Introduction 2. Restructuring of the European chocolate industry and its impact on cocoa production in West Africa. According to an estimate, her annual GDP was 1.375 trillion US dollars in 2020. PESTEL Analysis & Environment Analysis The PESTEL analysis is a tool devised by Harvard professor Francis Aguilar to conduct a thorough external analysis of the business environment of any industry for which data is available. . Strategy planning process often requires five steps -Recycled, recyclable and biodegradable packaging. First with the consumer pushback against their usage of the Ivory Coast (and potentially child labor). L - Legal. Digital Chocolate case study (referred as Chocolate Hawkins for purpose of this article) is a Harvard Business School (HBR) case study covering topics such as Organizational Development and strategic management. Regulations: Regulations on food safety, labeling, and advertising can impact the manufacturing and marketing of chocolate products. Chocolate Industry Contents Titles 1. - Unrest within the Country & Chances of Civil Unrest We dont think that Chocolate Gourmet business operations are facing any dangers from any kind of civil unrest or internal militant operations in the country. The leading chocolate producers in Japan are Lotto Group, Meiji Seika Kaisha Ltd, and Ezaki Glico which, in 2008, had market shares of 22%, 22% and 21%, respectively. 3. Cultural norms: Chocolate is often associated with indulgence and gift-giving in UK culture, which may impact consumption patterns and marketing strategies. Chocolate Gourmet has stringent norms for health and safety norms so in emerging economies it may have to compete with players who dont have high cost structures that of Chocolate Gourmet. 988 Words4 Pages. - Fiscal and Monetary Policies The Republican government tax break culture has increased the deficit and it can lead to fiscal trouble for the economy in coming years. The Hershey Company is adopting new technology to create better treats. Chocolate ingredients are more expensive. This can help Chocolate Gourmet to bring in more transparency and make supply chain more flexible. Dec 31, 2014 by PESTLEanalysis Contributor Cadbury is synonymous with chocolate consumption worldwide. Execution of the strategy and building a feedback loop, using which managers at Chocolate Hawkins can fine tune processes and strategies going forward. we specialize at providing professional PESTEL analysis & other strategic management MBA resources. Choosing the vision, mission and the reason of existence for Chocolate Gourmet. Temperature greatly affects the condition of the licorice; too much heat makes it heavy, while too much cold makes the candy lighter. At EMBA PRO, Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. - Foreign Exchange Rate Number of companies have incurred losses in past few years because of forex risk in Venezuela, Brazil, and Argentina. They include political policies and stability as well as trade, taxation and fiscal policies ". Mostly the unusual macroeconomic winds and generic challenges caused sales problems. - Transparency & Digital Drive Chocolate Hawkins can use digitalization of various processes to overcome corruption in the local economy. 2. - Consumer Protection Laws Chocolate Hawkins needs to know what are the consumer laws, what is the rate of enforcement, what is the attitude of authorities towards consumer protection laws, and what is the role activist groups in enforcement of consumer protection laws. 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. In highly hierarchical societies the power of decision making often reside at the top. Traceability: Technology such as barcoding, RFID (radio frequency identification), and blockchain are being used to enhance traceability of the chocolate supply chain, from cocoa bean to finished product. Available to download is a free sample file of the Chocolate Market report PDF. PESTEL analysis for the chocolate confectionery industry in Italy shows that there are 4 major factors impacting the overall market environment. Chocolate Gourmet can make strategies based on the stable political environment. Consumer consciousness regarding the health benefits of eating high-quality chocolate, which remains the key driver of the market. Business Analysis: Kirkland. E - Environmental. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. There are four major factors identified to capsulate the different factors found from the different environmental influences. At EMBA PRO, According to an estimate, Nestle, Dr. Pepper Snapple, Coca-Cola, Pepsi, and Danone recycle approximately 6.6% of the bottles annually. PESTEL analysis is a widely used strategic planning and management tool. The Industrial Organization (I/O) approach advocates that for sustainable competitive advantage external factors are as important as internal factors of the Chocolate Hawkins. As such, theyre looking to bring more good into the world by building thriving communities and becoming better stewards of the planet. 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. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. If youve ever enjoyed the classic Hersheys, Kit Kat, or Reeses Peanut Butter Cups, then youve been a consumer of the Hersheys Company. In 2002, growth in receipts outpaced volume gains for chocolate candy by 8.7 percentage points over the previous year. - Segregation of Political Responsibilities between Different Government Agencies There are numerous government agencies which reduces the risk of overwhelming pressure by one agency. 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By last estimates, the 8 Cadbury factories in the UK had employed 3,000 workers. - Immigration Policies and Level of Immigration What are the immigration policies of the country, what is the level of immigration, and in which sectors immigration is encouraged. Choosing the vision, mission and the reason of existence for Chocolate Hawkins. - Health & Safety Laws What are the health and safety laws in the country and what Chocolate Gourmet needs to do to comply with them. - Role Local Governments Play Local governments are highly influential in the policy making process and implementation as most of the policies and regulations are implemented by the local government as enforcement agencies mostly report to local government in their own states regarding various laws. The chocolate industry has to anticipate the outcomes of their business operations in such a way that are in abidance with the rules and regulations made by the government of the country. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Rocky Mountain Chocolate Factory, Inc.. - Per Capita and National Carbon Emission What is the per capita carbon emission of the country and what is the overall level of carbon emissions of the country. Here are 7 professional tips that can, Our General Mills SWOT Analysis examines internal and external factors that impact the company's operations, What is root cause analysis, the goal, and why is it important? For example Uber employment system is not consistent with French laws and it is facing challenges in the country. Definition of PESTEL / PEST / STEP Analysis. The snapshot of this . INTRODUCTION * Indian chocolates industry is growing at a rapidly18-20% per annum. Called consumer trips by the company, buying in stores went down by 2 percent that year. According to the date compiled by CNN Money, the Philippines is projected to be the fourth fastest in the world, that has a GDP at 6.7%. - Focus & Spending on Renewable Technologies How much of the budget is spend on renewable energy sources and how Chocolate Gourmet can make this investment as part of its competitive strategy. Some of the legal factors that may impact the chocolate industry in the UK include: Some environmental factors that may affect the chocolate industry in the UK include climate change and its impact on cocoa production, deforestation and habitat destruction in cocoa-growing regions, resource consumption and waste generation in the manufacturing process, and the environmental impact of packaging and transportation. Chocolate Gourmet can leverage this trend by expanding its product range and targeting new customers. Much of this gain in retail value could be attributed to a shift of U.S. consumers toward higher priced chocolates. - Types of Immigration & Attitude towards Immigrants Given the latest developments such as Brexit and Immigrant detention on Southern border of United States. Packaging: There is a growing demand for sustainable and eco-friendly packaging solutions, which has led to the development of new technology for biodegradable or compostable packaging materials. In this PEST analysis of Cadbury, we saw how this leading chocolate company has dealt with external factors in the UK and in many other countries as well. Journal of Economic Geography, 1 (4), pp.405 Norton, Marcy. The imposition of taxes is yet another political factor that will determine how Cadbury manages its investment and payment to shareholders. Economic Status. we specialize at providing professional PESTEL analysis & other strategic management MBA resources. Food safety and labeling regulations, such as those related to allergen labeling, nutritional information, and ingredient labeling. Chocolate Hawkins has stringent norms for health and safety norms so in emerging economies it may have to compete with players who dont have high cost structures that of Chocolate Hawkins. Technological Factors that Impact Digital Chocolate - Empowerment of Supply Chain Partners Chocolate Hawkins should analyze areas where technology can empower supply chain partners. Feel free to connect with us if you need business research. - Mobile Phone & Internet Penetration Chocolate Gourmet should assess the level of internet and mobile phone penetration in the country as it will it in building a requisite business model based on local needs and realities. Which dollar? If the legal system is not strong then Chocolate Gourmet can face numerous challenges from consumer petitions to shakedowns from authorities. The total retail value of the U.S. market for chocolate was estimated at $13.7 billion in 