Barry Callebaut: Industry Analysis and Market Position

Running head: BUSINESS AND STRATEGIC MANAGEMENT
Business Management and Strategic Management
Name of the Student
Name of the University
Author’s note

1BUSINESS AND STRATEGIC MANAGEMENT
PART 1
About the industry
Chocolate is a multi-billion dollar industry, it is one of the largest selling sweet
treats in the world. From 6-60 almost everyone seems to enjoy chocolate. Coco beans are
processed and used to make chocolate, the demand for the product never seems to drop but the
issue that has been surfaced is the supply of the cocoa beans. Due to several reasons like natural
calamities, crop diseases etc this shortage in supply has manifested. Ivory Coast is the biggest
supplier of cocoa beans in the world. Companies like Nestle or Cadbury gather their supply
from Ivory Coast. But it has been issued in a report that there will be significant global shortage
of cocoa beans supply by 2020. Anthony Ward also known as “chocofinger” in the industry is
the founder of Armajaro Asset Management. The company is known to be one of the market
leaders in the cocoa market. In 2010, Ward cornered a considerable amount of the world’s cocoa
supply. The holding is so enormous that it had threatened leading manufacturers of chocolate to
increase the price of some of their most popular items. Since then, there have been several
speculations regarding the supply of cocoa in the market (Leake and Cooper 2010).
With the help of PESTEL analysis of Ghana and Nigeria cocoa production situations the
cocoa market can be determined. Both Ghana and Nigeria has been significant contributor of
cocoa in the world, Ghana being the second largest and Nigeria being the fourth (Goldberg
2015).
Ghana: Generations of people has been involved in the production of the cocoa beans in this
country. The Dutch missionaries at the beginning of the 19thcentury introduced the Cocoa beans
to Ghana by. In the 19th century Ghana was regarded as the largest producer supplying up to 30-

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40 percent of the world’s cocoa. Coco beans have a significant role in the livelihood of the
people as well as have a major impact on the economy of the country (Cocobod.gh 2018). The
crop is known as the “King” and the image of the crop is on the currency as well (refer to the
appendix). Cocoa is the major cash crop in the country but the production process have seen
major setbacks due to the several reasons such as weather conditions, declining area of
cultivation, low yields per hectare, there has been several diseases that has been reported in the
past decade. There is another issue with the process where recommendations from researchers
have not been implemented (Goldberg 2015). On the other hand it is argued that this shortage is
not only due to the above stated factors but also due to lack of management and proper planning
(Goldberg 2015).
PESTEL
Ghana
Political The government of the country has been sporting the farmers as this is the major
cash crop in the country. In 1947, the government realized the potential of the crop
and established the CMB (Cocoa Marketing Board). This institution is the main
author for looking after the cocoa industry. There is a Ghana Cocoa Board that
looks after the quality of the production. Research and development investment is
also looked after by the government (Goldberg 2015).
Economy Aforementioned cocoa beans are the major cash crop and thus it has impacted the
economy of the country significantly. Approximately 800,000 farm families who
are spread over six out of the ten regions of Ghana have been employed in this
industry. This industry has contributed $2 billion in foreign exchange annually and
is a major contributor to Government Revenue and GDP (1).
Social There are generations of people who have been involved in this business, most

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farmers own their land. Chocolate is not only a part of the economy but is also a
major part of the culture in Ghana. Western, Central, Brong Ahafo, Eastern, Ashanti
and the Volta regions are the major regions where cocoa is cultivated (Läderach et
al. 2013).
Technological The Ghana Cocoa board is responsible for any development of the industry. Cocoa
Research Institute of Ghana (CRIG), the Seed Production Unit (SPU) and the
Cocoa Swollen Shoot Virus Disease Control Unit (CSSVDCU) are the pre-harvest
institutions which deal with the challenges faced by the farmers during faring
process. Quality Control Division (QCD) and the Cocoa Marketing Company
(CMC) is the authorities that deal with post harvest matters. Digital Green is a
program by the World cocoa foundation it involves in helping and supporting the
farmers growing cocoa beans.
Environmental Many farmers in the country has adapted sustainable means of production, the
government also has taken several sustainable actions with the help of the cocoa
board.
Legal . The government has mandated the sale of cocoa through government bodies thus
this has helped in fixing a price for the farmers who grow the crop. The rules and
regulations favor the industry in Ghana supporting the farmers (Goldberg 2015).
Nigeria: Stands fourth in the production list however, Cocoa beans production has been on a
major decline in the country (Agronewsng.com 2018). This decline is because of inconsistent
production patterns, disease and pest infections in the crops, furthermore low levels of
automation with dependence on cutlass and hoe agriculture and declining quality of cocoa fields
are some of the factors responsible for the decline (Worldatlas.com 2018).