Bullet Point 1

Question 1

How many chocolate manufactures dominated the market in 1998?

Answer 1

7

Question 2

What were the 7 main manufacturers in 1998?

Answer 2

1. Mars
2. Nestle
3. Kraft foods
4. Cadbury Schweppes
5. Hershey
6. Ferrero
7. Lindt

Question 3

How many chocolate manufacturers dominate the market in 2018?

Answer 3

5

Question 4

What are the 5 main manufacturers in 2018?

Answer 4

1. Mars
2. Mondelez (Formally kraft, changed name. Owns Cadbury and Green and blacks
3. Nestle
4. Ferrero (Thorntons)
5. Hershey

Question 5

What is the market overview of the 2018 market?

Answer 5

It is split, at one end there are large MNCs which dominate the market, and then there is a thriving industry of small artisan chocolate makers who are catering to niche markets

Question 6

Explain what Lindt is investing:

Answer 6

Investing in darker chocolate. Innovated in darker chocolate varieties for the growing consumer demand for health beneficial chocolate

Question 7

Explain what Mars is investing:

Answer 7

Investment to increase production. Invested £710 million to boost their manufacturing factories to increase production capacity, which in turn created jobs. In Kansas is created 70 jobs to produce M&Ms. Then invested £639 million in the US supply chain to improve their sustainability

Question 8

Explain what Cadbury is investing:

Answer 8

Reinvested in Bourneville and set up the global chocolate and research development there. They increased the levels of automation which reduced the number of jobs needed.

Question 9

Explain what Ferrero is investing:

Answer 9

Invested in improving and expanding their factories, plants and equipment. Total investment was 1.126 billion

Question 10

For divine chocolate, what happened in 1998?

Answer 10

In 1998, the day chocolate company was started by farmers of the Kuapa Kokomo co-operative in Ghana supported by comic relief.
The first product was divine chocolate, which was a fair trade product.
In 2007, the name was changed to divine chocolate. it is a social enterprise

Question 11

What is the percentage which global sales increased by?

Answer 11

2%. This is less than half of the rate which it increased in 2016

Question 12

Why is the global chocolate sales increasing so slowly? (3)

Answer 12

1. Deceleration in the biggest markets, such as US, UK and other advantaged economies
2. Sales growth is also slowing in emerging markets such as China, India and Brazil.
3. Rise in consumerism - trend is towards healthier eating

Question 13

Who did Cadbury take over in 2005, and why?

Answer 13

Green and blacks for £25 million.
Why?
In 2005, green and blacks was the fastest growing U.K. chocolate brand with the worlds first organic bar.
Giant MNCs looking to buy ethical, small scale, niche products to improve their brand portfolio

Question 14

What is Kraft takeover in 2009, and then what happened?

Answer 14

Hostile takeover of Cadbury for £11.5 billion. Shortly after Kraft assured the Government that no jobs would be lost, Kraft shut the somerdale plant near Bristol with 400 job losses.

Question 15

Why did Kraft want to takeover Cadbury? (4)

Answer 15

1. Have large global presence with strong competitively advantaged positions in high growth emerging economies
2. 2008, Cadbury’s dairy milk was the number 1 choc bar in India, Mexico and South Africa
3. Had a well invested supply chain
4. Cadbury had a portfolio of strong brands

Question 16

Who did Ferrero buy in 2015, and why?

Answer 16

Thornton’s for £112 million.
Why?
Thornton’s had been struggling for a while (with competitive pressure from Lindt which contains more cocoa) and tried selling into supermarkets.
Ferrero bought Thornton’s to help them expand into the U.K. This brought together two complementary businesses and allowed Ferrero to gain more U.K. market share than its Swiss rival Lindt

Question 17

Who did Ferrero buy in 2018?

Answer 17

Nestles US confectionary business to £2 billion.

Question 18

what are three reasons for mergers and takeovers? (with examples)

Answer 18

1. Attempt to ensure increased market share - in 2015 Mars bought Mexican Lindt distributor Grupo Turin. This gave mars a foothold in the premium chocolate market.
2. Access to technology, staff or intellectual property - to gain access to patents such as secret ingredients in the chocolate bar to the colour of the bar - Cadbury won the right to the purple bar in a battle with Nestle. Cadbury also has a patent on bar which stay solid in 40c heat for 3 hours
3. Access to new markets - Kraft bought Cadbury as a way into the emerging markets of India, South Africa and Mexico. Cadbury milk held #1 or #2 in 7 of the top 12 emerging markets.