Strategy 201

1. What is competition like in the premium chocolate industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants?

Answer: Competition in premium chocolate industries is based on regional brands. Forces that accelerate competition among premium chocolate industries include variation in quality of products and other services offered to customers. Various premium companies have individual techniques that ensure delivery of high quality product in the market. In addition to product quality, price of the product is another area where competition arises. Depending on the production cost, different premium industries offer different prices in the market. Packaging and physical presentation of the products is another avenue for competition in premium chocolate industries. Company that offers attractive products especially targeting younger generation dominates the market. Furthermore, advertisement methods and geographical distribution is also a potential area for competition a high sale is realized in company whose product is mostly spread and common. From these forces, geographical distribution emerges to contribute much in hastening competition among chocolate companies.

Even though all forces stated above hastens competition among these chocolate companies, product quality surface to have least impact on extent of competition. Attractiveness and profitability of chocolate products is determined by how the product is molded, colored, and packed. Packaging therefore, plays a role in ensuring manufactured product appears attractive in the market. To a customer, nature of wrapping materials tells more about quality of the item delivered. High profit is thus realized if the product is attractive to the customer. Advertisement methods used in promoting the product also determine how attractive the product would be in...