The Market Environment for Donald B-Free-Samples for Student

Question: Discuss about the examines the market environment for Donald B'. Answer: Introduction: The topic basically examines the market environment for Donald B' that operates through wholly-owned stores in Melbourne. It currently produces chocolates containing milk ingredients. The success that they have achieved so far, had encouraged the management to think of expanding the business to get better exposure to a much wider market and hence, the revenue growth. Plans are in place to move to other parts of Australia and also in different other markets at the global level. The study is purposefully aimed at understating the various factors which can potentially influence the business both in positive and negative ways. Such factors do lay the foundation of strategy making which is important prior to any such business expansion. The study covers the background information on the topic, both macro micro-environmental analysis, competitor analysis and the consumer behavior for chocolate confectionery. Background: Donald B is a Melbourne based company which is specialized in chocolate making. They have their existence limited just to two wholly owned stores in Melbourne; however, they have been a potential choice for customers in areas where the stores are based. Chocolate related products are expected to be much in demand in Australia in the nearing future. There are several factors like the market trends and foreign chocolate brands entering in Australia, which is making up the platform. People are now educated about the benefits and the harmfulness of having chocolates. They have pre-established beliefs on the benefits of having milk. Additionally, chocolate is now identified as good for health. This is for such reason milk chocolate is more preferred over other types of chocolates like the dark and white chocolates (Vecchio Annunziata, 2015). The other trend which is helping the chocolate industry to grow is an incrementing participation of foreign brands such as Nestle, Krafts Foods, Ferrero Group and others which are entering Australia (Gallo, Antolin-Lopez Montiel, 2018). The entrance is helpful in regards to the trend as people get to know the various flavors offered by a number of different chocolate making companies. This is also true that the increasing number of companies will possibly enhance the market competition as customers have wider options and can easily find the best taste for their desire (Gallo, Antolin-Lopez Montiel, 2018). The best taste can be from any brands which are why it is necessary that brands compete with each other in producing best taste to customers. This also means that the Australian chocolate manufacturing business will have enhanced competition and hence, there is very less place for any operational flaws from competitor companies (Hackenesch, 2017). Macro-environmental Factors: Political- There have always been government involvements in the chocolate making industry. The involvements were being majorly due to the harmfulness of excessive consumption of chocolates. Chocolates if being consumed excessively can supply the calories more than 250 which is as identified at the universal level, is not good for health (Miah et al., 2018). Calorie intakes in excessive amounts may contribute to obesity which is not less than an epidemic in the global societies. Likewise, the Australian government has more or less the same attitude for chocolates and related products. They have kept on discouraging the excessive consumption of chocolates as these are rich in calorie. There have been a few health-related campaigns and media reporting also where excessive consumption of chocolates has been publicized as harmful to health (Elliott et al., 2014). Moreover, common people are now concerned with the fact which is also evident in the current market trend for chocolates. The current market trends have been very good for chocolates made with milk ingredients (Elliott et al., 2014). The government is also appreciating the moves of reputed chocolate manufacturing companies like Nestle and Mondelezs Cadbury for supporting the cocoa producers and the child labor. The major manufacturers have now decided to make cocoa oriented chocolates, so that, farmers get ample of demands for cocoa. They are also discouraging deforestation which is another important po int for a sustainable cocoa production (Glin, Oosterveer Mol, 2015). Economic The Australian market has been one of the favorite choices for reputed chocolate brands like Cadbury and Nestle across the globe. This simply means they have favorable factors in the country both from the customer and the government perspectives (Soosay et al., 2016). A deal between Cadbury and Kraft in the past does also indicate the very same fact (Ausfoodnews.com.au, 2018). Both are globally renowned companies in different domains. The deal validates a few points which are also good for the case study company. First and foremost, it speaks of the government supports which have been encouraging in Australia. Afterward, it also indicates the market potentials which are making such deals to happen. After then, consumer behavior has also been very encouraging and helping for chocolate manufacturing companies (Soosay et al., 2016). Such facts just validate that the case study company Donald B is expected to get potential growth options in Australia. Social People are now educated and have the proper idea of health-related facts of chocolates. This is for such fact; the market trend is more in favor of chocolates being made from milk ingredients. Afterward, they prefer having dark and white chocolates (Schouteten et al., 2015). It is also expected that the chocolate consumption will increase in the nearing future. This is because customers are now aware of the safe level of consuming the chocolates. They also know that having a chocolate made of milk ingredients is advisable instead. Hence, they now have fewer worries and more excitement for chocolates (Schouteten et al., 2015). One more factor is quite admirable, which is the incrementing trend of customers for various kinds of stores like the Hypermarket Supermarkets, Chocolate Boutiques, Convenience Stores, Online Retail and others. It means the case company Donald B has better opportunities to reach to a wider customer base (Alberts Cidell, 2015). Technological A supportive environment is now available