Thorntons Plc produces and sells confectionery and seeks to expand globally. It analyzed entry into Germany and Austria. Germany was identified as the best target market based on factors like GDP, infrastructure, and consumption. Thorntons would use direct exporting and indirect channels like retailers and e-commerce. A pricing strategy of penetration pricing and promotion through advertising was recommended to enter the German market. The analysis concluded Germany provides advantages for Thorntons' expansion through existing direct exporting modes.

2. Thorntons

3. Presented by Abhishek VarierAmy NeelimaChih-Ling LeeJuliet Onogu

4. To identify an industry and company within the industry.To explore the global opportunities of expansion for the company.To have an in depth market analysis.To determine the best entry mode strategies.Objectives

5. Module 1: Company Situation Analysis

6. Thorntons Plc was founded in 1911 by Joseph Thornton, engages in the manufacturing, distribution and retailing of confectionery's.This is aimed at creating the finest chocolate and confectionery.Company Background

7. Product ProfileThorntons products are consumer based goods.

8. Product Life Cycle & Sales OverviewBoth Thorntons and chocolate confectionery industry are currently in maturity stage of product life cycle.

9. Direct Exporting: -> Foreign Based Agents-> Foreign Based Distributors-> Foreign Sales Representatives-> Foreign Retailer-> Direct Sales to End User Global Readiness

10. Thorntons uses product differentiation, producing a high premium well packaged chocolates as well as personalized chocolates. With a core product of boxed chocolates, they also have by products as toffee, fudge, hamper and gift boxes. Business Strategies

12. Module 2 : Global Market Search

13. INTIAL COUNTRIES SELECTED

14. The major factors for the selection criteria are DemographicsLiving Standards (5%)Population and its growth (10% of each)Unemployment rate (5%)Economic criteriaConsumer expenditure (5%)Foreign Direct Investment (FDI) (5%)GDP per capita (10%)Inflation rate (10%)Selection Criteria

15. InfrastructureInternet users (5%) Local consumption/UsePer capita Consumption of product (10%)Political/Legal issuesCorruption Perception Index (10%)Ease of doing business (5%)Economic Freedom Index (5%)Political Stability Index (5%)Cont..

16. Country Evaluation

18. Module 3 : In Depth Market Analysis

19. Industry Analysis

20. Competitor AnalysisGermanyAustriaLindtFerreroLindtFerrero15 years15 years12 years Years in business53 years2.9 billion6.2 billion2.9 billion6.2 billionTotal RevenuePremium PricingPremium PricingPremium PricingPremium PricingPricing StrategyLuxury ChocolatesLuxury ChocolatesLuxury ChocolatesLuxury ChocolatesServicePromotionAdvertising, Internet adsAdvertising, Internet adsAdvertising, Internet adsAdvertising, Internet adsQualityHighHighHighHighAll age groupAll age group35-50 age group35-50 age groupTarget Market Profile

21. Entry ConditionsGERMANY AUSTRIATax ratesCorporate tax rates LEAST FAVOURABLE LESS FAVOURABLEPersonal tax rates MORE FAVOURABLE LESS FAVOURABLEVAT FAVOURABLE LESS FAVOURABLEForeign exchangeRate performance MODERATE LESS FAVOURABLEThe country’s currency is convertible YES YES The country’s current account is in good standing (Balance of Payments) YES YESThe currency of the country has been stable MODERATE MODERATE

22. Cont..Labour issues Germany AustriaChild labour issues MOST FAVOURABLE MODERATELabour wage rates FAVOURABLE MODERATEManagement- labour relations FAVOURABLE MODERATEStrength of labour unions FAVOURABLE MODERATECountry Infrastructure Banking system FAVOURABLE LESS FAVOURABLEEnergy MOST FAVOURABLE MODERATEInternet Connections MOST FAVOURABLE MODERATETelecommunications system MOST FAVOURABLE MODERATETransportation systems MOST FAVOURABLE MODERATE

23. MARKET ACCESSIBILITY

24. Best Target Market16.889.93

25. Module 4 : Entry Strategy and Marketing Plan

26. Entry Mode Strategies

27. The pricing strategy for the Germany market will be penetration pricing.Selling price of the product in Germany will be higher than that of UK so as to cover up the additional cost incurred.The promotion strategy for Germany market will be advertising (TV, Outdoor advertising) and Internet ads.Pricing and Promotion Strategy

28. The distribution strategy which Thorntons will be applying in Germany is Intensive Distribution : Using the existing distribution channels and local company’s distribution channel.Direct mode of selling products will be Sales Branches and Company owned Retail Stores.Indirect mode of selling products will be Retailers and use of E-commerce (Internet)Distribution Strategy

29. Projected Profit/Loss Statement

30. Break Even PointPercentage Gross Profit = Total Gross Profit/Total net sales BEP sales = Total operating expenses/Percentage Gross Profit

31. After going through the business profile of Thorntons plc, we have identified its competitors, gathered data of different countries, we intend to venture into Germany which has a better market potential.Thorntons plc should expand its business to Germany by Direct and Indirect exporting. This would be advantageous as most of their modes of expansion have been direct exporting. Conclusion & Recommendation

32. http://www.doingbusiness.orghttp://hoovers.comhttp://www.worldwide-tax.comhttp://www.nationmaster.comhttp://www.worldbank.comhttp://www.thornton.co.ukhttp://lindt.co.ukhttp://ferrero.comhttp://www.euromonitor.comhttp://www.cia.govhttp://www.gmmso3.comhttp://www.transparency.orgReferences

33. Thank you

34. Questions