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. - Types of Immigration & Attitude towards Immigrants Given the latest developments such as Brexit and Immigrant detention on Southern border of United States. The full-year net sales increased by 1 percent, even though the four-quarter net sales dropped by 1.6 percent. U.S. retail chocolate sales were forecast to grow to $14.5 billion in 2007. The A.I transmits data to the cloud. . For example most of EU countries now want the EU citizen data to be saved in EU countries only. Chocolate Mould Market Share, Size Global Growth Analysis, Trends, Industry Analysis, Key Players and Value,Opportunity Forecast to 2025 Posted o. Wednesday, 01 March 2023 08:34 GMT. we specialize at providing professional PESTEL analysis & other strategic management MBA resources. Analyze the Chocolate Gourmet external competitive environment to identify opportunities and threats. According to Jose Lopez, Nestle's Vice . Many US companies have incurred losses in Mexico in regular forex crisis in that country. 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. * Cadbury 's occupy about 72% of the chocolate /confectionery market with Dairy Milk Five Star Perk Gems * The organized sector in chocolates constitutes 40%. 2. - Regulatory Practices - The regulatory practices are streamlined with global norms which have helped the country to improve its ease of doing business ranking. Market Segmentation 13. However, the GDP is expected to slow down in both 2020 and 2021 and bounce back in 2022. This is an out-of-the-box usage of technology that hands Hersheys a competitive advantage. Choosing the vision, mission and the reason of existence for Chocolate Gourmet. The snapshot of this . 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. In practice, analyses based on the PESTEL model are used in conjunction with studies on the micro-environment as part of the overall . Cultural norms: Chocolate is often associated with indulgence and gift-giving in UK culture, which may impact consumption patterns and marketing strategies. By last estimates, the 8 Cadbury factories in the UK had employed 3,000 workers. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. The retail distribution of take-home and eat-later confectionery is basically done through two groups of channels, i.e. According to Michael Porter organizational performance is to large extend determined by various industry forces. - 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. 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 . There is consistency in both policy making and implementations of those policies. For example, Value-added Tax rose by 2.5% in 2010 and increased chocolate prices and reduced sales. Chocolate industry Presentation 1. If the legal system is not strong then Chocolate Gourmet can face numerous challenges from consumer petitions to shakedowns from authorities. Political environment and other factors not only impact the cost of doing business but also long term sustainability. In-depth industry statistics and market share insights of the Chocolate Market sector for 2020, 2021, and 2022. PESTEL analysis is critical to understand the external threats & opportunities arising because of the macro environment developments. Expert Solution. - Focus & Spending on Renewable Technologies How much of the budget is spend on renewable energy sources and how Chocolate Hawkins can make this investment as part of its competitive strategy. These factors are Political, Legal, Economic and Social. - 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. 2. Chocolate Gourmet can leverage such a situation to hire the best people in business. Psychographics and Demographics 14. Note on the U.S. Chocolate Market case study (referred as Chocolate Gourmet for purpose of this article) is a Harvard Business School (HBR) case study covering topics such as Strategy & Execution and strategic management. Full-text available. Chocolate Hawkins needs to be careful about building marketing strategy that is dependent on Purchase on Credit consumer behavior. Strengthening of democratic institution will foster greater transparency and reduce the level of corruption in the country. . The rest of the billions of bottles end up polluting the ocean and endangering sea life. Save my name, email, and website in this browser for the next time I comment. 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. The company has attempted to make amends by creating socially-conscious programs to help children in need. 5. Political environment and other factors not only impact the cost of doing business but also long term sustainability. Cadbury is synonymous with chocolate consumption worldwide. This analysis helps businesses to make informed decisions and take advantage of opportunities while mitigating potential risks. - Research and Development Investment Levels If there is high level of investment in technology development sector then there are high chances of building a self sustaining ecosystem that drives innovation. The Company has various popular products in the Petcare as well as in the chocolate category for example; in the Petcare industry Pedigree, Royal Canin, Whiskas etc. 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. 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. - Transition of Government and Changes in Policy There is consistency in policy making from one government to another. Chocolate Gourmet can leverage this trend by expanding its product range and targeting new customers. Managers at Chocolate Gourmet need to examine three inter-related environments in order to come up with an effective strategy. 