to the research development (RD) process in Australia. The existing chocolate leaders have been able to identify the sustainable resource for chocolate making. This is why the Australian chocolate industry is now switching over to cocoa largely (Afoakwa, 2016). By doing so, they are not actually proving their stand for healthier chocolates but, in another way, they are also supporting the farmers of cocoa. They are actually benefitting them in several ways like they are being able to produce a much better chocolate from the health perspective. Additionally, they are also proving their stand for corporate social responsibility (CSR) which is a growing concern for the local government and also the common public (Cole, 2014). Donald B may expectedly be able to explore the RD practices, so that, it manages both the direct and the indirect competition. Environmental Cocoa production has long been associated with environmental harms like soil erosion and then forest deforestation. When soil erodes, it makes soil less fertile for cocoa (Thakur Dillon, 2018). This is a real challenge as from where more lands for the cultivation of cocoa trees will be managed. However, an improved mixing of advanced technologies can help to prevent potential harms to the environment (Thakur Dillon, 2018). This is also good from the perspective of case company as they are considering switching over to cocoa. The advancement of cocoa production will mean a sustainable supply of cocoa which is necessary to further the business in the chocolate industry (Thakur Dillon, 2018). Legal According to the Fair Labor Association, the minimum age of labor for hazardous work is 18 (Toffel, Short Ouellet, 2015). Chocolate companies including the major manufacturers like Nestle could not avoid using children under the allowed minimum age limit for hazardous works, in its supply chains for so many years. This means the case company needs to prove its stand in terms of CSR (corporate social responsibility) which is a challenge considering the fact that child below the minimum allowed limit is still being employed for hazardous works in cocoa production. However, the Australian major chocolate brands have announced their commitments for abolishing the child labor in the cocoa growing industry (Toffel, Short Ouellet, 2015). Micro-environmental Factors: Bargaining power of suppliers Bargaining power of suppliers in the chocolate making industry is high. The Australian chocolate making industry imports only the premium quality of cocoa and hence is required to pay a high amount for it. They are not able to get the premium quality cocoa on their desired quotation for the price (Wessel Quist-Wessel, 2015). However, the situation may be different in the nearing future as the reputed chocolate brands in Australia have announced to import cocoa only from the region that guarantees of sustainable cocoa production. Moreover, a sustainable cocoa production does also mean not exploiting the child labors. Hence, the reputed chocolate brands in Australia may have a much-improved control on their suppliers (Wessel Quist-Wessel, 2015). Bargaining power of customers Customers are always the driving factor in business. Likewise, they are also driving the chocolate industry in Australia. They have different preferences distributed distinguishably in the, unlike age groups. They are also aware of the fact that chocolates made of milk ingredients with fewer calories in it can be healthier (Nakamura et al., 2015). However, cultures relevant to chocolate consumption can be created. There is a population who just cares about the taste while less bothering the after effects. These are mainly the children in the age group of (6-12) years and the teenage people. In such situation, manufacturers drive the market with the distinguished variety of taste (Laureati, Bergamaschi Pagliarini, 2015). However, parents who are aware of the chocolates and its relevant after-effects, they may take a step to prevent their kids from consuming excessive of chocolates. Threat of new entrants Threat of new entrants is also high. However, the level of risks may vary depending on the market segment where the business operates. Threat may be severe in the mass market where globally renowned brands like Nestle and Cadbury operates. However, this may be comparatively lesser in mid-market where all SMEs operate (Booth Whelan, 2014). This is good for the case company Donald B as it has plans to enter the mass market. As threats are higher, the case company will face fewer challenges prior to entering the market. However, this also means that there will be more such new entrants in the market. The number of entrants will enhance the level of competition in the target market segment. The case company may be competing with the globally renowned names and some other potential names in future. Threat of substitutes Threat of substitute is also high. This may be severe also as chocolate manufacturers have the minimum or probably no idea of the substitute threats (Mialon et al., 2016). The threat needs to be countered, so that, chocolate manufacturers can have potential business in Australia. There is a need for a highly integrated management information systems, so that, required data could be collected from other industries and its relevant products. This may really help in identifying the possible threat of substitutes (Mialon et al., 2016). Competitive rivalry Competition is very high in the Australian chocolate industry. In the mass market, there are competitors like Mondelez (Cadbury), Mars, Ferrero, Haigh's, Nestle, Lindt and others (Wellard et al., 2017). The mid-level market is also occupied by various chocolate brands. A switching over to the mass market will require strategic capabilities to remain competitive. The case company Donald B will need to have effective strategies planned before it actually enters the mass market. The company is in the mass market will have indirect competition from renowned names like Nestle, Cadbury, and Lindt. This is why it is important that they take care of materials supply and the manufacturing capabilities, so that, quality chocolates could be offered to customers (Wellard et al., 2017). Direct Indirect Competitors: The case study company will face indirect competition from renowned global names like Nestle, Mondelez (Cadbury), Ferrero, Haigh's, Lindt and others. The company will need to do a lot in order to stay