Arcor serves the sugar confectionary market, which includes hard-boiled sweets, caramels, gums, mints, and other candies. These products are sold through various retail stores globally. Arcor is a prominent leader in this market, ranking around 8th or 9th. Arcor faces competition from many international brands in Latin America as well as Nestle, Kraft, Mars, and Cadbury. However, Arcor dominates the Latin American market as the largest food products company. It has also expanded through joint ventures. Entry barriers into the confectionary industry include high costs of production facilities and resources. Arcor gains an advantage through vertical integration of ingredients.

1. 2. Industry/Market they serve
The overall industry in which Arcor serves is the sugar confectionary market, or products
that have a high amount of sugar or sweetener. This industry is vernally divided in to six
different segments: hard-boiled sweets, caramel and toffees, gums and jellies, medicated
confectionary, mints, and others. As many of us are aware of, these products are distributed
through convenience stores, retail stores, discounters, hypermarkets, and supermarkets.
Regarding geographical layout, the market is divided into the Americas, The International
Conference on Asian and Pacific Coasts (APAC), Europe, and the Middle East and Africa
(MEA). As far as the leaders of this market goes, the best way in which to calculate position is
based on the revenue brought in from selling these six product types. Based on recent data from
Technavio, the market leaders include: Ferrara Candy, HARIBO, Mondelez International,
Nestlé, Perfetti Van Melle, and Wrigley. For the company of Arcor, it is a prominent leader as
well coming in around 8th or 9th in the top 10 confectionary market leaders.
3. Competitors and Competitive Landscape (5 Forces)
As far as the competition goes for Arcor, the global confectionary markets is home to
hundreds of confectionary and sweets brands that range from international corporations to small
local shops. In the case of Latin America, Arcor’s biggest competitors are Nestlé, Kraft, Mars,
Cadbury Schweppes, as well as Hershey. While these names are in fact well known in the
international market, Arcor currently dominates the Latin America industry as the largest and
most recognized food products company and candy distributor. Not only this, but it has become a
leading company in the region due to a joint venture through Bagley Latinoamérica SA, with
Danone Group for cookies and crackers, alfajores, and cereal business. Due to high levels of

2. competition as well as the investment necessary for confectionary manufacturing equipment,
switching costs are not low and the industry does not have any excess capacity. With this being
said, we also turn our attention to the product life cycle. Regarding Latin America, Arcor is in the
maturity state as the company has had a local presence for over sixty years. It is experiencing the
growth stage for North America and Europe and in the introduction stage for Asia. In 2013,
Arcor exported over $375 billion worth of products to over 120 countries and holds 13 satellite
offices across other continents. It is looking to expand its presence even more by installing
manufacturing plants in others continents like Asia, Europe, and North America.
-Entry Conditions: When we first observe entry conditions, it is important to look at what
barriers will prevent just any company from entering the confectionary industry. Overall, there
are a variety of high fixed costs that include purchasing factories, plants, machinery, and land. In
addition, variable costs like ingredients, a well trained workforce, and wages become another
factor of consideration. As companies in the market have grown rapidly over the past couple
decades, the quest for access to key resources like cocoa, sugar, milk, and fructose are becoming
more and more of a challenge to have a dominant hold in. Luckily for Arcor, their company is
based on a vertical integration strategy in which they self-produce fructose, sugar, milk,
semolina, and cereal ethanol. As a result, the struggle of gaining access to limited resources
around Latin America is not an issue. Brand identity is a large barrier to entry as it is one of the
most key aspects in a confectionary company’s ability to sell. When conSumers like a product,
they will generally stick to that brand as with the case of Arcor. For patent protections, it is hard
to have any patents on a candy or chocolate as other competitors can produce the same product

3. with a different name (as is the case in the food industry), however through brand and trademark
recognition, this can help reduce the level of replication amongst rivals.
-Substitutes: As far as substitutes go, companies are coming out with different types of
products and diversifying their products across different types of candies, sweets, and food
products. Not only this, but technology is becoming a massive factor as companies are able to
generate and move at a much faster rate than ever before. Factories are requiring less employees
due to machine efficiency, therefore Arcor must figure out how to reduce their fixed costs such as
purchasing more durable equipment and reducing exposure to fluctuating sugar and cocoa costs.
With this they must ensure the maintaining of their thirty-nine industrial plants across Latin
America and brace for possible disasters whether natural or business related. For Arcor, it has a
very loyal consumer base that gives it its top leading position in Latin America and rise in other
countries. However one powerful substitute that is becoming increasingly threatening is the
growing health phase that has risen dramatically across the world over the past decade. People
around the world have become increasingly susceptible to the growing trend of better diets and
intakes and have more ways than ever to know what it is good and bad through today;s
technology. Regarding the confectionary industry, consumers focused on the health trend are not
completely turned away but are rather looking for healthier options of sweets and candies (i.e.,
organic and natural candies). As a result, it is vital that Arcor look into this trend and find
strategies and new products in which they can implement their product into a healthier persona.
-Supplier power: As previously stated, the most important factors that go into candy and
sweet production include ingredients like sugar, cocoa, milk, and fructose. For Arcor, the vast
growing competition in Latin America would usually cause a challenge for resources and

4. ultimately the ability for suppliers to exercise bargaining leverage. However, because Arcor self-
produces its ingredients, the supplier power and rival collaborative partnerships with suppliers
are no longer an issue. Not only this, but Arcor’s vast size and presence in Latin America allows
it to have larger control or influence on any other resources it needs (labor, machinery
equipment, etc.) with over 16,000 suppliers. Catocor is a Arcor Group company that specializes
in manufacturing cardboard containers for Arcor’s products to be shipped in. In the case of North
America, Europe, and Asia, the situation becomes a little different as Arcor does not have
manufacturing plants installed in any of these countries. Nevertheless, based on its precious
strategies, Arcor will not begin manufacturing in other countries until it can self-produce or
establish good relations with suppliers. It continues to export over $300 billion to its forge in
markets.
-Buyer power: When it comes to the consumer, the issue is about the same for Arcor in
Latin America compared to its outside markets. To explain, Arcor has a dominant foothold in the
countries of Latin America concerning selling its product over it's leading competitors. Because
Arcor is so widely known and welcomed in Latin America, the issue of buyers choosing another
product or brand is not a heavy issue as consumer loyalty has been strong for so many years.
However in the case of other markets like the United States and Asia, the situation becomes
significantly different. These outside countries ultimately have much larger buying power
because they are already loyal to domestic and pre-established companies like Hershey, Mars,
and Nestlé. Because of this, Arcor must continue to work its brands into these foreign markets
through ad campaign, social media, and sampling to ensure that their products will be accepted if

5. serious production begins. Arcor is already doing so through its thirteen offices located in
various countries to try and reach consumers and suppliers alike.
-Complements: When we look at the overall production line of Arcor, their main products
include candies, chocolates, ice cream, and crackers. With that being said, some complements
would include coffee, wine, and soft drinks for their candies and chocolates. Interesting enough,
Arcor has a large partnership with Coca-Cola in the making of a large portfolio of relating
products in South American countries. In addition, meals like dinner and lunch can be
complements to ice cream or sweet crackers that act as desserts to these a regular meal. Based on
our analysis, these complements do not place Arcor in any standard of being a differentiator as
several other companies offer the same style of candies and chocolates. It really comes to brand
recognition and loyalty that has set Arcor apart from competitors.