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Chocolate Industry in Central Europe, Case Study Example

Pages: 5

Words: 1355

Case Study

This case study will review the Central European chocolate industry.  The attention of the report was directed towards one of the Central European chocolate manufacturing leading concerns.  Lindt &Sprügli.  An analysis of the Central European chocolate industry along with one of its industry leaders, Lindt &Sprügli will be conducted by the application of a Porter’s five forces analysis which will analyze the strengths, weaknesses opportunities and threatsof the Central European chocolate industry from a political, economic social and technological perspective.  The works of Johnson (2013), Lindt (2015), Shotter (2013), Shotter&Massoudi (2014) and Wiggins (2009) were accessed.

Case Study of CentralEuropean Chocolate Manufacturers

The Sprüglifamily established chocoadefabrickenLindt&Sprügli AG over 170 years ago. The Lindt&Sprüglibrand is one of the most respectedCentral European Chocolatemanufacturers. The Lindt and SprügliAG chocolate manufacturingfacility is one of the global manufacturers of chocolate related and chocolate products.  The Lindt&Sprüglichocolateproducts are marketedglobally in over eighty nations.  The Lindt&Sprüglichocolate manufacturing organization is headquartered in Switzerland  and they manufacturers a number of their products in Austria, Italy, France , Germany and the United States The products that are manufactured by Lindt&SprügliAG include Golden bunnies, Excellence, Gift boxes, chocolate bags and chocolate bars (Lindt, 2015).

Switzerland is one of the leading consuming nations with respect to chocolate. The peopleofSwitzerland consume approximately 25.6 pounds of chocolate annually percapita. The amount of chocolate that is consumed in Switzerland by the Swiss provides a substantially sized market for Lindt&Sprungli.  In addition, Switzerland has one of the most elevated standards of living in the world. These characteristics are some of the qualities that promote the consumption of premium chocolates. The chocolatemanufacturers in the Central Europe area sustain the quality and the prestige of the brand in order to enhance their market share. Switzerland is a neighbor to a number of countries that have high per capita consumption indexes of chocolate. These nations include Italy, France, Austria and Germany (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter&Massoudi, 2014; Wiggins, 2009).

In Switzerland, food is a substantial part of the cultural expression. Dairy farming has always been integral in Switzerland. Dairy farming is an integral part of the activities in the neighboring nations of CentralEurope. In Switzerland, chocolate consumption has a cultural significance. These qualities have created a resilient and permanentconsumer market base for the Swiss chocolate manufacturing concern.  The infrastructure of Central Europe is well developed which enables the Lindt&Sprügli organization to effectively develop its home market (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter&Massoudi, 2014; Wiggins, 2009).

PEST

Political

Switzerland is similar to many of the Central European nations. It is a highly stable area which a parliamentary and democratic government. Thesecharacteristics aremutually maintained between many of the Central European nations. The authority system is stable and Centralized in Switzerland. There are free trade organizations and a unitary currency. The environmental conditions enable the chocolate manufacturers to prosper in CentralEurope (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter&Massoudi, 2014; Wiggins, 2009).

Economic

The people of Central Europe and Switzerland have a comparatively high living standard. The inflation rate is low and theCentral European economies are among the most competitive economies in the world.  The Lindt&Sprungli organization outsources a number of its functions to the neighboring Central European nations due to the attribute of lower wages. This characteristic provides a boost to the marketing endeavors of the Lindt&Sprügliorganization. The expansion of its manufacturing facilities into other European nations has enabled the Lindt&sprungli organization to remain extremely viable during the most severe economic crises (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter&Massoudi, 2014; Wiggins, 2009).

Social

The people of Switzerland enjoy consuming high quality, high end luxury goods. The people of Switzerland are peaceful, loyal and cultured. The social culture of Switzerland encourages the maintenance of extended term relationships with the concerns (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter&Massoudi, 2014; Wiggins, 2009).

Technology                                                    

The nation of Switzerland is extremely advanced in terms of technology and science.  Switzerland is acknowledge as being one of the most inventive nations on the face of the globe.  This technologically friendly perspective has been one of the motivating forces that have enabled the Swiss to conceive more efficient manufacturing methods.  The perspective of the application of technology in order to increase production efficiency has been one of the factors that has facilitated the growth ofdomestic and international markets for Swiss chocolates (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter&Massoudi, 2014; Wiggins, 2009).