stronger in front of the competitors. They need to maintain effective relationship with suppliers. There is a need to use sustainable cocoa products to manufacture the varied kind of chocolate products. Advanced technologies should also be used to improve its product quality and to draw the customers attention. It is indeed challenging to draw the customers attention as there already exists, a few of the world-renowned names. Technology will also be required to enhance the capability of management information systems, so that, the threat of substitutes from other industries could be tracked. A close monitoring of the market trend for taste-related change and also the consumer behavior will also be the need (Serra Kunc, 2015). Analysis: The analysis clearly indicates that Donald B has a better platform in the form of mass market to enrich its business. However, it is expected to face tough challenges from established globally renowned brands like Nestle, Cadbury, Lindt, and others. Those established brands have their customers in the mass market which means Donald B' is certain to face the utmost challenge for producing its own customer base. For doing so, the case company needs to take care of innovative strategies which are required at the various level of operation. Innovation is required while managing a healthy relationship with the suppliers. It is also needed to identify who will be the ideal list of suppliers fulfilling the needs of the case company. Technological innovation is needed while during the manufacturing process, so that, improved taste could be delivered. They need to have the effective and innovative marketing strategies, so that, required hype could be created. Donald B has its customers in the mid-level market where they currently operate. Consumer Behaviour: Consumer behavior for chocolates can be understood from various factors like the current statistics showing the recent performance of the industry, the age brackets that prefer chocolates and others. According to the Roy Morgan Research, Australians are now consuming more chocolate that they were in 2013 (Ausfoodnews.com.au, 2018). Roy Morgan Research in 2016 had found approximately 68.4% of population ate few types of chocolates in an average four weeks. This is much more than the number of people consuming any type of chocolates in 2013 (Ausfoodnews.com.au, 2018). The increment is close to 2.6% (Ausfoodnews.com.au, 2018). Australians love to have the chocolate bars which are the most popular choice of the chocolate type. Approximately around 53.2% of the entire population love eating the chocolate bars. It is followed by 41.8% who like to consume the chocolate blocks (Ausfoodnews.com.au, 2018). Another 19.2% of the total population love eating the boxed chocolates (Ausfoodnews.com. au, 2018). From the aforesaid discussions on the eating habits of the Australians, it appears a growing trend in any type of chocolate consumption. There is a much better forecast in the nearing future. Consumers have now access to the internet and the available articles on the websites. They are now able to understand a bit about the harms and benefits of eating chocolates (Kakkos, Trivellas Sdrolias, 2015). The rising cases of obesity could have been a potential threat to the industry; however, the industry has strategically mitigated the threat to some extent. The industry has offered customers a varied range of chocolate options like made of milk ingredients. The fact that milk is good for health, it started to draw the attention of customers to the fact. A few related articles on websites supporting the consumption of chocolates by also citing its benefits have worked in favor of the business (Kakkos, Trivellas Sdrolias, 2015). The Australian chocolate and confectionery market remained resilient during the economic struggles due to investments in product development. According to the IBIS Worlds report, the chocolate and the confectionery manufacturing business in Australia have overcome the unstable commodity prices and enlarged import rivalry. They have done it by investing in NPD (Ibisworld.com.au, 2018). The report further adds that a rise in healthy substitute products has further boosted the industry. It has encouraged chocolate makers to offer customers the chocolates that add nutritional values to their life. The chocolate manufacturers had needed to use innovative strategies to respond to the changing perception of customers (Byrd?Bredbenner et al., 2015). They had rightly done the same which is also evident in the types of chocolates that are available in the market. Renowned names in the chocolate industry like Nestle and Cadbury had to use product innovations, strong brand loyalty, and aggressiv e marketing to respond to the changed consumer behavior (Byrd?Bredbenner et al., 2015). Age bracket does also matter a much in the chocolate industry. The children who are in the age group (6-12) have little or perhaps no concerns for healthy chocolates. They just need the varied range of tastes that they could experience in different moods. However, they are largely dependent on their parents for getting their favorite chocolates. Hence, if their parents are educated then they may try and prevent their children from consuming the chocolates. However, doors are always open for healthy chocolates which parents would also buy for their children (Solomon et al., 2014). The case example does very well support a fact that to have a sustained business in the chocolate and confectionary industry, it is imperative to use innovative strategies, so that, aspects of health benefits could be enhanced. Customers in their teenage may be the best customers for chocolates considering a fact that they prefer taste over anything (Solomon et al., 2014). Customers in the age bracket (20-35 ) may be developing the various changes in regards to product-related sense. Hence, they may be a good observer of health-related effects of what they consume (Ashman, Solomon and Wolny, 2015). Customers in their maturity level are the potential observers of what they consume. Chocolate making companies need to take innovative strategies if it targets them as their customers. Innovation will indeed help to deliver a health-oriented product (Ashman, Solomon and Wolny, 2015). Bibliography: Afoakwa, E. O. (2016).Chocolate science and technology. John Wiley Sons. Alberts, H. 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