Threat of substitutes: High Divine Chocolate substitutions may be categorized into two types: general substitutes and specific substitutes. Consumers have many choices in terms of general substitutes for instance chocolate brands such as Mars, Nestle or other type of snacks. A threat of substitutes is relatively high as we have a lot of non-chocolate snacks e.g. fruits, cereal bars,superfood. Bargaining power of buyer: Low If we consider two types of buyers, general chocolate buyers and specific chocolate buyers. General chocolate buyers do not pay much attention to environmental friendliness or fair trade of products. However, we aim at the specific, concerned buyers whom are conscious about sustainability therefore we will have low bargaining power. Building a loyal customer base is crucial for to stay profitable.So,customers need to become aware of the benefits of purchasing their product so they will not buy substitute products for a lower price. Bargaining power of supplier: High Bargaining power of suppliers is very important factor to be considered in any industry as they are the main strength of the company. As 44% of stake in Divine Chocolate belongs to
Case Study 3 Team 1 IMM-16 cocoa farmers, due to this fact, it will be disruptive to move from one supplier to another, that is high switching costs to the company. Rivalry level:High Divine Chocolate operates in an industry that is very competitive, which has large number of players. Key competitors of chocolate in France are ‘Ferrero’, Mars, Nestle. While, taking into account economic base of its fair trade competitors like Callebaut ’ s Organic and Kaoka, Divine faces competition from both industry players. The rivals easily diversify their product ranges so they can appeal to different sets of consumers. As such, Divine will have to come up with some unique tastes as well as quality so as to compete with rivals. 2.3 VRIO In order to be successful a company needs a sustained competitive advantage. To find out, how you can reach such an advantage, companies need to analyse their internal resources, therefore the VRIO framework can be used. VRIO stands for valuable, rare, imitability and organization. These represent the attributes the resources need to possess. A resource should therefore be valuable, rare, imperfectly imitable and non-substitutional. 1 Now we can check if Divine Chocolate Ltd. has a competitive advantage. First question: Are the resources from the Divine valuable? Does the product e.g. Chocolate enable the firm to exploit opportunities or defend against competitors? → YES, unlike their competitors Divine Chocolate Ltd. is producing certified fair-trade products. Moreover, the company helps farmers in West Africa to improve their living situation and gives them perspectives for a better future through financial investment e.g. community development projects. By offering fair-trade products to customers, they help to strengthen the growing social and environmental awareness. Through fair-trade products they can reach an increasingly growing customer group and a higher price due to the fact that fair-trade products are often more expensive than average products.
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- Fall '16
- Marketing, Divine Chocolate, Divine Chocolate Ltd., Divine Chocolate company, Divine Chocolate Ltd