2002, a 10.2% increase from 1998. Its GDP in 2019 was $703.8 billion that represented 0.58% of the world economy (Trading Economics, 2020). The implication for Chocolate Gourmet is that it can boost sales of its product in short run but also expose Chocolate Gourmet to medium term forex and currency depreciation risks. - Attitude towards Authority Various cultures in different part of the world have different attitude towards authority. PESTLE The SWOT analysis for Lindt & Sprngli is presented below in a table followed by the detailed analysis report. Chocolate industry Presentation 1. - Attitude towards Authority Various cultures in different part of the world have different attitude towards authority. The Chocolate Market research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. In each of these locations, the sales were weaker. - Unrest within the Country & Chances of Civil Unrest We dont think that Chocolate Hawkins business operations are facing any dangers from any kind of civil unrest or internal militant operations in the country. "Tasting Empire: Chocolate and the European Internalization of Mesoamerican Aesthetics." The American Historical Review 111 (3):pp 660 Odijie, E.M., 2016. For example most of EU countries now want the EU citizen data to be saved in EU countries only. - Technology transfer and licensing issues for Chocolate Gourmet laws and culture of licensing of IPR and other digital assets should be analyzed carefully so that Chocolate Gourmet can avoid shakedowns and IPR thefts. Objective 3. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of The Hershey Company. Opening shop in the early 19thcentury, Cadbury has emerged as a global brand with factories and offices the United Kingdom and North America, and a notable presence in Asia and Africa as well. Know More 4. Being a specialty retailer of home dcor and gifts, their primary products are . This analysis helps businesses to make informed decisions and take advantage of opportunities while mitigating potential risks. But on the flip side it does increases both time and cost of doing business and getting certifications and clearances. - Intellectual Property Rights Protection Chocolate Gourmet should assess the level of protection that intellectual property rights get under the legal system of the country. Since then, the PESTLE analysis has become a popular strategic tool to assess the macro environment of organisations . Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. Theyve adapted Microsoft-powered artificial intelligence (A.I) in their Pennsylvania factory. Net sales ($1,751.6 million) were an increase of 5.3 percent. Published by HBR Publications. INDUSTRY ANALYSIS PESTEL Analysis Economic Factors The Philippine economy is progressively increasing according to the World Bank Org. Although the company is clearly attempting to bring social good into the world, it doesnt stop them from blaming consumers when sales are declining. - Level of Acceptance of Technology in the Society Chocolate Hawkins has to figure out the level of technology acceptance in the society before launching new products. Hersheys has experienced a fair bit of controversy. Developing strategies that can capitalize on Chocolate Gourmet strengths and help mitigate weaknesses and impact of threats of macro-environment. This PEST analysis of the Hershey Company examines these issues, as well as their relationship with consumers and the use of cutting-edge technology. It requires less temperature and energy to produce (unlike non-raw chocolate), and thatll also bring a smile to the faces of eco-friendly consumers. - Political Governance System Based on the information provided in the Digital Chocolate case study, it seems that the country have a stable political system. 5. It should evaluate the e-commerce infrastructure, technology infrastructure etc before entering a new market. In 2015, the Hersheys Company surfed upon a sea of negatives. 4. Technology is fast disrupting business models across various industries. Digital Chocolate case study PESTEL analysis includes macro environment factors that impact the overall business environment Political, Economic, Social, Technological, Environmental, and Legal factors. 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. One way to start is by closely mapping the changes in consumer buying behavior and emerging value proposition. Government policies: Taxation, trade policies, and regulations can impact the cost of production and distribution of chocolate products, affecting the profitability of the industry. What is PESTLE Analysis. It first sold its items in United States in 1905. Glenn Carroll, Greg Powell (2018), "Note on the U.S. Chocolate Market Harvard Business Review Case Study. The Hersheys Company hasnt adopted this approach just yet, likely because it would increase costs. Quality control: Advanced technology such as spectroscopy and X-ray analysis are used to improve the quality and consistency of chocolate products. In doing so, theyre committed to being more transparent about the ingredients. Published by HBR Publications. