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 Im intrigued by Rocky Mountain Chocolate Factory. While the companys 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 consumers would not be generated. Secondly, there is the efficiency of the marketing campaigns. Successful chocolate manufactures need to not only sell a product, but an experience. They must also increase awareness of the products existence within the market. Third, there is the ability to remain alert to the changes which impact the micro and macro environments. It is crucial for economic agents to remain flexible and able to quickly respond to the emergent changes in the industry, as well as the changing consumer demands.
7. Is this an attractive industry overall? Why or why not?
The attractiveness of the industry depends on the personal features of each and every single investor. For the more prudential investors, who reveal a high trash hold for risks, the industry would not be appealing due to the high levels of competition it reveals, as well as the fierceness of the competition. For other investors on the other hand, who are more risky and who have a lower trash hold for risk, the industry would seem appealing due to the possibility of quick gains as the demand for the confectionary products and services.