SlideShare a Scribd company logo
Abhi Alavalapadu 
Andrew Davenport 
Joel Fried 
Kelly Bowker 
Sean To
Environmental 
Social Economic
Source: The World Cocoa Economy &Asia’s Chocolate Binge Compounding Global Cocoa Shortage
USD/ton 
Cocoa Price Volatility 
Source: How Weather Around the World Impacts Chocolate & NASDAQ
Source: Ibis World Reports, Team Analysis
Source: Confectionary News 
450 
400 
350 
300 
250 
200 
150 
100 
50 
0 
Mondelez Mars Nestle Hershey Lindt 
US Dollars 
in Millions
63% of 
consumers 
don’t know how 
find a firm’s 
Corporate 
Sustainability 
Report 
Source: Environmental Leader 2012 Consumer Survey
Source: Rank a Brand: Chocolate 
E Rating 
A 
C 
C 
C 
C 
C 
C 
C 
C 
C 
C 
C 
C 
E 
Lindt 
Hershey's 
Bros 
Rolo 
Smarties 
Nesquik 
Kinder 
After Eight 
Nestlé Crunch 
Nestlé Hot Coco 
Lion 
Nutella 
Kit-Kat 
Green & Black's
Cocoa Farming
• Lots of mobility on prices, 
consumers willing to pay 
premium for “fair trade” or 
“Sustainable” brands 
• Average across small 
sustainable brands: $5.46
• BCG report around sustainability interviewed corporate leaders across multiple 
industries, indicates that if sustainability is made a business case, added profits are 
hugely impacted 
Source: BCG Perspectives
Environmental 
SUSTAINABILITY 
Social Economic
Source: Network for 
Sustainable Business
Supplier power: Medium 
• Low # of premium cocoa 
suppliers 
• Trade regulations 
Threat of new entrants: Medium 
• Large competitors with economies of scale 
and scope 
• Usually customers are loyal to brand 
• Ability for Niche players to capitalize on 
market share 
• Companies with established distribution 
channels can challenge the current players 
• High margins in premium chocolate 
Existing firm rivalry: High 
• Rivals have huge amount of resources 
• Ability to absorb advertising spend 
• High fixed costs associated with 
capacity increments 
• High exit barriers 
• Firms compete on quality & brand 
rather than price 
Buyer power: Medium 
• Low switching costs 
• Distributors and retailers 
have high bargaining power 
• No monopsony in industry 
• Consumer might react 
strongly to higher pricing 
• Switch to healthier foods 
easily 
Threat of substitute products: High 
• Numerous substitute products like ice-cream, yogurt, 
fruits, low end chocolate 
• Alternates readily available 
• High product differentiation in mkt place
Cost Leadership Differentiation 
Broad 
Market 
Narrow 
Market
Ghiradelli:
Key Issues

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Lindt Shared Services Model Recommendation

  • 1. Abhi Alavalapadu Andrew Davenport Joel Fried Kelly Bowker Sean To
  • 3. Source: The World Cocoa Economy &Asia’s Chocolate Binge Compounding Global Cocoa Shortage
  • 4. USD/ton Cocoa Price Volatility Source: How Weather Around the World Impacts Chocolate & NASDAQ
  • 5. Source: Ibis World Reports, Team Analysis
  • 6. Source: Confectionary News 450 400 350 300 250 200 150 100 50 0 Mondelez Mars Nestle Hershey Lindt US Dollars in Millions
  • 7. 63% of consumers don’t know how find a firm’s Corporate Sustainability Report Source: Environmental Leader 2012 Consumer Survey
  • 8. Source: Rank a Brand: Chocolate E Rating A C C C C C C C C C C C C E Lindt Hershey's Bros Rolo Smarties Nesquik Kinder After Eight Nestlé Crunch Nestlé Hot Coco Lion Nutella Kit-Kat Green & Black's
  • 10. • Lots of mobility on prices, consumers willing to pay premium for “fair trade” or “Sustainable” brands • Average across small sustainable brands: $5.46
  • 11. • BCG report around sustainability interviewed corporate leaders across multiple industries, indicates that if sustainability is made a business case, added profits are hugely impacted Source: BCG Perspectives
  • 12.
  • 13.
  • 14.
  • 16.
  • 17. Source: Network for Sustainable Business
  • 18. Supplier power: Medium • Low # of premium cocoa suppliers • Trade regulations Threat of new entrants: Medium • Large competitors with economies of scale and scope • Usually customers are loyal to brand • Ability for Niche players to capitalize on market share • Companies with established distribution channels can challenge the current players • High margins in premium chocolate Existing firm rivalry: High • Rivals have huge amount of resources • Ability to absorb advertising spend • High fixed costs associated with capacity increments • High exit barriers • Firms compete on quality & brand rather than price Buyer power: Medium • Low switching costs • Distributors and retailers have high bargaining power • No monopsony in industry • Consumer might react strongly to higher pricing • Switch to healthier foods easily Threat of substitute products: High • Numerous substitute products like ice-cream, yogurt, fruits, low end chocolate • Alternates readily available • High product differentiation in mkt place
  • 19. Cost Leadership Differentiation Broad Market Narrow Market
  • 21.
  • 22.

Editor's Notes

  1. PRICE OF COCA COST OF DISTRIBUTION
  2. DEMAND FOR FAIR TRADE CLIMATE CHANGE EMISSIONS
  3. 18-49 yr olds account for 56.8% of chocolate consumption
  4. BENEFITS
  5. BENEFITS
  6. BENEFITS
  7. FARM LOCATIONS MANUFACTURING LOCATIONS (LINDT OWNED)
  8. HERSHEY’S COMPARE PRICE “LOCAL” – FINANCES
  9. BENEFITS
  10. CSR FRAMEWORK NETWORK FOR BUSINESS SUSTAINABLITY