Case study of Haribo
- External analysis
- Definition of the Industry
- Analysis of the economic forces affecting the industry
- Industry Analysis: Porter's 5 Forces
- Segmentation of the industry
- Internal analysis
- Definition of business
- Resource analysis
- Skills Analysis
- Final analysis
The confectionery sector is a highly competitive industry in which producers of candies must demonstrate great creativity and a keen sense of innovation to differentiate themselves from competitors. In 2002 this sector produced more than 212 000 tons of confectionery, which reflected an increase of 18% in 10 years while the consumption up 21% with 223 000 tons sold over the same period.
The candy market is a growing market in which there are three major producers (Haribo, Cadbury Schweppes and Lamy Lutti), which share 80% of the market share. We chose to analyze the company Haribo because it is one of the leading brands, and represents one of the widest ranges in confectionery.
We will first do an external analysis of the confectionery sector, with different actors who share this market. Then we will observe the internal analysis of Haribo with its skills, strengths and weaknesses. Finally, we conclude with a final diagnosis, including development paths and recommendations.
Defining the activity of the company: The principal activity of the Haribo Company is to manufacture market and distribute sugar based confectionery (candy, chewing gum, chocolate bars). The industry in which the company operates:
Haribo is a part of the sweets industry. Sugar confectionery includes 20 varieties of candy and more than 600 specialties. The main products are rubber, fruit paste, gum and licorice (67 000 tons), chewing gum (50 000 tons), caramels, toffee and chewing gum (36 000 tons), boiled sweets (33 000 tons), etc.
Although the sector has been experiencing a sharp increase, in recent times, the consumption is stagnating. This slower growth is due to diseases related to excessive consumption of sugar, obesity, etc. In addition, new legislation has emerged. The advertisements for certain food products come with a warning messages such as "For your health, eat at least five fruits and vegetables per day" or "For your health, avoid eating too much fat, too sweet, or too salty food, ""For your health, avoid snacking between meals "
In a highly competitive industry, manufacturers of candy bags are showing great creativity and innovation to boost sales, as they know that this is a market pulse for which 80% of purchases are decided in the store. Also, they use modern methods of communication and devise particular ranges depending on the texture, shape, flavor and sugar-free recipes to entice consumers of all ages. Thus, the appearance of the small pocket confectionery (PCP) without sugar increased sales by over 7% in 2002.
The main activities are producing value added products: In the core
?Production: It concerns all of creation and manufacture of confectionery. This will differ depending on the type of products sold and require different skills.
? Marketing and sales are also a source of added value and differentiation from the competition. It is essential for the company to form its own image in order to capture as many consumers as possible.
?Marketing is the collection and distribution of finished products to consumers.
Tags: Haribo Company, confectionery sector, finished products, marketing, value added products, innovation, Sugar confectionery, Cadbury Schweppes
[...] The study leads to strategic group analysis of competitive rivalry within an industry, from the three types of competition: the conditions for entry into the sector, the competitive struggle between strategic groups, and the rivalry within each group" Campus HEC.com The main competitors and their positioning What are the strategic groups? We can define two major strategic groups of sweet confectionary, which we will determine based on the positioning of the companies and particularly their quality and innovation. Group Enterprise-quality, but with a weak innovation: Ferrero, Wrigley and Cémoi GROUP Enterprise-grade strategy with a major innovation: Lutti Lami, Nestle, Kraft Foods and Chupa Chups. [...]
[...] Evaluate the key resources of the company by applying the VRIO model and / or assessing the strengths and weaknesses of these resources We found no specific resources for the company Haribo is why we did not model VRIO, but we will do an internal audit by function. Functions Forces Weaknesses Production Managed to push up productivity, in order to offer low prices. Innovation on the machines (quality charter autonomy of machines) Marketing Diversification of products (sweets, clothes, yoghurt) (Marseille and Uzes) with each cell taking orders which allows customers to have a rapid re-assortment. [...]
[...] Through these innovations, Haribo decided to encourage a policy of distinguishing the ever more extensive goods as well as different tastes, and original colors. Strategic choices have now given it the status of market leader in confectionery. However, because of its level of experience and results, the group manages to cope with the aggressive market penetration by competitors, who copy the products of the flagship brand of the little boy in red overalls. To keep up with its desire for growth, Haribo diversified early (since 1971). [...]