3. Article. Research Methodology 4. Glenn Carroll, Greg Powell (2018), "Note on the U.S. Chocolate Market Harvard Business Review Case Study. The conditions of a country affect the businesses within it, and PESTLE analysis helps these businesses understand the possible effects . As such, theyre looking to bring more good into the world by building thriving communities and becoming better stewards of the planet. Much of this gain in retail value could be attributed to a shift of U.S. consumers toward higher priced chocolates. And even before that in 2007, Cadbury Schweppes decided to outsource a major portion of its accounting and HR to an Indian firm in the face of increasing operational expenses and reducing margins. 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. 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. But on the flip side it does increases both time and cost of doing business and getting certifications and clearances. Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. A Comprehensive Project report on Chocolate Industry Bhavik Parmar Follow Co-Founder And MD at KadiBuddy Advertisement Advertisement Recommended Final report on chaco Shailesh Kumar 3.7k views 66 slides Chocolate industry project report hasnain2 6.2k views 74 slides Chocolates & confectionery Varun Deshpande 18.6k views 29 slides 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. View. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Rocky Mountain Chocolate Factory, Inc.. The remaining 35% of the chocolate industry was divided among Bourbon Corporation, Nestle S.A., Morinaga & Co, Fujiya, Kabaya Foods Corporation, and Cadbury. But this strategy entails risks when interest rate will go up. Lindt PESTLE Analysis By last estimates, the 8 Cadbury factories in the UK had employed 3,000 workers. The Chocolate Confections Corporation PESTEL Analysis will look at the external factors - political, economic, social, technological, environmental, and legal. Amul Chocolates also . 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. Then they scorned the dollar. Many nutritionists recommend people to reduce their consumption of chocolate and candy, which is likely to affect Cadbury sales in the future. This will help in better predicting the environment policy of the country. Technology is fast disrupting business models across various industries. This means less error in product development and packaging, possibly saving the company millions in expenses and product waste. Feel free to connect with us if you need business research. Government support: Government policies and initiatives to support the growth and development of the food industry can benefit the chocolate industry in the UK. - Data Protection Laws Chocolate Gourmet needs to assess what are the data laws in the country and what it needs to do to comply with them. Cadbury 11. Show . Case Description of Digital Chocolate Case Study Trip Hawkins founded Digital Chocolate in Silicon Valley in 2003 to develop outstanding games for mobile devices. 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. For example Uber employment system is not consistent with French laws and it is facing challenges in the country. Labor costs: The cost of labor, including wages, benefits, and training, can impact the profitability of chocolate manufacturers. 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. The gender composition of labor market is a good indicator of disposal income of household, priorities of the households, and related needs. Some of the economic factors that Chocolate Gourmet 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. Like with most food products, the major multiples have substantial buying power, and often buy directly from chocolate manufacturers. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. Recent moves in this regard include the use of pathogen testing systems and filing patents for heat-resistant chocolate. When too heavy, additional ingredients go to waste. This can help Chocolate Hawkins in numerous decisions such as plant location, product development, and pricing strategy. - Intellectual Property Rights and Patents Protection Before entering new market Chocolate Gourmet should focus on the environment for intellectual property rights. - 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. Chocolate Gourmet should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. 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. -Kew raw materials are sourced from local suppliers. Its a huge moral and ethical issue because the Ivory Coast is known to enforce child labor. Some social factors that may affect the chocolate industry in the UK include: Changing consumer preferences: Consumers in the UK are becoming more health-conscious and may seek out lower-calorie or healthier chocolate products. PEST or PESTLE analysis is used to identify important external (macro-environment level) forces that could affect a company, creating opportunities or threats for the organization. The chocolate market was impacted by low sales volume due to the COVID-19 pandemic, including supply-side issues linked to quality and certification. Yasemin Oraman. - 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. - 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. 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. It will help Chocolate Gourmet in both developing environmentally friendly products and thwarting PR stumble blocks.