PORTER'S FIVE FORCES

ANALYSIS

PRESENTED BY: GROUP 7

GROUP MEMBERS
o D-17-12 Joyson Dias
o D-20-07 Ashwin Patre
o D-20-08 Cedric Lopes
o D-20-21 Nikhil Rane
o D-20-22 Omkar Mandrekar
o D-20-35 Shivam Kamat
o D-20-36 Shivam Goltekar
ABOUT FERRERO ROCHER
• Ferrero Rocher is a chocolate and hazelnut confectionery
produced by the Italian chocolatier Ferrero.
• Type of chocolate: Praline Balls (Praline refers to an almond
or hazelnut coated confectionery with caramelized sugar). 
• Flavour: Hazelnut.
• Main ingredients: Milk chocolate, Hazelnut, Sugar, Palm oil,
Wheat flour
COMPETITIVE RIVALRY WITHIN THE
INDUSTRY (MODERATE)
o Number of players:
• The players in the market include Ferrero Rocher, Lindt
Lindor and so on.
• This market is dominated by Ferrero Rocher.
o Switching cost: The switching cost of buyers is very low
because of availability of various substitute products.
THREAT OF NEW ENTRANTS (LOW)
o Profit Margin: The profit margin of existing players is
good.
o Industry outlook: The industry has a positive outlook due
to growth in confectionary industry.
o Access to distribution channel: They are easily available at
retail stores because of the easy access to distribution
channels.
o Capital requirements: They need high initial capital
requirements.
o Customer loyalty: It is very less due to the easy availability
of various substitute products.
THREAT OF SUBSTITUTE PRODUCTS
(HIGH)
o Availability of substitute products: Substitute of
chocolate which includes soft drinks, snacks, sweets and
dry fruits are easily available.
o Price of substitute product: Price of substitute products
which are listed above is also less.
o Switching cost: The switching cost of buyers is very low
because of availability of various substitute products.
BARGAINING POWER OF SUPPLIERS
(HIGH)
o Cocoa
• Number of suppliers: The number of suppliers of cocoa are
few. They are concentrated to Southern states of India which
includes Tamilnadu, AP and Karnataka.
• Price of raw materials: The main raw material used in
manufacturing is cocoa. The price does not remain the same.
• Substitute of raw material: There is no substitute of cocoa
available. Cocoa is the raw material in chocolate
manufacturing.
BARGAINING POWER OF SUPPLIERS
(HIGH)
o Milk powder
• Number of suppliers: Suppliers of milk powder in India is
more.
• Price of raw materials: SMP prices in the domestic market have
recently fallen to ₹310 a kg from the peak of ₹330-340 a kg
seen in December-January as of February 26, 2020.
• Substitute of raw materials: There is no substitute of milk
powder which can be used in chocolate production.
BARGAINING POWER OF CUSTOMERS
(MODERATE)

o Number of buyers: Incase of chocolate the number of buyers

are many. Buyers can be children, youth or adults and so on.
o Buyers are well informed: Customers are well educated and
informed about products available in the market due to more
awareness.
o Customer loyalty: Buyers are not loyal to one particular brand.
As there are lots of substitute products available in the market
and switching cost is also low
CONCLUSION
Rivalry among competitors Moderate
Threat of new entrants Low
Threat of substitute products High
Bargaining power of suppliers High
Bargaining power of customers Moderate

o Cadbury Strengths
• Cadbury has a high brand equity and top of the mind chocolate
brand.
• Strong brand recall and customer loyalty among Cadbury's
customers.
• Strong parent brand of Mondelez International gives a strong
backing.
• Strong R&D and innovation in chocolates.
• Cadbury is a trusted and premium quality brand.
• Strong distribution network and operations.
o Weaknesses
• Cadbury does not have a diverse product portfolio..

o Opportunities
• There is a lot of potential for growth and a huge population
who do not eat chocolates even today can be converted as
new users.

o Threats
• Cost and price rise: Distribution prices have risen with an
increase in fuel prices as well as shipping costs. At the same
time, sourcing and production costs are also high.
• Health awareness on the rise: Instead of eating milk
chocolates, many people enjoy consuming dark chocolate.
Around the same time, many parents avoided offering their
children chocolates, looking at the adverse effects.
CONT….
• Increasing demand for individuals, increasing buying power.
• Change in government rules and policies can have a direct
impact on the company.
• Competitors pricing and similar Competitive products is a
major challenge to the company.

Yes, it is feasible for Cadbury to enter into this market in

India inorder to increase their product line.