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SWOT ANALYSIS ON “CHOCOLICIOUS CHOCOLATE”

I.B.M 130

Table of Contents CONTENTS INTRODUCTION EXECUTIVE SUMMARY DATA COLLECTION METHODS RESEARCH OBJECTIVES

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ANALYSIS OF COUNTRY #1 - SWEDEN  POLITICAL, LEGAL AND ECONOMIC DATA  MARKET INFRASTRUCTURE  MARKET FORCES  PRODUCT-SPECIFIC DATA  COMPETITIVE ENVIRONMENT

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SWOT ANALYSIS OF COUNTRY #1- SWEDEN  STRENGTHS  WEAKNESS  OPPORTUNITIES  THREATS

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ANALYSIS OF COUNTRY #2-SWITZERLAND  POLITICAL, LEGAL AND ECONOMIC DATA  MARKET INFRASTRUCTURE  MARKET FORCES  PRODUCT-SPECIFIC DATA  COMPETITIVE ENVIRONMENT

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SWOT ANALYSIS OF COUNTRY #2-SWITZERLAND  STRENGTHS  WEAKNESS  OPPORTUNITIES  THREATS

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ANALYSIS OF COUNTRY #3-UNITED KINGDOM  POLITICAL, LEGAL AND ECONOMIC DATA  MARKET INFRASTRUCTURE  MARKET FORCES  PRODUCT-SPECIFIC DATA  COMPETITIVE ENVIRONMENT

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SWOT ANALYSIS OF COUNTRY #3-UNITED KINGDOM  STRENGTHS  WEAKNESS  OPPORTUNITIES  THREATS

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ANALYSIS OF COUNTRY #4-GERMANY  POLITICAL, LEGAL AND ECONOMIC DATA  MARKET INFRASTRUCTURE  MARKET FORCES  PRODUCT-SPECIFIC DATA  COMPETITIVE ENVIRONMENT

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SWOT ANALYSIS OF COUNTRY #4-GERMANY  STRENGTHS

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

WEAKNESS

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 OPPORTUNITIES  THREATS CONCLUSION BIBLIOGRAPHY

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INTRODUCTION EXECUTIVE SUMMARY This report explains the merchandise STRENGTH, WEAKNESS, OPPORTUNITIES and THREATS (SWOT analysis) of ‘CHOCOLICIOUS CHOCOLATES” which is an improved version of Dark Chocolate. We aim to capture the market by implementing new strategies in order to overcome the existing competitors in European countries. For this we have changed the age-old formula to healthy ingredient called Lecithin. Lecithin is very important to chocolate because it reduces viscosity, replaces expensive ingredients such as cocoa butter, improves the flow properties of chocolate, and can improve the shelf life for certain products. Viscosity reduction, or making a coating thinner, can certainly be done by adding cocoa butter or other fats and oils, but it takes greater amounts to accomplish this and is therefore more costly We picked the item to be exported to European territory because of the fact that recent studies on chocolate buying in these areas demonstrated huge increasing trend. We identified this as an opportunity to be exploited to its maximum, due to these factors, we at, ‘CHOCOLICIOUS CHOCOLATES’ strongly believe that Europe zone is a perfect location for our product. We conceive to establish and gain a comprehensive solution for availability of less dark chocolates and health concerns. We will create a good S.W.O.T analysis of our market which will be indispensable to suppliers as a value effective way for them to penetrate the post-acute market and target markets. This report also conducts a PESTEL analysis concentrating on guidelines like packaging, labelling, shipping and information on security laws with the goal that our product is allowed to trade internationally . The final conclusions are taken only after the thorough identification of the PESTEL and S.W.O.T analysis. There are few competitors for this product within the market which sells the identical product with a more robust price and an intensive marketing research with PESTEL AND SWOT analysis is required for competing with them. Recommendations for these problems are discussed briefly in this report.

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DATA COLLECTION METHOD Research is done by gathering all available information collected through combined group members. We have prepared many relevant questions which might help our trade internationally in each country. We gathered information based on these questions through secondary source of data from online sources like Government websites, company websites, Newspapers and company reports.

