Since its publication init has become one of the most popular and highly regarded business strategy tools. Porter recognized that organizations likely keep a close watch on their rivals, but he encouraged them to look beyond the actions of their competitors and examine what other factors could impact the business environment. He identified five forces that make up the competitive environment, and which can erode your profitability.
In this report I will engage with the business frameworks that we learned in the first five weeks such as S. T analysis will be divided to tow parts, which are strength and weakness for internal business environment and opportunities and threads for external business environment.
After the full analysis for the existing strategy, we can see whether the strategy is able to face many changes from macro environment or microenvironment in this ever-changing world. Introduction When a new player wants to have business in a new industry, it would better to make a strategy to direct the right way to success.
We will write a custom essay sample on Strategic Management and External Business Environment or any similar topic specifically for you Do Not Waste HIRE WRITER Strategic planning is upward focused, looking at ensuring how tactics link up to corporate goals and strategies, strategic thinking is downward focused, looking to Five forces analysis of thorntons that meaning and purpose are diffused throughout the organization so that appropriate goals and tactics can be developed to meet the real needs of the organization.
External Business Environment 3. Political factors Basically, there is just a few political factors will effect the companies which are having business in chocolate industry, because governments do not have to many limitations to the food industry.
However, as the largest UK chocolate company, which has been exploring the foreign market outside EU, several uncertainties, has to be faced, such as the taxations in Asia are constantly changing. Normally, food industry can reflect the inflation most at the first time.
Generally speaking, price of food is the first sign to be noticed when the financial crisis happened. Based on information from http: Conversely, the total retail sales had an increase by 8.
However people bought more chocolate when goods were on sale.
First of all, in general, people do not think chocolate is a kind of healthy food at all. However, more and more people are seeking a healthy life style right now.
So for these people, they would not take the chocolates into considered. On the other hand, due to increasing competition, Torntons has to face lots of challenges with them.
For a chocolate company how to continuously improve the produce process have to be taken into account. Environment Factors For any food company, they are more dependent on raw materials. However, environment can decided whether companies are able to get good quality raw materials with reasonable price.
So environment factor is one of unpredictable factors in PESTEL analysis and organizations have to prepare a back up plan to protect them. First of all, the human resource legislation always changes including the working hours and insurance and taxation for the employees.
It will affect the human cost directly. On the other hand, because the continually improvement of the food hygiene, the quality of the chocolate will be higher. Meanwhile, they do not have store in any large retail chains that can reduce the power of buyers.
Thus, power of buyers for Thorntons is small and steady. But in terms of the big brand name, Thorntons still got strong supports from the outside suppliers with reasonable price.
Moreover, not only traditional chocolate companies could produce substitutes products, but also some other snack food item could imitate the chocolate taste. However the most important requirement is having a unique formula to produce chocolate, which is the value for a new brand just entered into this industry.
Thus, for chocolate industry is quite difficult for the new players to entry into.
However this will be a big threat to Thorntons because fewer competitors that mean new plays will locate their positioning in this level. Johnson et al, Exploring Strategy, According to the sales performance of the UK chocolate industry, we can easily see that from to the performance of sales increases steadily at the shake-out stage in the industry life cycle.
T analysis Opportunities and Threats Opportunities — More and more people like to buy box chocolate as a gift.thorntons cafÉ 9 case analysis 10 scope of business 10 the five forces framework 10 strategic capabilities 12 resources 12 competencies 12 cost efficiency 13 competitive advantage 13 strategic choice 13 the value network 14 suppliers 14 distribution 14 critical success factors 14 Understanding Porter's Five Forces The tool was created by Harvard Business School professor Michael Porter, to analyze an industry's attractiveness and likely profitability.
Since its publication in , it has become one of the most popular and highly regarded business strategy tools. Firstly the PESTEL analysis is applied to examine the macro-environment, and the Porter’s five forces to analyse the industry environment.
Secondly, several analytical tools, showing Thorntons ’ strength and weakness are used in order to make a SWOT analysis. We are sponsoring two girl’s football teams in Orpington to help raise the profile of our two new Orpington coffee shops and to the local community and activities.
We even sent our Operations Director Scott down to join the teams for an official photoshoot with News Shopper Newspaper.
Eight, the freshness of Thorntons chocolates is strength. Ninth, the manufacture and sale of ice cream during the low season is an important strength.
Tenth, the acquisition and development of larger and better prime location sites is an important strength. Below is the strategic analysis of Thornton’s in the view of Porter’s Five Forces. Competitive rivalry: Thornton’s primarily compete in the boxed chocolate market where they have to compete with brands like Cadbury, Bendicks, Green & Black’s, Whitbread etc.
Product quality is based on unique product recipes and the use of high quality.