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. Save my name, email, and website in this browser for the next time I comment. We at EMBA Pro believe that in near future the sector most disrupted by technological innovation is manufacturing and production. Cadbury 11. - Foreign Exchange Rate Number of companies have incurred losses in past few years because of forex risk in Venezuela, Brazil, and Argentina. PESTLE Analysis for Cannabis Startups PESTLE is the acronym for a framework which analyzes the Political, Economic, Social, Technological, Legislative, and Environmental (mostly in the ecological sense) factors that have direct and indirect impacts on a business. Those that cant afford it are also a problem because well, theyre not buying the chocolate. Like with most food products, the major multiples have substantial buying power, and often buy directly from chocolate manufacturers. - Transition of Government and Changes in Policy There is consistency in policy making from one government to another. - Likelihood of Entering into an Armed Conflict From the information in the Digital Chocolate case study, I dont think there is a likelihood of country entering into an armed conflict with a neighboring country. Experience economy is one of the fastest growing segments both among millennials and among baby-boomers. Indeed, retail sales of chocolate in the United States had experienced a steady increase in recent years. 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. Major Players 8. Amul Chocolates also . Some of the political factors are governance system, democracy & institutions, military coup chances, probability of armed conflict, law and order in market etc. Sep 2014. Linda A. Hill, Alison Berkley Wagonfeld (2018), "Digital Chocolate Harvard Business Review Case Study. Higher inflation may require Chocolate Hawkins to continuously increase prices in line of inflation which could lead to lower levels brand loyalty and constant endeavors to manage costs. By 2008, the company had expanded its operations into four countries and Digital Chocolate was one of the top developers of soloplayer games for standard mobile phones and iPhones. - 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. Many nutritionists recommend people to reduce their consumption of chocolate and candy, which is likely to affect Cadbury sales in the future. 1. - Level of Consumer Activism Regarding Environmental Concerns Chocolate Gourmet needs to know the level of consumer activism regarding environmental concerns is. One such act is called Shared Goodness; the company promises to keep communities, children, and the planet aligned with their business. In 2009, Hawkins was eager for Digital Chocolate to start developing new types of mobile games that could be played by multiple players over a period of time. - Price Fluctuations in both Local and International Markets Compare to the level of quantitative easing in last decade the prices of Chocolate Gourmet products and prices of overall products have remained sticky in the US market. 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. Cost Based Pricing could be a bad strategy under such conditions. operates in a complex and dynamic environment characterized by regulatory changes, growing environmental activism . Developing strategies that can capitalize on Chocolate Hawkins strengths and help mitigate weaknesses and impact of threats of macro-environment. However, the stringent restrictions on the entry of skilled workers from rest of Europe can affect Cadburys hiring decisions in the future. - Attitude towards Health & Safety The attitude towards health and safety is often reflected in the quality of the products and cost structures of manufacturing processes. Hersheys has dedicated commitments in social responsibility. Chocolate Gourmet should consider the fact that at deficit levels of United States in an emerging economy can lead to rampant inflation and serious risks of currency depreciation. - Gender Composition in Labor Market Chocolate Hawkins can use gender composition of labor market to understand the level of liberal nature of the society, women rights, and womens say in matter of societal issues and consumption decisions. Introduction PESTLE ANALYSIS and 5 FORCES ANALYSIS CHOCOLATE CONFECTIONERY PESTLE Analysis Although it has been nearly 4 years since the destruction of the twin towers in the US, terrorism remains a very real threat in much of the world, and a powerful political and economic influence on business. Legal factors often govern conditions to enter the market, laws to operate in the market, and procedure to resolve any dispute with other stakeholders. In one respect, Cadbury was born as a result of social factors. - Attitude towards Leisure Chocolate Hawkins should conduct an ethnographic research to understand both attitude towards leisure activities and choice of leisure activities. All Rights Reserved, Twitter PESTLE Analysis: 6 Notable Factors Affecting the Social Network, How to Pursue a Career in Cybersecurity: 7 Professional Tips to Follow, General Mills SWOT Analysis: 3 Opportunities to Gain Competitive Advantage, Root Cause Analysis: An Easy 6-Step Complete Guide, Mayo Clinic SWOT Analysis 2023: Healthcare Business Checkup, 3 Top Tech Tools for the Modern Commercial Contractor. Our Twitter PESTLE analysis highlights the external factors, like political, economic, social, and technological ones, Cybersecurity is an increasingly important field of work. 