RESEARCH OBJECTIVES 1. Political Factors:  Is it favourable to the government policy?  Identify trade restrictions. 2. Legal Factors:  Does it meet the import/export laws of both the countries?  Does it meet the Health and Safety laws prevailing in the country? 3. Economic Factors:  Identify the factors of economic growth.  Identify inflation and deflation rates. 4. Market Infrastructure:  Identify government and public sector involvement in the market.  Does the market facilitate delivery of goods and services? 5. Market Forces:  To identify if there is a growing demand for product in target market  To identify the government involvement in pricing 6. Product-specific Factors:  Does the product meet packaging and labelling criteria?  Can be the temperature level maintained properly? 7. Competitive Marketplace:  Identify the competitors in the market.  Identify better competitive strategy for market entry.

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I. ANALYSIS OF SWEDEN 1. Political factors

Canada and Sweden enjoy excellent trade relationship based on people to people and mutually benefit partnerships between governments. Both the countries follow similar fundamental values and common global business approach. So there wont be any hindrances regarding trade relationship with our destination country Sweden. Apart from that, there is no restriction on exporting chocolate from Canada to Sweden by both the governments as it is a confectionery product.

2. Legal factors.

Product exports, including their preparation and packaging, are required to follow Canadian and Swedish acts and regulations. Exporters must meet the following basic requirements to be eligible to export products from Canada such as:  Valid licence or registration (as applicable)  Labelling requirements of destination country.  It has been prepared under a food safety preventive control plan (PCP)  It meets Canadian requirements for food safety, grading and standards, labelling, packaging and containers.  Follows Harmonised System (HS) of the Tariff Schedules. 1.(Trade Regulations of Canada). We strictly adhere by the rules and regulations of both home country and host country.

3.

Economics factors

Sweden’s per capita gross national product is one of the highest in the world amounting to 551 billion US dollars. The Swedish economy is in good health and growing significantly. The committee of experts audits the government’s policy decisions regarding public finances and focus to ensure that they remain consistent with the goals of growth, employment and long-term financial sustainability. The Swedish government’s credible management of the public 6|Page

finances has meant that Sweden remains among the most fiscally responsible countries in European Union. Swedish indicators describe it as a healthy economy: growth was very strong at 4.1 percent in first half of 2016. It has low inflation rate of 1.8% and a healthy banking system. According to the International Monetary Fund, Sweden’s national debt to GDP ratio fell from 80% in 1995 to 41% in 2017. Leading credit agencies gave Sweden an ‘AAA’ rating, which is a rare distinction, even among developed economies. 2.(Chipperfield, N., & Sutherland, S. (2019, November 18). Sweden is one of the easiest nations to do business with, according to the World Bank. An important feature of the Swedish economy is its openness and liberal approach to trade and doing business. 4. Market Infrastructure

Market infrastructure basically refers to the transportation facilities, communication channels, technological development, government and public sector involvement and so on. We are expecting government interference regarding prices of our product as there is significant involvement of government in Swedish market. Moreover there is active participation of public, which can be beneficial to attract more stakholders. We have decided to export our product to Sweden using sea route because it is less expensive and can carry huge amount of load compared to other transportation methods by making use of large containers. Moreover, Sweden is one of the most developed countries in the world with around 11 large sea ports many other small ports too.

5. Market forces

Market forces literally means the dominant forces in the market like trends, consumer preferences competitors, government influence and so on. The consumption volume of chocolate and confectionery in Sweden amounted to roughly 15 kilograms per capita. 2.(Ridder, M. (2019, November 6) Being one of the most chocolate consuming countries, there is a large number of existing competitors in the field but in terms of dark chocolate there is less competition. There has been little government intervention in the confectionary market in Sweden compared to other European union countries. Although a new tax law is proposed regarding sugar content but is doubted whether it would come to existence. 3.(HPatrick. (2017, December 31).

