Chocolate is derived from the roasting of the cocoa seeds. Human beings have consuming cocoa seeds for the past 5300 years in different forms and styles, not exactly the modern chocolate form. Today, we’ll discuss Porter’s five forces analysis of Chocolate industry; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.
Usage of Chocolate in various food items
- Chocolate chips cookies
- Brownies Chocolate
- Candies filled with Chocolate
- Desserts, cakes, and pudding
- Snacks
- Chocolate bars
Statistical facts and figures of the Chocolate Industry
- Current market size – 109.13 billion USD (2024)
- Growth rate – 3.78%
- Predicted market capital – 145.14 billion USD (2030)
Top Companies in the Chocolate Industry
- Hershey’s
- Nestle SA
- Mondelez International
- Mars International
- Ferrero International SA
- Cadbury
Porter’s five forces analysis of Chocolate industry would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s the Chocolate industry Porter’s five forces analysis of trade and wholesale business as follows;
Porter’s Five Forces Analysis of Chocolate Industry
Let’s discuss the Porter’s five forces analysis of Chocolate Industry as a competitive force in strategic management and they’re as follows;
Bargaining Power of Suppliers in Chocolate Industry
The bargaining of suppliers is Lower in the Chocolate Industry as a competitive force in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Chocolate Industry Porter’s 5 forces analysis of cocoa business are as follows;
I-Easy Availability of Supplies
Cocoa powder, milk, and sugar are the key ingredients in producing the chocolate bars and other chocolate snacks. They are the type of raw materials and ingredients that are readily available in the market. In fact, multiple suppliers deal with cocoa powder in various countries worldwide.
Bargaining Power of Buyers in Chocolate Industry
The bargaining of Buyers is Higher in the chocolate business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Chocolate business 5 forces analysis of the chocolate industry are as follows;
I-Variety of Options
When it comes to buying the chocolate bars and chocolate snacks; any ordinary customer has a lot of options to choose from. There are brands and companies operating their business in the confectionary and chocolate industry and offering a vast variety of chocolate snacks to the customers.
II-Price Sensitive
Usually, the chocolate snacks customer market is highly price-sensitive. It is because they consume chocolate bars and snacks daily in their routine life and they notice a change in price to a great extent. In fact, they would change brands and prefer the one that offers cheaper chocolate snacks.
Threat of New Entrants in the Chocolate Industry
The threat of new entrants is low in the cocoa business and the Chocolate industry as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the cocoa business 5 forces analysis of Chocolate industry are as follows;
I-Regulatory Compliance
Chocolate snacks fall under the jurisdiction of the Food and Beverage Regulatory Authority. While launching a chocolate snack manufacturing company; it has to comply with the food and safety regulatory authority along with legal and documentation costs. High cost and tight regulatory compliance push away many new potential entrants.
II-Economies of Scale
Various chocolate snack brands have the competitive edge of manufacturing chocolate bars at a mass scale; it allows them to achieve lower per-unit prices. On the other hand, many new chocolate snack companies don’t have the resources to manufacture snacks at a mass scale. As a result, they can’t compete with the already established brands in the industry.
III-Branding Edge
Top chocolate brands invest a significant amount of resources in marketing, advertisement, and promotional campaigns. As a result, customers remember the names of chocolate brands like Hershey’s, Nestle, or Cadbury. Small chocolate companies don’t have a big marketing budget, and customers are reluctant to choose them.
Threat of Substitutes to Chocolate Industry
The threat of substitute products and brands is higher in the Chocolate industry as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the cocoa business 5 forces analysis of Chocolate industry are as follows;
I-Healthy Dietary Trends
The consumer market has become highly cautious about the healthy diet. They prefer snacks that have limited sugar and low calories. On the other hand, chocolate bars are full of high calories; that’s why diet-conscious customers prefer non-chocolate snacks.
II-Lower Price Alternative
As I mentioned earlier the customer market is highly price sensitive about the snacks they consume in their daily routine. If a chocolate brand increases its snack and bar price, then the customers would shift towards a lower price chocolate brand option.
III-Brand Loyalty
In order to deal with tough competition and other factors; a chocolate brand could offer healthy, dietary, and affordable chocolate snacks. It would help the company to stand out from the competition.
Competitive Rivalry in Chocolate Industry
The competitive rivalry among Chocolate industry is very high in the Chocolate industry as a competitive force in strategic management. Some of the main factors impacting competitive rivalry in the Chocolate business 5 forces analysis of the cocoa industry are as follows;
I-Tough Competition
The chocolate business market has become highly competitive. There are various chocolate brands operating their business in the chocolate industry and offering snacks at almost the same price. In order to win the competition, they run marketing and promotional campaigns and offers.
Conclusion: Chocolate Industry Porter’s Five Forces Analysis |5 Forces Analysis of Chocolate Industry
After an in-depth study of Porter’s five forces analysis of chocolate industry; we have realized that chocolate snacks are the world’s top-growing business. If you are learning about the Chocolate industry 5 forces analysis of cocoa business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.
Ahsan is an accomplished researcher and has a deep insight in worldly life affairs. He goes Live 3 days a week on various social media platforms. Other than research writing, he’s a very interesting person.
