E/B/27. Strategic Analysis of chocolate confectionery industry

The business environment at present is the result of much evolution. It is in constant flux, driven by numerous factors Ï some easily anticipated, others completely unpredictable. Consequently, analytical models and tools are constantly being conceptualized and modified in order to gain perspectives that aid firms in effectively anticipating these changes and quantitatively assessing their implications. This paper is centred on the practical application of some of these tools on the chocolate confectionery industry in Western Europe. The aims and objectives of the report are as follows: The first segment discusses the relevant environmental factors using the PESTLE Framework. In this segment, recent changes in the environment of the chocolate confectionery industry are presented. Their implications to firms are discussed and interpreted as either threats or opportunities. The second segment uses Michael Porters 5 Forces Model to analyze the competitive environment that the industry operates in. It assesses the severity of each force and uses a five-point scale to quantify the threat each force poses to industry profitability. Finally, the concept of Strategic Groups is tackled in order to gain insight into competitors in the industry. This concept is elaborated on through the use of a group map, which illustrates the strategic groups in the industry, as well as the strategic spaces that firms have not pursued. Mobility barriers or the factors that make it difficult for firms to move from one group to another are then enumerated and discussed.