6. Product specific factors

Our product is Dark Chocolate. So basically, chocolate is a sensitive product and various factors have to be considered regarding packaging, labelling, transportation, storage and so on. Packaging and labelling have to follow both home and destination country rules and are being followed, that is, labelling is done both in English and Swedish language. For transporting, refrigerated trucks are planned to be used from production plants to ports and then by ship to Sweden after ensuring proper temperatures are maintained in the shipment. That is, ideal temperatures are set to be between 12° C to 21° C. 7. Competitive market place

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Our study on Swedish market has revealed that it is one of the most chocolate consuming countries and there has been a number of competitors prevailing in the market. So, we believe we will be having fair competition in this field. Existing brands include Marabou, Pucko, Cleotta and so on. We have identified Kraft Foods Sverige remains the undisputed leader in chocolates in Sweden during the year 2012, an estimated 39% of total retail sales in the category through its brand Marabou proportion. 4.(HPatrick. (2017, December 31). Those firms are well established but we believe we can attain market share eventually because our main focus is bringing healthier chocolates with high cocoa content and less sugar content thereby providing adequate nutrition levels and a wholesome diet.

 SWOT ANALYSIS OF SWEDEN Strengths

Weakness

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Increasing demand for chocolate.

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Sweden is having similar producers of

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Geographic location- easy to transport

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chocolate. Huge investment on product promotion.

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Healthier version of chocolate with high

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Language barriers.

cocoa content. Opportunities

Threats

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Sweden is a European union member.

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Climatic condition- not best climate for

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Canada-European Union Comprehensive

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growing cocoa. Presence of existing competitors.

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Economic and Trade Agreement (CETA) Tariff rates are common

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Developing imports.

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protectionism-

taxing

II. ANALYSIS OF SWITZERLAND Political factors It is favourable to government policies of Switzerland. Canada and Switzerland have a close and multifaceted respective relations, based upon shared values and a commitment to democracy and human rights. Wheat farmers from imported products through high tariffs without penalising exporters of transformed food items like chocolate. Switzerland's trade relations with the EU are mainly governed through a series of bilateral agreements where Switzerland has agreed to take over-certain aspects of EU legislation in exchange for accessing part of the EU's single market. Legal factors However, on imports from countries with which Switzerland has concluded free trade agreements. Exporters need to be followed the rules in-order to export the product. The Federal Council cited the World Trade Organisations decision in 2015 to put an end to agricultural export subsidies by 2020. However, instead of paying compensation to chocolate exporters, the government proposes paying a special allowance to Swiss milk and cereal producers. chocolate was praised for its positive effects on health and nutrition. As people were poor, hungry, and short of energy, chocolate drinks and later chocolate bars became an important additional source of nutrition. Economic factors Switzerland’s economy has for some time been removed for its impressive and highly developed service sector. Switzerland are associated with prestigious traditions of chocolate manufacturing. Switzerland has a strong economy because of its long-term monetary money related to security, neutral, political position, low value added tax rate and exceptionally qualified work power. 9|Page

Market infrastructure Government and public both have involvement in market infrastructure. Private has more influence since government is not much strong there. 80% of the market is controlled by the private sector. The market does facilitate delivery of goods and services as private sector rules the market and it’s a free market economy. Market forces There is a growing demand for product in target market because the attractiveness of the country for the chocolate industry is popular. Increase in consumption and production of cocoa products has provided a huge opportunity for the growth of the chocolates in market. moreover, the increased advancement in technology and the increase for chocolate in the market offers great potential to the compound chocolate market Product specific factors The labelling and packaging are done according to the country rules and regulations like permits and licenses, Business number and so on. In Labelling all the details of the chocolate should be included the logo, ingredients, expiry date and so on. The packaging of chocolate should be packed in aluminium foil and wrapped with paper wrappers and then packed in to batches and then stored in to refrigerated trucks. The ideal temperature level to be ֯ ֯ maintained is 12 C to 21 C. Competitive market place The study on Switzerland shows it is one of the countries producing good chocolates and there are lot of competitors in the market so there are lot of high competition occurs in the market field. Chocoladefabriken Lindt & Sprüngli, Nestlé Suisse, Barry Callebaut, Milka Swiss Chocolates, Toblerone are some of the major competitors for us in the market. Thus, main focus of our company is to provide healthier dark chocolates.