SWOT

Switzerland is an economy that possess a robust financial position in comparison to other nations.  In addition, the brand of Lindt&Sprügliis a strong brand that has been around for over 170 years. The history of Lindt&Sprüglihas enabled it to receive a high level ofbrandloyalty from its consumers.  Lindt&Sprüglialso applies excellent packaging and has great taste. These qualities have enabled Lindt&Sprügli to become world renowned as one of the global chocolate brands. Considering that Lindt&Sprügli is a Swiss owned company, the manufacturing processes are continually being renovated and innovated (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter&Massoudi, 2014; Wiggins, 2009).

Weaknesses

The Lindt&Sprüglibrand of chocolates are expensive. In addition, the Lindt&Sprüglichocolates are scarce in the majority of the world. The distribution chain could be amplified, however, considering that the European chocolate market is well developed, the expansion of the distribution lines may be difficult (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter&Massoudi, 2014; Wiggins, 2009).

Opportunities

The Central European chocolatemanufacturers which include Lindt&Sprügli AG can access the markets in the growing global cities. The Central European chocolate manufactures can also provide smaller gift boxes and add variety to their product lines. The market that is directed toward those who wish to live a sugar free healthier lifestyle could be accessed to a greater extent. The Central European chocolatemanufacturers can horizontally and vertically expand into the marketing of coffee and cakes (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter& Massoudi, 2014; Wiggins, 2009).

 Threats

There are number of Central European brands that are competing for market share. There are many people who have become more calories conscious who are not attracted to chocolates (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter& Massoudi, 2014; Wiggins, 2009).

Recommendations

Considering the strengths of the Lindt&Sprügli organization and the brand name, the organization has the potential of addressing the opportunities and challenges that are presented by the following methods. The Lindt&Sprügli organization can apply the strength of its well established global chocolate brand and Swiss innovation in order to devise chocolates that are low in sugar and calories. This can be accomplished while maintaining the taste that has made the Lindt&Sprüglibrand famous over the past one hundred and seventy years. The Lindt&Sprügli organization can apply mufti faceted approach in order to increase the availability of the chocolates that it markets and manufacturers to consumers worldwide (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter& Massoudi, 2014; Wiggins, 2009).

The consumers are constantly seeking smallergiftpackages. The Lindt&Sprüglichocolate manufacturing organization can apply innovation in order to create small and innovative chocolate gift packages.   Notwithstanding that the global economy is experiencing difficult times, the Lindt&Sprügli organization in addition to the chocolate manufacturing industry have the capacity for futuregrowth. This is attributed to the increasing population density. In addition, the global demand for luxuryitems that include high end chocolates is growing. There is a growing awareness of the perils of genetically modified soy products. Consequently, Lindt &Sprügli can manufacture and advertise on their products labels that their products are free from genetically modified soy (Johnson, 2013; Lindt, 2015; Shotter, 2013; Shotter& Massoudi, 2014; Wiggins, 2009).

Conclusion

Considering the information that has been researched and formulated into the PEST and SWOT analysis, Central Europe has an important participation in the production of chocolate. The strengths of the global brand Lindt &Sprügli are testaments to the viability of the European chocolate industry. Lindt &Sprügli are among the most well established chocolate manufacturing concerns in Central Europe. One hundred and seventy years after its inception, Lindt &Sprügli continues being one of the global manufacturers of chocolate.

References

Johnson, S. (10 March 2013). Swiss chief reveals ‘family’ secret. Financial Times.

Lindt. (2015).Chocolate making is an art! Lindt.

Shotter, J. (20 August 2013). Lindt &Sprügli chews over 9% sales rise at halfway. Financial Times.

Shotter, J. & Massoudi, A. (14 July 2014).  Lindt wraps up purchase of US chocolate box maker Russell Stover. Financial Times. 

Wiggins, J. (17 March 2009). Lindt closes lid on most of its US stores. Financial Times.

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