Forces and Trends in Chocolate Industry Essay Example | Topics and Well Written Essays - 1000 words

Forces and Trends in Chocolate Industry - Essay Example Population Growth Like any other industry, the chocolate industry is driven by population growth. For the chocolate industry, this population growth occurs in one crucial way. This is owed to the fact that the elderly age group is anticipated to triple by 2015 (Silva and Simoes, 2010). Consequently, players in the chocolate industry must come up with inventive products that satisfy the needs of this generation. As mentioned earlier, Hershey Chocolates Company has already reacted by coming up with the Kisses dark chocolate. This product is associated with low cholesterol values and numerous antioxidants. Consequently, the product is tailor-made for the baby boomer generation. Supplier Power This refers to the company’s ability to operate regardless of the prevailing suppliers in the industry. It is necessary to note that the primary raw materials in the production of chocolates are cocoa bean, milk and secondary sugar. Therefore, with regard to the production of sugar and milk, there exist numerous suppliers in the market. Thus, supplier power in regards to these two products is limited. On the other hand, the supply of the cocoa beans is limited to only a few suppliers in the industry. This implies that the supplier power of the cocoa bean firms is extremely high. Therefore, the chocolate producing firms such as Hershey Chocolates Company must come up with effective ways of lowering the supplier power of these companies in order to remain competitive in the industry. Consequently, Hershey Chocolates Company has reacted to this challenge in the following ways: Research on alternative ingredient formulation Optimizing current cocoa production Research on Alternative Ingredient Formulation... The researcher focuses on the effects of economic recession, that today usually refer to a spell in the business cycle where there exists a contraction or slowdown in business activity. Consequently, economic recession impacts negatively on businesses. This implies that, for Hershey Chocolates Company to succeed it has to effectively wither the economic recession. Consequently, these products have given the company a competitive advantage over similar firms in the industry. However, the industry also faces stiff competition from other substitute products such as ordinary candy and cookies. Other non-chocolate snacks such as fruits, ice cream and yoghurt also pose a challenge to the industry. Health concerns are continually taking a toll on the chocolate industry with consumers insisting on consumption of healthy diets. Consequently, industry players like the Hershey Chocolates Company must develop increased premium products in order to penetrate into the consumer market. The products must be sensitive to the health and ethical issues so as to win a share of the crowded market in the industry. With regards to rivalry with other similar companies, market growth of around 20 percent annually, together with its unique products cushions the company from the stiff competition it would have to face. Therefore, the chocolates industry experiences various forces and trends. Thus, it can be concluded that Hershey Chocolates Company must employ strategic measures in order to maintain profitability in the fragmented market system.