 SWOT ANALYSIS OF SWITZERLAND STRENGTH Highlights and taste: our chocolates are different in taste and texture. A unique portion highlights the conch which expanded the smoothness of chocolate and the interesting process of tempering which cuts down the arrangement of crystals stones on the outside of the chocolate and the strategy of making chocolate fillings. Quality: our brand always focused quality and never compromise on the quality of the ingredients or the process of manufacturing. Composition: The ingredients that make our chocolates are what makes the chocolates additional extra special. The chocolates are made with the best cocoa in the world.

WEAKNESS

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Increase in material cost: There is a high increase in the cost of cocoa beans which is the essential raw material for chocolates. The competition among top retailers has down the edges for chocolate makers. Concentrate on specialty markets: Most of the contributions of our chocolates are intended for specialty markets where their objective gatherings are individuals with cash who can bear to spend on uniquely designed strength chocolates. This is making it hard for them to focus on the mass market where the bulk part of the deals occurs. Costly: The popular observation is that our chocolate is a costly brand and this limits their target market to the premium segment only. Besides, there is additionally an observation among the middle-income groups that there is no reason to spend excessively on chocolates which makes it worse.

OPPORTUNITES High demand for dark chocolate: Globally there is a surge in the demand for dark chocolate since it is presumed to be healthy. Market expansion

THREATS High competition:

The main players here include Frey, Tolerance, Milka, and Cailler. Globally our greatest

competitor is Mondelez. Low barriers to entry: The market has low barriers to entry with the result that many new players are entering into the market.

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III. ANALYSIS OF THE UNITED KINGDOM 1. POLITICAL ANALYSIS Since the decision to exit of the United Kingdom from ‘Europe Union’ it has The Trade Bill, introduced on 7 November 2017, It will put in place essential legal powers and structures to enable the UK to operate an independent trade policy which favours us in trade practice.

Imports of food and agricultural products from outside the EU covered by the Common Agricultural Policy (CAP goods) are often subject to customs duty and quotas and may require a licence or certificate. The Food Standards Agency (FSA) provides information on importing food from outside the EU. Trade with certain countries is forbidden or restricted in accordance with UN, EU or OSCE sanctions.

2. ECONOMIC ANALYSIS U.K is the 5th highest GDP (Gross Domestic Product) in the world, second in Europe only to Germany and has Large population allowing for even small markets to be profitable it has a Diversified economy with both large public and private sectors it contains a Free market and there is an Increasing Foreign Direct Investment The consumer price inflation in the UK slowed to 1.3 percent year-on-year in December 2019, the lowest reading since November 2016 and below market consensus of 1.5 percent, as prices rose at a softer pace for food beverages at 1.7 percent. 12 | P a g e

3. LEGAL ANALYSIS Food and drink products imported from the EU have no restrictions but most regulations are for food and drink that are imported from countries outside the EU. In this we need:  health certificates  import licences The countries health and safety law consist of  Adequate training of staff to ensure health and safety procedures are understood and adhered to  Adequate welfare provisions for staff at work  A safe working environment that is properly maintained and where operations within it are conducted safely  Suitable provision of relevant information, instruction and supervision 4. MARKET INFRASTRUCTURE

In the UK voters elect a national or local government and the government has a key role in managing the country’s economy, Government economic objectives include:  Low unemployment,  Lower prices.  Economic growth. For those products requiring a physical delivery, you should consider both:  

logistics technology

5. MARKET FORCES

The UK compound chocolate market is growing at a CAGR of 3.32% during the forecast period (2019-2024). The primary factor driving the market for compound chocolates in the country is the rising consumer expenditure on indulgent confectionery products, especially chocolate confectioneries. Also, robust demand for the product from the expanding food and beverage industry in the country

Usually, prices are set by the market forces (where supply and demand meet) But there are various reasons governments may wish to intervene in a free market to set prices. Which include  To stabilise prices (e.g. prevent rapid fluctuations in the price of food)  Make some goods more e...