PESTEL analysis Essay

Political Denmark: in 2011, introduced fat tax I-JK: Debate on introducing fat tax which suggest increase in prices of unhealthy food Two-pronged approach in policy in order to encourage healthy lifestyle Public health responsibility deal Traffic labelling scheme Technological GLOBAL Innovation on healthy-oriented chocolate confectionery New formats rather than product innovation Development in packaging: smaller packaging, sharing bags, multi – purposes single bag Flavour extension Economic Economic growth up to 2013: Weakest in Western Europe Rapid in Asia Pacific and Latin America

Salary rate: Emerging countries: rapid economic growth 0 high growth in income I-JK: low wage/ salary rate International chocolate confectionery demand started rising since 2011 : Slow growth in Western and European markets Accelerated growth in emerging markets Environmental A decrease in global cocoa production due to less-than-ideal growing condition and an increase in cocoa consumption 0 an increase in chocolate production costs Social Increase in health concerns, especially obesity Globally, consumers pay more for chocolate (GMID Datagraphic 29/7/2013) Increase in emand for low-priced convenient chocolate snacks.

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Prime example: France and US (Euro Monitor – Searching for… 2013) Different demand for chocolate in different regions: North America, Western Europe & Eastern Europe: Maturing consumer demand Asia (mostly China), India, Columbia & Brazil: Semi-premium & Premiumisation trend (mostly consumed in traditional celebrations) France, US, UK & Latin America (especially in urban areas): Higher demand for low-priced convenient chocolate snacks I-JK A decrease in trend of Fairtrade products

Factor influencing choice mostly: Price An increase in 65’s generation Legal The Food Safety Act 1990 (as amended) The General Food Law Regulation (EC) 178/2002 (key note, 2013) The General Food Regulation 2004 (as amended) Changes in legislation: The introduction of regulation No. 1169/2011 in order to raise consumer knowledge about food. (will take effect on 13th December 2014) From the framework, there are threats and opportunities captured for Cadbury. Firstly, in I-JK market, low economic growth, maturing consumer demand and increasing obesity oncerns has been and projected to continue hampering sales.

In other words, Cadbury has to cope with a threat that they cannot gain more profit if they only focus on their sale in I-JK. Fortunately, there are opportunities of expanding to global markets (market development strategy), especially Asian emerging countries where rapid economic growth and demand for premiumisation are seen. In addition, if Cadbury choose market penetration strategy, there is an opportunity for them from increasing snack culture and “lipstick effect” in their home market.

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