans (owing to a reduction in disposable income of customers and other stakeholders), sales actually remained quiet steady. However, the GDP is expected to slow down in both 2020 and 2021 and bounce back in 2022. 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. Foreign currency exchange rates were insignificant in the second quarter. - 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. Political: Nestle is a global company and in the food and beverage industry one of the most important factors to consider is globalization. PESTLE analysis. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. If other business units follow suit, this can result in a loss of hundreds of jobs across the globe. Chocolate Hawkins 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 Hawkins. 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. Sales were down only slightly, and the CEO John Bilbrey, as well as CFO Patricia Little, blamed everything for it. - Types of Immigration & Attitude towards Immigrants Given the latest developments such as Brexit and Immigrant detention on Southern border of United States. First with the consumer pushback against their usage of the Ivory Coast (and potentially child labor). According to Michael Porter organizational performance is to large extend determined by various industry forces. But while chocolate and other products sold by the company are socially acceptable worldwide, Cadbury has been on the receiving end of controversies, the recent one involving Cadbury products being Halal Certified to cater to Muslim markets around the world. Expert Solution. 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. E - Environmental. It should evaluate the e-commerce infrastructure, technology infrastructure etc before entering a new market. INTRODUCTION * Indian chocolates industry is growing at a rapidly18-20% per annum. Mostly the unusual macroeconomic winds and generic challenges caused sales problems. Brexit: The UKs departure from the European Union may have an impact on the chocolate industry, such as changes in trade agreements and regulations. 2. Your email address will not be published. E - Economic. Climate change and changing ecosystem is leading to the extinction of more than 20% of species on the planet by the turn of this century. Chocolate Gourmet can borrow cheaply under such circumstances. - Fiscal and Monetary Policies The Republican government tax break culture has increased the deficit and it can lead to fiscal trouble for the economy in coming years.