Confections Industry Structured? What Are

¶ … confections industry structured? What are the three to five most important structural characteristics of this industry? The confectionery industry is structured into three major categories, as follows: Chocolate products Non-chocolate products, and Gum products. By far, the largest generator of sales -- and as such the largest manufactured quantity -- is constituted by chocolate products. This simple division of the industry into three sectors is given by the creation of industry categories based on the main ingredients used in the manufacturing of the analyzed products.

Another structural characteristic is represented by the seasonality of the confectionary products. This specifically refers to the existence of several moments throughout the year when the demand for the confections products increases -- such as Valentine's Day or Christmas. This seasonality generates increased sales rates for the companies specialized in products specific for those times of year. Finally, a third structural characteristic is constituted by the origin of the cocoa beans from regions such as the Ivory Coast, Ghana, Indonesia or Nigeria. 2.

What is competition like in the confections industry? Is this industry highly competitive? Why or why not? The competition in the industry is extremely intense and this is due to a series of reasons. At a first level, the high levels of competition are generated by the fact that the demand for gourmet products within the modern day societies increases as a result of both efficient marketing, as well as the health benefits of chocolate. As the demand for these products increases, so does the offer.

At a secondary level however, it has to be noted that the offer increases at higher rates and in a quicker rhythm than the demand. This situation occurs as more economic agents recognize the potential for financial gain in the industry and enter it. The result is that of a wide array of providers from which the customers to choose those that best serve their needs. Ultimately then, competition intensifies. 3. What are forces or trends are driving change in the industry? Which ones are the most important? Explain.

Similar to any other modern day industry, the confectionary industry undergoes a series of modifications, due to a series of challenges, such as changing consumer demands, changing demands from the public which requires economic agents to operate in a more socio-environmentally responsible manner, changing economic climate which influences customer purchasing powers and so on. Competition is also an important driver of change as it forces economic agents to develop and implement strategies for improvement, or otherwise face the risks of losses as they become uncompetitive.

Also, seasonability -- discussed throughout the first section -- impacts the industry. The following are also noteworthy as drivers of change: The increase in obesity and diabetes and the more attention placed on heath The increasing demands and pressures from consumers, who insist on higher levels of business responsibility Increasing presence of specialized products and the development of niche markets. 4.

Which companies are in the strongest position? Which companies are in the weakest position? Two undisputable leaders of the confectionery industry are represented by the Hersheys Foods Corporation and by Nestle. Both of them are however characterized by the fact that they are large size companies, which operate in numerous sub-fields of the foods industry, without being actually specialized in chocolates and gourmet sweets. The Rocky Mountain Chocolate Factory is on the other hand a less powerful competitor within the industry, but it does reveal potential.

"I must admit I'm intrigued by Rocky Mountain Chocolate Factory. While the company's clearly not a Hershey in scope, and despite its share price having been essentially flat over the past year, I would venture that its debt-free balance sheet and its earnings growth will stand it in good stead going forward" (Case 22). 5. What moves are rivals likely to make next? In terms of what the future would bring about, two scenarios are plausible.

On the one hand, the future could integrate various efforts towards the development of new products, which stand more chances of serving a wide array of consumer needs. On the other hand, there is the external possibility of confectionary manufacturers engaging in operations of mergers and acquisitions in order to better consolidate their competitive positions within the market. 6. What are the key factors for success? Success in the highly structured and dynamic confections industry is pegged to a series of elements.

First of all, there is the high quality of the products offered, without which the loyalty of the.