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. It speaks out against child labor and slave labor, while also using sustainable practices for the environment. Recent moves in this regard include the use of pathogen testing systems and filing patents for heat-resistant chocolate. These factors are Political, Legal, Economic and Social. If other business units follow suit, this can result in a loss of hundreds of jobs across the globe. Kurien, the cooperative society makes milk and various milk products like curd, cheese, milk powder, cheese spread and chocolate amongst others. Two giants dominated: Hershey's controlled 32.6% of the market and Mars had 29.6%. The PEST analysis looks at four types of external environmental elements: P -Political factors in an economy include various forms of government intervention and political lobbying, such as . View. -Efforts to reduce consumption of water and energy and optimize transport routes. - Societal Norms and Hierarchy What sort of hierarchy and norms are acceptable in society also influence the types and level of consumption in a society. Foreign currency exchange rates were insignificant in the second quarter. The three inter-related environments are industry environment in which the company operates in, the geographic market or country in which company operates, and wider socio economic / macro environment. SWOT analysis of Amul Chocolates. Market share was divided among mass-market, gourmet, and cause-related manufacturers. Political environment and other factors not only impact the cost of doing business but also long term sustainability. 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 . Required fields are marked *. 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. However, the GDP is expected to slow down in both 2020 and 2021 and bounce back in 2022. PESTLE analysis of chocolate industry in JAPAN. According to Michael Porter organizational performance is to large extend determined by various industry forces. PESTLE analysis. 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. Mars Incorporated. This is an out-of-the-box usage of technology that hands Hersheys a competitive advantage. 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. It is an acronym for political, economic, social, technological, environmental and legal factors that shape the macro business environment. Lindt PESTLE Analysis By last estimates, the 8 Cadbury factories in the UK had employed 3,000 workers. . Intellectual property laws, such as those related to trademarks and patents for unique chocolate products or manufacturing processes. This technology could be adopted for Hersheys other products, particularly with chocolate. PESTEL Analysis, SWOT Analysis and Risk Analysis of Egypt Egypt PESTEL Analysis This report covers Egypt 's PESTEL (political, economic, social, technological, environmental and legal) analysis. Political Factors: " These factors determine the extent to which government and government policies can affect an organisation or a particular industry. Expert Solution. It is written by Linda A. Hill, Alison Berkley Wagonfeld and shed light on critical areas in field of Organizational Development, Creativity, Entrepreneurship, Leading teams, Product development that the protagonist in the case study is facing. 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. - Role Local Governments Play Local governments are highly influential in the policy making process and implementation as most of the policies and regulations are implemented by the local government as enforcement agencies mostly report to local government in their own states regarding various laws. For example as the population of USA and EU is growing old the demand for products mostly catering to this segment will grow. Employment laws and regulations, such as those related to minimum wage, working hours, and health and safety. For internal factors, check out the swot analysis of the UK. Analyze the Chocolate Hawkins external competitive environment to identify opportunities and threats. Australia is one of the world's most advanced developed countries mainly because of the economical strengths. The gender composition of labor market is a good indicator of disposal income of household, priorities of the households, and related needs. PEST is an acronym for Political Economic Social and Technological factors which are used to assess the market for a business. - Laws regarding Monopoly and Restrictive Trade Practices As a new player Chocolate Gourmet shouldnt be worried about the monopoly and restrictive trade practices law. Environmental regulations, such as those related to waste disposal and sustainable sourcing of cocoa and other ingredients.